BSVN 10-K & 10-Q changes, risk factors and insider trading
Bank7 Corp. · Nasdaq · State Commercial Banks · CIK 1746129 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “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.”
Largest changes
“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. …”see in full comparison
“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.”see in full comparison
“Our management is responsible for establishing and maintaining effective internal control over financial reporting. 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. …”see in full comparison
“While inflationary pressures have moderated from recent peaks, they remained “sticky” and slightly above the Federal Reserve’s target throughout 2025. The U.S. 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. Although inflation has eased, persistent costs in key categories such as shelter and services continued to impact the economic environment in 2025. …”see in full comparison
“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.”see in full comparison
“Inflation reached a near 40-year high in late 2021 and persisted at elevated levels during 2022 and 2023. While inflationary pressures have begun to moderate, their effects continued into 2024. The U.S. …”see in full comparison
Full comparison: every changed paragraph (7)
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. 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. 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:
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.
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. 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.
RisingElevated interest rates in prior periods have increased interest expense, which in turn has adversely affected net interest income,income andthroughout may2025. do so in the future ifWhile the Federal Reserve raises
rates as anticipated. Incommenced a risingseries 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 increases,remains intense, making it more costly to fund loan growth. In addition, athe risinginterest rate environment couldhas cause mortgage and mortgage warehouse
lending volumescontributed to substantiallya decline.decline in overall mortgage-related lending volumes. Any rapid and unexpected volatility in interest
rates, rates createsor uncertainty andregarding the pace of future monetary easing, creates potential for unexpected material adverse effects. The Company actively monitors and manages the balances of maturing and
repricing assets and liabilities to reduce the
adverse impact of changes in interest rates, but there can be no assurances that the Company can avoid all material adverse effects that such interest rate changes may have on the Company’s net
interest margin and overall 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. 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. 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.
Inflation reached a near 40-year high in late 2021 and persisted at elevated levels during 2022 and 2023. While inflationary pressures have begun to moderate, their effects continued into 2024. The
U.S. 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. Inflationary pressures have begun to moderate during 2024, and current
economic forecasts suggest a further easing in 2025.
Management's Discussion & Analysis (MD&A)
Removed heading “Goodwill and Intangibles”
Removed heading “Fair Value of Financial Instruments”
Largest changes
“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. 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. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
“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. …”see in full comparison
Full comparison: every changed paragraph (48)
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. 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. As of December 31, 2025, the federal funds target range stood at 3.50% to 3.75%. 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.
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. 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. 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. 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. 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. 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%. 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.
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. 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-taxWe netreported incometotal wasloans $60.4of million,$1.61 billion as of December 31, 2025, an increase of $23.1$209.0 million, or 62.1%,15.0%, for the year endedfrom December 31, 20242024. Total deposits were $1.70 billion as comparedof toDecember pre-tax31, net2025, incomean
increase of $37.2$185.4 millionmillion, foror the12.2%, samefrom periodDecember in31, 2023.2024.
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 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. 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. See Note 5 of the financial statements for further disclosure and discussion.
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. 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. See Note (6) of the financial statements
for further disclosure and discussion.
We experienced strong asset growth for the year ended December 31, 2023 compared to the year ended December 31, 2022:
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. For the three-year period between January 1, 20222023 and December 31, 2024,2025, the prime rate fluctuated between a high of 8.50%, and a low of 3.25%.6.75%.
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. Interest income on short-term investments increased $740,000, or 8.6%, to $9.3 million for year ended December 31, 2024 compared to 2023, due to an increase in the average balances of $9.7 million, or 5.6% and a yield increase of 13 basis points.
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. Interest expense on interest-bearing deposits totaled $45.3 million for the year ended December 31, 2024, compared to $39.0 million for 2023, an increase of $6.3 million, or 16.3%. The increase was related to the cost of interest-bearing deposits increasing to 3.98% for the year ended December 31, 2024 from 3.60% for the year ended December 31, 2023.
