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What changed in Bank7 Corp.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Bank7 Corp.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+371 added−387 removedSource: 10-K (2026-03-17) vs 10-K (2025-03-12)

Top changes in Bank7 Corp.'s 2025 10-K

371 paragraphs added · 387 removed · 275 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

23 edited+5 added−0 removed137 unchanged
Biggest changeThese statutes and regulations impose limits the amount of loans the Bank may make to directors and other insiders and require that the loans must be made on substantially the same terms, including interest rates and collateral, as prevailing at the time for comparable transactions with persons not affiliated with the Company or the Bank, that the Bank must follow credit underwriting procedures at least as stringent as those applicable to comparable transactions with persons who are not affiliated with the Company or the Bank; and that the loans must not involve a greater than normal risk of non-payment or include other features not favorable to the Bank.
Biggest changeThese statutes and regulations impose limits on the amount of loans the Bank may make to insiders and require that the loans must be made on substantially the same terms, including interest rates and collateral, as prevailing at the time for comparable transactions with persons not affiliated with the Company or the Bank.
Attracting, retaining and developing qualified, engaged employees who embody these values are crucial our success. We offer all of our employees a comprehensive benefits package that includes medical, dental and vision insurance, a flexible spending plan, group life insurance, short-term and long-term disability insurance, a traditional 401(k) Plan, competitive paid time off/paid holidays, and competitive incentives.
Attracting, retaining and developing qualified, engaged employees who embody these values are crucial to our success. We offer all of our employees a comprehensive benefits package that includes medical, dental and vision insurance, a flexible spending plan, group life insurance, short-term and long-term disability insurance, a traditional 401(k) plan, competitive paid time off/paid holidays, and competitive incentives.
As a result, our growth and earnings may be affected not only by management decisions and general economic conditions, but also by federal and state statutes and by the regulations and policies of various bank regulatory agencies, including the Oklahoma Banking Department (“OBD”), the Federal Reserve, the Federal Deposit Insurance Corporation (“FDIC”) and the Consumer Financial Protection Bureau (“CFPB”).
As a result, our growth and earnings may be affected not only by management decisions and general economic conditions, but also by federal and state statutes and by the regulations and policies of various bank regulatory agencies, including the Oklahoma Banking Department (“OBD”), the Federal Reserve (“FED”), the Federal Deposit Insurance Corporation (“FDIC”) and the Consumer Financial Protection Bureau (“CFPB”).
As of December 31, 2024, the Company’s and the Bank’s capital ratios exceeded the minimum capital adequacy guideline percentage requirements under the Basel III Capital Rules. 3 Table of Contents Prompt Corrective Action The Federal Deposit Insurance Act requires federal banking agencies to take “prompt corrective action” with respect to depository institutions that do not meet minimum capital requirements.
As of December 31, 2025, the Company’s and the Bank’s capital ratios exceeded the minimum capital adequacy guideline percentage requirements under the Basel III Capital Rules. 3 Table of Contents Prompt Corrective Action The Federal Deposit Insurance Act requires federal banking agencies to take “prompt corrective action” with respect to depository institutions that do not meet minimum capital requirements.
As of December 31, 2024, the Bank met the requirements for being deemed “well-capitalized” for purposes of the prompt corrective action regulations. The Company General . As a bank holding company, the Company is subject to regulation and supervision by the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHCA”).
As of December 31, 2025, the Bank met the requirements for being deemed “well-capitalized” for purposes of the prompt corrective action regulations. The Company General . As a bank holding company, the Company is subject to regulation and supervision by the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHCA”).
As described above, the Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of December 31, 2024. Transactions with Affiliates . The Bank is subject to sections 23A and 23B of the Federal Reserve Act (the “Affiliates Act”), and the Federal Reserve’s implementing Regulation W.
As described above, the Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of December 31, 2025. Transactions with Affiliates . The Bank is subject to sections 23A and 23B of the Federal Reserve Act (the “Affiliates Act”), and the Federal Reserve’s implementing Regulation W.
On November 18, 2021, the federal banking agencies issued a new rule effective in 2022 that requires banks to notify their regulators within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.” 9 Table of Contents Impact of Monetary Policy The monetary policy of the Federal Reserve has a significant effect on the operating results of financial or bank holding companies and their subsidiaries.
On November 18, 2021, the federal banking agencies issued a new rule effective in 2022 that requires banks to notify their regulators within 36 hours of a “computer-security incident” that rises to the level of a “notification incident.” Impact of Monetary Policy The monetary policy of the Federal Reserve has a significant effect on the operating results of financial or bank holding companies and their subsidiaries.
The Federal Reserve and the OBD also may, under certain circumstances, prohibit the payment of dividends to us from the Bank. Oklahoma corporate law also requires that dividends can only be paid out of funds legally available therefor.
The Federal Reserve and the OBD also may, under certain circumstances, prohibit the payment of dividends to us from the Bank. Oklahoma corporate law also requires that dividends can only be paid out of funds legally available therefore.
If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors including the parent bank holding company with respect to any extensions of credit they have made to that insured depository institution. Deposit Insurance .
If an insured depository institution fails, insured and uninsured depositors, along with the FDIC, will have priority in payment ahead of unsecured, non-deposit creditors including the parent bank holding company with respect to any extensions of credit they have made to that insured depository institution. 5 Table of Contents Deposit Insurance .
Human Capital Our corporate culture is defined by core values which include integrity, accountability, professionalism, community-focus and efficiency. As of December 31, 2024, we had 124 full time employees. We value our employees by investing in competitive compensation and benefit packages and fostering a team environment centered on professional service and open communication.
Human Capital Our corporate culture is defined by core values which include integrity, accountability, professionalism, community-focus and efficiency. As of December 31, 2025, we had 125 full-time employees. We value our employees by investing in competitive compensation and benefit packages and fostering a team environment centered on professional service and open communication.
The ratings range from a high of “outstanding” to a low of “substantial noncompliance.” The Bank had a CRA rating of “satisfactory” as of its most recent CRA assessment. Anti-Money Laundering and the Office of Foreign Assets Control Regulation .
The ratings range from a high of “outstanding” to a low of “substantial noncompliance.” The Bank had a CRA rating of “satisfactory” as of its most recent CRA assessment. 7 Table of Contents Anti-Money Laundering and the Office of Foreign Assets Control Regulation .
At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, may increase or decrease the assessment rates, following notice and comment on proposed rulemaking. As a result, the Bank’s FDIC deposit insurance premiums could increase. 5 Table of Contents Examination Assessments .
At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, may increase or decrease the assessment rates, following notice and comment on proposed rulemaking. As a result, the Bank’s FDIC deposit insurance premiums could increase. Examination Assessments .
It cannot be predicted whether, or in what form, any such legislation or regulations may be enacted or the extent to which the business of the Company or the Bank would be affected thereby.
It cannot be predicted whether, or in what form, any such legislation or regulations may be enacted or the extent to which the business of the Company or the Bank would be affected thereby. 9 Table of Contents
During the year ended December 31, 2024, the Bank paid examination assessments to the OBD totaling $246,000. Capital Requirements . Banks are generally required to maintain minimum capital ratios. For a discussion of the capital requirements applicable to the Bank, see “—Regulatory Capital Requirements” above. Bank Reserves .
During the year ended December 31, 2025, the Bank paid examination assessments to the OBD totaling $214,000. Capital Requirements . Banks are generally required to maintain minimum capital ratios. For a discussion of the capital requirements applicable to the Bank, see “—Regulatory Capital Requirements” above. Bank Reserves .
The Basel III Capital Rules require the Bank and the Company to comply with four minimum capital standards: a Tier 1 leverage ratio of at least 4.0%; a CET1 to risk-weighted assets ratio of 4.5%; a Tier 1 capital to risk-weighted assets ratio of at least 6.0%; and a total capital to risk-weighted assets ratio of at least 8.0%.
The Basel III Capital Rules require the Bank and the Company to comply with four minimum capital standards: a Tier 1 leverage ratio of at least 4.0%; a Common Equity Tier 1 (“CET1”) capital to risk-weighted assets ratio of 4.5%; a Tier 1 capital to risk-weighted assets ratio of at least 6.0%; and a total capital to risk-weighted assets ratio of at least 8.0%.
OFAC publishes lists of specially designated targets and countries. Financial institutions are responsible for, among other things, blocking accounts of and transactions with such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.
Financial institutions are responsible for, among other things, blocking accounts of and transactions with such targets and countries, prohibiting unlicensed trade and financial transactions with them and reporting blocked transactions after their occurrence.
Regulatory Capital Requirements The federal banking agencies require that banking organizations meet several risk-based capital adequacy requirements. The current risk-based capital standards applicable to the Company and the Bank are based on the Basel III Capital Rules established by the Basel Committee on Banking Supervision (the “Basel Committee”).
Regulatory Capital Requirements The federal banking agencies require that banking organizations meet several risk-based capital adequacy requirements. The current risk-based capital standards applicable to Bank7 Corp. (the “Company”) and Bank7 (the “Bank”) are based on the Basel III Capital Rules established by the Basel Committee on Banking Supervision (the “Basel Committee”).
The Bank’s legal lending limit to any one borrower was $68.2 million as of December 31, 2024. 6 Table of Contents Safety and Soundness Standards/Risk Management . The federal banking agencies have adopted guidelines establishing operational and managerial standards to promote the safety and soundness of federally insured depository institutions.
The Bank’s legal lending limit to any one borrower was $78.4 million as of December 31, 2025. Safety and Soundness Standards/Risk Management . The federal banking agencies have adopted guidelines establishing operational and managerial standards to promote the safety and soundness of federally insured depository institutions.
We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed banking solutions. As of December 31, 2024, we had total assets of $1.74 billion, total loans of $1.40 billion, total deposits of $1.52 billion and total shareholders’ equity of $213.2 million. Our website is: www.bank7.com.
We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed banking solutions. As of December 31, 2025, we had total assets of $1.96 billion, total loans of $1.61 billion, total deposits of $1.70 billion and total shareholders’ equity of $251.0 million. Our website is: www.bank7.com.
Failure of a financial institution to maintain and implement adequate AML and OFAC programs, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required. 7 Table of Contents Consumer Financial Services We are subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers.
Failure of a financial institution to maintain and implement adequate AML and OFAC programs, or to comply with all of the relevant laws or regulations, could have serious legal and reputational consequences for the institution, including causing applicable bank regulatory authorities not to approve merger or acquisition transactions when regulatory approval is required or to prohibit such transactions even if approval is not required.
Federal Reserve policies also forbid the payment by bank subsidiaries of management fees which are unreasonable in amount or exceed the fair market value of the services rendered or, if no market exists, actual costs plus a reasonable profit. Loans to Directors, Executive Officers and Principal Shareholders .
Federal Reserve policies also forbid the payment by bank subsidiaries of management fees which are unreasonable in amount or exceed the fair market value of the services rendered or, if no market exists, actual costs plus a reasonable profit. 6 Table of Contents Transactions with Related Parties .
Regulatory authorities routinely examine financial institutions for compliance with these obligations and have imposed cease and desist orders and civil money penalties against institutions found to be in violation of these obligations. Likewise, OFAC administers and enforces economic and trade sanctions against targeted foreign countries and regimes under authority of various laws, including designated foreign countries, nationals and others.
Regulatory authorities routinely examine financial institutions for compliance with these obligations and have imposed cease and desist orders and civil money penalties against institutions found to be in violation of these obligations.
Furthermore, the Bank must periodically report all loans made to directors and other insiders to the bank regulators. As of December 31, 2024, the Bank had no outstanding loans to insiders. Limits on Loans to One Borrower . As an Oklahoma state-chartered bank, the Bank is subject to limits on the amount of loans it can make to one borrower.
Limits on Loans to One Borrower . As an Oklahoma state-chartered bank, the Bank is subject to limits on the amount of loans it can make to one borrower.
Added
At December 31, 2025 and 2024, the Company had loans outstanding to these related parties in the amount of $10.45 million and $10.85 million, respectively. Additionally, the Company holds deposits from related parties, including directors, executive officers, and their related interests. At December 31, 2025 and 2024, these related party deposits totaled $66.62 million and $70.12 million, respectively.
Added
These deposit balances represented 26.55% and 32.89% of total stockholders’ equity at December 31, 2025 and 2024, respectively.
Added
All such loans and deposits were made in the ordinary course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with persons not affiliated with the Company or the Bank and did not involve more than the normal risk of collectability or present other unfavorable features.
Added
Likewise, Office of Foreign Asset Control (“OFAC”) administers and enforces economic and trade sanctions against targeted foreign countries and regimes under authority of various laws, including designated foreign countries, nationals and others. OFAC publishes lists of specially designated targets and countries.
Added
Consumer Financial Services We are subject to a number of federal and state consumer protection laws that extensively govern our relationship with our customers.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

40 edited+12 added−5 removed103 unchanged
Biggest changeSpecifically, we receive core systems processing, essential web hosting and other internet systems, loan and deposit processing and other processing services from third-party service providers. If these third-party service providers experience financial, operational or technological difficulties or terminate their services and we are unable to replace them with other service providers, our operations could be interrupted.
Biggest changeIf these third-party service providers experience financial, operational or technological difficulties or terminate their services and we are unable to replace them with other service providers, our operations could be interrupted. If an interruption were to continue for a significant period of time, our business, financial condition and results of operations could be materially adversely affected.
If real estate values decline, it is also more likely that we would be required to increase our allowance, which could adversely affect our business, financial condition and results of operations. 11 Table of Contents Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans.
If real estate values decline, it is also more likely that we would be required to increase our allowance, which could adversely affect our business, financial condition and results of operations. Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans.
As of December 31, 2024, the substantial majority of the loans in our loan portfolio were made to borrowers who live and/or conduct business in our markets and the substantial majority of our secured loans were secured by collateral located in our markets.
As of December 31, 2025, the substantial majority of the loans in our loan portfolio were made to borrowers who live and/or conduct business in our markets and the substantial majority of our secured loans were secured by collateral located in our markets.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities.
The effects of such policies upon our business, financial condition and results of operations cannot be predicted. 16 Table of Contents Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities.
Risks Relating to Our Business and Market Our business is concentrated in, and largely dependent upon, the continued growth and welfare of our markets, and adverse economic conditions in these markets could negatively impact our operations and customers. Our business is primarily affected by the economies of Oklahoma, Texas and to a smaller degree the State of Kansas.
Our business is concentrated in, and largely dependent upon, the continued growth and welfare of our markets, and adverse economic conditions in these markets could negatively impact our operations and customers. Our business is primarily affected by the economies of Oklahoma, Texas and to a smaller degree the state of Kansas.
The sale of these shares could impair our ability to raise capital through the sale of additional equity securities. We are controlled by insiders, whose interests may not coincide with our other shareholders. As of December 31, 2024, the Haines Family Trusts, management, and the board of directors control approximately 55.8% of our common stock.
The sale of these shares could impair our ability to raise capital through the sale of additional equity securities. We are controlled by insiders, whose interests may not coincide with our other shareholders. As of December 31, 2025, the Haines Family Trusts, management, and the board of directors control approximately 55.4% of our common stock.
If we increase interest rates paid to retain deposits, our earnings may be adversely affected. Liquidity risk could impair our ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition. Liquidity is essential to our business.
If we increase interest rates paid to retain deposits, our earnings may be adversely affected. 13 Table of Contents Liquidity risk could impair our ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition. Liquidity is essential to our business.
As of December 31, 2024, approximately 40.3% of our gross loans were maturing within one year, compared to approximately 40.0% of our gross loans that were maturing within one year as of December 31, 2023. As a result, we will either need to renew or replace these loans during the course of the year.
As of December 31, 2025, approximately 37% of our gross loans were maturing within one year, compared to approximately 40.3% of our gross loans that were maturing within one year as of December 31, 2024. As a result, we will either need to renew or replace these loans during the course of the year.
We may be exposed to risk of environmental liabilities with respect to properties to which we take title. In the course of our business, we may foreclose and take title to real estate, and we could be subject to environmental liabilities with respect to these properties.
In the course of our business, we may foreclose and take title to real estate, and we could be subject to environmental liabilities with respect to these properties.
As of December 31, 2024, we had $39 million in unfunded commitments to borrowers in the oil and gas industry. 10 Table of Contents We have credit exposure to the hospitality industry. The Company has loan exposure to the hospitality industry, primarily through loans made to construct or finance the operation of hotels.
As of December 31, 2025, we had $72.4 million in unfunded commitments to borrowers in the oil and gas industry. 10 Table of Contents We have credit exposure to the hospitality industry. The Company has loan exposure to the hospitality industry, primarily through loans made to construct or finance the operation of hotels.
Our largest deposit relationships currently make up a material percentage of our deposits and the withdrawal of deposits by our largest depositors could force us to fund our business through more expensive and less stable sources. At December 31, 2024, our 20 largest deposit relationships accounted for 29.3% of our total deposits.
Our largest deposit relationships currently make up a material percentage of our deposits and the withdrawal of deposits by our largest depositors could force us to fund our business through more expensive and less stable sources. At December 31, 2025, our 20 largest deposit relationships accounted for 28.5% of our total deposits.
As of December 31, 2024, we had approximately $1.38 billion of commercial purpose loans, which include general commercial, energy, agricultural, and CRE loans, representing approximately 99.0% of our gross loan portfolio. Commercial purpose loans are often larger and involve greater risks than other types of lending.
As of December 31, 2025, we had approximately $1.60 billion of commercial purpose loans, which include general commercial, energy, agricultural, and CRE loans, representing approximately 99.2% of our gross loan portfolio. Commercial purpose loans are often larger and involve greater risks than other types of lending.
In addition, as of December 31, 2024 approximately 55.8% of our outstanding common stock is beneficially owned by our principal shareholders, executive officers and directors.
In addition, as of December 31, 2025, approximately 55.4% of our outstanding common stock is beneficially owned by our principal shareholders, executive officers and directors.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations. 15 Table of Contents A natural disaster affecting our market areas could adversely affect the Company’s financial condition and results of operations.
As of December 31, 2024, our energy loans, which include loans to exploration and production companies, midstream companies, purchasers of mineral and royalty interests and service providers totaled $133.3 million, or 9.5% of total loans, as compared to $190.6 million, or 14.0% of total loans as of December 31, 2023.
As of December 31, 2025, our energy loans, which include loans to exploration and production companies, midstream companies, purchasers of mineral and royalty interests and service providers totaled $156.8 million, or 9.7% of total loans, as compared to $133.3 million, or 9.5% of total loans as of December 31, 2024.
At December 31, 2024, this exposure was approximately $259.1 million, or 18.5%, of the total loan portfolio, along with an additional $2.9 million in unfunded debt, as compared to $298.5 million, or 21.9%, of the total loan portfolio, along with an additional $5.7 million in unfunded debt as of December 31, 2023.
At December 31, 2025, this exposure was approximately $310.6 million, or 19.3%, of the total loan portfolio, along with an additional $17.8 million in unfunded debt, as compared to $259.1 million, or 18.5%, of the total loan portfolio, along with an additional $2.9 million in unfunded debt as of December 31, 2024.
A natural disaster affecting our market areas could adversely affect the Company’s financial condition and results of operations. Our business is concentrated in Oklahoma, the Dallas/Ft. Worth and to a lesser extent Kansas. Almost all of our credit exposure is in that area. This geographic region has been subject to tornadoes and severe hail storms with occasional flooding.
Our business is concentrated in Oklahoma, the Dallas/Ft. Worth and to a lesser extent Kansas. Almost all of our credit exposure is in that area. This geographic region has been subject to tornadoes and severe hail storms with occasional flooding.
Our largest loan relationships make up a material percentage of our total loan portfolio . As of December 31, 2024, our 20 largest borrowing relationships ranged from approximately $16.8 million to $45.1 million (including unfunded commitments) and totaled approximately $552.1 million in total commitments (representing, in the aggregate, 32.8% of our total outstanding commitments as of December 31, 2024).
