Bank7 Corp. (BSVN)

CIK: 0001746129. SIC: 6022 State Commercial Banks. Latest 10-K as of: 2026-03-17.

SIC breadcrumb: Finance, Insurance, And Real Estate > Depository Institutions > SIC 6022 State Commercial Banks

SEC company page: https://www.sec.gov/edgar/browse/?CIK=1746129. Latest filing source: 0001140361-26-009657.

Informational only - descriptive public-record data, not investment advice.

Business

Read BSVN's verbatim Item 1 Business section from its latest 10-K: Business.

Risk Factors

Read BSVN's verbatim Item 1A Risk Factors from its latest 10-K: Risk Factors.

Selected Fundamentals

Metric	Value	Unit	FY	Filed
Revenue	128,758,000	USD	2025	2026-03-17
Net income	43,069,000	USD	2025	2026-03-17
Assets	1,963,640,000	USD	2025	2026-03-17

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-17. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001746129.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Download these verified figures (annual + quarterly, with per-value filing provenance): JSON · CSV

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Revenue	33,153,000	42,870,000	46,800,000	51,709,000	53,314,000	56,289,000	78,749,000	121,544,000	131,540,000	128,758,000
Net income	16,817,000	23,789,000	25,000,000	8,225,000	19,266,000	23,159,000	29,638,000	28,275,000	45,698,000	43,069,000
Diluted EPS	2.31	3.26	3.03	0.81	2.05	2.55	3.22	3.05	4.84	4.50
Operating cash flow	19,357,000	25,877,000	27,001,000	19,180,000	25,235,000	30,133,000	39,714,000	49,125,000	55,046,000	46,136,000
Capital expenditures	2,319,000	3,969,000	378,000	3,100,000	438,000	599,000	294,000	2,834,000	4,197,000	4,740,000
Dividends paid	6,995,000	9,749,000	56,155,000	1,006,000	7,803,000	3,982,000	4,366,000	6,323,000	8,057,000	9,342,000
Assets		703,594,000	770,511,000	866,392,000	1,016,669,000	1,350,549,000	1,584,169,000	1,771,666,000	1,739,808,000	1,963,640,000
Liabilities		634,418,000	682,045,000	766,266,000	909,350,000	1,223,141,000	1,440,069,000	1,601,340,000	1,526,595,000	1,712,645,000
Stockholders' equity	55,136,000	69,176,000	88,466,000	100,126,000	107,319,000	127,408,000	144,100,000	170,326,000	213,213,000	250,995,000
Free cash flow	17,038,000	21,908,000	26,623,000	16,080,000	24,797,000	29,534,000	39,420,000	46,291,000	50,849,000	41,396,000

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Metric	2016	2017	2018	2019	2020	2021	2022	2023	2024	2025
Net margin	50.73%	55.49%	53.42%	15.91%	36.14%	41.14%	37.64%	23.26%	34.74%	33.45%
Return on equity	30.50%	34.39%	28.26%	8.21%	17.95%	18.18%	20.57%	16.60%	21.43%	17.16%
Return on assets		3.38%	3.24%	0.95%	1.90%	1.71%	1.87%	1.60%	2.63%	2.19%
Liabilities / equity		9.17	7.71	7.65	8.47	9.60	9.99	9.40	7.16	6.82

Industry Peer Context

Each number-line places BSVN against the min, median, and max of latest reported values among companies in the same SIC industry when at least three peers report that ratio.

Net margin peer context

ROE peer context

ROA peer context

Financial Bridges

Waterfall figures reconcile reported SEC companyfacts components. Missing bridges are omitted when required components are not present for the same fiscal year.

Free cash flow = operating cash flow - capital expenditures

Figure provenance: SEC companyfacts FY 2025. Operating cash flow: accession 0001140361-26-009657; concept NetCashProvidedByUsedInOperatingActivities; source concepts us-gaap:NetCashProvidedByUsedInOperatingActivities | Capital expenditures: accession 0001140361-26-009657; concept PaymentsToAcquirePropertyPlantAndEquipment; source concepts us-gaap:PaymentsToAcquirePropertyPlantAndEquipment | Free cash flow: accession 0001140361-26-009657; concept NetCashProvidedByUsedInOperatingActivities - PaymentsToAcquirePropertyPlantAndEquipment; source concepts us-gaap:NetCashProvidedByUsedInOperatingActivities; us-gaap:PaymentsToAcquirePropertyPlantAndEquipment

Financial Charts

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: InterestAndDividendIncomeOperating. Source concepts: us-gaap:InterestAndDividendIncomeOperating.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: NetIncomeLoss. Source concepts: us-gaap:NetIncomeLoss.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: NetCashProvidedByUsedInOperatingActivities. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: PaymentsToAcquirePropertyPlantAndEquipment. Source concepts: us-gaap:PaymentsToAcquirePropertyPlantAndEquipment.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: PaymentsOfDividends. Source concepts: us-gaap:PaymentsOfDividends.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: Assets. Source concepts: us-gaap:Assets.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: Liabilities. Source concepts: us-gaap:Liabilities.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: StockholdersEquity. Source concepts: us-gaap:StockholdersEquity.

Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0001140361-26-009657; filed 2026-03-17. Concept: NetCashProvidedByUsedInOperatingActivities - PaymentsToAcquirePropertyPlantAndEquipment. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities; us-gaap:PaymentsToAcquirePropertyPlantAndEquipment.

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-11. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0001746129.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarter	End Date	Revenue	Net Income	Diluted EPS	Method
2022-Q2	2022-06-30			0.76	reported discrete quarter
2022-Q3	2022-09-30			0.87	reported discrete quarter
2023-Q1	2023-03-31			1.04	reported discrete quarter
2023-Q2	2023-06-30	30,042,000	9,746,000	1.05	reported discrete quarter
2023-Q3	2023-09-30	31,722,000	7,853,000	0.85	reported discrete quarter
2023-Q4	2023-12-31	32,400,000	1,069,000		derived Q4 = FY annual - nine-month YTD
2024-Q1	2024-03-31	33,287,000	11,288,000	1.21	reported discrete quarter
2024-Q2	2024-06-30	32,436,000	11,524,000	1.23	reported discrete quarter
2024-Q3	2024-09-30	33,488,000	11,777,000	1.24	reported discrete quarter
2024-Q4	2024-12-31	32,330,000	11,109,000		derived Q4 = FY annual - nine-month YTD
2025-Q1	2025-03-31	30,438,000	10,336,000	1.08	reported discrete quarter
2025-Q2	2025-06-30	31,781,000	11,105,000	1.16	reported discrete quarter
2025-Q3	2025-09-30	33,717,000	10,844,000	1.13	reported discrete quarter
2025-Q4	2025-12-31	32,816,000	10,784,000		derived Q4 = FY annual - nine-month YTD
2026-Q1	2026-03-31	33,783,000	12,006,000	1.25	reported discrete quarter

Quarterly Charts

Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-03-31; accession 0001140361-26-020594; filed 2026-05-11. Concept: InterestAndDividendIncomeOperating. Source concepts: us-gaap:InterestAndDividendIncomeOperating.

Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-03-31; accession 0001140361-26-020594; filed 2026-05-11. Concept: NetIncomeLoss. Source concepts: us-gaap:NetIncomeLoss.

Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-03-31; accession 0001140361-26-020594; filed 2026-05-11. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.

Macro Cross-References

CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
UNRATE - Unemployment Rate
FEDFUNDS - Federal Funds Effective Rate
CES0500000003 - Average Hourly Earnings of All Employees, Total Private
DFEDTARU - Federal Funds Target Range - Upper Limit
DFEDTARL - Federal Funds Target Range - Lower Limit
DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
PCEPI - Personal Consumption Expenditures: Chain-type Price Index
PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
PPIACO - Producer Price Index by Commodity: All Commodities
T10YIE - 10-Year Breakeven Inflation Rate
U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
PAYEMS - All Employees, Total Nonfarm
CIVPART - Labor Force Participation Rate
EMRATIO - Employment-Population Ratio
UNEMPLOY - Unemployed
CE16OV - Employment Level
ICSA - Initial Claims
JTSJOL - Job Openings: Total Nonfarm
JTSQUR - Quits: Total Nonfarm
GDPC1 - Real Gross Domestic Product
A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
INDPRO - Industrial Production: Total Index
TCU - Capacity Utilization: Total Index
HOUST - New Privately-Owned Housing Units Started: Total Units
PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
RSAFS - Advance Retail Sales: Retail Trade
PCE - Personal Consumption Expenditures
DSPIC96 - Real Disposable Personal Income
PSAVERT - Personal Saving Rate
M2SL - M2
BOPGSTB - U.S. International Trade in Goods and Services: Balance
MSPUS - Median Sales Price of Houses Sold for the United States
HSN1F - New One Family Houses Sold: United States
RHORUSQ156N - Homeownership Rate in the United States
TTLCONS - Total Construction Spending: Total Construction in the United States
RRVRUSQ156N - Rental Vacancy Rate in the United States
TOTALSL - Total Consumer Credit Owned and Securitized
REVOLSL - Revolving Consumer Credit Owned and Securitized
DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
GDP - Gross Domestic Product
GPDI - Gross Private Domestic Investment
GCE - Government Consumption Expenditures and Gross Investment
PCEC - Personal Consumption Expenditures
NETEXP - Net Exports of Goods and Services
GFDEBTN - Federal Debt: Total Public Debt
GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
FYFSD - Federal Surplus or Deficit
FGRECPT - Federal Government Current Receipts
FGEXPND - Federal Government: Current Expenditures
MANEMP - All Employees, Manufacturing
USCONS - All Employees, Construction
USTRADE - All Employees, Retail Trade
USFIRE - All Employees, Financial Activities
USGOVT - All Employees, Government
AWHAETP - Average Weekly Hours of All Employees, Total Private
DGORDER - Manufacturers' New Orders: Durable Goods
NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
BUSINV - Total Business Inventories
EXPGS - Exports of Goods and Services
IMPGS - Imports of Goods and Services
IR - Import Price Index (End Use): All Commodities
PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001140361-26-020594.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-11. Report date: 2026-03-31.

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of
Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included
elsewhere in this Quarterly Report and in our Annual Report on Form 10-K for the year ended December 31, 2025.

Unless the context indicates otherwise, references in this management’s discussion and analysis to “we,” “our,” and “us,” refer to Bank7 Corp. and its
consolidated subsidiaries. All references to “the Bank” refer to Bank7, our wholly owned subsidiary.

General

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.

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.

Q1 2026 Overview

We reported total loans of $1.59 billion as of 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.

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 period in 2025.

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.

Table of Contents

Sale of Oil and Gas Assets

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.

GAAP to Non-GAAP Reconciliation for Oil and Gas Assets (dollars in thousands):

	Acquisition Date through
	March 31, 2026		April 30, 2026
GAAP Income before taxes	$	5,751		$	5,692
Add back non-cash expenses:
Depletion		9,134			9,134
Amortization & accretion		81			81
Net cash flow from operations (Non-GAAP)	$	14,966		$	14,907
Remaining accruals to be settled					68
Add: Sales proceeds from final disposition (April 2026)					5,164
Total cash generated by asset (Non-GAAP)				$	20,139
Less: Initial cash outlay for acquisition (Q4 2023)					(16,481	)
Net cash returned (Non-GAAP)				$	3,658
Initial cash outlay for acquisition (Q4 2023)				$	(16,487	)
Cash inflows:
Net cash receipts from operator statements					14,907
Sales proceeds from minor asset sales (2024)					17
Sales proceeds from final disposition (April 2026)					5,164
Total cash inflows				$	20,088
Cash outflows:
Transaction costs and other adjustments					57
Total Cash outflows				$	57
Net cash returned (Non-GAAP)				$	3,658

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.

Table of Contents

Results of Operations

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.

	Net Interest Margin
	For the Three Months Ended March 31,
	2026		2025
	Average Balance		Interest Income/ Expense			Average Yield/ Rate	Average Balance		Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Short-term investments	$	210,047		$	1,861		3.60	%	$	238,048		$	2,768	4.72	%
Debt securities, taxable		43,564			250		2.33			48,637			283	2.36
Debt securities, tax exempt(1)		11,052			59		2.17			12,514			63	2.04
Loans held for sale		1,983			-		-			580			-	-
Total loans(2)		1,596,201			31,613		8.03			1,398,350			27,324	7.92
Total interest-earning assets		1,862,847		$	33,783		7.35			1,698,129		$	30,438	7.27
Noninterest-earning assets		41,295								39,957
Total assets	$	1,904,142							$	1,738,086
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	1,058,572		$	7,223		2.77	%	$	956,891		$	7,118	3.02	%
Time deposits		264,608			2,368		3.63			236,325			2,482	4.26
Total interest-bearing deposits		1,323,180			9,591		2.94			1,193,216			9,600	3.62
Total interest-bearing liabilities		1,323,180			9,591		2.94			1,193,216			9,600	3.62
Noninterest-bearing liabilities:
Noninterest-bearing deposits		315,426								316,544
Other noninterest-bearing liabilities		9,515								9,983
Total noninterest-bearing liabilities		324,941								326,527
Shareholders’ equity		256,021								218,343
Total liabilities and shareholders’ equity	$	1,904,142							$	1,738,086
Net interest income				$	24,192							$	20,838
Net interest spread							4.41	%						4.01	%
Net interest margin							5.27	%						4.98	%

Column 1	Column 2
(1)	Taxable-equivalent yield of 2.85% as of March 31, 2026, applying a 24.1% effective tax rate.

Column 1	Column 2
(2)	Average loan balances include monthly average nonaccrual loans of $10.0 million and $6.7 million for the three months ended March 31, 2026 and March 31, 2025, respectively.

For the first quarter of 2026 compared to the first quarter of 2025:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $4.3 million, or 15.7%, to $31.6 million, due to increased loan yields as discussed below;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 7.35%, an increase of 8 basis points which was primarily attributable to higher loan yields of 11 basis points, and a decrease in yield on short-term investments of 112 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin was 5.27% compared to 4.98%.

Table of Contents

Increases and decreases in interest income and interest expense result from changes in average balances, or volume, of interest-earning assets and interest-bearing liabilities, as well as changes in average
interest rates. The following tables set forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income attributable to changes in
volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume).

	Analysis of Changes in Interest Income and Expenses
	For the Three Months Ended
	March 31, 2026 vs 2025
	Change due to:
	Volume(1)			Rate(1)			Interest
	Variance
	(Dollars in thousands)
Increase (decrease) in interest income:
Short-term investments	$	(326	)		$	(581	)	$	(907	)
Debt securities		(37	)			-			(37	)
Total loans		3,866				423			4,289
Total increase (decrease) in interest income		3,503				(158	)		3,345
Increase (decrease) in interest expense:
Deposits:
Transaction accounts		756				(651	)		105
Time deposits		297				(411	)		(114	)
Total interest-bearing deposits		1,053				(1,062	)		(9	)
Total increase (decrease) in interest expense		1,053				(1,062	)		(9	)
Increase (decrease) in net interest income	$	2,450			$	904		$	3,354

Column 1	Column 2
(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.

Table of Contents

Weighted Average Yield of Debt Securities

The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at March 31, 2026. The
following table presents securities at their expected maturities, which may differ from contractual maturities. The Company manages its debt securiti

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2026-03-17. Report date: 2025-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, references in this management’s discussion and analysis to “we”, “our”, and “us,” refer to Bank7 Corp. and its consolidated
subsidiaries. All references to “the Bank” refer to Bank7, our wholly owned subsidiary.

General

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.

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.

As of December 31, 2025, we had total assets of $1.96 billion, total loans of $1.61 billion, total deposits of $1.70 billion and total shareholders’ equity of $251.0 million.

The Federal Reserve aggressively raised the federal funds target rate throughout 2022 and 2023 to combat elevated inflation, reaching a peak range of 5.25% to 5.50% by December 31, 2023. 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.

2025 Overview

We reported total loans of $1.61 billion as of December 31, 2025, an increase of $209.0 million, or 15.0%, from December 31, 2024. Total deposits were $1.70 billion as of December 31, 2025, an
increase of $185.4 million, or 12.2%, from December 31, 2024.

Income before taxes was $56.8 million, a decrease of $3.6 million, or 6.0%, for the year ended December 31, 2025 as compared to income before taxes of $60.4 million for the same period in 2024.

Pre-tax return on average assets and return on average equity was 3.12% and 24.39%, respectively, for the year ended December 31, 2025, as compared to 3.50% and 31.41%, respectively, for the same
period in 2024. Tax-adjusted return on average assets and return on average equity was 2.37% and 18.51%, respectively, for the year ended December 31, 2025, as compared to 2.65% and 23.78%, respectively, for the same period in 2024. Our efficiency
ratio for the year ended December 31, 2025 was 40.24% as compared to 37.90% for the same period in 2024.

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.

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Results of Operations

Years Ended December 31, 2025, December 31, 2024, and December 31, 2023

Net Interest Income and Net Interest Margin

The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets, and the
resultant average yields; (ii) average balances, the total dollar amount of interest expense on interest-bearing liabilities, and the resultant average rates; (iii) net interest income; and (iv) the net interest margin.

	Net Interest Margin
	For the Year Ended December 31,
	2025		2024			2023
	Average Balance		Interest Income/ Expense			Average Yield/ Rate	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance	Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-earning assets:
Short-term investments	$	235,211		$	9,914		4.21	%	$	184,328		$	9,320		5.04	%	$	174,600	$	8,580	4.91	%
Debt securities, taxable		46,599			1,085		2.33			90,184			2,531		2.80			152,094		2,791	1.84
Debt securities, tax exempt(1)		12,042			246		2.04			16,651			273		1.64			19,430		330	1.70
Loans held for sale		1,448			-		-			343			-		-			158		-	-
Total loans(2)		1,483,112			117,513		7.92			1,391,552			119,416		8.56			1,315,578		109,843	8.35
Total interest-earning assets		1,778,412		$	128,758		7.24			1,683,058		$	131,540		7.79			1,661,860	$	121,544	7.31
Noninterest-earning assets		41,782								39,555								25,943
Total assets	$	1,820,194							$	1,722,613							$	1,687,803
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	1,021,059		$	31,396		3.07	%	$	882,314		$	33,408		3.78	%	$	825,169	$	28,582	3.46	%
Time deposits		237,548			9,489		3.99			254,057			11,937		4.69			256,672		10,416	4.06
Total interest-bearing deposits		1,258,607			40,885		3.25			1,136,371			45,345		3.98			1,081,841		38,998	3.60
Total interest-bearing liabilities		1,258,607			40,885		3.25			1,136,371			45,345		3.98			1,081,841		38,998	3.60
Noninterest-bearing liabilities:
Noninterest-bearing deposits		317,743								381,660								433,603
Other noninterest-bearing liabilities		11,105								12,419								10,423
Total noninterest-bearing liabilities		328,848								394,079								444,026
Shareholders’ equity		232,739								192,163								161,936
Total liabilities and shareholders’ equity	$	1,820,194							$	1,722,613							$	1,687,803
Net interest income				$	87,873							$	86,195						$	82,546
Net interest spread							3.99	%							3.81	%					3.71	%
Net interest margin							4.94	%							5.11	%					4.97	%

Column 1	Column 2
(1)	Taxable-equivalent yield of 2.69% as of December 31, 2025, applying a 24.1% effective tax rate

Column 1	Column 2
(2)	Average loan balances include monthly average nonaccrual loans of $5.97 million, $12.4 million and $18.8 million for the years ended December 31, 2025, 2024 and 2023, respectively.

For the year ended December 31, 2025 compared to the year ended December 31, 2024:

Column 1	Column 2	Column 3
	-	Total interest income on loans decreased $1.9 million, or 1.6%, to $117.5 million, due to decreased loan yields as discussed below;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 7.24%, a decrease of 55 basis points which was attributable to lower loan yields of 64 basis points, a decrease in yield on short term investments of 83 basis points, and a decrease in yield on taxable debt securities of 47 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2025 and 2024 was 4.94% and 5.11%, respectively.

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For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $9.6 million, or 8.7%, to $119.4 million, which was attributable to a $76.0 million increase in the average balance of loans to $1.39 billion during the year ended 2024 as compared with the average balance of loans of $1.32 billion for the year ended 2023, and increased loan yields as discussed below;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 7.79%, an increase of 48 basis points which was attributable to higher loan yields of 21 basis points, an increase in yield on short term investments of 13 basis points, and an increase in yield on taxable debt securities of 96 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2024 and 2023 was 5.11% and 4.97%, respectively.

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, 2023 and December 31, 2025, the prime rate fluctuated between a high of 8.50%, and a low of 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.

Net interest margin for the years ended December 31, 2025, 2024 and 2023 was 4.94%, 5.11% and 4.97%, respectively.

The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest income
attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume).

	Analysis of Changes in Interest Income and Expenses
	For the Year Ended			For the Year Ended
	December 31, 2025 vs 2024			December 31, 2024 vs 2023
	Change due to:						Change due to:
	Volume(1)			Rate(1)			Interest		Volume(1)		Rate(1)			Interest
	Variance			Variance
	(Dollars in thousands)			(Dollars in thousands)
Increase (decrease) in interest income:
Short-term investments	$	2,565			$	(1,971	)	$	594		$	478			$	262		$	740
Debt securities		(1,296	)			(177	)		(1,473	)		(1,186	)			869			(317	)
Total loans		7,838				(9,741	)		(1,903	)		6,344				3,229			9,573
Total increase (decrease) in interest income		9,107				(11,889	)		(2,782	)		5,636				4,360			9,996
Increase (decrease) in interest expense:
Deposits:
Transaction accounts		5,245				(7,257	)		(2,012	)		1,977				2,849			4,826
Time deposits		(774	)			(1,674	)		(2,448	)		(106	)			1,627			1,521
Total interest-bearing deposits		4,471				(8,931	)		(4,460	)		1,871				4,476			6,347
Total increase (decrease) in interest expense		4,471				(8,931	)		(4,460	)		1,871				4,476			6,347
Increase (Decrease) in net interest income	$	4,636			$	(2,958	)	$	1,678		$	3,765			$	(116	)	$	3,649

Column 1	Column 2
(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.

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Weighted Average Yield of Debt Securities

The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December 31, 2025. 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:

		As of December 31, 2025
						After One Year But		After Five Years But
	Within One Year			Within Five Years	Within Ten Years		After Ten Years			Total
	Amount			Yield *	Amount		Yield *			Amount		Yield *		Amount		Yield *			Amount			Yield *
Available-for-sale		(Dollars in thousands)
U.S. federal agencies		$	21		0.14	%	$	-			0.00	%	$	-			0.00	%		$	-		0.00	%	$	21		0.14	%
Mortgage-backed securities			902		1.33			7,059			1.37			-			-				17,471		1.70			25,432		1.60
State and political subdivisions			3,885		1.65			9,531			1.57			4,358			1.70				-		-			17,774		1.62
U.S. treasuries			983		0.97			3,743			1.09			882			1.12				-		-			5,608		1.08
Corporate debt securities			-		-			-			-			5,184			3.36				-		-			5,184		3.36
Total		$	5,791		1.48	%	$	20,333			1.41	%	$	10,424			2.47	%		$	17,471		1.70	%	$	54,019		1.72	%
Percentage of total			10.72	%				37.64	%					19.30	%						32.34	%				100.00	%

*Yield is on a taxable-equivalent basis using 21% tax rate

Provision for Credit Losses

For the year ended December 31, 2025 compared to the year ended December 31, 2024:

Column 1	Column 2	Column 3
	-	The provision for credit losses increased from $0 to $700,000, reflecting routine adjustments within our allowance for credit losses estimation methodology; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans decreased by 7 basis points to 1.21%.

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	The provision for credit losses decreased from $21.1 million to $0; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans decreased by 16 basis points to 1.28%.

Column 1	Column 2	Column 3
	-	The decrease in the provision was primarily due to the impact of a single loan customer that filed for bankruptcy in 2023, resulting in a $16.5 million charge-off recorded during that period.

Income Taxes

We file a consolidated income tax return and recognize deferred taxes based upon the future tax consequences of temporary differences between the carrying amounts and tax basis of assets and
liabilities. The process of determining the accruals for income taxes involves the exercise of considerable judgment regarding tax rates, laws, and the implementation of tax planning strategies.

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.