Interest income on short-term investments increased $740,000, or 8.6%, to $9.3 million for year ended December 31, 2024 compared to 2023, due to an increase in the average balances of $9.7 million,
or 5.6% and a yield increase of 13 basis points. 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 expense on interest-bearing deposits totaled $45.3 million for the year ended December 31, 2024, compared to $39.0 million for 2023, an increase of $6.3 million, or 16.3%. The increase was
related to the cost of interest-bearing deposits increasing to 3.98% for the year ended December 31, 2024 from 3.60% for the year ended December 31, 2023. 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.
(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.
*Yield is on a taxable-equivalent basis using 21% tax rate
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.
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.
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. 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 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.
For the year ended December 31, 2023 compared to the year ended December 31, 2022:
For the year ended December 31, 2023 compared to the year ended December 31, 2022:
For the year ended December 31, 2023 compared to the year ended December 31, 2022:
Total assets decreasedincreased $31.9$223.8 million, or 1.8%,12.9%, to $1.96 billion as of December 31, 2025, as compared to $1.74 billion as of December 31, 2024,2024 as compared toand $1.77 billion as of December 31, 2023 and $1.58 billion as of December 31, 2022.2023.
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
of our lending personnel. In addition to the segment evaluations, impairedsubstandard 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
established for its loan segment.
The allowance was $19.4 million at December 31, 2025, $17.9 million at December 31, 2024,2024 and $19.7 million at December 31, 2023 and $14.7 million at December 31, 2022.2023. See the 20242025 Overview for thefurther discussion regarding
discussionmanagement’s ongoing assessment of the decreaseadequacy inof allowancethe in 2024.allowance.
Nonaccrual Loans and Nonperforming Assets
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.
The following table presents information regarding nonperforming assets as of the dates indicated.indicated:
(1) Included in the nonaccrual loans balanceThere are $0 and $10.12 million ofno loans modified to borrowers experiencing financial difficulty included in nonaccrual loans as of December 31,
2024 2025 and December 31, 2023,2024, respectively. See Note 6 of the financial statements.
(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.
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. Substandard loans totaled $31.1 million as of December 31, 2023, an
increase of $10.1 million compared to December 31, 2022. The total net decrease in substandard loans in 20242025 as compared to 2023,2024, is comprised of a net decrease in commercial and industrial substandard loans primarily related to a decrease in
one relationship comprised of three notesnote totaling $18.4 $3.9
million with a $2.0 millionno specific reserve, and a net increasedecrease 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.
We gather deposits primarily through our twelve branch locations and online thoughthrough 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 were obtained through brokered transactions. We participate in the CDARS program, where customer funds are placed into multiple certificates of deposit, each in an amount
amount under the standard FDIC insurance maximum of $250,000, and placed at a network of banks across the United States. We also participate in the One-Way Buy Insured Cash Sweep service and similar services, which provide for one-way buy transactions
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. 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.
As of December 31, 2024, 2023, and 2022 brokered deposits were $336.7 million, $273.5 million, and $249.9 million, respectively.
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 $354.2$391.7 million and $448.7$354.2 million atas of December 31, 20242025 and December 31, 2023,2024, respectively, as calculated per
regulatory regulatory
guidance. This was approximately 23.4%23.2% and 28.2%23.4% of deposits atas of December 31, 20242025 and December 31, 2023,2024, respectively.
As of December 31, 2024,2025, 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
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 $159.2 million as of December 31, 2023,2024, and we had access to approximately $336.1$288.6 million in liquidity with the Federal Reserve Bank as of December 31, 2025
2024 and $0$336.1 million as of December 31, 2023.2024.
The following table summarizes commitments as of the dates presented.presented:
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.
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.
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.
The Company files 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.
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.
Management performs an analysis of the Company’s tax positions annually and believes it is more likely than not that all of its tax positions will be utilized in future years.
Fair Value of Financial Instruments
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.
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.
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.
What changed in the latest 10-Q
Risk Factors
There have been no material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Largest changes
“Pre-tax return on average assets and return on average equity was 2.37% and 16.76%, respectively for the three months ended June 30, 2026, as compared to 3.27% and 25.99%, respectively, for the same period in 2025. Pre-tax return on average assets and return on average equity was 2.87% and 20.83%, respectively for the six months ended June 30, 2026, as compared to 3.24% and 25.74%, respectively, for the same period in 2025. Our efficiency ratio for the three months ended June 30, 2026 was 52.05% as compared to 39.95% for the same period in 2025. …”see in full comparison
“Noninterest expense for the six months ended June 30, 2026 was $22.2 million compared to $18.6 million for the same period in 2025, an increase of $3.6 million, or 19.4%. Salaries and employee benefits expense was $12.5 million for the six months ended June 30, 2026 compared to $11.0 million for the same period in 2025, an increase of $1.5 million, or 13.9%. The increase in salaries and employee benefits was primarily attributable to overall increases in compensation tied to Company performance and efforts to effectively compete for executive and non-executive talent. …”see in full comparison
“Our provision for income taxes was $6.5 million for the six months ended June 30, 2026, compared to $7.0 million for the same period in 2025. This resulted in an effective tax rate of 24.16% in 2026, compared to 24.56% 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. …”see in full comparison
“Noninterest income for the six months ended June 30, 2026 was $3.0 million compared to $4.5 million for the same period in 2025, a decrease of $1.5 million, or 33.4%. The decrease was primarily driven by a $1.7 million decline in ‘Other income and fees’, which was largely attributable to a reduction in oil and gas related revenues following the disposition of the Company’s oil and gas assets early in the second quarter of 2026. The Company recognized $0.9 million of oil and gas related revenues during the six months ended June 30, 2026, compared to $2.7 million for the same period in 2025.”see in full comparison
Noninterest expense for the three months endedsee in full comparisonMarchJune31,30, 2026 was$10.3$11.9 million compared to$8.9$9.7 million for the same period in 2025, an increase of$1.5$2.2 million, or16.4%.22.2%. Salaries and employee benefits expense was$6.3$6.2 million for the three months endedMarchJune31,30, 2026 compared to$5.3$5.7 million for the same period in 2025, an increase of$1.1$0.5 million, or19.9%.8.3%. The increase in salaries and employee benefits was primarily attributable to overall increases in compensationduetied toto theCompany performanceof the Companyandto increases necessaryefforts to effectively compete for executive and non-executive talent. Additionally, ‘Other expense’ increased by $1.4 million, which was primarily driven by a $2.1 million pre-tax loss recognized on the disposition of the Company’s oil and gas assets during the second quarter of 2026.
“Noninterest income for the three months ended June 30, 2026 was $1.0 million compared to $2.7 million for the same period in 2025, a decrease of $1.7 million, or 62.9%. The decrease was primarily driven by a $1.6 million decline in ‘Other income and fees’, which was attributable to the absence of oil and gas related revenues during the second quarter of 2026 following the disposition of the Company’s oil and gas assets. For comparison, the Company recognized $1.6 million of oil and gas related revenues during the same period in 2025.”see in full comparison
Full comparison: every changed paragraph (35)
We reported total loans of $1.59$1.60 billion as of MarchJune 31,30, 2026, an increase of $170.1$100.0 million, or 11.9%,6.7%, from MarchJune 31,30, 2025. Total deposits were $1.67$1.64 billion as of March
31,June 30, 2026, an increase of $120.1 $43.7
million, or 7.7%,2.7%, from MarchJune 31,30, 2025.
Income before taxes was $15.8$11.0 million, ana increasedecrease of $2.1$3.7 million, or 15.4%,25.1%, for the three months ended MarchJune 31,30, 2026 as compared
to income before taxes of $13.7$14.7
million for the same period in 2025. Income before taxes was $26.8 million, a decrease of $1.6 million, or 5.6%, for the six months ended
June 30, 2026 as compared to income before taxes of $28.4 million for the same period in 2025.
Pre-tax return on average assets and return on average equity was 2.37% and 16.76%, respectively for the three months ended June 30, 2026, as compared to 3.27% and 25.99%, respectively, for the same period in 2025. Pre-tax return on average assets and return on average equity was 2.87% and 20.83%, respectively for the six months ended June 30, 2026, as compared to 3.24% and 25.74%, respectively, for the same period in 2025. Our efficiency ratio for the three months ended June 30, 2026 was 52.05% as compared to 39.95% for the same period in 2025. Our efficiency ratio for the six months ended June 30, 2026 was 45.18% as compared to 39.44% for the same period in 2025. The increases in the efficiency ratios for the 2026 periods were primarily driven by the disposition of the Company’s oil and gas assets in the second quarter, which resulted in a $2.1 million pre-tax loss recorded in noninterest expense and a corresponding reduction in oil and gas related noninterest income.
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 period in 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.
RegardingDuring the subsequentsecond eventquarter itemof mentioned in Note 1 herein,2026, 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 20232023, management
expended $16.5 million to acquire certain oil and gas assets. On a cash basis, prior toOver the secondholding quarter 2026period, the Company had received cash proceeds from oil and gas
sales of $14.9$15.0 million, and when that is combined with the final second quarter sale proceeds of $5.2
million, the total cash recovery of $20.1$20.2 million exceeds the initial $16.5 million cash outlay by $3.7 million. Over the holding period from
the fourth quarter of 2023 through firstthe disposition in the second quarter of 2026, these assets
generated cumulative pre-tax net income of approximately $5.8$3.7 million,million (which includes the $2.1 million non-cash loss on sale recognized in the second quarter), which we believe is the most directly comparable GAAP measure to the non-GAAP cash
summary presented
below.
For the firstsecond quarter of 2026 compared to the firstsecond quarter of 2025:
For the six months ended June 30, 2026 compared to the six months ended June 30, 2025:
The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at MarchJune 31,30, 2026. The
following table presents
securities at their expected maturities, which may differ from contractual maturities. 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:
There was no provision for credit losses for three and six months ended June 30, 2026 and June 30, 2025.
For the three months ended March 31, 2026 compared to the three months ended March 31, 2025, there was no provision for credit losses.
For the three and six months ended MarchJune 31,30, 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.
Our provision for income taxes was $3.8$2.7 million for the three months ended MarchJune 31,30, 2026, compared to $3.4$3.6 million for same period in 2025. This resulted in an effective tax rate of 24.11%24.23% in 2026, compared
to 24.63% 24.49%
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 MarchJune 31,30, 2026,2026 and March2025 31,totaled 2025,$6.1 million and $7.2 million, respectively, reflecting our domestic jurisdictional
profile and the timing of
estimated tax payments.
Our provision for income taxes was $6.5 million for the six months ended June 30, 2026, compared to $7.0 million for the same period in 2025. This resulted in an effective tax rate of 24.16% in 2026, compared to 24.56% 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 for the six months ended June 30, 2026 and 2025 totaled $6.1 million and $7.2 million, respectively, reflecting our domestic jurisdictional profile and the timing of estimated tax payments.
Noninterest income for the three months ended June 30, 2026 was $1.0 million compared to $2.7 million for the same period in 2025, a decrease of $1.7 million, or 62.9%. The decrease was primarily driven by a $1.6 million decline in ‘Other income and fees’, which was attributable to the absence of oil and gas related revenues during the second quarter of 2026 following the disposition of the Company’s oil and gas assets. For comparison, the Company recognized $1.6 million of oil and gas related revenues during the same period in 2025.
Noninterest income for the six months ended June 30, 2026 was $3.0 million compared to $4.5 million for the same period in 2025, a decrease of $1.5 million, or 33.4%. The decrease was primarily driven by a $1.7 million decline in ‘Other income and fees’, which was largely attributable to a reduction in oil and gas related revenues following the disposition of the Company’s oil and gas assets early in the second quarter of 2026. The Company recognized $0.9 million of oil and gas related revenues during the six months ended June 30, 2026, compared to $2.7 million for the same period in 2025.
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%.
Noninterest expense for the three months ended MarchJune 31,30, 2026 was $10.3$11.9 million compared to $8.9$9.7 million for the same period in 2025, an increase of $1.5$2.2 million, or 16.4%.22.2%. Salaries and employee benefits
expense was $6.3$6.2 million for the three
months ended MarchJune 31,30, 2026 compared to $5.3$5.7 million for the same period in 2025, an increase of $1.1$0.5 million, or 19.9%.8.3%. The increase in salaries and employee benefits was primarily attributable to overall increases in compensation duetied to
to theCompany performance of the Company and to increases necessaryefforts to effectively compete for executive and non-executive talent. Additionally, ‘Other expense’ increased by $1.4 million, which was primarily driven by a $2.1 million pre-tax loss recognized on the disposition of
the Company’s oil and gas assets during the second quarter of 2026.
Noninterest expense for the six months ended June 30, 2026 was $22.2 million compared to $18.6 million for the same period in 2025, an increase of $3.6 million, or 19.4%. Salaries and employee benefits expense was $12.5 million for the six months ended June 30, 2026 compared to $11.0 million for the same period in 2025, an increase of $1.5 million, or 13.9%. The increase in salaries and employee benefits was primarily attributable to overall increases in compensation tied to Company performance and efforts to effectively compete for executive and non-executive talent. Additionally, ‘Other expense’ increased by $0.9 million, which was primarily driven by a $2.1 million pre-tax loss recognized on the disposition of the Company’s oil and gas assets during the second quarter of 2026.
The following discussion of our financial condition compares MarchJune 31,30, 2026 and December 31, 2025.
Total assets decreased $18.6$49.3 million, or 1.0%,2.5%, to $1.95$1.91 billion as of MarchJune 31,30, 2026, compared to $1.96 billion as of December 31, 2025.
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 MarchJune 31,30, 2026, and
December 31, 2025, our gross loans were $1.60 billion and $1.61 billion, respectively.
The following table presents the balance and associated percentage of each major category in our loan portfolio as of MarchJune 31,30, 2026 and December 31, 2025:
The allowance was $19.5 million at MarchJune 31,30, 2026, compared to $19.4 million at December 31, 2025.
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
Loans accounted for on a nonaccrual basis were $9.3$6.3 million as of MarchJune 31,30, 2026, and $6.5 million as of December 31, 2025. OREO was $462,000,$464,000, and $461,000 as of MarchJune 31,30, 2026, and December 31, 2025, respectively.
(1) Includes nonaccrual financial difficulty modifications of $1.1 and $0 million as of June 30, 2026 and December 31, 2025, respectively. See note 5 of the financial statements.
(2) Excludes OREO of $464,000, and $461,000 as of June 30, 2026 and December 31, 2025, respectively, as the balances are not considered material for separate disclosure.
Of our interest-bearing deposits, some were obtained through brokered transactions. As of MarchJune 31,30, 2026 and December 31, 2025, brokered deposits were $135.1$135.2 million, and $205.6 million, respectively. Reciprocal
Reciprocal deposits totaled $644.4$570.8 million and $576.5 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively.
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$389.0 million and $391.7 million as of
March 31,June 30, 2026 and December
31, 2025, respectively, as calculated per regulatory guidance. These amounts were approximately 24.3%23.8% and 23.2% of deposits at March
31,June 30, 2026 and December 31, 2025,
respectively.
Total deposits as of MarchJune 31,30, 2026 and December 31, 2025 were $1.67$1.64 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.
As of MarchJune 31,30, 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$225.6 million as of MarchJune 31,30, 2026 and $213.8 million as of December 31, 2025, and we had access to approximately $301.1
$305.2 million in
liquidity with the Federal Reserve Bank as of MarchJune 31,30, 2026 and $288.6 million as of December 31, 2025.
As of MarchJune 31,30, 2026, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action frame work. There have been no conditions or events since MarchJune 31,30, 2026
that management
believes would change this classification.
The table below presents our applicable capital requirements, as well as our capital ratios as of MarchJune 31,30, 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.
Under the Basel III Capital Rules, in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers, a banking
banking organization must hold a capital conservation buffer composed of CET1 capital above its minimum risk-based capital requirements. As of MarchJune 31,30, 2026, the Company and the Bank met all capital adequacy requirements under the
Basel III Capital Rules.
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$15.3 million as of MarchJune 31,30, 2026 to $259.8$266.3 million, compared to $251.0 million as of December 31, 2025.
The following tables contain supplemental information regarding our total contractual obligations as of MarchJune 31,30, 2026, and December 31, 2025:
BSVN insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 5 filings (4 insiders, 6 trade dates, 16,026 shares, about $771.5K). Net open-market shares: -16,026 (purchases minus sales); net value about -$771.5K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-08-04 | Estes Jason E |
Open-market sale | 2,077 | $50.17 | $104.2K |
| 2026-08-03 | Estes Jason E |
Open-market sale | 400 | $51.25 | $20.5K |
| 2026-07-29 | Phillips John T |
Grant/award | 5,843 | — | — |
| 2026-07-29 | Phillips John T |
Shares withheld for tax | 156 | $50.32 | $7.8K |
| 2026-07-29 | Levinson Andrew J |
Grant/award | 3,500 | — | — |
| 2026-07-29 | Haines Douglas A |
Grant/award | 2,500 | — | — |
| 2026-07-29 | Litchfield Henry |
Grant/award | 2,500 | — | — |
| 2026-07-29 | Estes Jason E |
Shares withheld for tax | 1,654 | $50.32 | $83.2K |
| 2026-07-29 | Estes Jason E |
Grant/award | 8,198 | — | — |
| 2026-07-29 | Estes Jason E |
Shares withheld for tax | 301 | $50.32 | $15.1K |
| 2026-07-29 | Harris Kelly J |
Shares withheld for tax | 116 | $50.32 | $5.8K |
| 2026-07-29 | Harris Kelly J |
Grant/award | 4,471 | — | — |
| 2026-07-29 | Travis Thomas L |
Grant/award | 18,581 | — | — |
| 2026-07-29 | Travis Thomas L |
Shares withheld for tax | 572 | $50.32 | $28.8K |
| 2026-07-29 | Mathews Darrell Lee Jr. |
Grant/award | 3,500 | — | — |
| 2026-07-29 | Gray Edward Patrick |
Grant/award | 866 | — | — |
| 2026-07-29 | Whitcomb Gary D |
Grant/award | 823 | — | — |
| 2026-07-29 | Dick Teresa L. |
Grant/award | 769 | — | — |
| 2026-07-29 | Buergler William M |
Grant/award | 866 | — | — |
| 2026-07-22 | Travis Thomas L |
Open-market sale | 6,500 | $48.01 | $312.1K |
| 2026-07-22 | Estes Jason E |
Open-market sale | 1,824 | $48.25 | $88.0K |
| 2026-07-21 | Estes Jason E |
Open-market sale | 1,975 | $49.70 | $98.2K |
| 2026-07-21 | Estes Jason E |
Open-market sale | 1,250 | $49.20 | $61.5K |
| 2026-07-21 | Estes Jason E |
Option exercise | 1,250 | $14.31 | $17.9K |
| 2026-05-28 | Haines Douglas A |
Open-market sale | 1,000 | $44.07 | $44.1K |
| 2026-05-05 | Mathews Darrell Lee Jr. |
Open-market sale | 1,000 | $43.00 | $43.0K |
| 2026-02-19 | Phillips John T |
Gift | 500 | — | — |
Well-known investors holding BSVN (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 15,700 | $768.5K | 0.0% | Added 32% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 13,905 | $680.6K | 0.0% | Reduced 49% |
| Two Sigma Investments | 2026-06-30 | 13,797 | $675.4K | 0.0% | Added 9% |
| Millennium Management (Israel Englander) | 2026-06-30 | 10,924 | $435.6K | — | Sold out |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 8,151 | $399.0K | 0.0% | New position |