Our largest loan relationships make up a material percentage of our total loan portfolio . As of December 31, 2025, our 20 largest borrowing relationships ranged from approximately $21.9 million to $56.9 million (including unfunded commitments) and totaled approximately $659.9 million in total commitments (representing, in the aggregate, 33.8% of our total outstanding commitments as of December 31, 2025).
Our profitability depends on interest rates generally, and we may be adversely affected by changes in market interest rates. Our profitability depends in substantial part on our net interest income. Net interest income is the difference between the amounts received by us on our interest-earning assets and the interest paid by us on our interest-bearing liabilities.
Our profitability depends in substantial part on our net interest income. Net interest income is the difference between the amounts received by us on our interest-earning assets and the interest paid by us on our interest-bearing liabilities.
Based on our experience, we believe that our savings, money market and non-interest-bearing accounts are relatively stable sources of funds. Historically, a majority of non-brokered certificates of deposit are renewed upon maturity as long as we pay competitive interest rates. Many of these customers are, however, interest-rate conscious and may be willing to move funds into higher-yielding investment alternatives.
Historically, a majority of non-brokered certificates of deposit are renewed upon maturity as long as we pay competitive interest rates. Many of these customers are, however, interest-rate conscious and may be willing to move funds into higher-yielding investment alternatives.
These events may obstruct our ability to provide services and process transactions. While we believe we are in compliance with all applicable privacy and data security laws, an incident could put our customer confidential information at risk.
While we believe we are in compliance with all applicable privacy and data security laws, an incident could put our customer confidential information at risk.
As of December 31, 2024, our Regulatory CRE represented 254.04% of our total Bank capital and our construction, land development and other land loans represented 74.82% of our total Bank capital, as compared to 290.69% and 73.97% as of December 31, 2023, respectively. During the prior 36-month period, our Regulatory CRE has decreased 48.43%.
As of December 31, 2025, our Regulatory CRE represented 261.89% of our total Bank capital and our construction, land development and other land loans represented 85.91% of our total Bank capital, as compared to 254.04% and 74.82% as of December 31, 2024, respectively. During the prior 36-month period, our Regulatory CRE has decreased 42.83%.
The composition of our rate-sensitive assets or liabilities is subject to change and could result in a more unbalanced position that would cause market rate changes to have a greater impact on our earnings.
The composition of our rate-sensitive assets or liabilities is subject to change and could result in a more unbalanced position that would cause market rate changes to have a greater impact on our earnings. Fluctuations in market rates and other market disruptions are neither predictable nor controllable and may adversely affect our financial condition and earnings.
This could result in a significant decline in the size of our loan portfolio. 12 Table of Contents Our allowance for Credit losses may not be adequate to cover our actual credit losses, which could adversely affect our earnings.
This could result in a significant decline in the size of our loan portfolio. Our allowance for credit losses may not be adequate to cover our actual credit losses, which could adversely affect our earnings. We maintain an allowance for credit losses in an amount that we believe is appropriate to provide for losses inherent in the portfolio.
Negative developments in the financial industry and the impact of new legislation and regulation in response to those developments could negatively impact our business operations and adversely impact our financial performance. 16 Table of Contents Monetary policy and other economic factors could affect our profitability adversely.
Furthermore, government policy and regulation, particularly as implemented through the Federal Reserve, significantly affect credit conditions. Negative developments in the financial industry and the impact of new legislation and regulation in response to those developments could negatively impact our business operations and adversely impact our financial performance. Monetary policy and other economic factors could affect our profitability adversely.
An increase in nonperforming loans could result in a loss of earnings from these loans, an increase in the allowance for credit losses, or an increase in loan charge-offs, which could have an adverse impact on our results of operations and financial condition.
An increase in nonperforming loans could result in a loss of earnings from these loans, an increase in the allowance for credit losses, or an increase in loan charge-offs, which could have an adverse impact on our results of operations and financial condition. 12 Table of Contents Our profitability depends on interest rates generally, and we may be adversely affected by changes in market interest rates.
Because payments on these loans are often dependent on the successful operation or development of the property or business involved, their repayment is more sensitive than other types of loans to adverse conditions in the real estate market or the general economy.
Because payments on these loans are often dependent on the successful operation or development of the property or business involved, their repayment is more sensitive than other types of loans to adverse conditions in the real estate market or the general economy. 11 Table of Contents Accordingly, a downturn in the real estate market or the general economy could heighten our risk related to commercial purpose loans, particularly energy and CRE loans.
Bureau of Labor Statistics reported that the 12-month percent change in the Consumer Price Index for All Urban Consumers (not seasonally adjusted) for all items was 2.9% for December 2023 to December 2024, 3.4% for December 2022 to December 2023, 6.5% for December 2021 to December 2022, 7.0% for December 2020 to December 2021, 1.4% for December 2019 to December 2020, and 2.3% for December 2018 to December 2019.
Bureau of Labor Statistics reported that the 12-month percent change in the Consumer Price Index for All Urban Consumers (not seasonally adjusted) was 2.7% for the period ended December 31, 2025, compared to 2.9% and 3.4% for the years ended December 31, 2024 and 2023, respectively.
Inflationary pressures have begun to moderate during 2024, and current economic forecasts suggest a further easing in 2025. Small to medium -sized businesses may be impacted more during periods of high inflation as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses.
Small to medium -sized businesses may be impacted more during periods of high inflation as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses.
Furthermore, our customers could incorrectly blame us and terminate their account with us for a cyber-incident which occurred on their own system or with that of an unrelated third party. In addition, a security breach could also subject us to additional regulatory scrutiny and expose us to civil litigation and possible financial liability.
Furthermore, our customers could incorrectly blame us and terminate their account with us for a cyber-incident which occurred on their own system or with that of an unrelated third party.
Third-party or internal systems and networks may fail to operate properly or become disabled due to deliberate attacks or unintentional events. Our operations are vulnerable to disruptions from human error, natural disasters, power loss, computer viruses, spam attacks, denial of service attacks, unauthorized access and other unforeseen events. Undiscovered data corruption could render our customer information inaccurate.
Our operations are vulnerable to disruptions from human error, natural disasters, power loss, computer viruses, spam attacks, denial of service attacks, unauthorized access and other unforeseen events. Undiscovered data corruption could render our customer information inaccurate. These events may obstruct our ability to provide services and process transactions.
Thus, an increase in the amount of nonaccrual loans would have an adverse impact on net interest income. Rising interest rates in prior periods have increased interest expense, which in turn has adversely affected net interest income, and may do so in the future if the Federal Reserve raises rates as anticipated.
Thus, an increase in the amount of nonaccrual loans would have an adverse impact on net interest income. Elevated interest rates in prior periods increased interest expense, which in turn adversely affected net interest income throughout 2025.
If an interruption were to continue for a significant period of time, our business, financial condition and results of operations could be materially adversely affected. Even if we are able to replace our service providers, it may be at a higher cost to us, which could adversely affect our business, financial condition and results of operations.
Even if we are able to replace our service providers, it may be at a higher cost to us, which could adversely affect our business, financial condition and results of operations. We may be exposed to risk of environmental liabilities with respect to properties to which we take title.
Any substantial, unexpected or prolonged change in the level or cost of liquidity could have a material adverse effect on our financial condition and results of operations, and could impair our ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition. 14 Table of Contents We are exposed to cybersecurity risks associated with our internet-based systems and online commerce security, including “hacking” and “identify theft.” We conduct a portion of our business over the internet.
Any substantial, unexpected or prolonged change in the level or cost of liquidity could have a material adverse effect on our financial condition and results of operations, and could impair our ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition.
As is the case with all financial institutions, the profitability of the Bank is subject to the fluctuating cost and availability of money, changes in interest rates and in economic conditions in general. In addition, various federal and state statutes limit the amount of dividends that the Bank may pay to the Company without regulatory approval. 18 Table of Contents
As is the case with all financial institutions, the profitability of the Bank is subject to the fluctuating cost and availability of money, changes in interest rates and in economic conditions in general.
Our operations could be interrupted if our third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations. We depend to a significant extent on a number of relationships with third-party service providers.
In addition, a security breach could also subject us to additional regulatory scrutiny and expose us to civil litigation and possible financial liability. 14 Table of Contents Our operations could be interrupted if our third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations.
We rely heavily upon data processing, including loan servicing and deposit processing, software, communications and information systems from a number of third parties to conduct our business. As a bank, we are more likely to be targeted by cyber-attacks in an effort to unlawfully access customer funds or customer personally identifiable information.
As a bank, we are more likely to be targeted by cyber-attacks in an effort to unlawfully access customer funds or customer personally identifiable information. Third-party or internal systems and networks may fail to operate properly or become disabled due to deliberate attacks or unintentional events.
In a rising interest rate environment, competition for cost-effective deposits increases, making it more costly to fund loan growth. In addition, a rising rate environment could cause mortgage and mortgage warehouse lending volumes to substantially decline. Any rapid and unexpected volatility in interest rates creates uncertainty and potential for unexpected material adverse effects.
In addition, the interest rate environment has contributed to a decline in overall mortgage-related lending volumes. Any rapid and unexpected volatility in interest rates, or uncertainty regarding the pace of future monetary easing, creates potential for unexpected material adverse effects.
If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity and results of operations could be materially and adversely affected. 15 Table of Contents Inflationary pressures and rising prices may affect our results of operations and financial condition. Inflation reached a near 40-year high in late 2021 and persisted at elevated levels during 2022 and 2023.
If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity and results of operations could be materially and adversely affected. Inflationary pressures and rising prices may affect our results of operations and financial condition. While inflationary pressures have moderated from recent peaks, they remained “sticky” and slightly above the Federal Reserve’s target throughout 2025. The U.S.
As of December 31, 2024, approximately $1.28 billion, or 84.2%, of our deposits consisted of demand, savings, money market and negotiable order of withdrawal, or NOW, accounts. Approximately $239.2 million of the remaining balance of deposits consists of certificates of deposit, of which approximately $231.7 million, or 96.9% of remaining deposits, was due to mature within one year.
Approximately $243.5 million of the remaining balance of deposits consists of certificates of deposit, of which approximately $219.2 million, or 90.0% of remaining deposits, was due to mature within one year. Based on our experience, we believe that our savings, money market and non-interest-bearing accounts are relatively stable sources of funds.
Removed
Accordingly, a downturn in the real estate market or the general economy could heighten our risk related to commercial purpose loans, particularly energy and CRE loans.
Added
Risks Relating to Our Business and Market We have identified a material weakness in our internal control over financial reporting, which could, if not remediated, result in material misstatements of our financial statements and adversely affect our stock price. Our management is responsible for establishing and maintaining effective internal control over financial reporting.
Removed
We maintain an allowance for credit losses in an amount that we believe is appropriate to provide for losses inherent in the portfolio.
Added
As disclosed in Item 9A of this Annual Report on Form 10-K, management concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective and we did not maintain effective internal control over financial reporting due to the material weaknesses identified in Item 9A of this Annual Report.
Removed
Fluctuations in market rates and other market disruptions are neither predictable nor controllable and may adversely affect our financial condition and earnings. 13 Table of Contents We rely on short-term funding, which can be adversely affected by local and general economic conditions.
Added
The material weaknesses (more fully described in Item 9A of this Annual Report) relate to the failure to maintain effectively designed internal control over financial reporting in the following areas: • Deposit operations; • Related party transactions; • Reconciliations; • Financial statement disclosures; • Segregation of duties; • Completeness and Accuracy of Information produced by the Company; • Information technology general controls; and • Control activities component of internal control.
Removed
While inflationary pressures have begun to moderate, their effects continued into 2024. The U.S.
Added
While we have not identified any material misstatements in our financial statements for the period ended December 31, 2025 as a result of these material weaknesses, these weaknesses create a reasonable possibility that a future material misstatement would not be prevented or detected.
Removed
Furthermore, government policy and regulation, particularly as implemented through the Federal Reserve, significantly affect credit conditions.
Added
We are taking specific steps to remediate these material weaknesses, including enhancements to policies, procedures, oversight activities, and information technology controls supporting financial reporting There can be no assurance as to when the remediation will be completed or that it will be determined to be effective.
Added
If we are unsuccessful in remediating these material weaknesses, or if we identify additional material weaknesses, we may be unable to report our financial results accurately and timely, which could result in a negative impact on our financial condition, results of operations or cash flow, restrict our ability to access the capital markets, require significant resources to correct, result in a loss of investor confidence and/or a decline in our stock price, and subject us to fines, potential litigation or regulatory action.
Added
While the Federal Reserve commenced a series of rate reductions in the latter half of 2025, the interest rate environment remains high relative to historical averages, which may continue to impact net interest income if funding costs remain elevated. In this environment, competition for cost-effective deposits remains intense, making it more costly to fund loan growth.
Added
We rely on short-term funding, which can be adversely affected by local and general economic conditions. As of December 31, 2025, approximately $1.46 billion, or 85.7%, of our deposits consisted of demand, savings, money market and negotiable order of withdrawal, or NOW, accounts.
Added
We are exposed to cybersecurity risks associated with our internet-based systems and online commerce security, including “hacking” and “identify theft.” We conduct a portion of our business over the internet. We rely heavily upon data processing, including loan servicing and deposit processing, software, communications and information systems from a number of third parties to conduct our business.
Added
We depend to a significant extent on a number of relationships with third-party service providers. Specifically, we receive core systems processing, essential web hosting and other internet systems, loan and deposit processing and other processing services from third-party service providers.
Added
Although inflation has eased, persistent costs in key categories such as shelter and services continued to impact the economic environment in 2025. Current economic forecasts suggest a gradual descent toward the Federal Reserve’s target in 2026, though uncertainty remains regarding the pace of future easing and its potential impact on our funding costs and borrower health.
Added
In addition, various federal and state statutes limit the amount of dividends that the Bank may pay to the Company without regulatory approval. 18 Table of Contents Item 1B. Unresolved Staff Comments Not applicable.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

1 edited+0 added−0 removed10 unchanged
Biggest changeRisk Factors. We are exposed to cybersecurity risks associated with our internet-based systems and online commerce security, including ‘hacking’ and ‘identify theft.’” Governance Our cybersecurity function is overseen by our COO/ IT Manager who has over 9 years’ experience managing such functions.
Biggest changeRisk Factors. We are exposed to cybersecurity risks associated with our internet-based systems and online commerce security, including ‘hacking’ and ‘identify theft.’” Governance Our cybersecurity function is overseen by our COO/ IT Manager who has over 10 years’ experience managing such functions.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 4. Mine Safety Disclosures 20 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Item 6. [Reserved] 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 42
Biggest changeItem 4. Mine Safety Disclosures 20 PART II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 20 Item 6. [Reserved] 20 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 23 Item 7A. Quantitative and Qualitative Disclosures about Market Risk 41

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed1 unchanged
Biggest changeWe paid quarterly dividends of $0.21 per share with respect to each of the first two quarters of 2024, increasing to $0.24 per share for the third and fourth quarters. We currently expect to continue quarterly dividends of $0.24 per share in the future.
Biggest changeWe paid quarterly dividends of $0.24 per share with respect to each of the first two quarters of 2025, increasing to $0.27 per share for the third and fourth quarters. We currently expect to continue quarterly dividends of $0.27 per share in the future.
Set forth below is information as of December 31, 2024 regarding securities authorized for issuance under the equity compensation plans. The plan that has been approved by the shareholders is the Bank7 Corp. 2018 Equity Incentive Plan.
Set forth below is information as of December 31, 2025 regarding securities authorized for issuance under the equity compensation plans. The plan that has been approved by the shareholders is the Bank7 Corp. 2018 Equity Incentive Plan.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on The NASDAQ Global Select Market under the symbol “BSVN”. The approximate number of holders of record of the Company’s common stock as of March 12, 2025 was 5.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Our common stock is traded on The NASDAQ Global Select Market under the symbol “BSVN”. The approximate number of holders of record of the Company’s common stock as of March 16, 2026 was 5.
Plan Number of securities to be issued upon exercise of outstanding options and rights Weighted average exercise price Number of securities remaining available for issuance under plan Equity compensation plans approved by shareholders 311,927 $ 16.79 636,430 Equity compensation plans not approved by shareholders - - -
Plan Number of securities to be issued upon exercise of outstanding options and rights Weighted average exercise price Number of securities remaining available for issuance under plan Equity compensation plans approved by shareholders 317,046 $ 16.96 623,504 Equity compensation plans not approved by shareholders - - -

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

53 edited+11 added−28 removed56 unchanged
Biggest changeRisk Factors. 28 Table of Contents The following tables show the contractual maturities of our gross loans as of the periods below: As of December 31, 2024 Due after One Year Due after Five Years Due in One Year or Less Through Five Years Through Fifteen Years Due after Fifteen Years Fixed Adjustable Fixed Adjustable Fixed Adjustable Fixed Adjustable Total Rate Rate Rate Rate Rate Rate Rate Rate (Dollars in thousands) Construction & development $ 9,378 $ 76,709 $ 2,050 $ 78,786 $ - $ 564 $ 198 $ - $ 167,685 1-4 family real estate 15,426 20,085 43,558 31,566 964 4,826 4,622 - 121,047 Commercial real estate - other 47,737 61,482 103,484 271,156 153 18,303 8,989 - 511,304 Total commercial real estate 72,541 158,276 149,092 381,508 1,117 23,693 13,809 - 800,036 Commercial & industrial 36,062 263,026 13,639 175,729 8,232 9,738 597 - 507,023 Agricultural 22,768 8,991 16,581 26,677 - 1,054 1,851 - 77,922 Consumer 1,661 4 5,641 170 602 3,570 2,664 - 14,312 Gross loans $ 133,032 $ 430,297 $ 184,953 $ 584,084 $ 9,951 $ 38,055 $ 18,921 $ - $ 1,399,293 As of December 31, 2023 Due after One Year Due after Five Years Due in One Year or Less Through Five Years Through Fifteen Years Due after Fifteen Years Fixed Adjustable Fixed Adjustable Fixed Adjustable Fixed Adjustable Total Rate Rate Rate Rate Rate Rate Rate Rate (Dollars in thousands) Construction & development $ 11,431 $ 70,040 $ 8,970 $ 44,935 $ - $ 1,438 $ 392 $ - $ 137,206 1-4 family real estate 13,628 13,015 41,602 21,451 26 5,443 5,411 - 100,576 Commercial real estate - other 50,251 65,120 152,250 219,260 129 21,283 10,329 - 518,622 Total commerical real estate 75,310 148,175 202,822 285,646 155 28,164 16,132 - 756,404 Commercial & industrial 20,389 263,564 41,520 186,776 3,276 10,041 619 - 526,185 Agricultural 13,250 22,615 13,935 13,032 - 810 2,853 - 66,495 Consumer 2,170 14 5,490 121 595 3,604 2,523 - 14,517 Gross loans $ 111,119 $ 434,368 $ 263,767 $ 485,575 $ 4,026 $ 42,619 $ 22,127 $ - $ 1,363,601 As of December 31, 2022 Due after One Year Due after Five Years Due in One Year or Less Through Five Years Through Fifteen Years Due after Fifteen Years Fixed Adjustable Fixed Adjustable Fixed Adjustable Fixed Adjustable Total Rate Rate Rate Rate Rate Rate Rate Rate (Dollars in thousands) Construction & development $ 11,749 $ 81,002 $ 7,556 $ 57,439 $ - $ 1,160 $ - $ 4,297 $ 163,203 1-4 family real estate 10,550 12,664 24,741 15,782 314 6,606 - 6,271 76,928 Commercial real estate - other 2,680 59,870 131,105 207,819 6,635 17,146 - 13,746 439,001 Total real estate 24,979 153,536 163,402 281,040 6,949 24,912 - 24,314 679,132 Commercial & industrial 43,823 234,573 60,275 159,571 3,745 10,390 - 634 513,011 Agricultural 1,798 17,514 8,767 33,270 469 980 140 3,207 66,145 Consumer 1,683 22 6,310 156 587 2,860 82 3,249 14,949 Gross loans $ 72,283 $ 405,645 $ 238,754 $ 474,037 $ 11,750 $ 39,142 $ 222 $ 31,404 $ 1,273,237 29 Table of Contents Allowance for Credit Losses The allowance is based on management’s estimate of probable losses in the loan portfolio.
