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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification Number)
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(Address of principal executive offices) | (Zip Code) |
Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Large accelerated filer ☐
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Accelerated filer ☐
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Smaller reporting company
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Emerging growth company
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Page
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PART I.
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Item 1.
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1
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Item 1A.
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10
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Item 1B.
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19
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Item 1C.
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19
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Item 2.
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19
|
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Item 3.
|
20
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Item 4.
|
20
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PART II.
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||
Item 5.
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20
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Item 6.
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20
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Item 7.
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23
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Item 7A.
|
42
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Item 8.
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44
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Item 9.
|
98 | |
Item 9A.
|
98 | |
Item 9B.
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98
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Item 9C.
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98 | |
PART III.
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||
Item 10.
|
99 | |
Item 11.
|
99
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Item 12.
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99 | |
Item 13.
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99 | |
Item 14.
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99
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PART IV.
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||
Item 15.
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99 | |
Item 16.
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101
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|
102 |
•
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the development of deep business relationships with our commercial customers and their principals;
|
•
|
disciplined growth without compromising our asset quality or credit culture;
|
•
|
drawing upon years of executive level experience at multi-billion dollar banks;
|
•
|
efficiencies gained by adherence to automated and repeatable processes; and
|
•
|
investing in our people and technology.
|
• |
that a majority of our board of directors consists of “independent directors,” as defined under NASDAQ rules;
|
• |
that director nominations are selected, or recommended for the board of directors’ selection, by either (i) the independent directors constituting a majority of the board of directors’ independent directors
in a vote in which only independent directors participate, or (ii) a nominating and corporate governance committee that is composed entirely of independent directors; and
|
• |
that we have a compensation committee that is composed entirely of independent directors.
|
•
|
Continuous 24/7/365 monitoring of our information systems;
|
•
|
Scanning of our information systems;
|
•
|
Continuous updating and testing processes;
|
•
|
Performing vulnerability assessments; and
|
•
|
Maintaining up-to-date firewall and anti-virus protections.
|
• |
historical and projected financial condition, liquidity and results of operations;
|
• |
our capital levels and requirements;
|
• |
statutory and regulatory prohibitions and other limitations;
|
• |
any contractual restriction on our ability to pay cash dividends, including pursuant to the terms of any of our credit agreements or other borrowing arrangements;
|
• |
business strategy;
|
• |
tax considerations;
|
• |
any acquisitions or potential acquisitions;
|
• |
general economic conditions; and
|
• |
other factors deemed relevant by the Board of Directors.
|
Plan
|
Number of
securities to be
issued upon
exercise of
outstanding
options and
rights
|
Weighted average
exercise price
|
Number of
securities
remaining
available for
issuance
under plan
|
|||||||||
Equity compensation plans approved by shareholders
|
432,400
|
$
|
17.52
|
637,371
|
||||||||
Equity compensation plans not approved by shareholders
|
-
|
-
|
-
|
• |
our ability to effectively execute our expansion strategy and manage our growth, including identifying and consummating suitable acquisitions;
|
• |
business and economic conditions, particularly those affecting our market areas of Oklahoma, the Dallas/Fort Worth metropolitan area and Kansas, including a decrease in or the volatility of oil and gas prices
or agricultural commodity prices within the region;
|
•
|
the geographic concentration of our markets in Oklahoma, the Dallas/Fort Worth metropolitan area and Kansas;
|
•
|
high concentrations of loans secured by real estate and energy located in our market areas;
|
• |
risks associated with our commercial loan portfolio, including the risk for deterioration in value of the general business assets that secure such loans;
|
•
|
risks related to the significant amount of credit that we have extended to a limited number of borrowers;
|
•
|
our ability to maintain our reputation;
|
•
|
our ability to successfully manage our credit risk and the sufficiency of our allowance;
|
•
|
reinvestment risks associated with a significant portion of our loan portfolio maturing in one year or less;
|
•
|
our ability to attract, hire and retain qualified management personnel;
|
• |
our dependence on our management team, including our ability to retain executive officers and key employees and their customer and community relationships;
|
•
|
interest rate fluctuations, which could have an adverse effect on our profitability;
|
•
|
competition from banks, credit unions and other financial services providers;
|
•
|
system failures, service denials, cyber-attacks and security breaches;
|
•
|
our ability to maintain effective internal control over financial reporting;
|
• |
employee error, fraudulent activity by employees or customers and inaccurate or incomplete information about our customers and counterparties;
|
• |
increased capital requirements imposed by banking regulators, which may require us to raise capital at a time when capital is not available on favorable terms or at all;
|
•
|
costs and effects of litigation, investigations or similar matters to which we may be subject, including any effect on our reputation;
|
•
|
severe weather, acts of god, acts of war, pandemics or terrorism;
|
• |
compliance with governmental and regulatory requirements;
|
• |
changes in the laws, rules, regulations, interpretations or policies relating to financial institutions, accounting, tax, trade, monetary and fiscal matters, including the policies of the Federal Reserve and
as a result of initiatives of the current and future administrations; and
|
•
|
other factors that are discussed in the section entitled “Risk Factors,” beginning on page 10.
|
|
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
|
%
|
(1) |
Taxable-equivalent yield of 2.24% as of December 31, 2023, applying a 24.0% effective tax rate
|
(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.
|
|
We continued to experience strong asset growth for the year ended December 31, 2023 compared to the year ended December 31, 2022:
|
- |
Total interest income on loans increased $35.4 million, or 47.6%, to $109.8 million, which was attributable to a $172.2 million increase in the average balance of loans to $1.32 billion during the year ended
2023 as compared with the average balance of loans of $1.14 billion for the year ended 2022, and increased loan yields as discussed below;
|
- |
Yields on our interest-earning assets totaled 7.31%, an increase of 185 basis points which was attributable to higher loan rates of 184 basis points, an increase in yield on short term investments of 362
basis points, and an increase in yield on taxable debt securities of 25 basis points; and
|
- |
Net interest margin for the years ended 2023 and 2022 was 4.97% and 4.82%, respectively.
|
- |
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;
|
- |
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
|
- |
Net interest margin for the years ended 2022 and 2021 was 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
|
(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.
|
|
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
|
%
|
- |
The provision for credit losses increased from $4.5 million to $21.1 million; and
|
- |
The allowance as a percentage of loans increased by 29 basis points to 1.44%.
|
- |
Increases are related to the single loan customer discussed in the 2023 Overview.
|
- |
The provision for credit losses increased from $4.2 million to $4.5 million; and
|
- |
The allowance as a percentage of loans increased by 16 basis points to 1.16%.
|
|
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
|
%
|
- |
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.
|
|
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
|
%
|
- |
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.
