What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-03-31 compared with 2021-03-25 · 286 added, 328 removed, 136 unchanged (82% of the section changed)

We believe the risks described below are the risks that are material to us.

Any of the following risks, as well as risks that we do not know or currently deem

immaterial, could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Any of the following risks, as well as risks that we do not know or currently deem immaterial,

could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

Risks Relating to Our Business and Market

Our business is concentrated in, and largely dependent upon, the continued growth and welfare of our markets, and adverse economic conditions in these markets

could negatively impact our operations and customers.

Our business is affected by the economy of Oklahoma, the Dallas/Fort Worth metropolitan area and Kansas, our primary markets.

Our success depends to a significant extent upon the business activity,

population, income levels, employment trends, deposits and real estate activity in these markets.

The Oklahoma economy has been generally steady, if not increasing, in the past few years.

The housing market remains strong with prices having increased

through 2020.

Our business is concentrated in, and largely dependent upon, the continued growth and welfare of our markets, and adverse economic conditions in these

markets could negatively impact our operations and customers.

Our business is primarily affected by the economy of Oklahoma, and the Dallas/Fort Worth metropolitan area and to a smaller degree the State of Kansas.

Our success depends to a significant extent

upon the business activity, population, income levels, employment trends, deposits and real estate activity in these markets.

In spite of the COVID-19 pandemic, the Oklahoma economy has been generally steady, if not increasing, in the past few

The housing market remains strong with prices having increased through 2021.

Vacancy rates for commercial properties remain low and small business owners are increasingly considering bank borrowings in order to grow.

However, in early March 2020, the economic outlook changed dramatically due to multiple events,

the COVID-19 virus, possible supply chain disruption, an increasing risk of recession, and in some cases, fear of the unknown.

In addition, market developments may affect consumer confidence levels and may cause adverse changes in payment patterns, causing increases in delinquencies and default rates, which

could impact our charge-offs and provision for credit losses.

Adverse changes in economic conditions in these markets could reduce our growth in loans and deposits, impair our ability to collect our loans, increase our problem loans and charge-offs

and otherwise negatively affect our performance and financial condition.

In addition, market developments may affect consumer confidence levels and may cause adverse changes in payment patterns, causing increases in delinquencies and default rates, which could impact

our charge-offs and provision for credit losses.

Adverse changes in economic conditions in these markets could reduce our growth in loans and deposits, impair our ability to collect our loans, increase our problem loans and charge-offs and

otherwise negatively affect our performance and financial condition.

We have credit exposure to the energy industry.

The energy industry is a significant sector in our Oklahoma market, and to a lesser extent, Kansas and the Dallas/Fort Worth metropolitan area.

A downturn or lack of growth in the

energy industry and energy-related business, including sustained low oil or gas prices or the failure of oil or gas prices to rise in the future, could adversely affect our business, financial condition and results of operations.

As of December 31,

2020, our energy loans, which include loans to exploration and production companies, midstream companies, purchasers of mineral and royalty interests and service providers totaled $101.9 million, or 12.1% of total loans, as compared to $102.1

million, or 14.4% of total loans as of December 31, 2019.

In addition to our direct exposure to energy loans, we also have indirect exposure to energy prices, as some of our non-energy customers' businesses are directly affected by volatility with

the oil and gas industry and energy prices and otherwise are dependent on energy-related businesses.

A downturn or lack of growth in the energy industry

and energy-related business, including sustained low oil or gas prices or the failure of oil or gas prices to rise in the future, could adversely affect our business, financial condition and results of operations.

As of December 31, 2021, our

energy loans, which include loans to exploration and production companies, midstream companies, purchasers of mineral and royalty interests and service providers totaled $98.5 million, or 9.6% of total loans, as compared to $101.9 million, or 12.1%

of total loans as of December 31, 2020.

In addition to our direct exposure to energy loans, we also have indirect exposure to energy prices, as some of our non-energy customers’ businesses are directly affected by volatility with the oil and gas

industry and energy prices and otherwise are dependent on energy-related businesses.

As of December 31, 2021, we had $9.4 million in unfunded commitments to borrowers in the oil and gas industry.

We expect prolonged depressed pricing

pressure on oil and gas to lead to increased credit stress in our energy portfolio, increased losses associated with our energy portfolio, increased utilization of our contractual obligations to extend credit and weaker demand for energy lending.

General uncertainty resulting from continued volatility could have other adverse impacts, such as job losses in industries tied to energy, decreased spending habits, lower borrowing needs, higher transaction deposit balances or a number of other

effects that are difficult to isolate or quantify, particularly in markets with significant dependence on the energy industry like Oklahoma, and to a lesser extent Kansas and the Dallas/Fort Worth metropolitan area, all of which could have an adverse

effect on our business, financial condition and results of operations.

We have credit exposure to the hospitality industry.

The Company has loan exposure to the hospitality industry, primarily through loans made to construct or finance the operation of hotels.

At December 31, 2020, this exposure was

approximately $194.3 million, or 23.2%, of the total loan portfolio, along with an additional $65 million in unfunded debt, as compared to $167 million, or 23.6%, of the total loan portfolio, along with an additional $39.4 million in unfunded debt as

of December 31, 2019.

At December 31, 2021, this exposure was approximately

$198.4 million, or 19.2%, of the total loan portfolio, along with an additional $41.5 million in unfunded debt, as compared to $194.3 million, or 23.2%, of the total loan portfolio, along with an additional $65 million in unfunded debt as of

December 31, 2020.

The hospitality industry is subject to changes in the travel patterns of business and leisure travelers, both of which are affected by the strength of the economy, as well as other factors.

1 unchanged sentence

industry has traditionally been closely linked with the performance of the general economy and, specifically, growth in gross domestic product.

Changes in travel patterns of both business and leisure travelers, particularly during periods of economic

contraction or low levels of economic growth, may create difficulties for the industry over the long-term.

Although we have made a large portion of our hospitality loans to long-term, well-established hotel operators in strategic locations, a general

downturn in the supply growth of such markets or hotel occupancy or room rates could negatively impact the borrowers’ ability to repay.

A significant loss in this portfolio could materially and adversely affect the Company’s financial condition and

results of operations.

Our customers in the hospitality industry may be particularly susceptible to a material decline in revenues resulting from decreased travel and leisure activities following the outbreak of COVID-19.

The continued economic impacts of the coronavirus ("COVID-19") could adversely affect our business activities, financial condition and results of operations.

Our business is dependent upon the willingness and ability of our customers to conduct banking and other financial transactions.

Beginning in early 2020, COVID-19 spread across the

world, including the U.S.

The spread of COVID-19 caused severe disruptions in the U.S.

economy, regional quarantines, business shutdowns, high unemployment, disruptions to supply chains, and overall economic instability.

The pandemic’s ultimate

impact on our business will depend on highly uncertain and unpredictable future developments, including the magnitude and duration of the pandemic and actions taken by governmental authorities in response to the pandemic, particularly within our

geographic footprint.

The pandemic and resultant governmental action have severely restricted economic activity and resulted in a general deterioration in economic conditions.

Many businesses saw a steep decline in revenue and have endured temporary

closures or are operating at reduced capacities, some of which are our borrowers.