Biggest changeRisk Factors. 28 Table of Contents The following tables show the contractual maturities of our gross loans as of the periods below: As of December 31, 2025 Due after One Year Due after Five Years Due in One Year or Less Through Five Years Through Fifteen Years Due after Fifteen Years Fixed Adjustable Fixed Adjustable Fixed Adjustable Fixed Adjustable Total Rate Rate Rate Rate Rate Rate Rate Rate (Dollars in thousands) Construction & development $ 638 $ 116,658 $ 10,497 $ 95,444 $ - $ 399 $ 930 $ - $ 224,566 1-4 family real estate 7,281 21,031 32,503 56,599 775 5,533 2,400 - 126,122 Commercial real estate - other 22,817 41,301 66,266 412,436 139 38,515 6,123 - 587,597 Total commercial real estate 30,736 178,990 109,266 564,479 914 44,447 9,453 - 938,285 Commercial & industrial 47,266 293,406 14,097 173,586 107 38,246 572 - 567,280 Agricultural 31,633 10,926 6,560 37,162 - 3,253 1,374 - 90,908 Consumer 1,747 2 4,866 258 806 3,714 1,501 - 12,894 Gross loans $ 111,382 $ 483,324 $ 134,789 $ 775,485 $ 1,827 $ 89,660 $ 12,900 $ - $ 1,609,367 As of December 31, 2024 Due after One Year Due after Five Years Due in One Year or Less Through Five Years Through Fifteen Years Due after Fifteen Years Fixed Adjustable Fixed Adjustable Fixed Adjustable Fixed Adjustable Total Rate Rate Rate Rate Rate Rate Rate Rate (Dollars in thousands) Construction & development $ 9,378 $ 76,709 $ 2,050 $ 78,786 $ - $ 564 $ 198 $ - $ 167,685 1-4 family real estate 15,426 20,085 43,558 31,566 964 4,826 4,622 - 121,047 Commercial real estate - other 47,737 61,482 103,484 271,156 153 18,303 8,989 - 511,304 Total commercial real estate 72,541 158,276 149,092 381,508 1,117 23,693 13,809 - 800,036 Commercial & industrial 36,062 263,026 13,639 175,729 8,232 9,738 597 - 507,023 Agricultural 22,768 8,991 16,581 26,677 - 1,054 1,851 - 77,922 Consumer 1,661 4 5,641 170 602 3,570 2,664 - 14,312 Gross loans $ 133,032 $ 430,297 $ 184,953 $ 584,084 $ 9,951 $ 38,055 $ 18,921 $ - $ 1,399,293 As of December 31, 2023 Due after One Year Due after Five Years Due in One Year or Less Through Five Years Through Fifteen Years Due after Fifteen Years Fixed Adjustable Fixed Adjustable Fixed Adjustable Fixed Adjustable Total Rate Rate Rate Rate Rate Rate Rate Rate (Dollars in thousands) Construction & development $ 11,431 $ 70,040 $ 8,970 $ 44,935 $ - $ 1,438 $ 392 $ - $ 137,206 1-4 family real estate 13,628 13,015 41,602 21,451 26 5,443 5,411 - 100,576 Commercial real estate - other 50,251 65,120 152,250 219,260 129 21,283 10,329 - 518,622 Total real estate 75,310 148,175 202,822 285,646 155 28,164 16,132 - 756,404 Commercial & industrial 20,389 263,564 41,520 186,776 3,276 10,041 619 - 526,185 Agricultural 13,250 22,615 13,935 13,032 - 810 2,853 - 66,495 Consumer 2,170 14 5,490 121 595 3,604 2,523 - 14,517 Gross loans $ 111,119 $ 434,368 $ 263,767 $ 485,575 $ 4,026 $ 42,619 $ 22,127 $ - $ 1,363,601 29 Table of Contents Allowance for Credit Losses The allowance is based on management’s estimate of probable losses in the loan portfolio.
Noninterest Expense Noninterest expense for the year ended December 31, 2024 was $37.1 million compared to $33.4 million for the year ended December 31, 2023, an increase of $3.7 million or 11.0%.
Noninterest expense for the year ended December 31, 2024 was $37.1 million compared to $33.4 million for the year ended December 31, 2023, an increase of $3.7 million or 11.0%.
There have been no conditions or events since December 31, 2024 that management believes would change this classification. 37 Table of Contents The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Bank’s capital ratios as of December 31, 2024, 2023, and 2022.
There have been no conditions or events since December 31, 2025 that management believes would change this classification. 37 Table of Contents The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Bank’s capital ratios as of December 31, 2025, 2024, and 2023.
In addition to the segment evaluations, impaired loans with a balance of $250,000 or more are individually evaluated based on facts and circumstances of the loan to determine if a specific allowance amount may be necessary.
In addition to the segment evaluations, substandard loans with a balance of $250,000 or more are individually evaluated based on facts and circumstances of the loan to determine if a specific allowance amount may be necessary.
See Note (6) of the financial statements for further disclosure and discussion. 23 Table of Contents Results of Operations Years Ended December 31, 2024, December 31, 2023, and December 31, 2022 Net Interest Income and Net Interest Margin The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets, and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities, and the resultant average rates; (iii) net interest income; and (iv) the net interest margin.
See Note 5 of the financial statements for further disclosure and discussion. 23 Table of Contents Results of Operations Years Ended December 31, 2025, December 31, 2024, and December 31, 2023 Net Interest Income and Net Interest Margin The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets, and the resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities, and the resultant average rates; (iii) net interest income; and (iv) the net interest margin.
As of December 31, 2024, we had no unsecured fed funds lines with correspondent depository institutions with no amounts advanced.
As of December 31, 2025, we had no unsecured fed funds lines with correspondent depository institutions with no amounts advanced.
Net interest margin for the years ended December 31, 2024, 2023 and 2022 was 5.11%, 4.97% and 4.82%, respectively. The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown.
Net interest margin for the years ended December 31, 2025, 2024 and 2023 was 4.94%, 5.11% and 4.97%, respectively. The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown.
As of December 31, 2024, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework.
As of December 31, 2025, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework.
The quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition. As of December 31, 2024, 2023, and 2022, our gross loans were $1.40 billion, $1.36 billion and $1.27 billion, respectively.
The quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition. As of December 31, 2025, 2024, and 2023, our gross loans were $1.61 billion, $1.40 billion and $1.36 billion, respectively.
Adjustments to the segment-level or portfolio-level expected credit loss estimates may be necessary when specific loan characteristics warrant a different loss expectation than indicated by the segment risk factors.
Adjustments to the segment-level or portfolio-level expected credit loss estimates may be necessary when specific loan characteristics warrant a different loss expectation than indicated by the segment risk factors. 40 Table of Contents
In addition, based on the values of loans pledged as collateral, we had borrowing availability with the FHLB of $190.9 million as of December 31, 2024 and $159.2 million as of December 31, 2023, and we had access to approximately $336.1 million in liquidity with the Federal Reserve Bank as of December 31, 2024 and $0 as of December 31, 2023. 36 Table of Contents Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal and state banking regulators.
In addition, based on the values of loans pledged as collateral, we had borrowing availability with the FHLB of $213.8 million as of December 31, 2025 and $190.9 million as of December 31, 2024, and we had access to approximately $288.6 million in liquidity with the Federal Reserve Bank as of December 31, 2025 and $336.1 million as of December 31, 2024. 36 Table of Contents Capital Requirements The Bank is subject to various regulatory capital requirements administered by the federal and state banking regulators.
Nonperforming assets consist of nonperforming loans plus OREO. Loans accounted for on a nonaccrual basis were $7.2 million as of December 31, 2024, $18.9 million as of December 31, 2023 and $8.0 million as of December 31, 2022. OREO was $321,000, $0, and $0 as of December 31, 2024, December 31, 2023, and December 31, 2022, respectively.
Nonperforming assets consist of nonperforming loans plus OREO. Loans accounted for on a nonaccrual basis were $6.5 million as of December 31, 2025, $7.2 million as of December 31, 2024, and $18.9 million as of December 31, 2023. OREO was $461,000, $321,000, and $0 as of December 31, 2025, December 31, 2024, and December 31, 2023, respectively.
Total shareholders’ equity increased to $213.2 million as of December 31, 2024, compared to $170.3 million as of December 31, 2023 and $144.1 million as of December 31, 2022. The increases were driven by retained capital from net income during the periods.
Total shareholders’ equity increased to $251.0 million as of December 31, 2025, compared to $213.2 million as of December 31, 2024 and $170.3 million as of December 31, 2023. The increases were driven by retained capital from net income during the periods.
Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of the customer to a third party. They are intended to be disbursed, subject to certain conditions, upon request of the borrower. The following table summarizes commitments as of the dates presented.
Standby letters of credit are conditional commitments issued by the Bank to guarantee the performance of the customer to a third party. They are intended to be disbursed, subject to certain conditions, upon request of the borrower.
The following table provides an analysis of the activity in our allowance for the periods indicated: For the Year Ended December 31, 2024 2023 2022 (Dollars in thousands) Balance at beginning of the period $ 19,691 $ 14,734 $ 10,316 Impact of CECL adoption - 250 - Provision for credit losses for loans - 21,181 4,468 Charge-offs: Construction & development - - - 1-4 family real estate - - - Commercial real estate - other (275 ) - - Commercial & industrial (2,000 ) (16,500 ) (2 ) Agricultural - (7 ) (50 ) Consumer - (17 ) (22 ) Total charge-offs (2,275 ) (16,524 ) (74 ) Recoveries: Construction & development - - - 1-4 family real estate - - - Commercial real estate - other - - - Commercial & industrial 495 40 10 Agricultural 7 2 4 Consumer - 8 10 Total recoveries 502 50 24 Net recoveries (charge-offs) (1,773 ) (16,474 ) (50 ) Balance at end of the period $ 17,918 $ 19,691 $ 14,734 Net recoveries (charge-offs) to average loans -0.13 % 1.25 % 0.00 % 30 Table of Contents While the entire allowance is available to absorb losses from any and all loans, the following table represents management’s allocation of the allowance by loan category, and the percentage of allowance in each category, for the periods indicated: As of December 31, 2024 2023 2022 Amount Percent Amount Percent Amount Percent (Dollars in thousands) Construction & development $ 1,223 6.8 % $ 1,417 7.2 % $ 1,889 12.8 % 1-4 family real estate 1,313 7.3 % 1,271 6.5 % 890 6.0 % Commercial real estate - other 6,992 39.0 % 6,889 35.0 % 5,080 34.5 % Commercial & industrial 6,797 38.0 % 9,237 46.8 % 5,937 40.3 % Agricultural 1,106 6.2 % 628 3.2 % 765 5.2 % Consumer 487 2.7 % 249 1.3 % 173 1.2 % Total $ 17,918 100.0 % $ 19,691 100.0 % $ 14,734 100.0 % 31 Table of Contents Nonperforming Assets Loans are considered delinquent when principal or interest payments are past due 30 days or more.
The following table provides an analysis of the activity in our allowance for the periods indicated: As of December 31, 2025 2024 2023 (Dollars in thousands) Balance at beginning of the period $ 17,918 $ 19,691 $ 14,734 Impact of CECL adoption - - 250 Provision for credit losses for loans 700 - 21,181 Charge-offs: Construction & development - - - 1-4 family real estate - - - Commercial real estate - other (197 ) (275 ) - Commercial & industrial - (2,000 ) (16,500 ) Agricultural - - (7 ) Consumer (3 ) - (17 ) Total charge-offs (200 ) (2,275 ) (16,524 ) Recoveries: Construction & development - - - 1-4 family real estate - - - Commercial real estate - other 17 - - Commercial & industrial 965 495 40 Agricultural 4 7 2 Consumer 3 - 8 Total recoveries 989 502 50 Net recoveries (charge-offs) 789 (1,773 ) (16,474 ) Balance at end of the period $ 19,407 $ 17,918 $ 19,691 Net recoveries (charge-offs) to average loans 0.05 % -0.13 % -1.25 % 30 Table of Contents While the entire allowance is available to absorb losses from any and all loans, the following table represents management’s allocation of the allowance by loan category, and the percentage of allowance in each category, for the periods indicated: As of December 31, 2025 2024 2023 Amount Percent Amount Percent Amount Percent (Dollars in thousands) Construction & development $ 1,222 6.3 % $ 1,223 6.8 % $ 1,417 7.2 % 1-4 family real estate 964 5.0 % 1,313 7.3 % 1,271 6.5 % Commercial real estate - other 6,855 35.3 % 6,992 39.0 % 6,889 35.0 % Commercial & industrial 9,369 48.2 % 6,797 38.0 % 9,237 46.8 % Agricultural 612 3.2 % 1,106 6.2 % 628 3.2 % Consumer 385 2.0 % 487 2.7 % 249 1.3 % Total $ 19,407 100.0 % $ 17,918 100.0 % $ 19,691 100.0 % 31 Table of Contents Nonaccrual Loans and Nonperforming Assets Loans are considered delinquent when principal or interest payments are past due 30 days or more.
Total Assets Total assets decreased $31.9 million, or 1.8%, to $1.74 billion as of December 31, 2024, as compared to $1.77 billion as of December 31, 2023 and $1.58 billion as of December 31, 2022. Loan Portfolio Our loans represent the largest portion of our earning assets.
Total Assets Total assets increased $223.8 million, or 12.9%, to $1.96 billion as of December 31, 2025, as compared to $1.74 billion as of December 31, 2024 and $1.77 billion as of December 31, 2023. Loan Portfolio Our loans represent the largest portion of our earning assets.
Actual With Capital Conservation Buffer Minimum to be “Well- Capitalized” Under Prompt Corrective Action Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2024 Total capital (to risk-weighted assets) Company $ 227,229 15.21 % $ 156,830 10.50 % N/A N/A Bank 227,189 15.22 % 156,723 10.50 % $ 149,260 10.00 % Tier 1 capital (to risk-weighted assets) Company 208,847 13.98 % 126,957 8.50 % N/A N/A Bank 208,807 13.99 % 126,871 8.50 % 119,408 8.00 % CET 1 capital (to risk-weighted assets) Company 208,847 13.98 % 104,553 7.00 % N/A N/A Bank 208,807 13.99 % 104,482 7.00 % 97,019 6.50 % Tier 1 capital (to average assets) Company 208,847 12.19 % N/A N/A N/A N/A Bank 208,807 12.18 % N/A N/A 85,698 5.00 % Actual With Capital Conservation Buffer Minimum to be “Well- Capitalized” Under Prompt Corrective Action Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2023 Total capital (to risk-weighted assets) Company $ 185,171 12.74 % $ 152,579 10.50 % N/A N/A Bank 185,118 12.75 % 152,472 10.50 % $ 145,211 10.00 % Tier 1 capital (to risk-weighted assets) Company 166,982 11.49 % 123,516 8.50 % N/A N/A Bank 166,942 11.50 % 123,429 8.50 % 116,169 8.00 % CET 1 capital (to risk-weighted assets) Company 166,982 11.49 % 101,719 7.00 % N/A N/A Bank 166,942 11.50 % 101,648 7.00 % 94,387 6.50 % Tier 1 capital (to average assets) Company 166,982 9.50 % N/A N/A N/A N/A Bank 166,942 9.50 % N/A N/A 87,897 5.00 % Actual With Capital Conservation Buffer Minimum to be “Well- Capitalized” Under Prompt Corrective Action Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2022 Total capital (to risk-weighted assets) Bank7 Corp. $ 158,158 12.41 % $ 133,862 10.50 % N/A N/A Bank 158,158 12.42 % 133,756 10.50 % $ 127,387 10.00 % Tier 1 capital (to risk-weighted assets) Bank7 Corp. 143,424 11.25 % 108,365 8.50 % N/A N/A Bank 143,424 11.26 % 108,279 8.50 % 101,909 8.00 % CET 1 capital (to risk-weighted assets) Bank7 Corp. 143,424 11.25 % 89,241 7.00 % N/A N/A Bank 143,424 11.26 % 89,171 7.00 % 82,801 6.50 % Tier 1 capital (to average assets) Bank7 Corp. 143,424 9.19 % N/A N/A N/A N/A Bank 143,424 9.18 % N/A N/A 78,111 5.00 % 38 Table of Contents Shareholders’ equity provides a source of permanent funding, allows for future growth and provides a cushion to withstand unforeseen adverse developments.
Actual With Capital Conservation Buffer Minimum to be “Well- Capitalized” Under Prompt Corrective Action Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2025 Total capital (to risk-weighted assets) Company $ 261,451 15.24 % $ 180,076 10.50 % N/A N/A Bank 261,411 15.25 % 179,970 10.50 % $ 171,400 10.00 % Tier 1 capital (to risk-weighted assets) Company 241,580 14.09 % 145,776 8.50 % N/A N/A Bank 241,540 14.09 % 145,690 8.50 % 137,120 8.00 % CET 1 capital (to risk-weighted assets) Company 241,580 14.09 % 120,051 7.00 % N/A N/A Bank 241,540 14.09 % 119,980 7.00 % 111,410 6.50 % Tier 1 capital (to average assets) Company 241,580 12.82 % N/A N/A N/A N/A Bank 241,540 12.82 % N/A N/A 94,213 5.00 % Actual With Capital Conservation Buffer Minimum to be “Well- Capitalized” Under Prompt Corrective Action Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2024 Total capital (to risk-weighted assets) Company $ 227,229 15.21 % $ 156,830 10.50 % N/A N/A Bank 227,189 15.22 % 156,723 10.50 % $ 149,260 10.00 % Tier 1 capital (to risk-weighted assets) Company 208,847 13.98 % 126,957 8.50 % N/A N/A Bank 208,807 13.99 % 126,871 8.50 % 119,408 8.00 % CET 1 capital (to risk-weighted assets) Company 208,847 13.98 % 104,553 7.00 % N/A N/A Bank 208,807 13.99 % 104,482 7.00 % 97,019 6.50 % Tier 1 capital (to average assets) Company 208,847 12.19 % N/A N/A N/A N/A Bank 208,807 12.18 % N/A N/A 85,698 5.00 % Actual With Capital Conservation Buffer Minimum to be “Well- Capitalized” Under Prompt Corrective Action Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2023 Total capital (to risk-weighted assets) Company $ 185,171 12.74 % $ 152,579 10.50 % N/A N/A Bank 185,118 12.75 % 152,472 10.50 % $ 145,211 10.00 % Tier 1 capital (to risk-weighted assets) Company 166,982 11.49 % 123,516 8.50 % N/A N/A Bank 166,942 11.50 % 123,429 8.50 % 116,169 8.00 % CET 1 capital (to risk-weighted assets) Company 166,982 11.49 % 101,719 7.00 % N/A N/A Bank 166,942 11.50 % 101,648 7.00 % 94,387 6.50 % Tier 1 capital (to average assets) Company 166,982 9.50 % N/A N/A N/A N/A Bank 166,942 9.50 % N/A N/A 87,897 5.00 % 38 Table of Contents Shareholders’ equity provides a source of permanent funding, allows for future growth and provides a cushion to withstand unforeseen adverse developments.
Pre-tax return on average assets and return on average equity was 3.50% and 31.41%, respectively, for the year ended December 31, 2024, as compared to 2.21% and 23.47%, respectively, for the same period in 2023.
Pre-tax return on average assets and return on average equity was 3.12% and 24.39%, respectively, for the year ended December 31, 2025, as compared to 3.50% and 31.41%, respectively, for the same period in 2024.
