What changed in this filing

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Item 1. Business

2025-03-12 compared with 2024-03-25 · 170 added, 186 removed, 282 unchanged (56% of the section changed)

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We are Bank7 Corp., a bank holding company headquartered in Oklahoma City, Oklahoma.

Through our wholly-owned subsidiary, Bank7, we operate twelve full-service branches in Oklahoma, Texas, and Kansas.

Through our wholly-owned subsidiary, Bank7, we operate twelve full-service branches in Oklahoma, Texas, and

We were formed in 2004 in connection with our acquisition of First National Bank of Medford, which was renamed Bank7 (the “Bank”).

We are focused on serving business owners and entrepreneurs by delivering fast, consistent and well-designed banking

We are focused on serving business owners and entrepreneurs by delivering fast, consistent and

well-designed banking solutions.

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

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www.bank7.com.

We make available free of charge through our website, our annual report on Form 10-K, our quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to

those reports as soon as reasonably practicable after they have been electronically filed or furnished with the Securities and Exchange Commission.

We make available free of charge through our website, our annual report on Form 10-K, our quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments

to those reports as soon as reasonably practicable after they have been electronically filed or furnished with the Securities and Exchange Commission.

Information included on our website is not incorporated into this filing.

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exceptional service and meeting their banking needs through a wide variety of commercial and retail financial services.

The Bank has a particular focus in the following loan categories (i) commercial real estate lending, (ii) hospitality lending, (iii) energy lending, and (iv) commercial and industrial lending.

The Bank has a particular focus in the following loan categories (i) commercial real estate lending (“CRE”), (ii) hospitality lending, (iii) energy lending, and (iv) commercial and industrial

Although it is a small segment of the Bank, we also provide consumer lending services to individuals for personal and household purposes, including secured and unsecured term loans and home improvement loans.

Consumer lending services include (i)

residential real estate loans and mortgage banking services, (ii) personal lines of credit, (iii) loans for the purchase of automobiles, and (iv) other installment loans.

Consumer lending services

include (i) residential real estate loans and mortgage banking services, (ii) personal lines of credit, (iii) loans for the purchase of automobiles, and (iv) other installment loans.

The Bank offers deposit banking products, including (i) commercial deposit services, commercial checking, money market, and other deposit accounts, and (ii) retail deposit services such as

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We focus on our daily execution, making sound credit decisions and maintaining cost discipline, which is the foundation for our success.

Our customers are our top priority and we focus on efficiently

providing tailored banking products and services to business owners and entrepreneurs, with a goal of generating consistent growth and delivering exceptional returns to our shareholders.

Additionally, we continually position ourselves for future

growth both organically and through strategic acquisitions.

Our customers are our top priority and we focus on

efficiently providing tailored banking products and services to business owners and entrepreneurs, with a goal of generating consistent growth and delivering exceptional returns to our shareholders.

Additionally, we continually position

ourselves for future growth both organically and through strategic acquisitions.

Cost Discipline and Efficiency

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Interest rates on loans and deposits, as well as prices on fee-based services, are typically significant competitive factors within the banking and financial services industry.

Many of our competitors

are much larger financial institutions that have greater financial resources than we do and compete aggressively for market share.

These competitors attempt to gain market share through their financial product mix, pricing strategies and banking

center locations.

Other important competitive factors in our industry and markets include office locations and hours, quality of customer service, community reputation, continuity of personnel and services, capacity and willingness to extend

credit, and ability to offer excellent banking products and services.

While we seek to remain competitive with respect to fees charged, interest rates and pricing, we believe that our broad suite of financial solutions, our high-quality customer

service culture, our positive reputation and our long-standing community relationships enable us to compete successfully within our markets and enhance our ability to attract and retain customers.

competitors are much larger financial institutions that have greater financial resources than we do and compete aggressively for market share.

These competitors attempt to gain market share through their financial product mix, pricing strategies

and banking center locations.

extend credit, and ability to offer excellent banking products and services.

While we seek to remain competitive with respect to fees charged, interest rates and pricing, we believe that our broad suite of financial solutions, our high-quality

customer service culture, our positive reputation and our long-standing community relationships enable us to compete successfully within our markets and enhance our ability to attract and retain customers.

Human Capital

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value our employees by investing in competitive compensation and benefit packages and fostering a team environment centered on professional service and open communication.

Attracting, retaining and developing qualified, engaged employees who embody

these values are crucial our success.

We offer all of our employees a comprehensive benefits package that includes medical, dental and vision insurance, a flexible spending plan, group life insurance, short-term and long-term disability insurance,

a traditional 401(k) Plan, competitive paid time off/paid holidays, and competitive incentives.

Attracting, retaining and developing qualified, engaged employees who

embody these values are crucial our success.

We offer all of our employees a comprehensive benefits package that includes medical, dental and vision insurance, a flexible spending plan, group life insurance, short-term and long-term disability

insurance, a traditional 401(k) Plan, competitive paid time off/paid holidays, and competitive incentives.

We are committed and focused on the health and safety of our employees, customers, and communities and are committed to providing a safe and secure work environment in accordance with applicable

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Federal and state laws, and the related regulations of the bank regulatory agencies, affect, among

other things, the scope of business, the kinds and amounts of investments banks may make, reserve requirements, capital levels relative to operations, the nature and amount of collateral for loans, the establishment of branches, the ability to

merge, consolidate and acquire, dealings with insiders and affiliates.

other things, the scope of business, the kinds and amounts of permissible investments, reserve requirements, capital levels relative to assets, the nature and amount of collateral for loans, the establishment of branches, the ability to merge,

consolidate and acquire, dealings with insiders and affiliates.

the payment of dividends and redemption of securities.

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These regulatory agencies have broad discretion to impose restrictions and limitations on the operations of a regulated entity and exercise enforcement

powers over a regulated entity (including terminating deposit insurance, imposing orders, fines and other civil and criminal penalties, removing officers and directors and appointing supervisors and conservators) where the agencies determine, among

other things, that such operations are unsafe or unsound, fail to comply with applicable law or are otherwise inconsistent with laws and regulations or with the supervisory policies of these agencies.

among other things, that such operations are unsafe or unsound, fail to comply with applicable law or regulations, or are otherwise inconsistent with the supervisory policies of these agencies.

Regulatory Capital Requirements

The federal banking agencies require that banking organizations meet several risk-based capital adequacy requirements.

The current risk-based capital standards applicable to the Company and the Bank are based on the

Basel III Capital Rules established by the Basel Committee on Banking Supervision (the “Basel Committee”).

The Basel Committee is a committee of central banks and bank supervisors/regulators from the major industrialized countries that develops

broad policy guidelines for use by each country’s supervisors in determining the supervisory policies they apply.

The requirements are intended to ensure that banking organizations have adequate capital given the risk levels of assets and

off-balance sheet financial instruments.

The current risk-based capital standards applicable to the Company and the Bank are based on

the Basel III Capital Rules established by the Basel Committee on Banking Supervision (the “Basel Committee”).

The Basel Committee is a committee of central banks and bank supervisors/regulators from the major industrialized countries that

develops broad policy guidelines for use by each country’s supervisors in determining the supervisory policies they apply.

The requirements are intended to ensure that banking organizations have adequate capital given the risk levels of assets

and off-balance sheet financial instruments.

The Basel III Capital Rules require the Bank and the Company to comply with four minimum capital standards:

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a CET1 to risk-weighted assets ratio of 4.5%;

a Tier 1 capital to

risk-weighted assets ratio of at least 6.0%;

a Tier 1 capital

to risk-weighted assets ratio of at least 6.0%;

and a total capital to risk-weighted assets ratio of at least 8.0%.

The calculation of all types of regulatory capital is subject to definitions, deductions and adjustments specified in the regulations.

The calculation of all types of regulatory capital is subject to definitions, deductions and adjustments specified in the

The Basel III Capital Rules also require a “capital conservation buffer” of 2.5% above the regulatory minimum risk-based capital requirements.

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subject to limitations on certain activities, including payment of dividends, share repurchases and discretionary bonuses to executive officers based on the amount of the shortfall.

As of December 31, 2023, the Company’s and the Bank’s capital ratios exceeded the minimum capital adequacy guideline percentage requirements under the Basel III Capital Rules on a fully phased-in basis.

As of December 31, 2024, the Company’s and the Bank’s capital ratios exceeded the minimum capital adequacy guideline percentage requirements under the Basel III Capital Rules.

Prompt Corrective Action

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corrective action, the law establishes five capital tiers:

“well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically undercapitalized.” A depository institution’s capital tier depends on its

capital levels and certain other factors established by regulation.

Under the applicable FDIC regulations, an institution is deemed to be “well-capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital

ratio of 8.0% or greater, a CET1 ratio of 6.5% or greater and a leverage ratio of 5.0% or greater.

its capital levels and certain other factors established by regulation.

Under the applicable FDIC regulations, an institution is deemed to be “well-capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based

capital ratio of 8.0% or greater, a CET1 ratio of 6.5% or greater and a leverage ratio of 5.0% or greater.

At each lower capital category, a bank is subject to increased restrictions on its operations.

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guarantee by the parent holding company, if any).

“Significantly undercapitalized” banks are subject to broad regulatory restrictions, including among other things, capital directives, forced mergers, restrictions on the rates of interest they may

pay on deposits, restrictions on asset growth and activities, and prohibitions on paying bonuses or increasing compensation to senior executive officers without FDIC approval.

“Significantly undercapitalized” banks are subject to broad regulatory restrictions, including among other things, capital directives, forced mergers, restrictions on the rates of interest they

may pay on deposits, restrictions on asset growth and activities, and prohibitions on paying bonuses or increasing compensation to senior executive officers without FDIC approval.

“Critically undercapitalized” are subject to even more severe

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The capital classification of a bank affects the frequency of regulatory examinations, the bank’s ability to engage in certain activities and the deposit insurance premium paid by the bank.

A bank’s capital category

is determined solely for the purpose of applying prompt correct action regulations and the capital category may not accurately reflect the bank’s overall financial condition or prospects.

A bank’s capital

category is determined solely for the purpose of applying prompt correct action regulations and the capital category may not accurately reflect the bank’s overall financial condition or prospects.

As of December 31, 2024, the Bank met the requirements for being deemed “well-capitalized” for purposes of the prompt corrective action regulations.

As a bank holding company, the Company is subject to regulation and supervision by the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHCA”).

Under the BHCA, the Company

is subject to periodic examination by the Federal Reserve.

Under the BHCA, the

Company is subject to periodic examination by the Federal Reserve.

The Company is required to file with the Federal Reserve periodic reports of its operations and such additional information as the Federal Reserve may require.

Acquisitions, Activities and Change in Control .

The BHCA generally requires the prior approval by the Federal Reserve for any merger involving a bank holding company or a bank holding company’s acquisition of

more than 5% of a class of voting securities of any additional bank or bank holding company or to acquire all or substantially all of the assets of any additional bank or bank holding company.

Subject to certain conditions (including deposit concentration limits established by the BHCA and the Dodd-Frank Act), the Federal Reserve may allow a bank holding company to acquire banks located in any state of the

United States.

The BHCA generally requires the prior approval by the Federal Reserve for any merger involving a bank holding company or a bank holding company’s acquisition

of more than 5% of a class of voting securities of any additional bank or bank holding company or to acquire all or substantially all of the assets of any additional bank or bank holding company.

the United States.

Federal law also generally prohibits any person or company from acquiring “control” of an FDIC-insured depository institution or its holding company without prior notice to the appropriate federal bank regulator.

Permitted Activities .

The BHCA generally prohibits the Company from controlling or engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and their

subsidiaries.

The BHCA generally prohibits the Company from controlling or engaging in any business other than that of banking, managing and controlling banks or furnishing services to banks and

their subsidiaries.

This general prohibition is subject to a number of exceptions.

The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve prior to

November 11, 1999 to be “so closely related to banking as to be a proper incident thereto.” This authority would permit the Company to engage in a variety of banking-related businesses, including operating a mortgage, finance, credit card or

factoring company;

The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve

prior to November 11, 1999 to be “so closely related to banking as to be a proper incident thereto.” This authority would permit the Company to engage in a variety of banking-related businesses, including operating a mortgage, finance, credit

card or factoring company;

performing certain data processing operations;

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acting as an insurance agent for certain types of credit-related insurance;

leasing personal property on a full-payout, non-operating

leasing personal property on a full-payout,

non-operating basis;

and providing certain stock brokerage and investment advisory services.

The BHCA generally does not place territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies.

The Federal Reserve has the

power to order any bank holding company or its subsidiaries to terminate any activity or to terminate its ownership or control of any subsidiary when the Federal Reserve has reasonable grounds to believe that continuing such activity, ownership or

control constitutes a serious risk to the financial soundness, safety or stability of any bank subsidiary of the bank holding company.

Reserve has the power to order any bank holding company or its subsidiaries to terminate any activity or to terminate its ownership or control of any subsidiary when the Federal Reserve has reasonable grounds to believe that continuing such

activity, ownership or control constitutes a serious risk to the financial soundness, safety or stability of any bank subsidiary of the bank holding company.

Source of Strength .

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Under this requirement the Company is expected to commit resources to support the Bank, including at times when the Company may not be in a financial position to provide it.

The Company must stand ready to use its

available resources to provide adequate capital to the Bank during periods of financial stress or adversity.

The Company must also maintain the financial flexibility and capital raising capacity to obtain additional resources for assisting the

The Company must stand ready to use

its available resources to provide adequate capital to the Bank during periods of financial stress or adversity.

The Company must also maintain the financial flexibility and capital raising capacity to obtain additional resources for assisting

The Company’s failure to meet its source of strength obligations may constitute an unsafe and unsound practice or a violation of the Federal Reserve’s regulations or both.

The source of strength obligation most directly affects bank holding

companies where a bank holding company’s subsidiary bank fails to maintain adequate capital levels.

Any capital loans by a bank holding company to the subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness

of the subsidiary bank.

The BHCA provides that in the event of a bank holding company’s bankruptcy any commitment by a bank holding company to a federal bank regulatory agency to maintain the capital of its subsidiary bank will be assumed by the

bankruptcy trustee and entitled to priority of payment.

The source of strength obligation most directly affects bank

holding companies where a bank holding company’s subsidiary bank fails to maintain adequate capital levels.

Any capital loans by a bank holding company to the subsidiary bank are subordinate in right of payment to deposits and to certain other

indebtedness of the subsidiary bank.

assumed by the bankruptcy trustee and entitled to priority of payment.

Safe and Sound Banking Practices .

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Dividend Payments, Stock Redemptions and Repurchases .

The Company’s ability to pay dividends to its shareholders is affected by both general corporate law considerations and the regulations and policies of the

Federal Reserve applicable to bank holding companies, including the Basel III Capital Rules.

The Company’s ability to pay dividends to its shareholders is affected by both general corporate law considerations and the regulations and policies of

the Federal Reserve applicable to bank holding companies, including the Basel III Capital Rules.

Generally, an Oklahoma corporation may pay dividends out of surplus or, if there is no surplus, out of the corporation’s net profits for the fiscal year in which the dividend is declared and/or the preceding fiscal

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deficiency in the amount of capital represented by the preferred stock has been restored.

It is the Federal Reserve’s policy that bank holding companies should generally pay dividends on common stock only out of income available over the past year, and only if prospective earnings retention is consistent

with the organization’s expected future needs and financial condition.

It is also the Federal Reserve’s policy that bank holding companies should not maintain dividend levels that undermine their ability to be a source of strength to its banking

subsidiaries.

Additionally, the Federal Reserve has indicated that bank holding companies should carefully review their dividend policy and has discouraged payment ratios that are at maximum allowable levels unless both asset quality and capital

are very strong.

Bank holding companies must consult with the Federal Reserve before redeeming any equity or other capital instrument included in Tier 1 or Tier 2 capital (or, for small bank holding companies like the Company, before

redeeming any instruments included in equity as defined under GAAP) prior to stated maturity, if such redemption could have a material effect on the level or composition of the organization’s capital base.

In addition, bank holding companies are

unable to repurchase shares equal to 10% or more of its net worth if it would not be well-capitalized (as defined by the Federal Reserve) after giving effect to such repurchase.

Bank holding companies experiencing financial weaknesses, or that are

at significant risk of developing financial weaknesses, must consult with the Federal Reserve before redeeming or repurchasing common stock or other regulatory capital instruments.

consistent with the organization’s expected future needs and financial condition.

It is also the Federal Reserve’s policy that bank holding companies should not maintain dividend levels that undermine their ability to be a source of strength to

its banking subsidiaries.

and capital are very strong.

Bank holding companies must consult with the Federal Reserve before redeeming any equity or other capital instrument included in Tier 1 or Tier 2 capital prior to stated maturity, if such redemption could have a

material effect on the level or composition of the organization’s capital base.

In addition, bank holding companies are unable to repurchase shares equal to 10% or more of its net worth if it would not be well-capitalized (as defined by the

Federal Reserve) after giving effect to such repurchase.

Bank holding companies experiencing financial weaknesses, or that are at significant risk of developing financial weaknesses, must consult with the Federal Reserve before redeeming or

repurchasing common stock or other regulatory capital instruments.

The Bank is an Oklahoma-chartered member bank and is subject to examination, supervision and regulation by the OBD and the Federal Reserve.

The Bank is also subject to certain regulations of the FDIC

and the CFPB.

The Bank is also subject to certain regulations of the

FDIC and the CFPB.

The OBD supervises and regulates all areas of the Bank’s operations including, without limitation, the making of loans, the issuance of securities, the conduct of the Bank’s corporate affairs, the satisfaction of

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As an FDIC-insured institution, the Bank is required to pay deposit insurance premiums to the FDIC.

The amount of such premiums is determined by multiplying the institution’s assessment rate

by its assessment base.

The amount of such premiums is determined by multiplying the institution’s assessment

rate by its assessment base.

The assessment rate is based on the institution’s risk classification which is assigned based on the institution’s capital levels and the level of supervisory concern the institution poses to the regulators.

The assessment

base is calculated as the institution’s average consolidated total assets minus average tangible equity.

Additionally, the Dodd-Frank Act altered the minimum designated reserve ratio of the DIF, increasing the minimum from 1.15% to 1.35% of the estimated amount of total insured deposits, and eliminating the requirement

that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds.

At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, may increase or decrease the assessment

rates, following notice and comment on proposed rulemaking.

assessment base is calculated as the institution’s average consolidated total assets minus average tangible equity.

requirement that the FDIC pay dividends to depository institutions when the reserve ratio exceeds certain thresholds.

At least semi-annually, the FDIC updates its loss and income projections for the DIF and, if needed, may increase or decrease

the assessment rates, following notice and comment on proposed rulemaking.

As a result, the Bank’s FDIC deposit insurance premiums could increase.

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The primary source of funds for the Company is dividends from the Bank.

Unless the approval of the Federal Reserve is obtained, the Bank may not declare or pay a dividend if the total of all

dividends declared during the calendar year, including the proposed dividend, exceeds the sum of the Bank’s net income during the current calendar year and the retained net income of the prior two calendar years.

Unless the approval of the Federal Reserve is obtained, the Bank may not declare or pay a dividend if the total of

all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of the Bank’s net income during the current calendar year and the retained net income of the prior two calendar years.

Oklahoma law also places

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This may decrease any amount available for the payment of dividends in a particular period if the surplus funds for the Bank fail to comply with this limitation.

the approval of the Commissioner of the OBD is required if the total of all dividends declared by the Bank in any calendar year exceed the total of its net profits of that year combined with its retained net profits of the preceding two years, less

any required transfers to surplus or a fund for the retirement of any preferred stock.

less any required transfers to surplus or a fund for the retirement of any preferred stock.

The Federal Reserve and the OBD also may, under certain circumstances, prohibit the payment of dividends to us from the Bank.

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generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized.

As described above, the Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of December

As described above, the Bank exceeded its minimum capital requirements under applicable regulatory guidelines as of

December 31, 2024.

Transactions with Affiliates .

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surplus, and such transactions are limited in the aggregate to 20% of the Bank’s capital and surplus.

All such transactions, as well as contracts entered into between the Bank and affiliates, must be on terms that are no less favorable to the Bank

than those that would be available from non-affiliated third parties.

Federal Reserve policies also forbid the payment by bank subsidiaries of management fees which are unreasonable in amount or exceed the fair market value of the services rendered

or, if no market exists, actual costs plus a reasonable profit.

All such transactions, as well as contracts entered into between the Bank and affiliates, must be on terms that are no less favorable to the

Bank than those that would be available from non-affiliated third parties.

Federal Reserve policies also forbid the payment by bank subsidiaries of management fees which are unreasonable in amount or exceed the fair market value of the services

rendered or, if no market exists, actual costs plus a reasonable profit.

Loans to Directors, Executive Officers and Principal Shareholders .

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Furthermore, the Bank must periodically report all loans made to directors and other insiders to the bank regulators.

December 31, 2023, the Bank had one line of credit for loans to an insider with a maximum credit of $500,000 and an outstanding balance of $203,000;

as of December 31, 2023, the Bank had no other loans outstanding to insiders.

December 31, 2024, the Bank had no outstanding loans to insiders.

Limits on Loans to One Borrower .

As an Oklahoma state-chartered bank, the Bank is subject to limits on the amount of loans it can make to one borrower.

With certain limited exceptions, loans and extensions of

credit from Oklahoma state-chartered banks outstanding to any borrower (including certain related entities of the borrower) at any one time may not exceed 30% of the capital, less intangible assets, of the bank.

An Oklahoma state-chartered bank may

lend an additional amount if the loan is fully secured by certain types of collateral, like bonds or notes of the United States.

Certain types of loans are exempted from the lending limits, including loans secured by segregated deposits held by the

With certain limited exceptions, loans and extensions

of credit from Oklahoma state-chartered banks outstanding to any borrower (including certain related entities of the borrower) at any one time may not exceed 30% of the capital, less intangible assets, of the bank.

An Oklahoma state-chartered

bank may lend an additional amount if the loan is fully secured by certain types of collateral, like bonds or notes of the United States.

Certain types of loans are exempted from the lending limits, including loans secured by segregated deposits

held by the Bank.

The Bank’s legal lending limit to any one borrower was $68.2 million as of December 31, 2024.

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maintaining compliance.

If a financial institution fails to submit an acceptable compliance plan, or fails in any material respect to implement a compliance plan that has been accepted by its primary federal regulator, the regulator is required to

issue an order directing the institution to cure the deficiency.

Until the deficiency cited in the regulator’s order is cured, the regulator may restrict the financial institution’s rate of growth, require the financial institution to increase its

capital, restrict the rates the institution pays on deposits or require the institution to take any action the regulator deems appropriate under the circumstances.

Noncompliance with the standards established by the safety and soundness guidelines

may also constitute grounds for other enforcement action by the federal bank regulatory agencies, including cease and desist orders and civil money penalty assessments.

to issue an order directing the institution to cure the deficiency.

Until the deficiency cited in the regulator’s order is cured, the regulator may restrict the financial institution’s rate of growth, require the financial institution to increase

its capital, restrict the rates the institution pays on deposits or require the institution to take any action the regulator deems appropriate under the circumstances.

Noncompliance with the standards established by the safety and soundness

guidelines may also constitute grounds for other enforcement action by the federal bank regulatory agencies, including cease and desist orders and civil money penalty assessments.

Branching Authority .

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lending service and investment performance rather than the extent to which the institution conducts needs assessments, documents community outreach or complies with other procedural requirements.

The ratings range from a high of “outstanding” to a

low of “substantial noncompliance.” The Bank had a CRA rating of “satisfactory” as of its most recent CRA assessment.

The ratings range from a high of “outstanding” to

a low of “substantial noncompliance.” The Bank had a CRA rating of “satisfactory” as of its most recent CRA assessment.

Anti-Money Laundering and the Office of Foreign Assets Control Regulation .

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Likewise, OFAC administers and enforces economic and trade sanctions against targeted foreign countries and regimes under authority of various laws, including designated foreign countries, nationals and others.

publishes lists of specially designated targets and countries.

OFAC publishes lists of specially designated targets and countries.

Financial institutions are responsible for, among other things, blocking accounts of and transactions with such targets and countries, prohibiting unlicensed trade and financial

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Service Members Civil Relief Act, the Military Lending Act, and these laws’ respective state law counterparts, as well as state usury laws and laws regarding unfair and deceptive acts and practices.

These and other federal laws, among other things,

require disclosures of the cost of credit and terms of deposit accounts, provide substantive consumer rights, prohibit discrimination in credit transactions, regulate the use of credit report information, provide financial privacy protections,

prohibit unfair, deceptive and abusive practices and subject us to substantial regulatory oversight.

Violations of applicable consumer protection laws can result in significant potential liability from litigation brought by customers, including

actual damages, restitution and attorneys’ fees.

Federal bank regulators, state attorneys general and state and local consumer protection agencies may also seek to enforce consumer protection requirements and obtain these and other remedies,

including regulatory sanctions, customer rescission rights, action by the state and local attorneys general in each jurisdiction in which we operate and civil money penalties.

Failure to comply with consumer protection requirements may also result

in failure to obtain any required bank regulatory approval for mergers or acquisitions or prohibition from engaging in such transactions even if approval is not required.

These and other federal laws, among other

things, require disclosures of the cost of credit and terms of deposit accounts, provide substantive consumer rights, prohibit discrimination in credit transactions, regulate the use of credit report information, provide financial privacy

protections, prohibit unfair, deceptive and abusive practices and subject us to substantial regulatory oversight.

Violations of applicable consumer protection laws can result in significant potential liability from litigation brought by

customers, including actual damages, restitution and attorneys’ fees.

Federal bank regulators, state attorneys general and state and local consumer protection agencies may also seek to enforce consumer protection requirements and obtain these and

other remedies, including regulatory sanctions, customer rescission rights, action by the state and local attorneys general in each jurisdiction in which we operate and civil money penalties.

Failure to comply with consumer protection

requirements may also result in failure to obtain any required bank regulatory approval for mergers or acquisitions or prohibition from engaging in such transactions even if approval is not required.

Rulemaking authority for most federal consumer protection laws was transferred from the prudential regulators to the CFPB on July 21, 2011.

In some cases, regulators such as the Federal Trade Commission and the DOJ

also retain certain rulemaking or enforcement authority.

The CFPB also has broad authority to prohibit unfair, deceptive and abusive acts and practices, or UDAAP, and to investigate and penalize financial institutions that violate this prohibition.

While the statutory language of the Dodd-Frank Act sets forth the standards for acts and practices that violate the prohibition on UDAAP, certain aspects of these standards are untested, and thus it is currently not possible to predict how the CFPB

will exercise this authority.

The consumer protection provisions of the Dodd-Frank Act and the examination, supervision and enforcement of those laws and implementing regulations by the CFPB have created a more intense and complex environment for

consumer finance regulation.

The CFPB has significant authority to implement and enforce federal consumer protection laws and new requirements for financial services products provided for in the Dodd-Frank Act, as well as the authority to identify

and prohibit UDAAP.

In some cases, regulators such as the Federal Trade Commission and the

DOJ also retain certain rulemaking or enforcement authority.

The CFPB also has broad authority to prohibit unfair, deceptive and abusive acts and practices, or UDAAP, and to investigate and penalize financial institutions that violate this

predict how the CFPB will exercise this authority.

for consumer finance regulation.

identify and prohibit UDAAP.

The review of products and practices to prevent such acts and practices is a continuing focus of the CFPB, and of banking regulators more broadly.

The ultimate impact of this heightened scrutiny is uncertain but could result in

changes to pricing, practices, products and procedures.

The ultimate impact of this heightened scrutiny is uncertain but could

result in changes to pricing, practices, products and procedures.

It could also result in increased costs related to regulatory oversight, supervision and examination, additional remediation efforts and possible penalties.

In addition, the Dodd-Frank Act

provides the CFPB with broad supervisory, examination and enforcement authority over various consumer financial products and services, including the ability to require reimbursements and other payments to customers for alleged legal violations and

to impose significant penalties, as well as injunctive relief that prohibits lenders from engaging in allegedly unlawful practices.

The CFPB also has the authority to obtain cease and desist orders providing for affirmative relief or monetary

In addition, the

Dodd-Frank Act provides the CFPB with broad supervisory, examination and enforcement authority over various consumer financial products and services, including the ability to require reimbursements and other payments to customers for alleged

legal violations and to impose significant penalties, as well as injunctive relief that prohibits lenders from engaging in allegedly unlawful practices.

The CFPB also has the authority to obtain cease and desist orders providing for affirmative

relief or monetary penalties.

The Dodd-Frank Act does not prevent states from adopting stricter consumer protection standards.

State regulation of financial products and potential enforcement actions could also adversely affect our business, financial condition or

results of operations.

State regulation of financial products and potential enforcement actions could also adversely affect our business,

financial condition or results of operations.

The CFPB has examination and enforcement authority over providers with more than $10 billion in assets.

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by their applicable bank regulators.

environment for consumer finance regulation.

The CFPB has significant authority to implement and enforce federal consumer protection laws and new requirements for financial services products provided for in the Dodd-Frank Act, as well as the

authority to identify and prohibit UDAAP.

The review of products and practices to prevent such acts and practices is a continuing focus of the CFPB, and of banking regulators more broadly.

The ultimate impact of this heightened scrutiny is

uncertain but could result in changes to pricing, practices, products and procedures.

It could also result in increased costs related to regulatory oversight, supervision and examination, additional remediation efforts and possible penalties.

addition, the Dodd-Frank Act provides the CFPB with broad supervisory, examination and enforcement authority over various consumer financial products and services, including the ability to require reimbursements and other payments to customers for

alleged legal violations and to impose significant penalties, as well as injunctive relief that prohibits lenders from engaging in allegedly unlawful practices.

The CFPB also has the authority to obtain cease and desist orders providing for

affirmative relief or monetary penalties.

The Dodd-Frank Act does not prevent states from adopting stricter consumer protection standards.

State regulation of financial products and potential enforcement actions could also adversely affect our

business, financial condition or results of operations.

The CFPB has examination and enforcement authority over providers with more than $10 billion in assets.

Banks and savings institutions with $10 billion or less in assets, like the Bank, will continue

to be examined by their applicable bank regulators.

Federal Banking Agency Incentive Compensation Guidance

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organizations by encouraging excessive risk-taking.

The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk management, control and governance processes.

The incentive compensation guidance sets expectations for banking organizations concerning their incentive compensation arrangements and related risk management, control and governance

The incentive compensation guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon three primary principles:

risk-taking incentives;

balanced risk-taking incentives;

(2) compatibility with effective controls and risk management;

and (3) strong corporate governance.

Any deficiencies in compensation practices that are identified may be incorporated into the organization’s supervisory

ratings, which can affect its ability to make acquisitions or take other actions.

In addition, under the incentive compensation guidance, a banking organization’s federal supervisor may initiate enforcement action if the organization’s incentive

compensation arrangements pose a risk to the safety and soundness of the organization.

Further, the Basel III capital rules limit discretionary bonus payments to bank executives if the institution’s regulatory capital ratios fail to exceed certain

Although the federal bank regulatory agencies proposed additional rules in 2016 related to incentive compensation for all banks with more than $1.0 billion in assets, which would include the Company and the Bank, those rules have not

been finalized and the scope and content of the U.S.

banking regulators’ policies on executive compensation are continuing to develop and are likely to continue evolving in the near future.

Any deficiencies in compensation practices that are identified may be incorporated into the organization’s

supervisory ratings, which can affect its ability to make acquisitions or take other actions.

In addition, under the incentive compensation guidance, a banking organization’s federal supervisor may initiate enforcement action if the

organization’s incentive compensation arrangements pose a risk to the safety and soundness of the organization.

Further, the Basel III capital rules limit discretionary bonus payments to bank executives if the institution’s regulatory capital

ratios fail to exceed certain thresholds.

Although the federal bank regulatory agencies proposed additional rules in June of 2016 and again in May of 2024 related to incentive compensation for all banks with more than $1.0 billion in assets,

which would include the Company and the Bank, those rules have not been finalized and the scope and content of the U.S.

banking regulators’ policies on executive compensation are continuing to develop and are likely to continue evolving in the

Financial Privacy

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limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a non-affiliated third party.

These regulations affect how consumer information is

transmitted through financial services companies and conveyed to outside vendors.

In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a product

or service, such as that shown on consumer credit reports and asset and income information from applications.

These regulations affect how consumer information

is transmitted through financial services companies and conveyed to outside vendors.

In addition, consumers may also prevent disclosure of certain information among affiliated companies that is assembled or used to determine eligibility for a

product or service, such as that shown on consumer credit reports and asset and income information from applications.

Consumers also have the option to direct banks and other financial institutions not to share information about transactions and

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These security and privacy policies and procedures for the protection of confidential and personal information are in effect across our lines of business.

Furthermore, the federal banking regulators regularly issue guidance

regarding cybersecurity intended to enhance cyber risk management.

A financial institution is expected to implement multiple lines of defense against cyber-attacks and ensure that their risk management procedures address the risk posed by potential

cyber threats.

Furthermore, the federal banking regulators regularly issue

guidance regarding cybersecurity intended to enhance cyber risk management.

A financial institution is expected to implement multiple lines of defense against cyber-attacks and ensure that their risk management procedures address the risk posed

by potential cyber threats.

A financial institution is further expected to maintain procedures to effectively respond to a cyber-attack and resume operations following any such attack.

The Bank has adopted and implemented policies and procedures to comply with

privacy, information security, and cybersecurity requirements.

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.”

The Bank has adopted and implemented policies and procedures

to comply with privacy, information security, and cybersecurity requirements.

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.”

Impact of Monetary Policy

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Other legislative and regulatory initiatives which could affect the Company, the Bank and the banking industry in general may be pending, proposed or introduced before the U.S.

Congress, the Oklahoma Legislature and

other governmental bodies from time to time.

Congress, the Oklahoma Legislature

and other governmental bodies from time to time.

Such proposals, if enacted, may further alter the structure, regulation and competitive relationship among financial institutions, and may subject the Company or the Bank to increased regulation,

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What changed 10-K

Item 1. Business