The pandemic’s impact on our customer’s businesses has resulted in the recognition of credit losses in our loan portfolios and increases in our allowance for credit

losses and such effects may continue if the economy continues to worsen or more clients draw on their lines of credit or seek additional loans to help finance their businesses.

Additionally, the COVID-19 pandemic has significantly affected the financial markets and has resulted in a number of Federal Reserve actions.

Market interest rates declined

significantly in March 2020 and have remained at lower rates throughout 2020 into 2021.

On March 3, 2020, the 10-year Treasury yield fell below 1.00% for the first time, and the Federal Reserve reduced the target federal funds rate by 50 basis points

to 1.00% to 1.25%.

On March 15, 2020, the Federal Reserve further reduced the target federal funds rate by 100 basis points to 0.00% to 0.25% and announced a $700 billion quantitative easing program in response to the expected economic downturn

caused by the COVID-19 pandemic.

The Federal Reserve reduced the interest that it pays on excess reserves from 1.60% to 1.10% on March 3, 2020, and then to 0.10% on March 15, 2020.

These prolonged reductions in interest rates, have adversely affected

our net interest income and margins and our profitability.

These negative economic conditions have negatively impacted our financial results and are expected to have a continued adverse effect on our business, including adversely impacting the demand for our

products and services, our net interest income and our liquidity and regulatory capital requirements.

Changes in travel patterns of both business and leisure travelers, particularly during periods of

economic contraction or low levels of economic growth, may create difficulties for the industry over the long-term.

Although we have made a large portion of our hospitality loans to long-term, well-established hotel operators in strategic

locations, a general downturn in the supply growth of such markets or hotel occupancy or room rates could negatively impact the borrowers’ ability to repay.

A significant loss in this portfolio could materially and adversely affect the Company’s

financial condition and results of operations.

The COVID pandemic, including variants of the coronavirus, has adversely affected the U.S.

economy and our customers, which has had, and may continue to have, a material and

adverse effect on our business, financial condition, results of operations and growth prospects.

The COVID pandemic, including variants of the coronavirus, continues to negatively impact the United States and the world.

The spread of COVID and the responses of federal, state and local

governments have negatively impacted the U.S.

economy and our customers, including through periods of economic recession, volatile levels of unemployment, increased inflation, supply chain and labor shortages, and other trends, all of which have

had and may continue to have an adverse effect on our business and operations.

In particular, these trends have, among other things, negatively impacted loan demand and our growth strategy, and increased the risk of delinquencies, defaults, foreclosures, and losses on our

loans, particularly for our customers with exposure to the hospitality industry

The ultimate impact of the pandemic is highly uncertain and subject to change, and even if after the pandemic subsides, we may continue to experience material adverse impacts to our business as a

result of the global economic impact of the pandemic and related governmental and social responses.

We have a concentration in commercial real estate lending that could cause our regulators to restrict our ability to grow.

As a part of their regulatory oversight, the federal regulators have issued guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices, or the CRE

Concentration Guidance, with respect to a financial institution’s concentrations in CRE lending activities.

The CRE Concentration Guidance identifies certain concentration levels that, if exceeded, will expose the institution to additional

supervisory analysis with regard to the institution’s CRE concentration risk.

The CRE Concentration Guidance is designed to promote appropriate levels of capital and sound loan and risk management practices for institutions with a concentration of

In general, the CRE Concentration Guidance establishes the following supervisory criteria as preliminary indications of possible CRE concentration risk:

(1) the institution’s total construction, land development and other land loans

represent 100% or more of total capital;

or (2) total CRE loans as defined in this guidance, or Regulatory CRE, represent 300% or more of total capital, and the institution’s Regulatory CRE has increased by 50% or more during the prior 36-month

Pursuant to the CRE Concentration Guidance, loans secured by owner occupied CRE are not included for purposes of the CRE concentration calculation.

As of December 31, 2020, our Regulatory CRE represented 343.8% of our total Bank capital and

our construction, land development and other land loans represented 93.5% of our total Bank capital, as compared to 322.6% and 66.3% as of December 31, 2019, respectively.

During the prior 36-month period, our Regulatory CRE has increased 87.3%.

are actively working to manage our Regulatory CRE concentration, and we believe that our underwriting policies, management information systems, independent credit administration process, and monitoring of real estate loan concentrations are currently

sufficient to address the CRE Concentration Guidance.

As a part of their regulatory oversight, the federal regulators have issued guidance on Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices, or the CRE Concentration

Guidance, with respect to a financial institution’s concentrations in CRE lending activities.

The CRE Concentration Guidance identifies certain concentration levels that, if exceeded, will expose the institution to additional supervisory analysis

with regard to the institution’s CRE concentration risk.

The CRE Concentration Guidance is designed to promote appropriate levels of capital and sound loan and risk management practices for institutions with a concentration of CRE loans.

general, the CRE Concentration Guidance establishes the following supervisory criteria as preliminary indications of possible CRE concentration risk:

(1) the institution’s total construction, land development and other land loans represent 100% or

more of total capital;

the CRE Concentration Guidance, loans secured by owner occupied CRE are not included for purposes of the CRE concentration calculation.

As of December 31, 2021, our Regulatory CRE represented 302.47% of our total Bank capital and our construction,

land development and other land loans represented 129.02% of our total Bank capital, as compared to 343.8% and 93.5% as of December 31, 2020, respectively.

During the prior 36-month period, our Regulatory CRE has decreased 32.8%.

We are actively

working to manage our Regulatory CRE concentration, and we believe that our underwriting policies, management information systems, independent credit administration process, and monitoring of real estate loan concentrations are currently sufficient

to address the CRE Concentration Guidance.

We have implemented enhanced CRE monitoring techniques as expected by banking regulators as our concentrations have approached or exceeded the regulatory guidance.

Nevertheless, the Federal

Reserve could become concerned about our CRE loan concentrations, and it could limit our ability to grow by restricting its approvals for the establishment or acquisition of branches, or approvals of mergers or other acquisition opportunities, or by

requiring us to raise additional capital, reduce our loan concentrations or undertake other remedial actions.

Because a portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair

the value of collateral securing our real estate loans and result in loan and other losses.

Adverse developments affecting real estate values, particularly in Oklahoma City and the Dallas/Fort Worth metropolitan area, could increase the credit risk associated with our real

estate loan portfolio.

Nevertheless, the Federal Reserve could

become concerned about our CRE loan concentrations, and it could limit our ability to grow by restricting its approvals for the establishment or acquisition of branches, or approvals of mergers or other acquisition opportunities, or by requiring us

to raise additional capital, reduce our loan concentrations or undertake other remedial actions.

Because a portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could

impair the value of collateral securing our real estate loans and result in loan and other losses.

Adverse developments affecting real estate values, particularly in Oklahoma City and the Dallas/Fort Worth metropolitan area, could increase the credit risk associated with our real estate loan

Real estate values may experience periods of fluctuation, and the market value of real estate can fluctuate significantly in a short period of time.

Adverse changes affecting real estate values and the liquidity of real estate

in one or more of our markets could increase the credit risk associated with our loan portfolio, and could result in losses that adversely affect credit quality, financial condition and results of operation.

Negative changes in the economy affecting

real estate values and liquidity in our market areas could significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses.

Collateral may

have to be sold for less than the outstanding balance of the loan, which could result in losses on such loans.