|
- |
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.
|
|
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
|
|
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
|
|
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
|
%
|
|
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
|
%
|
|
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
|
%
|
|
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
|
|
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
|
|
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
|
%
|
|
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
|
%
|
|
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
|
|
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
|
%
|
|
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
|
|
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
|
As of December 31,
|
|||||||||||||||||||||||||
2023
|
2022
|
2021
|
|||||||||||||||||||||||
Change in Interest Rates
(Basis Points)
|
Percent Change
in Net Interest
Income
|
Percent
Change in Fair
Value of Equity
|
Percent Change
in Net Interest
Income
|
Percent
Change in Fair
Value of Equity
|
Percent Change
in Net Interest
Income
|
Percent
Change in Fair
Value of Equity
|
|||||||||||||||||||
+400
|
23.35
|
%
|
17.72
|
%
|
13.41
|
%
|
20.90
|
%
|
32.34
|
%
|
23.35
|
%
|
|||||||||||||
+300
|
19.04
|
%
|
16.63
|
%
|
9.96
|
%
|
20.13
|
%
|
23.63
|
%
|
21.37
|
%
|
|||||||||||||
+200
|
14.74
|
%
|
15.45
|
%
|
6.50
|
%
|
19.17
|
%
|
14.88
|
%
|
19.21
|
%
|
|||||||||||||
+100
|
10.42
|
%
|
14.20
|
%
|
2.99
|
%
|
18.04
|
%
|
6.07
|
%
|
16.86
|
%
|
|||||||||||||
Base
|
5.76
|
%
|
12.72
|
%
|
-0.77
|
%
|
16.91
|
%
|
-2.80
|
%
|
14.33
|
%
|
|||||||||||||
-100
|
0.73
|
%
|
11.22
|
%
|
-4.82
|
%
|
15.25
|
%
|
-5.38
|
%
|
11.30
|
%
|
|
Page
|
45 | |
|
|
Consolidated Financial Statements:
|
|
48 |
|
49 |
|
50 |
|
51 | |
52 |
Shareholders, Board of Directors, and Audit Committee
Bank7 Corp.
|
•
|
Obtained an understanding of the Company’s process for establishing the ACL
|
•
|
Evaluated and tested the design of internal controls over the reliability and accuracy of data used to calculate and estimate the components of the ACL
including:
|
o
|
Loan data completeness and accuracy
|
o
|
Grouping of loans by segment
|
o
|
Model inputs including PD, LGD, and discounted cash flow
|
o
|
Model assumptions
|
o
|
Establishment of qualitative factors
|
o
|
Loan risk ratings
|
•
|
Tested the completeness and accuracy of the data utilized in the ACL
|
•
|
Tested the model’s mathematical accuracy
|
•
|
Evaluated the relevance and reliability of data and assumptions used in the estimate
|
•
|
Evaluated the qualitative and economic forecast adjustments to the historical loss rates, including assessing the basis for the adjustments and the
reasonableness of the significant assumptions
|
•
|
Evaluated credit quality trends in delinquencies, non-accruals, charge offs, and loan risk gradings
|
•
|
Tested the internal loan review function and evaluated the reasonableness of loan grades
|
Shareholders, Board of Directors, and Audit Committee
Bank7 Corp.
|
•
|
Evaluated the reasonableness of specific allocations associated with individually evaluated loans
|
•
|
Evaluated the overall reasonableness of the ACL and compared to trends identified within peer group
|
•
|
Evaluated the reasonableness of methodology utilized by a third party in determining loss driver economic performance variables
|
•
|
Evaluated the accuracy and completeness of Topic 326 disclosures in the financial statements
|
•
|
Obtained an understanding of the Company’s process for preparing the oil and gas reserve estimates
|
•
|
Identified inputs and assumptions that were significant to the period end determination of proved reserve volumes and tested management’s process of
determining the significant inputs and assumptions, as follows:
|
o
|
Assessed the reasonableness of operating cost inputs by comparing the forecasted amount to current year actual costs
|
o
|
Assessed the reasonableness of forecasted capital expenditures by comparing to management’s planned future investment
|
o
|
Assessed the reasonableness of forecasted production estimates by (i) comparing forecasted production amounts to actual results and (ii) comparing
forecasted production amounts in the current year reserve report to the actual historical production amounts in the current year
|
o
|
Vouched the working and royalty interests used in the reserve report to underlying ownership records
|
o
|
Assessed the reasonableness of pricing inputs and market differentials by comparing to third-party sources and actual results in the current year
|
|
December 31,
|
|||||||
Assets | 2023 |
2022 |
||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Interest-bearing time deposits in other banks
|
|
|
||||||
Available-for-sale debt securities |
||||||||
Loans, net of allowance for credit losses of $
|
|
|
||||||
Loans held for sale
|
|
|
||||||
Premises and equipment, net
|
|
|
||||||
Nonmarketable equity securities
|
|
|
||||||
Core deposit intangibles
|
|
|
||||||
Goodwill
|
||||||||
Interest receivable and other assets
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Deposits
|
||||||||
Noninterest-bearing
|
$
|
|
$
|
|
||||
Interest-bearing
|
|
|
||||||
Total deposits
|
|
|
||||||
Income taxes payable |
||||||||
Interest payable and other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Shareholders’ equity
|
||||||||
Common stock, $
|
|
|
||||||
Additional paid-in capital
|
|
|
||||||
Retained earnings
|
|
|
||||||
Accumulated other comprehensive loss
|
( |
) | ( |
) | ||||
Total shareholders’ equity
|
|
|
||||||
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Year ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Interest Income
|
||||||||||||
Loans, including fees
|
$
|
|
$
|
|
$
|
|
||||||
Interest-bearing time deposits in other banks
|
|
|
|
|||||||||
Debt securities, taxable
|
||||||||||||
Debt securities, tax-exempt
|
||||||||||||
Other interest and dividend income
|
|
|
|
|||||||||
Total interest income
|
|
|
|
|||||||||
Interest Expense
|
||||||||||||
Deposits
|
|
|
|
|||||||||
Total interest expense
|
|
|
|
|||||||||
Net Interest Income
|
|
|
|
|||||||||
Provision for Credit Losses
|
|
|
|
|||||||||
Net Interest Income After Provision for Credit Losses
|
|
|
|
|||||||||
Noninterest Income
|
||||||||||||