Noninterest Income

The following table sets forth the major components of our noninterest income for the years ended December 31, 2025, 2024 and 2023:

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		For the Years Ended			For the Years Ended
		December 31,			December 31,
		2025			2024			$ Increase		% Increase		2024			2023			$ Increase		% Increase
	(Decrease)			(Decrease)			(Decrease)		(Decrease)
		(Dollars in thousands)			(Dollars in thousands)
Noninterest income:
Mortgage lending income		$	1,326			$	370		$	956			258.38	%		$	370		$	331		$	39	11.78	%
Gain (Loss) on sales, prepayments, and calls of available-for-sale debt securities			(10	)			(6	)		(4	)		66.67	%			(6	)		(16	)		10	-62.50	%
Service charges on deposit accounts			941				975			(34	)		-3.49	%			975			869			106	12.20	%
Other			6,246				9,915			(3,669	)		-37.00	%			9,915			8,058			1,857	23.05	%
Total noninterest income		$	8,503			$	11,254		$	(2,751	)		-24.44	%		$	11,254		$	9,242		$	2,012	21.77	%

For the year ended December 31, 2025 compared to the year ended December 31, 2024:

Column 1	Column 2	Column 3
	-	Other noninterest income was $6.2 million compared to $9.9 million, a decrease of $3.7 million, or 37.0%. The decrease was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	Other noninterest income was $9.9 million compared to $8.1 million, an increase of $1.9 million, or 23.1%. The increase was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

Noninterest Expense

Noninterest expense for the year ended December 31, 2025 was $38.9 million compared to $37.1 million for the year ended December 31, 2024, an increase of $1.8 million or 4.9%. Noninterest expense
for the year ended December 31, 2024 was $37.1 million compared to $33.4 million for the year ended December 31, 2023, an increase of $3.7 million or 11.0%. The following table sets forth the major components of our noninterest expense for the
years ended December 31, 2025, 2024 and 2023:

	For the Years Ended		For the Years Ended
	December 31,		December 31,
	2025		2024			$ Increase (Decrease)		% Increase (Decrease)		2024			2023			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)		(Dollars in thousands)
Noninterest expense:
Salaries and employee benefits	$	22,634		$	20,783		$	1,851			8.91	%		$	20,783		$	17,385	$	3,398		19.55	%
Furniture and equipment		1,278			1,070			208			19.44	%			1,070			995		75		7.54	%
Occupancy		2,580			2,640			(60	)		-2.27	%			2,640			2,689		(49	)	-1.82	%
Data and item processing		2,128			1,897			231			12.18	%			1,897			1,730		167		9.65	%
Accounting, marketing, and legal fees		757			836			(79	)		-9.45	%			836			543		293		53.96	%
Regulatory assessments		814			1,196			(382	)		-31.94	%			1,196			1,537		(341	)	-22.19	%
Advertising and public relations		917			549			368			67.03	%			549			427		122		28.57	%
Travel, lodging and entertainment		439			431			8			1.86	%			431			374		57		15.24	%
Other expense		7,364			7,693			(329	)		-4.28	%			7,693			7,740		(47	)	-0.61	%
Total noninterest expense	$	38,911		$	37,095		$	1,816			4.90	%		$	37,095		$	33,420	$	3,675		11.00	%

For the year ended December 31, 2025 compared to the year ended December 31, 2024:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $22.6 million compared to $20.8 million, an increase of $1.9 million, or 8.9%. The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to remain competitive.

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $20.8 million compared to $17.4 million, an increase of $3.4 million, or 19.6%. The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to remain competitive.

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Financial Condition

The following discussion of our financial condition compares December 31, 2025, 2024, and 2023.

Total Assets

Total assets increased $223.8 million, or 12.9%, to $1.96 billion as of December 31, 2025, as compared to $1.74 billion as of December 31, 2024 and $1.77 billion as of December 31, 2023.

Loan Portfolio

Our loans represent the largest portion of our earning assets. The quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition. As of
December 31, 2025, 2024, and 2023, our gross loans were $1.61 billion, $1.40 billion and $1.36 billion, respectively.

The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2025, December 31, 2024 and December 31, 2023:

	As of December 31,
	2025			2024		2023
	Amount			% of Total		Amount		% of Total		Amount			% of Total
	(Dollars in thousands)
Construction & development	$	224,566			14.0	%	$	167,685			12.0	%		$	137,206		10.1	%
1-4 family real estate		126,122			7.8	%		121,047			8.7	%			100,576		7.4	%
Commercial real estate - other		587,597			36.5	%		511,304			36.5	%			518,622		38.0	%
Total commercial real estate		938,285			58.3	%		800,036			57.2	%			756,404		55.5	%
Commercial & industrial		567,280			35.2	%		507,023			36.2	%			526,185		38.5	%
Agricultural		90,908			5.7	%		77,922			5.6	%			66,495		4.9	%
Consumer		12,894			0.8	%		14,312			1.0	%			14,517		1.1	%
Gross loans		1,609,367			100.0	%		1,399,293			100.0	%			1,363,601		100.0	%
Less: unearned income, net		(2,936	)					(1,910	)						(2,762	)
Total Loans, net of unearned income		1,606,431						1,397,383							1,360,839
Less: Allowance for credit losses		(19,407	)					(17,918	)						(19,691	)
Net loans	$	1,587,024					$	1,379,465						$	1,341,148

We have established internal concentration limits in the loan portfolio for CRE loans, hospitality loans, energy loans, and construction loans, among others. 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.

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The following tables show the contractual maturities of our gross loans as of the periods below:

		As of December 31, 2025
								Due after One Year		Due after Five Years
	Due in One Year or Less			Through Five Years			Through Fifteen Years		Due after Fifteen Years
		Fixed			Adjustable			Fixed		Adjustable		Fixed			Adjustable			Fixed		Adjustable	Total
	Rate			Rate			Rate		Rate		Rate			Rate			Rate		Rate
		(Dollars in thousands)
Construction & development		$	638			$	116,658		$	10,497		$	95,444			$	-		$	399	$	930	$	-	$	224,566
1-4 family real estate			7,281				21,031			32,503			56,599				775			5,533		2,400		-		126,122
Commercial real estate - other			22,817				41,301			66,266			412,436				139			38,515		6,123		-		587,597
Total commercial real estate			30,736				178,990			109,266			564,479				914			44,447		9,453		-		938,285
Commercial & industrial			47,266				293,406			14,097			173,586				107			38,246		572		-		567,280
Agricultural			31,633				10,926			6,560			37,162				-			3,253		1,374		-		90,908
Consumer			1,747				2			4,866			258				806			3,714		1,501		-		12,894
Gross loans		$	111,382			$	483,324		$	134,789		$	775,485			$	1,827		$	89,660	$	12,900	$	-	$	1,609,367

		As of December 31, 2024
								Due after One Year		Due after Five Years
	Due in One Year or Less			Through Five Years			Through Fifteen Years		Due after Fifteen Years
		Fixed			Adjustable			Fixed		Adjustable		Fixed			Adjustable			Fixed		Adjustable	Total
	Rate			Rate			Rate		Rate		Rate			Rate			Rate		Rate
		(Dollars in thousands)
Construction & development		$	9,378			$	76,709		$	2,050		$	78,786			$	-		$	564	$	198	$	-	$	167,685
1-4 family real estate			15,426				20,085			43,558			31,566				964			4,826		4,622		-		121,047
Commercial real estate - other			47,737				61,482			103,484			271,156				153			18,303		8,989		-		511,304
Total commercial real estate			72,541				158,276			149,092			381,508				1,117			23,693		13,809		-		800,036
Commercial & industrial			36,062				263,026			13,639			175,729				8,232			9,738		597		-		507,023
Agricultural			22,768				8,991			16,581			26,677				-			1,054		1,851		-		77,922
Consumer			1,661				4			5,641			170				602			3,570		2,664		-		14,312
Gross loans		$	133,032			$	430,297		$	184,953		$	584,084			$	9,951		$	38,055	$	18,921	$	-	$	1,399,293

		As of December 31, 2023
								Due after One Year		Due after Five Years
	Due in One Year or Less			Through Five Years			Through Fifteen Years		Due after Fifteen Years
		Fixed			Adjustable			Fixed		Adjustable		Fixed			Adjustable			Fixed		Adjustable	Total
	Rate			Rate			Rate		Rate		Rate			Rate			Rate		Rate
		(Dollars in thousands)
Construction & development		$	11,431			$	70,040		$	8,970		$	44,935			$	-		$	1,438	$	392	$	-	$	137,206
1-4 family real estate			13,628				13,015			41,602			21,451				26			5,443		5,411		-		100,576
Commercial real estate - other			50,251				65,120			152,250			219,260				129			21,283		10,329		-		518,622
Total real estate			75,310				148,175			202,822			285,646				155			28,164		16,132		-		756,404
Commercial & industrial			20,389				263,564			41,520			186,776				3,276			10,041		619		-		526,185
Agricultural			13,250				22,615			13,935			13,032				-			810		2,853		-		66,495
Consumer			2,170				14			5,490			121				595			3,604		2,523		-		14,517
Gross loans		$	111,119			$	434,368		$	263,767		$	485,575			$	4,026		$	42,619	$	22,127	$	-	$	1,363,601

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Allowance for Credit Losses

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.

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, 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.

The allowance was $19.4 million at December 31, 2025, $17.9 million at December 31, 2024 and $19.7 million at December 31, 2023. See the 2025 Overview for further discussion regarding
management’s ongoing assessment of the adequacy of the allowance.

The following table provides an analysis of the activity in our allowance for the periods indicated:

	As of December 31,
	2025			2024			2023
	(Dollars in thousands)
Balance at beginning of the period	$	17,918			$	19,691		$	14,734
Impact of CECL adoption		-				-			250
Provision for credit losses for loans		700				-			21,181
Charge-offs:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		(197	)			(275	)		-
Commercial & industrial		-				(2,000	)		(16,500	)
Agricultural		-				-			(7	)
Consumer		(3	)			-			(17	)
Total charge-offs		(200	)			(2,275	)		(16,524	)
Recoveries:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		17				-			-
Commercial & industrial		965				495			40
Agricultural		4				7			2
Consumer		3				-			8
Total recoveries		989				502			50
Net recoveries (charge-offs)		789				(1,773	)		(16,474	)
Balance at end of the period	$	19,407			$	17,918		$	19,691
Net recoveries (charge-offs) to average loans		0.05	%			-0.13	%		-1.25	%

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While the entire allowance is available to absorb losses from any and all loans, the following table represents management’s allocation of the allowance by loan category, and the percentage of
allowance in each category, for the periods indicated:

	As of December 31,
	2025		2024		2023
	Amount		Percent		Amount		Percent	Amount			Percent
	(Dollars in thousands)
Construction & development	$	1,222		6.3	%	$	1,223		6.8	%		$	1,417	7.2	%
1-4 family real estate		964		5.0	%		1,313		7.3	%			1,271	6.5	%
Commercial real estate - other		6,855		35.3	%		6,992		39.0	%			6,889	35.0	%
Commercial & industrial		9,369		48.2	%		6,797		38.0	%			9,237	46.8	%
Agricultural		612		3.2	%		1,106		6.2	%			628	3.2	%
Consumer		385		2.0	%		487		2.7	%			249	1.3	%
Total	$	19,407		100.0	%	$	17,918		100.0	%		$	19,691	100.0	%

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Nonaccrual Loans and Nonperforming Assets

Loans are considered delinquent when principal or interest payments are past due 30 days or more. Delinquent loans may remain on accrual status between 30 days and 90 days past due. Loans on
which the accrual of interest has been discontinued are designated as nonaccrual loans. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management,
there is a reasonable doubt as to collectability of the obligation. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on a nonaccrual loan is
subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well-secured and management believes full collectability of principal
and interest is probable.

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.

Real estate we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as other real estate owned, or OREO, until sold, and is initially recorded at fair value less
costs to sell when acquired, establishing a new cost basis.

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 $6.5 million as of December 31, 2025, $7.2 million as of December 31, 2024, and $18.9 million as of December 31, 2023. OREO was $461,000, $321,000, and $0 as of December 31, 2025, December 31, 2024, and December 31, 2023, respectively.

The following table presents information regarding nonperforming assets as of the dates indicated:

	As of December 31,
	2025			2024			2023
	(Dollars in thousands)
Nonaccrual loans(1)	$	6,460			$	7,170		$	18,941
Accruing loans 90 or more days past due		-				-			10,026
Total nonperforming assets(2)	$	6,460			$	7,170		$	28,967
Ratio of nonperforming loans to total loans		0.40	%			0.51	%		2.13	%
Ratio of nonaccrual loans to total loans		0.40	%			0.51	%		1.39	%
Ratio of allowance for credit losses to total loans		1.21	%			1.28	%		1.45	%
Ratio of allowance for credit losses to nonaccrual loans		300.42	%			249.90	%		103.96	%
Ratio of nonperforming assets to total assets		0.33	%			0.41	%		1.64	%

(1) There are no loans modified to borrowers experiencing financial difficulty included in nonaccrual loans as of December 31, 2025 and December 31, 2024, respectively.

(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.

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The following tables present an aging analysis of loans as of the dates indicated.

	As of December 31, 2025
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total past due loans		Current			Gross loans
	(Dollars in thousands)
Construction & development	$	79		$	-		$	-	$	-		$	79		$	224,487	$	224,566
1-4 family real estate		47			-			-		-			47			126,075		126,122
Commercial real estate - other		-			1,423			-		-			1,423			586,174		587,597
Commercial & industrial		1,702			80			3,429		-			5,211			562,069		567,280
Agricultural		-			-			-		-			-			90,908		90,908
Consumer		30			-			-		-			30			12,864		12,894
Total	$	1,858		$	1,503		$	3,429	$	-		$	6,790		$	1,602,577	$	1,609,367

	As of December 31, 2024
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Gross loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	167,685	$	167,685
1-4 family real estate		-			-			-		-			-			121,047		121,047
Commercial real estate - other		103			-			3,426		-			3,529			507,775		511,304
Commercial & industrial		403			5			-		-			408			506,615		507,023
Agricultural		-			-			-		-			-			77,922		77,922
Consumer		97			-			-		-			97			14,215		14,312
Total	$	603		$	5		$	3,426	$	-		$	4,034		$	1,395,259	$	1,399,293

	As of December 31, 2023
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Gross loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	137,206	$	137,206
1-4 family commercial		-			-			-		-			-			100,576		100,576
Commercial real estate - other		-			-			-		-			-			518,622		518,622
Commercial & industrial		472			10,969			9,946		9,946			21,387			504,798		526,185
Agricultural		-			-			-		-			-			66,495		66,495
Consumer		-			27			80		80			107			14,410		14,517
Total	$	472		$	10,996		$	10,026	$	10,026		$	21,494		$	1,342,107	$	1,363,601

In addition to the past due and nonaccrual criteria, the Company also evaluates loans according to its internal risk grading system. Loans are segregated between pass, watch, special mention, and
substandard categories. The definitions of those categories are as follows:

Pass: These loans generally conform to Bank policies, are characterized by policy-conforming advance rates on collateral, and have well-defined repayment
sources. In addition, these credits are extended to borrowers and guarantors with a strong balance sheet and either substantial liquidity or a reliable income history.

Watch: These loans are still considered “Pass” credits; however, various factors such as industry stress, material changes in cash flow or financial
conditions, or deficiencies in loan documentation, or other risk issues determined by the lending officer, Commercial Loan Committee or Credit Quality Committee warrant a heightened sense and frequency of monitoring.

Special mention: These loans have observable weaknesses or evidence imprudent handling or structural issues. The weaknesses require close attention, and the
remediation of those weaknesses is necessary. No risk of probable loss exists. Credits in this category are expected to quickly migrate to “Watch” or “Substandard” as this is viewed as a transitory loan grade.

Substandard: These loans are not adequately protected by the sound worth and debt service capacity of the borrower, but may be well-secured. The loans have
defined weaknesses relative to cash flow, collateral, financial condition or other factors that might jeopardize repayment of all of the principal and interest on a timely basis. There is the possibility that a future loss will occur if
weaknesses are not remediated.

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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. The total net decrease in substandard loans in 2025 as compared to 2024, is comprised of a net decrease in commercial and industrial substandard loans primarily related to one note totaling $3.9
million with no specific reserve, and a net decrease in commercial real estate primarily related to one note totaling $3.0 million with a $0.2 million specific reserve.

Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows:

	As of December 31, 2025
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	222,688		$	-		$	1,323	$	555	$	224,566
1-4 family real estate		126,122			-			-		-		126,122
Commercial real estate - other		561,134			18,077			6,893		1,493		587,597
Commercial & industrial		505,252			37,285			18,908		5,835		567,280
Agricultural		87,129			-			3,779		-		90,908
Consumer		12,894			-			-		-		12,894
Total	$	1,515,219		$	55,362		$	30,903	$	7,883	$	1,609,367

	As of December 31, 2024
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	165,863		$	-		$	1,259	$	563	$	167,685
1-4 family real estate		121,047			-			-		-		121,047
Commercial real estate - other		498,835			-			7,493		4,976		511,304
Commercial & industrial		493,512			-			3,817		9,694		507,023
Agricultural		74,896			-			3,026		-		77,922
Consumer		14,312			-			-		-		14,312
Total	$	1,368,465		$	-		$	15,595	$	15,233	$	1,399,293

	As of December 31, 2023
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	136,417		$	-		$	789	$	-	$	137,206
1-4 family real estate		100,576			-			-		-		100,576
Commercial real estate - other		502,795			-			15,701		126		518,622
Commercial & industrial		485,433			4,094			5,767		30,891		526,185
Agricultural		66,495			-			-		-		66,495
Consumer		14,437			-			-		80		14,517
Total	$	1,306,153		$	4,094		$	22,257	$	31,097	$	1,363,601

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Deposits

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 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
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
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.

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 $391.7 million and $354.2 million as of December 31, 2025 and December 31, 2024, respectively, as calculated per
regulatory guidance. This was approximately 23.2% and 23.4% of deposits as of December 31, 2025 and December 31, 2024, respectively.

Total deposits as of December 31, 2025, 2024, and 2023 were $1.70 billion, $1.52 billion and $1.59 billion, respectively. The following table sets forth deposit balances by certain categories as of
the dates indicated and the percentage of each deposit category to total deposits.

	For the Year Ended December 31,
	2025		2024		2023
	Amount		Percentage of Total		Amount		Percentage of Total	Amount			Percentage of Total
	(Dollars in thousands)
Noninterest-bearing demand	$	341,416		20.07	%	$	313,258		20.70	%		$	482,349	30.40	%
Interest-bearing transaction deposits		1,023,325		60.17	%		889,679		58.70	%			702,150	44.10	%
Savings deposits		92,604		5.44	%		73,379		4.80	%			150,116	9.40	%
Time deposits (less than $250,000)		147,263		8.66	%		146,814		9.70	%			168,690	10.60	%
Time deposits ($250,000 or more)		96,225		5.66	%		92,341		6.10	%			88,086	5.50	%
Total interest-bearing deposits		1,359,417		79.9	%		1,202,213		79.3	%			1,109,042	69.6	%
Total deposits	$	1,700,833		100.0	%	$	1,515,471		100.0	%		$	1,591,391	100.0	%

The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2025, 2024, and 2023:

	For the Year Ended December 31,
	2025		2024		2023
	Average Balance		Weighted Average Rate		Average Balance		Weighted Average Rate	Average Balance			Weighted Average Rate
	(Dollars in thousands)
Noninterest-bearing demand	$	317,743		0.00	%	$	381,660		0.00	%		$	433,603	0.00	%
Interest-bearing transaction deposits		941,181		3.16	%		776,141		3.81	%			705,891	3.42	%
Savings deposits		79,878		1.88	%		106,173		3.63	%			119,278	3.74	%
Time deposits		237,548		3.99	%		254,057		4.69	%			256,672	4.06	%
Total interest-bearing deposits		1,258,607		3.25	%		1,136,371		3.98	%			1,081,841	3.60	%
Total deposits	$	1,576,350		2.59	%	$	1,518,031		2.99	%		$	1,515,444	2.57	%

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The following tables set forth the maturity of time deposits as of the dates indicated below:

	As of December 31, 2025 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits (less than $250,000)	$	56,951		$	45,791		$	37,766	$	6,755	$	147,263
Time deposits ($250,000 or more)		37,413			21,015			20,278		17,519		96,225
Total time deposits	$	94,364		$	66,806		$	58,044	$	24,274	$	243,488

	As of December 31, 2024 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits (less than $250,000)	$	62,577		$	38,514		$	41,345	$	4,378	$	146,814
Time deposits ($250,000 or more)		45,667			25,552			18,055		3,067		92,341
Total time deposits	$	108,244		$	64,066		$	59,400	$	7,445	$	239,155

Liquidity

Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs,
all at a reasonable cost. 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.

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.

Our short-term and long-term liquidity requirements are primarily met through cash flow from operations, redeployment of prepaying and maturing balances in our loan portfolios, and increases in
customer deposits. Other alternative sources of funds will supplement these primary sources to the extent necessary to meet additional liquidity requirements on either a short-term or long-term basis.

As of December 31, 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
had borrowing availability with the FHLB of $213.8 million as of December 31, 2025 and $190.9 million as of December 31, 2024, and we had access to approximately $288.6 million in liquidity with the Federal Reserve Bank as of December 31, 2025
and $336.1 million as of December 31, 2024.

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Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet regulatory capital requirements may result in certain
mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for “prompt corrective
action” (described below), the Bank must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies. The capital amounts
and classifications are subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors. Qualitative measures established by regulation to ensure capital adequacy required the Bank to
maintain minimum amounts and ratios of Common Equity Tier 1, or CET1, capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets, referred to as the “leverage ratio.” For further
information, see “Supervision and Regulation – Regulatory Capital Requirements” and “Supervision and Regulation – Prompt Corrective Action Framework.”

In the wake of the global financial crisis of 2008 and 2009, the role of capital has become fundamentally more important, as banking regulators have concluded that the amount and quality of capital
held by banking organizations was insufficient to absorb losses during periods of severely distressed economic conditions. The Dodd-Frank Act and banking regulations promulgated by the U.S. federal banking regulators to implement Basel III have
established strengthened capital standards for banks and bank holding companies and require more capital to be held in the form of common stock. In addition, the Basel III regulations implement a concept known as the “capital conservation
buffer.” In general, banks, bank holding companies with more than $3.0 billion in assets and bank holding companies with publicly-traded equity are required to hold a buffer of CET1 capital equal to 2.5% of risk-weighted assets over each minimum
capital ratio in order to avoid being subject to limits on capital distributions (e.g., dividends, stock buybacks, etc.) and certain discretionary bonus payments to executive officers.

As of December 31, 2025, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework. There have been no conditions or events since December 31, 2025 that
management believes would change this classification.

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The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Bank’s capital ratios as of
December 31, 2025, 2024, and 2023. The Bank exceeded all regulatory capital requirements under Basel III and the Bank was considered to be “well-capitalized” as of the dates reflected in the tables below.

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2025
Total capital (to risk-weighted assets)
Company	$	261,451		15.24	%	$	180,076		10.50	%			N/A	N/A
Bank		261,411		15.25	%		179,970		10.50	%		$	171,400	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		241,580		14.09	%		145,776		8.50	%			N/A	N/A
Bank		241,540		14.09	%		145,690		8.50	%			137,120	8.00	%
CET 1 capital (to risk-weighted assets)
Company		241,580		14.09	%		120,051		7.00	%			N/A	N/A
Bank		241,540		14.09	%		119,980		7.00	%			111,410	6.50	%
Tier 1 capital (to average assets)
Company		241,580		12.82	%		N/A		N/A				N/A	N/A
Bank		241,540		12.82	%		N/A		N/A				94,213	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2024
Total capital (to risk-weighted assets)
Company	$	227,229		15.21	%	$	156,830		10.50	%			N/A	N/A
Bank		227,189		15.22	%		156,723		10.50	%		$	149,260	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		208,847		13.98	%		126,957		8.50	%			N/A	N/A
Bank		208,807		13.99	%		126,871		8.50	%			119,408	8.00	%
CET 1 capital (to risk-weighted assets)
Company		208,847		13.98	%		104,553		7.00	%			N/A	N/A
Bank		208,807		13.99	%		104,482		7.00	%			97,019	6.50	%
Tier 1 capital (to average assets)
Company		208,847		12.19	%		N/A		N/A				N/A	N/A
Bank		208,807		12.18	%		N/A		N/A				85,698	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2023
Total capital (to risk-weighted assets)
Company	$	185,171		12.74	%	$	152,579		10.50	%			N/A	N/A
Bank		185,118		12.75	%		152,472		10.50	%		$	145,211	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		166,982		11.49	%		123,516		8.50	%			N/A	N/A
Bank		166,942		11.50	%		123,429		8.50	%			116,169	8.00	%
CET 1 capital (to risk-weighted assets)
Company		166,982		11.49	%		101,719		7.00	%			N/A	N/A
Bank		166,942		11.50	%		101,648		7.00	%			94,387	6.50	%
Tier 1 capital (to average assets)
Company		166,982		9.50	%		N/A		N/A				N/A	N/A
Bank		166,942		9.50	%		N/A		N/A				87,897	5.00	%

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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 to
$251.0 million as of December 31, 2025, compared to $213.2 million as of December 31, 2024 and $170.3 million as of December 31, 2023. The increases were driven by retained capital from net income during the periods.

Contractual Obligations

The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2025 and December 31, 2024:

	Payments Due as of December 31, 2025
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,457,345		$	-		$	-	$	-	$	1,457,345
Time deposits		219,214			23,893			381		-		243,488
Operating lease commitments		621			798			368		359		2,146
Total contractual obligations	$	1,677,180		$	24,691		$	749	$	359	$	1,702,979

	Payments Due as of December 31, 2024
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,276,316		$	-		$	-	$	-	$	1,276,316
Time deposits		231,710			6,746			699		-		239,155
Operating lease commitments		646			516			236		476		1,874
Total contractual obligations	$	1,508,672		$	7,262		$	935	$	476	$	1,517,345

We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through
profitability, loan repayment and maturity activity and continued deposit gathering activities. We have in place various borrowing mechanisms for both short-term and long-term liquidity needs.

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to
extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The contractual or notional amounts of
those instruments reflect the extent of involvement we have in particular classes of financial instruments. To control this credit risk, the Company uses the same underwriting standards as it uses for loans recorded on the balance sheet.

Loan commitments are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments issued by
the Bank to guarantee the performance of the customer to a third party. They are intended to be disbursed, subject to certain conditions, upon request of the borrower.

The following table summarizes commitments as of the dates presented:

	As of December 31,
	2025		2024			2023
	(Dollars in thousands)
Commitments to extend credit	$	324,748		$	272,261		$	256,888
Standby letters of credit		19,540			11,333			4,247
Total	$	344,288		$	283,594		$	261,135

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Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP, management
makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments are
based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statement. In particular, management
has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.

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 found in Note 1 of the Company’s consolidated financial statements included in the Annual Report on the Form 10-K.

Allowance for Credit Losses

The allowance is based on management’s estimate of probable 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 and changes in the composition of the loan
portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’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.

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.

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MD&A history

Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. The latest 10-K appears above; prior years are below.

FY 2024 filed 2025-03-12
FY 2023 filed 2024-03-25
FY 2022 filed 2023-03-24
FY 2021 filed 2022-03-31

FY 2024 10-K MD&A

SEC filing source: 0001140361-25-008438.

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2025-03-12. Report date: 2024-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, references in this management’s discussion and analysis to “we”, “our”, and “us,” refer to Bank7 Corp. and its consolidated subsidiaries.
All references to “the Bank” refer to Bank7, our wholly owned subsidiary.

General

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.

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.

As of December 31, 2024, we had total assets of $1.74 billion, total loans of $1.40 billion, total deposits of $1.52 billion and total shareholders’ equity of $213.2 million.

The U.S. economy experienced widespread volatility throughout 2020 and 2021 as a result of the COVID-19 pandemic and government responses to the pandemic. 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.

2024 Overview

We reported total loans of $1.40 billion as of December 31, 2024, an increase of $36.5 million, or 2.7%, from December 31, 2023. Total deposits were $1.52 billion as of December 31, 2024, a decrease
of $75.9 million, or 4.8%, from December 31, 2023.

Pre-tax net income was $60.4 million, an increase of $23.1 million, or 62.1%, for the year ended December 31, 2024 as compared to pre-tax net income of $37.2 million for the same period in 2023.

Pre-tax return on average assets and return on average equity was 3.50% and 31.41%, respectively, for the year ended December 31, 2024, as compared to 2.21% and 23.47%, respectively, for the same
period in 2023. Tax-adjusted return on average assets and return on average equity was 2.65% and 23.78%, respectively, for the year ended December 31, 2024, as compared to 1.68% and 17.83%, respectively, for the same period in 2023. Our
efficiency ratio for the year ended December 31, 2024 was 37.90% as compared to 36.07% for the same period in 2023.

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.

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Results of Operations

Years Ended December 31, 2024, December 31, 2023, and December 31, 2022

Net Interest Income and Net Interest Margin

The following table presents, for the periods indicated, information about: (i) weighted average balances, the total dollar amount of interest income from interest-earning assets, and the resultant average yields; (ii)
average balances, the total dollar amount of interest expense on interest-bearing liabilities, and the resultant average rates; (iii) net interest income; and (iv) the net interest margin.

	Net Interest Margin
	For the Year Ended December 31,
	2024		2023			2022
	Average Balance		Interest Income/ Expense			Average Yield/ Rate	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance	Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-Earning Assets:
Short-term investments	$	184,328		$	9,320		5.04	%	$	174,600		$	8,580		4.91	%	$	129,624	$	1,673	1.29	%
Debt securities, taxable		90,184			2,531		2.80			152,094			2,791		1.84			145,915		2,313	1.59
Debt securities, tax exempt(1)		16,651			273		1.64			19,430			330		1.70			21,635		360	1.66
Loans held for sale		343			-		-			158			-		-			586		-	-
Total loans(2)		1,391,552			119,416		8.56			1,315,578			109,843		8.35			1,143,380		74,403	6.51
Total interest-earning assets		1,683,058			131,540		7.79			1,661,860			121,544		7.31			1,441,140		78,749	5.46
Noninterest-earning assets		39,555								25,943								23,532
Total assets	$	1,722,613							$	1,687,803							$	1,464,672
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	882,314			33,408		3.78	%	$	825,169			28,582		3.46	%	$	724,617		7,842	1.08	%
Time deposits		254,057			11,937		4.69			256,672			10,416		4.06			165,735		1,480	0.89
Total interest-bearing deposits		1,136,371			45,345		3.98			1,081,841			38,998		3.60			890,352		9,322	1.05
Total interest-bearing liabilities		1,136,371			45,345		3.98			1,081,841			38,998		3.60			890,352		9,322	1.05
Noninterest-bearing liabilities:
Noninterest-bearing deposits		381,660								433,603								432,901
Other noninterest-bearing liabilities		12,419								10,423								7,520
Total noninterest-bearing liabilities		394,079								444,026								440,421
Shareholders’ equity		192,163								161,936								133,899
Total liabilities and shareholders’ equity	$	1,722,613							$	1,687,803							$	1,464,672
Net interest income				$	86,195							$	82,546						$	69,427
Net interest spread							3.81	%							3.71	%					4.42	%
Net interest margin							5.11	%							4.97	%					4.82	%

Column 1	Column 2
(1)	Taxable-equivalent yield of 2.16% as of December 31, 2024, applying a 24.3% effective tax rate

Column 1	Column 2
(2)	Average loan balances include monthly average nonaccrual loans of $12.4 million, $18.8 million and $8.8 million for the years ended December 31, 2024, 2023 and 2022, respectively.

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $9.6 million, or 8.7%, to $119.4 million, which was attributable to a $76.0 million increase in the average balance of loans to $1.39 billion during the year ended 2024 as compared with the average balance of loans of $1.32 billion for the year ended 2023, and increased loan yields as discussed below;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 7.79%, an increase of 48 basis points which was attributable to higher loan rates of 21 basis points, an increase in yield on short term investments of 13 basis points, and an increase in yield on taxable debt securities of 96 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2024 and 2023 was 5.11% and 4.97%, respectively.

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We experienced strong asset growth for the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $35.4 million, or 47.6%, to $109.8 million, which was attributable to a $172.2 million increase in the average balance of loans to $1.32 billion during the year ended 2023 as compared with the average balance of $1.14 billion for the year ended 2022, and increased loan yields as discussed below;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 7.31%, an increase of 185 basis points which was attributable to higher loan rates of 184 basis points, an increase in yield on short term investments of 362 basis points, and an increase in yield on taxable debt securities of 25 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2023 and 2022 was 4.97% and 4.82%, respectively.

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.

Net interest margin for the years ended December 31, 2024, 2023 and 2022 was 5.11%, 4.97% and 4.82%, respectively.

	Analysis of Changes in Interest Income and Expenses
	For the Year Ended			For the Year Ended
	December 31, 2024 vs 2023			December 31, 2023 vs 2022
	Change due to:						Change due to:
	Volume(1)			Rate(1)			Interest		Volume(1)		Rate(1)		Interest
	Variance			Variance
	(Dollars in thousands)			(Dollars in thousands)
Increase (decrease) in interest income:
Short-term investments	$	478			$	262		$	740		$	580		$	6,327	$	6,907
Debt securities		(1,186	)			869			(317	)		61			387		448
Total loans		6,344				3,229			9,573			11,210			24,230		35,440
Total increase (decrease) in interest income		5,636				4,360			9,996			11,851			30,944		42,795
Increase (decrease) in interest expense:
Deposits:
Transaction accounts		1,977				2,849			4,826			1,086			19,654		20,740
Time deposits		(106	)			1,627			1,521			809			8,127		8,936
Total interest-bearing deposits		1,871				4,476			6,347			1,895			27,781		29,676
Total increase (decrease) in interest expense		1,871				4,476			6,347			1,895			27,781		29,676
Increase (Decrease) in net interest income	$	3,765			$	(116	)	$	3,649		$	9,956		$	3,163	$	13,119

(1) Variances attributable to both volume and rate are allocated on a consistent basis between rate and volume based on the absolute value of the variances
in each category.

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Weighted Average Yield of Debt Securities

The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December 31, 2024. 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:

		As of December 31, 2024
						After One Year But		After Five Years But
	Within One Year			Within Five Years	Within Ten Years		After Ten Years			Total
	Amount			Yield *	Amount		Yield *			Amount		Yield *		Amount		Yield *			Amount			Yield *
Available-for-sale		(Dollars in thousands)
U.S. Federal agencies		$	-		0.00	%	$	64			2.78	%	$	-			0.00	%		$	-		0.00	%	$	64		2.78	%
Mortgage-backed securities			2,653		1.72			8,402			1.37			-			-				19,141		1.70			30,196		1.61
State and political subdivisions			2,028		1.09			11,564			1.47			6,134			1.70				-		-			19,726		1.51
U.S. Treasuries			-		-			3,687			1.05			1,639			1.12				-		-			5,326		1.08
Corporate debt securities			-		-			-			-			4,629			3.36				-		-			4,629		3.36
Total		$	4,681		1.44	%	$	23,717			1.37	%	$	12,402			2.26	%		$	19,141		1.70	%	$	59,941		1.68	%
Percentage of total			7.81	%				39.57	%					20.69	%						31.93	%				100.00	%

*Yield is on a taxable-equivalent basis using 21% tax rate

Provision for Credit Losses

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	The provision for credit losses decreased from $21.1 million to $0; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans decreased by 16 basis points to 1.28%.

Column 1	Column 2	Column 3
	-	Decreases are related to the single loan customer discussed in the 2024 Overview.

For the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	The provision for credit losses increased from $4.5 million to $21.1 million; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans increased by 29 basis points to 1.44%.

Column 1	Column 2	Column 3
	-	Increases are related to the single loan customer discussed in the 2024 Overview.

Noninterest Income

The following table sets forth the major components of our noninterest income for the years ended December 31, 2024, 2023 and 2022:

		For the Years Ended			For the Years Ended
		December 31,			December 31,
		2024			2023			$ Increase		% Increase	2023			2022			$ Increase		% Increase
	(Decrease)			(Decrease)			(Decrease)		(Decrease)
		(Dollars in thousands)			(Dollars in thousands)
Noninterest income:
Mortgage lending income		$	370			$	331		$	39		11.78	%		$	331		$	486		$	(155	)	-31.89	%
Gain (Loss) on sales, prepayments, and calls of available-for-sale debt securities			(6	)			(16	)		10		-62.50	%			(16	)		(127	)		111		-87.40	%
Service charges on deposit accounts			975				869			106		12.20	%			869			900			(31	)	-3.44	%
Other			9,915				8,058			1,857		23.05	%			8,058			1,680			6,378		379.64	%
Total noninterest income		$	11,254			$	9,242		$	2,012		21.77	%		$	9,242		$	2,939		$	6,303		214.46	%

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	Other noninterest income was $9.9 million compared to $8.1 million, an increase of $1.9 million, or 23.1%. The increase was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

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For the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	Other noninterest income was $8.1 million compared to $1.7 million, an increase of $6.4 million, or 380%. The increase was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

Noninterest Expense

Noninterest expense for the year ended December 31, 2024 was $37.1 million compared to $33.4 million for the year ended December 31, 2023, an increase of $3.7 million or 11.0%. Noninterest expense
for the year ended December 31, 2023 was $33.4 million compared to $28.6 million for the year ended December 31, 2022, an increase of $4.8 million or 16.7%. The following table sets forth the major components of our noninterest expense for the
years ended December 31, 2024, 2023 and 2022:

	For the Years Ended		For the Years Ended
	December 31,		December 31,
	2024		2023			$ Increase		% Increase		2023			2022			$ Increase		% Increase
	(Decrease)		(Decrease)			(Decrease)		(Decrease)
	(Dollars in thousands)		(Dollars in thousands)
Noninterest expense:
Salaries and employee benefits	$	20,783		$	17,385		$	3,398			19.55	%		$	17,385		$	17,040	$	345		2.02	%
Furniture and equipment		1,070			995			75			7.54	%			995			1,468		(473	)	-32.22	%
Occupancy		2,640			2,689			(49	)		-1.82	%			2,689			2,329		360		15.46	%
Data and item processing		1,897			1,730			167			9.65	%			1,730			2,068		(338	)	-16.34	%
Accounting, marketing, and legal fees		836			543			293			53.96	%			543			984		(441	)	-44.82	%
Regulatory assessments		1,196			1,537			(341	)		-22.19	%			1,537			1,344		193		14.36	%
Advertising and public relations		549			427			122			28.57	%			427			477		(50	)	-10.48	%
Travel, lodging and entertainment		431			374			57			15.24	%			374			363		11		3.03	%
Other expense		7,693			7,740			(47	)		-0.61	%			7,740			2,568		5,172		201.40	%
Total noninterest expense	$	37,095		$	33,420		$	3,675			11.00	%		$	33,420		$	28,641	$	4,779		16.69	%

For the year ended December 31, 2024 compared to the year ended December 31, 2023:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $20.8 million compared to $17.4 million, an increase of $3.4 million, or 19.6%. The increase was primarily attributable to overall increases in compensation due to the performance of the Company and to remain competitive.

For the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	Other expense was $7.7 million compared to $2.6 million, an increase of $5.2 million, or 200%. The increase was primarily attributable to expenses related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

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Financial Condition

The following discussion of our financial condition compares December 31, 2024, 2023, and 2022.

Total Assets

Total assets decreased $31.9 million, or 1.8%, to $1.74 billion as of December 31, 2024, as compared to $1.77 billion as of December 31, 2023 and $1.58 billion as of December 31, 2022.

Loan Portfolio

Our loans represent the largest portion of our earning assets. The quality and diversification of the loan portfolio is an important consideration when reviewing our financial condition. As of
December 31, 2024, 2023, and 2022, our gross loans were $1.40 billion, $1.36 billion and $1.27 billion, respectively.

The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2024, December 31, 2023 and December 31, 2022:

	As of December 31,
	2024			2023		2022
	Amount			% of Total		Amount		% of Total		Amount			% of Total
	(Dollars in thousands)
Construction & development	$	167,685			12.0	%	$	137,206			10.1	%		$	163,203		12.8	%
1-4 family real estate		121,047			8.7	%		100,576			7.4	%			76,928		6.0	%
Commercial real estate - other		511,304			36.5	%		518,622			38.0	%			439,001		34.5	%
Total commercial real estate		800,036			57.2	%		756,404			55.5	%			679,132		53.3	%
Commercial & industrial		507,023			36.2	%		526,185			38.5	%			513,011		40.3	%
Agricultural		77,922			5.6	%		66,495			4.9	%			66,145		5.2	%
Consumer		14,312			1.0	%		14,517			1.1	%			14,949		1.2	%
Gross loans		1,399,293			100.0	%		1,363,601			100.0	%			1,273,237		100.0	%
Less: unearned income, net		(1,910	)					(2,762	)						(2,781	)
Total Loans, net of unearned income		1,397,383						1,360,839							1,270,456
Less: Allowance for credit losses		(17,918	)					(19,691	)						(14,734	)
Net loans	$	1,379,465					$	1,341,148						$	1,255,722

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The following tables show the contractual maturities of our gross loans as of the periods below:

		As of December 31, 2024
								Due after One Year		Due after Five Years
	Due in One Year or Less			Through Five Years			Through Fifteen Years		Due after Fifteen Years
		Fixed			Adjustable			Fixed		Adjustable		Fixed			Adjustable			Fixed		Adjustable	Total
	Rate			Rate			Rate		Rate		Rate			Rate			Rate		Rate
		(Dollars in thousands)
Construction & development		$	9,378			$	76,709		$	2,050		$	78,786			$	-		$	564	$	198	$	-	$	167,685
1-4 family real estate			15,426				20,085			43,558			31,566				964			4,826		4,622		-		121,047
Commercial real estate - other			47,737				61,482			103,484			271,156				153			18,303		8,989		-		511,304
Total commercial real estate			72,541				158,276			149,092			381,508				1,117			23,693		13,809		-		800,036
Commercial & industrial			36,062				263,026			13,639			175,729				8,232			9,738		597		-		507,023
Agricultural			22,768				8,991			16,581			26,677				-			1,054		1,851		-		77,922
Consumer			1,661				4			5,641			170				602			3,570		2,664		-		14,312
Gross loans		$	133,032			$	430,297		$	184,953		$	584,084			$	9,951		$	38,055	$	18,921	$	-	$	1,399,293

		As of December 31, 2023
								Due after One Year		Due after Five Years
	Due in One Year or Less			Through Five Years			Through Fifteen Years		Due after Fifteen Years
		Fixed			Adjustable			Fixed		Adjustable		Fixed			Adjustable			Fixed		Adjustable	Total
	Rate			Rate			Rate		Rate		Rate			Rate			Rate		Rate
		(Dollars in thousands)
Construction & development		$	11,431			$	70,040		$	8,970		$	44,935			$	-		$	1,438	$	392	$	-	$	137,206
1-4 family real estate			13,628				13,015			41,602			21,451				26			5,443		5,411		-		100,576
Commercial real estate - other			50,251				65,120			152,250			219,260				129			21,283		10,329		-		518,622
Total commerical real estate			75,310				148,175			202,822			285,646				155			28,164		16,132		-		756,404
Commercial & industrial			20,389				263,564			41,520			186,776				3,276			10,041		619		-		526,185
Agricultural			13,250				22,615			13,935			13,032				-			810		2,853		-		66,495
Consumer			2,170				14			5,490			121				595			3,604		2,523		-		14,517
Gross loans		$	111,119			$	434,368		$	263,767		$	485,575			$	4,026		$	42,619	$	22,127	$	-	$	1,363,601

		As of December 31, 2022
								Due after One Year		Due after Five Years
	Due in One Year or Less			Through Five Years			Through Fifteen Years		Due after Fifteen Years
		Fixed			Adjustable			Fixed		Adjustable		Fixed			Adjustable			Fixed		Adjustable	Total
	Rate			Rate			Rate		Rate		Rate			Rate			Rate		Rate
		(Dollars in thousands)
Construction & development		$	11,749			$	81,002		$	7,556		$	57,439			$	-		$	1,160	$	-	$	4,297	$	163,203
1-4 family real estate			10,550				12,664			24,741			15,782				314			6,606		-		6,271		76,928
Commercial real estate - other			2,680				59,870			131,105			207,819				6,635			17,146		-		13,746		439,001
Total real estate			24,979				153,536			163,402			281,040				6,949			24,912		-		24,314		679,132
Commercial & industrial			43,823				234,573			60,275			159,571				3,745			10,390		-		634		513,011
Agricultural			1,798				17,514			8,767			33,270				469			980		140		3,207		66,145
Consumer			1,683				22			6,310			156				587			2,860		82		3,249		14,949
Gross loans		$	72,283			$	405,645		$	238,754		$	474,037			$	11,750		$	39,142	$	222	$	31,404	$	1,273,237

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Allowance for Credit Losses

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 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.

The allowance was $17.9 million at December 31, 2024, $19.7 million at December 31, 2023 and $14.7 million at December 31, 2022. See the 2024 Overview for the
discussion of the decrease in allowance in 2024.

The following table provides an analysis of the activity in our allowance for the periods indicated:

	For the Year Ended December 31,
	2024			2023			2022
	(Dollars in thousands)
Balance at beginning of the period	$	19,691			$	14,734		$	10,316
Impact of CECL adoption		-				250			-
Provision for credit losses for loans		-				21,181			4,468
Charge-offs:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		(275	)			-			-
Commercial & industrial		(2,000	)			(16,500	)		(2	)
Agricultural		-				(7	)		(50	)
Consumer		-				(17	)		(22	)
Total charge-offs		(2,275	)			(16,524	)		(74	)
Recoveries:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		-				-			-
Commercial & industrial		495				40			10
Agricultural		7				2			4
Consumer		-				8			10
Total recoveries		502				50			24
Net recoveries (charge-offs)		(1,773	)			(16,474	)		(50	)
Balance at end of the period	$	17,918			$	19,691		$	14,734
Net recoveries (charge-offs) to average loans		-0.13	%			1.25	%		0.00	%

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While the entire allowance is available to absorb losses from any and all loans, the following table represents management’s allocation of the allowance by loan category, and the percentage
of allowance in each category, for the periods indicated:

	As of December 31,
	2024		2023		2022
	Amount		Percent		Amount		Percent	Amount			Percent
	(Dollars in thousands)
Construction & development	$	1,223		6.8	%	$	1,417		7.2	%		$	1,889	12.8	%
1-4 family real estate		1,313		7.3	%		1,271		6.5	%			890	6.0	%
Commercial real estate - other		6,992		39.0	%		6,889		35.0	%			5,080	34.5	%
Commercial & industrial		6,797		38.0	%		9,237		46.8	%			5,937	40.3	%
Agricultural		1,106		6.2	%		628		3.2	%			765	5.2	%
Consumer		487		2.7	%		249		1.3	%			173	1.2	%
Total	$	17,918		100.0	%	$	19,691		100.0	%		$	14,734	100.0	%

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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.

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 $7.2 million as of December 31, 2024, $18.9 million as of December 31, 2023 and $8.0 million as of December 31, 2022. OREO was $321,000, $0, and $0 as of December 31, 2024, December 31, 2023, and December 31, 2022,
respectively.

The following table presents information regarding nonperforming assets as of the dates indicated.

	As of December 31,
	2024			2023			2022
	(Dollars in thousands)
Nonaccrual loans(1)	$	7,170			$	18,941		$	8,039
Accruing loans 90 or more days past due		-				10,026			9,941
Total nonperforming assets	$	7,170			$	28,967		$	17,980
Ratio of nonperforming loans to total loans		0.51	%			2.13	%		1.42	%
Ratio of nonaccrual loans to total loans		0.51	%			1.39	%		0.63	%
Ratio of allowance for credit losses to total loans		1.28	%			1.45	%		1.16	%
Ratio of allowance for credit losses to nonaccrual loans		249.90	%			103.96	%		183.28	%
Ratio of nonperforming assets to total assets		0.41	%			1.64	%		1.13	%

(1) Included in the nonaccrual loans balance are $0 and $10.12 million of loans modified to borrowers experiencing financial difficulty as of December 31,
2024 and December 31, 2023, respectively. See Note 6 of the financial statements.

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The following tables present an aging analysis of loans as of the dates indicated.

	As of December 31, 2024
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total past due loans		Current			Gross loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	167,685	$	167,685
1-4 family real estate		-			-			-		-			-			121,047		121,047
Commercial real estate - other		103			-			3,426		-			3,529			507,775		511,304
Commercial & industrial		403			5			-		-			408			506,615		507,023
Agricultural		-			-			-		-			-			77,922		77,922
Consumer		97			-			-		-			97			14,215		14,312
Total	$	603		$	5		$	3,426	$	-		$	4,034		$	1,395,259	$	1,399,293

	As of December 31, 2023
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Gross loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	137,206	$	137,206
1-4 family real estate		-			-			-		-			-			100,576		100,576
Commercial real estate - other		-			-			-		-			-			518,622		518,622
Commercial & industrial		472			10,969			9,946		9,946			21,387			504,798		526,185
Agricultural		-			-			-		-			-			66,495		66,495
Consumer		-			27			80		80			107			14,410		14,517
Total	$	472		$	10,996		$	10,026	$	10,026		$	21,494		$	1,342,107	$	1,363,601

	As of December 31, 2022
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Gross loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	163,203	$	163,203
1-4 family commerical		-			-			-		-			-			76,928		76,928
Commercial real estate - other		-			617			-		-			617			438,384		439,001
Commercial & industrial		21			-			9,923		9,923			9,944			503,067		513,011
Agricultural		4			-			-		-			4			66,141		66,145
Consumer		291			82			22		18			395			14,554		14,949
Total	$	316		$	699		$	9,945	$	9,941		$	10,960		$	1,262,277	$	1,273,237

In addition to the past due and nonaccrual criteria, the Company also evaluates loans according to its internal risk grading system. Loans are segregated between pass, watch, special mention,
and substandard categories. The definitions of those categories are as follows:

Special mention: These loans have observable weaknesses or evidence imprudent handling or structural issues. The weaknesses require close attention, and
the remediation of those weaknesses is necessary. No risk of probable loss exists. Credits in this category are expected to quickly migrate to “Watch” or “Substandard” as this is viewed as a transitory loan grade.

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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 2024 as compared to 2023, is comprised of a net decrease in commercial and industrial substandard loans primarily related to a decrease in
one relationship comprised of three notes totaling $18.4 million with a $2.0 million specific reserve, and a net increase in commercial real estate primarily related to two relationships comprised of one note totaling $3.0 million with a $0.2
million specific reserve, and one note totaling $1.45 million with no specific reserve.

Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows:

	As of December 31, 2024
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	165,863		$	-		$	1,259	$	563	$	167,685
1-4 family real estate		121,047			-			-		-		121,047
Commercial real estate - other		498,835			-			7,493		4,976		511,304
Commercial & industrial		493,512			-			3,817		9,694		507,023
Agricultural		74,896			-			3,026		-		77,922
Consumer		14,312			-			-		-		14,312
Total	$	1,368,465		$	-		$	15,595	$	15,233	$	1,399,293

	As of December 31, 2023
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	136,417		$	-		$	789	$	-	$	137,206
1-4 family real estate		100,576			-			-		-		100,576
Commercial real estate - other		502,795			-			15,701		126		518,622
Commercial & industrial		485,433			4,094			5,767		30,891		526,185
Agricultural		66,495			-			-		-		66,495
Consumer		14,437			-			-		80		14,517
Total	$	1,306,153		$	4,094		$	22,257	$	31,097	$	1,363,601

	As of December 31, 2022
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	163,203		$	-		$	-	$	-	$	163,203
1-4 family real estate		76,928			-			-		-		76,928
Commercial real estate - other		397,295			14,976			24,747		1,983		439,001
Commercial & industrial		493,412			-			584		19,015		513,011
Agricultural		65,857			288			-		-		66,145
Consumer		14,927			-			-		22		14,949
Total	$	1,211,622		$	15,264		$	25,331	$	21,020	$	1,273,237

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Deposits

We gather deposits primarily through our twelve branch locations and online though 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 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 among banks for the purpose of purchasing cost-effective floating-rate funding without collateralization or stock purchase requirements.

As of December 31, 2024, 2023, and 2022 brokered deposits were $336.7 million, $273.5 million, and $249.9 million, respectively.

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 million and $448.7 million at December 31, 2024 and December 31, 2023, respectively, as calculated per regulatory
guidance. This was approximately 23.4% and 28.2% of deposits at December 31, 2024 and December 31, 2023, respectively.

Total deposits as of December 31, 2024, 2023, and 2022 were $1.52 billion, $1.59 billion and $1.43 billion, respectively. 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 December 31,
	2024		2023		2022
	Amount		Percentage of Total		Amount		Percentage of Total	Amount			Percentage of Total
	(Dollars in thousands)
Noninterest-bearing demand	$	313,258		20.7	%	$	482,349		30.4	%		$	441,509	30.9	%
Interest-bearing transaction deposits		889,679		58.70	%		702,150		44.10	%			669,852	46.80	%
Savings deposits		73,379		4.80	%		150,116		9.40	%			136,537	9.50	%
Time deposits (less than $250,000)		146,814		9.70	%		168,690		10.60	%			140,929	9.80	%
Time deposits ($250,000 or more)		92,341		6.10	%		88,086		5.50	%			42,573	3.00	%
Total interest-bearing deposits		1,202,213		79.3	%		1,109,042		69.6	%			989,891	69.1	%
Total deposits	$	1,515,471		100.0	%	$	1,591,391		100.0	%		$	1,431,400	100.0	%

The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2024, 2023, and 2022:

	For the Year Ended December 31,
	2024		2023		2022
	Average Balance		Weighted Average Rate		Average Balance		Weighted Average Rate	Average Balance			Weighted Average Rate
	(Dollars in thousands)
Noninterest-bearing demand	$	381,660		0.00	%	$	433,603		0.00	%		$	432,901	0.00	%
Interest-bearing transaction deposits		776,141		3.81	%		705,891		3.42	%			613,799	1.11	%
Savings deposits		106,173		3.63	%		119,278		3.74	%			110,818	0.92	%
Time deposits		254,057		4.69	%		256,672		4.06	%			165,735	0.89	%
Total interest-bearing deposits		1,136,371		3.98	%		1,081,841		3.60	%			890,352	1.05	%
Total deposits	$	1,518,031		2.99	%	$	1,515,444		2.57	%		$	1,323,253	0.70	%

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The following tables set forth the maturity of time deposits as of the dates indicated below:

	As of December 31, 2024 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits (less than $250,000)	$	62,577		$	38,514		$	41,345	$	4,378	$	146,814
Time deposits ($250,000 or more)		45,667			25,552			18,055		3,067		92,341
Total time deposits	$	108,244		$	64,066		$	59,400	$	7,445	$	239,155

	As of December 31, 2023 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits (less than $250,000)	$	52,423		$	55,570		$	50,047	$	10,650	$	168,690
Time deposits ($250,000 or more)		30,807			18,472			17,492		21,315		88,086
Total time deposits	$	83,230		$	74,042		$	67,539	$	31,965	$	256,776

Liquidity

As of December 31, 2024, 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 $190.9 million as of December 31, 2024 and $159.2 million as of December 31, 2023, and we had access to approximately $336.1 million in liquidity with the Federal Reserve Bank as of December 31,
2024 and $0 as of December 31, 2023.

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Capital Requirements

In the wake of the global financial crisis of 2008 and 2009, the role of capital has become fundamentally more important, as banking regulators have concluded that the amount and quality of
capital held by banking organizations was insufficient to absorb losses during periods of severely distressed economic conditions. The Dodd-Frank Act and banking regulations promulgated by the U.S. federal banking regulators to implement Basel
III have established strengthened capital standards for banks and bank holding companies and require more capital to be held in the form of common stock. In addition, the Basel III regulations implement a concept known as the “capital
conservation buffer.” In general, banks, bank holding companies with more than $3.0 billion in assets and bank holding companies with publicly-traded equity are required to hold a buffer of CET1 capital equal to 2.5% of risk-weighted assets
over each minimum capital ratio in order to avoid being subject to limits on capital distributions (e.g., dividends, stock buybacks, etc.) and certain discretionary bonus payments to executive officers.

As of December 31, 2024, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework. There have been no conditions or events since December 31, 2024 that
management believes would change this classification.

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The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Bank’s capital ratios as
of December 31, 2024, 2023, and 2022. The Bank exceeded all regulatory capital requirements under Basel III and the Bank was considered to be “well-capitalized” as of the dates reflected in the tables below.

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2024
Total capital (to risk-weighted assets)
Company	$	227,229		15.21	%	$	156,830		10.50	%			N/A	N/A
Bank		227,189		15.22	%		156,723		10.50	%		$	149,260	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		208,847		13.98	%		126,957		8.50	%			N/A	N/A
Bank		208,807		13.99	%		126,871		8.50	%			119,408	8.00	%
CET 1 capital (to risk-weighted assets)
Company		208,847		13.98	%		104,553		7.00	%			N/A	N/A
Bank		208,807		13.99	%		104,482		7.00	%			97,019	6.50	%
Tier 1 capital (to average assets)
Company		208,847		12.19	%		N/A		N/A				N/A	N/A
Bank		208,807		12.18	%		N/A		N/A				85,698	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2023
Total capital (to risk-weighted assets)
Company	$	185,171		12.74	%	$	152,579		10.50	%			N/A	N/A
Bank		185,118		12.75	%		152,472		10.50	%		$	145,211	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		166,982		11.49	%		123,516		8.50	%			N/A	N/A
Bank		166,942		11.50	%		123,429		8.50	%			116,169	8.00	%
CET 1 capital (to risk-weighted assets)
Company		166,982		11.49	%		101,719		7.00	%			N/A	N/A
Bank		166,942		11.50	%		101,648		7.00	%			94,387	6.50	%
Tier 1 capital (to average assets)
Company		166,982		9.50	%		N/A		N/A				N/A	N/A
Bank		166,942		9.50	%		N/A		N/A				87,897	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2022
Total capital (to risk-weighted assets)
Bank7 Corp.	$	158,158		12.41	%	$	133,862		10.50	%			N/A	N/A
Bank		158,158		12.42	%		133,756		10.50	%		$	127,387	10.00	%
Tier 1 capital (to risk-weighted assets)
Bank7 Corp.		143,424		11.25	%		108,365		8.50	%			N/A	N/A
Bank		143,424		11.26	%		108,279		8.50	%			101,909	8.00	%
CET 1 capital (to risk-weighted assets)
Bank7 Corp.		143,424		11.25	%		89,241		7.00	%			N/A	N/A
Bank		143,424		11.26	%		89,171		7.00	%			82,801	6.50	%
Tier 1 capital (to average assets)
Bank7 Corp.		143,424		9.19	%		N/A		N/A				N/A	N/A
Bank		143,424		9.18	%		N/A		N/A				78,111	5.00	%

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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 to
$213.2 million as of December 31, 2024, compared to $170.3 million as of December 31, 2023 and $144.1 million as of December 31, 2022. The increases were driven by retained capital from net income during the periods.

Contractual Obligations

The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2024 and December 31, 2023:

	Payments Due as of December 31, 2024
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,276,316		$	-		$	-	$	-	$	1,276,316
Time deposits		231,710			6,746			699		-		239,155
Operating lease commitments		646			516			236		476		1,874
Total contractual obligations	$	1,508,672		$	7,262		$	935	$	476	$	1,517,345

	Payments Due as of December 31, 2023
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,334,615		$	-		$	-	$	-	$	1,334,615
Time deposits		224,811			31,345			620		-		256,776
Operating lease commitments		553			627			308		850		2,338
Total contractual obligations	$	1,559,979		$	31,972		$	928	$	850	$	1,593,729

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments
to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The contractual or notional amounts
of those instruments reflect the extent of involvement we have in particular classes of financial instruments. To control this credit risk, the Company uses the same underwriting standards as it uses for loans recorded on the balance sheet.

Loan commitments are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments issued
by the Bank to guarantee the performance of the customer to a third party. They are intended to be disbursed, subject to certain conditions, upon request of the borrower.

The following table summarizes commitments as of the dates presented.

	As of December 31,
	2024		2023			2022
	(Dollars in thousands)
Commitments to extend credit	$	272,261		$	256,888		$	198,027
Standby letters of credit		11,333			4,247			1,043
Total	$	283,594		$	261,135		$	199,070

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Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP, management
makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and judgments are
based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statement. In particular,
management has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.

Allowance for Credit Losses

The allowance is based on management’s estimate of probable 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 and changes in the composition of the
loan portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’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.

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.

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.

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Income Taxes

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.

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FY 2023 10-K MD&A

SEC filing source: 0001140361-24-014984.

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2024-03-25. Report date: 2023-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, references in this management’s discussion and analysis to “we”, “our”, and “us,” refer to Bank7 Corp. and its consolidated subsidiaries.
All references to “the Bank” refer to Bank7, our wholly owned subsidiary.

General

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.

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.

As of December 31, 2023, we had total assets of $1.77 billion, total loans of $1.36 billion, total deposits of $1.59 billion and total shareholders’ equity of $170.3 million.

The U.S. economy experienced widespread volatility throughout 2020 and 2021 as a result of the COVID-19 pandemic and government responses to the pandemic. 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. These actions positively impacted growth in net interest income in for 2023 and 2022, but the higher rates could negatively impact loan customers in a
slowing economy.

2023 Overview

We reported total loans of $1.36 billion as of December 31, 2023, an increase of $90.4 million, or 7.1%, from December 31, 2022. Total deposits were $1.59 billion as of December 31, 2023, an increase
of $160.0 million, or 11.2%, from December 31, 2022.

Pre-tax net income was $37.2 million, a decrease of $2.0 million, or 5.2%, for the year ended December 31, 2023 as compared to pre-tax net income of $39.3 million for the same period in 2022.

Pre-tax return on average assets and return on average equity was 2.21% and 23.47%, respectively for the year ended December 31, 2023, as compared to 2.68% and 29.32%, respectively, for the same
period in 2022. Tax-adjusted return on average assets and return on average equity was 1.68% and 17.83%, respectively for the year ended December 31, 2023, as compared to 2.02% and 23.92%, respectively, for the same period in 2022. Our efficiency
ratio for the year ended December 31, 2023 was 36.07% as compared to 39.29% for the same period in 2022.

The provision for credit losses for the year ended December 31, 2023 increased $16.7 million, or 373.5%, from $4.5 million compared to the same period in 2022.

During the year ended December 31, 2023, we had a single loan customer file 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.

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Results of Operations

Years Ended December 31, 2023, December 31, 2022, and December 31, 2021

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.

	Net Interest Margin
	For the Year Ended December 31,
	2023		2022			2021
	Average Balance		Interest Income/ Expense			Average Yield/ Rate	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance	Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-Earning Assets:
Short-term investments	$	174,600		$	8,580		4.91	%	$	129,624		$	1,673		1.29	%	$	126,136	$	178	0.25	%
Debt securities, taxable		152,094			2,791		1.84			145,915			2,313		1.59			4,663		312	3.84
Debt securities, tax exempt(1)		19,430			330		1.70			21,635			360		1.66			1,852		31	1.62
Loans held for sale		158			-		-			586			-		-			318		-	-
Total loans(2)		1,315,578			109,843		8.35			1,143,380			74,403		6.51			905,804		55,768	6.16
Total interest-earning assets		1,661,860			121,544		7.31			1,441,140			78,749		5.46			1,038,773		56,289	5.42
Noninterest-earning assets		25,943								23,532								7,361
Total assets	$	1,687,803							$	1,464,672							$	1,046,134
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	825,169			28,582		3.46	%	$	724,617			7,842		1.08	%	$	430,268		1,396	0.32	%
Time deposits		256,672			10,416		4.06			165,735			1,480		0.89			205,437		1,657	0.81
Total interest-bearing deposits		1,081,841			38,998		3.60			890,352			9,322		1.05			635,705		3,053	0.48
Total interest-bearing liabilities		1,081,841			38,998		3.60			890,352			9,322		1.05			635,705		3,053	0.48
Noninterest-bearing liabilities:
Noninterest-bearing deposits		433,603								432,901								288,446
Other noninterest-bearing liabilities		10,423								7,520								4,930
Total noninterest-bearing liabilities		444,026								440,421								293,376
Shareholders' equity		161,936								133,899								117,053
Total liabilities and shareholders' equity	$	1,687,803							$	1,464,672							$	1,046,134
Net interest income				$	82,546							$	69,427						$	53,236
Net interest spread							3.71	%							4.42	%					4.94	%
Net interest margin							4.97	%							4.82	%					5.12	%

Column 1	Column 2
(1)	Taxable-equivalent yield of 2.24% as of December 31, 2023, applying a 24.0% effective tax rate

Column 1	Column 2
(2)	Average loan balances include monthly average nonaccrual loans of $18.8 million, $8.8 million and $12.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Column 1	Column 2
	We continued to experience strong asset growth for the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $35.4 million, or 47.6%, to $109.8 million, which was attributable to a $172.2 million increase in the average balance of loans to $1.32 billion during the year ended 2023 as compared with the average balance of loans of $1.14 billion for the year ended 2022, and increased loan yields as discussed below;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 7.31%, an increase of 185 basis points which was attributable to higher loan rates of 184 basis points, an increase in yield on short term investments of 362 basis points, and an increase in yield on taxable debt securities of 25 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2023 and 2022 was 4.97% and 4.82%, respectively.

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We experienced strong asset growth for the year ended December 31, 2022 compared to the year ended December 31, 2021:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $18.6 million, or 33.4%, to $74.4 million, which was attributable to a $237.6 million increase in the average balance of loans to $1.14 billion during the year ended 2022 as compared with the average balance of $905.8 million for the year ended 2021;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 5.46%, an increase of 4 basis points which was attributable to higher loan rates of 35 basis points, an increase in yield on short term investments of 104 basis points, and a decrease in yield on taxable debt securities of 225 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2022 and 2021 was 4.82% and 5.12%, respectively.

Interest income on short-term investments increased $6.9 million, or 412.9%, to $8.6 million for year ended December 31, 2023 compared to 2022, due to an increase in the average balances of $45.0
million, or 34.7% and a yield increase of 362 basis points. Interest income on short-term investments increased $1.5 million, or 839.9%, to $1.7 million for year ended December 31, 2022 compared to 2021, due to yield increase of 104 basis points.

Interest expense on interest-bearing deposits totaled $39.0 million for the year ended December 31, 2023, compared to $9.3 million for 2022, an increase of $29.7 million, or 318.3%. The increase was
related to the cost of interest-bearing deposits increasing to 3.60% for the year ended December 31, 2023 from 1.05% for the year ended December 31, 2022. Interest expense on interest-bearing deposits totaled $9.3 million for the year ended
December 31, 2022, compared to $3.1 million for 2021, an increase of $6.2 million, or 205.3%. The increase was related to the cost of interest-bearing deposits increasing to 1.05% for the year ended December 31, 2022 from 0.48% for the year ended
December 31, 2021.

Net interest margin for the years ended December 31, 2023, 2022 and 2021 was 4.97%, 4.82% and 5.12%, respectively.

	Analysis of Changes in Interest Income and Expenses
	For the Year Ended December 31, 2023 vs 2022		For the Year Ended December 31, 2022 vs 2021
	Change due to:					Change due to:
	Volume(1)		Rate(1)			Interest Variance		Volume(1)	Rate(1)			Interest Variance
	(Dollars in thousands)		(Dollars in thousands)
Increase (decrease) in interest income:
Short-term investments	$	580		$	6,327		$	6,907	$	10			$	1,485		$	1,495
Debt securities		61			387			448		7,633				(5,303	)		2,330
Total loans		11,210			24,230			35,440		14,635				4,000			18,635
Total increase (decrease) in interest income		11,851			30,944			42,795		22,278				182			22,460
Increase (decrease) in interest expense:
Deposits:
Transaction accounts		1,086			19,654			20,740		942				5,504			6,446
Time deposits		809			8,127			8,936		(322	)			145			(177	)
Total interest-bearing deposits		1,895			27,781			29,676		620				5,649			6,269
Total increase (decrease) in interest expense		1,895			27,781			29,676		620				5,649			6,269
Increase (Decrease) in net interest income	$	9,956		$	3,163		$	13,119	$	21,658			$	(5,467	)	$	16,191

Column 1	Column 2
(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.

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Weighted Average Yield of Debt Securities

The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December 31, 2023. 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:

	As of December 31, 2023
	Within One Year			After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years		Total
	Amount			Yield *		Amount		Yield *		Amount			Yield *			Amount	Yield *		Amount			Yield *
Available-for-sale	(Dollars in thousands)
U.S. Federal agencies	$	33			2.29	%	$	102			2.89	%		$	-		0	%	$	-			0	%	$	135		2.74	%
Mortgage-backed securities		483			1.03			9,685			1.32				2,470		1.54			21,864			1.71			34,502		1.59
State and political subdivisions		5,828			1.08			11,793			1.32				8,091		1.52			144			1.66			25,856		1.34
U.S. Treasuries		99,325			1.19			2,780			1.04				2,552		1.12			-			-			104,657		1.18
Corporate debt securities		-			-			-			-				4,337		3.36			-			-			4,337		3.36
Total	$	105,669			1.18	%	$	24,360			1.29	%		$	17,450		1.97	%	$	22,008			1.71	%	$	169,487		1.36	%
Percentage of total		62.35	%					14.36	%						10.30	%				12.99	%					100.00	%

*Yield is on a taxable-equivalent basis using 21% tax rate

Provision for Credit Losses

For the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	The provision for credit losses increased from $4.5 million to $21.1 million; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans increased by 29 basis points to 1.44%.

Column 1	Column 2	Column 3
	-	Increases are related to the single loan customer discussed in the 2023 Overview.

For the year ended December 31, 2022 compared to the year ended December 31, 2021:

Column 1	Column 2	Column 3
	-	The provision for credit losses increased from $4.2 million to $4.5 million; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans increased by 16 basis points to 1.16%.

Noninterest Income

The following table sets forth the major components of our noninterest income for the years ended December 31, 2023, 2022 and 2021:

	For the Years Ended			For the Years Ended
	December 31,			December 31,
	2023			2022			$ Increase (Decrease)		% Increase (Decrease)		2022			2021			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)			(Dollars in thousands)
Noninterest income:
Mortgage lending income	$	331			$	486		$	(155	)		-31.89	%		$	486		$	435	$	51		11.72	%
Gain (Loss) on sales, prepayments, and calls of available-for-sale debt securities		(16	)			(127	)		111			-87.40	%			(127	)		-		(127	)	-100.00	%
Service charges on deposit accounts		869				900			(31	)		-3.44	%			900			550		350		63.64	%
Other		8,058				1,680			6,378			379.64	%			1,680			1,265		415		32.81	%
Total noninterest income	$	9,242			$	2,939		$	6,303			214.46	%		$	2,939		$	2,250	$	689		30.62	%

For the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	Other noninterest income was $8.1 million compared to $1.7 million, an increase of $6.4 million, or 380%. The increase was primarily attributable to income related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

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Noninterest Expense

Noninterest expense for the year ended December 31, 2023 was $33.4 million compared to $28.6 million for the year ended December 31, 2022, an increase of $4.8 million or 16.7%. Noninterest expense for
the year ended December 31, 2022 was $28.6 million compared to $20.4 million for the year ended December 31, 2021, an increase of $8.2 million or 40.4%. The following table sets forth the major components of our noninterest expense for the years
ended December 31, 2023, 2022 and 2021:

	For the Years Ended		For the Years Ended
	December 31,		December 31,
	2023		2022			$ Increase (Decrease)		% Increase (Decrease)		2022			2021			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)		(Dollars in thousands)
Noninterest expense:
Salaries and employee benefits	$	17,385		$	17,040		$	345			2.02	%		$	17,040		$	11,983	$	5,057		42.20	%
Furniture and equipment		995			1,468			(473	)		-32.22	%			1,468			883		585		66.25	%
Occupancy		2,689			2,329			360			15.46	%			2,329			1,899		430		22.64	%
Data and item processing		1,730			2,068			(338	)		-16.34	%			2,068			1,237		831		67.18	%
Accounting, marketing, and legal fees		543			984			(441	)		-44.82	%			984			800		184		23.00	%
Regulatory assessments		1,537			1,344			193			14.36	%			1,344			604		740		122.52	%
Advertising and public relations		427			477			(50	)		-10.48	%			477			282		195		69.15	%
Travel, lodging and entertainment		374			363			11			3.03	%			363			409		(46	)	-11.25	%
Other expense		7,740			2,568			5,172			201.40	%			2,568			2,300		268		11.65	%
Total noninterest expense	$	33,420		$	28,641		$	4,779			16.69	%		$	28,641		$	20,397	$	8,244		40.42	%

For the year ended December 31, 2023 compared to the year ended December 31, 2022:

Column 1	Column 2	Column 3
	-	Other expense was $7.7 million compared to $2.6 million, an increase of $5.2 million, or 200%. The increase was primarily attributable to expenses related to the operation of oil and gas assets acquired during the fourth quarter of 2023, see Note 2 of the financial statements.

For the year ended December 31, 2022 compared to the year ended December 31, 2021:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $17.0 million compared to $12.0 million, an increase of $5.1 million, or 42.2%. The increase was attributable to overall increases in compensation to remain competitive, and due to our acquisition of Cornerstone Bank in late 2021, which increased employee headcount.

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Financial Condition

The following discussion of our financial condition compares December 31, 2023, 2022, and 2021.

Total Assets

Total assets increased $187.5 million, or 11.8%, to $1.77 billion as of December 31, 2023, as compared to $1.58 billion as of December 31, 2022 and $1.35 billion as of December 31, 2021.

Loan Portfolio

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
December 31, 2023, 2022 and 2021, our gross loans were $1.36 billion, $1.27 billion and $1.03 billion, respectively.

The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2023, December 31, 2022 and December 31, 2021:

	As of December 31
	2023			2022		2021
	Amount			% of Total		Amount		% of Total		Amount			% of Total
	(Dollars in thousands)
Construction & development	$	137,206			10.1	%	$	163,203			12.8	%		$	169,322		16.4	%
1-4 family real estate		100,576			7.4	%		76,928			6.0	%			62,971		6.1	%
Commercial real estate - other		518,622			38.0	%		439,001			34.5	%			339,655		32.9	%
Total commercial real estate		756,404			55.5	%		679,132			53.3	%			571,948		55.5	%
Commercial & industrial		526,185			38.5	%		513,011			40.3	%			361,974		35.1	%
Agricultural		66,495			4.9	%		66,145			5.2	%			73,010		7.1	%
Consumer		14,517			1.1	%		14,949			1.2	%			24,046		2.3	%
Gross loans		1,363,601			100.0	%		1,273,237			100.0	%			1,030,978		100.0	%
Less: unearned income, net		(2,762	)					(2,781	)						(2,577	)
Total Loans, net of unearned income		1,360,839						1,270,456							1,028,401
Less: Allowance for credit losses		(19,691	)					(14,734	)						(10,316	)
Net loans	$	1,341,148					$	1,255,722						$	1,018,085

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.

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The following tables show the contractual maturities of our gross loans as of the periods below:

	As of December 31, 2023
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	11,431		$	70,040		$	8,970	$	44,935		$	-		$	1,438	$	392	$	-	$	137,206
1-4 family real estate		13,628			13,015			41,602		21,451			26			5,443		5,411		-		100,576
Commercial real estate - other		50,251			65,120			152,250		219,260			129			21,283		10,329		-		518,622
Total commercial real estate		75,310			148,175			202,822		285,646			155			28,164		16,132		-		756,404
Commercial & industrial		20,389			263,564			41,520		186,776			3,276			10,041		619		-		526,185
Agricultural		13,250			22,615			13,935		13,032			-			810		2,853		-		66,495
Consumer		2,170			14			5,490		121			595			3,604		2,523		-		14,517
Gross loans	$	111,119		$	434,368		$	263,767	$	485,575		$	4,026		$	42,619	$	22,127	$	-	$	1,363,601

	As of December 31, 2022
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	11,749		$	81,002		$	7,556	$	57,439		$	-		$	1,160	$	-	$	4,297	$	163,203
1-4 family real estate		10,550			12,664			24,741		15,782			314			6,606		-		6,271		76,928
Commercial real estate - other		2,680			59,870			131,105		207,819			6,635			17,146		-		13,746		439,001
Total commerical real estate		24,979			153,536			163,402		281,040			6,949			24,912		-		24,314		679,132
Commercial & industrial		43,823			234,573			60,275		159,571			3,745			10,390		-		634		513,011
Agricultural		1,798			17,514			8,767		33,270			469			980		140		3,207		66,145
Consumer		1,683			22			6,310		156			587			2,860		82		3,249		14,949
Gross loans	$	72,283		$	405,645		$	238,754	$	474,037		$	11,750		$	39,142	$	222	$	31,404	$	1,273,237

	As of December 31, 2021
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	7,283		$	71,551		$	10,148	$	74,052		$	-		$	2,243	$	-	$	4,045	$	169,322
1-4 family real estate		3,259			21,322			11,979		11,674			926			7,375		-		6,436		62,971
Commercial real estate - other		5,156			97,309			59,227		143,906			413			19,230		-		14,414		339,655
Total real estate		15,698			190,182			81,354		229,632			1,339			28,848		-		24,895		571,948
Commercial & industrial		24,249			142,553			16,346		145,654			20,474			12,047		-		651		361,974
Agricultural		2,529			17,441			5,156		39,305			623			1,587		-		6,369		73,010
Consumer		4,870			29			10,825		172			1,554			2,458		84		4,054		24,046
Gross loans	$	47,346		$	350,205		$	113,681	$	414,763		$	23,990		$	44,940	$	84	$	35,969	$	1,030,978

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Allowance for Credit Losses

The allowance is based on management’s estimate of probable 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.

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 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.