Adverse changes affecting real estate values and the liquidity of real estate in one or

more of our markets could increase the credit risk associated with our loan portfolio, and could result in losses that adversely affect credit quality, financial condition and results of operation.

Negative changes in the economy affecting real

estate values and liquidity in our market areas could significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses.

Collateral may have

to be sold for less than the outstanding balance of the loan, which could result in losses on such loans.

Such declines and losses could have a material adverse impact on our business, results of operations and growth prospects.

2 unchanged sentences

Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans.

As of December 31, 2020, we had approximately $829 million of commercial purpose loans, which include general commercial, energy, agricultural, and CRE loans, representing

approximately 98.8% of our gross loan portfolio.

As of December 31, 2021, we had approximately $1.0 billion of commercial purpose loans, which include general commercial, energy, agricultural, and CRE loans, representing approximately 97.7% of

our gross loan portfolio.

Commercial purpose loans are often larger and involve greater risks than other types of lending.

Because payments on these loans are often dependent on the successful operation or development of the

property or business involved, their repayment is more sensitive than other types of loans to adverse conditions in the real estate market or the general economy.

Because payments on these loans are often dependent on the successful operation or development of the property or business

involved, their repayment is more sensitive than other types of loans to adverse conditions in the real estate market or the general economy.

Accordingly, a downturn in the real estate market or the general economy could heighten our risk related to commercial purpose loans, particularly energy and CRE loans.

residential mortgage loans, which generally are made on the basis of the borrowers’ ability to make repayment from their employment and other income and which are secured by real property whose value tends to be more easily ascertainable, commercial

purpose loans typically are made on the basis of the borrowers’ ability to make repayment from the cash flow of the commercial venture.

Unlike residential

mortgage loans, which generally are made on the basis of the borrowers’ ability to make repayment from their employment and other income and which are secured by real property whose value tends to be more easily ascertainable, commercial purpose

loans typically are made on the basis of the borrowers’ ability to make repayment from the cash flow of the commercial venture.

If the cash flow from business operations is reduced, the borrowers’ ability to repay the loan may be impaired.

a result of the larger average size of each commercial purpose loan as compared with other loans such as residential loans, as well as the collateral which is generally less readily marketable, losses incurred on a small number of commercial purpose

result of the larger average size of each commercial purpose loan as compared with other loans such as residential loans, as well as the collateral which is generally less readily marketable, losses incurred on a small number of commercial purpose

loans could have a material adverse impact on our financial condition and results of operations.

Our largest loan relationships make up a material percentage of our total loan portfolio .

As of December 31, 2020, our 20 largest borrowing relationships ranged from approximately $13 million to $31.6 million (including unfunded commitments) and totaled approximately

$363.4 million in total commitments (representing, in the aggregate, 34.7% of our total outstanding commitments as of December 31, 2020).

Of these 20 relationships, $235.6 million were originated from the Oklahoma market, with the remaining $127.7

million extended to borrowers located in the Dallas/Fort Worth metropolitan area.

Each of the loans associated with these relationships has been underwritten in accordance with our underwriting policies and limits.

Along with other risks inherent in

these loans, such as the deterioration of the underlying businesses or property securing these loans, this concentration of borrowers presents a risk that, if one or more of these relationships were to become delinquent or suffer default, we could be

exposed to material losses.

The allowance for loan losses may not be adequate to cover losses associated with any of these relationships, and any loss or increase in the allowance would negatively affect our earnings and capital.

Even if these loans

are adequately collateralized, an increase in classified assets could harm our reputation with our regulators and inhibit our ability to execute our business plan.

Our largest deposit relationships currently make up a material percentage of our deposits and the withdrawal of deposits by our largest depositors could force us

to fund our business through more expensive and less stable sources.

Our largest loan relationships make up a material percentage of our

total loan portfolio .

As of December 31, 2021, our 20 largest borrowing relationships ranged from approximately $13.4 million to $33.6 million (including unfunded commitments) and totaled approximately $405 million in

total commitments (representing, in the aggregate, 32.7% of our total outstanding commitments as of December 31, 2021).

Each of the loans associated with these relationships has been underwritten in accordance with our underwriting policies and

Along with other risks inherent in these loans, such as the deterioration of the underlying businesses or property securing these loans, this concentration of borrowers presents a risk that, if one or more of these relationships were to

become delinquent or suffer default, we could be exposed to material losses.

The allowance for loan losses may not be adequate to cover losses associated with any of these relationships, and any loss or increase in the allowance would negatively

affect our earnings and capital.

Even if these loans are adequately collateralized, an increase in classified assets could harm our reputation with our regulators and inhibit our ability to execute our business plan.

Our largest deposit relationships currently make up a material percentage of our deposits and the withdrawal of deposits by our largest depositors could

force us to fund our business through more expensive and less stable sources.

At December 31, 2021, our 20 largest deposit relationships accounted for 23.2% of our total deposits.

Withdrawals of deposits by any one of our largest depositors or by one of our

related customer groups could force us to rely more heavily on borrowings and other sources of funding for our business and withdrawal demands, adversely affecting our net interest margin and results of operations.

We may also be forced, as a result

of withdrawals of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources.

Withdrawals of deposits by any one of our largest depositors or by one of our related

customer groups could force us to rely more heavily on borrowings and other sources of funding for our business and withdrawal demands, adversely affecting our net interest margin and results of operations.

We may also be forced, as a result of

withdrawals of deposits, to rely more heavily on other, potentially more expensive and less stable funding sources.

Additionally, such circumstances could require us to raise deposit rates in an attempt to attract new deposits, which would

1 unchanged sentence

Under applicable regulations, if the Bank were no longer “well capitalized,” the Bank would not be able to accept brokered deposits without the approval of the FDIC.

A substantial portion of our loan portfolio consists of loans maturing within one year, and there is no guarantee that these loans will be replaced upon maturity

or renewed on the same terms or at all.

As of December 31, 2020, approximately 43.2% of our gross loans were maturing within one year, compared to approximately 41.7% of our gross loans that were maturing within one year as

of December 31, 2019.

A substantial portion of our loan portfolio consists of loans maturing within one year, and there is no guarantee that these loans will be replaced upon

maturity or renewed on the same terms or at all.

As of December 31, 2021, approximately 38.4% of our gross loans were maturing within one year, compared to approximately 43.2% of our gross loans that were maturing within one year as of December

As a result, we will either need to renew or replace these loans during the course of the year.

There is no guarantee that these loans will be originated or renewed by borrowers on the same terms or at all, as demand for such

loans may decrease.

Furthermore, there is no guarantee that borrowers will qualify for new loans or that existing loans will be renewed by us on the same terms or at all, as collateral values may be insufficient or the borrowers’ cash flow may be

materially less than when the loan was initially originated.

There is no guarantee that these loans will be originated or renewed by borrowers on the same terms or at all, as demand for such loans may

less than when the loan was initially originated.

This could result in a significant decline in the size of our loan portfolio.

3 unchanged sentences

quality and to identify loans that may become nonperforming, at any time there are loans included in the portfolio that will result in losses but that have not been identified as nonperforming or potential problem loans.

We cannot be sure that we

will be able to identify deteriorating loans before they become nonperforming assets or that we will be able to limit losses on those loans that are identified.

We cannot be sure that

we will be able to identify deteriorating loans before they become nonperforming assets or that we will be able to limit losses on those loans that are identified.