Mortgage lending income
|
||||||||||||
Loss on sales, prepayments, and calls of available-for-sale debt securities
|
( |
) | ( |
) | ||||||||
Service charges on deposit accounts
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total noninterest income
|
|
|
|
|||||||||
Noninterest Expense
|
||||||||||||
Salaries and employee benefits
|
|
|
|
|||||||||
Furniture and equipment
|
|
|
|
|||||||||
Occupancy
|
|
|
|
|||||||||
Data and item processing
|
|
|
|
|||||||||
Accounting, marketing and legal fees
|
|
|
|
|||||||||
Regulatory assessments
|
|
|
|
|||||||||
Advertising and public relations
|
|
|
|
|||||||||
Travel, lodging and entertainment
|
|
|
|
|||||||||
Other
|
|
|
|
|||||||||
Total noninterest expense
|
|
|
|
|||||||||
Income Before Taxes
|
|
|
|
|||||||||
Income tax expense
|
|
|
|
|||||||||
Net Income
|
$
|
|
$
|
|
$
|
|
||||||
Earnings per common share - basic
|
$
|
|
$
|
|
$
|
|
||||||
Earnings per common share - diluted
|
|
|
|
|||||||||
Weighted average common shares outstanding - basic
|
|
|
|
|||||||||
Weighted average common shares outstanding - diluted
|
|
|
|
|||||||||
Other Comprehensive Income (Loss) |
||||||||||||
Unrealized gains (losses) on securities, net of (tax expense) tax benefit of ($
|
$ | $ | ( |
) | $ | |||||||
Reclassification adjustment for realized loss included in net income net of tax of $
|
||||||||||||
Other comprehensive
income(loss)
|
$ | $ | ( |
) | $ | |||||||
Comprehensive Income | $ | $ | $ |
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Common Stock (Shares)
|
||||||||||||
Balance at beginning of period
|
|
|
|
|||||||||
Exercise of employee stock options
|
||||||||||||
Shares issued for restricted stock units
|
|
|
|
|||||||||
Shares acquired and canceled
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Balance at end of period
|
|
|
|
|||||||||
Common Stock (Amount)
|
||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Shares issued for restricted stock units
|
|
|
|
|||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
||||||
Additional Paid-in Capital
|
||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Shares purchased and retired for restricted stock units
|
( |
) | ( |
) | ( |
) | ||||||
Exercise of stock options
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|||||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
||||||
Retained Earnings
|
||||||||||||
Balance at beginning of period
|
$
|
|
$
|
|
$
|
|
||||||
Net income
|
|
|
|
|||||||||
|
( |
) | ||||||||||
Cash dividends declared ($
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Balance at end of period
|
$
|
|
$
|
|
$
|
|
||||||
Accumulated Other Comprehensive Income(Loss)
|
||||||||||||
Balance at beginning of period
|
$ | ( |
) | $ | $ | |||||||
Comprehensive income(loss) |
( |
) | ||||||||||
Balance at end of period
|
$ | ( |
) | $ | ( |
) | $ | |||||
Total Shareholders’ equity
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Operating Activities
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Adjustments to reconcile net income to net cash provided by operating activities
|
||||||||||||
Depreciation and amortization
|
|
|
|
|||||||||
Provision for credit losses
|
|
|
|
|||||||||
Amortization of premiums and discounts on securities
|
|
|
|
|||||||||
Gain on sales of loans
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net loss on sale of available-for-sale debt securities
|
||||||||||||
Stock-based compensation expense
|
|
|
|
|||||||||
Gain on sale of premises and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Cash receipts from the sale of loans originated for sale
|
|
|
|
|||||||||
Cash disbursements for loans originated for sale
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Deferred income tax (benefit)
|
(
|
)
|
(
|
)
|
|
|||||||
Changes in
|
||||||||||||
Interest receivable and other assets
|
(
|
)
|
(
|
)
|
|
|||||||
Interest payable and other liabilities
|
|
|
(
|
)
|
||||||||
Net cash provided by operating activities
|
|
|
|
|||||||||
Investing Activities
|
||||||||||||
Net cash (paid) received for acquisition
|
( |
) | ||||||||||
Maturities of interest-bearing time deposits in other banks
|
|
|
|
|||||||||
Purchases of interest-bearing time deposits in other banks
|
(
|
)
|
(
|
)
|
|
|||||||
Proceeds from sale of available-for-sale debt securities
|
||||||||||||
Maturities, prepayments and calls of available-for-sale debt securities
|
||||||||||||
Purchases of available-for-sale debt securities
|
|
(
|
)
|
|
||||||||
Net change in loans
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Purchases of premises and equipment
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Proceeds from sale of premises and equipment
|
||||||||||||
Change in nonmarketable equity securities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Financing Activities
|
||||||||||||
Net change in deposits
|
|
|
|
|||||||||
Cash distributions
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Shares purchased and retired for restricted stock units
|
( |
) | ( |
) | ( |
) | ||||||
Net settlement of stock options
|
||||||||||||
Common stock issued for restricted stock units
|
|
|
|
|||||||||
Net cash provided by financing activities
|
|
|
|
|||||||||
Net Increase/(Decrease) in Cash and Due from Banks
|
|
(
|
)
|
|
||||||||
Cash and Due from Banks, Beginning of Period
|
|
|
|
|||||||||
Cash and Due from Banks, End of Period
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental Disclosure of Cash Flows Information
|
||||||||||||
Interest paid
|
$
|
|
$
|
|
$
|
|
||||||
Income taxes paid
|
$
|
|
$
|
|
$
|
|
||||||
Dividends declared and not paid
|
$
|
|
$
|
|
$
|
|
||||||
Measurement period goodwill adjustment
|
$
|
(
|
)
|
$
|
|
$
|
|
|||||
Supplemental Disclosure of Investing Activities
|
||||||||||||
Cash consideration for acquisition
|
$ | $ | $ | |||||||||
Fair value of assets acquired in acquisition
|
$
|
|
$
|
|
$
|
|
||||||
Fair value of liabilities assumed in acquisition
|
$ | $ | $ |
Note 1: |
Nature of Operations and Summary of Significant Accounting Policies
|
|
•
|
Segment loans into pools according to similar risk characteristics;
|
|
•
|
Develop historical loss rates for each loan pool segment;
|
|
•
|
Incorporate the impact of forecasts;
|
|
•
|
Incorporate the impact of other qualitative factors; and
|
|
•
|
Calculate and review pool specific allowance for credit loss estimate.
|
January 1, 2023
|
||||||||||||
As Reported
Under ASC 326
|
Pre ASC 326
Adoption
|
Impact of ASC
326 Adoption
|
||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
||||||
1 - 4 family real estate
|
|
|
(
|
)
|
||||||||
Commercial real estate - other
|
|
|
(
|
)
|
||||||||
Total commercial real estate
|
$
|
|
$
|
|
$
|
(
|
)
|
|||||
Commercial & industrial
|
|
|
|
|||||||||
Agricultural
|
|
|
(
|
)
|
||||||||
Consumer
|
|
|
(
|
)
|
||||||||
Allowance for credit losses on loans
|
$
|
|
$
|
|
$
|
|
||||||
Allowance for credit losses on off-balance sheet credit exposures (unfunded
commitments), see Note (6) and Note (17)
|
|
|
|
|||||||||
Total Impact
|
$
|
|
$
|
|
$
|
|
Note 2: |
Recent Events, Including Mergers and Acquisitions
|
Estimated Fair Value | ||||
(in thousands)
|
|
|||
Assets Acquired
|
||||
Cash and cash equivalents
|
$
|
|
||
Available-for-sale debt securities
|
|
|||
Federal funds sold
|
|
|||
Loans
|
|
|||
Premises and equipment
|
|
|||
Core deposit intangible
|
|
|||
Prepaid expenses and other assets
|
|
|||
Total assets acquiried
|
$ |
|
||
Liabilities Assumed
|
||||
Deposits
|
$
|
|
||
Accounts payable and accrued expenses
|
|
|||
Total liabilities assumed
|
$ |
|
||
Net assets acquired
|
$
|
|
||
Consideration transferred
|
|
|||
Goodwill
|
$ |
|
Actual from Acquisition |
Pro-Forma for Year Ended December 31,
|
|||||||||||
Date through
December 31, 2021
|
2021
|
2020
|
||||||||||
Net interest income
|
$
|
|
$
|
|
$
|
|
||||||
Non-interest income
|
|
|
|
|||||||||
Net income
|
|
|
|
|||||||||
Pro-forma earnings per share:
|
||||||||||||
Basic
|
$
|
|
$
|
|
||||||||
Diluted
|
$
|
|
$
|
|
Note 3: |
Restriction on Cash and Due from Banks
|
Note 4: |
Earnings per Share
|
As of and for the Years ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
(Dollars in thousands, except per share amounts)
|
||||||||||||
Numerator
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Denominator
|
||||||||||||
Weighted-average shares outstanding for basic earnings per share
|
|
|
|
|||||||||
Dilutive effect of stock compensation(1)
|
|
|
|
|||||||||
Denominator for diluted earnings per share
|
|
|
|
|||||||||
Earnings per common share
|
||||||||||||
Basic
|
$
|
|
$
|
|
$
|
|
||||||
Diluted
|
$
|
|
$
|
|
$
|
|
(1)
|
|
Note 5: |
Debt Securities
|
(in thousands)
|
Amortized Cost
|
Gross Unrealized
Gains
|
Gross Unrealized
Losses
|
Fair Value
|
||||||||||||
Available-for-sale as of December 31, 2023
|
||||||||||||||||
U.S. Federal agencies
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Mortgage-backed securities(1)(2)
|
|
|
(
|
)
|
|
|||||||||||
State and political subdivisions
|
|
|
(
|
)
|
|
|||||||||||
U.S. Treasuries
|
|
|
(
|
)
|
|
|||||||||||
Corporate debt securities
|
( |
) | ||||||||||||||
Total available-for-sale
|
|
|
(
|
)
|
|
|||||||||||
Total debt securities
|
|
|
|
|
|
(
|
)
|
|
|
(in thousands)
|
Amortized Cost
|
Gross Unrealized
Gains |
Gross Unrealized
Losses |
Fair Value
|
||||||||||||
Available-for-sale as of December 31, 2022
|
||||||||||||||||
U.S. Federal agencies
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||||
Mortgage-backed securities(1)(2)
|
|
|
(
|
)
|
|
|||||||||||
State and political subdivisions
|
|
|
(
|
)
|
|
|||||||||||
U.S. Treasuries
|
|
|
(
|
)
|
|
|||||||||||
Corporate debt securities
|
( |
) | ||||||||||||||
Total available-for-sale
|
|
|
(
|
)
|
|
|||||||||||
Total debt securities
|
|
|
(
|
)
|
|
(1)
|
|
(2)
|
|
(in thousands)
|
Amortized Cost
|
Fair Value
|
||||||
Available-for-sale as of December 31, 2023
|
||||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five years through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Mortgage-backed securities
|
|
|
||||||
Total available-for-sale
|
|
|
(in thousands)
|
Amortized Cost
|
Fair Value
|
||||||
Available-for-sale as of December 31, 2022
|
||||||||
Due in one year or less
|
$
|
|
$
|
|
||||
Due after one year through five years
|
|
|
||||||
Due after five years through ten years
|
|
|
||||||
Due after ten years
|
|
|
||||||
Mortgage-backed securities
|
|
|
||||||
Total available-for-sale
|
|
|
|
|
Year Ended December 31, | ||||||||
2023
|
2022
|
|||||||
(in thousands)
|
||||||||
Proceeds from sales, maturities, prepayments and calls
|
$
|
|
$
|
|
||||
Gross realized gains on sales, prepayments and calls
|
|
|
||||||
Gross realized losses on sales, prepayments and calls
|
(
|
)
|
(
|
)
|
||||
Total realized (losses), net
|
$
|
(
|
)
|
$
|
(
|
)
|
Year Ended December 31, |
||||||||
(in thousands)
|
2023
|
2022
|
||||||
Book value of pledged securities
|
$
|
|
$
|
|
Less than Twelve Months
|
Twelve Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Available-for-sale as of December 31, 2023
|
||||||||||||||||||||||||
U.S. Federal agencies
|
$ | $ | $ | $ | ( |
) | $ | $ | ( |
) | ||||||||||||||
Mortgage-backed securities
|
( |
) | ( |
) | ||||||||||||||||||||
State and political subdivisions(1)
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||
U.S. Treasuries
|
|
|
|
(
|
)
|
|
(
|
)
|
||||||||||||||||
Corporate debt securities
|
( |
) | ( |
) | ( |
) | ||||||||||||||||||
Total available-for-sale
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
(
|
)
|
Less than Twelve Months
|
Twelve Months or Longer
|
Total
|
||||||||||||||||||||||
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
Fair Value
|
Gross Unrealized
Losses
|
|||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Available-for-sale as of December 31, 2022
|
||||||||||||||||||||||||
U.S. Federal agencies
|
$ | $ | ( |
) | $ | $ | $ | $ | ( |
) | ||||||||||||||
Mortgage-backed securities
|
( |
) | ( |
) | ||||||||||||||||||||
State and political subdivisions(1)
|
( |
) | ( |
) | ||||||||||||||||||||
U.S. Treasuries
|
|
(
|
)
|
|
|
|
(
|
)
|
||||||||||||||||
Corporate debt securities
|
( |
) | ( |
) | ||||||||||||||||||||
Total available-for-sale
|
$
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
|
$
|
(
|
)
|
(1)
|
|
Note 6: |
Loans and Allowance for Loan Losses
|
December 31, | ||||||||
2023
|
2022
|
|||||||
Construction & development
|
$
|
|
$
|
|
||||
1 - 4 family real estate
|
|
|
||||||
Commercial real estate - other
|
|
|
||||||
Total commercial real estate
|
$ |
|
$ |
|
||||
Commercial & industrial
|
|
|
||||||
Agricultural
|
|
|
||||||
Consumer
|
|
|
||||||
Gross loans
|
|
|
||||||
Less allowance for credit losses
|
(
|
)
|
(
|
)
|
||||
Less deferred loan fees
|
(
|
)
|
(
|
)
|
||||
Net loans
|
$
|
|
$
|
|
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
December 31, 2023
|
||||||||||||||||||||||||||||
Loans |
||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Impact of CECL adoption
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Charge-offs
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||
Provision (credit) for credit losses
|
(
|
)
|
|
|
|
|
|
|
||||||||||||||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Unfunded Commitments |
||||||||||||||||||||||||||||
Balance, beginning of period
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Impact of CECL adoption
|
||||||||||||||||||||||||||||
Provision (credit) for credit losses
|
( |
) | ( |
) | ( |
) | ( |
) | ||||||||||||||||||||
Balance, end of period
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total Allowance for Credit Losses
|
$ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
Total Provision for Credit Losses
|
$ | ( |
) | $ | $ | $ | $ | $ | $ |
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Balance, beginning of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Charge-offs
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
(
|
)
|
|||||||||||||||||
Recoveries
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Net (charge-offs) recoveries
|
|
|
|
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||||||||||||||
Provision (credit) for credit losses
|
|
|
|
|
|
(
|
)
|
|
||||||||||||||||||||
Balance, end of period
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
• |
Grade 1 (Pass) – These loans generally conform to Bank policies, and are characterized by policy conforming advance rates on
collateral, and have well-defined repayment sources. In addition, these credits are extended to Borrowers and/or Guarantors with a strong balance sheet and either substantial liquidity or a reliable income history.
|
• |
Grade 2 (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 (CLC), or Credit Quality Committee (CQC) warrant a heightened sense and frequency of monitoring.
|
• |
Grade 3 (Special Mention) – These loans must have observable weaknesses or evidence of 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 a “2” or a “4” as this is viewed as a transitory loan grade.
|
• |
Grade 4 (Substandard) – These loans are not adequately protected by the sound worth and debt service capacity of the Borrower, but may be well secured. They 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.
|
As of December 31, 2023
|
2023
|
2022
|
2021
|
2020
|
2019
|
Prior
|
Revolving
Loans
Amortized
Cost Basis
|
Total
|
||||||||||||||||||||||||
Construction & development
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total construction & development
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
1 - 4 family real estate
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total 1 - 4 family real estate
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Commercial real estate - other
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial real estate - other
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Commercial and industrial
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total Commercial and industrial
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Agriculural
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total agriculural
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Consumer
|
||||||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||||||
1 (Pass)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Total consumer
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Current-period gross charge-offs
|
||||||||||||||||||||||||||||||||
Total loans held for investment
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||||
Total current-period gross charge-offs
|
$ | $ | $ | $ | $ | $ | $ | $ |
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Grade
|
||||||||||||||||||||||||||||
1 (Pass)
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
2 (Watch)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
3 (Special Mention)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
4 (Substandard)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Past Due
|
Total Loans | |||||||||||||||||||||||||||
30–59
Days
|
60–89
Days
|
Greater than
90 Days
|
Total
|
Current
|
Total
Loans
|
> 90 Days &
Accruing
|
||||||||||||||||||||||
December 31, 2023
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
1 - 4 family real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate - other
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial & industrial(1)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer(2)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
December 31, 2022
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
1 - 4 family real estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial real estate - other
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial & industrial(1)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
(1)
|
|
(2)
|
|
With an
Allowance
|
No Allowance
|
Total Non-
Accrual
Loans
|
Related
Allowance
|
Interest
Income
Recognized
|
||||||||||||||||
December 31, 2023
|
||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
1 - 4 Family Real Estate
|
|
|
|
|
|
|||||||||||||||
Commercial Real Estate - other
|
|
|
|
|
|
|||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|||||||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Unpaid
Principal
Balance
|
Recorded
Investment
with No
Allowance
|
Recorded
Investment
with an
Allowance
|
Total
Recorded
Investment
|
Related
Allowance
|
Average
Recorded
Investment
|
Interest
Income
Recognized
|
||||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
1 - 4 Family Real Estate
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial Real Estate - other
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Consumer
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Collateral Type
|
||||||||||||||||||||
Business
|
Specific
|
|||||||||||||||||||
Real Estate
|
Assets
|
Other Assets
|
Total
|
Allocation
|
||||||||||||||||
December 31, 2023
|
||||||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
1 - 4 Family Real Estate
|
|
|
|
|
|
|||||||||||||||
Commercial Real Estate - other
|
|
|
|
|
|
|||||||||||||||
Commercial & industrial
|
|
|
|
|
|
|||||||||||||||
Agricultural
|
|
|
|
|
|
|||||||||||||||
Consumer
|
|
|
|
|
|
|||||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Term Extension and Payment Deferral
|
|||||||||
Amortized Cost Basis
|
% of Total Class
|
Financial Effect
|
|||||||
December 31, 2023
|
|||||||||
Construction & development
|
$
|
|
|
%
|
|||||
1 - 4 Family Real Estate
|
|
|
|||||||
Commercial Real Estate - other
|
|
|
|||||||
Commercial & industrial
|
|
|
Extended the maturity of loan by
|
||||||
Agricultural
|
|
|
|||||||
Consumer
|
|
|
|||||||
Total
|
$
|
|
|
%
|
Current
|
30-89 Days Past Due
|
90+ Days Past Due
|
Non-Accruing
|
|||||||||||||
December 31, 2023
|
||||||||||||||||
Construction & development
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
1 - 4 Family Real Estate
|
|
|
|
|
||||||||||||
Commercial Real Estate - other
|
|
|
|
|
||||||||||||
Commercial & industrial
|
|
|
|
|
||||||||||||
Agricultural
|
|
|
|
|
||||||||||||
Consumer
|
|
|
|
|
||||||||||||
Total
|
$
|
|
$
|
|
$
|
|
$
|
|
Construction &
Development
|
1 - 4 Family
Real Estate
|
Commercial
Real Estate -
Other
|
Commercial
& Industrial
|
Agricultural
|
Consumer
|
Total
|
||||||||||||||||||||||
December 31, 2022
|
||||||||||||||||||||||||||||
Nonaccrual loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||||||
Troubled-debt restructurings (1)
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Accruing loans 90 or more days past due
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total nonperforming loans
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
Note 7: |
Premises and Equipment
|
|
December 31,
|
||||||||
2023 | 2022 | ||||||||
Land, buildings and improvements
|
$
|
|
$
|
|
|||||
Furniture and equipment
|
|
|
|||||||
Automobiles
|
|
|
|||||||
|
|
||||||||
Less accumulated depreciation
|
(
|
)
|
(
|
)
|
|||||
Net premises and equipment
|
$
|
|
$
|
|
Note 8: |
Goodwill and Core Deposit Intangibles
|
Gross
Carrying
Amount
|
Accumulated Amortization
|
Net Carrying
Amount
|
||||||||||
As of December 31, 2023
|
||||||||||||
Goodwill
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Core deposit intangibles
|
|
(
|
)
|
|
||||||||
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
Gross
Carrying
Amount |
Accumulated Amortization
|
Net Carrying
Amount
|
||||||||||
As of December 31, 2022
|
||||||||||||
Goodwill
|
$
|
|
$
|
(
|
)
|
$
|
|
|||||
Core deposit intangibles
|
|
(
|
)
|
|
||||||||
Total
|
$
|
|
$
|
(
|
)
|
$
|
|
2024
|
$ |
|
||
2025
|
|
|||
2026 |
||||
2027 |
||||
2028 |
||||
Thereafter
|
||||
Total
|
$
|
|
Note 9: |
Interest-Bearing Deposits
|
2024
|
$
|
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
Thereafter
|
|
|||
Total
|
$
|
|
Note 10: |
Income Taxes
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Federal:
|
||||||||||||
Current
|
$
|
|
$
|
|
$
|
|
||||||
Deferred
|
(
|
)
|
(
|
)
|
|
|||||||
Total federal tax provision
|
$
|
|
$
|
|
$
|
|
||||||
State:
|
||||||||||||
Current
|
$
|
|
$
|
|
$
|
|
||||||
Deferred
|
(
|
)
|
(
|
)
|
|
|||||||
FIN48
|
( |
) | ||||||||||
Total state tax provision
|
$
|
|
$
|
|
$
|
|
||||||
Total income tax provision
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||||||
2023
|
2022
|
2021
|
||||||||||
Statutory U.S. Federal Income Tax
|
$
|
|
$
|
|
$
|
|
||||||
Increase (decrease) resulting from:
|
||||||||||||
State Taxes
|
|
|
|
|||||||||
Permanent Differences
|
|
|
|
|||||||||
Return to provision and deferred true ups | ( |
) | ||||||||||
FIN 48 Activity | ( |
) | ||||||||||
Other
|
|
|
(
|
)
|
||||||||
Provision for income taxes
|
$
|
|
$
|
|
$
|
|
Year Ended December 31,
|
||||||||
2023
|
2022
|
|||||||
Deferred tax assets:
|
||||||||
Allowance for loan losses
|
$
|
|
$
|
|
||||
Non-accrual Loans
|
|
|
||||||
Deferred Compensation
|
|
|
||||||
Deferred Revenue | ||||||||
Discounts and premiums on assets acquired | ||||||||
Net unrealized loss on securities available for sale | ||||||||
Accrued expenses | ||||||||
Lease liabilities
|
|
|
||||||
Other
|
||||||||
Total deferred tax assets
|
$
|
|
$
|
|
||||
Deferred tax liabilities:
|
||||||||
Property and equipment
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Intangible assets
|
(
|
)
|
(
|
)
|
||||
Prepaid Expenses
|
(
|
)
|
(
|
)
|
||||
Right of Use Asset
|
( |
) | ( |
) | ||||
Other
|
(
|
)
|
(
|
)
|
||||
Total deferred tax liabilities
|
$
|
(
|
)
|
$
|
(
|
)
|
||
Net deferred tax assets
|
$
|
|
$
|
|
Note 11: |
Letters of Credit
|
Note 12: |
Advances and Borrowings
|
Note 13: |
Shareholders’ Equity
|
|
Year Ended
December 31,
|
|||||||
2023
|
2022
|
|||||||
Number of shares repurchased
|
|
|
||||||
Average price of shares repurchased
|
$
|
|
$
|
|
||||
Shares remaining to be repurchased
|
|
|
Actual
|
Minimum
Capital Requirements
|
With Capital
Conservation Buffer
|
Minimum
To Be Well Capitalized
Under Prompt
Corrective Action
|
|||||||||||||||||||||||||||||
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
Amount |
Ratio |
|||||||||||||||||||||||||
As of December 31, 2023
|
||||||||||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
$ |
|
|
%
|
|||||||||||||||||||
Tier I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
CET I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
Tier I capital to average assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|
|
%
|
|||||||||||||||||||||
As of December 31, 2022
|
||||||||||||||||||||||||||||||||
Total capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
$
|
|
|
%
|
$
|
|
|
%
|
$
|
|
|
%
|
N/A
|
N/A
|
||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
$
|
|
|
%
|
|||||||||||||||||||
Tier I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
CET I capital to risk-weighted assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
|
|
%
|
|
|
%
|
||||||||||||||||||||
Tier I capital to average assets
|
||||||||||||||||||||||||||||||||
Company
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
N/A
|
N/A
|
||||||||||||||||||||||
Bank
|
|
|
%
|
|
|
%
|
N/A
|
N/A
|
|
|
%
|
Note 14: |
Related-Party Transactions
|
Note 15: |
Employee Benefits
|
Options
|
Wgtd. Avg.
Exercise Price
|
Wgtd. Avg.
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Year Ended December 31, 2023
|
||||||||||||||||
Outstanding at December 31, 2022
|
|
$
|
|
|||||||||||||
Options Granted
|
|
|
||||||||||||||
Options Exercised
|
(
|
)
|
|
|||||||||||||
Options Forfeited
|
(
|
)
|
|
|||||||||||||
Outstanding at December 31, 2023
|
|
|
|
$
|
|
|||||||||||
Exercisable at December 31, 2023
|
|
|
|
$
|
|
Options |
Wgtd. Avg.
Exercise Price
|
Wgtd. Avg.
Remaining
Contractual Term
|
Aggregate
Intrinsic
Value
|
|||||||||||||
Year Ended December 31, 2022
|
||||||||||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||||||||||
Options Granted
|
|
|
||||||||||||||
Options Exercised
|
(
|
)
|
|
|||||||||||||
Options Forfeited
|
|
|
||||||||||||||
Outstanding at December 31, 2022
|
|
|
|
$
|
|
|||||||||||
Exercisable at December 31, 2022
|
|
|
|
$
|
|
For the Year
Ended
December 31,
2022
|
||||
Risk-free interest rate
|
|
%
|
||
Dividend yield
|
|
%
|
||
Stock price volatility
|
|
%
|
||
Expected term
|
|
Number of Shares
|
Wgtd. Avg.
Grant Date Fair Value
|
|||||||
Year Ended December 31, 2023
|
||||||||
Outstanding at December 31, 2022
|
|
$
|
|
|||||
Shares granted
|
|
|
||||||
Shares vested
|
(
|
)
|
|
|||||
Shares forfeited
|
(
|
)
|
|
|||||
End of the period balance
|
|
$
|
|
Number of Shares
|
Wgtd. Avg.
Grant Date
Fair Value
|
|||||||
Year Ended December 31, 2022
|
||||||||
Outstanding at December 31, 2021
|
|
$
|
|
|||||
Shares granted
|
|
|
||||||
Shares vested
|
(
|
)
|
|
|||||
Shares forfeited
|
(
|
)
|
|
|||||
End of the period balance
|
|
$
|
|
Note 16: |
Disclosures about Fair Value of Assets and Liabilities
|
Level 1 |
Quoted prices in active markets for identical assets or liabilities
|
Level 2 |
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be
corroborated by observable market data for substantially the full term of the assets or liabilities
|
Level 3 |
Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities
|
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
|||||||||||||
December 31, 2023
|
||||||||||||||||
Impaired loans (collateral- dependent)
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||
Asset retirement obligations |
||||||||||||||||
December 31, 2022
|
||||||||||||||||
Impaired loans (collateral- dependent)
|
$
|
|
$
|
|
$
|
|
$
|
|
Fair Value
|
Valuation
Technique
|
Unobservable
Inputs
|
Weighted-
Average
|
||||||||
December 31, 2023
|
|
|
|||||||||
Collateral-dependent impaired loans
|
$
|
|
Estimated cash to be received pending resolution
of bankruptcy proceedings
|
Estimated cost to sell
|
|
%
|
|||||
Asset retirement obligaions |
Expected present value |
Plugging and abandonment expense |
% | ||||||||
|
|
||||||||||
December 31, 2022
|
|
|
|||||||||
Collateral-dependent impaired loans
|
$
|
|
Appraisals from comparable assets
|
Estimated cost to sell
|
% |
Carrying
|
Fair Value Measurements
|
|||||||||||||||||||
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
December 31, 2023
|
||||||||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest-bearing time deposits in other banks
|
|
|
|
|
|
|||||||||||||||
Loans, net of allowance
|
|
|
|
|
|
|||||||||||||||
Loans held for sale
|
|
|
|
|
|
|||||||||||||||
Nonmarketable equity securities
|
|
|
|
|
|
|||||||||||||||
Interest receivable and other assets
|
|
|
|
|
|
|||||||||||||||
|
||||||||||||||||||||
Financial Liabilities
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest payable and other liabilities
|
|
|
|
|
|
|||||||||||||||
December 31, 2022
|
||||||||||||||||||||
Financial Assets
|
||||||||||||||||||||
Cash and due from banks
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest-bearing time deposits in other banks
|
|
|
|
|
|
|||||||||||||||
Loans, net of allowance
|
|
|
|
|
|
|||||||||||||||
Nonmarketable equity securities
|
|
|
|
|
|
|||||||||||||||
Interest receivable
|
|
|
|
|
|
|||||||||||||||
Financial Liabilities
|
||||||||||||||||||||
Deposits
|
$
|
|
$
|
|
$
|
|
$
|
|
$
|
|
||||||||||
Interest payable
|
|
|
|
|
|
Note 17: |
Financial Instruments with Off-Balance Sheet Risk
|
December 31,
2023
|
December 31,
2022
|
|||||||
Commitments to extend credit
|
$
|
|
$
|
|
||||
Financial and performance standby letters of credit
|
|
|
||||||
$
|
|
$
|
|
Note 18: |
Significant Estimates and Concentrations
|
Note 19: |
Operating Leases
|
Year Ending December 31:
|
||||
2023
|
$
|
|
||
2022
|
|
|||
2021
|
|
2024
|
$ |
|
||
2025
|
|
|||
2026
|
|
|||
2027
|
|
|||
2028
|
|
|||
Thereafter
|
|
|||
Total lease payments
|
|
|||
Less imputed interest
|
(
|
)
|
||
Operating lease liability
|
$ |
|
Note 20: |
Asset Retirement Obligation
|
Asset retirement obligations as of January 1, 2023
|
$
|
|
||
Liability additions
|
|
|||
Accretion expense
|
|
|||
Asset retirement obligations as of December 31, 2023
|
$
|
|
Note 21: |
General Litigation
|
Note 22: |
Parent-only Financial Statements
|
Condensed Balance Sheets
|
|
|||||||
December 31, |
||||||||
Assets
|
2023
|
2022
|
||||||
Cash and due from banks
|
$
|
|
$
|
|
||||
Investment in bank subsidiary
|
|
|
||||||
Dividends receivable
|
|
|
||||||
Goodwill
|
|
|
||||||
Total assets
|
$
|
|
$
|
|
||||
Liabilities and Shareholders’ Equity
|
||||||||
Dividends Payable
|
$ | $ | ||||||
Other liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
|
||||||||
Total shareholders’ equity
|
|
|
||||||
|
||||||||
Total liabilities and shareholders’ equity
|
$
|
|
$
|
|
Condensed Statements of Comprehensive Income
|
For the Years Ended December 31,
|
|||||||||||
2023
|
2022
|
2021
|
||||||||||
Income
|
||||||||||||
Dividends from subsidiary bank
|
$
|
|
$
|
|
$
|
|
||||||
Total Income
|
|
|
|
|||||||||
Expense
|
||||||||||||
Other
|
|
|
|
|||||||||
Total expense
|
|
|
|
|||||||||
Income and equity in undistributed net income of bank subsidiary
|
|
|
|
|||||||||
Equity in undistributed net income of bank subsidiary
|
|
|
|
|||||||||
Income before Taxes |
||||||||||||
Income tax expense
|
|
|
|
|||||||||
Net Income Available to Common Shareholders
|
$
|
|
$
|
|
$
|
|
||||||
Other Comprehensive Income | ||||||||||||
Equity in other comprehensive (loss) income of subsidiary | $ | $ | ( |
) | $ | |||||||
Other comprehensive gain(loss)
|
$ | $ | ( |
) | $ | |||||||
Comprehensive Income | $ | $ | $ |
Condensed Statements of Cash Flows
|
For the Years Ended December 31,
|
|||||||||||
2023
|
2022
|
2021
|
||||||||||
Operating Activities
|
||||||||||||
Net income
|
$
|
|
$
|
|
$
|
|
||||||
Items not requiring (providing) cash
|
||||||||||||
Equity in undistributed net income
|
(
|
)
|
(
|
)
|
(
|
)
|
||||||
Changes in
|
||||||||||||
Other current assets and liabilities
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Net cash provided by operating activities
|
|
|
||||||||||
Financing Activities
|
||||||||||||
Common stock issued, net of offering costs
|
|
|
|
|||||||||
Dividends paid
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Net cash used in financing activities
|
( |
) |
(
|
)
|
(
|
)
|
||||||
Increase (Decrease) in Cash and Due from Banks
|
(
|
)
|
|
(
|
)
|
|||||||
Cash and Due from Banks, Beginning of Period
|
|
|
|
|||||||||
Cash and Due from Banks, End of Period
|
$
|
|
$
|
|
$
|
|
||||||
Supplemental Disclosure of Cash Flows Information
|
||||||||||||
Dividends declared and not paid
|
$
|
|
$
|
|
$
|
|
a) |
Controls and Procedures
|
b) |
Management’s Annual Report on Internal Control over Financial Reporting
|
c) |
Not applicable.
|
d) |
Changes in Internal Control Over Financial Reporting
|
Amended and Restated Certificate of Incorporation of Bank7 Corp.(1)
|
|
Second Amended and Restated Bylaws of Bank7 Corp.(2)
|
|
Specimen Common Stock Certificate of Bank7 Corp.(3)
|
|
Description of Common Stock Securities Registered Pursuant to Section 12 of the Exchange Act of 1934(4)
|
|
Form of Tax Sharing Agreement(5)
|
|
Bank7 Corp. 2018 Equity Incentive Plan(6)
|
|
First Amendment to Bank7 Corp. 2018 Equity Incentive Plan(7)
|
|
Form of Stock Option award Agreement under the Bank7 Corp. 2018 Equity Incentive Plan(8)
|
|
Form of Restricted Stock Unit Award Agreement under the Bank7 Corp. 2018 Equity Incentive Plan(9)
|
|
Form of Indemnification Agreement(10)
|
|
Form of Registration Rights Agreement(11)
|
|
Stock Award Agreement Between the Company and Thomas L. Travis issued under the 2018 Equity Incentive Plan (12)
|
|
Stock Award Agreement Between the Company and Jason E. Estes issued under the 2018 Equity Incentive Plan(13)
|
|
Share Acquisition Agreement dated as of October 6, 2021 by and among Bank7 Corp., Watonga Bancshares, Inc., Cornerstone Bank, and Randy Barrett solely in his capacity as representative (14)
|
|
Employment Agreement dated March 30, 2022 between the Company and Thomas L. Travis (15)
|
|
Employment Agreement dated March 30, 2022 between the Company and Jason E. Estes (16)
|
|
Subsidiaries of Bank7 Corp.
|
|
Consent of Independent Registered Public Accounting Firm
|
|
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
Certification of Chief Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
Policy Relating to the Recover of Erroneously Awarded Compensation
|
101.INS
|
Inline XBRL Instance Document
|
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL
|
Inline XBRL Taxonomy Calculation Linkbase Document
|
101.DEF
|
Inline XBRL Taxonomy Definition Linkbase Document
|
101.LAB
|
Inline XBRL Taxonomy Label Linkbase Document
|
101.PRE
|
Inline XBRL Taxonomy Presentation Linkbase Document
|
104
|
Cover Page Interactive Data File (Formatted as Inline XBRL and contained in Exhibit 101)
|
(1) |
Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on May 24, 2021.
|
(2) |
Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the Securities and Exchange Commission on March 20, 2024 (File No. 333-227010).
|
(3) |
Incorporated by reference to Exhibit 4.1 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on September 10, 2018 (File No. 333-227010).
|
(4) |
Incorporated by reference to Exhibit 4.2 to the Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission on March 30, 2020.
|
(5) |
Incorporated by reference to Exhibit 10.1 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 24, 2018 (File No. 333-227010).
|
(6) |
Incorporated by reference to Exhibit 10.2 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on September 10, 2018 (File No. 333-227010).
|
(7)
|
Incorporated by reference to Appendix A of the Proxy Statement on Schedule 14A filed with the Securities and Exchange Commission on March 31, 2020.
|
(8) |
Incorporated by reference to Exhibit 10.3 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on September 10, 2018 (File No. 333-227010).
|
(9) |
Incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on September 10, 2018 (File No. 333-227010).
|
(10) |
Incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1/A filed with the Securities and Exchange Commission on September 10, 2018 (File No. 333-227010).
|
(11) |
Incorporated by reference to Exhibit 10.4 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on August 24, 2018 (File No. 333-227010).
|
(12) |
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on September 5, 2019.
|
(13) |
Incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2023.
|
(14) |
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on October 7, 2021.
|
(15) |
Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission on April 5, 2022.
|
(16) |
Incorporated by reference to Exhibit 10.12 to the Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 24, 2023.
|
Bank7 Corp.
|
|||
Date: March 25, 2024
|
By:
|
/s/ Thomas L. Travis
|
|
Thomas L. Travis
|
|||
President and Chief Executive Officer
|
|||
(Principal Executive Officer)
|
|||
By:
|
/s/ Kelly J. Harris
|
||
Kelly J. Harris
|
|||
Executive Vice President and Chief Financial Officer
|
|||
(Principal Financial and Accounting Officer)
|
|
Signatures
|
Title
|
Date
|
||
|
|
|
|||
/s/ William B. Haines
|
Director; Chairman
|
March 25, 2024
|
|||
William B. Haines
|
|||||
/s/ Thomas L. Travis
|
Director; President and Chief Executive Officer (Principal Executive Officer)
|
March 25, 2024
|
|||
Thomas L. Travis
|
|||||
|
|||||
/s/ William M. Buergler
|
Director
|
March 25, 2024
|
|||
William M. Buergler
|
|||||
/s/ John T. Phillips
|
Director
|
March 25, 2024
|
|||
John T. Phillips
|
|||||
/s/ Gary D. Whitcomb
|
Director
|
March 25, 2024
|
|||
Gary D. Whitcomb
|
|||||
/s/ J. Michael Sanner
|
Director
|
March 25, 2024
|
|||
J. Michael Sanner
|
|||||
/s/ Teresa L. Dick
|
Director
|
March 25, 2024
|
|||
Teresa L. Dick
|
|||||
/s/ Edward P. Gray
|
Director
|
March 25, 2024
|
|||
Edward P. Gray
|