For the year ended December 31, 2024 compared to the year ended December 31, 2023: - Total interest income on loans increased $9.6 million, or 8.7%, to $119.4 million, which was attributable to a $76.0 million increase in the average balance of loans to $1.39 billion during the year ended 2024 as compared with the average balance of loans of $1.32 billion for the year ended 2023, and increased loan yields as discussed below; - Yields on our interest-earning assets totaled 7.79%, an increase of 48 basis points which was attributable to higher loan rates of 21 basis points, an increase in yield on short term investments of 13 basis points, and an increase in yield on taxable debt securities of 96 basis points; and - Net interest margin for the years ended 2024 and 2023 was 5.11% and 4.97%, respectively. 24 Table of Contents We experienced strong asset growth for the year ended December 31, 2023 compared to the year ended December 31, 2022: - Total interest income on loans increased $35.4 million, or 47.6%, to $109.8 million, which was attributable to a $172.2 million increase in the average balance of loans to $1.32 billion during the year ended 2023 as compared with the average balance of $1.14 billion for the year ended 2022, and increased loan yields as discussed below; - Yields on our interest-earning assets totaled 7.31%, an increase of 185 basis points which was attributable to higher loan rates of 184 basis points, an increase in yield on short term investments of 362 basis points, and an increase in yield on taxable debt securities of 25 basis points; and - Net interest margin for the years ended 2023 and 2022 was 4.97% and 4.82%, respectively.
For the year ended December 31, 2025 compared to the year ended December 31, 2024: - Total interest income on loans decreased $1.9 million, or 1.6%, to $117.5 million, due to decreased loan yields as discussed below; - Yields on our interest-earning assets totaled 7.24%, a decrease of 55 basis points which was attributable to lower loan yields of 64 basis points, a decrease in yield on short term investments of 83 basis points, and a decrease in yield on taxable debt securities of 47 basis points; and - Net interest margin for the years ended 2025 and 2024 was 4.94% and 5.11%, respectively. 24 Table of Contents For the year ended December 31, 2024 compared to the year ended December 31, 2023: - Total interest income on loans increased $9.6 million, or 8.7%, to $119.4 million, which was attributable to a $76.0 million increase in the average balance of loans to $1.39 billion during the year ended 2024 as compared with the average balance of loans of $1.32 billion for the year ended 2023, and increased loan yields as discussed below; - Yields on our interest-earning assets totaled 7.79%, an increase of 48 basis points which was attributable to higher loan yields of 21 basis points, an increase in yield on short term investments of 13 basis points, and an increase in yield on taxable debt securities of 96 basis points; and - Net interest margin for the years ended 2024 and 2023 was 5.11% and 4.97%, respectively.
Tax-adjusted return on average assets and return on average equity was 2.65% and 23.78%, respectively, for the year ended December 31, 2024, as compared to 1.68% and 17.83%, respectively, for the same period in 2023. Our efficiency ratio for the year ended December 31, 2024 was 37.90% as compared to 36.07% for the same period in 2023.
Tax-adjusted return on average assets and return on average equity was 2.37% and 18.51%, respectively, for the year ended December 31, 2025, as compared to 2.65% and 23.78%, respectively, for the same period in 2024. Our efficiency ratio for the year ended December 31, 2025 was 40.24% as compared to 37.90% for the same period in 2024.
As of December 31, 2024 2023 2022 (Dollars in thousands) Commitments to extend credit $ 272,261 $ 256,888 $ 198,027 Standby letters of credit 11,333 4,247 1,043 Total $ 283,594 $ 261,135 $ 199,070 39 Table of Contents Critical Accounting Policies and Estimates Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate.
The following table summarizes commitments as of the dates presented: As of December 31, 2025 2024 2023 (Dollars in thousands) Commitments to extend credit $ 324,748 $ 272,261 $ 256,888 Standby letters of credit 19,540 11,333 4,247 Total $ 344,288 $ 283,594 $ 261,135 39 Table of Contents Critical Accounting Policies and Estimates Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate.
The total net decrease in substandard loans in 2024 as compared to 2023, is comprised of a net decrease in commercial and industrial substandard loans primarily related to a decrease in one relationship comprised of three notes totaling $18.4 million with a $2.0 million specific reserve, and a net increase in commercial real estate primarily related to two relationships comprised of one note totaling $3.0 million with a $0.2 million specific reserve, and one note totaling $1.45 million with no specific reserve.
The total net decrease in substandard loans in 2025 as compared to 2024, is comprised of a net decrease in commercial and industrial substandard loans primarily related to one note totaling $3.9 million with no specific reserve, and a net decrease in commercial real estate primarily related to one note totaling $3.0 million with a $0.2 million specific reserve.
The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2024, December 31, 2023 and December 31, 2022: As of December 31, 2024 2023 2022 Amount % of Total Amount % of Total Amount % of Total (Dollars in thousands) Construction & development $ 167,685 12.0 % $ 137,206 10.1 % $ 163,203 12.8 % 1-4 family real estate 121,047 8.7 % 100,576 7.4 % 76,928 6.0 % Commercial real estate - other 511,304 36.5 % 518,622 38.0 % 439,001 34.5 % Total commercial real estate 800,036 57.2 % 756,404 55.5 % 679,132 53.3 % Commercial & industrial 507,023 36.2 % 526,185 38.5 % 513,011 40.3 % Agricultural 77,922 5.6 % 66,495 4.9 % 66,145 5.2 % Consumer 14,312 1.0 % 14,517 1.1 % 14,949 1.2 % Gross loans 1,399,293 100.0 % 1,363,601 100.0 % 1,273,237 100.0 % Less: unearned income, net (1,910 ) (2,762 ) (2,781 ) Total Loans, net of unearned income 1,397,383 1,360,839 1,270,456 Less: Allowance for credit losses (17,918 ) (19,691 ) (14,734 ) Net loans $ 1,379,465 $ 1,341,148 $ 1,255,722 We have established internal concentration limits in the loan portfolio for CRE loans, hospitality loans, energy loans, and construction loans, among others.
The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2025, December 31, 2024 and December 31, 2023: As of December 31, 2025 2024 2023 Amount % of Total Amount % of Total Amount % of Total (Dollars in thousands) Construction & development $ 224,566 14.0 % $ 167,685 12.0 % $ 137,206 10.1 % 1-4 family real estate 126,122 7.8 % 121,047 8.7 % 100,576 7.4 % Commercial real estate - other 587,597 36.5 % 511,304 36.5 % 518,622 38.0 % Total commercial real estate 938,285 58.3 % 800,036 57.2 % 756,404 55.5 % Commercial & industrial 567,280 35.2 % 507,023 36.2 % 526,185 38.5 % Agricultural 90,908 5.7 % 77,922 5.6 % 66,495 4.9 % Consumer 12,894 0.8 % 14,312 1.0 % 14,517 1.1 % Gross loans 1,609,367 100.0 % 1,399,293 100.0 % 1,363,601 100.0 % Less: unearned income, net (2,936 ) (1,910 ) (2,762 ) Total Loans, net of unearned income 1,606,431 1,397,383 1,360,839 Less: Allowance for credit losses (19,407 ) (17,918 ) (19,691 ) Net loans $ 1,587,024 $ 1,379,465 $ 1,341,148 We have established internal concentration limits in the loan portfolio for CRE loans, hospitality loans, energy loans, and construction loans, among others.
As of December 31, 2024 2023 2022 Amount Percentage of Total Amount Percentage of Total Amount Percentage of Total (Dollars in thousands) Noninterest-bearing demand $ 313,258 20.7 % $ 482,349 30.4 % $ 441,509 30.9 % Interest-bearing transaction deposits 889,679 58.70 % 702,150 44.10 % 669,852 46.80 % Savings deposits 73,379 4.80 % 150,116 9.40 % 136,537 9.50 % Time deposits (less than $250,000) 146,814 9.70 % 168,690 10.60 % 140,929 9.80 % Time deposits ($250,000 or more) 92,341 6.10 % 88,086 5.50 % 42,573 3.00 % Total interest-bearing deposits 1,202,213 79.3 % 1,109,042 69.6 % 989,891 69.1 % Total deposits $ 1,515,471 100.0 % $ 1,591,391 100.0 % $ 1,431,400 100.0 % The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2024, 2023, and 2022: For the Year Ended December 31, 2024 2023 2022 Average Balance Weighted Average Rate Average Balance Weighted Average Rate Average Balance Weighted Average Rate (Dollars in thousands) Noninterest-bearing demand $ 381,660 0.00 % $ 433,603 0.00 % $ 432,901 0.00 % Interest-bearing transaction deposits 776,141 3.81 % 705,891 3.42 % 613,799 1.11 % Savings deposits 106,173 3.63 % 119,278 3.74 % 110,818 0.92 % Time deposits 254,057 4.69 % 256,672 4.06 % 165,735 0.89 % Total interest-bearing deposits 1,136,371 3.98 % 1,081,841 3.60 % 890,352 1.05 % Total deposits $ 1,518,031 2.99 % $ 1,515,444 2.57 % $ 1,323,253 0.70 % 35 Table of Contents The following tables set forth the maturity of time deposits as of the dates indicated below: As of December 31, 2024 Maturity Within: Three Months Three to Six Months Six to 12 Months After 12 Months Total (Dollars in thousands) Time deposits (less than $250,000) $ 62,577 $ 38,514 $ 41,345 $ 4,378 $ 146,814 Time deposits ($250,000 or more) 45,667 25,552 18,055 3,067 92,341 Total time deposits $ 108,244 $ 64,066 $ 59,400 $ 7,445 $ 239,155 As of December 31, 2023 Maturity Within: Three Months Three to Six Months Six to 12 Months After 12 Months Total (Dollars in thousands) Time deposits (less than $250,000) $ 52,423 $ 55,570 $ 50,047 $ 10,650 $ 168,690 Time deposits ($250,000 or more) 30,807 18,472 17,492 21,315 88,086 Total time deposits $ 83,230 $ 74,042 $ 67,539 $ 31,965 $ 256,776 Liquidity Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, all at a reasonable cost.
For the Year Ended December 31, 2025 2024 2023 Amount Percentage of Total Amount Percentage of Total Amount Percentage of Total (Dollars in thousands) Noninterest-bearing demand $ 341,416 20.07 % $ 313,258 20.70 % $ 482,349 30.40 % Interest-bearing transaction deposits 1,023,325 60.17 % 889,679 58.70 % 702,150 44.10 % Savings deposits 92,604 5.44 % 73,379 4.80 % 150,116 9.40 % Time deposits (less than $250,000) 147,263 8.66 % 146,814 9.70 % 168,690 10.60 % Time deposits ($250,000 or more) 96,225 5.66 % 92,341 6.10 % 88,086 5.50 % Total interest-bearing deposits 1,359,417 79.9 % 1,202,213 79.3 % 1,109,042 69.6 % Total deposits $ 1,700,833 100.0 % $ 1,515,471 100.0 % $ 1,591,391 100.0 % The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2025, 2024, and 2023: For the Year Ended December 31, 2025 2024 2023 Average Balance Weighted Average Rate Average Balance Weighted Average Rate Average Balance Weighted Average Rate (Dollars in thousands) Noninterest-bearing demand $ 317,743 0.00 % $ 381,660 0.00 % $ 433,603 0.00 % Interest-bearing transaction deposits 941,181 3.16 % 776,141 3.81 % 705,891 3.42 % Savings deposits 79,878 1.88 % 106,173 3.63 % 119,278 3.74 % Time deposits 237,548 3.99 % 254,057 4.69 % 256,672 4.06 % Total interest-bearing deposits 1,258,607 3.25 % 1,136,371 3.98 % 1,081,841 3.60 % Total deposits $ 1,576,350 2.59 % $ 1,518,031 2.99 % $ 1,515,444 2.57 % 35 Table of Contents The following tables set forth the maturity of time deposits as of the dates indicated below: As of December 31, 2025 Maturity Within: Three Months Three to Six Months Six to 12 Months After 12 Months Total (Dollars in thousands) Time deposits (less than $250,000) $ 56,951 $ 45,791 $ 37,766 $ 6,755 $ 147,263 Time deposits ($250,000 or more) 37,413 21,015 20,278 17,519 96,225 Total time deposits $ 94,364 $ 66,806 $ 58,044 $ 24,274 $ 243,488 As of December 31, 2024 Maturity Within: Three Months Three to Six Months Six to 12 Months After 12 Months Total (Dollars in thousands) Time deposits (less than $250,000) $ 62,577 $ 38,514 $ 41,345 $ 4,378 $ 146,814 Time deposits ($250,000 or more) 45,667 25,552 18,055 3,067 92,341 Total time deposits $ 108,244 $ 64,066 $ 59,400 $ 7,445 $ 239,155 Liquidity Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, all at a reasonable cost.
As of December 31, 2024 2023 2022 (Dollars in thousands) Nonaccrual loans (1) $ 7,170 $ 18,941 $ 8,039 Accruing loans 90 or more days past due - 10,026 9,941 Total nonperforming assets $ 7,170 $ 28,967 $ 17,980 Ratio of nonperforming loans to total loans 0.51 % 2.13 % 1.42 % Ratio of nonaccrual loans to total loans 0.51 % 1.39 % 0.63 % Ratio of allowance for credit losses to total loans 1.28 % 1.45 % 1.16 % Ratio of allowance for credit losses to nonaccrual loans 249.90 % 103.96 % 183.28 % Ratio of nonperforming assets to total assets 0.41 % 1.64 % 1.13 % (1) Included in the nonaccrual loans balance are $0 and $10.12 million of loans modified to borrowers experiencing financial difficulty as of December 31, 2024 and December 31, 2023, respectively.
The following table presents information regarding nonperforming assets as of the dates indicated: As of December 31, 2025 2024 2023 (Dollars in thousands) Nonaccrual loans (1) $ 6,460 $ 7,170 $ 18,941 Accruing loans 90 or more days past due - - 10,026 Total nonperforming assets (2) $ 6,460 $ 7,170 $ 28,967 Ratio of nonperforming loans to total loans 0.40 % 0.51 % 2.13 % Ratio of nonaccrual loans to total loans 0.40 % 0.51 % 1.39 % Ratio of allowance for credit losses to total loans 1.21 % 1.28 % 1.45 % Ratio of allowance for credit losses to nonaccrual loans 300.42 % 249.90 % 103.96 % Ratio of nonperforming assets to total assets 0.33 % 0.41 % 1.64 % (1) There are no loans modified to borrowers experiencing financial difficulty included in nonaccrual loans as of December 31, 2025 and December 31, 2024, respectively.
Contractual Obligations The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2024 and December 31, 2023: Payments Due as of December 31, 2024 Within One Year One to Three Years Three to Five Years After Five Years Total (Dollars in thousands) Deposits without a stated maturity $ 1,276,316 $ - $ - $ - $ 1,276,316 Time deposits 231,710 6,746 699 - 239,155 Operating lease commitments 646 516 236 476 1,874 Total contractual obligations $ 1,508,672 $ 7,262 $ 935 $ 476 $ 1,517,345 Payments Due as of December 31, 2023 Within One Year One to Three Years Three to Five Years After Five Years Total (Dollars in thousands) Deposits without a stated maturity $ 1,334,615 $ - $ - $ - $ 1,334,615 Time deposits 224,811 31,345 620 - 256,776 Operating lease commitments 553 627 308 850 2,338 Total contractual obligations $ 1,559,979 $ 31,972 $ 928 $ 850 $ 1,593,729 We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels.
Contractual Obligations The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2025 and December 31, 2024: Payments Due as of December 31, 2025 Within One Year One to Three Years Three to Five Years After Five Years Total (Dollars in thousands) Deposits without a stated maturity $ 1,457,345 $ - $ - $ - $ 1,457,345 Time deposits 219,214 23,893 381 - 243,488 Operating lease commitments 621 798 368 359 2,146 Total contractual obligations $ 1,677,180 $ 24,691 $ 749 $ 359 $ 1,702,979 Payments Due as of December 31, 2024 Within One Year One to Three Years Three to Five Years After Five Years Total (Dollars in thousands) Deposits without a stated maturity $ 1,276,316 $ - $ - $ - $ 1,276,316 Time deposits 231,710 6,746 699 - 239,155 Operating lease commitments 646 516 236 476 1,874 Total contractual obligations $ 1,508,672 $ 7,262 $ 935 $ 476 $ 1,517,345 We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels.
Total uninsured deposits were $354.2 million and $448.7 million at December 31, 2024 and December 31, 2023, respectively, as calculated per regulatory guidance. This was approximately 23.4% and 28.2% of deposits at December 31, 2024 and December 31, 2023, respectively. Total deposits as of December 31, 2024, 2023, and 2022 were $1.52 billion, $1.59 billion and $1.43 billion, respectively.
Total uninsured deposits were $391.7 million and $354.2 million as of December 31, 2025 and December 31, 2024, respectively, as calculated per regulatory guidance. This was approximately 23.2% and 23.4% of deposits as of December 31, 2025 and December 31, 2024, respectively.
Net Interest Margin For the Year Ended December 31, 2024 2023 2022 Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate (Dollars in thousands) Interest-Earning Assets: Short-term investments $ 184,328 $ 9,320 5.04 % $ 174,600 $ 8,580 4.91 % $ 129,624 $ 1,673 1.29 % Debt securities, taxable 90,184 2,531 2.80 152,094 2,791 1.84 145,915 2,313 1.59 Debt securities, tax exempt (1) 16,651 273 1.64 19,430 330 1.70 21,635 360 1.66 Loans held for sale 343 - - 158 - - 586 - - Total loans (2) 1,391,552 119,416 8.56 1,315,578 109,843 8.35 1,143,380 74,403 6.51 Total interest-earning assets 1,683,058 131,540 7.79 1,661,860 121,544 7.31 1,441,140 78,749 5.46 Noninterest-earning assets 39,555 25,943 23,532 Total assets $ 1,722,613 $ 1,687,803 $ 1,464,672 Funding sources: Interest-bearing liabilities: Deposits: Transaction accounts $ 882,314 33,408 3.78 % $ 825,169 28,582 3.46 % $ 724,617 7,842 1.08 % Time deposits 254,057 11,937 4.69 256,672 10,416 4.06 165,735 1,480 0.89 Total interest-bearing deposits 1,136,371 45,345 3.98 1,081,841 38,998 3.60 890,352 9,322 1.05 Total interest-bearing liabilities 1,136,371 45,345 3.98 1,081,841 38,998 3.60 890,352 9,322 1.05 Noninterest-bearing liabilities: Noninterest-bearing deposits 381,660 433,603 432,901 Other noninterest-bearing liabilities 12,419 10,423 7,520 Total noninterest-bearing liabilities 394,079 444,026 440,421 Shareholders’ equity 192,163 161,936 133,899 Total liabilities and shareholders’ equity $ 1,722,613 $ 1,687,803 $ 1,464,672 Net interest income $ 86,195 $ 82,546 $ 69,427 Net interest spread 3.81 % 3.71 % 4.42 % Net interest margin 5.11 % 4.97 % 4.82 % (1) Taxable-equivalent yield of 2.16% as of December 31, 2024, applying a 24.3% effective tax rate (2) Average loan balances include monthly average nonaccrual loans of $12.4 million, $18.8 million and $8.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.
Net Interest Margin For the Year Ended December 31, 2025 2024 2023 Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate Average Balance Interest Income/ Expense Average Yield/ Rate (Dollars in thousands) Interest-earning assets: Short-term investments $ 235,211 $ 9,914 4.21 % $ 184,328 $ 9,320 5.04 % $ 174,600 $ 8,580 4.91 % Debt securities, taxable 46,599 1,085 2.33 90,184 2,531 2.80 152,094 2,791 1.84 Debt securities, tax exempt (1) 12,042 246 2.04 16,651 273 1.64 19,430 330 1.70 Loans held for sale 1,448 - - 343 - - 158 - - Total loans (2) 1,483,112 117,513 7.92 1,391,552 119,416 8.56 1,315,578 109,843 8.35 Total interest-earning assets 1,778,412 $ 128,758 7.24 1,683,058 $ 131,540 7.79 1,661,860 $ 121,544 7.31 Noninterest-earning assets 41,782 39,555 25,943 Total assets $ 1,820,194 $ 1,722,613 $ 1,687,803 Funding sources: Interest-bearing liabilities: Deposits: Transaction accounts $ 1,021,059 $ 31,396 3.07 % $ 882,314 $ 33,408 3.78 % $ 825,169 $ 28,582 3.46 % Time deposits 237,548 9,489 3.99 254,057 11,937 4.69 256,672 10,416 4.06 Total interest-bearing deposits 1,258,607 40,885 3.25 1,136,371 45,345 3.98 1,081,841 38,998 3.60 Total interest-bearing liabilities 1,258,607 40,885 3.25 1,136,371 45,345 3.98 1,081,841 38,998 3.60 Noninterest-bearing liabilities: Noninterest-bearing deposits 317,743 381,660 433,603 Other noninterest-bearing liabilities 11,105 12,419 10,423 Total noninterest-bearing liabilities 328,848 394,079 444,026 Shareholders’ equity 232,739 192,163 161,936 Total liabilities and shareholders’ equity $ 1,820,194 $ 1,722,613 $ 1,687,803 Net interest income $ 87,873 $ 86,195 $ 82,546 Net interest spread 3.99 % 3.81 % 3.71 % Net interest margin 4.94 % 5.11 % 4.97 % (1) Taxable-equivalent yield of 2.69% as of December 31, 2025, applying a 24.1% effective tax rate (2) Average loan balances include monthly average nonaccrual loans of $5.97 million, $12.4 million and $18.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.