As a result, future additions to the allowance may be necessary.

Additionally, future

additions may be required based on changes in the loans comprising the portfolio and changes in the financial condition of borrowers, such as may result from changes in economic conditions or as a result of incorrect assumptions by management in

determining the allowance.

Additionally,

future additions may be required based on changes in the loans comprising the portfolio and changes in the financial condition of borrowers, such as may result from changes in economic conditions or as a result of incorrect assumptions by

management in determining the allowance.

Federal banking regulators, as an integral part of their supervisory function, periodically review our allowance for loan losses.

These regulatory agencies may require us to increase our provision for loan losses or to

recognize further loan charge-offs based upon their judgments, which may be different from ours.

These regulatory agencies may require us to increase our provision for

loan losses or to recognize further loan charge-offs based upon their judgments, which may be different from ours.

Any increase in the allowance for loan losses could have a negative effect on our financial condition and results of operations.

Commercial and

commercial real estate loans comprise a significant portion of our total loan portfolio.

Commercial and commercial real estate loans comprise a significant portion of our total loan portfolio.

These types of loans typically are larger than residential real estate loans and other consumer loans.

Because our loan portfolio contains a significant

number of commercial and commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans may cause a significant increase in nonperforming assets.

An increase in nonperforming loans could result in a

loss of earnings from these loans, an increase in the allowance for loan losses, or an increase in loan charge-offs, which could have an adverse impact on our results of operations and financial condition.

One of our senior loan officers is responsible for a material portion of our loan originations and the loss of such officer could adversely affect our business,

financial condition and results of operation.

Since joining the Bank in August 2015, one senior loan officer in the Dallas/Fort Worth metropolitan area, has originated 24.1% of our total loan portfolio as of December 31, 2020.

This senior loan officer is subject to a noncompetition agreement but the loss of his expertise and ability, could have an adverse impact on our business, financial condition and results of operations.

Because our loan portfolio contains a

significant number of commercial and commercial real estate loans with relatively large balances, the deterioration of one or a few of these loans may cause a significant increase in nonperforming assets.

An increase in nonperforming loans could

result in a loss of earnings from these loans, an increase in the allowance for loan losses, or an increase in loan charge-offs, which could have an adverse impact on our results of operations and financial condition.

We may be adversely impacted by the transition from the use of the LIBOR interest rate index in the future.

We have certain loans, investment securities and subordinated debt securities indexed to LIBOR to calculate the interest rate.

The continued availability of the LIBOR index is not guaranteed

after the United Kingdom administrators of LIBOR have announced that the publication of the most commonly used U.S.

dollar LIBOR settings will cease to be published after June 2023.

We cannot predict, in the interim, whether and to what extent

banks will continue to provide LIBOR submissions to the administrator of LIBOR or whether any additional reforms to LIBOR may be enacted.

With respect to our loan assets, at this time, there is some industry guidance regarding acceptable

alternatives to LIBOR.

After review and analysis from the Federal Reserve Board’s Alternative Reference Rates Committee, the Consumer Financial Protection Bureau published its final rule recommending the Secured Overnight Financing Rate, or SOFR,

as a compliant replacement index to LIBOR that would not trigger a refinance under existing regulations for certain consumer loans.

Loan contracts may also contain alternate rate language permitting transfer to SOFR, Wall Street Journal Prime or

another index when LIBOR is no longer available.

The timing and manner in which each customer’s contract transitions to a new index will vary on a case-by-case basis.

There continues to be some uncertainty related to the LIBOR transition.

rates and payments will differ from LIBOR, which may lead to increased volatility.

The transition has impacted our market risk profiles and required changes to our risk and pricing models, valuation tools, and product design.

Furthermore, failure

to adequately manage this transition process with our customers could adversely impact our reputation.

With respect to investment securities and subordinated debt securities, we expect similar transition issues.

Failure to adequately manage the

transition could have a material adverse effect on our business, financial condition and results of operations.

Our profitability depends on interest rates generally, and we may be adversely affected by changes in market interest rates.

Our profitability depends in substantial part on our net interest income.

Net interest income is the difference between the amounts received by us on our interest-earning assets and

the interest paid by us on our interest-bearing liabilities.

Our net interest income depends on many factors that are partly or completely outside of our control, including competition, federal economic, monetary and fiscal policies and economic

conditions generally.

Net interest income is the difference between the amounts received by us on our interest-earning assets and the interest

paid by us on our interest-bearing liabilities.

Our net interest income depends on many factors that are partly or completely outside of our control, including competition, federal economic, monetary and fiscal policies and economic conditions

Our net interest income will be adversely affected if market interest rates change so that the interest we pay on deposits and borrowings increases faster than the interest we earn on loans and investments.

Changes in interest rates could affect our ability to originate loans and deposits.

Historically, there has been an inverse correlation between the demand for loans and interest

Loan origination volume usually declines during periods of rising or high interest rates and increases during periods of declining or low interest rates.

Changes in interest rates also have a significant impact on the carrying value of certain

of our assets, including loans and other assets, on our balance sheet.

Historically, there has been an inverse correlation between the demand for loans and interest rates.

origination volume usually declines during periods of rising or high interest rates and increases during periods of declining or low interest rates.

Changes in interest rates also have a significant impact on the carrying value of certain of our

assets, including loans and other assets, on our balance sheet.

Interest rate increases often result in larger payment requirements for our borrowers, which increase the potential for default.

At the same time, the marketability of any underlying

property that serves as collateral for such loans may be adversely affected by any reduced demand resulting from higher interest rates.

An increase in interest rates that adversely affects the ability of borrowers to pay the principal or interest on

loans may lead to an increase in nonperforming assets and a reduction of income recognized, which could have a material adverse effect on our results of operations and cash flows.

Further, when we place a loan on nonaccrual status, we reverse any

accrued but unpaid interest receivable, which decreases interest income.

At the same time, the marketability of any underlying property

that serves as collateral for such loans may be adversely affected by any reduced demand resulting from higher interest rates.

An increase in interest rates that adversely affects the ability of borrowers to pay the principal or interest on loans

may lead to an increase in nonperforming assets and a reduction of income recognized, which could have a material adverse effect on our results of operations and cash flows.

Further, when we place a loan on nonaccrual status, we reverse any accrued

but unpaid interest receivable, which decreases interest income.

Subsequently, we continue to have a cost to fund the loan, which is reflected as interest expense, without any interest income to offset the associated funding expense.

increase in the amount of nonaccrual loans would have an adverse impact on net interest income.

As short-term interest rates have remained at low levels, and as longer term interest rates have fallen, we expect to experience net interest margin compression as our

interest-earning assets will continue to reprice downward while our interest-bearing liability rates could fail to decline in tandem.

This could have a material adverse effect on our net interest income and our results of operations.

The ratio of variable- to fixed-rate loans in our loan portfolio, the ratio of short-term (maturing at a given time within 12 months) to long-term loans, and the ratio of our demand,

money market and savings deposits to certificates of deposit (and their time periods), are the primary factors affecting the sensitivity of our net interest income to changes in market interest rates.

The composition of our rate-sensitive assets or

liabilities is subject to change and could result in a more unbalanced position that would cause market rate changes to have a greater impact on our earnings.