The allowance was $19.7 million at December 31, 2023, $14.7 million at December 31, 2022 and $10.3 million at December 31, 2021. The increasing trend was related to loan growth and the single loan
customer discussed in the 2023 Overview.

The following table provides an analysis of the activity in our allowance for the periods indicated:

	For the Year Ended December 31,
	2023			2022			2021
	(Dollars in thousands)
Balance at beginning of the period	$	14,734			$	10,316		$	9,639
Impact of CECL adoption		250				-			-
Provision for credit losses for loans		21,181				4,468			4,175
Charge-offs:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		-				-			-
Commercial & industrial		(16,500	)			(2	)		(3,750	)
Agricultural		(7	)			(50	)		-
Consumer		(17	)			(22	)		(68	)
Total charge-offs		(16,524	)			(74	)		(3,818	)
Recoveries:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		-				-			-
Commercial & industrial		40				10			16
Agricultural		2				4			300
Consumer		8				10			4
Total recoveries		50				24			320
Net recoveries (charge-offs)		(16,474	)			(50	)		(3,498	)
Balance at end of the period	$	19,691			$	14,734		$	10,316
Net recoveries (charge-offs) to average loans		1.25	%			0.00	%		0.39	%

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			As of December 31,
	2023		2022		2021
	Amount		Percent		Amount		Percent	Amount			Percent
	(Dollars in thousands)
Construction & development	$	1,417		7.2	%	$	1,889		12.8	%		$	1,695	16.4	%
1-4 family real estate		1,271		6.5	%		890		6.0	%			630	6.1	%
Commercial real estate - Other		6,889		35.0	%		5,080		34.5	%			3,399	32.9	%
Commercial & industrial		9,237		46.8	%		5,937		40.3	%			3,621	35.2	%
Agricultural		628		3.2	%		765		5.2	%			730	7.1	%
Consumer		249		1.3	%		173		1.2	%			241	2.3	%
Total	$	19,691		100.0	%	$	14,734		100.0	%		$	10,316	100.0	%

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Nonperforming Assets

Loans are considered delinquent when principal or interest payments are past due 30 days or more. Delinquent loans may remain on accrual status between 30 days and 90 days past due. Loans on which the
accrual of interest has been discontinued are designated as nonaccrual loans. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90 days or when, in the opinion of management, there is a
reasonable doubt as to collectability of the obligation. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period interest income. Income on a nonaccrual loan is subsequently
recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well-secured and management believes full collectability of principal and interest is
probable.

A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on nonaccrual
status and loans modified in a troubled debt restructuring, or TDR. Income from a loan on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a particular loan’s
circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the collateral less
estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by independent
appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan monitoring
process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral dependent loan is charged off to the allowance if deemed not
collectible and the impairment amount on a loan that is not collateral dependent is set up as a specific reserve.

Real estate we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as other real estate owned, or OREO, until sold, and is initially recorded at fair value less costs to
sell when acquired, establishing a new cost basis.

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 $21.2 million as of December 31, 2023, $8.0 million as of December 31, 2022 and $9.9 million as of December 31, 2021. OREO was $0 as of December 31, 2023, December 31, 2022 and December 31, 2021.

The following table presents information regarding nonperforming assets as of the dates indicated.

	As of December 31,
	2023			2022			2021
	(Dollars in thousands)
Nonaccrual loans(1)	$	18,941			$	8,039		$	9,885
Accruing loans 90 or more days past due		10,026				9,941			496
Total nonperforming assets	$	28,967			$	17,980		$	10,381
Ratio of nonperforming loans to total loans		2.13	%			1.42	%		1.01	%
Ratio of nonaccrual loans to total loans		1.39	%			0.63	%		0.96	%
Ratio of allowance for credit losses to total loans		1.45	%			1.16	%		1.00	%
Ratio of allowance for credit losses to nonaccrual loans		103.96	%			183.28	%		104.36	%
Ratio of nonperforming assets to total assets		1.64	%			1.13	%		0.77	%

(1) Includes $10.12 million of loans modified to borrowers experiencing financial difficulty, see Note 6 of the financial statements.

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The following tables present an aging analysis of loans as of the dates indicated.

	As of December 31, 2023
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total past due loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	137,206	$	137,206
1-4 family real estate		-			-			-		-			-			100,576		100,576
Commercial real estate		-			-			-		-			-			518,622		518,622
Commercial & industrial		472			10,969			9,946		9,946			21,387			504,798		526,185
Agricultural		-			-			-		-			-			66,495		66,495
Consumer		-			27			80		80			107			14,410		14,517
Total	$	472		$	10,996		$	10,026	$	10,026		$	21,494		$	1,342,107	$	1,363,601

	As of December 31, 2022
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	163,203	$	163,203
1-4 family real estate		-			-			-		-			-			76,928		76,928
Commercial real estate		-			617			-		-			617			438,384		439,001
Commercial & industrial		21			-			9,923		9,923			9,944			503,067		513,011
Agricultural		4			-			-		-			4			66,141		66,145
Consumer		291			82			22		18			395			14,554		14,949
Total	$	316		$	699		$	9,945	$	9,941		$	10,960		$	1,262,277	$	1,273,237

	As of December 31, 2021
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	169,322	$	169,322
1-4 family commerical		-			-			-		-			-			62,971		62,971
Commercial real estate - Other		-			174			-		-			174			339,481		339,655
Commercial & industrial		-			19			501		401			520			361,454		361,974
Agricultural		-			-			77		77			77			72,933		73,010
Consumer		48			15			18		18			81			23,965		24,046
Total	$	48		$	208		$	596	$	496		$	852		$	1,030,126	$	1,030,978

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Substandard loans totaled $31.1 million as of December 31, 2023, an increase of $10.1 million compared to December 31, 2022. Substandard loans totaled $21.0 million as of December 31, 2022, a decrease
of $3.7 million compared to December 31, 2021. The total net increase in 2023 as compared to 2022, is comprised of a net increase in commercial and industrial substandard loans primarily related to an increase in one relationship comprised of three
notes totaling $18.4 million with a $2.0 million specific reserve and a decrease in one relationship comprised of one note totaling $6.6 million with no specific reserve, and a net decrease in commercial real estate substandard loans primarily
related to one relationship comprised of one note totaling $1.2 million with no specific reserves.

Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows:

	As of December 31, 2023
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	136,417		$	-		$	789	$	-	$	137,206
1-4 family real estate		100,576			-			-		-		100,576
Commercial real estate - Other		502,795			-			15,701		126		518,622
Commercial & industrial		485,433			4,094			5,767		30,891		526,185
Agricultural		66,495			-			-		-		66,495
Consumer		14,437			-			-		80		14,517
Total	$	1,306,153		$	4,094		$	22,257	$	31,097	$	1,363,601

	As of December 31, 2022
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	163,203		$	-		$	-	$	-	$	163,203
1-4 family real estate		76,928			-			-		-		76,928
Commercial real estate - Other		397,295			14,976			24,747		1,983		439,001
Commercial & industrial		493,412			-			584		19,015		513,011
Agricultural		65,857			288			-		-		66,145
Consumer		14,927			-			-		22		14,949
Total	$	1,211,622		$	15,264		$	25,331	$	21,020	$	1,273,237

	As of December 31, 2021
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	169,322		$	-		$	-	$	-	$	169,322
1-4 family real estate		62,971			-			-		-		62,971
Commercial real estate - Other		282,268			14,976			27,112		15,299		339,655
Commercial & industrial		341,661			4,658			6,300		9,355		361,974
Agricultural		72,295			255			460		-		73,010
Consumer		24,000			-			-		46		24,046
Total	$	952,517		$	19,889		$	33,872	$	24,700	$	1,030,978

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Deposits

We gather deposits primarily through our twelve branch locations and online though 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 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 among banks for the
purpose of purchasing cost-effective floating-rate funding without collateralization or stock purchase requirements.

As of December 31, 2023, 2022, and 2021 brokered deposits were $273.5 million, $249.9 million, and $71.7 million, respectively.

Total deposits as of December 31, 2023, 2022, and 2021 were $1.59 billion, $1.43 billion and $1.22 billion, respectively. The increase was primarily due to acquired deposits and organic deposit
growth. 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.

	For the Year Ended December 31,
	2023		2022		2021
	Amount		Percentage of Total		Amount		Percentage of Total	Amount			Percentage of Total
	(Dollars in thousands)
Noninterest-bearing demand	$	482,349		30.4	%	$	441,509		30.9	%		$	366,705	30.1	%
Interest-bearing transaction deposits		702,150		44.1	%		669,852		46.8	%			583,389	47.9	%
Savings deposits		150,116		9.4	%		136,537		9.5	%			89,778	7.4	%
Time deposits (less than $250,000)		168,690		10.6	%		140,929		9.8	%			132,690	10.9	%
Time deposits ($250,000 or more)		88,086		5.5	%		42,573		3.0	%			44,909	3.7	%
Total interest-bearing deposits		1,109,042		69.6	%		989,891		69.1	%			850,766	69.9	%
Total deposits	$	1,591,391		100.0	%	$	1,431,400		100.0	%		$	1,217,471	100.0	%

The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2023, 2022, and 2021:

	For the Year Ended December 31,
	2023		2022		2021
	Average Balance		Weighted Average Rate		Average Balance		Weighted Average Rate	Average Balance			Weighted Average Rate
	(Dollars in thousands)
Non interest-bearing demand	$	433,603		0.00	%	$	432,901		0.00	%		$	288,446	0.00	%
Interest-bearing transaction deposits		705,891		3.42	%		613,799		1.11	%			375,048	0.34	%
Savings deposits		119,278		3.74	%		110,818		0.92	%			55,220	0.23	%
Time deposits		256,672		4.06	%		165,735		0.89	%			205,437	0.81	%
Total interest-bearing deposits		1,081,841		3.60	%		890,352		1.05	%			635,705	0.48	%
Total deposits	$	1,515,444		2.57	%	$	1,323,253		0.70	%		$	924,151	0.33	%

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The following tables set forth the maturity of time deposits as of the dates indicated below:

	As of December 31, 2023 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits (less than $250,000)	$	52,423		$	55,570		$	50,047	$	10,650	$	168,690
Time deposits ($250,000 or more)		30,807			18,472			17,492		21,315		88,086
Total time deposits	$	83,230		$	74,042		$	67,539	$	31,965	$	256,776

	As of December 31, 2022 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits (less than $250,000)	$	58,184		$	25,333		$	38,844	$	18,568	$	140,929
Time deposits ($250,000 or more)		12,292			5,579			17,001		7,701		42,573
Total time deposits	$	70,476		$	30,912		$	55,845	$	26,269	$	183,502

Liquidity

Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow needs, all
at a reasonable cost. 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.

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.

As of December 31, 2023, 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 $159.2 million as of December 31, 2023 and $129.2 million as of December 31, 2022.

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Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet regulatory capital requirements may result in certain mandatory
and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for “prompt corrective action”
(described below), the Bank must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting policies. The capital amounts and
classifications are subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors. Qualitative measures established by regulation to ensure capital adequacy required the Bank to maintain
minimum amounts and ratios of Common Equity Tier 1, or CET1, capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets, referred to as the “leverage ratio.” For further information, see
“Supervision and Regulation – Regulatory Capital Requirements” and “Supervision and Regulation – Prompt Corrective Action Framework.”

In the wake of the global financial crisis of 2008 and 2009, the role of capital has become fundamentally more important, as banking regulators have concluded that the amount and quality of capital
held by banking organizations was insufficient to absorb losses during periods of severely distressed economic conditions. The Dodd-Frank Act and banking regulations promulgated by the U.S. federal banking regulators to implement Basel III have
established strengthened capital standards for banks and bank holding companies and require more capital to be held in the form of common stock. In addition, the Basel III regulations implement a concept known as the “capital conservation buffer.”
In general, banks, bank holding companies with more than $3.0 billion in assets and bank holding companies with publicly-traded equity are required to hold a buffer of CET1 capital equal to 2.5% of risk-weighted assets over each minimum capital
ratio in order to avoid being subject to limits on capital distributions (e.g., dividends, stock buybacks, etc.) and certain discretionary bonus payments to executive officers.

As of December 31, 2023, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework. There have been no conditions or events since December 31, 2023 that
management believes would change this classification.

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The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Bank’s capital ratios as of
December 31, 2023, 2022, and 2021. The Bank exceeded all regulatory capital requirements under Basel III and the Bank was considered to be “well-capitalized” as of the dates reflected in the tables below.

	Actual		With Capital Conservation Buffer		Minimum to be "Well- Capitalized" Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2023
Total capital (to risk-weighted assets)
Company	$	185,171		12.74	%	$	152,579		10.50	%			N/A	N/A
Bank		185,118		12.75	%		152,472		10.50	%		$	145,211	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		166,982		11.49	%		123,516		8.50	%			N/A	N/A
Bank		166,942		11.50	%		123,429		8.50	%			116,169	8.00	%
CET 1 capital (to risk-weighted assets)
Company		166,982		11.49	%		101,719		7.00	%			N/A	N/A
Bank		166,942		11.50	%		101,648		7.00	%			94,387	6.50	%
Tier 1 capital (to average assets)
Company		166,982		9.50	%		N/A		N/A				N/A	N/A
Bank		166,942		9.50	%		N/A		N/A				87,897	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be "Well- Capitalized" Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2022
Total capital (to risk-weighted assets)
Company	$	158,158		12.41	%	$	133,862		10.50	%			N/A	N/A
Bank		158,158		12.42	%		133,756		10.50	%		$	127,387	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		143,424		11.25	%		108,365		8.50	%			N/A	N/A
Bank		143,424		11.26	%		108,279		8.50	%			101,909	8.00	%
CET 1 capital (to risk-weighted assets)
Company		143,424		11.25	%		89,241		7.00	%			N/A	N/A
Bank		143,424		11.26	%		89,171		7.00	%			82,801	6.50	%
Tier 1 capital (to average assets)
Company		143,424		9.19	%		N/A		N/A				N/A	N/A
Bank		143,424		9.18	%		N/A		N/A				78,111	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be "Well- Capitalized" Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2021:
Total capital (to risk-weighted assets)
Bank7 Corp.	$	127,946		12.54	%	$	107,126		10.50	%			N/A	N/A
Bank		127,844		12.54	%		107,020		10.50	%		$	101,924	10.00	%
Tier 1 capital (to risk-weighted assets)
Bank7 Corp.		117,631		11.53	%		86,721		8.50	%			N/A	N/A
Bank		117,528		11.53	%		86,635		8.50	%			81,539	8.00	%
CET 1 capital (to risk-weighted assets)
Bank7 Corp.		117,631		11.53	%		71,417		7.00	%			N/A	N/A
Bank		117,528		11.53	%		71,347		7.00	%			66,250	6.50	%
Tier 1 capital (to average assets)
Bank7 Corp.		117,631		10.56	%		N/A		N/A				N/A	N/A
Bank		117,528		10.55	%		N/A		N/A				55,714	5.00	%

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 to
$170.3 million as of December 31, 2023, compared to $144.1 million as of December 31, 2022 and $127.4 million as of December 31, 2021. The increases were driven by retained capital from net income during the periods.

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Contractual Obligations

The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2023:

	Payments Due as of December 31, 2023
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,334,615		$	-		$	-	$	-	$	1,334,615
Time deposits		224,811			31,345			620		-		256,776
Operating lease commitments		553			627			308		850		2,338
Total contractual obligations	$	1,559,979		$	31,972		$	928	$	850	$	1,593,729

We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to maintain adequate cash levels through profitability,
loan repayment and maturity activity and continued deposit gathering activities. We have in place various borrowing mechanisms for both short-term and long-term liquidity needs.

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to
extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The contractual or notional amounts of those
instruments reflect the extent of involvement we have in particular classes of financial instruments. To control this credit risk, the Company uses the same underwriting standards as it uses for loans recorded on the balance sheet.

The following table summarizes commitments as of the dates presented.

	As of December 31,
	2023		2022			2021
	(Dollars in thousands)
Commitments to extend credit	$	256,888		$	198,027		$	200,393
Standby letters of credit		4,247			1,043			5,809
Total	$	261,135		$	199,070		$	206,202

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Critical Accounting Policies and Estimates

Allowance for Credit Losses

The allowance is based on management’s estimate of probable 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 and changes in the composition of the loan portfolio.
In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’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.

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 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.

Goodwill and Intangibles

Intangible assets totaled $1.0 million and goodwill, net of accumulated amortization totaled $8.5 million for the year ended December 31, 2023, compared to intangible assets of $1.3 million and goodwill, net of
accumulated amortization of $8.6 million for the year ended December 31, 2022.

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.

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Income Taxes

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

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.

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FY 2022 10-K MD&A

SEC filing source: 0001140361-23-013727.

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2023-03-24. Report date: 2022-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

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.

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 our efficiency ratio, which is calculated by dividing noninterest expense
by the sum of net interest income on a tax equivalent basis and noninterest income.

As of December 31, 2022, we had total assets of $1.58 billion, total loans of $1.26 billion, total deposits of $1.43 billion and total shareholders’ equity of $144.1 million.

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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. These actions positively impacted growth in net interest income in 2022 but the higher rates could negatively impact loan customers in a slowing economy.

2022 Highlights

For the year ended December 31, 2022, we reported pre-tax net income of $39.3 million, an increase of $8.3 million, or 27.0% compared to pre-tax net income of $30.9 million for the year ended
December 31, 2021. The increase was primarily related to an increase in interest earning assets. For the year ended December 31, 2022, average loans totaled $1.14 billion, an increase of $237.6 million or 26.2%, from December 31, 2021.

Pre-tax return on average assets and return on average equity was 2.68% and 29.32%, respectively for the year ended December 31, 2022, as compared to 2.96% and 26.41%, respectively, for the
same period in 2021. Tax-adjusted return on average assets and return on average equity was 2.02% and 23.92%, respectively for the year ended December 31, 2022, as compared to 2.21% and 20.13%, respectively, for the same period in 2021. Our
efficiency ratio for the year ended December 31, 2022 was 39.29% as compared to 36.76% for the year ended December 31, 2021.

As of December 31, 2022, total loans were $1.27 billion, an increase of $242.1 million, or 23.5%, from December 31, 2021. Total deposits were $1.43 billion as of December 31, 2022, an increase
of $211.8 million, or 17.4%, from December 31, 2021.

Results of Operations

Years Ended December 31, 2022, December 31, 2021, and December 31, 2020

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.

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	Net Interest Margin
	For the Year Ended December 31,
	2022		2021			2020
	Average Balance		Interest Income/ Expense			Average Yield/ Rate	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance	Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-Earning Assets:
Short-term investments	$	129,624		$	1,673		1.29	%	$	126,136		$	178		0.25	%	$	116,295	$	828	0.71	%
Debt securities, taxable		145,915			2,313		1.59			4,663			312		3.84			1,123		36	3.21
Debt securities, tax exempt(1)		21,635			360		1.66			1,852			31		1.62			-		-	-
Loans held for sale		586			-		-			318			-		-			244		-	-
Total loans(2)		1,143,380			74,403		6.51			905,804			55,768		6.16			823,228		52,450	6.37
Total interest-earning assets		1,441,140			78,749		5.46			1,038,773			56,289		5.42			940,890		53,314	5.67
Noninterest-earning assets		23,532								7,361								8,067
Total assets	$	1,464,672							$	1,046,134							$	948,957
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	724,617			7,842		1.08	%	$	430,268			1,396		0.32	%	$	377,519		2,729	0.72	%
Time deposits		165,735			1,480		0.89			205,437			1,657		0.81			207,442		3,424	1.65
Total interest-bearing deposits		890,352			9,322		1.05			635,705			3,053		0.48			584,961		6,153	1.05
Total interest-bearing liabilities		890,352			9,322		1.05			635,705			3,053		0.48			584,961		6,153	1.05
Noninterest-bearing liabilities:
Noninterest-bearing deposits		432,901								288,446								256,431
Other noninterest-bearing liabilities		7,520								4,930								5,206
Total noninterest-bearing liabilities		440,421								293,376								261,637
Shareholders’ equity		133,899								117,053								102,359
Total liabilities and shareholders’ equity	$	1,464,672							$	1,046,134							$	948,957
Net interest income				$	69,427							$	53,236						$	47,161
Net interest spread							4.42	%							4.94	%					4.61	%
Net interest margin							4.82	%							5.12	%					5.01	%

Column 1	Column 2	Column 3
	(1)	Taxable-equivalent yield of 2.20% as of December 31, 2022, applying a 24.5% effective tax rate

Column 1	Column 2	Column 3
	(2)	Average loan balances include monthly average nonaccrual loans of $8.8 million, $12.6 million and $11.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

We continued to experience strong asset growth for the year ended December 31, 2022 compared to the year ended December 31, 2021:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $18.6 million, or 33.4%, to $74.4 million, which was attributable to a $237.6 million increase in the average balance of loans to $1.14 billion during the year ended 2022 as compared with the average balance of $905.8 million for the year ended 2021;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 5.46%, an increase of 4 basis points which was attributable to higher loan rates of 35 basis points, an increase in yield on short term investments of 104 basis points, and a decrease in yield on taxable debt securities of 225 basis points; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2022 and 2021 was 4.82% and 5.12%, respectively.

For the year ended December 31, 2021 compared to the year ended December 31, 2020:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $3.3 million, or 6.3%, to $55.8 million, which was attributable to a $82.6 million increase in the average balance of loans to $905.8 million during the year ended 2021 as compared with the average balance of $823.2 million for the year ended 2020;

Column 1	Column 2	Column 3
	-	Loan fees totaled $7.8 million, an increase of $2.8 million or 54.7%. $949,000 of the increase was due to PPP fee income recognized;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 5.42%, a decrease of 25 basis points which was attributable to lower loan rates and a decrease in yield on short term investments of 46 basis points, both were primarily impacted by the aforementioned changes in market interest rates related to the pandemic; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2021 and 2020 was 5.12% and 5.01%, respectively.

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Interest income on short-term investments increased $1.5 million, or 839.9%, to $1.7 million for year ended December 31, 2022 compared to 2021, due to an increase in the average balances of
$3.5 million, or 2.8% and a yield increase of 104 basis points. Interest income on short-term investments decreased $515,000, or 62.2%, to $313,000 for year ended December 31, 2021
compared to 2020, due to yield decrease of 46 basis points.

Interest expense on interest-bearing deposits totaled $9.3 million for the year ended December 31, 2022, compared to $3.1 million for 2021, an increase of $6.2 million, or 205.3%. The increase
was related to the cost of interest-bearing deposits increasing to 1.05% for the year ended December 31, 2022 from 0.48% for the year ended December 31, 2021. Interest expense on interest-bearing deposits totaled $3.1 million for the year ended
December 31, 2021, compared to $6.2 million for 2020, a decrease of $3.1 million, or 50.4%. The decrease was related to the cost of interest-bearing deposits decreasing to 0.48% for the year ended December 31, 2021 from 1.05% for the year ended
December 31, 2020, which was related to the aforementioned changes in market interest rates related to the pandemic.

Net interest margin for the years ended December 31, 2022, 2021 and 2020 was 4.82%, 5.12% and 5.01%, respectively.

The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided with respect to (i) effects on interest
income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume).

	Analysis of Changes in Interest Income and Expenses
	For the Year Ended December 31, 2022 vs 2021			For the Year Ended December 31, 2021 vs 2020
	Change due to:						Change due to:
	Volume(1)			Rate(1)			Interest Variance		Volume(1)		Rate(1)			Interest Variance
	(Dollars in thousands)						(Dollars in thousands)
Increase (decrease) in interest income:
Short-term investments	$	10			$	1,485		$	1,495		$	70			$	(585	)	$	(515	)
Debt securities		7,633				(5,303	)		2,330			354				(211	)		143
Total loans		14,635				4,000			18,635			5,260				(1,943	)		3,317
Total increase (decrease) in interest income		22,278				182			22,460			5,684				(2,739	)		2,945
Increase (decrease) in interest expense:
Deposits:
Transaction accounts		942				5,504			6,446			380				(1,713	)		(1,333	)
Time deposits		(322	)			145			(177	)		(33	)			(1,734	)		(1,767	)
Total interest-bearing deposits		620				5,649			6,269			347				(3,447	)		(3,100	)
Total increase (decrease) in interest expense		620				5,649			6,269			347				(3,447	)		(3,100	)
Increase (Decrease) in net interest income	$	21,657			$	(5,466	)	$	16,191		$	5,337			$	708		$	6,045

(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.

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Weighted Average Yield of Debt Securities

The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December 31, 2022. 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:

	As of December 31, 2022
	Within One Year			After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years		Total
	Amount			Yield *		Amount		Yield *		Amount			Yield *			Amount	Yield *		Amount			Yield *
Available-for-sale	(Dollars in thousands)
U.S. Federal agencies	$	11			2.62	%	$	176			1.83	%		$	955		1	%	$	-			0	%	$	1,142		1.21	%
Mortgage-backed securities		500			1.17			9,599			0.96				3,541		1.30			24,434			1.66			38,074		1.45
State and political subdivisions		2,104			1.61			15,070			1.24				10,650		1.44			531			1.48			28,356		1.35
U.S. Treasuries		-			-			98,168			1.18				2,492		1.11			-			-			100,660		1.18
Corporate debt securities		-			-			-			-				4,934		3.36			-			-			4,933		3.36
Total	$	2,615			1.53	%	$	123,014			1.17	%		$	22,571		1.78	%	$	24,965			1.66	%	$	173,165		1.34	%
Percentage of total		1.51	%					71.04	%						13.03	%				14.42	%					100.00	%

*Yield is on a taxable-equivalent basis using 21% tax rate

Provision for Loan Losses

For the year ended December 31, 2022 compared to the year ended December 31, 2021:

Column 1	Column 2	Column 3
	-	The provision for loan losses increased from $4.2 million to $4.5 million; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans increased by 16 basis points to 1.16%.

For the year ended December 31, 2021 compared to the year ended December 31, 2020:

Column 1	Column 2	Column 3
	-	The provision for loan losses decreased from $5.4 million to $4.2 million; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans decreased by 15 basis points to 1.00%.

Noninterest Income

The following table sets forth the major components of our noninterest income for the years ended December 31, 2022, 2021 and 2020:

	For the Years Ended			For the Years Ended
	December 31,			December 31,
	2022			2021			$ Increase (Decrease)		% Increase (Decrease)		2021			2020			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)			(Dollars in thousands)
Noninterest income:
Mortgage lending income	$	486			$	435		$	51			11.72	%		$	435		$	175	$	260	148.57	%
Gain (Loss) on sales of available-for-sale debt securities		(127	)			-			(127	)		-100.00	%			-
Service charges on deposit accounts		900				550			350			63.64	%			550			442		108	24.43	%
Other income and fees		1,680				1,265			415			32.81	%			1,265			1,048		217	20.71	%
Total noninterest income	$	2,939			$	2,250		$	689			30.62	%		$	2,250		$	1,665	$	585	35.14	%

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Noninterest Expense

Noninterest expense for the year ended December 31, 2022 was $28.6 million compared to $20.4 million for the year ended December 31, 2021, an increase of $8.2 million or 40.4%. Noninterest
expense for the year ended December 31, 2021 was $20.4 million compared to $17.6 million for the year ended December 31, 2020, an increase of $2.8 million or 15.9%. The following table sets forth the major components of our noninterest expense
for the years ended December 31, 2022, 2021 and 2020:

	For the Years Ended		For the Years Ended
	December 31,		December 31,
	2022		2021			$ Increase (Decrease)		% Increase (Decrease)		2021			2020			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)		(Dollars in thousands)
Noninterest expense:
Salaries and employee benefits	$	17,040		$	11,983		$	5,057			42.20	%		$	11,983		$	10,130	$	1,853		18.29	%
Furniture and equipment		1,468			883			585			66.25	%			883			868		15		1.73	%
Occupancy		2,329			1,899			430			22.64	%			1,899			1,957		(58	)	-2.96	%
Data and item processing		2,068			1,237			831			67.18	%			1,237			1,091		146		13.38	%
Accounting, marketing, and legal fees		984			800			184			23.00	%			800			536		264		49.25	%
Regulatory assessments		1,344			604			740			122.52	%			604			506		98		19.37	%
Advertising and public relations		477			282			195			69.15	%			282			400		(118	)	-29.50	%
Travel, lodging and entertainment		363			409			(46	)		-11.25	%			409			241		168		69.71	%
Other expense		2,568			2,300			268			11.65	%			2,300			1,863		437		23.46	%
Total noninterest expense	$	28,641		$	20,397		$	8,244			40.42	%		$	20,397		$	17,592	$	2,805		15.94	%

For the year ended December 31, 2022 compared to the year ended December 31, 2021:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $17.0 million compared to $12.0 million, an increase of $5.1 million, or 42.2%. The increase was attributable to overall increases in compensation to remain competitive, and due to our acquisition of Cornerstone Bank in late 2021, which increased employee headcount.

For the year ended December 31, 2021 compared to the year ended December 31, 2020:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $12.0 million compared to $10.1 million, an increase of $1.9 million, or 18.3%. The increase was attributable to overall increases in compensation to remain competitive, and partially due to our acquisition of Cornerstone Bank in late 2021, which increased employee headcount.

Financial Condition

The following discussion of our financial condition compares December 31, 2022, 2021, and 2020.

Total Assets

Total assets increased $233.6 million, or 17.3%, to $1.58 billion as of December 31, 2022, as compared to $1.35 billion as of December 31, 2021 and $1.02 billion as of December 31, 2020.

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Loan Portfolio

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
December 31, 2022, 2021 and 2020, our gross loans were $1.27 billion, $1.03 billion and $839.1 million, respectively.

The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2022, December 31, 2021 and December 31, 2020:

	As of December 31,
	2022			2021		2020
	Amount			% of Total		Amount		% of Total		Amount			% of Total
	(Dollars in thousands)
Construction & development	$	163,203			12.8	%	$	169,322			16.4	%		$	107,855		12.8	%
1-4 family real estate		76,928			6.0	%		62,971			6.1	%			29,079		3.5	%
Commercial real estate - other		439,001			34.5	%		339,655			32.9	%			290,489		34.6	%
Total commercial real estate		679,132			53.3	%		571,948			55.5	%			427,423		50.9	%
Commercial & industrial		513,011			40.3	%		361,974			35.1	%			351,248		41.9	%
Agricultural		66,145			5.2	%		73,010			7.1	%			50,519		6.0	%
Consumer		14,949			1.2	%		24,046			2.3	%			9,898		1.2	%
Gross loans		1,273,237			100.0	%		1,030,978			100.0	%			839,088		100.0	%
Less: unearned income, net		(2,781	)					(2,577	)						(2,475	)
Total Loans, net of unearned income		1,270,456						1,028,401							836,613
Less: Allowance for loan losses		(14,734	)					(10,316	)						(9,639	)
Net loans	$	1,255,722					$	1,018,085						$	826,974

During the second quarter of 2020, we began originating loans to qualified small businesses under the PPP administered by the SBA under the provisions of the CARES Act. Included in our
commercial & industrial balance at December 31, 2022 and 2021, are $2.6 million and $18.7 million of PPP loans, respectively.

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The following tables show the contractual maturities of our gross loans as of the periods below:

	As of December 31, 2022
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	11,749		$	81,002		$	7,556	$	57,439		$	-		$	1,160	$	-	$	4,297	$	163,203
1-4 family real estate		10,550			12,664			24,741		15,782			314			6,606		-		6,271		76,928
Commercial real estate - other		2,680			59,870			131,105		207,819			6,635			17,146		-		13,746		439,001
Total commercial real estate		24,979			153,536			163,402		281,040			6,949			24,912		-		24,314		679,132
Commercial & industrial		43,823			234,573			60,275		159,571			3,745			10,390		-		634		513,011
Agricultural		1,798			17,514			8,767		33,270			469			980		140		3,207		66,145
Consumer		1,683			22			6,310		156			587			2,860		82		3,249		14,949
Gross loans	$	72,283		$	405,645		$	238,754	$	474,037		$	11,750		$	39,142	$	222	$	31,404	$	1,273,237

	As of December 31, 2021
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	7,283		$	71,551		$	10,148	$	74,052		$	-		$	2,243	$	-	$	4,045	$	169,322
1-4 family real estate		3,259			21,322			11,979		11,674			926			7,375		-		6,436		62,971
Commercial real estate - other		5,156			97,309			59,227		143,906			413			19,230		-		14,414		339,655
Total commerical real estate		15,698			190,182			81,354		229,632			1,339			28,848		-		24,895		571,948
Commercial & industrial		24,249			142,553			16,346		145,654			20,474			12,047		-		651		361,974
Agricultural		2,529			17,441			5,156		39,305			623			1,587		-		6,369		73,010
Consumer		4,870			29			10,825		172			1,554			2,458		84		4,054		24,046
Gross loans	$	47,346		$	350,205		$	113,681	$	414,763		$	23,990		$	44,940	$	84	$	35,969	$	1,030,978

	As of December 31, 2020
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	14		$	47,649		$	885	$	58,387		$	-		$	920	$	-	$	-	$	107,855
1-4 family real estate		273			13,394			4,712		9,959			39			702		-		-		29,079
Commercial real estate - other		2,377			55,307			45,880		180,721			294			4,288		-		1,622		290,489
Total real estate		2,664			116,350			51,477		249,067			333			5,910		-		1,622		427,423
Commercial & industrial		16,914			194,520			39,593		93,707			11			6,503		-		-		351,248
Agricultural		5,141			27,215			2,534		14,420			60			541		-		608		50,519
Consumer		1,544			150			6,570		65			1,057			425		87		-		9,898
Gross loans	$	26,263		$	338,235		$	100,174	$	357,259		$	1,461		$	13,379	$	87	$	2,230	$	839,088

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Allowance for Loan and Lease Losses

The allowance is based on management’s estimate of probable 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.

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 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.

The allowance was $14.7 million at December 31, 2022, $10.3 million at December 31, 2021 and $9.6 million at December 31, 2020. The increasing trend was related to loan growth.

The following table provides an analysis of the activity in our allowance for the periods indicated:

	For the Year Ended December 31,
	2022			2021			2020
	(Dollars in thousands)
Balance at beginning of the period	$	10,316			$	9,639		$	7,846
Provision for loan losses		4,468				4,175			5,350
Charge-offs:
Construction & development		-				-			-
1-4 family real estate		-				-			-
Commercial real estate - other		-				-			-
Commercial & industrial		(2	)			(3,750	)		(3,289	)
Agricultural		(50	)			-			(300	)
Consumer		(22	)			(68	)		(1	)
Total charge-offs		(74	)			(3,818	)		(3,590	)
Recoveries:
Construction & development		-				-			-
1-4 family real estate		-				-			2
Commercial real estate - other		-				-			-
Commercial & industrial		10				16			18
Agricultural		4				300			10
Consumer		10				4			3
Total recoveries		24				320			33
Net recoveries (charge-offs)		(50	)			(3,498	)		(3,557	)
Balance at end of the period	$	14,734			$	10,316		$	9,639
Net recoveries (charge-offs) to average loans		0.00	%			0.39	%		0.43	%

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	As of December 31,
	2022		2021		2020
	Amount		Percent		Amount		Percent	Amount			Percent
	(Dollars in thousands)
Construction & development	$	1,889		12.8	%	$	1,695		16.4	%		$	1,239	12.8	%
1-4 family real estate		890		6.0	%		630		6.1	%			334	3.5	%
Commercial real estate - Other		5,080		34.5	%		3,399		32.9	%			3,337	34.6	%
Commercial & industrial		5,937		40.3	%		3,621		35.2	%			4,035	41.9	%
Agricultural		765		5.2	%		730		7.1	%			580	6.0	%
Consumer		173		1.2	%		241		2.3	%			114	1.2	%
Total	$	14,734		100.0	%	$	10,316		100.0	%		$	9,639	100.0	%

Nonperforming Assets

A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include loans on
nonaccrual status and loans modified in a troubled debt restructuring, or TDR. Income from a loan on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance is deemed collectible. Depending on a
particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the fair value of the
collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair value, where possible, is determined by
independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our attention as part of our problem loan
monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral dependent loan is charged off to the allowance if
deemed not collectible and the impairment amount on a loan that is not collateral dependent is set up as a specific reserve.

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In cases where a borrower experiences financial difficulties and we make certain concessionary modifications to contractual terms, the loan is classified as a TDR. Included in certain loan
categories of impaired loans are TDRs on which we have granted certain material concessions to the borrower as a result of the borrower experiencing financial difficulties. The concessions granted by us may include, but are not limited to: (1) a
modification in which the maturity date, timing of payments or frequency of payments is modified, (2) an interest rate lower than the current market rate for new loans with similar risk, or (3) a combination of the first two concessions.

If a borrower on a restructured accruing loan has demonstrated performance under the previous terms, is not experiencing financial difficulty and shows the capacity to continue to perform under
the restructured terms, the loan will remain on accrual status. Otherwise, the loan will be placed on nonaccrual status until the borrower demonstrates a sustained period of performance, which generally requires six consecutive months of
payments. Loans identified as TDRs are evaluated for impairment using the present value of the expected cash flows or the estimated fair value of the collateral, if the loan is collateral dependent. The fair value is determined, when possible, by
an appraisal of the property less estimated costs related to liquidation of the collateral. The appraisal amount may also be adjusted for current market conditions. Adjustments to reflect the present value of the expected cash flows or the
estimated fair value of collateral dependent loans are a component in determining an appropriate allowance, and as such, may result in increases or decreases to the provision for loan losses in current and future earnings.

Nonperforming loans include nonaccrual loans, loans past due 90 days or more and still accruing interest and loans modified under TDRs that are not performing in accordance with their modified
terms. Nonperforming assets consist of nonperforming loans plus OREO. Loans accounted for on a nonaccrual basis were $8.0 million as of December 31, 2022, $9.9 million as of December 31, 2021 and $14.6 million as of December 31, 2020. OREO was $0
as of December 31, 2022, December 31, 2021 and December 31, 2020.

The following table presents information regarding nonperforming assets as of the dates indicated.

	As of December 31,
	2022			2021			2020
	(Dollars in thousands)
Nonaccrual loans	$	8,039			$	9,885		$	14,575
Troubled-debt restructurings (1)		-				-			-
Accruing loans 90 or more days past due		9,941				496			1,960
Total nonperforming loans		17,980				10,381			16,535
Other real estate owned		-				-			-
Total nonperforming assets	$	17,980			$	10,381		$	16,535
Ratio of nonperforming loans to total loans		1.42	%			1.01	%		1.98	%
Ratio of nonaccrual loans to total loans		0.63	%			0.96	%		1.74	%
Ratio of allowance for loan losses to total loans		1.16	%			1.00	%		1.15	%
Ratio of allowance for loan losses to nonaccrual loans		183.28	%			104.36	%		66.13	%
Ratio of nonperforming assets to total assets		1.13	%			0.77	%		1.63	%

(1) $1.2 million, $1.4 million and $12.98 million of TDRs as of December 31, 2022, 2021 and 2020, respectively.

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The following tables present an aging analysis of loans as of the dates indicated.

	As of December 31, 2022
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	163,203	$	163,203
1-4 family real estate		-			-			-		-			-			76,928		76,928
Commercial real estate - other		-			617			-		-			617			438,384		439,001
Commercial & industrial		21			-			9,923		9,923			9,944			503,067		513,011
Agricultural		4			-			-		-			4			66,141		66,145
Consumer		291			82			22		18			395			14,554		14,949
Total	$	316		$	699		$	9,945	$	9,941		$	10,960		$	1,262,277	$	1,273,237

	As of December 31, 2021
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	-		$	-		$	-	$	-		$	-		$	169,322	$	169,322
1-4 family real estate		-			-			-		-			-			62,971		62,971
Commercial real estate - other		-			174			-		-			174			339,481		339,655
Commercial & industrial		-			19			501		401			520			361,454		361,974
Agricultural		-			-			77		77			77			72,933		73,010
Consumer		48			15			18		18			81			23,965		24,046
Total	$	48		$	208		$	596	$	496		$	852		$	1,030,126	$	1,030,978

	As of December 31, 2020
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	714		$	-		$	-	$	-		$	714		$	107,141	$	107,855
1-4 family commerical		-			-			-		-			-			29,079		29,079
Commercial real estate - Other		1,444			-			1,960		1,960			3,404			287,085		290,489
Commercial & industrial		-			-			-		-			-			351,248		351,248
Agricultural		-			-			-		-			-			50,519		50,519
Consumer		193			-			-		-			193			9,705		9,898
Total	$	2,351		$	-		$	1,960	$	1,960		$	4,311		$	834,777	$	839,088

In addition to the past due and nonaccrual criteria, the Company also evaluates loans according to its internal risk grading system. Loans are segregated between pass, watch, special mention,
and substandard categories. The definitions of those categories are as follows:

Watch: These loans are still considered “Pass” credits; however, various factors such as industry stress, material changes in cash flow or financial
conditions, or deficiencies in loan documentation, or other risk issues determined by the lending officer, Commercial Loan Committee or CQC warrant a heightened sense and frequency of monitoring.

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Substandard loans totaled $21.0 million as of December 31, 2022, a decrease of $3.7 million compared to December 31, 2021. Substandard loans totaled $24.7 million as of December 31, 2021, an
increase of $1.6 million compared to December 31, 2020. The total net decrease in 2022 as compared to 2021, is comprised of a net increase in commercial and industrial substandard loans primarily related to an increase in two relationships
comprised of four notes totaling $16.4 million with a $133,306 specific reserve and a decrease in one relationship comprised of one note totaling $2.1 million with no specific reserve, and a net decrease in commercial real estate substandard
loans primarily related to two relationships comprised of one note each totaling $13.8 million with no specific reserves.

Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows:

	As of December 31, 2022
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	163,203		$	-		$	-	$	-	$	163,203
1-4 family real estate		76,928			-			-		-		76,928
Commercial real estate - Other		397,295			14,976			24,747		1,983		439,001
Commercial & industrial		493,412			-			584		19,015		513,011
Agricultural		65,857			288			-		-		66,145
Consumer		14,927			-			-		22		14,949
Total	$	1,211,622		$	15,264		$	25,331	$	21,020	$	1,273,237

	As of December 31, 2021
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	169,322		$	-		$	-	$	-	$	169,322
1-4 family real estate		62,971			-			-		-		62,971
Commercial real estate - Other		282,268			14,976			27,112		15,299		339,655
Commercial & industrial		341,661			4,658			6,300		9,355		361,974
Agricultural		72,295			255			460		-		73,010
Consumer		24,000			-			-		46		24,046
Total	$	952,517		$	19,889		$	33,872	$	24,700	$	1,030,978

	As of December 31, 2020
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	107,855		$	-		$	-	$	-	$	107,855
1-4 family real estate		28,711			368			-		-		29,079
Commercial real estate - Other		248,194			24,155			10,086		8,054		290,489
Commercial & industrial		328,656			7,691			300		14,601		351,248
Agricultural		50,051			-			-		468		50,519
Consumer		9,898			-			-		-		9,898
Total	$	773,365		$	32,214		$	10,386	$	23,123	$	839,088

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Troubled Debt Restructurings

TDRs are defined as those loans in which a bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise
consider. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with original contractual terms of the loan. Loans
with insignificant delays or insignificant short-falls in the amount of payments expected to be collected are not considered to be impaired. Loans defined as individually impaired, based on applicable accounting guidance, include larger balance
nonperforming loans and TDRs.

The CARES Act includes a provision that permits a financial institution to elect to suspend temporarily troubled debt restructuring accounting under ASC Subtopic 310-40 in certain circumstances
(“section 4013”). To be eligible under section 4013, a loan modification must be (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3) executed between March 1, 2020, and the
earlier of (A) 60 days after the date of termination of the National Emergency or (B) January 1, 2022. In response to this section of the CARES Act, the federal banking agencies issued a revised interagency statement on April 7, 2020 that, in
consultation with the Financial Accounting Standards Board, confirmed that for loans not subject to section 4013, short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are
not troubled debt restructurings under ASC Subtopic 310-40. As of December 31, 2022, one loan totaling $2.6 million was modified, related to COVID-19, which was not considered a troubled debt restructuring.

The following table presents loans restructured as TDRs as of December 31, 2022, December 31, 2021 and December 31, 2020.

	As of December 31, 2022
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment		Specific Reserves Allocated
	(Dollars in thousands)
Commercial real estate		1		$	1,198		$	1,198	$	-
Total		1		$	1,198		$	1,198	$	-

	As of December 31, 2021
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment		Specific Reserves Allocated
	(Dollars in thousands)
Commercial real estate		1		$	1,402		$	1,402	$	-
Total		1		$	1,402		$	1,402	$	-

	As of December 31, 2020
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post-Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial & industrial		1		$	10,886		$	10,886	$	-
Agricultural		1			469			469		-
Commercial real estate		1			1,622			1,622		-
Total		3		$	12,977		$	12,977	$	-

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There were no payment defaults with respect to loans modified as TDRs as of December 31, 2022, 2021, and 2020.

Impairment analyses are prepared on TDRs in conjunction with the normal allowance process. TDRs restructured during the years ended December 31, 2022, 2021, and 2020 required $0, $0 and $0 in
specific reserves, respectively.

The following table presents total TDRs, both in accrual and nonaccrual status as of the periods indicated:

	As of December 31
	2022		2021			2020
	Number of contracts		Amount			Number of contracts	Amount	Number of contracts		Amount
	(Dollars in thousands)
Accrual		-		$	-		-	$	-		-	$	-
Nonaccrual		1			1,198		1		1,402		3		12,977
Total		1		$	1,198		1	$	1,402		3	$	12,977

Deposits

We gather deposits primarily through our twelve branch locations and online though 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
under the standard FDIC insurance maximum of $250,000, and placed at a network of banks across the United States.

As of December 31, 2022, 2021, and 2020 brokered deposits were $261.3 million, $273.8 million, and $427.0 million, respectively, of these $261.3
million, $273.8 million, and $427.0 million, respectively, were reciprocal deposits.

Total deposits as of December 31, 2022, 2021, and 2020 were $1.43 billion, $1.22 billion and $905.5 million, respectively. The increase was primarily due to acquired deposits and organic
deposit growth. 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 December 31
	2022		2021		2020
	Amount		Percentage of Total		Amount		Percentage of Total	Amount			Percentage of Total
	(Dollars in thousands)
Noninterest-bearing demand	$	439,409		30.8	%	$	366,705		30.1	%		$	246,569	27.2	%
Interest-bearing transaction deposits		669,852		46.7	%		583,389		47.9	%			392,784	43.4	%
Savings deposits		136,537		9.6	%		89,778		7.4	%			54,008	6.0	%
Time deposits ($250,000 or less)		140,929		9.9	%		132,690		10.9	%			135,811	15.0	%
Time deposits (more than $250,000)		42,573		3.0	%		44,909		3.7	%			76,342	8.4	%
Total interest-bearing deposits		989,891		69.2	%		850,766		69.9	%			658,945	72.8	%
Total deposits	$	1,429,300		100.0	%	$	1,217,471		100.0	%		$	905,514	100.0	%

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The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2022, 2021, and 2020:

	For the Year Ended December 31,
	2022		2021		2020
	Average Balance		Weighted Average Rate		Average Balance		Weighted Average Rate	Average Balance			Weighted Average Rate
	(Dollars in thousands)
Non interest-bearing demand	$	432,901		0.00	%	$	288,446		0.00	%		$	256,431	0.00	%
Interest-bearing transaction deposits		613,798		1.11	%		375,048		0.34	%			318,713	1.50	%
Savings deposits		110,818		0.92	%		55,220		0.23	%			58,806	0.56	%
Time deposits		165,735		0.89	%		205,437		0.81	%			207,442	1.65	%
Total interest-bearing deposits		890,351		1.05	%		635,705		0.48	%			584,961	1.05	%
Total deposits	$	1,323,252		0.70	%	$	924,151		0.33	%		$	841,392	0.73	%

The following tables set forth the maturity of time deposits as of the dates indicated below:

	As of December 31, 2022 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits ($250,000 or less)	$	58,184		$	25,333		$	38,844	$	18,568	$	140,929
Time deposits (more than $250,000)		12,292			5,579			17,001		7,701		42,573
Total time deposits	$	70,476		$	30,912		$	55,845	$	26,269	$	183,502

	As of December 31, 2021 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits ($250,000 or less)	$	32,680		$	37,016		$	31,197	$	31,797	$	132,690
Time deposits (more than $250,000)		18,234			5,932			10,729		10,014		44,909
Total time deposits	$	50,914		$	42,948		$	41,926	$	41,811	$	177,599

Liquidity

Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our operating, capital and strategic cash flow
needs, all at a reasonable cost. 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.

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.

As of December 31, 2022, 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 $129.2 million as of December 31, 2022 and $78.1 million as of December 31, 2021.

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Capital Requirements

In the wake of the global financial crisis of 2008 and 2009, the role of capital has become fundamentally more important, as banking regulators have concluded that the amount and quality of
capital held by banking organizations was insufficient to absorb losses during periods of severely distressed economic conditions. The Dodd-Frank Act and banking regulations promulgated by the U.S. federal banking regulators to implement Basel
III have established strengthened capital standards for banks and bank holding companies and require more capital to be held in the form of common stock. In addition, the Basel III regulations implement a concept known as the “capital
conservation buffer.” In general, banks, bank holding companies with more than $3.0 billion in assets and bank holding companies with publicly-traded equity are required to hold a buffer of CET1 capital equal to 2.5% of risk-weighted assets over
each minimum capital ratio in order to avoid being subject to limits on capital distributions (e.g., dividends, stock buybacks, etc.) and certain discretionary bonus payments to executive officers.

As of December 31, 2022, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework. There have been no conditions or events since December 31, 2022 that
management believes would change this classification.

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The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory perspective, as well as the Bank’s capital ratios
as of December 31, 2022, 2021, and 2020. The Bank exceeded all regulatory capital requirements under Basel III and the Bank was considered to be “well-capitalized” as of the dates reflected in the tables below.

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2022
Total capital (to risk-weighted assets)
Company	$	158,158		12.41	%	$	133,862		10.50	%			N/A	N/A
Bank		158,158		12.42	%		133,756		10.50	%		$	127,387	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		143,424		11.25	%		108,365		8.50	%			N/A	N/A
Bank		143,424		11.26	%		108,279		8.50	%			101,909	8.00	%
CET 1 capital (to risk-weighted assets)
Company		143,424		11.25	%		89,241		7.00	%			N/A	N/A
Bank		143,424		11.26	%		89,171		7.00	%			82,801	6.50	%
Tier 1 capital (to average assets)
Company		143,424		9.19	%		N/A		N/A				N/A	N/A
Bank		143,424		9.18	%		N/A		N/A				78,111	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2021
Total capital (to risk-weighted assets)
Company	$	127,946		12.54	%	$	107,126		10.50	%			N/A	N/A
Bank		127,844		12.54	%		107,020		10.50	%		$	101,924	10.00	%
Tier 1 capital (to risk-weighted assets)
Company		117,631		11.53	%		86,721		8.50	%			N/A	N/A
Bank		117,528		11.53	%		86,635		8.50	%			81,539	8.00	%
CET 1 capital (to risk-weighted assets)
Company		117,631		11.53	%		71,417		7.00	%			N/A	N/A
Bank		117,528		11.53	%		71,347		7.00	%			66,250	6.50	%
Tier 1 capital (to average assets)
Company		117,631		10.56	%		N/A		N/A				N/A	N/A
Bank		117,528		10.55	%		N/A		N/A				55,714	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2020:
Total capital (to risk-weighted assets)
Bank7 Corp.	$	115,375		14.73	%	$	82,216		10.50	%			N/A	N/A
Bank		115,335		14.75	%		82,114		10.50	%		$	78,204	10.00	%
Tier 1 capital (to risk-weighted assets)
Bank7 Corp.		105,736		13.50	%		66,556		8.50	%			N/A	N/A
Bank		105,696		13.51	%		66,473		8.50	%			62,563	8.00	%
CET 1 capital (to risk-weighted assets)
Bank7 Corp.		105,736		13.50	%		54,811		7.00	%			N/A	N/A
Bank		105,696		13.51	%		54,743		7.00	%			50,832	6.50	%
Tier 1 capital (to average assets)
Bank7 Corp.		105,736		10.78	%		N/A		N/A				N/A	N/A
Bank		105,696		10.78	%		N/A		N/A				49,041	5.00	%

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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
to $144.1 million as of December 31, 2022, compared to $127.4 million as of December 31, 2021 and $107.3 million as of December 31, 2020. The increases were driven by retained capital from net income during the periods.

Contractual Obligations

The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2022:

	Payments Due as of December 31, 2022
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,245,798		$	-		$	-	$	-	$	1,245,798
Time deposits		157,233			26,002			267		-		183,502
Operating lease commitments		532			815			453		530		2,330
Total contractual obligations	$	1,403,563		$	26,817		$	720	$	530	$	1,431,630

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers. These financial instruments include
commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheet. The contractual or notional
amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments. To control this credit risk, the Company uses the same underwriting standards as it uses for loans recorded on the balance
sheet.

Loan commitments are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Standby letters of credit are conditional commitments
issued by the Bank to guarantee the performance of the customer to a third party. They are intended to be disbursed, subject to certain conditions, upon request of the borrower.

The following table summarizes commitments as of the dates presented.

	As of December 31,
	2022		2021			2020
	(Dollars in thousands)
Commitments to extend credit	$	198,027		$	200,393		$	206,520
Standby letters of credit		1,043			5,809			2,366
Total	$	199,070		$	206,202		$	208,886

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Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate. To prepare financial statements in conformity with GAAP,
management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes. These estimates, assumptions and
judgments are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the financial statement. In
particular, management has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.

The JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. We have elected to take advantage of this extended
transition period, which means that the financial statements included in this report, as well as any financial statements that we file in the future, will not be subject to all new or revised accounting standards generally applicable to public
companies for the transition period for so long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act.

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 found in Note 1 of the Company’s consolidated financial statements included in the Annual Report on the Form 10-K.

Allowance for Loan and Lease Losses

The allowance is based on management’s estimate of probable 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 and changes in the composition of the loan
portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’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.

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 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.

Goodwill and Intangibles

Intangible assets totaled $1.3 million and goodwill, net of accumulated amortization totaled $8.6 million for the year ended December 31, 2022, compared to intangible assets of $1.6 million and
goodwill, net of accumulated amortization of $8.5 million for the year ended December 31, 2021.

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.

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Income Taxes

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.

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.

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FY 2021 10-K MD&A

SEC filing source: 0001140361-22-012281.

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high. Filing date: 2022-03-31. Report date: 2021-12-31.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our
consolidated financial statements and related notes included elsewhere in this report.

Unless the context indicates otherwise, references in this management’s discussion and analysis to “we”, “our”, and “us,” refer
to Bank7 Corp. and its consolidated subsidiaries. All references to “the Bank” refer to Bank7, our wholly owned subsidiary.

General

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.

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 our efficiency ratio,
which is calculated by dividing noninterest expense by the sum of net interest income on a tax equivalent basis and noninterest income.

As of December 31, 2021, we had total assets of $1.4 billion, total loans of $1.0 billion, total deposits of $1.2 billion and total shareholders’
equity of $127.4 million.

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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 2021. 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. This decline in interest rates led to new all-time low
yields across the U.S. Treasury maturity curve. On March 16, 2022 the Federal Reserve revised its target for short term interest rates by 0.25% to a range of 0.25% to 0.50%. The Federal Reserve signaled that it expects the rate to be 1.9% by the
end of 2022, implying a total of seven rate hikes this year.

2021 Highlights

On December 9, 2021, the Company acquired 100% of the outstanding equity of Watonga Bancshares, Inc. (“Watonga”), the bank holding company for
Cornerstone Bank, for $29.3 million in cash. Immediately following the acquisition, Watonga was dissolved and Cornerstone Bank merged with and into Bank7. The Company acquired total assets of $267.3 million, including $117.3 million in total
loans. The Company assumed liabilities of $245.5 million, including $243.5 million in deposits. Further, the Company benefitted from 23 days of revenue of $477,000 from the acquired entity, and incurred total one time acquisition-related expenses
of $712,000.

For the year ended December 31, 2021, we reported pre-tax net income of $30.9 million, an increase of $5.0 million, or 16.2% compared to pre-tax net
income of $25.9 million for the year ended December 31, 2020. The increase was primarily related to an increase in interest earning assets, decreased interest expense due to the lower rate environment and lower ALLL provision expense. For the
year ended December 31, 2021, average loans totaled $905.8 million, an increase of $82.6 million or 10.0%, from December 31, 2020.

Pre-tax return on average assets and return on average equity was 2.96% and 26.41%, respectively for the year ended December 31, 2021, as compared to
2.73% and 25.29%, respectively, for the same period in 2020. Tax-adjusted return on average assets and return on average equity was 2.21% and 20.13%, respectively for the year ended December 31, 2021, as compared to 2.03% and 19.14%,
respectively, for the same period in 2020. Our efficiency ratio for the year ended December 31, 2021 was 36.76% as compared to 36.03% for the year ended December 31, 2020.

As of December 31, 2021, total loans were $1.03 billion, an increase of $191.8 million, or 22.9%, from December 31, 2020. Total deposits were $1.22
billion as of December 31, 2021, an increase of $312.0 million, or 34.5%, from December 31, 2020.

Results of Operations

Years Ended December 31, 2021, December 31, 2020, and December 31, 2019

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.

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	Net Interest Margin
	For the Year Ended December 31,
	2021		2020			2019
	Average Balance		Interest Income/ Expense			Average Yield/ Rate	Average Balance		Interest Income/ Expense		Average Yield/ Rate			Average Balance	Interest Income/ Expense		Average Yield/ Rate
	(Dollars in thousands)
Interest-Earning Assets:
Short-term investments	$	126,136		$	178		0.25	%	$	116,295		$	828		0.71	%	$	151,434	$	3,459	2.28	%
Investment securities, taxable		4,663			312		3.84			1,123			36		3.21			1,065		50	4.69
Debt securities, tax exempt		1,852			31		1.62			-			-		-			-		-	-
Loans held for sale		318			-		-			244			-		-			236		-	-
Total loans(1)		905,804			55,768		6.16			823,228			52,450		6.37			636,274		48,200	7.58
Total interest-earning assets		1,038,773			56,289		5.42			940,890			53,314		5.67			789,009		51,709	6.55
Noninterest-earning assets		7,361								8,067								9,519
Total assets	$	1,046,134							$	948,957							$	798,528
Funding sources:
Interest-bearing liabilities:
Deposits:
Transaction accounts	$	430,268			1,396		0.32	%	$	377,519			2,729		0.72	%	$	295,576		5,057	1.71	%
Time deposits		205,437			1,657		0.81			207,442			3,424		1.65			208,375		4,459	2.14
Total interest-bearing deposits		635,705			3,053		0.48			584,961			6,153		1.05			503,951		9,516	1.89
Total interest-bearing liabilities		635,705			3,053		0.48			584,961			6,153		1.05			503,951		9,516	1.89
Noninterest-bearing liabilities:
Noninterest-bearing deposits		288,446								256,431								192,562
Other noninterest-bearing liabilities		4,930								5,206								4,585
Total noninterest-bearing liabilities		293,376								261,637								197,147
Shareholders’ equity		117,053								102,359								97,430
Total liabilities and shareholders’ equity	$	1,046,134							$	948,957							$	798,528
Net interest income				$	53,236							$	47,161						$	42,193
Net interest spread							4.94	%							4.61	%					4.67	%
Net interest margin							5.12	%							5.01	%					5.35	%

Column 1	Column 2	Column 3
	(1)	Average loan balances include monthly average nonaccrual loans of $12.6 million, $11.3 million and $2.1 million for the years ended December 31, 2021, 2020 and 2019, respectively.

We continued to experience strong asset growth for the year ended December 31, 2021 compared to the year ended December 31, 2020:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $3.3 million, or 6.3%, to $55.8 million which was attributable to a $82.6 million increase in the average balance of loans to $905.8 million during the year ended 2021 as compared with the average balance of $823.2 million for the year ended 2020;

Column 1	Column 2	Column 3
	-	Loan fees totaled $7.8 million, an increase of $2.8 million or 54.7%. $949,000 of the increase was due to PPP fee income recognized;

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 5.42%, a decrease of 25 basis points which was attributable to lower loan rates and a decrease in yield on short term investments of 46 basis points, both were primarily impacted by the aforementioned changes in market interest rates related to the pandemic; and

Column 1	Column 2	Column 3
	-	Net interest margin for the years ended 2021 and 2020 was 5.12% and 5.01%, respectively.

For the year ended December 31, 2020 compared to the year ended December 31, 2019:

Column 1	Column 2	Column 3
	-	Total interest income on loans increased $4.3 million, or 8.8%, to $52.5 million which was attributable to a $187.0 million increase in the average balance of loans to $823.2 million during the year ended 2020 as compared with the average balance of $636.3 million for the year ended 2019;

Column 1	Column 2	Column 3
	-	Loan fees totaled $5.0 million, an increase of $592,000 or 13.3%.

Column 1	Column 2	Column 3
	-	Yields on our interest-earning assets totaled 5.67%, a decrease of 88 basis points which was attributable to lower loan rates and a decrease in yield on short term investments of 157 basis points, both were primarily impacted by the aforementioned changes in market interest rates related to the pandemic; and

Column 1	Column 2	Column 3
	-	Net interest margin for the year ended 2020 and 2019 was 5.01% and 5.35 %, respectively.

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The FED influences the general market rates of interest, including the deposit and loan rates offered by many financial institutions. Our loan
portfolio is significantly affected by changes in the prime interest rate. For the three year period between January 1, 2019 and December 31, 2021, the prime rate fluctuated between a high of 5.5%, and a low of 3.25%. The FED raised its target
for short term interest rates in March 2022, the first such raise since 2018 and has signaled that it expects the rate to be 1.9% at the end of 2022 and 2.8% at the end of 2023, implying multiple rate hikes over that period.

Interest income on short-term investments decreased $515,000, or 62.2%, to $313,000 for year ended December 31, 2021 compared to 2020, due to yield
decrease of 46 basis points. Interest income on short-term investments decreased $2.6 million, or 76.1%, to $828,000 for year ended December 31, 2020 compared to 2019, due to a decrease in the average balances of $35.1 million, or 23.2% and a
yield decrease of 157 basis points related to the aforementioned changes in market interest rates related to the pandemic.

Interest expense on interest-bearing deposits totaled $3.1 million for the year ended December 31, 2021, compared to $6.2 million for 2020, a
decrease of $3.1 million, or 50.4%. The decrease was related to the cost of interest-bearing deposits decreasing to 0.48% for the year ended December 31, 2021 from 1.05% for the year ended December 31, 2020, which was related to the
aforementioned changes in market interest rates related to the pandemic. Interest expense on interest-bearing deposits totaled $6.2 million for the year ended December 31, 2020, compared to $9.5 million for 2019, a decrease of $3.4 million, or
35.3%. The decrease was related to the cost of interest-bearing deposits decreasing to 1.05% for the year ended December 31, 2020 from 1.89% for the year ended December 31, 2019, which was related to the aforementioned changes in market interest
rates related to the pandemic.

Net interest margin for the years ended December 31, 2021, 2020 and 2019 was 5.12%, 5.01% and 5.35%, respectively.

The following table sets forth the effects of changing rates and volumes on our net interest income during the period shown. Information is provided
with respect to (i) effects on interest income attributable to changes in volume (change in volume multiplied by prior rate) and (ii) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume).

		Analysis of Changes in Interest Income and Expenses
		For the Year Ended December 31, 2021 vs 2020			For the Year Ended December 31, 2020 vs 2019
		Change due to:						Change due to:
		Volume(1)			Rate(1)			Interest		Volume(1)		Rate(1)			Interest
	Variance			Variance
		(Dollars in thousands)			(Dollars in thousands)
Increase (decrease) in interest income:
Short-term investments		$	70			$	(585	)	$	(515	)	$	(803	)		$	(1,828	)	$	(2,631	)
Investment securities			354				(211	)		143			3				(17	)		(14	)
Total loans			5,260				(1,943	)		3,317			14,163				(9,913	)		4,250
Total increase (decrease) in interest income			5,684				(2,739	)		2,945			13,363				(11,758	)		1,605
Increase (decrease) in interest expense:
Deposits:
Transaction accounts			380				(1,713	)		(1,333	)		1,402				(3,730	)		(2,328	)
Time deposits			(33	)			(1,734	)		(1,767	)		(20	)			(1,015	)		(1,035	)
Total interest-bearing deposits			347				(3,447	)		(3,100	)		1,382				(4,745	)		(3,363	)
Total increase (decrease) in interest expense			347				(3,447	)		(3,100	)		1,382				(4,745	)		(3,363	)
Increase (Decrease) in net interest income		$	5,337			$	708		$	6,045		$	11,981			$	(7,013	)	$	4,968

(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.

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Weighted Average Yield of Debt Securities

The following table summarizes the maturity distribution schedule with corresponding weighted average taxable equivalent yields of the debt securities portfolio at December
31, 2021. 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:

		As of December 31, 2021
		Within One Year			After One Year But Within Five Years		After Five Years But Within Ten Years		After Ten Years			Total
	Amount			Yield *		Amount		Yield *			Amount			Yield *		Amount		Yield *			Amount			Yield *
Available-for-sale		(Dollars in thousands)
U.S. Federal agencies		$	10			6.86	%	$	303				3.56	%	$	-			0	%		$	-		0	%	$	313		3.66	%
Mortgage-backed securities			1,397			3.82			10,211				2.00			13,834			2.46				7,712		2.32			33,154		2.34
State and political subdivisions			3,618			2.82			20,750				1.94			17,792			2.15				3,134		2.22			45,294		2.11
U.S. Treasury			-			-			1,018				1.56			5,029			1.76				-		-			6,047		1.73
Total		$	5,025			3.11	%	$	32,282				1.96	%	$	36,655			2.21	%		$	10,846		2.29	%	$	84,808		2.18	%
Percentage of total			5.93	%					38.06	%						43.22	%						12.79	%				100.00	%

*Yield is on a taxable-equivalent basis using 21% tax rate

Provision for Loan Losses

For the year ended December 31, 2021 compared to the year ended December 31, 2020:

Column 1	Column 2	Column 3
	-	The provision for loan losses decreased from $5.4 to $4.2 million

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans decreased by 15 basis points to 1.00%.

For the year ended December 31, 2020 compared to the year ended December 31, 2019:

Column 1	Column 2	Column 3
	-	The provision for loan losses increased from zero to $5.4 million related to loan growth, uncertainty in the economy caused by the COVID-19 pandemic and $3.6 million in net charge offs; and

Column 1	Column 2	Column 3
	-	The allowance as a percentage of loans increased by 4 basis points to 1.15%.

Noninterest Income

The following table sets forth the major components of our noninterest income for the years ended December 31, 2021, 2020 and 2019:

	For the Years Ended		For the Years Ended
	December 31,		December 31,
	2021		2020			$ Increase (Decrease)		% Increase (Decrease)	2020			2019			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)		(Dollars in thousands)
Noninterest income:
Secondary market income	$	435		$	175		$	260		148.57	%		$	175		$	164	$	11	6.71	%
Service charges on deposit accounts		550			442			108		24.43	%			442			392		50	12.76	%
Other income and fees		1,265			1,048			217		20.71	%			1,048			752		296	39.36	%
Total noninterest income	$	2,250		$	1,665		$	585		35.14	%		$	1,665		$	1,308	$	357	27.29	%

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Noninterest Expense

Noninterest expense for the year ended December 31, 2021 was $20.4 million compared to $17.6 million for the year ended December 31, 2020, an
increase of $2.8 million or 15.9%. Noninterest expense for the year ended December 31, 2020 was $17.6 compared to $28.4 million for the year ended December 31, 2019, a decrease of $10.8 million, or 38.1%. The following table sets forth the major
components of our noninterest expense for the years ended December 31, 2021, 2020 and 2019:

	For the Years Ended		For the Years Ended
	December 31,		December 31,
	2021		2020			$ Increase (Decrease)		% Increase (Decrease)		2020			2019			$ Increase (Decrease)		% Increase (Decrease)
	(Dollars in thousands)		(Dollars in thousands)
Noninterest expense:
Salaries and employee benefits	$	11,983		$	10,130		$	1,853			18.29	%		$	10,130		$	21,265	$	(11,135	)	-52.36	%
Furniture and equipment		883			868			15			1.73	%			868			829		39		4.70	%
Occupancy		1,899			1,957			(58	)		-2.96	%			1,957			1,677		280		16.70	%
Data and item processing		1,237			1,091			146			13.38	%			1,091			1,078		13		1.21	%
Accounting, marketing, and legal fees		800			536			264			49.25	%			536			757		(221	)	-29.19	%
Regulatory assessments		604			506			98			19.37	%			506			126		380		301.59	%
Advertising and public relations		282			400			(118	)		-29.50	%			400			588		(188	)	-31.97	%
Travel, lodging and entertainment		409			241			168			69.71	%			241			368		(127	)	-34.51	%
Other expense		2,300			1,863			437			23.46	%			1,863			1,744		119		6.82	%
Total noninterest expense	$	20,397		$	17,592		$	2,805			15.94	%		$	17,592		$	28,432	$	(10,840	)	-38.13	%

For the year ended December 31, 2021 compared to the year ended December 31, 2020:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $12.0 million compared to $10.1 million, an increase of $1.9 million, or 18.3%. The increase was attributable to overall increases in compensation to remain competitive, and partially due to our acquisition of Cornerstone Bank, which increased employee headcount.

For the year ended December 31, 2020 compared to the year ended December 31, 2019:

Column 1	Column 2	Column 3
	-	Salaries and employee benefits expense was $10.1 million compared to $21.3 million, an decrease of $11.1 million, or 52.4%. The decrease in 2020 was attributable to our one-time non-cash executive stock transaction.

Column 1	Column 2	Column 3
	-	Occupancy expense was $2.0 million compared to $1.7 million, an increase of $280,000, or 16.7%. The increase in 2020 was primarily due to 2020 being the first full year of depreciation for the renovation of our main branch and headquarters and increased rent at our full-service Tulsa location.

Financial Condition

The following discussion of our financial condition compares December 31, 2021, 2020, and 2019.

Total Assets

The increasing trend in total assets is primarily attributable to strong organic loan and retail deposit growth within the Oklahoma City market and
expansion into the Dallas/Fort Worth metropolitan area, as well as the addition of loans as a result of the acquisition of Watonga Bancshares on December 9, 2021. Total assets increased $334.2 million, or 32.87%, to $1.4 billion as of December
31, 2021, as compared to $1.0 billion as of December 31, 2020 and $866.4 million as of December 31, 2019.

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Loan Portfolio

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 December 31, 2021, 2020 and 2019, our gross loans were $1.0 billion, $839.1 million and $708.7 million, respectively.

The following table presents the balance and associated percentage of each major category in our loan portfolio as of December 31, 2021, December 31,
2020 and December 31, 2019:

	As of December 31,
	2021			2020		2019
	Amount			% of Total		Amount		% of Total		Amount			% of Total
	(Dollars in thousands)
Construction & development	$	169,322			16.4	%	$	107,855			12.8	%		$	70,628		10.0	%
1-4 family real estate		62,971			6.1	%		29,079			3.5	%			34,160		4.8	%
Commercial real estate - Other		339,655			32.9	%		290,489			34.6	%			273,278		38.5	%
Total commercial real estate		571,948			55.5	%		427,423			50.9	%			378,066		53.3	%
Commercial & industrial		361,974			35.1	%		351,248			41.9	%			260,762		36.8	%
Agricultural		73,010			7.1	%		50,519			6.0	%			57,945		8.2	%
Consumer		24,046			2.3	%		9,898			1.2	%			11,895		1.7	%
Gross Loans		1,030,978			100.0	%		839,088			100.0	%			708,668		100.0	%
Less unearned income, net		(2,577	)					(2,475	)						(1,364	)
Total Loans, net of unearned income		1,028,401						836,613							707,304
Allowance for loan and lease losses		(10,316	)					(9,639	)						(7,846	)
Net loans	$	1,018,085					$	826,974						$	699,458

During the second quarter of 2020, we began originating loans to qualified small businesses under the PPP administered by the SBA under the provisions of the CARES Act.
Included in our commercial & industrial balance at December 31, 2021 and 2020, are $18.7 million and $44.9 million of PPP loans, respectively.

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.

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The following tables show the contractual maturities of our gross loans as of the periods below:

	As of December 31, 2021
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	7,283		$	71,551		$	10,148	$	74,052		$	-		$	2,243	$	-	$	4,045	$	169,322
1-4 family real estate		3,259			21,322			11,979		11,674			926			7,375		-		6,436		62,971
Commercial real estate - other		5,156			97,309			59,227		143,906			413			19,230		-		14,414		339,655
Total commercial real estate		15,698			190,182			81,354		229,632			1,339			28,848		-		24,895		571,948
Commercial & industrial		24,249			142,553			16,346		145,654			20,474			12,047		-		651		361,974
Agricultural		2,529			17,441			5,156		39,305			623			1,587		-		6,369		73,010
Consumer		4,870			29			10,825		172			1,554			2,458		84		4,054		24,046
Gross loans	$	47,346		$	350,205		$	113,681	$	414,763		$	23,990		$	44,940	$	84	$	35,969	$	1,030,978

	As of December 31, 2020
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	14		$	47,649		$	885	$	58,387		$	-		$	920	$	-	$	-	$	107,855
1-4 family real estate		273			13,394			4,712		9,959			39			702		-		-		29,079
Commercial real estate - other		2,377			55,307			45,880		180,721			294			4,288		-		1,622		290,489
Total real estate		2,664			116,350			51,477		249,067			333			5,910		-		1,622		427,423
Commercial & industrial		16,914			194,520			39,593		93,707			11			6,503		-		-		351,248
Agricultural		5,141			27,215			2,534		14,420			60			541		-		608		50,519
Consumer		1,544			150			6,570		65			1,057			425		87		-		9,898
Gross loans	$	26,263		$	338,235		$	100,174	$	357,259		$	1,461		$	13,379	$	87	$	2,230	$	839,088

	As of December 31, 2019
	Due in One Year or Less		Due after One Year Through Five Years			Due after Five Years Through Fifteen Years		Due after Fifteen Years
	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Fixed Rate		Adjustable Rate			Fixed Rate		Adjustable Rate	Total
	(Dollars in thousands)
Construction & development	$	-		$	31,860		$	833	$	37,483		$	-		$	452	$	-	$	-	$	70,628
1-4 family real estate		282			9,598			3,843		19,676			43			718		-		-		34,160
Commercial real estate - other		1,849			23,533			23,194		219,390			335			3,168		-		1,809		273,278
Total real estate		2,131			64,991			27,870		276,549			378			4,338		-		1,809		378,066
Commercial & industrial		11,677			176,329			9,973		54,233			12			7,195		-		1,343		260,762
Agricultural		3,947			34,875			2,786		13,055			1,319			1,355		-		608		57,945
Consumer		2,042			-			4,824		159			3,958			511		89		312		11,895
Gross loans	$	19,797		$	276,195		$	45,453	$	343,996		$	5,667		$	13,399	$	89	$	4,072	$	708,668

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Allowance for Loan and Lease Losses

The allowance is based on management’s estimate of probable 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.

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 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.

The allowance was $10.3 million at December 31, 2021, $9.6 million at December 31, 2020 and $7.8 million at December 31, 2019. The increasing trend
was related to loan growth.

The following table provides an analysis of the activity in our allowance for the periods indicated:

	For the Year Ended December 31,
	2021			2020			2019
	(Dollars in thousands)
Balance at beginning of the period	$	9,639			$	7,846		$	7,832
Provision for loan losses		4,175				5,350			-
Charge-offs:
Construction & development		-				-			-
1-4 family real estate		-				-			(2	)
Commercial real estate - Other		-				-			-
Commercial & industrial		(3,750	)			(3,289	)		(4	)
Agricultural		-				(300	)		(11	)
Consumer		(68	)			(1	)		(1	)
Total charge-offs		(3,818	)			(3,590	)		(18	)
Recoveries:
Construction & development		-				-			-
1-4 family real estate		-				2			5
Commercial real estate - Other		-				-			-
Commercial & industrial		16				18			24
Agricultural		300				10			3
Consumer		4				3			-
Total recoveries		320				33			32
Net charge-offs		(3,498	)			(3,557	)		14
Balance at end of the period	$	10,316			$	9,639		$	7,846
Net charge-offs to average loans		0.39	%			0.43	%		0.00	%

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While the entire allowance is available to absorb losses from any and all loans, the following table represents management’s allocation of the
allowance by loan category, and the percentage of allowance in each category, for the periods indicated:

	As of December 31,
	2021		2020		2019
	Amount		Percent		Amount		Percent	Amount			Percent
	(Dollars in thousands)
Construction & development	$	1,695		16.4	%	$	1,239		12.8	%		$	782	10.0	%
1-4 family real estate		630		6.1	%		334		3.5	%			378	4.8	%
Commercial real estate - Other		3,399		32.9	%		3,337		34.6	%			3,025	38.5	%
Commercial & industrial		3,621		35.1	%		4,035		41.9	%			2,887	36.8	%
Agricultural		730		7.1	%		580		6.0	%			642	8.2	%
Consumer		241		2.3	%		114		1.2	%			132	1.7	%
Total	$	10,316		100.0	%	$	9,639		100.0	%		$	7,846	100.0	%

Nonperforming Assets

Loans are considered delinquent when principal or interest payments are past due 30 days or more. Delinquent loans may remain on accrual status
between 30 days and 90 days past due. Loans on which the accrual of interest has been discontinued are designated as nonaccrual loans. Typically, the accrual of interest on loans is discontinued when principal or interest payments are past due 90
days or when, in the opinion of management, there is a reasonable doubt as to collectability of the obligation. When loans are placed on nonaccrual status, all interest previously accrued but not collected is reversed against current period
interest income. Income on a nonaccrual loan is subsequently recognized only to the extent that cash is received and the loan’s principal balance is deemed collectible. Loans are restored to accrual status when loans become well-secured and
management believes full collectability of principal and interest is probable.

A loan is considered impaired when it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan
agreement. Impaired loans include loans on nonaccrual status and loans modified in a troubled debt restructuring, or TDR. Income from a loan on nonaccrual status is recognized to the extent cash is received and when the loan’s principal balance
is deemed collectible. Depending on a particular loan’s circumstances, we measure impairment of a loan based upon either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable
market price, or the fair value of the collateral less estimated costs to sell if the loan is collateral dependent. A loan is considered collateral dependent when repayment of the loan is based solely on the liquidation of the collateral. Fair
value, where possible, is determined by independent appraisals, typically on an annual basis. Between appraisal periods, the fair value may be adjusted based on specific events, such as if deterioration of quality of the collateral comes to our
attention as part of our problem loan monitoring process, or if discussions with the borrower lead us to believe the last appraised value no longer reflects the actual market for the collateral. The impairment amount on a collateral dependent
loan is charged off to the allowance if deemed not collectible and the impairment amount on a loan that is not collateral dependent is set up as a specific reserve.

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In cases where a borrower experiences financial difficulties and we make certain concessionary modifications to contractual terms, the loan is
classified as a TDR. Included in certain loan categories of impaired loans are TDRs on which we have granted certain material concessions to the borrower as a result of the borrower experiencing financial difficulties. The concessions granted by
us may include, but are not limited to: (1) a modification in which the maturity date, timing of payments or frequency of payments is modified, (2) an interest rate lower than the current market rate for new loans with similar risk, or (3) a
combination of the first two concessions.

If a borrower on a restructured accruing loan has demonstrated performance under the previous terms, is not experiencing financial difficulty and
shows the capacity to continue to perform under the restructured terms, the loan will remain on accrual status. Otherwise, the loan will be placed on nonaccrual status until the borrower demonstrates a sustained period of performance, which
generally requires six consecutive months of payments. Loans identified as TDRs are evaluated for impairment using the present value of the expected cash flows or the estimated fair value of the collateral, if the loan is collateral dependent.
The fair value is determined, when possible, by an appraisal of the property less estimated costs related to liquidation of the collateral. The appraisal amount may also be adjusted for current market conditions. Adjustments to reflect the
present value of the expected cash flows or the estimated fair value of collateral dependent loans are a component in determining an appropriate allowance, and as such, may result in increases or decreases to the provision for loan losses in
current and future earnings.

Real estate we acquire as a result of foreclosure or by deed-in-lieu of foreclosure is classified as other real estate owned, or OREO, until sold,
and is initially recorded at fair value less costs to sell when acquired, establishing a new cost basis.

Nonperforming loans include nonaccrual loans, loans past due 90 days or more and still accruing interest and loans modified under TDRs that are not
performing in accordance with their modified terms. Nonperforming assets consist of nonperforming loans plus OREO. Loans accounted for on a nonaccrual basis were $9.9 million as of December 31, 2021, $14.6 million as of December 31, 2020 and $1.8
million as of December 31, 2019. OREO was $0 as of December 31, 2021, December 31, 2020 and December 31, 2019.

The following table presents information regarding nonperforming assets as of the dates indicated.

	As of December 31,
	2021			2020			2019
	(Dollars in thousands)
Nonaccrual loans	$	9,885			$	14,575		$	1,809
Troubled-debt restructurings (1)		-				-			912
Accruing loans 90 or more days past due		496				1,960			612
Total nonperforming loans		10,381				16,535			3,333
Other real estate owned		-				-			-
Total nonperforming assets	$	10,381			$	16,535		$	3,333
Ratio of nonperforming loans to total loans		1.01	%			1.98	%		0.47	%
Ratio of nonaccrual loans to total loans		0.96	%			1.74	%		0.26	%
Ratio of allowance for loan losses to total loans		1.00	%			1.15	%		1.11	%
Ratio of allowance for loan losses to nonaccrual loans		104.36	%			66.13	%		433.72	%
Ratio of nonperforming assets to total assets		0.77	%			1.63	%		0.38	%

(1) $1.4 million, $12.98 million and $1.81 million of TDRs as of December 31, 2021, December 31, 2020 and December 31, 2019, respectively

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The following tables present an aging analysis of loans as of the dates indicated.

		As of December 31, 2021
		Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development		$	-		$	-		$	-	$	-		$	-		$	169,322	$	169,322
1-4 family real estate			-			-			-		-			-			62,971		62,971
Commercial real estate - Other			-			174			-		-			174			339,481		339,655
Commercial & industrial			-			19			501		401			520			361,454		361,974
Agricultural			-			-			77		77			77			72,933		73,010
Consumer			48			15			18		18			81			23,965		24,046
Total		$	48		$	208		$	596	$	496		$	852		$	1,030,126	$	1,030,978

	As of December 31, 2020
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
	(Dollars in thousands)
Construction & development	$	714		$	-		$	-	$	-		$	714		$	107,141	$	107,855
1-4 family real estate		-			-			-		-			-			29,079		29,079
Commercial real estate - Other		1,444			-			1,960		1,960			3,404			287,085		290,489
Commercial & industrial		-			-			-		-			-			351,248		351,248
Agricultural		-			-			-		-			-			50,519		50,519
Consumer		193			-			-		-			193			9,705		9,898
Total	$	2,351		$	-		$	1,960	$	1,960		$	4,311		$	834,777	$	839,088

	As of December 31, 2019
	Loans 30-59 days past due		Loans 60-89 days past due			Loans 90+ days past due		Loans 90+ days past due and accruing	Total Past Due Loans		Current			Total loans
Construction & development	$	-		$	-		$	-	$	-		$	-		$	70,628	$	70,628
1-4 family commerical		-			-			-		-			-			34,160		34,160
Commercial real estate - Other		-			-			-		-			-			273,278		273,278
Commercial & industrial		-			-			14		14			14			260,748		260,762
Agricultural		-			-			598		598			598			57,347		57,945
Consumer		90			-			-		-			90			11,805		11,895
Total	$	90		$	-		$	612	$	612		$	702		$	707,966	$	708,668

In addition to the past due and nonaccrual criteria, the Company also evaluates loans according to its internal risk grading system. Loans are
segregated between pass, watch, special mention, and substandard categories. The definitions of those categories are as follows:

Pass: These loans generally conform to Bank policies, are characterized by policy-conforming advance rates
on collateral, and have well-defined repayment sources. In addition, these credits are extended to borrowers and guarantors with a strong balance sheet and either substantial liquidity or a reliable income history.

Watch: These loans are still considered “Pass” credits; however, various factors such as industry stress,
material changes in cash flow or financial conditions, or deficiencies in loan documentation, or other risk issues determined by the lending officer, Commercial Loan Committee or CQC warrant a heightened sense and frequency of monitoring.

Special mention: These loans have observable weaknesses or evidence imprudent handling or structural issues.
The weaknesses require close attention, and the remediation of those weaknesses is necessary. No risk of probable loss exists. Credits in this category are expected to quickly migrate to “Watch” or “Substandard” as this is viewed as a transitory
loan grade.

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Substandard: These loans are not adequately protected by the sound worth and debt service capacity of the
borrower, but may be well-secured. The loans have defined weaknesses relative to cash flow, collateral, financial condition or other factors that might jeopardize repayment of all of the principal and interest on a timely basis. There is the
possibility that a future loss will occur if weaknesses are not remediated.

Substandard loans totaled $24.7 million as of December 31, 2021, an increase of $1.6 million compared to December 31, 2020. Substandard loans totaled
$23.1 million as of December 31, 2020, an increase of $12.0 million compared to December 31, 2019. The increase primarily related to two commercial and industrial relationships comprised of one note each totaling $14.4 million with no specific
reserves and two commercial real estate relationships comprised one note each totaling $5.0 million with no specific reserves.

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Outstanding loan balances categorized by internal risk grades as of the periods indicated are summarized as follows:

	As of December 31, 2021
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	169,322		$	-		$	-	$	-	$	169,322
1-4 family real estate		62,971			-			-		-		62,971
Commercial real estate - Other		282,268			14,976			27,112		15,299		339,655
Commercial & industrial		341,661			4,658			6,300		9,355		361,974
Agricultural		72,295			255			460		-		73,010
Consumer		24,000			-			-		46		24,046
Total	$	952,517		$	19,889		$	33,872	$	24,700	$	1,030,978

	As of December 31, 2020
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	107,855		$	-		$	-	$	-	$	107,855
1-4 family real estate		28,711			368			-		-		29,079
Commercial real estate - Other		248,194			24,155			10,086		8,054		290,489
Commercial & industrial		328,656			7,691			300		14,601		351,248
Agricultural		50,051			-			-		468		50,519
Consumer		9,898			-			-		-		9,898
Total	$	773,365		$	32,214		$	10,386	$	23,123	$	839,088

	As of December 31, 2019
	Pass		Watch			Special mention		Substandard	Total
	(Dollars in thousands)
Construction & development	$	70,628		$	-		$	-	$	-	$	70,628
1-4 family real estate		33,622			538			-		-		34,160
Commercial real estate - Other		267,437			-			-		5,841		273,278
Commercial & industrial		241,176			5,312			11,524		2,750		260,762
Agricultural		53,290			-			2,128		2,527		57,945
Consumer		11,895			-			-		-		11,895
Total	$	678,048		$	5,850		$	13,652	$	11,118	$	708,668

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Troubled Debt Restructurings

TDRs are defined as those loans in which a bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to
the borrower that it would not otherwise consider. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due from the borrower in accordance with
original contractual terms of the loan. Loans with insignificant delays or insignificant short-falls in the amount of payments expected to be collected are not considered to be impaired. Loans defined as individually impaired, based on applicable
accounting guidance, include larger balance nonperforming loans and TDRs.

The CARES Act includes a provision that permits a financial institution to elect to suspend temporarily troubled debt restructuring accounting under
ASC Subtopic 310-40 in certain circumstances (“section 4013”). To be eligible under section 4013, a loan modification must be (1) related to COVID-19; (2) executed on a loan that was not more than 30 days past due as of December 31, 2019; and (3)
executed between March 1, 2020, and the earlier of (A) 60 days after the date of termination of the National Emergency or (B) January 1, 2022. In response to this section of the CARES Act, the federal banking agencies issued a revised interagency
statement on April 7, 2020 that, in consultation with the Financial Accounting Standards Board, confirmed that for loans not subject to section 4013, short-term modifications made on a good faith basis in response to COVID-19 to borrowers who
were current prior to any relief are not troubled debt restructurings under ASC Subtopic 310-40. As of December 31, 2021, one loan totaling $3.1 million was modified, related to COVID-19, which was not considered a troubled debt restructuring.

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The following table presents loans restructured as TDRs as of December 31, 2021, December 31, 2020 and December 31, 2019.

	As of December 31, 2021
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post- Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial real estate		1		$	1,402		$	1,402		-
Total		1		$	1,402		$	1,402	$	-

	As of December 31, 2020
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post- Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial & industrial		1		$	10,886		$	10,886	$	-
Agricultural		1			469			469		-
Commercial real estate		1			1,622			1,622		-
Total		3		$	12,977		$	12,977	$	-

	As of December 31, 2019
	Number of Contracts		Pre-Modification Outstanding Recorded Investment			Post- Modification Outstanding Recorded Investment		Specific reserves allocated
	(Dollars in thousands)
Commercial & industrial		1		$	1,809		$	1,809	$	26
Agricultural		2			912			912		-
Total		3		$	2,721		$	2,721	$	26

There were no payment defaults with respect to loans modified as TDRs as of December 31, 2021, 2020, and 2019.

Impairment analyses are prepared on TDRs in conjunction with the normal allowance process. TDRs restructured during the years ended December 31,
2021, 2020, and 2019 required $0, $0 and $26,000 in specific reserves, respectively.

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The following table presents total TDRs, both in accrual and nonaccrual status as of the periods indicated:

	As of December 31, 2021		As of December 31, 2020			As of December 31, 2019
	Number of contracts		Amount			Number of contracts	Amount	Number of contracts		Amount
	(Dollars in thousands)		(Dollars in thousands)
Accrual		-		$	-		-	$	-		2	$	912
Nonaccrual		1			1,402		3		12,977		1		1,809
Total		1		$	1,402		3	$	12,977		3	$	2,721

Deposits

We gather deposits primarily through our twelve branch locations and online though 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 under the standard FDIC insurance maximum of $250,000, and placed at a network of banks across the United States.

Total deposits as of December 31, 2021, 2020, and 2019 were $1.2 billion, $905.5 million and $757.5 million, respectively. The increase was primarily
due to acquired deposits and organic deposit growth. 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.

	December 31,		December 31,		December 31,
	2021		2020		2019
	Amount		Percentage of Total		Amount		Percentage of Total	Amount			Percentage of Total
	(Dollars in thousands)
Demand deposits	$	366,705		30.1	%	$	246,569		27.2	%		$	219,221	29.0	%
Interest-bearing transaction deposits		583,389		47.9	%		392,784		43.4	%			262,974	34.7	%
Savings deposits		89,778		7.4	%		54,008		6.0	%			72,750	9.6	%
Time deposits ($250,000 or less)		132,690		10.9	%		135,811		15.0	%			146,834	19.4	%
Time deposits (more than $250,000)		44,909		3.7	%		76,342		8.4	%			55,704	7.3	%
Total interest-bearing		850,766		69.9	%		658,945		72.8	%			538,262	71.0	%
Total deposits	$	1,217,471		100.0	%	$	905,514		100.0	%		$	757,483	100.0	%

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The following table summarizes our average deposit balances and weighted average rates for the years ended December 31, 2021, 2020, and 2019:

	For the Year Ended December 31,		For the Year Ended December 31,		For the Year Ended December 31,
	2021		2020		2019
	Average Balance		Weighted Average Rate		Average Balance		Weighted Average Rate	Average Balance			Weighted Average Rate
	(Dollars in thousands)
Demand deposits	$	288,446		0.00	%	$	256,431		0.00	%		$	192,562	0.00	%
Interest-bearing transaction deposits		375,048		0.34	%		318,713		1.50	%			227,959	3.66	%
Savings deposits		55,220		0.23	%		58,806		0.56	%			67,617	1.30	%
Time deposits		205,437		0.81	%		207,442		1.65	%			208,375	2.14	%
Total interest-bearing		635,705		0.48	%		584,961		1.05	%			503,951	1.89	%
Total deposits	$	924,151		0.33	%	$	841,392		0.73	%		$	696,513	1.37	%

The following tables set forth the maturity of time deposits as of the dates indicated below:

	As of December 31, 2021 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits ($250,000 or less)	$	32,680		$	37,016		$	31,197	$	31,797	$	132,690
Time deposits (more than $250,000)		18,234			5,932			10,729		10,014		44,909
Total time deposits	$	50,914		$	42,948		$	41,926	$	41,811	$	177,599

	As of December 31, 2020 Maturity Within:
	Three Months		Three to Six Months			Six to 12 Months		After 12 Months	Total
	(Dollars in thousands)
Time deposits ($250,000 or less)	$	29,730		$	25,894		$	54,410	$	25,777	$	135,811
Time deposits (more than $250,000)		11,119			7,845			35,770		21,608		76,342
Total time deposits	$	40,849		$	33,739		$	90,180	$	47,385	$	212,153

Liquidity

Liquidity refers to the measure of our ability to meet the cash flow requirements of depositors and borrowers, while at the same time meeting our
operating, capital and strategic cash flow needs, all at a reasonable cost. 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.

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.

Our short-term and long-term liquidity requirements are primarily met through cash flow from operations, redeployment of prepaying and maturing
balances in our loan portfolios, and increases in customer deposits. Other alternative sources of funds will supplement these primary sources to the extent necessary to meet additional liquidity requirements on either a short-term or long-term
basis.

As of December 31, 2021, 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 $78.1 million as of December 31, 2021 and $64.8 million as of December 31, 2020.

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Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal and state banking regulators. Failure to meet regulatory
capital requirements may result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our financial statements. Under capital adequacy guidelines and the
regulatory framework for “prompt corrective action” (described below), the Bank must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under regulatory
accounting policies. The capital amounts and classifications are subject to qualitative judgments by the federal banking regulators about components, risk weightings and other factors. Qualitative measures established by regulation to ensure
capital adequacy required the Bank to maintain minimum amounts and ratios of Common Equity Tier 1, or CET1, capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets, referred to as the
“leverage ratio.” For further information, see “Supervision and Regulation – Regulatory Capital Requirements” and “Supervision and Regulation – Prompt Corrective Action Framework.”

In the wake of the global financial crisis of 2008 and 2009, the role of capital has become fundamentally more important, as banking regulators have
concluded that the amount and quality of capital held by banking organizations was insufficient to absorb losses during periods of severely distressed economic conditions. The Dodd-Frank Act and banking regulations promulgated by the U.S. federal
banking regulators to implement Basel III have established strengthened capital standards for banks and bank holding companies and require more capital to be held in the form of common stock. In addition, the Basel III regulations implement a
concept known as the “capital conservation buffer.” In general, banks, bank holding companies with more than $3.0 billion in assets and bank holding companies with publicly-traded equity are required to hold a buffer of CET1 capital equal to 2.5%
of risk-weighted assets over each minimum capital ratio in order to avoid being subject to limits on capital distributions (e.g., dividends, stock buybacks, etc.) and certain discretionary bonus payments to executive officers.

As of December 31, 2021, the FDIC categorized the Bank as “well-capitalized” under the prompt corrective action framework. There have been no
conditions or events since December 31, 2021 that management believes would change this classification.

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The table below also summarizes the capital requirements applicable to the Bank in order to be considered “well-capitalized” from a regulatory
perspective, as well as the Bank’s capital ratios as of December 31, 2021, 2020, and 2019. The Bank exceeded all regulatory capital requirements under Basel III and the Bank was considered to be “well-capitalized” as of the dates reflected in the
tables below.

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2021
Total capital (to risk-weighted assets)
Bank7 Corp.	$	127,946		12.54	%	$	107,126		10.50	%			N/A	N/A
Bank		127,844		12.54	%		107,020		10.50	%		$	101,924	10.00	%
Tier 1 capital (to risk-weighted assets)
Bank7 Corp.		117,631		11.53	%		86,721		8.50	%			N/A	N/A
Bank		117,528		11.53	%		86,635		8.50	%			81,539	8.00	%
CET 1 capital (to risk-weighted assets)
Bank7 Corp.		117,631		11.53	%		71,417		7.00	%			N/A	N/A
Bank		117,528		11.53	%		71,347		7.00	%			66,250	6.50	%
Tier 1 capital (to average assets)
Bank7 Corp.		117,631		10.56	%		N/A		N/A				N/A	N/A
Bank		117,528		10.55	%		N/A		N/A				55,714	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
	(Dollars in thousands)
As of December 31, 2020
Total capital (to risk-weighted assets)
Bank7 Corp.	$	115,375		14.73	%	$	82,216		10.50	%			N/A	N/A
Bank		115,335		14.75	%		82,114		10.50	%		$	78,204	10.00	%
Tier 1 capital (to risk-weighted assets)
Bank7 Corp.		105,736		13.50	%		66,556		8.50	%			N/A	N/A
Bank		105,696		13.51	%		66,473		8.50	%			62,563	8.00	%
CET 1 capital (to risk-weighted assets)
Bank7 Corp.		105,736		13.50	%		54,811		7.00	%			N/A	N/A
Bank		105,696		13.51	%		54,743		7.00	%			50,832	6.50	%
Tier 1 capital (to average assets)
Bank7 Corp.		105,736		10.78	%		N/A		N/A				N/A	N/A
Bank		105,696		10.78	%		N/A		N/A				49,041	5.00	%

	Actual		With Capital Conservation Buffer		Minimum to be “Well- Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio	Amount			Ratio
As of December 31, 2019:
Total capital (to risk-weighted assets)
Bank7 Corp.	$	105,137		15.25	%	$	72,393		10.50	%			N/A	N/A
Bank		106,148		15.42	%		72,287		10.50	%		$	68,845	10.00	%
Tier 1 capital (to risk-weighted assets)
Bank7 Corp.		97,291		14.11	%		58,604		8.50	%			N/A	N/A
Bank		98,302		14.28	%		58,518		8.50	%			55,076	8.00	%
CET 1 capital (to risk-weighted assets)
Bank7 Corp.		97,291		14.11	%		48,262		7.00	%			N/A	N/A
Bank		98,302		14.28	%		48,192		7.00	%			44,749	6.50	%
Tier 1 capital (to average assets)
Bank7 Corp.		97,291		11.53	%		N/A		N/A				N/A	N/A
Bank		98,302		11.65	%		N/A		N/A				42,241	5.00	%

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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 to $127.4 million as of December 31, 2021, compared to $107.3 million as of December 31, 2020 and $100.1 million as of December 31, 2019. The increases were driven by retained capital from net
income during the periods.

Contractual Obligations

The following tables contain supplemental information regarding our total contractual obligations as of December 31, 2021:

	Payments Due as of December 31, 2021
	Within One Year		One to Three Years			Three to Five Years		After Five Years	Total
	(Dollars in thousands)
Deposits without a stated maturity	$	1,039,872		$	-		$	-	$	-	$	1,039,872
Time deposits		135,788			39,904			1,907		-		177,599
Securities sold under agreements to repurchase		-			-			-		-		-
Operating lease commitments		611			782			241		-		1,634
Total contractual obligations	$	1,176,271		$	40,686		$	2,148	$	-	$	1,219,105

We believe that we will be able to meet our contractual obligations as they come due through the maintenance of adequate cash levels. We expect to
maintain adequate cash levels through profitability, loan repayment and maturity activity and continued deposit gathering activities. We have in place various borrowing mechanisms for both short-term and long-term liquidity needs.

Off-Balance Sheet Arrangements

We are a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of our customers.
These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated
balance sheet. The contractual or notional amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments. To control this credit risk, the Company uses the same underwriting standards as it
uses for loans recorded on the balance sheet.

Loan commitments are agreements to lend to a customer, as long as there is no violation of any condition established in the contract. Standby letters
of credit are conditional commitments issued by the Bank to guarantee the performance of the customer to a third party. They are intended to be disbursed, subject to certain conditions, upon request of the borrower.

The following table summarizes commitments as of the dates presented.

	As of December 31,
	2021		2020			2019
	(Dollars in thousands)
Commitments to extend credit	$	200,393		$	206,520		$	191,459
Standby letters of credit		5,809			2,366			3,338
Total	$	206,202		$	208,886		$	194,797

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Critical Accounting Policies and Estimates

Our accounting and reporting policies conform to GAAP and conform to general practices within the industry in which we operate. To prepare financial
statements in conformity with GAAP, management makes estimates, assumptions and judgments based on available information. These estimates, assumptions and judgments affect the amounts reported in the financial statements and accompanying notes.
These estimates, assumptions and judgments are based on information available as of the date of the financial statements and, as this information changes, actual results could differ from the estimates, assumptions and judgments reflected in the
financial statement. In particular, management has identified several accounting policies that, due to the estimates, assumptions and judgments inherent in those policies, are critical in understanding our financial statements.

The JOBS Act permits us an extended transition period for complying with new or revised accounting standards affecting public companies. We have
elected to take advantage of this extended transition period, which means that the financial statements included in this report, as well as any financial statements that we file in the future, will not be subject to all new or revised accounting
standards generally applicable to public companies for the transition period for so long as we remain an emerging growth company or until we affirmatively and irrevocably opt out of the extended transition period under the JOBS Act.

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 found in Note 1 of the Company’s consolidated financial statements as of December 31, 2021.

Allowance for Loan and Lease Losses

The allowance is based on management’s estimate of probable 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
and changes in the composition of the loan portfolio. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’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.

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 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.

Goodwill and Intangibles

Intangible assets totaled $1.6 million and goodwill, net of accumulated amortization totaled $8.5 million for the year ended December 31, 2021, compared to intangible
assets of $572,000 and goodwill, net of accumulated amortization of $1.0 million for the year ended December 31, 2020. The increase is due to core deposit intangible acquired and goodwill recognized as a result of the acquisition of Watonga
Bancshares, Inc. on December 9, 2021.

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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.

Income Taxes

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.

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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.