Analysis of Changes in Interest Income and Expenses For the Year Ended For the Year Ended December 31, 2024 vs 2023 December 31, 2023 vs 2022 Change due to: Change due to: Volume (1) Rate (1) Interest Volume (1) Rate (1) Interest Variance Variance (Dollars in thousands) (Dollars in thousands) Increase (decrease) in interest income: Short-term investments $ 478 $ 262 $ 740 $ 580 $ 6,327 $ 6,907 Debt securities (1,186 ) 869 (317 ) 61 387 448 Total loans 6,344 3,229 9,573 11,210 24,230 35,440 Total increase (decrease) in interest income 5,636 4,360 9,996 11,851 30,944 42,795 Increase (decrease) in interest expense: Deposits: Transaction accounts 1,977 2,849 4,826 1,086 19,654 20,740 Time deposits (106 ) 1,627 1,521 809 8,127 8,936 Total interest-bearing deposits 1,871 4,476 6,347 1,895 27,781 29,676 Total increase (decrease) in interest expense 1,871 4,476 6,347 1,895 27,781 29,676 Increase (Decrease) in net interest income $ 3,765 $ (116 ) $ 3,649 $ 9,956 $ 3,163 $ 13,119 (1) Variances attributable to both volume and rate are allocated on a consistent basis between rate and volume based on the absolute value of the variances in each category. 25 Table of Contents Weighted Average Yield of Debt Securities The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December 31, 2024.
Analysis of Changes in Interest Income and Expenses For the Year Ended For the Year Ended December 31, 2025 vs 2024 December 31, 2024 vs 2023 Change due to: Change due to: Volume (1) Rate (1) Interest Volume (1) Rate (1) Interest Variance Variance (Dollars in thousands) (Dollars in thousands) Increase (decrease) in interest income: Short-term investments $ 2,565 $ (1,971 ) $ 594 $ 478 $ 262 $ 740 Debt securities (1,296 ) (177 ) (1,473 ) (1,186 ) 869 (317 ) Total loans 7,838 (9,741 ) (1,903 ) 6,344 3,229 9,573 Total increase (decrease) in interest income 9,107 (11,889 ) (2,782 ) 5,636 4,360 9,996 Increase (decrease) in interest expense: Deposits: Transaction accounts 5,245 (7,257 ) (2,012 ) 1,977 2,849 4,826 Time deposits (774 ) (1,674 ) (2,448 ) (106 ) 1,627 1,521 Total interest-bearing deposits 4,471 (8,931 ) (4,460 ) 1,871 4,476 6,347 Total increase (decrease) in interest expense 4,471 (8,931 ) (4,460 ) 1,871 4,476 6,347 Increase (Decrease) in net interest income $ 4,636 $ (2,958 ) $ 1,678 $ 3,765 $ (116 ) $ 3,649 (1) Variances attributable to both volume and rate are allocated on a consistent basis between rate and volume based on the absolute value of the variances in each category. 25 Table of Contents Weighted Average Yield of Debt Securities The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December 31, 2025.
Noninterest Income The following table sets forth the major components of our noninterest income for the years ended December 31, 2024, 2023 and 2022: For the Years Ended For the Years Ended December 31, December 31, 2024 2023 $ Increase % Increase 2023 2022 $ Increase % Increase (Decrease) (Decrease) (Decrease) (Decrease) (Dollars in thousands) (Dollars in thousands) Noninterest income: Mortgage lending income $ 370 $ 331 $ 39 11.78 % $ 331 $ 486 $ (155 ) -31.89 % Gain (Loss) on sales, prepayments, and calls of available-for-sale debt securities (6 ) (16 ) 10 -62.50 % (16 ) (127 ) 111 -87.40 % Service charges on deposit accounts 975 869 106 12.20 % 869 900 (31 ) -3.44 % Other 9,915 8,058 1,857 23.05 % 8,058 1,680 6,378 379.64 % Total noninterest income $ 11,254 $ 9,242 $ 2,012 21.77 % $ 9,242 $ 2,939 $ 6,303 214.46 % For the year ended December 31, 2024 compared to the year ended December 31, 2023: - Other noninterest income was $9.9 million compared to $8.1 million, an increase of $1.9 million, or 23.1%.
Noninterest Income The following table sets forth the major components of our noninterest income for the years ended December 31, 2025, 2024 and 2023: 26 Table of Contents For the Years Ended For the Years Ended December 31, December 31, 2025 2024 $ Increase % Increase 2024 2023 $ Increase % Increase (Decrease) (Decrease) (Decrease) (Decrease) (Dollars in thousands) (Dollars in thousands) Noninterest income: Mortgage lending income $ 1,326 $ 370 $ 956 258.38 % $ 370 $ 331 $ 39 11.78 % Gain (Loss) on sales, prepayments, and calls of available-for-sale debt securities (10 ) (6 ) (4 ) 66.67 % (6 ) (16 ) 10 -62.50 % Service charges on deposit accounts 941 975 (34 ) -3.49 % 975 869 106 12.20 % Other 6,246 9,915 (3,669 ) -37.00 % 9,915 8,058 1,857 23.05 % Total noninterest income $ 8,503 $ 11,254 $ (2,751 ) -24.44 % $ 11,254 $ 9,242 $ 2,012 21.77 % For the year ended December 31, 2025 compared to the year ended December 31, 2024: - Other noninterest income was $6.2 million compared to $9.9 million, a decrease of $3.7 million, or 37.0%.
We also participate in the One-Way Buy Insured Cash Sweep service and similar services, which provide for one-way buy transactions among banks for the purpose of purchasing cost-effective floating-rate funding without collateralization or stock purchase requirements. As of December 31, 2024, 2023, and 2022 brokered deposits were $336.7 million, $273.5 million, and $249.9 million, respectively.
We also participate in the One-Way Buy Insured Cash Sweep service and similar services, which provide for one-way buy transactions among banks for the purpose of purchasing cost-effective floating-rate funding without collateralization or stock purchase requirements. Of our interest-bearing deposits, some were obtained through brokered transactions.
The following table sets forth the major components of our noninterest expense for the years ended December 31, 2024, 2023 and 2022: For the Years Ended For the Years Ended December 31, December 31, 2024 2023 $ Increase % Increase 2023 2022 $ Increase % Increase (Decrease) (Decrease) (Decrease) (Decrease) (Dollars in thousands) (Dollars in thousands) Noninterest expense: Salaries and employee benefits $ 20,783 $ 17,385 $ 3,398 19.55 % $ 17,385 $ 17,040 $ 345 2.02 % Furniture and equipment 1,070 995 75 7.54 % 995 1,468 (473 ) -32.22 % Occupancy 2,640 2,689 (49 ) -1.82 % 2,689 2,329 360 15.46 % Data and item processing 1,897 1,730 167 9.65 % 1,730 2,068 (338 ) -16.34 % Accounting, marketing, and legal fees 836 543 293 53.96 % 543 984 (441 ) -44.82 % Regulatory assessments 1,196 1,537 (341 ) -22.19 % 1,537 1,344 193 14.36 % Advertising and public relations 549 427 122 28.57 % 427 477 (50 ) -10.48 % Travel, lodging and entertainment 431 374 57 15.24 % 374 363 11 3.03 % Other expense 7,693 7,740 (47 ) -0.61 % 7,740 2,568 5,172 201.40 % Total noninterest expense $ 37,095 $ 33,420 $ 3,675 11.00 % $ 33,420 $ 28,641 $ 4,779 16.69 % For the year ended December 31, 2024 compared to the year ended December 31, 2023: - Salaries and employee benefits expense was $20.8 million compared to $17.4 million, an increase of $3.4 million, or 19.6%.
The following table sets forth the major components of our noninterest expense for the years ended December 31, 2025, 2024 and 2023: For the Years Ended For the Years Ended December 31, December 31, 2025 2024 $ Increase (Decrease) % Increase (Decrease) 2024 2023 $ Increase (Decrease) % Increase (Decrease) (Dollars in thousands) (Dollars in thousands) Noninterest expense: Salaries and employee benefits $ 22,634 $ 20,783 $ 1,851 8.91 % $ 20,783 $ 17,385 $ 3,398 19.55 % Furniture and equipment 1,278 1,070 208 19.44 % 1,070 995 75 7.54 % Occupancy 2,580 2,640 (60 ) -2.27 % 2,640 2,689 (49 ) -1.82 % Data and item processing 2,128 1,897 231 12.18 % 1,897 1,730 167 9.65 % Accounting, marketing, and legal fees 757 836 (79 ) -9.45 % 836 543 293 53.96 % Regulatory assessments 814 1,196 (382 ) -31.94 % 1,196 1,537 (341 ) -22.19 % Advertising and public relations 917 549 368 67.03 % 549 427 122 28.57 % Travel, lodging and entertainment 439 431 8 1.86 % 431 374 57 15.24 % Other expense 7,364 7,693 (329 ) -4.28 % 7,693 7,740 (47 ) -0.61 % Total noninterest expense $ 38,911 $ 37,095 $ 1,816 4.90 % $ 37,095 $ 33,420 $ 3,675 11.00 % For the year ended December 31, 2025 compared to the year ended December 31, 2024: - Salaries and employee benefits expense was $22.6 million compared to $20.8 million, an increase of $1.9 million, or 8.9%.
The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to remain competitive. For the year ended December 31, 2023 compared to the year ended December 31, 2022: - Other expense was $7.7 million compared to $2.6 million, an increase of $5.2 million, or 200%.
The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to remain competitive. For the year ended December 31, 2024 compared to the year ended December 31, 2023: - Salaries and employee benefits expense was $20.8 million compared to $17.4 million, an increase of $3.4 million, or 19.6%.
Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows: As of December 31, 2024 Pass Watch Special mention Substandard Total (Dollars in thousands) Construction & development $ 165,863 $ - $ 1,259 $ 563 $ 167,685 1-4 family real estate 121,047 - - - 121,047 Commercial real estate - other 498,835 - 7,493 4,976 511,304 Commercial & industrial 493,512 - 3,817 9,694 507,023 Agricultural 74,896 - 3,026 - 77,922 Consumer 14,312 - - - 14,312 Total $ 1,368,465 $ - $ 15,595 $ 15,233 $ 1,399,293 As of December 31, 2023 Pass Watch Special mention Substandard Total (Dollars in thousands) Construction & development $ 136,417 $ - $ 789 $ - $ 137,206 1-4 family real estate 100,576 - - - 100,576 Commercial real estate - other 502,795 - 15,701 126 518,622 Commercial & industrial 485,433 4,094 5,767 30,891 526,185 Agricultural 66,495 - - - 66,495 Consumer 14,437 - - 80 14,517 Total $ 1,306,153 $ 4,094 $ 22,257 $ 31,097 $ 1,363,601 As of December 31, 2022 Pass Watch Special mention Substandard Total (Dollars in thousands) Construction & development $ 163,203 $ - $ - $ - $ 163,203 1-4 family real estate 76,928 - - - 76,928 Commercial real estate - other 397,295 14,976 24,747 1,983 439,001 Commercial & industrial 493,412 - 584 19,015 513,011 Agricultural 65,857 288 - - 66,145 Consumer 14,927 - - 22 14,949 Total $ 1,211,622 $ 15,264 $ 25,331 $ 21,020 $ 1,273,237 34 Table of Contents Deposits We gather deposits primarily through our twelve branch locations and online though our website.
Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows: As of December 31, 2025 Pass Watch Special mention Substandard Total (Dollars in thousands) Construction & development $ 222,688 $ - $ 1,323 $ 555 $ 224,566 1-4 family real estate 126,122 - - - 126,122 Commercial real estate - other 561,134 18,077 6,893 1,493 587,597 Commercial & industrial 505,252 37,285 18,908 5,835 567,280 Agricultural 87,129 - 3,779 - 90,908 Consumer 12,894 - - - 12,894 Total $ 1,515,219 $ 55,362 $ 30,903 $ 7,883 $ 1,609,367 As of December 31, 2024 Pass Watch Special mention Substandard Total (Dollars in thousands) Construction & development $ 165,863 $ - $ 1,259 $ 563 $ 167,685 1-4 family real estate 121,047 - - - 121,047 Commercial real estate - other 498,835 - 7,493 4,976 511,304 Commercial & industrial 493,512 - 3,817 9,694 507,023 Agricultural 74,896 - 3,026 - 77,922 Consumer 14,312 - - - 14,312 Total $ 1,368,465 $ - $ 15,595 $ 15,233 $ 1,399,293 As of December 31, 2023 Pass Watch Special mention Substandard Total (Dollars in thousands) Construction & development $ 136,417 $ - $ 789 $ - $ 137,206 1-4 family real estate 100,576 - - - 100,576 Commercial real estate - other 502,795 - 15,701 126 518,622 Commercial & industrial 485,433 4,094 5,767 30,891 526,185 Agricultural 66,495 - - - 66,495 Consumer 14,437 - - 80 14,517 Total $ 1,306,153 $ 4,094 $ 22,257 $ 31,097 $ 1,363,601 34 Table of Contents Deposits We gather deposits primarily through our twelve branch locations and online through our website.
The following table sets forth deposit balances by certain categories as of the dates indicated and the percentage of each deposit category to total deposits.
Total deposits as of December 31, 2025, 2024, and 2023 were $1.70 billion, $1.52 billion and $1.59 billion, respectively. The following table sets forth deposit balances by certain categories as of the dates indicated and the percentage of each deposit category to total deposits.
Interest income on short-term investments increased $6.9 million, or 412.9%, to $8.6 million for year ended December 31, 2023 compared to 2022, due to an increase in the average balances of $45.0 million, or 34.7% and a yield increase of 362 basis points.
Interest income on short-term investments increased $594,000, or 6.4%, to $9.9 million for year ended December 31, 2025 compared to 2024, due to an increase in the average balances of $50.9 million, or 27.6% and a yield decrease of 83 basis points.
As of December 31, 2024 Loans 30-59 days past due Loans 60-89 days past due Loans 90+ days past due Loans 90+ days past due and accruing Total past due loans Current Gross loans (Dollars in thousands) Construction & development $ - $ - $ - $ - $ - $ 167,685 $ 167,685 1-4 family real estate - - - - - 121,047 121,047 Commercial real estate - other 103 - 3,426 - 3,529 507,775 511,304 Commercial & industrial 403 5 - - 408 506,615 507,023 Agricultural - - - - - 77,922 77,922 Consumer 97 - - - 97 14,215 14,312 Total $ 603 $ 5 $ 3,426 $ - $ 4,034 $ 1,395,259 $ 1,399,293 As of December 31, 2023 Loans 30-59 days past due Loans 60-89 days past due Loans 90+ days past due Loans 90+ days past due and accruing Total Past Due Loans Current Gross loans (Dollars in thousands) Construction & development $ - $ - $ - $ - $ - $ 137,206 $ 137,206 1-4 family real estate - - - - - 100,576 100,576 Commercial real estate - other - - - - - 518,622 518,622 Commercial & industrial 472 10,969 9,946 9,946 21,387 504,798 526,185 Agricultural - - - - - 66,495 66,495 Consumer - 27 80 80 107 14,410 14,517 Total $ 472 $ 10,996 $ 10,026 $ 10,026 $ 21,494 $ 1,342,107 $ 1,363,601 As of December 31, 2022 Loans 30-59 days past due Loans 60-89 days past due Loans 90+ days past due Loans 90+ days past due and accruing Total Past Due Loans Current Gross loans (Dollars in thousands) Construction & development $ - $ - $ - $ - $ - $ 163,203 $ 163,203 1-4 family commerical - - - - - 76,928 76,928 Commercial real estate - other - 617 - - 617 438,384 439,001 Commercial & industrial 21 - 9,923 9,923 9,944 503,067 513,011 Agricultural 4 - - - 4 66,141 66,145 Consumer 291 82 22 18 395 14,554 14,949 Total $ 316 $ 699 $ 9,945 $ 9,941 $ 10,960 $ 1,262,277 $ 1,273,237 In addition to the past due and nonaccrual criteria, the Company also evaluates loans according to its internal risk grading system.
As of December 31, 2025 Loans 30-59 days past due Loans 60-89 days past due Loans 90+ days past due Loans 90+ days past due and accruing Total past due loans Current Gross loans (Dollars in thousands) Construction & development $ 79 $ - $ - $ - $ 79 $ 224,487 $ 224,566 1-4 family real estate 47 - - - 47 126,075 126,122 Commercial real estate - other - 1,423 - - 1,423 586,174 587,597 Commercial & industrial 1,702 80 3,429 - 5,211 562,069 567,280 Agricultural - - - - - 90,908 90,908 Consumer 30 - - - 30 12,864 12,894 Total $ 1,858 $ 1,503 $ 3,429 $ - $ 6,790 $ 1,602,577 $ 1,609,367 As of December 31, 2024 Loans 30-59 days past due Loans 60-89 days past due Loans 90+ days past due Loans 90+ days past due and accruing Total Past Due Loans Current Gross loans (Dollars in thousands) Construction & development $ - $ - $ - $ - $ - $ 167,685 $ 167,685 1-4 family real estate - - - - - 121,047 121,047 Commercial real estate - other 103 - 3,426 - 3,529 507,775 511,304 Commercial & industrial 403 5 - - 408 506,615 507,023 Agricultural - - - - - 77,922 77,922 Consumer 97 - - - 97 14,215 14,312 Total $ 603 $ 5 $ 3,426 $ - $ 4,034 $ 1,395,259 $ 1,399,293 As of December 31, 2023 Loans 30-59 days past due Loans 60-89 days past due Loans 90+ days past due Loans 90+ days past due and accruing Total Past Due Loans Current Gross loans (Dollars in thousands) Construction & development $ - $ - $ - $ - $ - $ 137,206 $ 137,206 1-4 family commercial - - - - - 100,576 100,576 Commercial real estate - other - - - - - 518,622 518,622 Commercial & industrial 472 10,969 9,946 9,946 21,387 504,798 526,185 Agricultural - - - - - 66,495 66,495 Consumer - 27 80 80 107 14,410 14,517 Total $ 472 $ 10,996 $ 10,026 $ 10,026 $ 21,494 $ 1,342,107 $ 1,363,601 In addition to the past due and nonaccrual criteria, the Company also evaluates loans according to its internal risk grading system.
Special mention : These loans have observable weaknesses or evidence imprudent handling or structural issues. The weaknesses require close attention, and the remediation of those weaknesses is necessary. No risk of probable loss exists.
Special mention : These loans have observable weaknesses or evidence imprudent handling or structural issues. The weaknesses require close attention, and the remediation of those weaknesses is necessary. No risk of probable loss exists. Credits in this category are expected to quickly migrate to “Watch” or “Substandard” as this is viewed as a transitory loan grade.
Total deposits were $1.52 billion as of December 31, 2024, a decrease of $75.9 million, or 4.8%, from December 31, 2023. Pre-tax net income was $60.4 million, an increase of $23.1 million, or 62.1%, for the year ended December 31, 2024 as compared to pre-tax net income of $37.2 million for the same period in 2023.