Fluctuations in market rates and other market disruptions are neither predictable nor

controllable and may adversely affect our financial condition and earnings.

Rising interest rates in prior periods have increased interest expense, which in turn has adversely affected net interest income, and may do so in the future if the Federal Reserve raises rates

as anticipated.

In a rising interest rate environment, competition for cost-effective deposits increases, making it more costly to fund loan growth.

In addition, a rising rate environment could cause mortgage and mortgage warehouse lending

volumes to substantially decline.

Any rapid and unexpected volatility in interest rates creates uncertainty and potential for unexpected material adverse effects.

The Company actively monitors and manages the balances of maturing and repricing

assets and liabilities to reduce the adverse impact of changes in interest rates, but there can be no assurances that the Company can avoid all material adverse effects that such interest rate changes may have on the Company’s net interest margin

and overall financial condition.

The ratio of variable- to fixed-rate loans in our loan portfolio, the ratio of short-term (maturing at a given time within 12 months) to long-term loans, and the ratio of our demand, money market

and savings deposits to certificates of deposit (and their time periods), are the primary factors affecting the sensitivity of our net interest income to changes in market interest rates.

The composition of our rate-sensitive assets or liabilities

is subject to change and could result in a more unbalanced position that would cause market rate changes to have a greater impact on our earnings.

Fluctuations in market rates and other market disruptions are neither predictable nor controllable

and may adversely affect our financial condition and earnings.

We rely on short-term funding, which can be adversely affected by local and general economic conditions.

As of December 31, 2020, approximately $693.4 million, or 76.6%, of our deposits consisted of demand, savings, money market and negotiable order of withdrawal, or NOW, accounts.

Approximately $212.2 million of the remaining balance of deposits consists of certificates of deposit, of which approximately $164.8 million, or 18.2% of our total deposits, was due to mature within one year.

Based on our experience, we believe that

our savings, money market and non-interest-bearing accounts are relatively stable sources of funds.

As of December 31, 2021, approximately $1.0 billion, or 85.4%, of our deposits consisted of demand, savings, money market and negotiable order of withdrawal, or NOW, accounts.

Approximately

$177.6 million of the remaining balance of deposits consists of certificates of deposit, of which approximately $135.8 million, or 76.5% of remaining deposits, was due to mature within one year.

Based on our experience, we believe that our savings,

money market and non-interest-bearing accounts are relatively stable sources of funds.

Historically, a majority of non-brokered certificates of deposit are renewed upon maturity as long as we pay competitive interest rates.

Many of these

customers are, however, interest-rate conscious and may be willing to move funds into higher-yielding investment alternatives.

Many of these customers

are, however, interest-rate conscious and may be willing to move funds into higher-yielding investment alternatives.

Our ability to attract and maintain deposits, as well as our cost of funds, has been, and will continue to be significantly

4 unchanged sentences

Liquidity is essential to our business.

Liquidity risk is the potential that we will be unable to meet our obligations as they come due because of an inability to liquidate assets or

obtain adequate funding.

Liquidity risk is the potential that we will be unable to meet our obligations as they come due because of an inability to liquidate assets or obtain

adequate funding.

The Bank’s primary funding source is customer deposits.

In addition, the Bank has historically had access to advances from the Federal Home Loan Bank of Topeka, or the FHLB, the Federal Reserve Bank of Kansas City, or the

FRB, discount window and other wholesale sources, such as internet-sourced deposits to fund operations.

In addition, the Bank has historically had access to advances from the Federal Home Loan Bank of Topeka, or the FHLB, the Federal Reserve Bank of Kansas City, or the FRB,

discount window and other wholesale sources, such as internet-sourced deposits to fund operations.

We participate in the Certificate of Deposit Account Registry Service, or CDARS, 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.

Although the Bank has historically been able to replace maturing deposits and advances as necessary, it might

not be able to replace such funds in the future.

Although the Bank has historically been able to replace maturing deposits and advances as necessary, it

might not be able to replace such funds in the future.

An inability to raise funds through deposits, borrowings, the sale of loans and other sources could have a substantial negative effect on liquidity.

Our access to funding sources in amounts adequate to finance our activities or on acceptable terms could be impaired by factors that affect our organization specifically or the

financial services industry or economy in general.

Factors that could detrimentally impact access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are

concentrated or adverse regulatory actions against us.

The Bank’s ability to borrow or attract and retain deposits in the future could be adversely affected by the Bank’s financial condition or regulatory restrictions, or impaired by factors that are

not specific to it, such as FDIC insurance changes, disruption in the financial markets or negative views and expectations about the prospects for the banking industry.

Borrowing capacity from the FHLB or FRB may fluctuate based upon the condition of

the Bank or the acceptability and risk rating of loan collateral and counterparties could adjust discount rates applied to such collateral at the lender’s discretion.

Our access to funding sources in amounts adequate to finance our activities or on acceptable terms could be impaired by factors that affect our organization specifically or the financial services

industry or economy in general.

Factors that could detrimentally impact access to liquidity sources include a decrease in the level of our business activity as a result of a downturn in the markets in which our loans are concentrated or adverse

regulatory actions against us.

The Bank’s ability to borrow or attract and retain deposits in the future could be adversely affected by the Bank’s financial condition or regulatory restrictions, or impaired by factors that are not specific to it,

such as FDIC insurance changes, disruption in the financial markets or negative views and expectations about the prospects for the banking industry.

Borrowing capacity from the FHLB or FRB may fluctuate based upon the condition of the Bank or the

acceptability and risk rating of loan collateral and counterparties could adjust discount rates applied to such collateral at the lender’s discretion.

The FRB or FHLB could restrict or limit the Bank’s access to secured borrowings.

Correspondent banks can withdraw unsecured lines of credit or require collateralization for the

purchase of fed funds.

Correspondent banks can withdraw unsecured lines of credit or require collateralization for the purchase of fed

Liquidity also may be affected by the Bank’s routine commitments to extend credit.

Market conditions or other events could also negatively affect the level or cost of funding, affecting our ongoing ability to accommodate

liability maturities and deposit withdrawals, meet contractual obligations and fund asset growth and new business transactions at a reasonable cost, in a timely manner and without adverse consequences.

Any substantial, unexpected or prolonged change in the level or cost of liquidity could have a material adverse effect on our financial condition and results of operations, and could

impair our ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition.

Market conditions or other events could also negatively affect the level or cost of funding, affecting our ongoing ability to accommodate liability maturities

and deposit withdrawals, meet contractual obligations and fund asset growth and new business transactions at a reasonable cost, in a timely manner and without adverse consequences.

Any substantial, unexpected or prolonged change in the level or cost of liquidity could have a material adverse effect on our financial condition and results of operations, and could impair our

ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition.

We are exposed to cybersecurity risks associated with our internet-based systems and online commerce security, including “hacking” and “identify theft.”

We conduct a portion of our business over the internet.

We rely heavily upon data processing, including loan servicing and deposit processing, software, communications and information

systems from a number of third parties to conduct our business.

We rely heavily upon data processing, including loan servicing and deposit processing, software, communications and information systems

from a number of third parties to conduct our business.

As a bank, we are more likely to be targeted by cyber-attacks in an effort to unlawfully access customer funds or customer personally identifiable information.

Cybersecurity concerns are

further heightened by Russia’s recent invasion of Ukraine.

