Bank7 Corp.
For the period ended Mar 31, 2026. Filed May 11, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2026 · Filed May 11, 2026
BSVN$58.39-0.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-09-30; filed 2025-11-07.
0001140361-25-041162
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-03-31; filed 2026-05-11.
0001140361-26-020594
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 103 previous paragraphs and 92 current paragraphs.
51 unchanged; 23 reworded; 16 added; 28 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 44 previous and 32 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
Income before taxes was $15.8 million, an increase of $2.1 million, or 15.4%, for the three months ended March 31, 2026 as compared to income before taxes of $13.7 million for the same periodin 2025.
Current report
Regarding the subsequent event item mentioned in Note 1 herein, management has successfully completed its objective to maximize the loan loss recovery related to an oil and gas loan. To refresh memories, in the fourth quarter of 2023 management expended $16.5 million to acquire certain oil and gas assets. On a cash basis, prior to the second quarter 2026 the Company had received cash proceeds from oil and gas sales of $14.9 million, and when that is combined with the second quarter sale proceeds of $5.2 million, the total cash recovery of $20.1 million exceeds the $16.5 million cash outlay by $3.7 million. Over the holding period from fourth quarter of 2023 through first quarter of 2026, these assets generated cumulative pre-tax net income of approximately $5.8 million, which we believe is the most directly comparable GAAP measure to the non-GAAP cash summary presented below.
Current report
GAAP to Non-GAAP Reconciliation for Oil and Gas Assets (dollars in thousands):
Current report
Net Cash Returned is a non-GAAP financial measure used by management to analyze the cash cycle of this specific investment. This measure has significant limitations and is not a substitute for results prepared in accordance with U.S. GAAP. It should not be considered in isolation or as an alternative to net income. This measure is reconciled from income before taxes by adding back only the non-cash expenses shown in the table above.
Current report
For the first quarter of 2026 compared to the first quarter of 2025:
Current report
Weighted Average Yield of Debt Securities
Current report
*Yield is on a taxable-equivalent basis using 21% tax rate
Current report
For the three months ended March 31, 2026, and 2025, 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.
Current report
Our provision for income taxes was $3.8 million for the three months ended March 31, 2026, compared to $3.4 million for 2025. This resulted in an effective tax rate of 24.11% in 2026, compared to 24.63% in 2025. 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. Cash taxes paid was $0 for the three months ended March 31, 2026, and March 31, 2025, reflecting our domestic jurisdictional profile and the timing of estimated tax payments.
Current report
Noninterest income for the three months ended March 31, 2026 was $2.0 million compared to $1.8 million for the same period in 2025, an increase of $0.2 million, or 11.9%.
Current report
Noninterest expense for the three months ended March 31, 2026 was $10.3 million compared to $8.9 million for the same period in 2025, an increase of $1.5 million, or 16.4%. Salaries and employee benefits expense was $6.3 million for the three months ended March 31, 2026 compared to $5.3 million for the same period in 2025, an increase of $1.1 million, or 19.9%. The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to increases necessary to effectively compete for executive and non-executive talent.
Current report
Total assets decreased $18.6 million, or 1.0%, to $1.95 billion as of March 31, 2026, compared to $1.96 billion as of December 31, 2025.
Current report
Nonaccrual Loans and Nonperforming Assets
Current report
Nonperforming loans include nonaccrual loans and loans past due 90 days or more and still accruing interest. Nonperforming assets consist of nonperforming loans plus OREO. Loans accounted for on a nonaccrual basis were $9.3 million as of March 31, 2026, and $6.5 million as of December 31, 2025. OREO was $462,000, and $461,000 as of March 31, 2026, and December 31, 2025, respectively.
Current report
Of our interest-bearing deposits, some were obtained through brokered transactions. As of March 31, 2026 and December 31, 2025, brokered deposits were $135.1 million, and $205.6 million, respectively. Reciprocal deposits totaled $644.4 million and $576.5 million as of March 31, 2026 and December 31, 2025, respectively.