Total deposits were $1.70 billion as of December 31, 2025, an increase of $185.4 million, or 12.2%, from December 31, 2024. Income before taxes was $56.8 million, a decrease of $3.6 million, or 6.0%, for the year ended December 31, 2025 as compared to income before taxes of $60.4 million for the same period in 2024.
The allowance was $17.9 million at December 31, 2024, $19.7 million at December 31, 2023 and $14.7 million at December 31, 2022. See the 2024 Overview for the discussion of the decrease in allowance in 2024.
The allowance was $19.4 million at December 31, 2025, $17.9 million at December 31, 2024 and $19.7 million at December 31, 2023. See the 2025 Overview for further discussion regarding management’s ongoing assessment of the adequacy of the allowance.
Noninterest expense for the year ended December 31, 2023 was $33.4 million compared to $28.6 million for the year ended December 31, 2022, an increase of $4.8 million or 16.7%.
Noninterest Expense Noninterest expense for the year ended December 31, 2025 was $38.9 million compared to $37.1 million for the year ended December 31, 2024, an increase of $1.8 million or 4.9%.
The increase was primarily attributable to expenses related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements. 27 Table of Contents Financial Condition The following discussion of our financial condition compares December 31, 2024, 2023, and 2022.
The decrease was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.
In 2024, the Federal Reserve began to adjust monetary policy, ultimately lowering the federal funds rate three times, ending the year with a target range of 4.25% to 4.5%.
In 2024, the Federal Reserve began to adjust monetary policy, ultimately lowering the federal funds rate three times to end that year with a target range of 4.25% to 4.50%. This easing cycle continued into 2025, with the Federal Reserve implementing three additional 25-basis-point reductions in the second half of the year.
The loans have defined weaknesses relative to cash flow, collateral, financial condition or other factors that might jeopardize repayment of all of the principal and interest on a timely basis. There is the possibility that a future loss will occur if weaknesses are not remediated.
Substandard : These loans are not adequately protected by the sound worth and debt service capacity of the borrower, but may be well-secured. The loans have defined weaknesses relative to cash flow, collateral, financial condition or other factors that might jeopardize repayment of all of the principal and interest on a timely basis.
These monetary policy actions, along with the impact of the elevated interest rate environment experienced earlier in 2024, influenced our net interest income and credit quality throughout the year. 2024 Overview We reported total loans of $1.40 billion as of December 31, 2024, an increase of $36.5 million, or 2.7%, from December 31, 2023.
These monetary policy actions, along with the impact of the transition from a peak-rate environment, compressed our net interest margin while generally supporting stable credit quality throughout 2025. 2025 Overview We reported total loans of $1.61 billion as of December 31, 2025, an increase of $209.0 million, or 15.0%, from December 31, 2024.
For the year ended December 31, 2023 compared to the year ended December 31, 2022: - The provision for credit losses increased from $4.5 million to $21.1 million; and - The allowance as a percentage of loans increased by 29 basis points to 1.44%. - Increases are related to the single loan customer discussed in the 2024 Overview.
For the year ended December 31, 2024 compared to the year ended December 31, 2023: - The provision for credit losses decreased from $21.1 million to $0; and - The allowance as a percentage of loans decreased by 16 basis points to 1.28%. - The decrease in the provision was primarily due to the impact of a single loan customer that filed for bankruptcy in 2023, resulting in a $16.5 million charge-off recorded during that period.
The FED influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate. For the three-year period between January 1, 2022 and December 31, 2024, the prime rate fluctuated between a high of 8.50%, and a low of 3.25%.
The Federal Reserve (“FED”) influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan portfolio is significantly affected by changes in the prime interest rate.
Interest expense on interest-bearing deposits totaled $39.0 million for the year ended December 31, 2023, compared to $9.3 million for 2022, an increase of $29.7 million, or 318.3%. The increase was related to the cost of interest-bearing deposits increasing to 3.60% for the year ended December 31, 2023 from 1.05% for the year ended December 31, 2022.
Interest expense on interest-bearing deposits totaled $40.9 million for the year ended December 31, 2025, compared to $45.3 million for 2024, a decrease of $4.5 million, or 9.8%. The decrease was related to the cost of interest-bearing deposits decreasing to 3.25% for the year ended December 31, 2025 from 3.98% for the year ended December 31, 2024.
The increase was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements. 26 Table of Contents For the year ended December 31, 2023 compared to the year ended December 31, 2022: - Other noninterest income was $8.1 million compared to $1.7 million, an increase of $6.4 million, or 380%.
For the year ended December 31, 2024 compared to the year ended December 31, 2023: - Other noninterest income was $9.9 million compared to $8.1 million, an increase of $1.9 million, or 23.1%.
Substandard loans totaled $15.2 million as of December 31, 2024, a decrease of $15.9 million compared to December 31, 2023. Substandard loans totaled $31.1 million as of December 31, 2023, an increase of $10.1 million compared to December 31, 2022.
There is the possibility that a future loss will occur if weaknesses are not remediated. 33 Table of Contents Substandard loans totaled $7.9 million as of December 31, 2025, a decrease of $7.3 million compared to December 31, 2024. Substandard loans totaled $15.2 million as of December 31, 2024, a decrease of $15.9 million compared to December 31, 2023.
As the pandemic eased through 2021 and inflation increased, the Federal Reserve aggressively raised the federal funds target rate to 4.25-4.50% by the end of 2022 and to 5.25%-5.50% by the end of 2023.
As of December 31, 2025, we had total assets of $1.96 billion, total loans of $1.61 billion, total deposits of $1.70 billion and total shareholders’ equity of $251.0 million. The Federal Reserve aggressively raised the federal funds target rate throughout 2022 and 2023 to combat elevated inflation, reaching a peak range of 5.25% to 5.50% by December 31, 2023.
Changes periodically occur in the estimates due to changes in tax rates, tax laws and regulations and implementation of new tax planning strategies. The process of determining the accruals for income taxes necessarily involves the exercise of considerable judgment and consideration of numerous subjective factors.
Income Taxes We file a consolidated income tax return and recognize deferred taxes based upon the future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities. The process of determining the accruals for income taxes involves the exercise of considerable judgment regarding tax rates, laws, and the implementation of tax planning strategies.
See Note 6 of the financial statements. 32 Table of Contents The following tables present an aging analysis of loans as of the dates indicated.
(2) Excludes OREO of $461,000, $321,000, and $0 as of December 31, 2025, 2024, and 2023, respectively, as the balances are not considered material for separate disclosure. 32 Table of Contents The following tables present an aging analysis of loans as of the dates indicated.
Removed
As of December 31, 2024, we had total assets of $1.74 billion, total loans of $1.40 billion, total deposits of $1.52 billion and total shareholders’ equity of $213.2 million. The U.S. economy experienced widespread volatility throughout 2020 and 2021 as a result of the COVID-19 pandemic and government responses to the pandemic.
Added
As of December 31, 2025, the federal funds target range stood at 3.50% to 3.75%.
Removed
Economic condition declined rapidly and significantly following the initial widespread U.S. outbreak in March and April of 2020. Federal stimulus was quickly passed in the form of the CARES Act and the economy rebounded significantly in the second half of 2020.
Added
The provision for credit losses for the year ended December 31, 2025, was $700,000, an increase of 100% compared to a $0 provision for the year ended December 31, 2024. This provision was primarily attributable to the 15% year-over-year loan growth realized during the period, as total loans increased by $209.0 million to $1.61 billion at December 31, 2025.
Removed
In an emergency measure aimed at dampening the economic impact of COVID-19, the Federal Reserve lowered the target for the federal funds rate to a range of between zero to 0.25% effective on March 16, 2020 where it remained through the end of 2020.
Added
The 2025 provisioning reflects management’s ongoing assessment of the allowance for credit losses required to support the expanded loan portfolio and incorporates updated economic assumptions relevant to the current environment. We continue to monitor credit metrics and economic indicators to ensure the allowance for credit losses remains at an appropriate level to address potential credit risks within the portfolio.
Removed
This action by the Federal Reserve followed a prior reduction of the targeted federal funds rates to a range of 1.0% to 1.25% effective March 4, 2020.
Added
For the three-year period between January 1, 2023 and December 31, 2025, the prime rate fluctuated between a high of 8.50%, and a low of 6.75%.
Removed
The provision for credit losses for the year ended December 31, 2024 decreased $21.1 million, or 100%, from $21.1 million compared to the same period in 2023.
Added
The Company manages its debt securities portfolio for liquidity, as a tool to execute its asset/liability management strategy, and for pledging requirements for public funds: As of December 31, 2025 After One Year But After Five Years But Within One Year Within Five Years Within Ten Years After Ten Years Total Amount Yield * Amount Yield * Amount Yield * Amount Yield * Amount Yield * Available-for-sale (Dollars in thousands) U.S. federal agencies $ 21 0.14 % $ - 0.00 % $ - 0.00 % $ - 0.00 % $ 21 0.14 % Mortgage-backed securities 902 1.33 7,059 1.37 - - 17,471 1.70 25,432 1.60 State and political subdivisions 3,885 1.65 9,531 1.57 4,358 1.70 - - 17,774 1.62 U.S. treasuries 983 0.97 3,743 1.09 882 1.12 - - 5,608 1.08 Corporate debt securities - - - - 5,184 3.36 - - 5,184 3.36 Total $ 5,791 1.48 % $ 20,333 1.41 % $ 10,424 2.47 % $ 17,471 1.70 % $ 54,019 1.72 % Percentage of total 10.72 % 37.64 % 19.30 % 32.34 % 100.00 % *Yield is on a taxable-equivalent basis using 21% tax rate Provision for Credit Losses For the year ended December 31, 2025 compared to the year ended December 31, 2024: - The provision for credit losses increased from $0 to $700,000, reflecting routine adjustments within our allowance for credit losses estimation methodology; and - The allowance as a percentage of loans decreased by 7 basis points to 1.21%.
Removed
The provision expense for the year ended December 31, 2023 was related to loan growth in the first quarter of 2023, the impact of updated economic assumptions, and we had a single loan customer that filed for bankruptcy, and as a result, we recorded a charge-off of $16.5 million, increased nonaccrual loans by $18.4 million, and recorded an additional specific reserve to the allowance for credit losses and provision for loan losses of $2.0 million.
Added
For the years ended December 31, 2025, 2024, and 2023, all of our income before income taxes was generated from domestic operations. We do not currently have exposure to foreign tax jurisdictions; as such, our jurisdictional tax mix remains concentrated within the United States and specific state jurisdictions, primarily Oklahoma.
Removed
The Company manages its debt securities portfolio for liquidity, as a tool to execute its asset/liability management strategy, and for pledging requirements for public funds: As of December 31, 2024 After One Year But After Five Years But Within One Year Within Five Years Within Ten Years After Ten Years Total Amount Yield * Amount Yield * Amount Yield * Amount Yield * Amount Yield * Available-for-sale (Dollars in thousands) U.S.
Added
Our provision for income taxes was $13.7 million for the year ended December 31, 2025, compared to $14.7 million for 2024. This resulted in an effective tax rate of 24.13% in 2025, compared to 24.28% in 2024.
Removed
Federal agencies $ - 0.00 % $ 64 2.78 % $ - 0.00 % $ - 0.00 % $ 64 2.78 % Mortgage-backed securities 2,653 1.72 8,402 1.37 - - 19,141 1.70 30,196 1.61 State and political subdivisions 2,028 1.09 11,564 1.47 6,134 1.70 - - 19,726 1.51 U.S.
Added
The effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the effect of state income taxes (net of federal benefit) and nondeductible expenses. The year-over-year rate change was primarily driven by the impact of Oklahoma state taxes and certain nondeductible reconciling items.
Removed
Treasuries - - 3,687 1.05 1,639 1.12 - - 5,326 1.08 Corporate debt securities - - - - 4,629 3.36 - - 4,629 3.36 Total $ 4,681 1.44 % $ 23,717 1.37 % $ 12,402 2.26 % $ 19,141 1.70 % $ 59,941 1.68 % Percentage of total 7.81 % 39.57 % 20.69 % 31.93 % 100.00 % *Yield is on a taxable-equivalent basis using 21% tax rate Provision for Credit Losses For the year ended December 31, 2024 compared to the year ended December 31, 2023: - The provision for credit losses decreased from $21.1 million to $0; and - The allowance as a percentage of loans decreased by 16 basis points to 1.28%. - Decreases are related to the single loan customer discussed in the 2024 Overview.
Added
Cash taxes paid during 2025 totaled $13.7 million, compared to $15.1 million in 2024, reflecting our domestic jurisdictional profile and the timing of estimated tax payments.
Removed
Income from loans placed on nonaccrual status continues to be recognized to the extent cash is received and when the collectability of the loan’s principal balance is reasonably assured.
Added
The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to remain competitive. 27 Table of Contents Financial Condition The following discussion of our financial condition compares December 31, 2025, 2024, and 2023.
Removed
The following table presents information regarding nonperforming assets as of the dates indicated.
Added
As of December 31, 2025, 2024, and 2023, brokered deposits were $205.6 million, $225.5 million, and $50.1 million, respectively. To manage liquidity and provide insurance for customer funds, the Company participates in reciprocal deposit programs, such as CDARS and ICS. At December 31, 2025, reciprocal deposits totaled $576.5 million.
Removed
Credits in this category are expected to quickly migrate to “Watch” or “Substandard” as this is viewed as a transitory loan grade. 33 Table of Contents Substandard : These loans are not adequately protected by the sound worth and debt service capacity of the borrower, but may be well-secured.
Removed
Goodwill and Intangibles Intangible assets totaled $878,000 and goodwill, net of accumulated amortization totaled $8.5 million for the year ended December 31, 2024, compared to intangible assets of $1.0 million and goodwill, net of accumulated amortization of $8.5 million for the year ended December 31, 2023.
Removed
Goodwill resulting from a business combination represents the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is tested annually for impairment or more frequently if other impairment indicators are present.
Removed
If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value. Subsequent increases in goodwill value are not recognized in the accompanying consolidated financial statements.
Removed
Other intangible assets consist of core deposit intangible assets and are amortized on a straight-line basis based on an estimated useful life of 10 years. Such assets are periodically evaluated as to the recoverability of their carrying values. 40 Table of Contents Income Taxes The Company files a consolidated income tax return.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

153 edited+68 added−79 removed126 unchanged
Biggest changeThe following table presents, by portfolio segment, the activity in the allowance for credit losses for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands): Construction & Development 1 - 4 Family Real Estate Commercial Real Estate - Other Commercial & Industrial Agricultural Consumer Total December 31, 2024 Loans Balance, beginning of period $ 1,417 $ 1,271 $ 6,889 $ 9,237 $ 628 $ 249 $ 19,691 Charge-offs - - (275 ) (2,000 ) - - (2,275 ) Recoveries - - - 495 7 - 502 Net (charge-offs) recoveries - - (275 ) (1,505 ) 7 - (1,773 ) Provision (credit) for credit losses (194 ) 42 378 (935 ) 471 238 - Balance, end of period $ 1,223 $ 1,313 $ 6,992 $ 6,797 $ 1,106 $ 487 $ 17,918 Unfunded Commitments Balance, beginning of period $ 158 $ 4 $ 8 $ 280 $ 11 $ 3 $ 464 Provision (credit) for credit losses 44 2 1 (50 ) 3 - - Balance, end of period $ 202 $ 6 $ 9 $ 230 $ 14 $ 3 $ 464 Total Allowance for Credit Losses $ 1,425 $ 1,319 $ 7,001 $ 7,027 $ 1,120 $ 490 $ 18,382 Total Provision for Credit Losses $ (150 ) $ 44 $ 379 $ (985 ) $ 474 $ 238 $ - Construction & Development 1 - 4 Family Real Estate Commercial Real Estate - Other Commercial & Industrial Agricultural Consumer Total December 31, 2023 Loans Balance, beginning of period $ 1,889 $ 890 $ 5,080 $ 5,937 $ 765 $ 173 $ 14,734 Impact of CECL adoption 44 (138 ) (168 ) 716 (149 ) (55 ) 250 Charge-offs - - - (16,500 ) (7 ) (17 ) (16,524 ) Recoveries - - - 40 2 8 50 Net (charge-offs) recoveries - - - (16,460 ) (5 ) (9 ) (16,474 ) Provision (credit) for credit losses (516 ) 519 1,977 19,044 17 140 21,181 Balance, end of period $ 1,417 $ 1,271 $ 6,889 $ 9,237 $ 628 $ 249 $ 19,691 Unfunded Commitments Balance, beginning of period $ - $ - $ - $ - $ - $ - $ - Impact of CECL adoption 171 4 24 274 25 2 500 Provision (credit) for credit losses (13 ) - (16 ) 6 (14 ) 1 (36 ) Balance, end of period $ 158 $ 4 $ 8 $ 280 $ 11 $ 3 $ 464 Total Allowance for Credit Losses $ 1,575 $ 1,275 $ 6,897 $ 9,517 $ 639 $ 252 $ 20,155 Total Provision for Credit Losses $ (529 ) $ 519 $ 1,961 $ 19,050 $ 3 $ 141 $ 21,145 Construction & Development 1 - 4 Family Real Estate Commercial Real Estate - Other Commercial & Industrial Agricultural Consumer Total December 31, 2022 Balance, beginning of period $ 1,695 $ 630 $ 3,399 $ 3,621 $ 730 $ 241 $ 10,316 Charge-offs - - - (2 ) (50 ) (22 ) (74 ) Recoveries - - - 10 4 10 24 Net (charge-offs) recoveries - - - 8 (46 ) (12 ) (50 ) Provision (credit) for credit losses 194 260 1,681 2,308 81 (56 ) 4,468 Balance, end of period $ 1,889 $ 890 $ 5,080 $ 5,937 $ 765 $ 173 $ 14,734 68 Table of Contents Bank7 Corp.
Biggest changeThe following table presents, by portfolio segment, the activity in the allowance for credit losses for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands): Commercial Construction & 1 - 4 Family Real Estate - Commercial Development Real Estate Other & Industrial Agricultural Consumer Total December 31, 2025 Loans Balance, beginning of period $ 1,223 $ 1,313 $ 6,992 $ 6,797 $ 1,106 $ 487 $ 17,918 Charge-offs - - (197 ) - - (3 ) (200 ) Recoveries - - 17 965 4 3 989 Net (charge-offs) recoveries - - (180 ) 965 4 - 789 Provision (credit) for credit losses (1 ) (349 ) 43 1,607 (498 ) (102 ) 700 Balance, end of period $ 1,222 $ 964 $ 6,855 $ 9,369 $ 612 $ 385 $ 19,407 Unfunded Commitments Balance, beginning of period $ 202 $ 6 $ 9 $ 230 $ 14 $ 3 $ 464 Provision (credit) for credit losses (92 ) (2 ) 26 63 5 - - Balance, end of period $ 110 $ 4 $ 35 $ 293 $ 19 $ 3 $ 464 Total allowance for credit losses and reserve for unfunded commitments $ 1,332 $ 968 $ 6,890 $ 9,662 $ 631 $ 388 $ 19,871 Total provision (credit) for credit losses $ (93 ) $ (351 ) $ 69 $ 1,670 $ (493 ) $ (102 ) $ 700 Commercial Construction & 1 - 4 Family Real Estate - Commercial Development Real Estate Other & Industrial Agricultural Consumer Total December 31, 2024 Loans Balance, beginning of period $ 1,417 $ 1,271 $ 6,889 $ 9,237 $ 628 $ 249 $ 19,691 Charge-offs - - (275 ) (2,000 ) - - (2,275 ) Recoveries - - - 495 7 - 502 Net (charge-offs) recoveries - - (275 ) (1,505 ) 7 - (1,773 ) Provision (credit) for credit losses (194 ) 42 378 (935 ) 471 238 - Balance, end of period $ 1,223 $ 1,313 $ 6,992 $ 6,797 $ 1,106 $ 487 $ 17,918 Unfunded Commitments Balance, beginning of period $ 158 $ 4 $ 8 $ 280 $ 11 $ 3 $ 464 Provision (credit) for credit losses 44 2 1 (50 ) 3 - - Balance, end of period $ 202 $ 6 $ 9 $ 230 $ 14 $ 3 $ 464 Total allowance for credit losses and reserve for unfunded commitments $ 1,425 $ 1,319 $ 7,001 $ 7,027 $ 1,120 $ 490 $ 18,382 Total provision (credit) for credit losses $ (150 ) $ 44 $ 379 $ (985 ) $ 474 $ 238 $ - Commercial Construction & 1 - 4 Family Real Estate - Commercial Development Real Estate Other & Industrial Agricultural Consumer Total December 31, 2023 Loans Balance, beginning of period $ 1,889 $ 890 $ 5,080 $ 5,937 $ 765 $ 173 $ 14,734 Impact of CECL adoption 44 (138 ) (168 ) 716 (149 ) (55 ) 250 Charge-offs - - - (16,500 ) (7 ) (17 ) (16,524 ) Recoveries - - - 40 2 8 50 Net (charge-offs) recoveries - - - (16,460 ) (5 ) (9 ) (16,474 ) Provision (credit) for credit losses (516 ) 519 1,977 19,044 17 140 21,181 Balance, end of period $ 1,417 $ 1,271 $ 6,889 $ 9,237 $ 628 $ 249 $ 19,691 Unfunded Commitments Balance, beginning of period $ - $ - $ - $ - $ - $ - $ - Impact of CECL adoption 171 4 24 274 25 2 500 Provision (credit) for credit losses (13 ) - (16 ) 6 (14 ) 1 (36 ) Balance, end of period $ 158 $ 4 $ 8 $ 280 $ 11 $ 3 $ 464 Total allowance for credit losses and reserve for unfunded commitments $ 1,575 $ 1,275 $ 6,897 $ 9,517 $ 639 $ 252 $ 20,155 Total provision (credit) for credit losses $ (529 ) $ 519 $ 1,961 $ 19,050 $ 3 $ 141 $ 21,145 69 Table of Contents Bank7 Corp.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB.
Mortgage Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income.
Loans Held for Sale Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate. Net unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income.
The CODM uses net income to monitor budget versus actual results and in the determination of allocating resources across the Company. The Company’s single reportable segment, the Bank, generates revenues primarily from interest income from financial instruments and non-interest income and service charges on deposit accounts. There are no intra-entity sales or transfers within the Company.
The CODM uses net income to monitor budget versus actual results and in the determination of allocating resources across the Company. The Company’s single reportable segment, generates revenues primarily from interest income from financial instruments and non-interest income and service charges on deposit accounts. There are no intra-entity sales or transfers within the Company.
Therefore, management considers all financial service operations to be aggregated within one reportable operating segment, the Bank, and evaluates financial performance on a company-wide basis using net income as reported on the Consolidated Statement of Income. The measure of segment assets is total assets, as reported on the Consolidated Statements of Condition.
Therefore, management considers all financial service operations to be aggregated within one reportable operating segment, and evaluates financial performance on a company-wide basis using net income as reported on the consolidated statement of income. The measure of segment assets is total assets, as reported on the consolidated statements of condition.
Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
While the CODM monitors the revenue streams of the various products and services offered by the Bank, the Company’s operations are managed and financial performance is evaluated on a Company-wide basis as a single reportable operating segment, which is the Bank.
While the CODM monitors the revenue streams of the various products and services offered by the Bank, the Company’s operations are managed and financial performance is evaluated on a Company-wide basis as a single reportable operating segment.
Loans That Share Similar Risk Characteristics (Pooled Loans) The general steps in determining expected credit losses for the pooled loan component of the allowance are as follows: • Segment loans into pools according to similar risk characteristics; • Develop historical loss rates for each loan pool segment; • Incorporate the impact of forecasts; • Incorporate the impact of other qualitative factors; and • Calculate and review pool specific allowance for credit loss estimate. 53 Table of Contents Bank7 Corp.
Loans That Share Similar Risk Characteristics (Pooled Loans) The general steps in determining expected credit losses for the pooled loan component of the allowance are as follows: • Segment loans into pools according to similar risk characteristics; • Develop historical loss rates for each loan pool segment; • Incorporate the impact of forecasts; • Incorporate the impact of other qualitative factors; and • Calculate and review pool specific allowance for credit loss estimate. 54 Table of Contents Bank7 Corp.
The Company or one of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are no longer subject to U.S. federal or state tax examinations for years before 2021. Comprehensive Income Comprehensive income includes all changes in shareholders’ equity during a period, except those resulting from transactions with shareholders.
The Company or one of its subsidiaries file income tax returns in the U.S. federal jurisdiction and various state jurisdictions. We are no longer subject to U.S. federal or state tax examinations for years before 2022. Comprehensive Income Comprehensive income includes all changes in shareholders’ equity during a period, except those resulting from transactions with shareholders.
There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities Recurring Measurements Assets and liabilities measured at fair value on a recurring basis include the following: Available-for-sale securities: Debt securities classified as available-for-sale are reported at fair value utilizing Level 2 inputs.
There is a hierarchy of three levels of inputs that may be used to measure fair value: Level 1 Quoted prices in active markets for identical assets or liabilities Level 2 Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities Level 3 Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities Recurring Measurements Assets and liabilities measured at fair value on a recurring basis include the following: Available-for-sale securities: Debt securities classified as available-for-sale, as discussed in Note 4 are reported at fair value utilizing Level 2 inputs.
Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies. 42 Table of Contents On a quarterly basis, we run various simulation models including a static balance sheet and dynamic growth balance sheet.
Actual results will differ from the model’s simulated results due to timing, magnitude and frequency of interest rate changes as well as changes in market conditions and the application and timing of various management strategies. 41 Table of Contents On a quarterly basis, we run various simulation models including a static balance sheet and dynamic growth balance sheet.
As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation. 43 Table of Contents Item 8 .
As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates may not necessarily move in the same direction or in the same magnitude as the prices of goods and services. However, other operating expenses do reflect general levels of inflation. 42 Table of Contents Item 8 .
Credit risk is driven by consumer economic factors, such as unemployment and general economic conditions in the Company’s market area and the creditworthiness of a borrower. 69 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements Loan grades are numbered 1 through 4. Grade 1 is considered satisfactory.
Credit risk is driven by consumer economic factors, such as unemployment and general economic conditions in the Company’s market area and the creditworthiness of a borrower. 70 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements Loan grades are numbered 1 through 4. Grade 1 is considered satisfactory.
As of December 31, 2024, the Company’s and the Bank’s capital ratios exceeded the minimum capital adequacy guideline percentage requirements under the Basel III Capital Rules on a fully phased-in basis. The Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval.
As of December 31, 2025, the Company’s and the Bank’s capital ratios exceeded the minimum capital adequacy guideline percentage requirements under the Basel III Capital Rules on a fully phased-in basis. The Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval.
The calculation of all types of regulatory capital is subject to definitions, deductions and adjustments specified in the regulations. 82 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements The Basel III Capital Rules also require a “capital conservation buffer” of 2.5% above the regulatory minimum risk-based capital requirements.
The calculation of all types of regulatory capital is subject to definitions, deductions and adjustments specified in the regulations. 84 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements The Basel III Capital Rules also require a “capital conservation buffer” of 2.5% above the regulatory minimum risk-based capital requirements.
It is possible these estimates could be revised in the near term and these revisions could be material. The Company’s estimates of oil, natural gas and NGL reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data, as well as the projection of future rates of production.
It is possible these estimates could be revised in the near term. The Company’s estimates of oil, natural gas and NGL reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data, as well as the projection of future rates of production.
As of December 31, 2024, the Company had the ability and intent to hold the debt securities classified as available-for-sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased and acquired.
As of December 31, 2025, the Company had the ability and intent to hold the debt securities classified as available-for-sale for a period of time sufficient for a recovery of cost. The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased and acquired.
Risk factors management considers in this assessment include trends in underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters. 54 Table of Contents Bank7 Corp.
Risk factors management considers in this assessment include trends in underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters. 55 Table of Contents Bank7 Corp.
Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. They are included in noninterest income or expense and, when applicable, are reported as a reclassification adjustment in other comprehensive income(loss). 51 Table of Contents Bank7 Corp.
Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. They are included in noninterest income or expense and, when applicable, are reported as a reclassification adjustment in other comprehensive income (loss). 52 Table of Contents Bank7 Corp.
Notes to Consolidated Financial Statements Note 16: Disclosures about Fair Value of Assets and Liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Notes to Consolidated Financial Statements Note 15: Disclosures about Fair Value of Assets and Liabilities Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Notes to Consolidated Financial Statements Allowance for Credit Losses – Investment Securities On January 1, 2023, the Company was required to adopt a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology. Allowance for Credit Losses - AFS Securities - The Company evaluates its available-for-sale securities portfolio on a quarterly basis for potential credit-related impairment.
Notes to Consolidated Financial Statements Allowance for Credit Losses – Investment Securities On January 1, 2023, the Company was required to adopt a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology. Allowance for Credit Losses – Available for Sale (“AFS”) Securities - The Company evaluates its available-for-sale securities portfolio on a quarterly basis for potential credit-related impairment.
Goodwill resulting from a business combination represents the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is tested annually for impairment or more frequently if other impairment indicators are present.
Goodwill resulting from a business combination represents the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is tested annually for impairment as of December 31, or more frequently if other impairment indicators are present.
Management believes, as of December 31, 2024, that the Company and Bank meet all capital adequacy requirements to which it is subject and maintains capital conservation buffers that allow the Company and Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to certain executive officers.
Management believes, as of December 31, 2025, that the Company and Bank meet all capital adequacy requirements to which it is subject and maintains capital conservation buffers that allow the Company and Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to certain executive officers.
Notes to Consolidated Financial Statements The following table details gross unrealized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2024 and December 31, 2023.
Notes to Consolidated Financial Statements The following table details gross unrealized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2025 and December 31, 2024.
During the twelve months ended December 31, 2024 and December 31, 2023, no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent. At a minimum, the estimated value of the collateral for loan equals the current book value.
During the twelve months ended December 31, 2025 and December 31, 2024, no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent. At a minimum, the estimated value of the collateral for loan equals the current book value.
For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2024, 2023 and 2022, the Company recognized no interest and penalties.
For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2025, 2024 and 2023, the Company recognized no interest and penalties.
As of December 31, 2024, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain capital ratios as set forth in the table.
As of December 31, 2025, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain capital ratios as set forth in the table.
Notes to Consolidated Financial Statements Note 17: Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit.
Notes to Consolidated Financial Statements Note 16: Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit.
Notes to Consolidated Financial Statements Stock-based Compensation The Company recognizes stock-based compensation as salaries and employee benefits expense in the consolidated statements of comprehensive income based on the fair value of the Company’s stock options and restricted stock units (“RSU’s”) on the measurement date, which, for the Company, is the date of the grant.
Notes to Consolidated Financial Statements Stock-based Compensation The Company recognizes stock-based compensation as salaries and employee benefits expense in the consolidated statements of comprehensive income based on the fair value of the Company’s stock options and restricted stock units (“RSUs”) on the measurement date, which, for the Company, is the date of the grant.
Revenue is recognized when the transactions occur or as services are performed over primarily monthly or quarterly periods. Payment is typically received in the period the transactions occur, or in some cases, within 90 days of the service period. 57 Table of Contents Bank7 Corp.
Revenue is recognized when the transactions occur or as services are performed over primarily monthly or quarterly periods. Payment is typically received in the period the transactions occur, or in some cases, within 90 days of the service period. 58 Table of Contents Bank7 Corp.
For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Collateral-Dependent Loans, Net of Allowance for Credit Losses The estimated fair value of collateral-dependent impaired loans is based on fair value, less estimated cost to sell.
For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below. Collateral-Dependent Loans, Net of Allowance for Credit Losses The estimated fair value of collateral-dependent loans is based on fair value, less estimated cost to sell. Collateral-dependent loans are classified within Level 3 of the fair value hierarchy.
Our internal policy regarding internal rate risk simulations currently specifies that for gradual parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 10% for a -100 basis point shift, 5% for a 100 basis point shift, 10% for a 200 basis point shift, 15% for a 300 basis point shift, and 20% for a 400 basis point shift.
Our internal policy regarding internal rate risk simulations currently specifies that for gradual parallel shifts of the yield curve, estimated net interest income at risk for the subsequent one-year period should not decline by more than 20% for a -200 basis point shift, 10% for a -100 basis point shift, 10% for a 100 basis point shift, 20% for a 200 basis point shift, 30% for a 300 basis point shift, and 30% for a 400 basis point shift.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.
Notes to Consolidated Financial Statements The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value: Cash and Due from Banks, Federal Funds Sold, Interest-Bearing Time Deposits in Other Banks, Nonmarketable Equity Securities, Interest Receivable and Interest Payable The carrying amount approximates fair value.
Notes to Consolidated Financial Statements The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value: Cash and Due from Banks, Interest-Bearing Time Deposits in Other Banks, Nonmarketable Equity Securities, Interest Receivable, Interest Payable The carrying amount approximates fair value.
Notes to Consolidated Financial Statements The amortized cost and estimated fair value of investment securities at December 31, 2024 and December 31, 2023, by contractual maturity, are shown below.
Notes to Consolidated Financial Statements The amortized cost and estimated fair value of investment securities at December 31, 2025 and December 31, 2024, by contractual maturity, are shown below.
The RSU expense is expected to be recognized over a weighted average period of 3.17 years, the stock option expense is expected to be recognized over a weighted average period of 1.51 years. 85 Table of Contents Bank7 Corp.
The RSU expense is expected to be recognized over a weighted average period of 3.17 years, the stock option expense is expected to be recognized over a weighted average period of 1.51 years. 87 Table of Contents Bank7 Corp.
In general, prepayment rates are based on peer group benchmark reporting of observed prepayment rates occurring in the loan portfolios of the peer group, and consideration of forecasted interest rates. Forecast Factors Adjustments are made to incorporate the impact of forecasted conditions. Certain assumptions are also applied, including the length of the forecast and reversion periods.
In general, prepayment rates are based on peer group benchmark reporting of observed prepayment rates occurring in the loan portfolios of the peer group, and consideration of forecasted interest rates. Forecast Factors Adjustments are made to incorporate the impact of forecasted conditions across all loan segments. Certain assumptions are also applied, including the length of the forecast and reversion periods.
Diluted EPS is computed based upon net income dividend by the weighted average number of commons shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and nonqualified stock options, calculated using the treasury stock method.
Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and nonqualified stock options, calculated using the treasury stock method.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements which was communicated or is required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.
Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.
Accrued interest receivable totaled $8.8 million and $8.7 million at December 31, 2024 and December 31, 2023, respectively, and was reported in interest receivable and other assets on the consolidated balance sheets. The Company has made the accounting policy election to exclude accrued interest receivable on loans from the estimate of credit losses.
Accrued interest receivable totaled $8.8 million and $8.8 million at December 31, 2025 and December 31, 2024, respectively, and was reported in interest receivable and other assets on the consolidated balance sheets. The Company has made the accounting policy election to exclude accrued interest receivable on loans from the estimate of credit losses.
The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities for the year ended December 31, 2024 and December 31, 2023.
The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities for the year ended December 31, 2025 and December 31, 2024.
Summary of Significant Accounting Policies--Specific to Production of Oil and Natural Gas Reserves Operations Use of Estimates Significant items subject to estimates and assumptions include, the proved oil, and natural gas and NGL reserves used in the valuation of oil and gas properties, asset retirement obligations, fair value of derivatives and revenue accruals.
Summary of Significant Accounting Policies--Specific to Production of Oil and Natural Gas Reserves Operations Use of Estimates Items subject to estimates and assumptions include the proved oil, and natural gas and natural gas liquid (“NGL”) reserves used in the valuation of oil and gas properties, asset retirement obligations, fair value of derivatives and revenue accruals.
The fair value of each option is expensed over its vesting period. 84 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements There were no options granted during the years ended December 31, 2024 and December 31, 2023. The following table summarizes share information about RSUs for the years ended December 31, 2024 and 2023: Number of Shares Wgtd.
The fair value of each option is expensed over its vesting period. 86 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements There were no options granted during the years ended December 31, 2025 and December 31, 2024. The following table summarizes share information about RSUs for the years ended December 31, 2025 and 2024: Number of Shares Wgtd.
(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
(“Company”) as of December 31, 2024, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).
On November 17, 2023, the transaction closed for a total purchase price of $15.1 million, after closing adjustments. As a part of the purchase, the Company assumed asset retirement obligations of $0.4 million that were included in “interest payable and other liabilities” on the consolidated balance sheets as of December 31, 2023.
On November 17, 2023, the transaction closed for a total purchase price of $15.1 million, after closing adjustments. As a part of the purchase, the Company assumed asset retirement obligations of $0.4 million that were included in interest payable and other liabilities on the consolidated balance sheets as of December 31, 2023.
The Bank leases office and retail banking space in Oklahoma City and Woodward, Oklahoma from Central Park on Lincoln, LLC and Haines Realty Investments Company, LLC, respectively, both related parties of the Company. Lease expense totaled $286,000, $251,000 and $155,000 for the years ended December 31, 2024, 2023 and 2022, respectively.
The Bank leases office and retail banking space in Oklahoma City and Woodward, Oklahoma from Central Park on Lincoln, LLC and Haines Realty Investments Company, LLC, respectively, both related parties of the Company. Lease expense totaled $326,000, $286,000 and $251,000 for the years ended December 31, 2025, 2024 and 2023, respectively.
Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize all benefits related to these deductible differences as of December 31, 2024.
Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize all benefits related to these deductible differences.
In addition, payroll and office sharing arrangements were in place between the Company and certain of its affiliates. 83 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements Note 15: Employee Benefits 401(k) Savings Plan The Company has a retirement savings 401(k) plan covering substantially all employees.
In addition, payroll and office sharing arrangements were in place between the Company and certain of its affiliates. 85 Table of Contents Bank7 Corp. Notes to Consolidated Financial Statements Note 14: Employee Benefits 401(k) Savings Plan The Company has a retirement savings 401(k) plan covering substantially all employees.
Note 2: Recent Events, Including Mergers and Acquisitions Acquisition On October 31, 2023, the Company entered into an asset purchase and sale agreement, effective September 1, 2023, to acquire proven oil and natural gas properties from HB2 Origination, LLC, which consisted of nine wells in formations in four counties in Texas for $15.4 million in cash.
Notes to Consolidated Financial Statements Note 2: Recent Events, Including Mergers and Acquisitions Acquisition On October 31, 2023, the Company entered into an asset purchase and sale agreement, effective September 1, 2023, to acquire proved oil and natural gas properties from HB2 Origination, LLC, which consisted of nine wells in formations in four counties in Texas for $15.4 million in cash.
The Basel III Capital Rules require the Bank and the Company to comply with four minimum capital standards: a Tier 1 leverage ratio of at least 4.0%; a CET1 to risk-weighted assets of 4.5%; a Tier 1 capital to risk-weighted assets of at least 6.0%; and a total capital to risk-weighted assets of at least 8.0%.
The Basel III Capital Rules require the Bank and the Company to comply with four minimum capital standards: a Tier 1 leverage ratio of at least 4.0%; a Common Equity Tier 1 (“CET1”) capital to risk-weighted assets of 4.5%; a Tier 1 capital to risk-weighted assets of at least 6.0%; and a total capital to risk-weighted assets of at least 8.0%.
Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts.
Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, and net deferred loan fees and costs.
The Company evaluates the definitions of loan grades and the allowance for loan losses methodology on an ongoing basis. No changes were made to either during the period ended December 31, 2024. 70 Table of Contents Bank7 Corp.
The Company evaluates the definitions of loan grades and the allowance for loan losses methodology on an ongoing basis. No changes were made to either during the period ended December 31, 2025. 71 Table of Contents Bank7 Corp.
Rental expense on all operating leases, including those rented on a monthly or temporary basis were as follows (Dollars in thousands): Year Ending December 31: 2024 $ 1,068 2023 1,001 2022 777 As of December 31, 2024, a right of use lease asset included in interest receivable and other assets on the balance sheet totaled $1.7 million, and a related lease liability included in accrued interest payable and other liabilities on the balance sheet totaled $1.9 million.
Rental expense on all operating leases, including those rented on a monthly or temporary basis were as follows (dollars in thousands): Year Ending December 31: 2025 $ 834 2024 1,068 2023 1,001 As of December 31, 2025, a right of use lease asset included in interest receivable and other assets on the consolidated balance sheet totaled $2.1 million, and a related lease liability included in accrued interest payable and other liabilities on the consolidated balance sheet totaled $2.1 million.
Note 12: Advances and Borrowings The Bank has a blanket floating lien security agreement with a maximum borrowing capacity of $190.9 million and $159.2 million at December 31, 2024 and December 31, 2023, respectively, with the FHLB, under which the Bank is required to maintain collateral for any advances, including its stock in the FHLB, as well as qualifying first mortgage and other loans.
Note 11: Advances and Borrowings The Bank has a blanket floating lien security agreement with a maximum borrowing capacity of $213.8 million and $190.9 million at December 31, 2025 and December 31, 2024, respectively, with the FHLB, under which the Bank is required to maintain collateral for any advances, including its stock in the FHLB, as well as qualifying first mortgage and other loans.
Financial Statements and Supplementary Data Consolidated Financial Statements Index Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 686 ) 45 Consolidated Financial Statements: Consolidated Balance Sheets at December 31, 2024 and 2023 47 Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2024 48 Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended December 31, 2024 49 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2024 50 Notes to Consolidated Financial Statements 51 44 Table of Contents Report of Independent Registered Public Accounting Firm Shareholders, Board of Directors, and Audit Committee Bank7 Corp.
Financial Statements and Supplementary Data Consolidated Financial Statements Index Page Report of RSM US LLP, Independent Registered Public Accounting Firm for the year ended December 31, 2025 (PCAOB ID: 49) 44 Report of Forvis Mazars, LLP, Independent Registered Public Accounting Firm for the years ended December 31, 2024 and 2023 (PCAOB ID: 686) 47 Consolidated Financial Statements: Consolidated Balance Sheets at December 31, 2025 and 2024 48 Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2025 49 Consolidated Statements of Shareholders’ Equity for each of the three years in the period ended December 31, 2025 50 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2025 51 Notes to Consolidated Financial Statements 52 43 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and the Board of Directors of Bank7 Corp.
Gains and losses on loan sales are recorded in noninterest income and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon the sale of the loan.
Gains and losses on loan sales are recorded in noninterest income and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon the sale of the loan. 53 Table of Contents Bank7 Corp.
Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
For collateral dependent loans where foreclosure is not probable, the Company has elected the practical expedient allowed by ASC 326-20 to measure the expected credit loss under the same approach as those loans where foreclosure is probable. For loans with balances greater than $250,000, the fair value of the collateral is obtained through independent appraisal of the underlying collateral.
For collateral dependent loans where foreclosure is not probable, the Company has elected the practical expedient allowed by ASC 326-20 to measure the expected credit loss under the same approach as those loans where foreclosure is probable. For loans the fair value of the collateral is obtained through independent appraisal or internal valuation of the underlying collateral.
Outstanding letters of credit to secure these public funds at December 31, 2024 and 2023 were $750,000 and $400,000, respectively. Loans with a collateral value of approximately $191.7 million and $159.6 million were used to secure the letters of credit at December 31, 2024 and 2023, respectively.
Outstanding letters of credit to secure these public funds at December 31, 2025 and 2024 were $750,000 and $750,000, respectively. Loans with a collateral value of approximately $214.5 million and $191.7 million were used to secure the letters of credit at December 31, 2025 and 2024, respectively.
The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated: As of December 31, 2024 2023 2022 Change in Interest Rates (Basis Points) Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity +400 17.71 % 23.27 % 23.35 % 17.72 % 13.41 % 20.90 % +300 13.65 % 22.34 % 19.04 % 16.63 % 9.96 % 20.13 % +200 9.54 % 21.30 % 14.74 % 15.45 % 6.50 % 19.17 % +100 5.15 % 20.15 % 10.42 % 14.20 % 2.99 % 18.04 % Base 0.24 % 18.82 % 5.76 % 12.72 % -0.77 % 16.91 % -100 -4.92 % 17.37 % 0.73 % 11.22 % -4.82 % 15.25 % The results are primarily due to behavior of demand, money market and savings deposits during such rate fluctuations.
The following table summarizes the simulated change in net interest income and fair value of equity over a 12-month horizon as of the dates indicated: As of December 31, 2025 2024 2023 Change in Interest Rates (Basis Points) Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity Percent Change in Net Interest Income Percent Change in Fair Value of Equity +400 24.80 % 20.66 % 17.71 % 23.27 % 23.35 % 17.72 % +300 19.28 % 19.58 % 13.65 % 22.34 % 19.04 % 16.63 % +200 13.51 % 18.45 % 9.54 % 21.30 % 14.74 % 15.45 % +100 7.41 % 17.25 % 5.15 % 20.15 % 10.42 % 14.20 % Base 1.06 % 15.98 % 0.24 % 18.82 % 5.76 % 12.72 % -100 -4.27 % 14.84 % -4.92 % 17.37 % 0.73 % 11.22 % -200 -6.12 % 13.48 % -9.83 % 15.73 % -4.31 % 9.47 % The results are primarily due to behavior of demand, money market and savings deposits during such rate fluctuations.
Notes to Consolidated Financial Statements Note 9: Interest-Bearing Deposits The aggregate amount of interest-bearing time deposits in denominations that meet or exceed the insured limit were $92.3 million and $88.1 million at December 31, 2024 and 2023, respectively.
Notes to Consolidated Financial Statements Note 8: Deposits The aggregate amount of interest-bearing time deposits in denominations that meet or exceed the insured limit were $96.2 million and $92.3 million at December 31, 2025 and 2024, respectively.
Notes to Consolidated Financial Statements Condensed Statements of Cash Flows For the Years Ended December 31, 2024 2023 2022 Operating Activities Net income $ 45,698 $ 28,275 $ 29,638 Items not requiring (providing) cash Equity in undistributed net income (37,319 ) (21,485 ) (24,900 ) Changes in Other current assets and liabilities (324 ) (725 ) (374 ) Net cash provided by operating activities 8,055 6,065 4,364 Financing Activities Common stock issued, net of offering costs 2 1 - Dividends paid (8,057 ) (6,323 ) (4,364 ) Net cash used in financing activities (8,055 ) (6,322 ) (4,364 ) Increase (Decrease) in Cash and Due from Banks - (257 ) - Cash and Due from Banks, Beginning of Period 40 297 297 Cash and Due from Banks, End of Period $ 40 $ 40 $ 297 Supplemental Disclosure of Cash Flows Information Dividends declared and not paid $ 2,254 $ 1,932 $ 1,463 94 Table of Contents Item 9.
Notes to Consolidated Financial Statements Statements of Cash Flows For the Years Ended December 31, 2025 2024 2023 Operating Activities Net income $ 43,069 $ 45,698 $ 28,275 Items not requiring (providing) cash Equity in undistributed net income (33,426 ) (37,319 ) (21,485 ) Changes in Other current assets and liabilities (302 ) (324 ) (725 ) Net cash provided by operating activities 9,341 8,055 6,065 Financing Activities Common stock issued, net of offering costs 1 2 1 Dividends paid (9,342 ) (8,057 ) (6,323 ) Net cash used in financing activities (9,341 ) (8,055 ) (6,322 ) Increase (Decrease) in Cash and Due from Banks - - (257 ) Cash and Due from Banks, Beginning of Period 40 40 297 Cash and Due from Banks, End of Period $ 40 $ 40 $ 40 Supplemental Disclosure of Cash Flows Information Dividends declared and not paid $ 2,555 $ 2,254 $ 1,932 95 Table of Contents Item 9.
Accounts Payable The Company’s oil and gas related accounts payable balance primarily consists of trade payables owed to vendors that provide services and equipment for the wells and assets that we operate. The oil and gas related accounts payable balance is included in “Interest payable and other liabilities” on the consolidated balances sheets. 58 Table of Contents Bank7 Corp.
Accounts Payable The Company’s oil and gas related accounts payable balance primarily consists of trade payables owed to vendors that provide services and equipment for the wells and assets. The oil and gas related accounts payable balance is included in interest payable and other liabilities on the consolidated balance sheets. 59 Table of Contents Bank7 Corp.
The purchase price and related asset retirement obligations were allocated based on the relative fair values of the assets acquired and $1.7 million was allocated to proved leasehold costs while the remaining $15.4 million was allocated to “interest receivable and other assets” on the consolidated balance sheets.
The purchase price and related asset retirement obligations were allocated based on the relative fair values of the assets acquired and $1.7 million was allocated to proved leasehold costs while the remaining $15.4 million was allocated to completed wells and related facilities and equipment, included in interest receivable and other assets on the consolidated balance sheets.
The Company does not have any net operating loss or tax credit carryforwards as of December 31, 2024. The Company is not presently under examination by the Internal Revenue Service or any state tax authority.
The Company has not established a valuation allowance as of December 31, 2025, 2024, and 2023. The Company does not have any net operating loss or tax credit carryforwards as of December 31, 2025. The Company is not presently under examination by the Internal Revenue Service or any state tax authority.
As of December 31, 2024, our operating leases have a weighted-average remaining lease term of 15.8 years and a weighted-average discount rate of 3.7 percent.
As of December 31, 2025, our operating leases have a weighted-average remaining lease term of 13.8 years and a weighted-average discount rate of 3.9 percent.
Note 4: Earnings per Share Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the year.
Notes to Consolidated Financial Statements Note 3: Earnings per Share Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic earnings per share (“EPS”) is computed based upon net income divided by the weighted average number of common shares outstanding during the period.
There were no uncertain tax positions as of December 31, 2024 and 2023, and there were no interest or penalties related to uncertain tax positions reflected in the consolidated statements of income for the years ended December 31, 2024, 2023, and 2022. 79 Table of Contents Bank7 Corp.
There were no uncertain tax positions as of December 31, 2025 and 2024, and 2023 and there were no interest or penalties related to uncertain tax positions reflected in the consolidated statements of comprehensive income for the years ended December 31, 2025, 2024, and 2023.
The following table shows the computation of basic and diluted earnings per share: As of and for the Years ended December 31, 2024 2023 2022 (Dollars in thousands, except per share amounts) Numerator Net income $ 45,698 $ 28,275 $ 29,638 Denominator Weighted-average shares outstanding for basic earnings per share 9,290,051 9,161,565 9,101,523 Dilutive effect of stock compensation (1) 157,700 102,742 103,193 Denominator for diluted earnings per share 9,447,751 9,264,307 9,204,716 Earnings per common share Basic $ 4.92 $ 3.09 $ 3.26 Diluted $ 4.84 $ 3.05 $ 3.22 (1) The following have not been included in diluted earnings per share because to do so would have been antidilutive for the periods presented: Nonqualified stock options outstanding of 0, 5,000, and 5,000 as of December 31, 2024, 2023, and 2022, respectively; Restricted stock units outstanding of 0, 156,186, and 0 as of December 31, 2024, 2023, and 2022, respectively. 63 Table of Contents Bank7 Corp.
The following table shows the computation of basic and diluted earnings per share: As of and for the Years ended December 31, 2025 2024 2023 (Dollars in thousands, except share and per share amounts) Numerator Net income $ 43,069 $ 45,698 $ 28,275 Denominator Weighted-average shares outstanding for basic earnings per share 9,444,105 9,290,051 9,161,565 Dilutive effect of stock compensation (1) 130,085 157,700 102,742 Denominator for diluted earnings per share $ 9,574,190 $ 9,447,751 $ 9,264,307 Earnings per common share Basic $ 4.56 $ 4.92 $ 3.09 Diluted $ 4.50 $ 4.84 $ 3.05 (1) The following have not been included in diluted earnings per share because to do so would have been antidilutive for the periods presented: Nonqualified stock options outstanding of 0, 0, and 5,000 as of December 31, 2025, 2024, and 2023, respectively; Restricted stock units outstanding of 30,600, 0, and 156,186 as of December 31, 2025, 2024, and 2023, respectively. 64 Table of Contents Bank7 Corp.
The following table is a summary of the stock option activity under the Bank7 Corp. 2018 Equity Incentive Plan (dollar amounts in thousands, except per share data): Options Wgtd. Avg. Exercise Price Wgtd. Avg.
The Company uses newly issued shares for granting RSUs and stock options. The following table is a summary of the stock option activity under the Bank7 Corp. 2018 Equity Incentive Plan (dollar amounts in thousands, except share and per share data): Options Wgtd. Avg. Exercise Price Wgtd. Avg.
Goodwill and Intangible Assets Intangible assets totaled $878,000 and goodwill, net of accumulated amortization totaled $8.5 million for the year ended December 31, 2024, compared to intangible assets of $1.0 million and goodwill, net of accumulated amortization of $8.5 million for the year ended December 31, 2023.
Goodwill and Intangible Assets Intangible assets totaled $752,000 and goodwill, net of accumulated amortization totaled $11.2 million for the year ended December 31, 2025, compared to intangible assets of $878,000 and goodwill, net of accumulated amortization of $8.5 million for the year ended December 31, 2024.
Estimated amortization expense for each of the remaining life is as follows (dollars in thousands): 2025 $ 125 2026 125 2027 125 2028 125 2029 125 Thereafter 253 Total $ 878 76 Table of Contents Bank7 Corp.
Estimated amortization expense for each of the remaining life is as follows (dollars in thousands): 2026 $ 125 2027 125 2028 125 2029 125 2030 125 Thereafter 127 Total $ 752 79 Table of Contents Bank7 Corp.
Nonrecurring Measurements The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2024 and December 31, 2023 (dollars in thousands): Fair Value (Level 1) (Level 2) (Level 3) December 31, 2024 Collateral-dependent loans $ 3,209 $ - $ - $ 3,209 Asset retirement obligations 292 - - 292 December 31, 2023 Collateral-dependent loans $ 16,370 $ - $ - $ 16,370 Asset retirement obligations 361 - - 361 86 Table of Contents Bank7 Corp.
Nonrecurring Measurements The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2025 and December 31, 2024 (dollars in thousands): Fair Value (Level 1) (Level 2) (Level 3) December 31, 2025 Collateral-dependent loans $ 369 $ - $ - $ 369 December 31, 2024 Collateral-dependent loans $ 3,209 $ - $ - $ 3,209 88 Table of Contents Bank7 Corp.
Consolidated Statements of Shareholders Equity (Dollar amounts in thousands, except par value) Year Ended December 31, 2024 2023 2022 Common Stock (Shares) Balance at beginning of period 9,197,696 9,131,973 9,071,417 Exercise of employee stock options 144,813 28,423 17,450 Shares issued for restricted stock units 68,578 57,354 61,902 Shares acquired and canceled (20,876 ) (20,054 ) (18,796 ) Balance at end of period 9,390,211 9,197,696 9,131,973 Common Stock (Amount) Balance at beginning of period $ 92 $ 91 $ 91 Net shares purchased and retired for restricted stock units and issue for stock options 2 1 - Balance at end of period $ 94 $ 92 $ 91 Additional Paid-in Capital Balance at beginning of period $ 97,417 $ 95,263 $ 94,024 Shares purchased and retired for restricted stock units (666 ) (513 ) (454 ) Exercise of stock options 2,591 503 309 Stock-based compensation expense 2,467 2,164 1,384 Balance at end of period $ 101,809 $ 97,417 $ 95,263 Retained Earnings Balance at beginning of period $ 78,962 $ 58,049 $ 33,149 Net income 45,698 28,275 29,638 Cumulative effect of change in accounting principle, net of tax of $178 - (572 ) - Cash dividends declared ($ 0.89 , $ 0.74 and $ 0.52 per share for the years ended December 31, 2024, 2023, and 2022, respectively) (8,379 ) (6,790 ) (4,738 ) Balance at end of period $ 116,281 $ 78,962 $ 58,049 Accumulated Other Comprehensive Loss Balance at beginning of period $ (6,145 ) $ (9,303 ) $ 144 Comprehensive income(loss) 1,174 3,158 (9,447 ) Balance at end of period $ (4,971 ) $ (6,145 ) $ (9,303 ) Total Shareholders’ equity $ 213,213 $ 170,326 $ 144,100 See accompanying notes to Consolidated Financial Statements 49 Table of Contents Bank7 Corp.
Consolidated Statements of Shareholders’ Equity (Dollar amounts in thousands, except share and per share data) Year Ended December 31, 2025 2024 2023 Common Stock (Shares) Balance at beginning of period 9,390,211 9,197,696 9,131,973 Exercise of employee stock options 9,313 144,813 28,423 Shares issued for restricted stock units 92,396 68,578 57,354 Shares acquired and retired (29,264 ) (20,876 ) (20,054 ) Balance at end of period 9,462,656 9,390,211 9,197,696 Common Stock (Amount) Balance at beginning of period $ 94 $ 92 $ 91 Net shares purchased and retired for restricted stock units and issued for stock options 1 2 1 Balance at end of period $ 95 $ 94 $ 92 Additional Paid-in Capital Balance at beginning of period $ 101,809 $ 97,417 $ 95,263 Shares purchased and retired for restricted stock units (1,277 ) (666 ) (513 ) Exercise of stock options 145 2,591 503 Stock-based compensation expense 3,062 2,467 2,164 Balance at end of period $ 103,739 $ 101,809 $ 97,417 Retained Earnings Balance at beginning of period $ 116,281 $ 78,962 $ 58,049 Net income 43,069 45,698 28,275 Cumulative effect of change in accounting principle, net of tax of $178 - - (572 ) Cash dividends declared ($1.02, $0.89 and $0.74 per share for the years ended December 31, 2025, 2024, and 2023, respectively) (9,643 ) (8,379 ) (6,790 ) Balance at end of period $ 149,707 $ 116,281 $ 78,962 Accumulated Other Comprehensive Loss Balance at beginning of period $ (4,971 ) $ (6,145 ) $ (9,303 ) Comprehensive income 2,425 1,174 3,158 Balance at end of period $ (2,546 ) $ (4,971 ) $ (6,145 ) Total Shareholders’ equity $ 250,995 $ 213,213 $ 170,326 See accompanying notes to Consolidated Financial Statements 50 Table of Contents Bank7 Corp.
The following summarizes those financial instruments with contract amounts representing credit risk as of December 31, 2024 and December 31, 2023 (dollars in thousands): December 31, 2024 December 31, 2023 Commitments to extend credit $ 272,261 $ 256,888 Financial and performance standby letters of credit 11,333 4,247 $ 283,594 $ 261,135 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
The following summarizes those financial instruments with contract amounts representing credit risk as of December 31, 2025 and December 31, 2024 (dollars in thousands): Year Ended December 31, 2025 2024 Commitments to extend credit $ 324,748 $ 272,261 Financial and performance standby letters of credit 19,540 11,333 $ 344,288 $ 283,594 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the Bank and its two subsidiaries, 1039 NW 63 rd , LLC, which holds real estate utilized by the Bank, and Giddings Production, LLC, which is engaged in the production of oil, natural gas and natural liquid (“NGL”) reserves in Texas.
Basis of Presentation The accompanying consolidated financial statements include the accounts of the Company, the Bank and its three subsidiaries: First American Mortgage, LLC, which provides residential mortgage lending services, 1039 NW 63rd, LLC, which holds real estate utilized by the Bank, and Giddings Production, LLC, which is engaged in the production of oil, natural gas and natural gas liquid (“NGL”) reserves in Texas.
(2) Our corporate debt securities are not rated. 66 Table of Contents Bank7 Corp.
(2) The corporate debt securities are not rated. 67 Table of Contents Bank7 Corp.
The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.
Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2025 expressed an unqualified opinion thereon .
We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.
Interest income is recognized at the coupon rate adjusted for amortization and accretion of premiums and discounts. Discounts are accreted into interest income over the estimated life of the related security and premiums are amortized against income to the earlier of the call date or weighted average life of the related security using the interest method.
Discounts are accreted into interest income over the estimated life of the related security and premiums are amortized against income to the earlier of the call date or weighted average life of the related security using the interest method.

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