Third-party or internal systems and networks may fail to operate properly or become disabled due to deliberate attacks or unintentional events.

Our operations are vulnerable to

disruptions from human error, natural disasters, power loss, computer viruses, spam attacks, denial of service attacks, unauthorized access and other unforeseen events.

Our operations are vulnerable to disruptions from

human error, natural disasters, power loss, computer viruses, spam attacks, denial of service attacks, unauthorized access and other unforeseen events.

Undiscovered data corruption could render our customer information inaccurate.

These events may obstruct our ability to provide services and process transactions.

These events may

obstruct our ability to provide services and process transactions.

While we believe we are in compliance with all applicable privacy and data security laws, an incident could put our customer confidential information at risk.

2 unchanged sentences

We monitor and modify, as necessary, our protective measures in response to the perpetual evolution of known cyber-threats.

A breach in the security of any of our information systems, or other cyber-incident, could have an adverse impact on, among other things, our revenue, ability to attract and maintain

customers and our reputation.

A breach in the security of any of our information systems, or other cyber-incident, could have an adverse impact on, among other things, our revenue, ability to attract and maintain customers

and our reputation.

In addition, as a result of any breach, we could incur higher costs to conduct our business, to increase protection, or related to remediation.

Furthermore, our customers could incorrectly blame us and terminate their

account with us for a cyber-incident which occurred on their own system or with that of an unrelated third party.

Furthermore, our customers could incorrectly blame us and terminate their account

with us for a cyber-incident which occurred on their own system or with that of an unrelated third party.

In addition, a security breach could also subject us to additional regulatory scrutiny and expose us to civil litigation and possible

2 unchanged sentences

We depend to a significant extent on a number of relationships with third-party service providers.

Specifically, we receive core systems processing, essential web hosting and other

internet systems, loan and deposit processing and other processing services from third-party service providers.

If these third-party service providers experience financial, operational or technological difficulties or terminate their services and we

are unable to replace them with other service providers, our operations could be interrupted.

Specifically, we receive core systems processing, essential web hosting and other internet

systems, loan and deposit processing and other processing services from third-party service providers.

If these third-party service providers experience financial, operational or technological difficulties or terminate their services and we are

unable to replace them with other service providers, our operations could be interrupted.

If an interruption were to continue for a significant period of time, our business, financial condition and results of operations could be materially

3 unchanged sentences

In the course of our business, we may foreclose and take title to real estate, and we could be subject to environmental liabilities with respect to these properties.

We may be held

liable to a governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or we may be required to investigate or clean up

hazardous or toxic substances, or chemical releases at a property.

We may be held liable to a

governmental entity or to third parties for property damage, personal injury, investigation and clean-up costs incurred by these parties in connection with environmental contamination, or we may be required to investigate or clean up hazardous or

toxic substances, or chemical releases at a property.

The costs associated with investigation or remediation activities could be substantial.

In addition, if we are the owner or former owner of a contaminated site, we may be subject to

claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.

In addition, if we are the owner or former owner of a contaminated site, we may be subject to claims by

third parties based on damages and costs resulting from environmental contamination emanating from the property.

If we ever become subject to significant environmental liabilities, our business, financial condition, liquidity and results of

1 unchanged sentence

Risks Relating to Our Regulatory Environment

We are subject to extensive regulation, which increases the cost and expense of compliance and could limit or restrict our activities, which in turn may adversely

impact our earnings and ability to grow.

We operate in a highly regulated environment and are subject to regulation, supervision and examination by a number of governmental regulatory agencies, including the Federal Reserve,

the OBD, and the FDIC.

We are subject to extensive regulation, which increases the cost and expense of compliance and could limit or restrict our activities, which in turn may

adversely impact our earnings and ability to grow.

We operate in a highly regulated environment and are subject to regulation, supervision and examination by a number of governmental regulatory agencies, including the Federal Reserve, the OBD,

and the FDIC.

Regulations adopted by these agencies, which are generally intended to provide protection for depositors, customers and the DIF, rather than for the benefit of shareholders, govern a comprehensive range of matters relating to

12 unchanged sentences

Furthermore, government policy and regulation, particularly as implemented through the Federal Reserve, significantly affect credit conditions.

Negative developments in the financial industry and the

impact of new legislation and regulation in response to those developments could negatively impact our business operations and adversely impact our financial performance.

Negative developments in the financial industry and

the impact of new legislation and regulation in response to those developments could negatively impact our business operations and adversely impact our financial performance.

Monetary policy and other economic factors could affect our profitability adversely.

In addition to being affected by general economic conditions, our earnings and growth are affected by the policies of the Federal Reserve.

An important function of the Federal Reserve

is to regulate the money supply and credit conditions.

An important function of the Federal Reserve is to

regulate the money supply and credit conditions.

Among the instruments used by the Federal Reserve to implement these objectives are open market purchases and sales of U.S.

4 unchanged sentences

charged on loans or paid on deposits.

The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do

so in the future.

The monetary policies and regulations of the Federal Reserve have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the

The effects of such policies upon our business, financial condition and results of operations cannot be predicted.

Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and

adversely affect our business opportunities.

We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively impacted

by these laws.

Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal

information and adversely affect our business opportunities.

We are subject to various privacy, information security and data protection laws, including requirements concerning security breach notification, and we could be negatively impacted by these

For example, our business is subject to the Gramm-Leach-Bliley Act which, among other things:

(i) imposes certain limitations on our ability to share non-public personal information about our customers with non-affiliated third

(ii) requires that we provide certain disclosures to customers about our information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with non-affiliated third parties

(with certain exceptions) and (iii) requires we develop, implement and maintain a written comprehensive information security program containing safeguards appropriate based on our size and complexity, the nature and scope of our activities and the

sensitivity of customer information we process, as well as plans for responding to data security breaches.

Various state and federal banking regulators and states have also enacted data security breach notification requirements with varying levels of

individual, consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach.

Moreover, legislators and regulators in the United States are increasingly adopting or revising privacy, information security

and data protection laws that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee

(i) imposes certain limitations on our ability to share non-public personal information about our customers with non-affiliated third parties;

requires that we provide certain disclosures to customers about our information collection, sharing and security practices and afford customers the right to “opt out” of any information sharing by us with non-affiliated third parties (with certain

exceptions) and (iii) requires we develop, implement and maintain a written comprehensive information security program containing safeguards appropriate based on our size and complexity, the nature and scope of our activities and the sensitivity of

customer information we process, as well as plans for responding to data security breaches.

Various state and federal banking regulators and states have also enacted data security breach notification requirements with varying levels of individual,

consumer, regulatory or law enforcement notification in certain circumstances in the event of a security breach.

Moreover, legislators and regulators in the United States are increasingly adopting or revising privacy, information security and data

protection laws that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee

information, and some of our current or planned business activities.

This could also increase our costs of compliance and business operations and could reduce income from certain business initiatives.

This includes increased privacy-related

enforcement activity at the federal level by the Federal Trade Commission, as well as at the state level.

On November 18, 2021, the federal banking agencies issued a new rule effective in 2022 that requires banks to notify their regulators within 36 hours of a “computer-security

incident” that rises to the level of a “notification incident.” This could also increase our costs of compliance and business operations and could reduce income from certain business initiatives.