Current report
To estimate the allowance for credit losses, the loan portfolio is segmented based on shared risk characteristics, primarily by loan type. Historical credit loss experience for each segment, adjusted for relevant current conditions and reasonable and supportable forecasts, is a significant input in determining the expected credit losses for each portfolio segment under the current expected credit loss methodology. These historical loss factors and adjustments are regularly evaluated and updated based on the evolving composition of each loan segment. Other considerations in our current expected credit loss estimation process include current volumes and trends of delinquencies, nonaccrual loans, levels of bankruptcies, trends in criticized and classified loans, expected losses on real estate secured loans, impact of new credit products and policies, current and forecasted economic conditions, concentrations of credit risk, and the experience and abilities of our lending personnel in the current environment. In addition to these segment-level estimations, loans with larger balances or unique risk profiles may be further analyzed based on specific facts and circumstances to refine the overall expected credit loss estimate. This individual analysis helps ensure the allowance for credit losses appropriately reflects the expected losses inherent in the portfolio. 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.
Removed paragraphs (28)
Previous report
Pre-tax net incomewas $14.2 million, a decrease of $1.3 million, or 8.5%, for the three months ended September 30, 2025 as compared to pre-tax net income of $15.5 million for the same period in 2024. Pre-tax net income was $42.6 million, a decrease of $3.0 million, or 6.6%, for the nine months ended September 30, 2025 as compared to pre-tax net income of $45.6 million for the same period in 2024.
Previous report
The provision for credit losses for the three months ended September 30, 2025 increased $0.7 million, or 100.0%, as compared to the same period in 2024. The provision for credit losses for the nine months ended September 30, 2025 increased $0.7 million, or 100.0%, as compared to the same period in 2024. The provision expense for the three and nine months ended September 30, 2025 was related to loan growth in the third quarter of 2025.
Previous report
For the third quarter of 2025 compared to the third quarter of 2024:
Previous report
For the first nine months of 2025 compared to the same period in 2024:
Previous report
Securities
Previous report
Our investment portfolio consists entirely of securities classified as available-for-sale. As a result, the carrying values of our investment securities are adjusted for unrealized gain or loss, and any gain or loss is reported on an after-tax basis as a component of other comprehensive income in shareholders’ equity.
Previous report
We evaluate our available-for-sale securities portfolio on a quarterly basis for potential credit-related losses. We assess potential credit losses by comparing the fair value of a debt security to its amortized cost basis. If the fair value of a debt security is greater than the amortized cost basis, no allowance for credit losses is recognized. If the fair value is less than the amortized cost basis, we review the factors to determine if the impairment is credit-related or noncredit-related. For debt securities we intend to sell or are more likely than not required to sell, before the recovery of their amortized cost basis, the difference between fair value and amortized cost is impaired and is recognized through earnings. For debt securities we do not intend to sell or are more likely than not required to sell, prior to expected recovery of amortized cost basis, the credit portion of the impairment is recognized through earnings, with a corresponding entry to an allowance for credit losses, and the noncredit portion is recognized through accumulated other comprehensive income.
Previous report
Credit risk is inherent in the business of making loans. We establish an Allowance for credit losses (“Allowance”) through charges to earnings, which are shown in the statements of comprehensive income as the provision for credit losses. The provision for credit losses and level of Allowance for each period are dependent upon many factors, including loan growth, net charge-offs, changes in the composition of the loan portfolio, delinquencies, management’s assessment of the quality of the loan portfolio, and the valuation of problems and the general economic conditions in our market areas.
Previous report
For the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024:
Previous report
Noninterest income for the nine months ended September 30, 2025 was $6.7 million comparedto $8.9 million for the same period in 2024, adecreaseof$2.2 million, or 24.7%. The decrease was primarily attributable to a decrease in income related to operations of oil and gas assets, see Note 2 of the financial statements.
Previous report
Noninterest expense for the three months ended September 30,2025 was $10.4 million compared to $9.4 million for the same period in 2024, an increase of $1.0 million, or 10.1%.
Previous report
Noninterest expense for the nine months ended September 30, 2025 was$29.0 million comparedto $27.7 million for the same period in 2024, an increase of $1.3 million, or 4.7%.
Previous report
Total assets increased $151.6 million, or 8.7%, to $1.89 billion as of September 30, 2025, comparedto $1.74 billion as of December 31, 2024.
Previous report
Nonperforming Assets
Previous report
Total deposits as of September 30, 2025 and December 31, 2024 were $1.64 billion and $1.52 billion, respectively.
Previous report
As of September 30, 2025, and December 31, 2024, brokered deposits were $387.6 million and $336.7 million, respectively.
Previous report
Basel III Capital Rules
Previous report
Goodwill and Intangibles
Previous report
Intangible assets totaled $784,000 and goodwill, net of accumulated amortization, totaled $11.2 million as of September 30, 2025, compared to intangible assets of $878,000 and goodwill of $8.5 million as of December 31, 2024.
Previous report
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. 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.
Previous report
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.
Previous report
The amount of accrued current and deferred income taxes is based on estimates of taxes due or receivable from taxing authorities either currently or in the future. Changes in these accruals are reported as tax expense, and involve estimates of the various components included in determining taxable income, tax credits, other taxes and temporary differences. 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.
Previous report
Management performs an analysis of our tax positions annually and believes it is more likely than not that all of its tax positions will be utilized in future years.
Previous report
The Company’s effective tax ratewas 23.6% for the third quarter of 2025, which was consistent with the rate of 24.2% for the same period in 2024. Our effective tax rate differs from the U.S. federal statutory rate of 21% primarily due to the effect of state income taxes, tax-exempt income earned on certain loans and investments, and nondeductible expenses.
Previous report
Fair Value of Financial Instruments
Previous report
ASC Topic 820, Fair Value Measurement, defines fair value as the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of assets and liabilities is dependent upon the availability of quoted market prices or observable market parameters. For financial instruments that trade actively and have quoted market prices or observable market parameters, there is minimal subjectivity involved in measuring fair value. When observable market prices and parameters are not available, management judgment is necessary to estimate fair value. In addition, changes in market conditions may reduce the availability of quoted prices or the observable date. Debt securities that are being held for indefinite periods of time and are not intended to sell, are classified as available for sale and are stated at estimated fair value. Unrealized gains or losses on debt securities available for sale are reported as a component of stockholders’ equity and comprehensive income, net of income tax.
Previous report
The Company reviews its portfolio of debt securities in an unrealized loss position at least quarterly. The Company first assesses whether it intends to sell, or it is more-likely-than-not that it will be required to sell, the securities before recovery of the amortized cost basis. If either of these criteria is met, the securities amortized cost basis is written down to fair value as a current period expense. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making this assessment, the Company considers, among other things, the period of time the security has been in an unrealized loss position, and performance of any underlying collateral and adverse conditions specifically related to the security.
Previous report
The estimates of fair values of debt securities and other financial instruments are based on a variety of factors. In some cases, fair values represent quoted market prices for identical or comparable instruments. In other cases, fair values have been estimated based on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of risk. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of year-end or that will be realized in the future.
Reworded paragraphs (23)
Previous wording
We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate twelve locations in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area and Kansas. We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed loan and deposit products to meet their financing needs. We intend to grow organically by selectively opening additional branches in our target markets and pursuing strategic acquisitions.
Current wording
We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma. Through our wholly-owned subsidiary, Bank7, we operate twelve full-service branches in Oklahoma, the Dallas/Fort Worth, Texas metropolitan area and Kansas. We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed loan and deposit products to meet their financing needs. We intend to grow organically by selectively opening additional branches in our target markets and we will also pursue strategic acquisitions.
Previous wording
As a bank holding company, we generate most of our revenue from interest income on loans and from short-term investments. The primary source of funding for our loans and short-term investments are deposits held by our subsidiary, Bank7. We measure our performance by our return on average equity, earnings per share, capital ratios, efficiency ratio (calculated by dividing noninterest expense by the sum of net interest income on a tax equivalent basis) and noninterest income.
Current wording
As a bank holding company, we generate most of our revenue from interest income on loans and from short-term investments. The primary source of funding for our loans and short-term investments are deposits held by our subsidiary, Bank7. We measure our performance by our return on average assets, return on average equity, earnings per share, capital ratios, and efficiency ratio, which is calculated by dividing noninterest expense by the sum of net interest income on a tax equivalent basis and noninterest income.
Previous wording
We reported total loans of $1.53 billion as of September 30, 2025, an increase of $96.7 million, or 6.7%, from September 30, 2024. Total deposits were $1.64 billion as of September 30, 2025, an increaseof$112.6 million, or 7.4%, as compared to September 30, 2024.
Current wording
We reported total loans of $1.59 billion asof March 31, 2026, an increase of $170.1 million, or 11.9%, from March 31, 2025. Total deposits were $1.67 billion as of March 31, 2026, an increase of $120.1 million, or 7.7%, from March 31, 2025.
Previous wording
Return on average assets and return on average equity was 2.33% and 18.11%, respectively for the three months ended September 30, 2025, as compared to 2.73% and 23.67%, respectively, for the same period in 2024. Return on average assets and return on average equity was 2.41% and 18.96%, respectively for the nine months ended September 30, 2025, as compared to 2.68% and 24.79%, respectively, for the same period in 2024. Our efficiency ratio for the three months ended September 30, 2025 was 41.12% as compared to 37.87% for the same period in 2024. Our efficiency ratio for the nine months ended September 30, 2025 was 39.94% as compared to 37.58% for the same period in 2024.
Current wording
Pre-tax return on average assets and return on average equity was 3.37% and 25.06%, respectively for the three months ended March 31, 2026, as compared to 3.20% and 25.47%, respectively, for the same periodin 2025. Our efficiency ratio for the three months ended March 31, 2026 was 39.64% as compared to 39.45% for the same period in 2025.
Previous wording
Noninterest income for the three months ended September 30, 2025 was $2.2 million comparedto $3.7 million for the same period in 2024, adecrease of$1.5 million, or 39.9%. Thedecrease was primarily attributable to a decrease in income related to operations of oil and gas assets, see Note 2 of the financial statements.
Current wording
Sale of Oil and Gas Assets
Previous wording
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.
Current wording
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.
Previous wording
For the three months ended September 30, 2025 compared to the three months ended September 30, 2024:
Current wording
For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, there was no provision for credit losses.
Previous wording
We file a consolidated income tax return. Deferred taxes are recognized under the balance sheet method based upon the future tax consequences of temporary differences between the carrying amounts and tax basis of assets and liabilities, using the tax rates expected to apply to taxable income in the periods when the related temporary differences are expected to be realized.
Current wording
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.
Previous wording
Our loans represent the largest portion of our earning assets. The quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition. As of September 30, 2025, and December 31, 2024, our gross loans were $1.54 billion and $1.40 billion, respectively.
Current wording
Our loans represent the largest portion of our earning assets. The quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition. As of March 31, 2026, and December 31, 2025, our gross loans were $1.60 billionand $1.61 billion, respectively.
Previous wording
We have established internal concentration limits in the loan portfolio for Commercial Real Estate (CRE) loans, hospitality loans, energy loans, and construction loans, among others. All loan types are within our established limits. We use underwriting guidelines to assess each borrower’s historical cash flow to determine debt service capabilities, and we further stress test the customer’s debt service capability under higher interest rate scenarios as well as other underlying macro-economic factors. Financial and performance covenants are used in commercial lending to allow us to react to a borrower’s deteriorating financial condition, should that occur.
Current wording
We have established internal concentration limits in the loan portfolio for CRE loans, hospitality loans, energy loans, and construction loans, among others. All loan types are within our established limits. We use underwriting guidelines to assess each borrower’s historical cash flow to determine debt service, and we further stress test the debt service under higher interest rate scenarios. Financial and performance covenants are used in commercial lending to allow us to react to a borrower’s deteriorating financial condition, should that occur. Discussion of credit risk as it relates to commercial lending, which is primarily comprised of hospitality and energy loans, is discussed under Item 1A. Risk Factors on our most recent Annual Report on Form 10-K.
Previous wording
The allowance is based on management’s estimate of potential losses inherent in the loan portfolio. In the opinion of management, the allowance is adequate to absorb estimated losses in the portfolio as of each balance sheet date. While management uses available information to analyze losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance. In analyzing the adequacy of the allowance, a comprehensive loan grading system to determine risk potential in loans is utilized together with the results of internal credit reviews.
Current wording
The allowance is based on management’s estimate of probable losses in the loan portfolio. In the opinion of management, the allowance is adequate to absorb estimated losses in the portfolio as of each balance sheet date. While management uses available information to analyze losses on loans, future additions to the allowance may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance. In analyzing the adequacy of the allowance, a comprehensive loan grading system to determine risk potential in loans is utilized together with the results of internal credit reviews.
Previous wording
To determine the adequacy of the allowance, the loan portfolio is broken into pools based on loan type and risk characteristics. Historical loss experience factors by pool, adjusted for changes in trends and conditions, are used to determine an indicated allowance for each portfolio pool. These factors are evaluated and updated based on the composition of the specific loan pool. Other considerations include volumes and trends of delinquencies, nonaccrual loans, levels of bankruptcies, criticized and classified loan trends, expected losses on real estate secured loans, new credit products and policies, economic conditions, concentrations of credit risk and the experience and abilities of our lending personnel. In addition to the pool evaluations, classified 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. Specific allowances may also be established for loans whose outstanding balances are below the $250,000 threshold when it is determined that the risk associated with the loan differs significantly from the risk factor amounts established for its loan pool.
Current wording
To determine the adequacy of the allowance, the loan portfolio is broken into segments based on loan type. Historical loss experience factors by segment, adjusted for changes in trends and conditions, are used to determine an indicated allowance for each portfolio segment. These factors are evaluated and updated based on the composition of the specific loan segment. Other considerations include volumes and trends of delinquencies, nonaccrual loans, levels of bankruptcies, criticized and classified loan trends, expected losses on real estate secured loans, new credit products and policies, economic conditions, concentrations of credit risk and the experience and abilities of our lending personnel. In addition to the segment evaluations, impaired 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. Specific allowances may also be established for loans whose outstanding balances are below the $250,000 threshold when it is determined that the risk associated with the loan differs significantly from the risk factor amounts established for its loan segment.
Previous wording
Theallowance was $19.4 million at September 30, 2025, compared to $17.9 million at December 31, 2024.
Current wording
Theallowance was $19.5 million at March 31, 2026, compared to $19.4 million at December 31, 2025.
Previous wording
Loans are evaluated for expected credit losses over their contractual term, reflecting management’s current estimate. Loans placed on nonaccrual status and loan modifications granted to borrowers experiencing financial difficulty are considered to have elevated credit risk and are carefully considered within our current expected credit loss methodology. 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. Depending on a particular loan’s risk characteristics, we estimate expected credit losses using methods such as present value of expected future cash flows discounted at the loan’s effective interest rate, observable market prices for similar assets if available, or the fair value of collateral less estimated costs to sell for collateral-dependent loans. A loan is considered collateral-dependent when the expected source of repayment is primarily the liquidation of the collateral. Fair value, where utilized, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the estimated fair value may be adjusted based on specific events, such as identified deterioration of collateral quality through our credit risk monitoring, or discussions with the borrower indicating the appraised value may no longer reflect current market conditions. The estimated credit losses are recognized as an allowance for credit losses, which is a valuation account. Changes in the allowance for credit losses, whether increases or decreases, are recorded in current period earnings as provision for credit losses.
Current wording
Loans are evaluated for expected credit losses over their contractual term, reflecting management’s current estimate. Loans placed on nonaccrual status and loan modifications granted to borrowers experiencing financial difficulty are considered to have elevated credit risk and are carefully considered within our current expected credit loss methodology. Depending on a particular loan’s risk characteristics, we estimate expected credit losses using methods such as present value of expected future cash flows discounted at the loan’s effective interest rate, observable market prices for similar assets if available, or the fair value of collateral less estimated costs to sell for collateral-dependent loans. A loan is considered collateral-dependent when the expected source of repayment is primarily the liquidation of the collateral. Fair value, where utilized, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the estimated fair value may be adjusted based on specific events, such as identified deterioration of collateral quality through our credit risk monitoring, or discussions with the borrower indicating the appraised value may no longer reflect current market conditions. The estimated credit losses are recognized as an allowance for credit losses, which is a valuation account. Changes in the allowance for credit losses, whether increases or decreases, are recorded in current period earnings as provision for credit losses.
Previous wording
We gather deposits primarily through our twelve branch locations and online through our website. We offer a variety of deposit products including demand deposit accounts and interest-bearing products, such as savings accounts and certificates of deposit. We put continued effort into gathering noninterest-bearing demand deposit accounts through loan production cross-selling, customer referrals, marketing efforts and various involvement with community networks. Some of our interest-bearing deposits are obtained through brokered transactions. We participate in the CDARS and ICS programs, where customer funds are placed into multiple deposit accounts, each in an amount under the standard FDIC insurance maximum of $250,000, and placed at a network of banks across the United States.
Current wording
We gather deposits primarily through our twelve branch locations and online through our website. We offer a variety of deposit products including demand deposit accounts and interest-bearing products, such as savings accounts and certificates of deposit. We put continued effort into gathering noninterest-bearing demand deposit accounts through loan production cross-selling, customer referrals, marketing efforts and various involvement with community networks. To manage liquidity and provide expanded FDIC insurance for customer funds, we participate in reciprocal deposit programs, including the Certificate of Deposit Account Registry Service (“CDARS”) and the Insured Cash Sweep (“ICS”) service. These programs place customer funds into multiple accounts, each under the standard FDIC insurance maximum of $250,000, at a network of banks across the United States. We also participate in the One-Way Buy ICS 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.
Previous wording
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured deposits were $401.8 million and $354.2 million at September 30, 2025 and December 31, 2024, respectively, as calculated per regulatory guidance. These amounts were approximately 24.6% and 23.4% of deposits at September 30, 2025 and December 31, 2024, respectively.
Current wording
Uninsured deposits are defined as the portion of deposit accounts in U.S. offices that exceed the FDIC insurance limit and amounts in any other uninsured investment or deposit account that are classified as deposits and are not subject to any federal or state deposit insurance regimes. Total uninsured deposits were $405.8 million and $391.7 million as of March 31, 2026 and December 31, 2025, respectively, as calculated per regulatory guidance. These amounts were approximately 24.3% and 23.2% of deposits at March 31, 2026 and December 31, 2025, respectively.
Previous wording
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.
Current wording
Total deposits as of March 31, 2026 and December 31, 2025 were $1.67 billion and $1.70 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.
Previous wording
Liquidity refers to 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. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders.
Current wording
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. We continuously monitor our liquidity position to ensure that assets and liabilities are managed in a manner that will meet all short-term and long-term cash requirements. We manage our liquidity position to meet the daily cash flow needs of customers, while maintaining an appropriate balance between assets and liabilities to meet the return on investment objectives of our shareholders.
Previous wording
Our liquidity position is supported by the management of liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks and fed funds sold. Other available sources of liquidity include wholesale deposits and borrowings from correspondent banks and FHLB advances.
Current wording
Our liquidity position is supported by management of liquid assets and access to alternative sources of funds. Our liquid assets include cash, interest-bearing deposits in correspondent banks and fed funds sold. Other available sources of liquidity include wholesale deposits and borrowings from correspondent banks and FHLB advances.
Previous wording
As of September 30, 2025, we had no unsecured fed funds lines with correspondent depository institutions, with no corresponding amounts advanced. In addition, based on the values of loans pledged as collateral, we had borrowing availability with the FHLBof $217.6 million as of September 30,2025 and $190.9 million as of December 31, 2024, and we had access toapproximately $298.4 million in liquidity with the Federal Reserve Bank as of September 30, 2025 and $336.1 million as of December 31, 2024.
Current wording
As of March 31, 2026, we had no unsecured fed funds lines with correspondent depository institutions, with no amounts advanced. In addition, based on the values of loans pledged as collateral, we had borrowing availability with the FHLB of $218.1 million as of March 31, 2026 and $213.8 million as of December 31, 2025, and we had access toapproximately $301.1 million in liquidity with the Federal Reserve Bank as of March 31, 2026 and $288.6 million as of December 31, 2025.
Previous wording
As of September 30, 2025, the Bank was in compliance with all applicable regulatory requirements and categorized as “well-capitalized” under the prompt corrective action frame work. There have been no conditions or events since September 30, 2025 that management believes would change this classification. The table below presents our applicable capital requirements, as well as our capital ratios as of September 30, 2025 and December 31, 2024. The Company exceeded all regulatory capital requirements and the Bank was considered to be “well-capitalized” as of the dates reflected in the tables below.
Current wording
The table below presents our applicable capital requirements, as well as our capital ratios as of March 31, 2026 and December 31, 2025. The Company exceeded all regulatory capital requirements and the Bank was considered to be “well-capitalized” as of the dates reflected in the tables below.
Previous wording
Shareholders’ equity provides a source of permanent funding, allows for future growth and provides a cushion to withstand unforeseen adverse developments. Total shareholders’equity increased $28.5 million as of September 30, 2025 to $241.7 million, compared to $213.2 million as of December 31, 2024.
Current wording
Shareholders’ equity provides a source of permanent funding, allows for future growth and provides a cushion to withstand unforeseen adverse developments. Total shareholders’equity increased $8.8 million asof March 31,2026 to $259.8 million, compared to $251.0 million as of December 31, 2025.
Previous wording
The following is a discussion of the critical accounting policies and significant estimates that we believe require us to make the most complex or subjective decisions or assessments.
Current wording
The following is a discussion of the critical accounting policies and significant estimates that we believe require us to make the most complex or subjective decisions or assessments. Additional information about these policies can be foundin Note 1 of the Company’s consolidated financial statements included in the Annual Report on the Form 10-K.
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
Net Interest Income and Net Interest Margin
Current report — wording carried from elsewhere
As of March 31, 2026, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action frame work. There have been no conditions or events since March 31, 2026 that management believes would change this classification.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
To determine the adequacy of the allowance, the loan portfolio is broken into segments based on loan type. Historical loss experience factors by segment, adjusted for changes in trends and conditions, are used to determine an indicated allowance for each portfolio segment. These factors are evaluated and updated based on the composition of the specific loan segment. Other considerations include volumes and trends of delinquencies, nonaccrual loans, levels of bankruptcies, criticized and classified loan trends, expected losses on real estate secured loans, new credit products and policies, economic conditions, concentrations of credit risk and the experience and abilities of our lending personnel.