This includes increased privacy-related enforcement

activity at the federal level by the Federal Trade Commission, as well as at the state level.

We rely on third parties, and in some cases subcontractors, to provide information technology and data services.

Although we provide for appropriate protections through our contracts

and perform information security risk assessments of its third-party service providers and business associates, we still have limited control over their actions and practices.

Although we provide for appropriate protections through our contracts and perform

information security risk assessments of its third-party service providers and business associates, we still have limited control over their actions and practices.

In addition, despite the security measures that we have in place to ensure

3 unchanged sentences

including financial data was subject to unauthorized access.

Compliance with current or future privacy, data protection and information security laws (including those regarding security breach notification) affecting customer or employee data

to which we are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of

Our failure to comply with privacy, data protection and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions and damage to our reputation,

which could have a material adverse effect on our business, financial condition or results of operations.

Compliance with current or future privacy, data protection and information security laws (including those regarding security breach notification) affecting customer or employee data to which we

are subject could result in higher compliance and technology costs and could restrict our ability to provide certain products and services, which could have a material adverse effect on our business, financial conditions or results of operations.

have a material adverse effect on our business, financial condition or results of operations.

Risks Related to Our Common Stock

1 unchanged sentence

This could cause the market price of our common stock to drop significantly.

Our principal shareholders (collectively, the “Haines Family Trusts”) have the benefit of certain registration rights covering all of their shares of our common stock pursuant to the

registration rights agreement that we entered into with the Haines Family Trusts in connection with our initial public offering.

Sales of a substantial number of these shares in the public market, or the perception that these sales could occur, could

cause the market price of our common stock to decline or to be lower than it might otherwise be.

In addition, as of December 31, 2020 approximately 70.3% of our outstanding common stock is beneficially owned by our principal shareholders, executive

officers and directors.

The substantial amount of common stock that is owned by and issuable to our principal shareholders, executive officers and directors may adversely affect our share price, our share price volatility and the development and

persistence of an active and liquid trading market.

Our principal shareholders (collectively, the “Haines Family Trusts”) have the benefit of certain registration rights covering all of their shares of our common stock pursuant to the registration

rights agreement that we entered into with the Haines Family Trusts in connection with our initial public offering.

Sales of a substantial number of these shares in the public market, or the perception that these sales could occur, could cause the

market price of our common stock to decline or to be lower than it might otherwise be.

In addition, as of December 31, 2021 approximately 59.3% of our outstanding common stock is beneficially owned by our principal shareholders, executive officers

and directors.

of an active and liquid trading market.

The sale of these shares could impair our ability to raise capital through the sale of additional equity securities.

Oklahoma law and the provisions of our amended and restated certificate of incorporation and amended and restated bylaws may have an anti-takeover effect, and

there are substantial regulatory limitations on changes of control of bank holding companies.

Oklahoma corporate law and provisions of our amended and restated certificate of incorporation, or certificate of incorporation, and our amended and restated bylaws, or bylaws, could

make it more difficult for a third party to acquire us, even if doing so would be perceived to be beneficial by our shareholders.

Furthermore, with certain limited exceptions, federal regulations prohibit a person or company or a group of persons

deemed to be “acting in concert” from, directly or indirectly, acquiring more than 10% (5% if the acquirer is a bank holding company) of any class of our voting stock or obtaining the ability to control in any manner the election of a majority of our

directors or otherwise direct the management or policies of our Company without prior notice or application to and the approval of the Federal Reserve.

Accordingly, prospective investors need to be aware of and comply with these requirements, if

applicable, in connection with any purchase of shares of our common stock.

Collectively, provisions of our certificate of incorporation and bylaws and other statutory and regulatory provisions may delay, prevent or deter a merger, acquisition, tender

offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their common stock.

Moreover, the combination of these provisions effectively inhibits certain business

combinations, which, in turn, could adversely affect the market price of our common stock.

We are controlled by trusts established for the benefit of members of the Haines family, whose interests may not coincide with our other shareholders.

As of December 31, 2021, the Haines Family Trusts control approximately 51.2% of our common stock.

So long as the Haines Family Trusts continue to control more than 50% of our

outstanding shares of common stock, they will have the ability, if they vote in the same manner, to determine the outcome of all matters requiring shareholder approval, including the election of directors, the approval of mergers, material

acquisitions and dispositions and other extraordinary transactions, and amendments to our certificate of incorporation, bylaws and other corporate governance documents.

In addition, this concentration of ownership may delay or prevent a change in

control of our Company and make some transactions more difficult or impossible without the support of the Haines Family Trusts.

So long as the Haines Family Trusts continue to control more than 50% of our outstanding shares

of common stock, they will have the ability, if they vote in the same manner, to determine the outcome of all matters requiring shareholder approval, including the election of directors, the approval of mergers, material acquisitions and

dispositions and other extraordinary transactions, and amendments to our certificate of incorporation, bylaws and other corporate governance documents.

In addition, this concentration of ownership may delay or prevent a change in control of our

Company and make some transactions more difficult or impossible without the support of the Haines Family Trusts.

The Haines Family Trusts also have certain rights, such as registration rights, that our other shareholders do not have.

In any of these matters, the interests of the Haines Family Trusts may differ from or conflict with our interests as a company or the interests of other shareholders.

Accordingly, the Haines Family Trusts could influence us to enter into transactions

or agreements that other shareholders would not approve or make decisions with which other shareholders may disagree.

these matters, the interests of the Haines Family Trusts may differ from or conflict with our interests as a company or the interests of other shareholders.

Accordingly, the Haines Family Trusts could influence us to enter into transactions or

agreements that other shareholders would not approve or make decisions with which other shareholders may disagree.

We are a “controlled company” within the meaning of the rules of NASDAQ, and qualify for exemptions from certain corporate governance requirements.

our shareholders do not have the same protections afforded to shareholders of companies that are subject to such requirements.

We are a “controlled company” under NASDAQ’s corporate governance listing standards, meaning that more than 50% of the voting power for the election of our board of directors will be

held by a single person, entity or group.

result, our shareholders do not have the same protections afforded to shareholders of companies that are subject to such requirements.

We are a “controlled company” under NASDAQ’s corporate governance listing standards, meaning that more than 50% of the voting power for the election of our board of directors will be held by a

single person, entity or group.

As a controlled company, we are exempt from the obligation to comply with certain corporate governance requirements, including the requirements:

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;

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;

that we have a compensation committee that is composed entirely of independent directors.

Even though we are a “controlled company,” we currently intend to comply with each of these requirements.

However, we may avail ourselves of certain of these other exemptions for as

long as we remain a “controlled company.” Accordingly, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of NASDAQ’s corporate governance requirements, which could make our stock less

attractive to investors or otherwise harm our stock price.

Our bylaws have an exclusive forum provision, which could limit a shareholder's ability to obtain a favorable judicial forum for disputes with us or our directors,

officers or other employees.

Our bylaws have an exclusive forum provision providing that, unless we consent in writing to an alternative forum, the state or federal courts for the Western District of Oklahoma are

the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Company, (ii) any action asserting a claim for breach of a fiduciary duty owed by any director, officer, employee or agent of the Company to the Company

or the Company’s shareholders, (iii) any action asserting a claim arising pursuant to any provision of the Oklahoma General Corporation Act, or OGCA, the certificate of incorporation or the bylaws or (iv) any action asserting a claim governed by the

internal affairs doctrine, in each case subject to said courts having personal jurisdiction over the indispensable parties named as defendants therein.

Any person purchasing or otherwise acquiring any interest in any shares of our capital stock will

be deemed to have notice of and to have consented to this provision of our certificate of incorporation.

The exclusive forum provision may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us

or our directors, officers or other employees, which may discourage such lawsuits.

Alternatively, if a court were to find the exclusive forum provision to be inapplicable or unenforceable in an action, we may incur additional costs associated with

resolving such action in other jurisdictions, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.

However, we may avail ourselves of certain of these other exemptions for as long as we

remain a “controlled company.” Accordingly, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all of NASDAQ’s corporate governance requirements, which could make our stock less attractive

to investors or otherwise harm our stock price.

We are a bank holding company and our only source of cash, other than further issuances of securities, is distributions from the Bank.

We are a bank holding company with no material activities other than activities incidental to holding the common stock of the Bank.

Our principal source of funds to pay distributions

on our common stock and service any of our obligations, other than further issuances of securities, would be dividends received from the Bank.

Furthermore, the Bank is not obligated to pay dividends to us, and any dividends paid to us would depend on

the earnings or financial condition of the Bank and various business considerations.

Our principal source of funds to pay distributions on our

common stock and service any of our obligations, other than further issuances of securities, would be dividends received from the Bank.

Furthermore, the Bank is not obligated to pay dividends to us, and any dividends paid to us would depend on the

earnings or financial condition of the Bank and various business considerations.

As is the case with all financial institutions, the profitability of the Bank is subject to the fluctuating cost and availability of money, changes in interest rates

1 unchanged sentence

In addition, various federal and state statutes limit the amount of dividends that the Bank may pay to the Company without regulatory approval.

Prior to our initial public offering, we were treated as an S Corporation, and claims of taxing authorities related to our prior status as an S Corporation could

Upon consummation of our initial public offering, our status as an S Corporation terminated and we became taxed as a C Corporation under the provisions of Sections 301 to 385 of the

Code, which treat the corporation as an entity that is subject to an entity level U.S.

federal income tax.

If the unaudited, open tax years in which we were an S Corporation are audited by the IRS, and we are determined not to have qualified for, or

to have violated, our S Corporation status, we likely would be obligated to pay corporate level tax, plus interest and possible penalties.

This could result in tax with respect to all of the income we reported for periods when we believed we properly

were treated as an S Corporation not subject to entity level taxation.

Under the terms of a tax sharing agreement entered into by the Company and the Haines Family Trusts, the Haines Family Trusts will indemnify us with respect to our unpaid tax

liabilities (including interest and penalties) to the extent that such unpaid tax liabilities are attributable to a decrease in the shareholders’ taxable income for any tax period and a corresponding increase in the Company’s taxable income for any

This indemnity includes any additional taxes resulting from the Company not being a valid S Corporation.

Any such claims, however, could result in additional costs to us and could have a material adverse effect on our results of operations

and financial condition.

We have entered into a tax sharing agreement with the Haines Family Trusts, and we could become obligated to make payments to the Haines Family Trusts for any

additional federal, state or local income taxes assessed against them for tax periods prior to the completion of our initial public offering.

We have entered into a tax sharing agreement with the Haines Family Trusts, and we could become obligated to make payments to the Haines Family Trusts for

any additional federal, state or local income taxes assessed against them for tax periods prior to the completion of our initial public offering.

Prior to our initial public offering, we were treated as an S Corporation for U.S.

federal income tax purposes.

As a result, the Haines Family Trusts, as our shareholders, were taxed

on our income.

As a result, the Haines Family Trusts, as our shareholders, were taxed on our

Therefore, the Haines Family Trusts have received certain distributions from us that were generally intended to equal the amount of tax such trusts were required to pay with respect to our income.

1 unchanged sentence

offering, our S Corporation status terminated.

As a result of such termination, we are subject to federal and state income taxes.

In the event an adjustment to our taxable income for any taxable period (or portion thereof) beginning after the date

of the termination of our S Corporation status results in any increase in taxable income of the Haines Family Trusts for any taxable period (or portion thereof) ending prior to termination of our S Corporation status, it is possible that the Haines

Family Trusts would be liable for additional income taxes for such prior periods.

As a result of such termination, effective September 24, 2018 we are subject to federal and state income taxes.

In the event an adjustment to our taxable income for any taxable period (or portion

thereof) beginning after the date of the termination of our S Corporation status results in any increase in taxable income of the Haines Family Trusts for any taxable period (or portion thereof) ending prior to termination of our S Corporation

status, it is possible that the Haines Family Trusts would be liable for additional income taxes for such prior periods.

Therefore, we have entered into an agreement with the Haines Family Trusts.

Pursuant to this agreement, in the event of any restatement of our taxable income for any

taxable period (or portion thereof) beginning after the date of termination of our S Corporation status pursuant to a determination by, or a settlement with, a taxing authority, then, depending on the nature of the adjustment, we may be required to

make a payment to the Haines Family Trusts in an amount equal to their incremental tax liability, which amount may be material.

In addition, we will indemnify the Haines Family Trusts with respect to unpaid income tax liabilities to the extent that

such unpaid income tax liabilities are attributable to our taxable income for any period after our S Corporation status terminates.

In both cases, the amount of the payment will be based on the assumption that the Haines Family Trusts are taxed at

the highest rate applicable to individuals for the relevant periods.

We will also indemnify the Haines Family Trusts for any interest, penalties, losses, costs or expenses arising out of any claim under the agreement.

However, the Haines Family

Trusts will indemnify us with respect to our unpaid tax liabilities (including interest and penalties) to the extent that such unpaid tax liabilities are attributable to a decrease in the shareholders’ taxable income for any for tax period and a

corresponding increase in the Company’s taxable income for any period.

The Haines Family Trusts will also indemnify the Company with respect to any additional taxes attributable to our final S Corporation tax year that ends with the termination of

our S Corporation status.

Pursuant to this agreement, in the event of any

restatement of our taxable income for any taxable period (or portion thereof) beginning after the date of termination of our S Corporation status pursuant to a determination by, or a settlement with, a taxing authority, then, depending on the

nature of the adjustment, we may be required to make a payment to the Haines Family Trusts in an amount equal to their incremental tax liability, which amount may be material.

In addition, we will indemnify the Haines Family Trusts with respect to

unpaid income tax liabilities to the extent that such unpaid income tax liabilities are attributable to our taxable income for any period after our S Corporation status terminates.

In both cases, the amount of the payment will be based on the

assumption that the Haines Family Trusts are taxed at the highest rate applicable to individuals for the relevant periods.

We will also indemnify the Haines Family Trusts for any interest, penalties, losses, costs or expenses arising out of any

claim under the agreement.

However, the Haines Family Trusts will indemnify us with respect to our unpaid tax liabilities (including interest and penalties) to the extent that such unpaid tax liabilities are attributable to a decrease in the

shareholders’ taxable income for any for tax period and a corresponding increase in the Company’s taxable income for any period.

The Haines Family Trusts will also indemnify the Company with respect to any additional taxes attributable to our final

S Corporation tax year that ends with the termination of our S Corporation status.

Unresolved Staff Comments

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors