What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-17 compared with 2025-03-12 · 787 added, 888 removed, 681 unchanged (71% of the section changed)

Financial Statements and

Supplementary Data

Financial Statements Index

Report of Independent Registered Public Accounting Firm (PCAOB ID:

Financial Statements and Supplementary Data

Consolidated Financial Statements Index

Report of RSM US LLP, Independent Registered Public Accounting Firm for the year ended December 31, 2025 (PCAOB ID:

Report of Forvis Mazars, LLP, Independent Registered Public Accounting Firm for the years ended December 31, 2024 and 2023 (PCAOB ID:

Consolidated Financial Statements:

5 unchanged sentences

Report of Independent Registered Public Accounting Firm

Shareholders, Board of Directors, and Audit Committee

Oklahoma City, Oklahoma

To the Shareholders and the Board of Directors of Bank7 Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Bank7 Corp.

(the “Company”) as of December 31, 2024 and 2023, the related consolidated statements

of comprehensive income, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the

consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023 and the results of its operations and its cash flows for each of the years in

the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control

over financial reporting as of December 31, 2024 based on criteria established in Internal Control – Integrated Framework (2013) issued by the

Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 12, 2025 expressed an unqualified opinion thereon .

We have audited the accompanying consolidated balance sheet of Bank7 Corp.

and its subsidiaries (the Company) as of December 31, 2025, the related consolidated statements of comprehensive income, shareholders’ equity

and cash flows for the year ended December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all material respects, the

financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based

on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Our report dated March 16, 2026 expressed an

opinion that the Company had not maintained effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued

by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements

based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm

registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance

about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing

procedures that respond to those risks.

Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and

significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of

material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by

management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Shareholders, Board of Directors, and Audit Committee

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements which was communicated or is required

to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of

critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the

accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of the critical audit matter does not alter in any way our opinion

on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses – Loans

As discussed in Notes 1 and 6 to the consolidated financial statements, the Company’s total loans and associated allowance for credit losses (ACL) were $1.4

billion and $17.9 million, respectively, as of December 31, 2024.

The amount of the ACL represents management’s best estimate of current expected credit losses on loans considering all available information from internal and external sources,

relevant to assessing exposure to credit loss over the contractual term of the loans.

Loans with similar risk characteristics are aggregated into homogenous segments for assessment.

For substantially all loan segments, the Company uses the discounted cash flow method to estimate expected losses.

For each loan segment, the Company generates

cash flow projections at the instrument level adjusting payment expectations for estimated prepayment speed, curtailments, probability of default, and loss given default.

Management qualitatively adjusts its model results for risk factors not considered within the modeling processes but still relevant in assessing the expected

credit losses within the loan pools.

Auditing management’s estimate of the ACL involved a high degree of subjectivity due to management’s identification and measurement of the qualitative factor

adjustments being highly judgmental.

The primary procedures we performed related to this critical audit matter included:

Obtained an understanding of the Company’s process for establishing the qualitative adjustment.

Evaluated and tested the design and operating effectiveness of controls over the establishment of qualitative factors.

Evaluated the qualitative adjustments to the ACL including assessing the basis for adjustments and the reasonableness of the significant assumptions.

/s/ Forvis Mazars, LLP

As discussed in Notes 1 and 5 to the consolidated financial statements, the Company’s allowance for credit losses on loans was $19.4 million as of December 31, 2025.

The allowance for

credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

The methodology for estimating the amount of credit losses reported in the allowance for

credit losses has two basic components:

an asset-specific component involving loans that do not share risk characteristics and the measurement of expected credit losses for such individual loans and a pooled component for expected credit losses

for pools of loans that share similar risk characteristics.

A discounted cash flow (“DCF”) methodology is utilized to calculate expected cash flows for the life of each individual loan, with the exception of consumer segment loans.

discounted present value of expected cash flow is then compared to the loan’s amortized cost basis to determine the credit loss estimate.

Individual loan results are aggregated at the pool level in determining total reserves for each loan

The primary inputs used to calculate expected cash flows include historical loss rates which reflect probability of default (“PD”) and loss given default (“LGD”), and prepayment rates.

The historical look-back period is a key factor in

the calculation of the PD rate and is based on management’s assessment of current and forecasted conditions and may vary by loan pool.

LGD rates generally reflect the historical average net loss rate by loan pool.

Expected cash flows are

further adjusted to incorporate the impact of loan prepayments which will vary by loan segment and interest rate conditions.

Adjustments are made to incorporate the impact of forecasted conditions across all loan segments.

The Company utilizes a 12-month reasonable and supportable forecast period, followed by a 12-month reversion period

where loss rates revert to the historical average on a straight-line basis.

The length of the forecast and reversion periods are periodically evaluated and based on management’s assessment of current and forecasted conditions.

For purposes of

developing a reasonable and supportable assessment of future conditions, management utilizes established industry and economic data points and sources, including forecasts for the national unemployment rate and gross domestic product growth

from the Federal Open Market Committee.

PD rates for the forecast period will be adjusted accordingly based on management’s assessment of future conditions.

Loss rates are further adjusted to account for other risk factors that impact loan defaults and losses.

These basis point adjustments are based on management’s assessment of trends and conditions that impact credit

risk and resulting credit losses, more specifically internal and external factors that are independent of and not reflected in the quantitative loss rate calculations.

Risk factors management considers in this assessment include trends in

underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters.

The evaluation

of these qualitative factors and forecasts requires that management make significant judgements and are highly sensitive to changes in significant assumptions.

We identified the qualitative factors and forecasts applied to the allowance for credit losses on loans as a critical audit matter because auditing the forecasts and qualitative factors required a high degree of

auditor judgment, as the estimate is highly sensitive to changes in significant assumptions.

Our audit procedures related to the forecasts and qualitative factors applied to the allowance for credit losses on loans included the following, among others:

We tested management’s process and evaluated the reasonableness of their judgements and assumptions to develop the qualitative factors and forecasts, which included:

Testing the relevancy, accuracy and consistency of the data inputs used by management as a basis for the adjustments for qualitative factors and supportable forecasts by comparing to internal and external independently sourced

data, including data related to current and forecasted periods.

Evaluating the magnitude and directional consistency of the adjustments with data points and trends in the loan portfolio, economic observations and other internal and external data inputs.

Evaluating whether management’s conclusions were consistent with Company provided internal data and external, independently sourced data and recalculating the adjustments and agreeing the calculated adjustments to the allowance

/s/ RSM US LLP

We have served as the Company’s auditor since 2025.

Dallas, Texas

March 16, 2026

Report of Independent Registered Public Accounting Firm

Shareholders, Board of Directors, and Audit Committee

Oklahoma City, Oklahoma

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Bank7 Corp.

(“Company”) as of December 31, 2024, the related consolidated statements of comprehensive income, shareholders’ equity, and cash flows

for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all

material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with accounting

principles generally accepted in the United States of America.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of

material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well

as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We served as the Company’s auditor from 2013 to 2025.

/s/ Forvis Mazars, LLP

Oklahoma City, Oklahoma

March 12, 2025

Consolidated Balance Sheets

(Dollar amounts in thousands, except par value)

(Dollar amounts in thousands, except par value and share data)

Cash and due from banks

Interest-bearing time deposits in other banks

Available-for-sale debt securities

Loans, net of allowance for credit losses of $ 17,918 and $ 19,691 at December 31, 2024 and December 31, 2023, respectively

Available-for-sale debt securities (amortized cost of $ 57,316 and

$ 66,445 at December 31, 2025 and December 31, 2024, respectively)

Loans, net of allowance for credit losses of $ 19,407 and

$ 17,918 at December 31, 2025 and December 31, 2024, respectively

Loans held for sale

13 unchanged sentences

50,000,000 shares authorized;

shares issued and outstanding:

issued and outstanding:

9,462,656 and 9,390,211 at December 31, 2025

7 unchanged sentences

Consolidated Statements of Comprehensive Income

(Dollar amounts in thousands, except par share data)

(Dollar amounts in thousands, except share and per share data)

Year ended December 31,

31 unchanged sentences

Weighted average common shares outstanding - diluted

Other comprehensive income (loss)

Unrealized gains (losses) on securities, net of tax (expense) benefit of ($ 335 ),

($ 1 million), and $ 2.8

million for the years ended December 31, 2024 , 2023 , and 2022 , respectively

Other Comprehensive Income

Unrealized gains on securities, net of tax expense of $ 784 , $ 335 and $ 1 million for the years ended December 31, 2025, 2024, and 2023, respectively

Reclassification adjustment for realized losses included in net income net of tax of $ 2 , $ 1

for the years ended December 31, 2024 , 2023 , and 2022 , respectively

Other comprehensive

income (loss)

and $ 4 for the years ended December 31, 2025, 2024, and 2023, respectively

Other comprehensive income

Comprehensive Income

1 unchanged sentence

Consolidated Statements of Shareholders’ Equity

(Dollar amounts in thousands, except par value)

(Dollar amounts in thousands, except share and per share data)

Year Ended December 31,

3 unchanged sentences

Shares issued for restricted stock units

Shares acquired and canceled

Shares acquired and retired

Balance at end of period

1 unchanged sentence

Balance at beginning of period

Net shares purchased and retired for restricted stock units and issue for stock options

Net shares purchased and retired for restricted stock units and issued for stock options

Balance at end of period

8 unchanged sentences

Cumulative effect of change in accounting principle, net of tax of $ 178

Cash dividends declared ($ 0.89 , $ 0.74 and $ 0.52 per share for

the years ended December 31, 2024, 2023, and 2022, respectively)

Cash dividends declared ($ 1.02 , $ 0.89 and $ 0.74 per share for the years ended December 31, 2025, 2024, and 2023, respectively)

Balance at end of period

1 unchanged sentence

Balance at beginning of period

Comprehensive income(loss)

Comprehensive income

Balance at end of period

8 unchanged sentences

Provision for credit losses

(Accretion)Amortization of premiums and discounts on securities

Gain on sales of loans

Amortization (Accretion) of premiums and discounts on securities

Gain on sales of loans held for sale

Net loss on sale of available-for-sale debt securities

3 unchanged sentences

Cash disbursements for loans originated for sale

Deferred income tax benefit

Deferred income tax expense

Interest receivable and other assets

5 unchanged sentences

Purchases of interest-bearing time deposits in other banks

Proceeds from sale of available-for-sale debt securities

Maturities, prepayments and calls of available-for-sale debt securities

3 unchanged sentences

Proceeds from sale of premises and equipment

Change in nonmarketable equity securities

Net cash provided by (used in) investing activities

Purchase of nonmarketable equity securities

Proceeds from sale of nonmarketable equity securities

Net cash (used in) provided by investing activities

Financing Activities

Net change in deposits

Cash distributions

Cash dividends paid

Shares purchased and retired for restricted stock units

2 unchanged sentences

Net cash provided by (used in) financing activities

Net Increase/(Decrease) in Cash and Due from Banks

Net Increase in Cash and Due from Banks

Cash and Due from Banks, Beginning of Period

9 unchanged sentences

Nature of Operations

(the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly owned subsidiary,

Bank7 (the “Bank”).

The Bank is primarily engaged in providing a full range of banking and financial services to individual and corporate customers located in Oklahoma, Texas, and Kansas.

The Bank is subject to competition from other financial

institutions.

The Company is subject to the regulation of certain federal agencies and undergoes periodic examinations by those regulatory authorities.

(the “Company”) is a bank holding company whose principal activity is the ownership and management of its wholly owned subsidiary, Bank7 (the “Bank”).

The Bank is primarily engaged in providing a

full range of banking and financial services to individual and corporate customers located in Oklahoma, Texas, and Kansas.

The Bank is subject to competition from other financial institutions.

The Company is subject to the regulation of

certain federal agencies and undergoes periodic examinations by those regulatory authorities.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company, the Bank and its two subsidiaries, 1039 NW 63 rd , LLC, which holds real estate utilized by the Bank, and Giddings

Production, LLC, which is engaged in the production of oil, natural gas and natural liquid (“NGL”) reserves in Texas.

The accompanying consolidated financial statements include the accounts of the Company, the Bank and its three subsidiaries:

First American Mortgage, LLC, which provides residential mortgage lending services, 1039 NW 63rd, LLC, which holds real estate utilized by the Bank, and Giddings Production, LLC, which is engaged in the production of oil, natural gas and natural gas liquid (“NGL”) reserves in Texas.

All significant intercompany accounts and transactions have been eliminated in consolidation.

Management has refined the presentation of the Fair Value disclosure footnote for financial instruments not recorded at fair value.

Specifically, the 2024 comparative disclosures for financial instruments

not recorded at fair value have been refined to enhance clarity.

These refinements had no impact on previously reported total assets, total liabilities, shareholders’ equity, or net income.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”)

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and

expenses during the reporting period.

Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses, income

taxes, goodwill and intangibles and fair values of financial instruments.

Reclassifications

Certain reclassifications have been made to the 2022 consolidated financial statements to conform to classification used for December 31, 2023.

These reclassifications had no impact on net income,

shareholders’ equity or cash flows as previously reported.

Cash Equivalents

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Actual results could

differ from those estimates.

Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses.

Cash and due from banks

The Company considers all liquid investments with original maturities of three months or less to be cash equivalents.

equivalents may include deposits held at Federal Home Loan Banks, which are not insured by the FDIC.

Cash equivalents may include deposits held at Federal Home Loan Banks, which are not

insured by the FDIC.

Interest-Bearing Time Deposits in Other Banks

Interest-bearing time deposits in other banks totaled $ 6.7 million and $ 17.7 million at December 31, 2024 and December 31, 2023 respectively, and have

original maturities generally ranging from three months to five years .

Interest-bearing time deposits in other banks totaled $ 10.5 million and $ 6.7 million at December 31, 2025 and December 31, 2024, respectively, and have original maturities generally ranging from three months to five years .

All of these deposits were fully insured under FDIC limits at December 31, 2025 and December 31, 2024.

Available-for-Sale Debt Securities

Available-for-sale debt securities are carried at fair value with unrealized gains and losses excluded from earnings and reported separately in

other comprehensive income, except for the credit-related impairment, as discussed in the following section.

The Company currently has no

securities designated as trading or held-to-maturity.

Available-for-sale debt securities are carried at fair value with unrealized gains and losses excluded from earnings and reported separately in other comprehensive income, except for the credit-related impairment, as discussed in the following section.

The Company currently has no securities designated as trading or held-to-maturity.

Interest income is recognized at the coupon rate adjusted for amortization and accretion of premiums and discounts.

Discounts are accreted into interest income over the estimated life of the

related security and premiums are amortized against income to the earlier of the call date or weighted average life of the related security using the interest method.

Gains and losses on the sale of securities are recorded on the trade date and are

determined using the specific identification method.

Discounts are accreted into interest income over the estimated life of the related security and premiums are amortized against income to the earlier of the call date or weighted average life of the related security using the interest method.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

They are included in noninterest income or expense and, when applicable, are reported as a reclassification adjustment in other comprehensive income (loss).

1 unchanged sentence

Allowance for Credit Losses – Investment Securities

On January 1, 2023, the Company was required to adopt a new credit loss methodology, the Current Expected Credit Losses (“CECL”)

Allowance for Credit Losses - AFS Securities - The Company evaluates its available-for-sale securities portfolio on a

quarterly basis for potential credit-related impairment.

On January 1, 2023, the Company was required to adopt a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology.

Allowance for Credit Losses – Available for Sale (“AFS”) Securities - The Company evaluates its available-for-sale securities portfolio on a quarterly basis for

potential credit-related impairment.

The Company assesses potential credit impairment by comparing the fair value of a debt security to its amortized cost basis.

If the fair value of a debt security is greater than the

amortized cost basis, no impairment is recognized.

If the fair value of a debt security is greater than the amortized cost basis,

no impairment is recognized.

If the fair value is less than the amortized costs basis, the Company reviews the factors to determine if the impairment is credit-related or noncredit-related.

For debt securities the Company

intends to sell or is more likely than not required to sell, before the recovery of their amortized cost basis, the difference between fair value and amortized cost is impaired and is recognized through earnings.

For debt securities the Company

does not intend to sell and is not more likely than not required to sell, prior to expected recovery of amortized cost basis, the credit portion of the impairment is recognized through earnings, with a corresponding entry to an allowance for

credit losses, and the noncredit portion is recognized through accumulated other comprehensive loss.

Mortgage Loans Held for Sale

Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate.

unrealized losses, if any, are recognized through a valuation allowance by charges to noninterest income.

Gains and losses on loan sales are recorded in noninterest income and direct loan origination costs and fees are deferred at origination of

the loan and are recognized in noninterest income upon the sale of the loan.

For debt securities the Company intends to sell

or is more likely than not required to sell, before the recovery of their amortized cost basis, the difference between fair value and amortized cost is impaired and is recognized through earnings.

For debt securities the Company does not

intend to sell and is not more likely than not required to sell, prior to expected recovery of amortized cost basis, the credit portion of the impairment is recognized through earnings, with a corresponding entry to an allowance for credit

losses, and the noncredit portion is recognized through accumulated other comprehensive loss.

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at amortized cost.

Amortized cost is the principal balance outstanding, net of purchase premiums and discounts.

Accrued interest receivable totaled $ 8.8 million and $ 8.7 million at December

31, 2024 and December 31, 2023, respectively, and was reported in interest receivable and other assets on the consolidated balance sheets.

The Company has made the accounting policy election to exclude accrued interest receivable on loans from the

estimate of credit losses.

Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, and net deferred loan fees and costs.

Accrued interest receivable totaled $ 8.8 million and $ 8.8 million at December 31, 2025 and December 31, 2024, respectively, and was reported in interest receivable and other assets on the consolidated balance sheets.

The Company has made the accounting policy election to exclude accrued interest receivable on loans from the estimate of credit losses.

Interest income is accrued on the unpaid principal balance using the simple-interest method on the daily balances of the principal amounts outstanding.

For loans amortized at cost, interest income is accrued based on the unpaid principal balance.

Loan origination fees, net of certain direct

origination costs, as well as premiums and discounts, are deferred and amortized over the respective term of the loan.

Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred

and amortized over the respective term of the loan.

The accrual of interest on loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection.

Past-due status is based on contractual terms of the loan.

In all cases, loans are placed on

nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

In all cases, loans are placed on nonaccrual or charged off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued but not collected for loans that are placed on nonaccrual or charged off are reversed against interest income.

on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual.

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future

payments are reasonably assured.

The interest on these loans is accounted for on the cash-basis or

cost-recovery method, until qualifying for return to accrual.

Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans acquired through business combinations are required to be carried at fair value as of the date of the combination.

Fair value is the price

that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly

transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date.

Loans Held for Sale

Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or fair value in the aggregate.

Net unrealized losses, if any, are recognized through a valuation

allowance by charges to noninterest income.

Gains and losses on loan sales are recorded in noninterest income and direct loan origination costs and fees are deferred at origination of the loan and are recognized in noninterest income upon

the sale of the loan.

Notes to Consolidated Financial Statements

1 unchanged sentence

On January 1, 2023, the Company was required to adopt a new credit loss methodology, the Current Expected Credit Losses (“CECL”) methodology.

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to

be collected on the loans.

The allowance for credit losses is adjusted by a credit loss provision which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries.

Loans are charged off against the allowance when

management believes the uncollectibility of a loan balance is confirmed.

The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans.

The allowance for credit losses

is adjusted by a credit loss provision which is reported in earnings, and reduced by the charge-off of loan amounts, net of recoveries.

Loans are charged off against the allowance when management believes the uncollectibility of a loan

balance is confirmed.

Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Expected credit loss inherent in non-cancellable off-balance

sheet credit exposures is accounted for as a separate liability included in other liabilities.

The allowance for credit losses is evaluated on a regular basis by management and is based upon management’s periodic review of the collectability of the loans in light of historical experience, the nature and volume of the loan portfolio,

adverse situations that may affect the borrower’s ability to repay and estimated value of any underlying collateral and prevailing economic conditions.

This evaluation is inherently subjective as it requires estimates that are susceptible to

significant revision as more information becomes available.

The methodology for estimating the amount of credit losses reported in the

allowance for credit losses has two basic components:

an asset-specific component involving loans that do not share risk characteristics and the measurement of expected credit losses for such individual loans;

and a pooled component for expected

credit losses for pools of loans that share similar risk characteristics.

Loans That Do Not Share

Risk Characteristics (Individually Analyzed)

Expected credit loss inherent in non-cancellable off-balance sheet credit exposures is accounted for

as a separate liability included in other liabilities.

and volume of the loan portfolio, adverse situations that may affect the borrower’s ability to repay and estimated value of any underlying collateral and prevailing economic conditions.

This evaluation is inherently subjective as it

requires estimates that are susceptible to significant revision as more information becomes available.

The methodology for estimating the amount of credit losses reported in the allowance for credit losses has two basic components:

an asset-specific component involving loans that do not share risk

characteristics and the measurement of expected credit losses for such individual loans;

and a pooled component for expected credit losses for pools of loans that share similar risk characteristics.

Loans That Do Not Share Risk Characteristics (Individually Analyzed)

Loans that do not share similar risk characteristics are evaluated on an individual basis.

Loans deemed to be collateral dependent have differing risk characteristics and are individually analyzed to estimate the expected credit loss.

Loans deemed to be collateral dependent have differing risk characteristics and are individually analyzed to

estimate the expected credit loss.

A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is dependent on the operation or liquidation and sale of the underlying collateral.

For collateral dependent loans where foreclosure

is probable, the expected credit loss is measured based on the difference between the fair value of the collateral (less selling cost) and the amortized cost basis of the asset.

For collateral dependent loans where foreclosure is not probable,

the Company has elected the practical expedient allowed by ASC 326-20 to measure the expected credit loss under the same approach as those loans where foreclosure is probable.

For loans with balances greater than $ 250 ,000, the fair value of the collateral is obtained through independent appraisal of the underlying collateral.

For loans with balances less than

$ 250 ,000, the Company has made a policy election to measure expected loss for these individual loans utilizing loss rates for similar

Loans That Share Similar

Risk Characteristics (Pooled Loans)

collateral dependent loans where foreclosure is probable, the expected credit loss is measured based on the difference between the fair value of the collateral (less selling cost) and the amortized cost basis of the asset.

For collateral

dependent loans where foreclosure is not probable, the Company has elected the practical expedient allowed by ASC 326-20 to measure the expected credit loss under the same approach as those loans where foreclosure is probable.

the fair value of the collateral is obtained through independent appraisal or internal valuation of the underlying collateral.

The Company estimates the fair value of the collateral using the best information available, which may include

independent appraisals or other relevant market data.

Loans That Share Similar Risk Characteristics (Pooled Loans)

The general steps in determining expected credit losses for the pooled loan component of the allowance are as follows:

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Notes to Consolidated Financial Statements

The weighted-average remaining maturity method (“WARM”) methodology is utilized

as the basis for the estimation of expected credit losses for consumer segment loans.

The WARM method uses a historical average annual charge-off rate.

This average annual charge-off rate contains loss content over a historical lookback period

and is used as a foundation for estimating the credit loss reserve for the remaining outstanding balances of loans in a segment at the balance sheet date.

The average annual charge-off rate is applied to the contractual term, further adjusted for

estimated prepayments, to determine the unadjusted historical charge-off rate.

The calculation of the unadjusted historical charge-off rate is then adjusted for current conditions and for reasonable and supportable forecast periods.

to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions,

such as changes in unemployment rates, property values, or other relevant factors.

These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in our historic loss factors.

A discounted cash flow (“DCF”) methodology is utilized to calculate expected

cash flows for the life of each individual loan, with the exception of consumer segment loans.

The discounted present value of expected cash flow is then compared to the loan’s amortized cost basis to determine the credit loss estimate.

The weighted-average remaining maturity method (“WARM”) methodology is utilized as the basis for the estimation of expected credit losses for consumer segment loans.

The WARM method uses a historical average

annual charge-off rate.

This average annual charge-off rate contains loss content over a historical lookback period and is used as a foundation for estimating the credit loss reserve for the remaining outstanding balances of loans in a

segment at the balance sheet date.

The average annual charge-off rate is applied to the contractual term, further adjusted for estimated prepayments, to determine the unadjusted historical charge-off rate.

The calculation of the unadjusted

historical charge-off rate is then adjusted for current conditions and for reasonable and supportable forecast periods.

Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such

as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors.

These qualitative

factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in our historic loss factors.

A discounted cash flow (“DCF”) methodology is utilized to calculate expected cash flows for the life of each individual loan, with the exception of consumer segment loans.

The discounted present value of

expected cash flow is then compared to the loan’s amortized cost basis to determine the credit loss estimate.

Individual loan results are aggregated at the pool level in determining total reserves for each loan pool.

The primary inputs used to calculate expected cash flows include historical

loss rates which reflect probability of default (“PD”) and loss given default (“LGD”), and prepayment rates.

The historical look-back period is a key factor in the calculation of the PD rate and is based on management’s assessment of current and

forecasted conditions and may vary by loan pool.

LGD rates generally reflect the historical average net loss rate by loan pool.

Expected cash flows are further adjusted to incorporate the impact of loan prepayments which will vary by loan

segment and interest rate conditions.

In general, prepayment rates are based on peer group benchmark reporting of observed prepayment rates occurring in the loan portfolios of the peer group, and consideration of forecasted interest rates.

The primary inputs used to calculate expected cash flows include historical loss rates which reflect probability of default (“PD”) and loss given default (“LGD”), and prepayment rates.

The historical

look-back period is a key factor in the calculation of the PD rate and is based on management’s assessment of current and forecasted conditions and may vary by loan pool.

LGD rates generally reflect the historical average net loss rate by

Expected cash flows are further adjusted to incorporate the impact of loan prepayments which will vary by loan segment and interest rate conditions.

In general, prepayment rates are based on peer group benchmark reporting of

observed prepayment rates occurring in the loan portfolios of the peer group, and consideration of forecasted interest rates.

Forecast Factors

Adjustments are made to incorporate the impact of forecasted conditions.

Adjustments are made to incorporate the impact of forecasted conditions across all loan segments.

Certain assumptions are also applied, including the length of the forecast and reversion periods.

The forecast period is the period within which management is able to make a reasonable and supportable assessment of future conditions.

reversion period is the period beyond which management believes it can develop a reasonable and supportable forecast, and bridges the gap between the forecast period and the use of historical default and loss rates.

The remainder period reflects

the remaining life of the loan.

The length of the forecast and reversion periods are periodically evaluated and based on management’s assessment of current and forecasted conditions and may vary by loan pool.

For purposes of developing a

reasonable and supportable assessment of future conditions, management utilizes established industry and economic data points and sources, with the forecasted unemployment rate being a significant factor.

PD rates for the forecast period will be

adjusted accordingly based on management’s assessment of future conditions.

The Company utilizes a 12 -month reasonable and supportable forecast period, followed by a 12 -month reversion period where loss rates revert to the historical average on a straight-line basis.

The length of the forecast and reversion periods are periodically evaluated and based on management’s assessment of current and forecasted conditions.

For purposes of developing a reasonable and supportable assessment of future conditions, management utilizes established industry and economic data points and sources, including forecasts for the national unemployment rate and gross domestic product (GDP) growth from the Federal Open Market Committee (FOMC).

PD rates for the forecast period will be adjusted accordingly based on management’s assessment of future conditions.

PD rates for the remainder period will reflect the historical mean PD rate.

Reversion period PD rates reflect the difference between forecast and remainder period PD

rates closed using a straight-line adjustment over the reversion period.

Reversion period PD rates reflect the difference between forecast and remainder period PD rates closed using a straight-line adjustment over the reversion period.

Qualitative Factors

Loss rates are further adjusted to account for other risk factors that impact

loan defaults and losses.

These basis point adjustments are based on management’s assessment of trends and conditions that impact credit risk and resulting credit losses, more specifically internal and external factors that are independent of and

not reflected in the quantitative loss rate calculations.

Risk factors management considers in this assessment include trends in underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral

valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters.

Loss rates are further adjusted to account for other risk factors that impact loan defaults and losses.

These basis point adjustments are based on management’s assessment of trends and conditions that impact

credit risk and resulting credit losses, more specifically internal and external factors that are independent of and not reflected in the quantitative loss rate calculations.

Risk factors management considers in this assessment include

trends in underwriting standards, nature/volume/terms of loan originations, past due loans, loan review systems, collateral valuations, concentrations, legal/regulatory/political conditions, and the unforeseen impact of natural disasters.

Notes to Consolidated Financial Statements

Purchased Loans

When a loan portfolio is purchased, an allowance is established for those loans

considered purchased with more-than-insignificant credit deterioration (“PCD”), and those not considered purchased with more-than-insignificant credit deterioration (“non-PCD”).

The allowance established utilizes the same risk factors discussed

above for our non-acquired allowance.

The allowance established for non-PCD loans is recognized through provision expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the

basis of the acquired loans.

Any subsequent increases and decreases in the allowance related to acquired loans are recognized through provision expense, with future charge-offs recorded to the allowance.

Allowance for Credit Losses on Off-Balance

Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in

which it is exposed to credit risk through a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company.

The allowance for credit losses on off-balance sheet credit exposures is adjusted as a

provision for credit loss expense and is recorded in interest payable and other liabilities.

The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be

funded over its estimated life and applies the same estimated loss rate as determined for current outstanding loan balances by segment.

When a loan portfolio is purchased, an allowance is established for those loans considered purchased with more-than-insignificant credit deterioration (“PCD”), and those not considered purchased with

more-than-insignificant credit deterioration (“non-PCD”).

The allowance established utilizes the same risk factors discussed above for our non-acquired allowance.

The allowance established for non-PCD loans is recognized through provision

expense upon acquisition, whereas the allowance established for loans considered PCD at acquisition is offset by an increase in the basis of the acquired loans.

Any subsequent increases and decreases in the allowance related to acquired

loans are recognized through provision expense, with future charge-offs recorded to the allowance.

Allowance for Credit Losses on Off-Balance Sheet Credit Exposures

The Company estimates expected credit losses over the contractual period in which it is exposed to credit risk through a contractual obligation to extend credit, unless that obligation is unconditionally

cancellable by the Company.

The allowance for credit losses on off-balance sheet credit exposures is adjusted as a provision for credit loss expense and is recorded in interest payable and other liabilities.

The estimate includes

consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life and applies the same estimated loss rate as determined for current outstanding

loan balances by segment.

Premises and Equipment

Premises and equipment are stated at cost, less accumulated depreciation.

Depreciation is charged to operating expense and is computed using the straight-line method over the estimated useful lives of the assets.

Depreciation is charged to operating expense and is computed using the straight-line method over the estimated useful lives of the

Maintenance and repairs are charged to expense as incurred while improvements are capitalized.

equipment is tested for impairment if events or changes in circumstances occur that indicate that the carrying amount of any premises and equipment may not be recoverable.

Premises that are identified to be sold are transferred to other real

estate owned at the lower of their carrying amounts or their fair values less estimated costs to sell.

Any losses on premises identified to be sold are charged to operating expense.

Certain operating leases are included as right of use lease assets in

interest receivable and other assets on the consolidated balance sheet and a related lease liability is included in interest payable and other liabilities on the consolidated balance sheet.

Right of use assets represent the Company’s right to

use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease.

The lease liability is measured as the present value of the unpaid lease payments, and the right

of use assets value is derived from the calculation of the lease liability.

To calculate the discount rate for each lease, the Company uses the rate implicit in the lease if available, otherwise an appropriate Federal Home Loan Bank (“FHLB”)

advance borrowing rate is used that correlates with the term of the lease.

Premises and equipment is tested for impairment if events or changes in circumstances occur that indicate that the carrying amount of any

premises and equipment may not be recoverable.

Premises that are identified to be sold are transferred to other real estate owned at the lower of their carrying amounts or their fair values less estimated costs to sell.

Any losses on

premises identified to be sold are charged to operating expense.

Certain operating leases are included as right of use lease assets in interest receivable and other assets on the consolidated balance sheet and a related lease liability is included in interest payable and

other liabilities on the consolidated balance sheet.

Right of use assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising

from the lease.

The lease liability is measured as the present value of the unpaid lease payments, and the right of use assets value is derived from the calculation of the lease liability.

To calculate the discount rate for each lease, the

Company uses the rate implicit in the lease if available, otherwise an appropriate Federal Home Loan Bank (“FHLB”) advance borrowing rate is used that correlates with the term of the lease.

Non-Marketable Equity Securities

Non-marketable equity securities consist primarily of Federal Home Loan Bank of Topeka stock and Federal Reserve Bank of Kansas City stock and

are required investments for financial institutions that are members of the FHLB and Federal Reserve systems.

Non-marketable equity securities consist primarily of Federal Home Loan Bank of Topeka stock and Federal Reserve Bank of Kansas City stock and are required investments for financial institutions that are

members of the FHLB and Federal Reserve systems.

The required investment in common stock is based on a predetermined formula, carried at cost and evaluated for impairment.

Long-Lived Asset Impairment

The Company evaluates the recoverability of the carrying value of long-lived assets whenever events or circumstances indicate the carrying

amount may not be recoverable.

If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows is expected to result from the use and eventual disposition of the asset is less than the carrying amount of the

asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

No asset impairment was

recognized during the years ended December 31, 2024, 2023, and 2022.

The Company evaluates the recoverability of the carrying value of long-lived assets, including premises and equipment, operating lease right-of-use assets, and core deposit intangibles, whenever events or

circumstances indicate the carrying amount may not be recoverable.

If a long-lived asset is tested for recoverability and the undiscounted estimated future cash flows is expected to result from the use and eventual disposition of the asset

is less than the carrying amount of the asset, the asset cost is adjusted to fair value and an impairment loss is recognized as the amount by which the carrying amount of a long-lived asset exceeds its fair value.

No asset impairment was recognized during the years ended December 31, 2025, 2024, and 2023.

Notes to Consolidated Financial Statements

Foreclosed Assets Held for Sale

Foreclosed assets held for sale consist of assets acquired through, or in lieu of, loan foreclosure and are initially recorded at fair value,

less cost to sell at the date of foreclosure, establishing a new cost basis.

Subsequent to foreclosure, valuations are periodically performed by management and the assets are carried at the lower of carrying amount of fair value less costs to

Revenue and expenses from operations and changes in the valuation allowance are included in current operations.

Other Real Estate Owned

OREO consists of properties acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure, and premises held for sale.

These properties are carried at the lower of the book values of

the related loans or fair values based upon appraisals, less estimated costs to sell.

Losses arising at the time of reclassification of such properties from loans to OREO are charged directly to the allowance for credit losses.

on premises identified to be sold are charged to operating expense at the time of transfer from premises to OREO.

Losses from declines in value of the properties subsequent to classification as OREO are charged to operating expense.

Revenues and expenses for OREO property are included in the consolidated statements of comprehensive income for the period in which they occur.

Gross rental income for OREO is included in other non-interest income.

The expenses of operating

or holding OREO property are included in noninterest expense.

Other real estate owned is included in interest receivable and other assets on the consolidated balance sheets.

The balance of OREO was not material for any of the periods

Business Combinations

The acquisition method of accounting is used for business combinations.

Under the acquisition accounting method, the acquiring Company

recognizes 100% of the assets acquired and liabilities assumed at the acquisition date fair value.

Under the acquisition accounting method, the acquiring Company recognizes 100% of the assets acquired and liabilities assumed at the

acquisition date fair value.

The excess of fair value of the consideration transferred over the acquisition date fair value of net assets acquired is recorded as goodwill.

Asset Acquisition

The fair value of assets acquired is measured and recognized at the amount of monetary assets or liabilities exchanged, which

generally includes the transaction costs of the assets acquired.

No gain or loss is recognized unless the fair value of any noncash assets given as consideration differs from the assets carrying amounts on the acquiring entities books.

The fair value of assets acquired is measured and recognized at the amount of monetary assets or liabilities exchanged, which generally includes the transaction costs of the assets acquired.

No gain or loss

is recognized unless the fair value of any noncash assets given as consideration differs from the assets carrying amounts on the acquiring entities books.

Goodwill and Intangible Assets

Intangible assets totaled $ 878 ,000

and goodwill, net of accumulated amortization totaled $ 8.5 million for the year ended December 31, 2024, compared to intangible assets

of $ 1.0 million and goodwill, net of accumulated amortization of $ 8.5 million for the year ended December 31, 2023.

Goodwill resulting from a business combination represents the excess of the fair value of the consideration transferred over the fair value of

the net assets acquired and liabilities assumed as of the acquisition date.

Goodwill is tested annually for impairment or more frequently if other impairment indicators are present.

If the implied fair value of goodwill is lower than its

carrying amount, a goodwill impairment is indicated and goodwill is written down to its implied fair value.

Subsequent increases in goodwill value are not recognized in the accompanying consolidated financial statements.

Other intangible assets consist of core deposit intangible assets and are amortized on a straight-line basis based on an estimated useful life

Intangible assets totaled $ 752 ,000 and goodwill, net of accumulated amortization totaled $ 11.2 million for the year ended December 31, 2025, compared to intangible assets of $ 878 ,000 and goodwill, net of accumulated amortization of $ 8.5 million for the year ended December 31, 2024.

Goodwill resulting from a business combination represents the excess of the fair value of the consideration transferred over the fair value of the net assets acquired and liabilities assumed as of the

acquisition date.

Goodwill is tested annually for impairment as of December 31, or more frequently if other impairment indicators are present.

For the annual impairment test in 2025, the Company performed a qualitative assessment and

concluded that it was not more than likely than not that the fair value of the reporting unit was less than its carrying amount.

If the implied fair value of goodwill is lower than its carrying amount, a goodwill impairment is indicated and

goodwill is written down to its implied fair value.

Other intangible assets consist of core deposit intangible assets and are amortized on a straight-line basis based on an estimated useful life of 10 years.

Such assets are periodically evaluated as to the recoverability of their carrying values.

The Company’s chief operating decision-maker (“CODM”) is the Chief Executive Officer.

Operating segments are defined as components of a business

about which separate financial information is available and evaluated regularly by the CODM in deciding how to allocate resources and assess performance.

While the CODM monitors the revenue streams of the various products and services offered by

the Bank, the Company’s operations are managed and financial performance is evaluated on a Company-wide basis as a single reportable operating segment, which is the Bank.

Operating segments are defined as components of a business about which separate financial information is available and

evaluated regularly by the CODM in deciding how to allocate resources and assess performance.

While the CODM monitors the revenue streams of the various products and services offered by the Bank, the Company’s operations are managed and

financial performance is evaluated on a Company-wide basis as a single reportable operating segment.

Discrete financial information, with a full allocation of revenue, costs, and capital from key corporate functions, is not available at a level other than on a Company-wide basis.

Although the CODM has some limited financial information about the

Company’s various financial products and services, this information is not complete and is insufficient for making resource allocation decisions or performance assessments at a more granular level.

Therefore, management considers all financial

service operations to be aggregated within one reportable operating segment, the Bank, and evaluates financial performance on a

company-wide basis using net income as reported on the Consolidated Statement of Income.

Although the CODM has some limited financial information about the Company’s various financial products and services, this information is not complete and is insufficient for making resource allocation decisions or performance assessments at a more granular level.

Therefore, management considers all financial service operations to be aggregated within one reportable operating segment, and evaluates financial performance on a company-wide basis using net income as reported on the consolidated statement of income.

The measure of segment assets is total assets, as reported on the consolidated statements of condition.

The CODM uses net income to monitor budget versus

actual results and in the determination of allocating resources across the Company.

The Company’s single reportable segment, the Bank, generates revenues primarily from interest income from financial instruments and non-interest income and service charges on deposit accounts.

There are no intra-entity sales or transfers within

The CODM uses net income to monitor budget versus actual results and in the determination of allocating resources across the Company.

The Company’s single reportable segment, generates revenues primarily from interest income from financial instruments and non-interest income and service charges on deposit accounts.

intra-entity sales or transfers within the Company.

Management continues to evaluate the Company’s business units for potential separate reporting in the future as facts and circumstances evolve.

Oil and gas operations do not constitute a

significant industry segment for the Company, therefore management determined that the supplemental oil and gas disclosures required by ASC 932 are not applicable.

Notes to Consolidated Financial Statements

Stock-based Compensation

The Company recognizes stock-based compensation as

salaries and employee benefits expense in the consolidated statements of comprehensive income based on the fair value of the Company’s stock options and restricted stock units (“RSU’s”) on the measurement date, which, for the Company, is the

date of the grant.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model and was based on certain assumptions including risk-free rate of return, dividend yield, stock price

volatility and the expected term.

The Company recognizes stock-based compensation as salaries and employee benefits expense in the consolidated statements of comprehensive income based on the fair value of the Company’s stock options and

restricted stock units (“RSUs”) on the measurement date, which, for the Company, is the date of the grant.

The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model and was based on

certain assumptions including risk-free rate of return, dividend yield, stock price volatility and the expected term.

The fair value of each RSU granted is equal to the market price of the Company’s stock at the date of grant.

The fair value of each option and RSU is expensed over its vesting period.

The Company uses a comprehensive model for recognizing, measuring, presenting, and disclosing in the financial statements tax positions taken or

expected to be taken on a tax return.

A tax position is recognized as a benefit only if it is ‘‘more likely than not’’ that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.

recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination.

value of each option and RSU is expensed over its vesting period.

The Company uses a comprehensive model for recognizing, measuring, presenting, and disclosing in the financial statements tax positions taken or expected to be taken on a tax return.

A tax position is

recognized as a benefit only if it is ‘‘more likely than not’’ that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur.

The amount recognized is the largest amount of tax benefit that is

greater than 50% likely of being realized on examination.

For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest accrued and penalties related to unrecognized tax benefits in tax expense.

During the years ended December 31,

2024, 2023 and 2022, the Company recognized no interest and penalties.

During the years ended December 31, 2025, 2024 and 2023, the Company recognized no interest and penalties.

The Company or one of its subsidiaries file income tax returns in the U.S.

federal jurisdiction and various state jurisdictions.

longer subject to U.S.

federal or state tax examinations for years before 2021.

We are no longer subject to U.S.

federal or state tax examinations for years

Comprehensive Income

Comprehensive income includes all changes in shareholders’ equity during a period, except those resulting from transactions with shareholders.

Besides net income, other components of the Company’s comprehensive income includes the after tax effect of changes in the net unrealized gain/loss on debt securities available-for-sale.

The Company’s policy is to release material stranded tax

effects included in accumulated other comprehensive income on a specific identification basis.

Besides net income, other components of the Company’s

comprehensive income includes the after tax effect of changes in the net unrealized gain/loss on debt securities available-for-sale.

The Company’s policy is to release material stranded tax effects included in accumulated other

comprehensive income on a specific identification basis.

Earnings per Share

Basic earnings per common share is computed by dividing net income, less any preferred dividends requirement, by the weighted average of common shares outstanding.

Diluted earnings per common share reflects

the potential dilution that could occur if options, RSU’s, convertible securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the

earnings of the Company.

Revenue Recognition

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Contract performance typically occurs in one year or less.

Incremental costs of obtaining a contract are expensed when incurred

when the amortization period is one year or less.

Incremental costs of obtaining

a contract are expensed when incurred when the amortization period is one year or less.

Service and transaction fees on depository accounts

Customers often pay certain fees to the bank to access the cash on deposit including certain non-transactional fees such as account maintenance

or dormancy fees, and certain transaction based fees such as ATM, wire transfer, or foreign exchange fees.

Customers often pay certain fees to the bank to access the cash on deposit including certain non-transactional fees such as account maintenance or dormancy fees, and certain transaction based fees such as ATM, wire transfer, or foreign exchange fees.

Revenue is recognized when the transactions occur or as services are performed over primarily monthly or quarterly periods.

typically received in the period the transactions occur, or in some cases, within 90 days of the service period.

Payment is typically received in the period the transactions occur, or in some cases, within 90 days of the service period.

Notes to Consolidated Financial Statements

Interchange Fees

Interchange fees, or “swipe” fees, are charges that merchants pay to the processors who, in turn, share that revenue with us and other

card-issuing banks for processing electronic payment transactions.

Interchange fees, or “swipe” fees, are charges that merchants pay to the processors who, in turn, share that revenue with us and other card-issuing banks for processing electronic payment transactions.

Interchange fees represent the portion of the debit card transaction amount that the card issuer retains to compensate it for processing transactions and providing rewards.

Interchange fees are settled and recognized on a daily or monthly basis.

Interchange fees are included with noninterest income and recorded net of related expenses as the Bank acts as an agent, introducing the customer transactions to the

Interchange fees are settled and recognized on a daily or monthly

Interchange fees are included with noninterest income and recorded net of related expenses as the Bank acts as an agent, introducing the customer transactions to the processor.

Summary of Significant Accounting Policies--Specific to Production of Oil and Natural Gas Reserves Operations

Use of Estimates

Significant items subject to estimates and assumptions include, the proved oil, and natural gas and NGL reserves used in the

valuation of oil and gas properties, asset retirement obligations, fair value of derivatives and revenue accruals.

It is possible these estimates could be revised in the near term and these revisions could be material.

The Company’s estimates of oil, natural gas and NGL reserves are, by necessity, projections based on geologic and engineering

data, and there are uncertainties inherent in the interpretation of such data, as well as the projection of future rates of production.

Reserve engineering is a subjective process of estimating underground accumulations of oil, natural gas, and

NGL that are difficult to measure.

The accuracy of any reserve estimate is a function of the quality of available data, engineering and geological interpretation and judgment.

Estimates of economically recoverable oil, natural gas and NGL

reserves and future net cash flows necessarily depend upon a number of variable factors and assumptions, such as historical production from the area compared with production from other producing areas, the assumed effect of regulations by

governmental agencies, and assumptions governing future oil, natural gas, and NGL prices, future operating costs, severance taxes, and workover costs, all of which may in fact vary considerably from actual results.

For these reasons, estimates

of the economically recoverable quantities of expected oil, natural gas, and NGL attributable to any particular group of properties, classifications of such reserves based on risk of recovery, and estimates of the future net cash flows may vary

substantially.

Any significant variance in the assumptions could materially affect the estimated quantity of the reserves, which could affect the carrying value of the Company’s oil, natural gas, and NGL properties and/or the rate of depletion

related to the oil, natural gas, and NGL properties.

Items subject to estimates and assumptions include the proved oil, and natural gas and natural gas liquid (“NGL”) reserves used in the valuation of oil and gas properties, asset retirement obligations, fair

value of derivatives and revenue accruals.

It is possible these estimates could be revised in the near term.

The Company’s estimates of oil, natural gas and NGL reserves are, by necessity, projections based on geologic and engineering data, and there are uncertainties inherent in the interpretation of such data, as

well as the projection of future rates of production.

Reserve engineering is a subjective process of estimating underground accumulations of oil, natural gas, and NGL that are difficult to measure.

The accuracy of any reserve estimate is a

function of the quality of available data, engineering and geological interpretation and judgment.

Estimates of economically recoverable oil, natural gas and NGL reserves and future net cash flows necessarily depend upon a number of

variable factors and assumptions, such as historical production from the area compared with production from other producing areas, the assumed effect of regulations by governmental agencies, and assumptions governing future oil, natural

gas, and NGL prices, future operating costs, severance taxes, and workover costs, all of which may in fact vary considerably from actual results.

For these reasons, estimates of the economically recoverable quantities of expected oil,

natural gas, and NGL attributable to any particular group of properties, classifications of such reserves based on risk of recovery, and estimates of the future net cash flows may vary substantially.

Any significant variance in the

assumptions could materially affect the estimated quantity of the reserves, which could affect the carrying value of the Company’s oil, natural gas, and NGL properties and/or the rate of depletion related to the oil, natural gas, and NGL

Accounts Receivable

The Company’s oil and gas related accounts receivable primarily consists of oil, natural gas and NGL receivables and joint

interest billings to our partners for their share of expenses on projects for which we are the operator.

These balances are generated when estimating and accruing for expected oil, natural gas and NGL sales, upon receipt of oil, natural gas and

NGL sales and when our cost is cutback to our joint interest partners.

The oil and gas related accounts receivable balance is included in “Interest receivable and other assets” on the consolidated balances sheets.

Additionally, due to the creditworthiness of our purchasers, we do not have any allowance for doubtful accounts recorded and do

not expect to write off any portion of our oil and gas related accounts receivable.

The Company’s oil and gas related accounts receivable primarily consists of oil, natural gas and NGL receivables.

The oil and gas related accounts receivable balance is included in interest receivable and

other assets on the consolidated balance sheets.

Additionally, due to the creditworthiness of our purchasers, we do not have any allowance for doubtful accounts recorded and do not expect to write off any portion of our oil and gas related accounts

Accounts Payable

The Company’s oil and gas related accounts payable balance primarily consists of trade payables owed to vendors that

provide services and equipment for the wells and assets that we operate.

The oil and gas related accounts payable balance is included in “Interest payable and other liabilities” on the consolidated balances sheets.

Notes to Consolidated Financial Statements

Revenue Recognition

recognize revenue from the sale of oil, natural gas and NGLs in the period that the performance obligations are satisfied in accordance with ASC 606.

Our performance obligations are primarily comprised of the delivery of oil, natural gas or

NGLs at a delivery point (pipeline, railcar or truck).

Each barrel of oil, MMBtu of natural gas or other unit of measure is separately identifiable and represents a distinct performance obligation to which the transaction price is allocated.

The transaction price used to recognize revenue is a function of the contract billing terms.

Revenue is invoiced, if required, by calendar month based on volumes at contractually based rates with payment typically received within 30 days of the end of the production month.

Performance obligations are satisfied at a point in time once control of the product has been

transferred to the customer through monthly delivery of oil, natural gas and NGLs.

Revenue from the sale of oil, natural gas and NGLs is included in “Other” noninterest income on the consolidated statements of comprehensive income, and taxes

assessed by governmental authorities on oil, natural gas and NGL sales are included in “Other” noninterest expense on the consolidated statements of comprehensive income.

Oil and Gas Property (Successful Efforts Method of Accounting)

The Company uses the successful efforts method of accounting for its oil and gas production activities.

Costs incurred by the Company related to the acquisition of oil and gas properties and the cost of

drilling development wells are capitalized.

Costs incurred to maintain wells and related equipment, delay rentals, lease and well operating costs are charged to expense as incurred.

Gains and losses arising from sales of production are

generally included in the consolidated statements of comprehensive income.

Capitalized acquisition costs attributable to proved oil and gas properties are depleted by formation or field using the unit-of-production method based on proved reserves.

Capitalized development costs, including asset retirement obligations,

are amortized by producing unit, based on proved developed producing reserves.

Depletion, depreciation, and amortization expense related to proved oil and gas properties was $ 2.7 million and $ 3.6 million for the years ended December 31,

2024 and December 31, 2023, respectively, and is included in “Other” noninterest expense on the consolidated statements of comprehensive income.

Capitalized costs are evaluated for impairment in accordance with FASB ASC Topic 360, Accounting for the Impairment or Disposal of Long-Lived Assets (ASC Topic 360), whenever events or changes in circumstances indicate that an asset’s carrying

amount may not be recoverable.

fair values of proved properties are measured using valuation techniques consistent with the income approach, converting future cash flows to a single discounted amount.

Significant inputs used to determine the fair values of proved properties

include estimates of:

(i) reserves;

(ii) future operating;

(iii) future commodity prices;

and (iv) a market-based weighted average cost of capital rate.

The underlying commodity prices embedded in the Company’s estimated cash flows are the

product of a process that begins with applicable forward curve pricing, adjusted for estimated location and quality differentials, as well as other factors that Company management believes will impact realizable prices.

determine if a depletable unit is impaired, the carrying value of the depletable unit is compared to the undiscounted future net cash flows by applying management’s estimates of future oil and gas prices to the estimated future production of

oil and gas reserves over the economic life of the property and deducting future costs.

Future net cash flows are based upon third party reservoir engineers’ estimates of proved reserves and internal management estimates for probable and

possible reserves.

For a property determined to be impaired, an impairment loss equal to the difference between the carrying value and the estimated fair value of the impaired property will be recognized.

Fair value, on a depletable unit basis,

is estimated to be the present value of the aforementioned expected future net cash flows.

Each part of this calculation is subject to a large degree of judgment, including the determination of the depletable units’ estimated reserves, future

net cash flows and fair value.

No impairment expense recorded for the year ended December 31, 2024.

There were no costs of unproved properties at December 31, 2024, and during the year ended December 31, 2024, the Company recognized no abandonment expense.

Notes to Consolidated Financial Statements

Asset Retirement Obligation

Company follows the provisions of ASC 410, Asset Retirement Obligations, which requires recognition of liabilities for retirement obligations associated with tangible long-lived assets, such as producing well sites when there is a legal

obligation associated with the retirement of such assets and the amount can be reasonably estimated.

The initial measurement of an asset retirement obligation is recorded as a liability at its fair value, with an offsetting asset retirement

cost recorded as an increase to the associated property and equipment on the consolidated balance sheet.

When the assumptions used to estimate a recorded asset retirement obligation change, a revision is recorded to both the asset retirement

obligation and the asset retirement cost.

The asset retirement cost is depreciated using a systematic and rational method similar to that used for the associated property and equipment.

The Company’s asset retirement obligations relate to the

plugging, dismantlement, removal, site reclamation and similar activities of its oil and natural gas properties.

The asset retirement obligation balance is included in “interest payable and other liabilities” on the consolidated of balance

Fair Value Measurements

derivatives are recognized on the consolidated balance sheet and are measured at fair value using mark-to-market accounting.

During 2023, the Company entered into a certain oil derivative position.

The Company primarily utilizes oil swap contracts to (i) reduce the effect of

price volatility on the commodities the Company produces and sells or consumes, and (ii) reduce commodity price risk associated with certain capital projects.

By using derivative financial instruments to economically hedge exposures to changes in commodity prices, the Company exposes itself to credit risk

and market risk.

Credit risk is the failure of the counterparty to perform under the terms of the derivative contract.

When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk.

Company is not required to post any collateral.

The Company does not receive collateral from its counterparties.

The Company does not apply hedge accounting to any of its derivative instruments as defined under accounting guidance.

The Company nets derivative assets and liabilities by commodity where legal right to such netting exists.

Therefore, the Company’s derivatives are

presented on a net basis on the consolidated balance sheets in “Interest receivable and other assets” or “Interest payable and other liabilities”.

Unrealized and realized gains or losses are recognized in “Other” noninterest income on the

consolidated statements of comprehensive income.

With respect to its derivatives, the Company recognized an unrealized loss of $ 0.1 million and an unrealized gain of $ 0.1 million for the

years ended December 31, 2024 and December 31, 2023, respectively, and recognized a realized loss of $ 0.2 million and $ 0 for the years ended December 31, 2024, and December 31, 2023, respectively.

The Company’s oil and gas related accounts payable balance primarily consists of trade payables owed to vendors that provide services and equipment for the wells and assets.

The oil and gas related accounts

payable balance is included in interest payable and other liabilities on the consolidated balance sheets.

Notes to Consolidated Financial Statements

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Standards Adopted During Current Period:

In November 2023, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU

2023-07”), which expands reportable segment disclosure requirements through enhanced disclosures about significant segment expenses.

The amendments in this update introduce a new requirement to disclose significant segment expenses regularly

provided to the chief operating decision maker, extend certain annual disclosures to interim periods, clarify that single reportable segment entities must apply Topic 280 in its entirety, permit more than one measure of segment profit or loss to

be reported under certain conditions and require disclosure of the title and position of the chief operating decision maker.

ASU 2023-07 is effective for public business entities for fiscal years beginning after December 15, 2023, and interim

periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company has evaluated the impact of adopting ASU 2023-07 and concluded the impact to be immaterial on its consolidated financial position, results

of operations, or disclosures.

See Note 1 for the corresponding segments disclosure.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), primarily focused on income tax disclosures regarding effective tax rates

and cash income taxes paid.

The Company adopted this ASU effective January 1, 2025, on a prospective basis.

The adoption resulted in expanded income tax disclosures in the notes to the consolidated financial statements but did not have a

material impact on the Company’s consolidated financial position or results of operations.

See Note 9 for the corresponding income tax disclosures.

Standards Not Yet Adopted:

In December 2025, the FASB issued ASU 2025-12, Codification Improvements.

This update includes a wide range of amendments to clarify, correct errors in, and make minor improvements to the Accounting Standards

Codification.

The amendments are effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years.

The Company does not expect the adoption of this ASU to have a material impact on its consolidated

financial statements.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements.

This update is intended to improve the clarity and consistency of interim reporting requirements.

amendments are effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years.

The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial

In November 2025, the FASB issued ASU 2025-09, Derivatives and Hedging (Topic 815):

Hedge Accounting Improvements.

This update aims to better align hedge accounting with an entity’s risk management

The amendments are effective for fiscal years beginning after December 15, 2026.

The Company does not apply formal hedge accounting and therefore does not expect the adoption of this ASU to have a material impact on its

consolidated financial statements.

In October 2025, the FASB issued ASU 2025-08, Financial Instruments—Credit Losses (Topic 326):

Purchased Loans.

This ASU modifies the accounting for expected credit losses for purchased financial assets.

standard is effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

As the Company has not acquired loans in the periods presented, the adoption of this ASU is not expected to have a material impact on

its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606).

This update provides targeted refinements to the scope of derivative

The standard is effective for annual periods beginning after December 15, 2026.

The Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.

Notes to Consolidated Financial Statements

In July 2025, the FASB issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets.

This update provides a practical expedient

allowing entities to assume that current economic conditions will remain unchanged for the life of short-term financial assets, such as trade receivables, that arise from contracts with customers.

The standard is effective for fiscal years

beginning after December 15, 2025, with early adoption permitted.

The Company is currently evaluating the impact of this new guidance, but does not expect its adoption to have a material impact on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions of

Convertible Debt Instruments.

This ASU clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments are effective for fiscal years

beginning after December 15, 2025, including interim periods within those fiscal years.

Induced Conversions of Convertible Debt Instruments.

This ASU clarifies the requirements for

determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments are effective for fiscal years beginning after December 15, 2025, including interim periods within

those fiscal years.

The Company does not currently have any convertible debt instruments;

therefore, the Company does not expect the adoption of this ASU to have a material

impact on its consolidated financial position, results of operations, or disclosures.

therefore, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial position, results of

operations, or disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures.

This ASU requires public business entities to disclose disaggregated information about certain expense captions,

including compensation costs, depreciation and amortization, advertising costs, shipping and handling costs, and research and development costs, in the notes to their financial statements.

The amendments are effective for fiscal years beginning

after December 15, 2026, and interim periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial position, results of operations, or disclosures.

In December 2023, the FASB issued ASU No.

2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”), primarily focused on income tax disclosures regarding effective tax rates and cash income taxes paid.

requires public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling

items is equal to or greater than 5 percent of the amount computed by multiplying pretax income by the applicable statutory income tax rate).

ASU 2023-09 is effective for fiscal years, and interim periods within those fiscal years beginning after

December 15, 2024, with early adoption permitted.

The Company has evaluated the impact of adopting ASU 2023-09 and concluded that the adoption impact is not material as it will primarily result in expanded income tax disclosures in the notes to

the financial statements.

This ASU requires public business entities to disclose disaggregated

information about certain expense captions, including compensation costs, depreciation and amortization, advertising costs, shipping and handling costs, and research and development costs, in the notes to their financial statements.

amendments are effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting this ASU on its consolidated financial statement

Notes to Consolidated Financial Statements

Legislative and Regulatory Developments

In April 2020, the Company began originating loans to qualified small businesses under the Paycheck Protection Program (PPP) administered by

the Small Business Administration (SBA).

PPP loans are fully guaranteed by the SBA and thus have a zero percent risk weight under applicable risk-based capital rules.

The Company had no PPP loans as of December 31, 2024.

As of December 31, 2023, the Company had one

PPP loan with a balance of $ 2.0 million.

The Company recognized $ 0 in fee income during the year ended December 31, 2024, with $ 0

remaining to be recognized, as compared to $ 50 ,000 recognized and $ 0 to be recognized as of December 31, 2023.

Company evaluated subsequent events through the date the consolidated financial statements were issued.

Subsequent Events

The Company evaluated subsequent events through the date the consolidated financial statements were issued.

There were no subsequent events requiring recognition or disclosure.

Revision of Prior-Period Comparative Financial Statements

Certain disclosures in the 2024 comparative consolidated financial statements have been revised to correct for misstatements that were not

material to the previously issued 2024 financial statements.

Management has concluded that the 2024 financial statements, as originally issued, can continue to be relied upon.

The revisions relate to the presentation of certain disclosures and do not impact previously reported total assets, total liabilities, total shareholders'

equity, or net income for the year ended December 31, 2024.

The specific revisions are as follows:

• Related-Party Loans:

A disclosure for loans to related parties, which was omitted from the 2024 footnotes, has been included in the comparative Note 14, "Related-Party Transactions." The corrected balance of loans to related parties as of December 31, 2024, is $ 10,846 ,000.

• Loan Portfolio Vintage Disclosure:

The loan portfolio vintage disclosure in Note 5 has been revised to properly disaggregate approximately $ 240 million of non-revolving loans by their year of origination.

These loans were previously aggregated in the "Revolving Loans" column in the 2024 financial statements.

Notes to Consolidated Financial Statements

Recent Events, Including Mergers and Acquisitions

On October 31, 2023, the Company entered into an asset purchase and sale agreement, effective September 1, 2023 , to acquire proven oil and natural gas properties from HB2 Origination, LLC, which consisted of nine wells in formations in four

counties in Texas for $ 15.4 million in cash.

On October 31, 2023, the Company entered into an asset purchase and sale agreement, effective September 1, 2023 , to acquire proved oil and natural gas properties from HB2 Origination, LLC, which consisted of nine wells in formations in four counties in Texas for $ 15.4 million in cash.

On November 17, 2023, the transaction closed for a total purchase price of $ 15.1 million, after closing adjustments.

As a part of the purchase, the Company assumed asset retirement obligations of $ 0.4 million that were included in interest payable and other liabilities on the consolidated balance sheets as of December 31, 2023.

The acquisition

was considered an asset acquisition and did not meet the definition of a business under ASC 805, Business Combinations.

Additionally, transaction costs of $ 1.4

million were capitalized into oil and gas properties related to this acquisition.

The purchase price and related asset retirement obligations were allocated based on the relative fair values of the assets acquired and $ 1.7 million was allocated to proved leasehold costs while the remaining $ 15.4 million was allocated to “interest receivable and other assets” on the consolidated balance sheets.

As of December 31,

2024, the Company had oil and gas assets and related receivables of $ 12.1 million included in “interest receivable and other assets” on

the consolidated balance sheets, assets retirement obligations and oil and gas related liabilities of $ 0.9 million included in

“interest payable and other liabilities” on the consolidated balance sheets, oil and gas related revenues of $ 8.5 million included in

“Other” noninterest income on the consolidated statements of comprehensive income, and oil and gas related expenses of $ 4.8 million

included in “Other” noninterest expense on the consolidated statements of comprehensive income.

As of December 31, 2023, the Company had oil and gas assets and related receivables of $ 16.8 million included in “interest receivable and other assets” on the consolidated balance sheets, assets retirement obligations and oil and gas

related liabilities of $ 1.3 million included in “interest payable and other liabilities” on the consolidated balance sheets, oil and gas

related revenues of $ 6.0 million included in “Other” noninterest income on the consolidated statements of comprehensive income, and oil

and gas related expenses of $ 4.8 million included in “Other” noninterest expense on the consolidated statements of comprehensive income.

The acquisition was considered an asset acquisition and did not meet the definition of a business under ASC 805, Business Combinations .

Additionally, transaction costs of $ 1.4 million were capitalized into oil and gas properties related to this acquisition.

The purchase price and related asset retirement obligations were allocated based on the relative fair values of the assets acquired and $ 1.7 million was allocated to proved leasehold costs while the remaining $ 15.4 million was allocated to completed wells and related facilities and equipment, included in interest receivable and other assets on the consolidated balance sheets.

The Company had oil and gas assets and related receivables included in interest receivable and other assets on the consolidated balance sheets of $ 8.9 million and $ 12.1 million, and assets retirement obligations and oil and gas related liabilities included in interest payable and other liabilities on the consolidated balance sheets of $ 0.8 million and $ 0.9 million as of December 31, 2025 and December 31, 2024, respectively.

The Company had oil and gas related revenues included in “Other” noninterest income on the consolidated statements of comprehensive income of $ 4.9 million and $ 8.5 million, and oil and gas related expenses included in “Other” noninterest expense on the consolidated statements of comprehensive income of $ 4.3 million and $ 4.8 million for the twelve months ended December 31, 2025 and December 31, 2024, respectively.

Notes to Consolidated Financial Statements

Restriction on Cash and Due from Banks

On March 26, 2020, the Federal Reserve Board reduced reserve requirement ratios to zero percent, effectively eliminating reserve requirements

for all depository institutions.

There was no reserve requirement as of December 31, 2024.

Earnings per Share

Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during

the reporting period.

Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the year.

Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that

would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during each reporting period.

Diluted EPS is computed based upon net income dividend by the weighted average number of

commons shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and nonqualified stock options, calculated using the treasury stock method.

Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period.

Basic earnings per share (“EPS”) is computed

based upon net income divided by the weighted average number of common shares outstanding during the period.

Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that would have been outstanding assuming the issuance of common shares

for all dilutive potential common shares outstanding during each reporting period.

Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect

of dilutive potential common shares, such as restricted stock awards and nonqualified stock options, calculated using the treasury stock method.

The following table shows the computation of basic and diluted earnings per share:

As of and for the Years ended December 31,

(Dollars in thousands, except per share amounts)

(Dollars in thousands, except share and per share amounts)

Weighted-average shares outstanding for basic earnings per share

2 unchanged sentences

Earnings per common share

The following have not been included in diluted earnings per share because to do so would have been antidilutive for the periods

Nonqualified stock options outstanding of 0 , 5,000 , and 5,000 as of December 31, 2024, 2023,

and 2022, respectively;

Restricted stock units outstanding of 0 , 156,186 , and 0 as of December 31, 2024, 2023,

and 2022, respectively.

(1) The following have not been included in diluted earnings per share because to do so would have been antidilutive for the periods presented:

Nonqualified stock options outstanding of 0 , 0 , and 5,000 as of December 31, 2025, 2024, and 2023, respectively;

Restricted stock units outstanding of 30,600 , 0, and 156,186 as of December 31, 2025, 2024, and 2023, respectively.

Notes to Consolidated Financial Statements

Debt Securities

The following table summarizes the amortized cost and fair value of debt securities available-for-sale at December 31, 2024 and December 31, 2023, and the

corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:

The following table summarizes the amortized cost and fair value of debt securities available-for-sale at December 31, 2025 and December 31, 2024, and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:

(in thousands)

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Total debt securities

All of our mortgage-backed

securities and collateralized mortgage obligations are issued and/or guaranteed by U.S.

(1) All mortgage-backed securities and collateralized mortgage obligations are issued and/or guaranteed by U.S.

government agencies or U.S.

government-sponsored entities.

in amortized cost of mortgage-backed securities is $ 21.97 million and $ 24.80 million of residential mortgage-backed securities and $ 11.73 million and $ 13.67 million of commercial mortgage-backed securities as of December 31,

(2) Included in amortized cost of mortgage-backed securities is $19.09 million and $21.97 million of residential mortgage-backed securities and $8.22 million and $11.73 million of commercial mortgage-backed securities as of December 31,

2025 and December 31, 2024, respectively.

1 unchanged sentence

The amortized cost and estimated fair value of investment securities at December 31, 2025 and December 31, 2024, by contractual maturity, are shown below.

life of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans with or without call or prepayment penalties.

The expected life of mortgage-backed securities will differ from contractual maturities because borrowers may have the right to call or prepay the underlying mortgage loans with or without call or prepayment penalties.

(in thousands)

16 unchanged sentences

Total available-for-sale

As of December 31, 2024, there were no holdings of securities in an amount greater than

10% of stockholders equity.

As of December 31, 2023, there was one holding of securities of issuers in an amount greater than

10% of stockholders equity, a U.S.

Treasury note with a fair value

of $ 99.3 million .

The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities for the year ended December 31, 2024 and

December 31, 2023.

There were no holdings of securities of issuers in an amount greater than 10% of stockholders’ equity at December 31, 2025.

The following table presents a summary of realized gains and losses from the sale, prepayment and call of debt securities for the year ended December 31, 2025 and December 31, 2024.

Year Ended December 31,

(in thousands)

Proceeds from sales, maturities, prepayments and calls

Gross realized gains on sales, prepayments and calls

Gross realized losses on sales, prepayments and calls

5 unchanged sentences

Notes to Consolidated Financial Statements

The following table details gross unrealized losses and fair values of investment securities aggregated by investment category and length of time that the individual

securities have been in a continuous unrealized loss position at December 31, 2024 and December 31, 2023.

As of December 31, 2024, the Company had the ability and intent to hold the debt securities classified as available-for-sale for a period of

time sufficient for a recovery of cost.

The following table details gross unrealized losses and fair values of investment securities aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position at December 31, 2025 and December 31, 2024.

As of December 31, 2025, the Company had the ability and intent to hold the debt securities classified as available-for-sale for a period of time sufficient for a recovery of cost.

The unrealized losses are due to increases in market interest rates over the yields available at the time the underlying debt securities were purchased and acquired.

The fair value of those debt securities

having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline.

Management has no intent or requirement to sell before the recovery of the

unrealized loss;

The fair value of those debt securities having unrealized losses is expected to recover as the securities approach their maturity date or repricing date, or if market yields for such investments decline.

Management has no intent or requirement to sell before the recovery of the unrealized loss;

therefore, no impairment loss was realized in the Company’s consolidated statement of comprehensive income.

As of December 31, 2025 and December 31, 2024, there was no allowance for credit losses recorded related to investment securities.

Less than Twelve Months

22 unchanged sentences

Total available-for-sale

Of our state and political subdivision securities , $ 17.83 million and $ 22.84 million are rated BBB+ or better and $ 1.90 million and $ 3.02

million are not rated as of December 31, 2024 and December 31, 2023, respectively .

Our corporate debt securities are not rated.

(1) The state and political subdivision securities, $ 16.33 million and $ 17.83 million are rated BBB+ or better and $ 1.45 million and $ 1.90 million are not rated as of December 31, 2025 and December 31, 2024, respectively.

(2) The corporate debt securities are not rated.

Notes to Consolidated Financial Statements

8 unchanged sentences

Less deferred loan fees

Included in the

commercial & industrial loan balances are $ 0 and $ 2.0 million of loans that were originated under the SBA PPP program as of December 31, 2024 and December 31, 2023, respectively.

Notes to Consolidated Financial Statements

On January 1, 2023, the Company adopted ASU 2016-13,

which replaces the incurred loss methodology for determining its provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model.

See Note (1) for additional information

regarding the factors that influenced the Company’s current estimate of expected credit losses.

Upon adoption, the allowance for credit losses was increased by $ 250 ,000 and $ 500 ,000 for loans and unfunded commitments, respectively, with no impact to the

consolidated statement of income.

Subsequent to the adoption of ASU 2016-13, the Company recorded a $ 21.2 million and ($ 36 ,000) provision for credit losses related to loans and unfunded commitments, respectively, for the twelve months of 2023 utilizing the newly

adopted CECL methodology.

The following table presents, by portfolio segment,

the activity in the allowance for credit losses for the years ended December 31, 2024, 2023, and 2022 (dollars in thousands):

On January 1, 2023, the Company adopted ASU 2016-13, which replaces the incurred loss methodology for determining its provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model.

See Note (1) for additional information regarding the factors that influenced the Company’s current estimate of expected credit losses.

Upon adoption, the allowance for credit losses was increased by $ 250 ,000 and $ 500 ,000 for loans and unfunded commitments, respectively, with no impact to the consolidated statement of income.

The following table presents, by portfolio segment, the activity in the allowance for credit losses for the years ended December 31, 2025, 2024, and 2023 (dollars in thousands):

Construction &

9 unchanged sentences

Balance, end of period

Total Allowance for Credit Losses

Total Provision for Credit Losses

Total allowance for credit losses and

reserve for unfunded commitments

Total provision (credit) for credit losses

Construction &

2 unchanged sentences

Balance, beginning of period

Impact of CECL adoption

Net (charge-offs) recoveries

3 unchanged sentences

Balance, beginning of period

Impact of CECL adoption

Provision (credit) for credit losses

Balance, end of period

Total Allowance for Credit Losses

Total Provision for Credit Losses

Total allowance for credit losses and

reserve for unfunded commitments

Total provision (credit) for credit losses

Construction &

2 unchanged sentences

Balance, beginning of period

Impact of CECL adoption

Net (charge-offs) recoveries

1 unchanged sentence

Balance, end of period

Unfunded Commitments

Balance, beginning of period

Impact of CECL adoption

Provision (credit) for credit losses

Balance, end of period

Total allowance for credit losses and

reserve for unfunded commitments

Total provision (credit) for credit losses

Notes to Consolidated Financial Statements

2 unchanged sentences

Risk characteristics applicable to each segment of the loan portfolio are described as follows:

Real Estate – The real estate portfolio consists of residential and commercial

Residential loans are generally secured by owner occupied 1–4 family residences.

Real Estate – The real estate portfolio consists of residential and commercial properties.

Residential loans are generally secured by owner occupied 1–4 family

Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.

Credit risk in these loans can be

impacted by economic conditions within the Company’s market areas that might impact either property values or a borrower’s personal income.

Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a

large number of borrowers.

Commercial real estate loans in this category typically involve larger principal amounts and are repaid primarily from the cash flow of a borrower’s principal business operation, the sale of the real estate or

income independent of the loan purpose.

Credit risk in these loans is driven by the creditworthiness of a borrower, property values, the local economy and other economic conditions impacting a borrower’s business or personal income.

Commercial & Industrial – The commercial portfolio includes loans to commercial

customers for use in financing working capital needs, equipment purchases and expansions.

Credit risk in these loans can be impacted by economic conditions within the Company’s market areas that might impact

either property values or a borrower’s personal income.

Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.

Commercial real estate loans in this category typically

involve larger principal amounts and are repaid primarily from the cash flow of a borrower’s principal business operation, the sale of the real estate or income independent of the loan purpose.

Credit risk in these loans is driven by the

creditworthiness of a borrower, property values, the local economy and other economic conditions impacting a borrower’s business or personal income.

Construction and development loans introduce additional risks, as repayment is generally

dependent on the successful completion of the project and the subsequent sale or permanent financing of the property.

Credit risk in these loans is primarily driven by potential construction delays, cost overruns, and shifts in market

conditions or interest rates that could impact the ultimate value of the project or the borrower’s ability to secure permanent financing.

Commercial & Industrial – The commercial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and

The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation.

Credit risk in these loans is driven

by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.

Agricultural – Loans secured by agricultural assets are generally made for the purpose

of acquiring land devoted to crop production, cattle or poultry or the operation of a similar type of business on the secured property.

Sources of repayment for these loans generally include income generated from operations of a business on

the property, rental income or sales of the property.

Credit risk in these loans may be impacted by crop and commodity prices, the creditworthiness of a borrower, and changes in economic conditions which might affect underlying property

values and the local economies in the Company’s market areas.

Consumer – The consumer loan portfolio consists of various term and line of credit

loans such as automobile loans and loans for other personal purposes.

Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose.

Credit risk is driven by consumer

economic factors, such as unemployment and general economic conditions in the Company’s market area and the creditworthiness of a borrower.

Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact

the cash flow stability from business operations.

Agricultural – Loans secured by agricultural assets are generally made for the purpose of acquiring land devoted to crop production, cattle or poultry or the operation

of a similar type of business on the secured property.

Sources of repayment for these loans generally include income generated from operations of a business on the property, rental income or sales of the property.

Credit risk in these

loans may be impacted by crop and commodity prices, the creditworthiness of a borrower, and changes in economic conditions which might affect underlying property values and the local economies in the Company’s market areas.

Consumer – The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes.

Repayment for

these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose.

Credit risk is driven by consumer economic factors, such as unemployment and general economic conditions in the Company’s

market area and the creditworthiness of a borrower.

Notes to Consolidated Financial Statements

1 unchanged sentence

Grade 1 is considered satisfactory.

The grades of 2 and 3, or Watch and Special Mention, respectively,

represent loans of lower quality and are considered criticized.

The grades of 2 and 3, or Watch and Special Mention, respectively, represent loans of lower quality and are considered criticized.

Grade of 4, or Substandard, refers to loans that are classified.

Grade 1 (Pass) – These loans generally conform to Bank policies, and are characterized by policy conforming advance rates on

collateral, and have well-defined repayment sources.

Grade 1 (Pass) – These loans generally conform to Bank policies, and are characterized by policy conforming advance rates on collateral, and have

well-defined repayment sources.

In addition, these credits are extended to Borrowers and/or Guarantors with a strong balance sheet and either substantial liquidity or a reliable income history.

Grade 2 (Watch) – These loans are still considered “Pass” credits;

however, various factors such as industry stress, material changes in cash flow or financial

conditions, or deficiencies in loan documentation, or other risk issues determined by the Lending Officer, Commercial Loan Committee (CLC), or Credit Quality Committee (CQC) warrant a heightened sense and frequency of monitoring.

however, various factors such as industry stress, material changes in cash flow or financial conditions, or deficiencies

in loan documentation, or other risk issues determined by the Lending Officer, Commercial Loan Committee (CLC), or Credit Quality Committee (CQC) warrant a heightened sense and frequency of monitoring.

Grade 3 (Special Mention) – These loans must have observable weaknesses or evidence of imprudent handling or structural issues.

The weaknesses require close

attention and the remediation of those weaknesses is necessary.

The weaknesses require close attention and the remediation of

those weaknesses is necessary.

No risk of probable loss exists.

1 unchanged sentence

Grade 4 (Substandard) – These loans are not adequately protected by the sound worth and debt service capacity of the Borrower, but may be well secured.

defined weaknesses relative to cash flow, collateral, financial condition, or other factors that might jeopardize repayment of all of the principal and interest on a timely basis.

There is the possibility that a future loss will occur

if weaknesses are not remediated.

They have defined weaknesses relative

to cash flow, collateral, financial condition, or other factors that might jeopardize repayment of all of the principal and interest on a timely basis.

There is the possibility that a future loss will occur if weaknesses are not

The Company evaluates the definitions of loan grades and the allowance for loan losses methodology on an ongoing basis.

No changes were made

to either during the period ended December 31, 2024.

No changes were made to either during the period ended December 31, 2025.

Notes to Consolidated Financial Statements

The following table presents the amortized cost of the Company’s loan portfolio with the gross charge-offs for the twelve months ended by year of origination based on

internal rating category as of December 31, 2024 (dollars in

The following table presents the amortized cost of the Company’s loan portfolio by year of origination based on internal rating category as of December 31, 2025 (dollars in thousands):

As of December 31, 2025

Revolving Loans Amortized Cost Basis

Construction & development

2 unchanged sentences

Total construction & development

Current-period gross charge-offs

1 - 4 family real estate

2 unchanged sentences

Total 1 - 4 family real estate

Current-period gross charge-offs

Commercial real estate - other

2 unchanged sentences

Total commercial real estate - other

Current-period gross charge-offs

Commercial and industrial

2 unchanged sentences

Total commercial and industrial

Current-period gross charge-offs

3 (Special Mention)

4 (Substandard)

Total agriculural

Current-period gross charge-offs

Total agricultural

3 (Special Mention)

1 unchanged sentence

Total consumer

Current-period gross charge-offs

Total loans held for investment

Total current-period gross charge-offs

Notes to Consolidated Financial Statements

The following

table presents the amortized cost of the Company’s loan portfolio with the gross charge-offs for the twelve months ended by year of origination based on internal rating category as of December 31, 2023 (dollars in thousands):

The following table presents the amortized cost of the Company’s loan portfolio by year of origination based on internal rating category as of December 31, 2024 (dollars in thousands):

As of December 31, 2024

Revolving Loans Amortized Cost Basis

Construction & development

2 unchanged sentences

Total construction & development

Current-period gross charge-offs

1 - 4 family real estate

2 unchanged sentences

Total 1 - 4 family real estate

Current-period gross charge-offs

Commercial real estate - other

2 unchanged sentences

Total commercial real estate - other

Current-period gross charge-offs

Commercial and industrial

2 unchanged sentences

Total commercial and industrial

Current-period gross charge-offs

3 (Special Mention)

4 (Substandard)

Total agriculural

Current-period gross charge-offs

Total agricultural

3 (Special Mention)

1 unchanged sentence

Total consumer

Current-period gross charge-offs

Total loans held for investment

Notes to Consolidated Financial Statements

The following tables presents the gross charge-offs of the Company’s loan portfolio by year of origination based on internal rating category for the twelve months ended December 31, 2025 and December 31, 2024, respectively (dollars in thousands):

Year Ended December 31, 2025

Revolving Loans Amortized Cost Basis

Construction & development

1 - 4 family real estate

Commercial real estate - other

Commercial and industrial

Total current-period gross charge-offs

Aged Analysis of Past Due Loans

The following

table presents the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31, 2024 and December 31, 2023 (dollars in thousands):

Year Ended December 31, 2024

Revolving Loans Amortized Cost Basis

Construction & development

1 - 4 family real estate

Commercial real estate - other

Commercial and industrial

Total current-period gross charge-offs

Notes to Consolidated Financial Statements

Aged Analysis of Past Due Loans Receivable

The following table presents the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31, 2025 and December 31, 2024 (dollars in thousands):

December 31, 2025

8 unchanged sentences

Commercial & industrial

million that is greater than 90 days past due as of December 31, 2023, primarily consists of a single borrower that is well collateralized

and for which collection is being diligently pursued .

The $ 80 ,000 that is greater than 90 days past due as of December 31, 2023, consists of a single borrower that is well secured and for which

collection is being diligently pursued.

Notes to Consolidated Financial Statements

Nonaccrual Loans

The following table presents information regarding nonaccrual loans as of December 31 , 2024 and December 31, 2023 (dollars in thousand s):

The following table presents information regarding nonaccrual loans as of December 31, 2025 and December 31, 2024 (dollars in thousands):

With an Allowance

Total Non-Accrual Loans

Related Allowance

December 31, 2025

3 unchanged sentences

Commercial & industrial

With an Allowance

Total Non-Accrual Loans

Related Allowance

December 31, 2024

3 unchanged sentences

Commercial & industrial

Interest income recognized on the nonaccrual loans for the years ended December 31, 2025, 2024, and 2023 was considered immaterial.

Notes to Consolidated Financial Statements

Collateral Dependent Loans

A loan is considered collateral-dependent when the

borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

During the twelve months ended December 31, 2024 and December 31, 2023, no material amount

of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent.

At a minimum, the estimated value of the collateral for loan equals the current book value.

The following table summarizes collateral-dependent

gross loans held for investment by collateral type and the related specific allocation as follows (dollars in thousands):

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral.

the twelve months ended December 31, 2025 and December 31, 2024, no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent.

At a minimum, the estimated

value of the collateral for loan equals the current book value.

The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows (dollars in thousands):

Collateral Type

Business Assets

Specific Allocation

December 31, 2025

4 unchanged sentences

Collateral Type

Business Assets

Specific Allocation

December 31, 2024

4 unchanged sentences

Notes to Consolidated Financial Statements

Loan Modifications to Borrowers Experiencing Financial

As part of the Company’s ongoing risk management

practices, the Company attempts to work with borrowers experiencing financial difficulty and when necessary to extend or modify loan terms to better align with their current ability to repay.

Modifications could include extension of the

maturity date, reductions of the interest rate, reduction or forgiveness of accrued interest, or principal forgiveness.

Combinations of these modifications may also be made for individual loans.

Extensions and modifications to loans are

made in accordance with internal policies and guidelines which conform to regulatory guidance.

Principal reductions may be made in limited circumstances, typically for specific commercial loan workouts, and in the event of borrower

Loan Modifications to Borrowers Experiencing Financial Difficulty

As part of the Company’s ongoing risk management practices, the Company attempts to work with borrowers experiencing financial difficulty and when necessary to extend or modify loan terms to better align with

their current ability to repay.

Modifications could include extension of the maturity date, reductions of the interest rate, reduction or forgiveness of accrued interest, or principal forgiveness.

Combinations of these modifications may

also be made for individual loans.

Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance.

Principal reductions may be made in limited circumstances, typically

for specific commercial loan workouts, and in the event of borrower bankruptcy.

Each occurrence is unique to the borrower and is evaluated separately.

The assessment of whether a borrower is experiencing

financial difficulty can be subjective in nature and management’s judgment may be required in making this determination.

The Company may determine that a borrower is experiencing financial difficulty if the borrower is currently in default

on any of its debt, or if it is probable that a borrower may default in the foreseeable future absent a modification.

Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial

During the twelve months ended December 31, 2024,

the Company modified a single commercial real estate loan to a borrower who was experiencing financial difficulty, which

included a term extension and interest rate reduction in exchange for credit enhancements.

The loan had a period-end amortized cost basis of $ 2.7

million and represented 0.5 % of the commercial real estate class of loans at December 31, 2024.

During the twelve months ended December 31, 2023, the Company modified a single commercial loan to a borrower who was

experiencing financial difficulty, which included a term extension and payment of principal and interest deferral until the sale of collateral.

The loan had a period-end amortized cost basis of $ 10.1 million and represented 1.9 % of the commercial and

industrial class of loans at December 31, 2023.

The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts.

There were no loans to borrowers experiencing financial

difficulty that had a payment default during the twelve months ended December 31, 2024 and were modified in the twelve months prior to default.

A change to the allowance for credit losses is generally not recorded upon modification

because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance methodology.

The assessment of whether a borrower is experiencing financial difficulty can be subjective in nature and management’s judgment may be required in making this determination.

The Company may determine that a

borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future absent a modification.

Many aspects of a borrower’s

financial situation are assessed when determining whether they are experiencing financial difficulty.

During the year ended December 31, 2025, the Company modified eight loans for borrowers experiencing financial difficulty.

Six of these modifications were related to a single borrower relationship and consisted of one construction and development loan and five commercial and industrial loans, all of which received term extensions.

The remaining two modifications involved one commercial real estate loan and one commercial and industrial loan, both of which received a term extension and a payment delay.

As of December 31, 2025, the period-end amortized cost basis of these modified loans was as follows:

• The modified construction and development loan had an amortized cost basis of $ 1.3 million, received a term extension of six months , and represented 0.6 % of the total construction and development loan portfolio.

• The modified commercial real estate loan had an amortized cost basis of $ 2.2 million, received a term extension of seven months and a payment delay of seven months , and represented 0.4 % of the total commercial real estate loan portfolio.

• The modified commercial and industrial loans consisted of five loans that had a combined amortized cost basis of $ 0.8 million that received a weighted-average term extension of 36 months, and one loan that had an amortized cost basis of $ 2.6 million that received a term extension of 24 months and a payment delay of 24 months.

Combined, these modifications represented 0.6 % of the total commercial and industrial loan portfolio.

During the year ended December 31, 2024, the Company modified a single commercial real estate loan to a borrower who was experiencing financial difficulty, which included a term extension and interest rate reduction in exchange for credit enhancements.

The loan had a period-end amortized cost basis of $ 2.7 million and represented 0.5 % of the commercial real estate class of loans at December 31, 2024.

The Company closely monitors the performance of loans modified for borrowers experiencing financial difficulty.

There were no loans modified for borrowers experiencing financial difficulty that subsequently

defaulted during the 12-month period ended December 31, 2025.

Notes to Consolidated Financial Statements

5 unchanged sentences

Net premises and equipment

The estimated useful lives range from five to 30 years for buildings and improvements, five to 15 years for furniture and equipment, and five years for automobiles.

Goodwill and Core Deposit Intangibles

The following is a summary of goodwill and intangible assets (dollars in thousands):

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

As of December 31, 2025

Core deposit intangibles

Gross Carrying Amount

Accumulated Amortization

Net Carrying Amount

As of December 31, 2024

Core deposit intangibles

Amortization expense for intangible assets

totaled $ 153 ,000, $ 305 ,000

and $ 307 ,000 for the years ended December 31, 2024, 2023 and 2022, respectively.

Estimated amortization expense for each of the

remaining life is as follows (dollars in thousands):

Amortization expense for intangible assets totaled $ 125 ,000, $ 153 ,000 and $ 305 ,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

Estimated amortization expense for each of the remaining life is as follows (dollars in thousands):

Notes to Consolidated Financial Statements

Interest-Bearing Deposits

The aggregate amount of interest-bearing time deposits in denominations that meet or exceed the insured limit were $ 92.3 million and $ 88.1 million at

December 31, 2024 and 2023, respectively.

The aggregate amount of interest-bearing time deposits in denominations that meet or exceed the insured limit were $ 96.2 million and $ 92.3 million at December 31, 2025 and 2024, respectively.

At December 31, 2025, the scheduled maturities of interest-bearing time deposits were as follows (dollars in thousands):

(benefit)/provision for income taxes for the years ended December 31, 2024, 2023 and 2022 consists of the following (dollars in thousands):

To manage liquidity and provide insurance for customer funds, the Company participates in reciprocal deposit programs, such as CDARS and ICS.

At December 31, 2025 reciprocal deposits totaled $ 576.5 million, and brokered deposits totaled $ 205.6 million.

The Company holds certain deposits from related parties.

For further information regarding these deposits, see Note 13.

For the years ended December 31, 2025, 2024, and 2023, all income before income taxes was generated from domestic operations.

The (benefit)/provision for income taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following (dollars in thousands):

Year Ended December 31,

2 unchanged sentences

Total income tax provision

The provision for income taxes for the year ended December 31, 2025 differs from the federal rate of 21 % due to the following (dollars in thousands):

Year Ended December 31, 2025

Statutory U.S.

federal income tax

State taxes (1)

Nontaxable and nondeductible items, net:

Provision for income taxes

(1) State taxes in Oklahoma made up the majority (greater than 50 percent) of the tax effect in this category.

Notes to Consolidated Financial Statements

The provision for income taxes for the years ended December 31, 2024, 2023 and 2022 differs from the federal rate of 21 % due to the following:

The provision for income taxes for the years ended December 31, 2024 and 2023 differs from the federal rate of 21 % due to the following (dollars in thousands):

Year Ended December 31,

1 unchanged sentence

federal income tax

Increase (decrease) resulting from:

FIN 48 Activity

State taxes (1)

Provision for income taxes

tax assets (liabilities) included in other assets in the accompanying consolidated balance sheet consist of the following:

The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (dollars in thousands):

Year Ended December 31,

US state and local

The components of the net deferred tax assets are as follows (dollars in thousands):

Year Ended December 31,

Deferred tax assets:

12 unchanged sentences

Right of use asset

Net unrealized gains on securities available for sale

Total deferred tax liabilities

1 unchanged sentence

Notes to Consolidated Financial Statements

In assessing the Company’s ability to realize deferred tax assets, management considers whether it is more likely than not that some portion

or all of the deferred tax assets will not be realized.

In assessing the Company’s ability to realize deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

Management considers projected future taxable income and tax planning strategies in making this assessment.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax

assets are deductible, management believes it is more likely than not that the Company will realize all benefits related to these deductible differences as of December 31, 2024.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize all benefits related to these deductible differences.

The Company has not established a valuation allowance as of December 31, 2025, 2024, and 2023.

The Company does not have any net operating loss or tax credit carryforwards as of December 31, 2025.

The Company is not presently under examination by the Internal Revenue Service or any state tax authority.

The Company establishes reserves for uncertain tax positions that reflect management’s best estimate of deductions and credits that may not be

sustained on a more-likely-than-not basis.

The Company establishes reserves for uncertain tax positions that reflect management’s best estimate of deductions and credits that may not be sustained on a more-likely-than-not basis.

Recognized income tax positions are measured at the largest amount that is considered greater than 50% likely of being realized.

Changes in recognition or measurement are reflected in the period in

which the change in judgment occurs.

There were no uncertain tax positions as of December 31, 2024 and 2023, and there were no interest or penalties related to uncertain tax positions reflected in the consolidated statements of income for the years ended December 31,

2024, 2023, and 2022.

Notes to Consolidated Financial Statements

Changes in recognition or measurement are reflected in the period in which the change in judgment occurs.

There were no uncertain tax positions as of December 31, 2025 and 2024, and 2023 and there were no interest or penalties related to uncertain tax positions reflected in the consolidated statements of comprehensive income for the years ended December 31, 2025, 2024, and 2023.

On July 4, 2025, the President signed H.R.

1, the “One Big Beautiful Bill Act,” (“the Act”) into law.

The legislation includes several changes to federal tax law that generally allow for more favorable

deductibility of certain business expenses beginning in 2025, including the restoration of immediate expensing of domestic R&D expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the

limitation on business interest expense.

The Act also made certain changes to the deductibility of the cost of meals and charitable contributions that are effective for tax years beginning after December 31, 2025.

These changes were not

reflected in the income tax provision for the period ended December 31, 2025.

The Company evaluated the impact on future periods and the legislation is not expected to have a significant impact on the Company’s consolidated financial

Letters of Credit

The Bank has entered into an arrangement with the FHLB resulting in the FHLB issuing letters of credit on behalf of the Bank with the

resulting beneficiary being certain public funds in connection with these deposits.

The Bank has entered into an arrangement with the FHLB resulting in the FHLB issuing letters of credit on behalf of the Bank to secure certain public fund deposits.

Outstanding letters of credit to secure these public funds at December 31, 2025 and 2024 were $ 750,000 and $ 750,000 , respectively.

Loans with a collateral value of

approximately $ 191.7 million and $ 159.6

million were used to secure the letters of credit at December 31, 2024 and 2023, respectively.

Loans with a collateral value of approximately $ 214.5 million and $ 191.7 million were used to secure the letters of credit at December 31, 2025 and 2024, respectively.

Advances and Borrowings

The Bank has a blanket floating lien security agreement with a maximum borrowing capacity of $ 190.9 million and $ 159.2 million at December 31, 2024 and

December 31, 2023, respectively, with the FHLB, under which the Bank is required to maintain collateral for any advances, including its stock in the FHLB, as well as qualifying first mortgage and other loans.

The Bank has a blanket floating lien security agreement with a maximum borrowing capacity of $ 213.8 million and $ 190.9 million at December 31, 2025 and December 31, 2024, respectively, with the FHLB, under which the Bank is required to maintain collateral for any advances, including its stock in the FHLB, as well as qualifying first mortgage and other loans.

The Bank had no advances from the FHLB at December 31, 2025 or 2024.

The Bank had additional liquidity with the Federal Reserve Bank of $ 336.1 million and $ 0 as of December

31, 2024 and December 31, 2023, respectively.

The Bank had additional liquidity with the Federal Reserve Bank of $ 288.6 million and $ 336.1 million as of December 31, 2025 and December 31, 2024, respectively.

Notes to Consolidated Financial Statements

Shareholders’ Equity

On October 28, 2021, the Company adopted a Repurchase Plan (the “RP”) that authorizes the repurchase of up to 750,000 shares of the Company’s stock.

Stock repurchases under the RP take place pursuant to a Rule 10b5-1 Plan with pricing and purchasing

parameters established by management.

The RP expired on October 28, 2023.

There were no share repurchases under this plan.

October 30, 2023, the Company adopted a new Repurchase Plan (the “New RP”) that authorizes the repurchase of up to 750,000 shares of

the Company’s stock.

Stock repurchases under the New RP will take place pursuant to a Rule 10b5-1 Plan with pricing and purchasing parameters established by management.

There were no repurchases as of December 31, 2024.

A summary of the activity under the RP is as follows:

On October 26, 2023, the Company adopted a Repurchase Plan (the “Plan”) authorizing the repurchase of up to 750,000 shares of the Company’s stock.

On August 20, 2025, the Board of Directors approved the renewal of the Plan.

Stock repurchases under the Plan take place pursuant to a Rule 10b5-1 Plan with pricing and purchasing parameters established by management.

The Plan may be suspended or discontinued at any time.

There were no share repurchases under the Plan during the period ending December 31, 2025.

A summary of the activity under the repurchase plan is as follows:

Number of shares repurchased

1 unchanged sentence

Shares remaining to be repurchased

Notes to Consolidated Financial Statements

The Company and Bank are subject to risk-based capital guidelines issued by the federal banking agencies.

Failure to meet minimum capital

requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

Under capital adequacy

guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under

GAAP, regulatory reporting requirements and regulatory capital standards.

The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other

Furthermore, the Company’s and the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios

(set forth in the following table) of total, Tier I, and Common Equity capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined).

Management believes, as of

December 31, 2024, that the Company and Bank meet all capital adequacy requirements to which it is subject and maintains capital conservation buffers that allow the Company and Bank to avoid limitations on capital distributions, including

dividend payments and certain discretionary bonus payments to certain executive officers.

As of December 31, 2024, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as well

capitalized under the regulatory framework for prompt corrective action.

Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional

discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action,

the Company and Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under GAAP, regulatory reporting requirements and regulatory capital

The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Furthermore, the Company’s and the Bank’s regulators

could require adjustments to regulatory capital not reflected in these financial statements.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the following table) of total, Tier I, and Common

Equity capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier I capital (as defined) to average assets (as defined).

Management believes, as of December 31, 2025, that the Company and Bank meet all capital

adequacy requirements to which it is subject and maintains capital conservation buffers that allow the Company and Bank to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to

certain executive officers.

As of December 31, 2025, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as well capitalized under the regulatory framework for prompt corrective

To be categorized as well capitalized, the Bank must maintain capital ratios as set forth in the table.

There are no conditions or events since that notification that

management believes have changed the Bank’s category.

In April 2020, we began originating loans to qualified small businesses under the PPP administered by the SBA.

Federal bank regulatory agencies have issued an interim

final rule that permits banks to neutralize the regulatory capital effects of participating in the Paycheck Protection Program Lending Facility (the “PPP Facility”) and clarify that PPP loans have a zero percent risk weight under applicable

risk-based capital rules.

Specifically, a bank may exclude all PPP loans pledged as collateral to the PPP Facility from its average total consolidated assets for the purposes of calculating its leverage ratio, while PPP loans that are not

pledged as collateral to the PPP Facility will be included.

There are no conditions or events since that notification that management believes have changed the Bank’s category.

Notes to Consolidated Financial Statements

The Company’s and Bank’s actual capital amounts and ratios are presented in the following table (dollars in thousands):

To Be Well Capitalized

Capital Requirements

Conservation Buffer

To Be Well Capitalized

Corrective Action

2 unchanged sentences

Tier I capital to risk-weighted assets

CET I capital to risk-weighted assets

Common equity tier I capital to risk-weighted assets

Tier I capital to average assets

2 unchanged sentences

Tier I capital to risk-weighted assets

CET I capital to risk-weighted assets

Common equity tier I capital to risk-weighted assets

Tier I capital to average assets

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:

a Tier 1 leverage ratio of at

a CET1 to risk-weighted assets of 4.5%;

a Tier 1 leverage ratio of at least 4.0%;

a Common Equity Tier 1 (“CET1”) capital to risk-weighted

assets of 4.5%;

a Tier 1 capital to risk-weighted assets of at least 6.0%;

and a total capital to risk-weighted assets 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 regulations.

Notes to Consolidated Financial Statements

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

The capital conservation buffer is designed to absorb losses during periods of economic stress and

effectively increases the minimum required risk-weighted capital ratios.

Banking institutions with a ratio of CET1 to risk-weighted assets below the effective minimum (4.5% plus the capital conservation buffer) are 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, 2024, 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.

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

The capital conservation buffer is designed to absorb losses

during periods of economic stress and effectively increases the minimum required risk-weighted capital ratios.

Banking institutions with a ratio of CET1 to risk-weighted assets below the effective minimum (4.5% plus the capital

conservation buffer) are 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, 2025, 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.

The Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval.

At December 31,

2024, approximately $ 83.7 million of retained earnings was available for dividend declaration from the Bank without prior regulatory

At December 31, 2025, approximately $ 92.2 million of retained earnings was available for dividend declaration from the Bank without prior regulatory approval.

Related-Party Transactions

At December 31, 2024 and December 31, 2023, the Company had loans outstanding to executive officers, directors, significant shareholders and

their affiliates (related parties) approximating $ 0 and $ 203,000 , respectively.

The Bank leases office and retail banking space in Oklahoma City and Woodward, Oklahoma from Central Park on Lincoln, LLC and Haines Realty

Investments Company, LLC, respectively, both related parties of the Company.

Lease expense totaled $ 286,000 , $ 251,000 and $ 155,000 for the years

ended December 31, 2024, 2023 and 2022, respectively.

At December 31, 2025 and December 31, 2024, the Company had loans outstanding to executive officers, directors, significant shareholders and their affiliates (related parties) in the amount of $ 10.5 million and $ 10.8 million, respectively.

A summary of these loans is as follows (dollars in thousands):

Year Ended December 31,

The Company holds deposits from related parties, including directors, executive officers, and their related interests.

At December 31, 2025 these related party deposits totaled $ 66.6 million.

These deposit balances represented 26.55 % of total stockholders’ equity at December 31, 2025.

All such deposits were made in the ordinary course of business on substantially the same terms, including interest rates, as those prevailing at the time for comparable transactions with other persons.

The Bank leases office and retail banking space in Oklahoma City and Woodward, Oklahoma from Central Park on Lincoln, LLC and Haines Realty Investments Company, LLC, respectively, both related parties of the Company.

Lease expense totaled $ 326,000 , $ 286,000 and $ 251,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

In addition, payroll and office sharing arrangements were in place between the Company and certain of its affiliates.

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The Company has a retirement savings 401(k) plan covering substantially all employees.

Employees may contribute up to the maximum legal limit

with the Bank matching up to 5 % of the employee’s salary.

Employer contributions charged to expense for the years ended December 31,

2024, 2023 and 2022 totaled $ 434,000 , $ 399,000

and $ 366,000 , respectively.

Employees may contribute up to the maximum legal limit with the Bank matching up to 5 % of the employee’s salary.

Employer contributions charged to expense for the years ended December 31, 2025, 2024 and 2023 totaled $ 438,000 , $ 434,000 and $ 399,000 , respectively.

Stock-Based Compensation

The Company adopted a nonqualified incentive stock option plan (the “Bank7 Corp.

2018 Equity Incentive Plan”) in September 2018 and amended

the Bank7 Corp.

2018 Equity Plan on May 20, 2020 adding an additional 507,500 shares to the plan.

The Bank7 Corp.

Incentive Plan will terminate in September 2028, if not extended.

Compensation expense, net of settlement of shares for payroll withholding related to the Plan for the years ended December 31, 2024, 2023 and 2022 totaled $ 2,467,000 , $ 2,164,000 and $ 1,384,000 , respectively.

There were 636,430

shares available for future grants as of December 31, 2024.

The Company grants to employees and directors restricted stock units (“RSU’s”) which vest ratably over one , three , four , five , or eight years and stock options which vest ratably over four years .

The Company adopted the Bank7 Corp.

2018 Equity Incentive Plan (the “Incentive Plan”) in September 2018.

The Incentive Plan permits the grant of restricted stock units and nonqualified incentive stock options.

The Incentive Plan will terminate in September 2028, if not extended.

Compensation expense related to the Incentive Plan for the years ended December 31, 2025, 2024 and 2023 totaled $ 3,062,000 , $ 2,467,000 and $ 2,164,000 , respectively.

There were 623,504 shares available for future grants as of December 31, 2025.

The Company grants to employees and directors restricted stock units (“RSUs”), which vest ratably over one , three , four , five , or eight years and stock options which vest ratably over four years .

All RSUs and stock options are granted at the fair value of the common stock at the time of the award.

The RSUs are considered fixed awards as the number of shares and fair value are known at the date of grant and

the fair value at the grant date is amortized over the vesting and/or service period.

The RSUs are considered fixed awards as the number of shares and fair value are known at the date of grant and the fair value at the grant date is amortized over the vesting and/or service period.

The Company uses newly issued shares for granting RSUs and stock options.

The following table is a summary of the stock option activity under the Bank7 Corp.

2018 Equity Incentive Plan (dollar amounts in

thousands, except per share data):

2018 Equity Incentive Plan (dollar amounts in thousands, except share and per share data):

Exercise Price

Contractual Term

Aggregate Intrinsic Value

Year Ended December 31, 2025

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Exercisable at December 31, 2025

Exercise Price

Contractual Term

Aggregate Intrinsic Value

Exercise Price

Year Ended December 31, 2024

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Exercisable at December 31, 2024

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model and is based on certain

assumptions including risk-free rate of return, dividend yield, stock price volatility and the expected term.

The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model and is based on certain assumptions, including risk-free rate of return, dividend yield,

stock price volatility and the expected term.

The fair value of each option is expensed over its vesting period.

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Number of Shares

Grant Date Fair Value

Year Ended December 31, 2025

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Number of Shares

Grant Date Fair Value

Year Ended December 31, 2024

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End of the period balance

As of December 31, 2024, there was approximately $ 4.7

million of unrecognized compensation expense related to 236 ,000 unvested RSUs and $ 18,000 of unrecognized compensation expense related to 76,000

unvested and/or unexercised stock options.

The RSU expense is expected to be recognized over a weighted average period of 3.17

years, the stock option expense is expected to be recognized over a weighted average period of 1.51 years.

As of December 31, 2025, there was approximately $ 6.4 million of unrecognized compensation expense related to 251,000 unvested RSUs and $ 11,000 of unrecognized compensation expense related to 66,000 unvested and/or unexercised stock options.

The RSU expense is expected to be recognized over a weighted average period of 3.76 years, the stock option expense is expected to be recognized over a weighted average period of 0.67 years.

As of December 31, 2024, there was approximately $ 4.7 million of unrecognized compensation expense related to 236,000 unvested RSUs and $ 18,000 of unrecognized compensation expense related to 76,000 unvested and/or unexercised stock options.

The RSU expense is expected to be recognized over a weighted average period of 3.17 years, the stock option expense is expected to be recognized over a weighted average period of 1.51 years.

Notes to Consolidated Financial Statements

Disclosures about Fair Value of Assets and Liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market

participants at the measurement date.

Fair value measurements must maximize the use of observable inputs and minimize the use of unobservable inputs.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

Fair value measurements must

maximize the use of observable inputs and minimize the use of unobservable inputs.

There is a hierarchy of three levels of inputs that may be used to measure fair value:

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quoted prices in markets that are not active;

or other inputs that are observable or can be

corroborated by observable market data for substantially the full term of the assets or liabilities

or other inputs that are observable or can be corroborated by observable market

data for substantially the full term of the assets or liabilities

Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities

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Available-for-sale securities:

Debt securities classified as available-for-sale are reported at fair value utilizing Level 2 inputs.

For those debt securities classified as Level 2, the Company obtains fair value measurements from an independent pricing

The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.

Treasury yield curve, live trading levels, trade execution data for similar securities, market consensus

prepayments speeds, credit information and the bond’s terms and conditions, among other things.

Debt securities classified as available-for-sale, as discussed in Note 4 are reported at fair

value utilizing Level 2 inputs.

For those debt securities classified as Level 2, the Company obtains fair value measurements from an independent pricing service.

The fair value measurements consider observable data that may include dealer

quotes, market spreads, cash flows, the U.

Treasury yield curve, live trading levels, trade execution data for similar securities, market consensus prepayments speeds, credit information and the bond’s terms and conditions, among other

Nonrecurring Measurements

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair

value hierarchy in which the fair value measurements fall at December 31, 2024 and December 31, 2023 (dollars in thousands):

The following table presents the fair value measurement of assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy in which the fair value measurements fall at December 31, 2025 and December 31, 2024 (dollars in thousands):

December 31, 2025

Collateral-dependent loans

Asset retirement obligations

December 31, 2024

Collateral-dependent loans

Asset retirement obligations

Notes to Consolidated Financial Statements

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and

recognized in the accompanying consolidated balance sheets, as well as the general classification of such assets pursuant to the valuation hierarchy.

For assets classified within Level 3 of the fair value hierarchy, the process used to develop

the reported fair value is described below.

Following is a description of the valuation methodologies and inputs used for assets measured at fair value on a nonrecurring basis and recognized in the accompanying consolidated balance sheets, as well as

the general classification of such assets pursuant to the valuation hierarchy.

For assets classified within Level 3 of the fair value hierarchy, the process used to develop the reported fair value is described below.

Collateral-Dependent Loans, Net of Allowance for Credit Losses

The estimated fair value of collateral-dependent impaired loans is based on fair value, less estimated cost to sell.

Collateral-dependent

impaired loans are classified within Level 3 of the fair value hierarchy.

The Company considers appraisal analysis as the starting point for determining fair value and then considers other factors and events in the

environment that may affect the fair value.

Values of the collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by executive management and

loan administration.

Values are reviewed for accuracy and consistency by executive management and loan administration.

The ultimate collateral values are reduced by discounts to consider lack of marketability and estimated cost to sell if

repayment or satisfaction of the loan is dependent on the sale of the collateral.

The estimated fair value of collateral-dependent loans is based on fair value, less estimated cost to sell.

Collateral-dependent loans are classified within Level 3 of the fair value hierarchy.

The Company considers appraisal analysis as the starting point for determining fair value and then considers other factors and events in the environment that may affect the fair value.

Values of the

collateral underlying collateral-dependent loans are obtained when the loan is determined to be collateral-dependent and subsequently as deemed necessary by executive management and loan administration.

Values are reviewed for accuracy and

consistency by executive management and loan administration.

The ultimate collateral values are reduced by discounts to consider lack of marketability and estimated cost to sell if repayment or satisfaction of the loan is dependent on the

sale of the collateral.

Unobservable (Level 3) Inputs

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value

measurements.

The following table presents quantitative information about unobservable inputs used in recurring and nonrecurring Level 3 fair value measurements.

December 31, 2025

Collateral-dependent loans

Estimated cash to be received pending

liquidation of collateral

Estimated cash to be received pending liquidation of collateral

Estimated cost to sell

Asset retirement obligations

Expected present value

Plugging and abandonment

December 31, 2024

Collateral-dependent loans

Estimated cash to be received pending

resolution of bankruptcy proceedings

Estimated cash to be received pending liquidation of collateral

Estimated cost to sell

Asset retirement obligations

Expected present value

Plugging and abandonment

Notes to Consolidated Financial Statements

following table presents estimated fair values of the Company’s financial instruments not recorded at fair value at December 31, 2024 and December 31, 2023 (dollars in thousands):

The following table presents estimated fair values of the Company’s financial instruments not recorded at fair value at December 31, 2025 and December 31, 2024 (dollars in thousands):

Fair Value Measurements

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Cash and due from banks

Interest-bearing time deposits in other banks

Interest-bearing timedeposits in other banks

Loans held for sale

Nonmarketable equity securities

Interest receivable and other assets

Interest receivable

Financial Liabilities

Interest payable and other liabilities

Interest payable

December 31, 2024

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Cash and due from banks

Interest-bearing time deposits in other banks

Loans held for sale

Interest-bearing time

deposits in other banks

Nonmarketable equity securities

Interest receivable and other assets

Interest receivable

Financial Liabilities

Interest payable and other liabilities

Interest payable

Notes to Consolidated Financial Statements

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated

balance sheets at amounts other than fair value:

Cash and Due from Banks, Federal Funds Sold, Interest-Bearing Time Deposits in Other Banks, Nonmarketable Equity Securities,

Interest Receivable and Interest Payable

The following methods were used to estimate the fair value of all other financial instruments recognized in the accompanying consolidated balance sheets at amounts other than fair value:

Cash and Due from Banks, Interest-Bearing Time Deposits in Other Banks, Nonmarketable Equity Securities, Interest Receivable, Interest Payable

The carrying amount approximates fair value.

Loans and Mortgage Loans Held for Sale

The fair value of loans is estimated by discounting the future cash flows using the market rates at which similar loans would be made to

borrowers with similar credit ratings and for the same remaining maturities.

Loans with similar characteristics were aggregated for purposes of the calculations.

The Company determines fair value of loans by using exit market price assumptions including factors such as liquidity, credit quality and risk of nonperformance.

The fair value is estimated by discounting the

future cash flows using the market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities.

Loans with similar characteristics were aggregated for purposes of the

calculations.

Loans Held for Sale

Mortgage loans originated and intended for sale in the secondary market are carried at the lower of cost or estimated fair value in the aggregate.

Net unrealized losses, if any, are recognized through a

valuation allowance by charges to income.

Because these loans are typically sold shortly after origination, their carrying value generally approximates fair value.

Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits.

The carrying amount approximates fair

The fair value of fixed-maturity time deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

The carrying amount of these deposits approximates fair value.

The fair value of fixed-maturity time

deposits is estimated using a discounted cash flow calculation that applies the rates currently offered for deposits of similar remaining maturities.

Commitments to Extend Credit, Lines of Credit and Standby Letters of Credit

The fair values of unfunded commitments are estimated using the fees currently charged to enter into similar agreements, taking into account

the remaining terms of the agreements and the present creditworthiness of the counterparties.

The fair values of standby letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost

to terminate or otherwise settle the obligations with the counterparties at the reporting date.

The estimated fair values of the Company’s commitments to extend credit, lines of credit and standby letters of credit were not material at December

31, 2024 or December 31, 2023.

Interest Receivable and Other Assets

Interest receivable and other assets

include prepaid expenses, right-of-use lease assets, interest receivable on loans, deferred tax assets, and oil and gas related assets.

For prepaid expense, right-of-use lease assets, deferred tax assets, and interest receivable on loans the

carrying amount approximates fair value.

For the determination of fair value of oil and gas assets, see discussion in Note 1, Summary of Significant Accounting Policies--Specific to Production of Oil and

Natural Gas Reserves Operations.

Interest Payable and Other Liabilities

Interest payable

and other liabilities include unfunded commitment liabilities, lease liabilities, interest payable on deposits,dividends payable, other accrued liabilities, and oil and gas related liabilities.

For unfunded commitment liabilities, lease

liabilities, interest payable on deposits, dividends payable, and other accrued liabilities carrying amount approximates fair value.For the determination of fair value of oil and gas liabilities, see discussion in Note 1, Summary of Significant Accounting Policies--Specific to Production of Oil and Natural Gas Reserves Operations .

The fair values of unfunded commitments are estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present

creditworthiness of the counterparties.

The fair values of standby letters of credit and lines of credit are based on fees currently charged for similar agreements or on the estimated cost to terminate or otherwise settle the obligations

with the counterparties at the reporting date.

The estimated fair values of the Company’s commitments to extend credit, lines of credit and standby letters of credit were not material at December 31, 2025 or December 31, 2024.

Notes to Consolidated Financial Statements

Financial Instruments with Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of

its customers.

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.

These financial instruments include commitments to extend credit and standby letters of credit.

Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the accompanying

consolidated balance sheets.

The following summarizes those financial instruments with contract amounts representing credit risk as of December 31, 2024 and December 31, 2023 (dollars in

Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the accompanying consolidated balance sheets.

The following summarizes those financial instruments with contract amounts representing credit risk as of December 31, 2025 and December 31, 2024 (dollars in thousands):

Commitments to extend credit

Financial and performance standby letters of credit

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the

Each instrument generally has fixed expiration dates or other termination clauses.

Since many of the instruments are expected to expire without being drawn upon, total commitments to extend credit amounts do not necessarily

represent future cash requirements.

The Company evaluates each customer’s creditworthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary, by the Company upon extension of credit is based on management’s

credit evaluation of the customer.

Standby letters of credit are irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party.

The credit risk involved in issuing letters of credit is

essentially the same as that involved in extending loan facilities to customers.

On January 1, 2023, the Company adopted ASU 2016-13, see Note (1) and Note (6).

Upon adoption, the Company estimated an allowance for credit

losses on off-balance sheet credit exposures, which resulted in recording a reserve for unfunded loan commitments of $ 500 ,000.

reserve for unfunded loan commitments totaled $ 464 ,000 and $ 464 ,000 at December 31, 2024 and December 31, 2023, respectively.

Significant Estimates and Concentrations

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract.

Each instrument generally has fixed expiration dates or other

termination clauses.

Since many of the instruments are expected to expire without being drawn upon, total commitments to extend credit amounts do not necessarily represent future cash requirements.

The Company evaluates each customer’s

creditworthiness on a case-by-case basis.

The amount of collateral obtained, if deemed necessary, by the Company upon extension of credit is based on management’s credit evaluation of the customer.

Standby letters of credit are

irrevocable conditional commitments issued by the Company to guarantee the performance of a customer to a third party.

The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan

facilities to customers.

The reserve for unfunded loan commitments totaled $ 464,000 at December 31, 2025 and December 31, 2024.

Concentrations

GAAP requires disclosure of certain significant estimates and current vulnerabilities due to certain concentrations.

Estimates related to the

allowance for loan losses are reflected in Note 6 regarding loans.

As of December 31, 2024, hospitality loans were 18.5 %

of gross total loans with outstanding balances of $ 259.1 million and unfunded commitments of $ 2.9 million;

energy loans were 9.5 %

of gross total loans with outstanding balances of $ 133.3 million and unfunded commitments of $ 39.0 million.

The Company evaluates goodwill for potential goodwill impairment on an annual basis or more often based on consideration if any impairment

indicators have occurred.

A prolonged strain on the U.S.

economy impacting the Company could result in goodwill being partially or fully impaired.

At December 31, 2024, goodwill of $ 8.5 million was recorded on the consolidated balance sheet.

Estimates related to the allowance for loan losses are reflected in Note 5 regarding loans.

As of December 31, 2025, hospitality loans were 19.3 % of gross total loans with outstanding balances of $ 310.6 million and unfunded commitments of $ 17.8 million;

energy loans were 9.7 % of gross total loans with outstanding balances of $ 156.8 million and unfunded commitments of $ 72.4 million;

construction.

Notes to Consolidated Financial Statements

Operating Leases

On January 1, 2022, the Company adopted ASU No.

2016-02, Leases (Topic 842), which requires the recognition of the Company’s

operating leases on its balance sheet.

See Note (1) for additional information.

The Company has operating leases, which primarily consist of office space in buildings, ATM locations, equipment and land on which it owns certain buildings.

Rental expense on all operating leases, including those rented on a monthly or temporary basis were as follows (Dollars in

Rental expense on all operating leases, including those rented on a monthly or temporary basis were as follows (dollars in thousands):

Year Ending December 31:

As of December 31, 2024, a right of use lease asset included in interest receivable and other assets on the balance sheet totaled $ 1.7

million, and a related lease liability included in accrued interest payable and other liabilities on the balance sheet totaled $ 1.9 million.

As of December 31, 2024, our operating leases have a weighted-average remaining lease term of 15.8 years and a weighted-average discount rate of 3.7

Future minimum rental commitments of branch facilities and office equipment due under non-cancelable operating leases at

December 31, 2024, were as follows (dollars in thousands):

As of December 31, 2025, a right of use lease asset included in interest receivable and other assets on the consolidated balance sheet totaled $ 2.1 million, and a related lease liability included in accrued interest payable and other liabilities on the consolidated balance sheet totaled $ 2.1 million.

As of December 31, 2025, our operating leases have a weighted-average remaining lease term of 13.8 years and a weighted-average discount rate of 3.9 percent.

Future minimum rental commitments of branch facilities and office equipment due under non-cancelable operating leases at December 31, 2025, were as follows (dollars in thousands):

Total lease payments

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Notes to Consolidated Financial Statements

Asset Retirement Obligation

Asset retirement obligations (“ARO”) relate to our obligation for the plugging and abandonment of oil and natural gas properties.

The ARO is recorded at

fair value and accretion expense, recognized over the life of the property, increases the liability to its expected settlement value.

Accretion expense is included within “Other” noninterest expense of the consolidated statements of comprehensive

income and consolidated statements of cash flows.

If the fair value of the estimated ARO changes, an adjustment is recorded for both the ARO and the asset retirement cost.

following table is a reconciliation of changes in the Company’s asset retirement obligations for the years ended December 31, 2024 and December 31, 2023 (dollars in thousands):

Asset retirement obligations as of January 1, 2024

Liability additions

Sale of wells

Accretion expense

Asset retirement obligations as of December 31, 2024

Asset retirement obligations as of January 1, 2023

Liability additions

Accretion expense

Asset retirement obligations as of December 31, 2023

The fair value of the ARO is measured using expected future cash outflows discounted at the Company’s credit-adjusted risk-free interest rate.

value, to the extent possible, includes a market risk premium for unforeseeable circumstances.

Inherent in the fair value calculation of the ARO are numerous assumptions and judgments including the ultimate settlement amounts, inflation factors,

credit adjusted discount rates, timing of settlement, and changes in the legal, regulatory, environmental, and political environments.

To the extent future revisions to these assumptions impact the fair value of the existing ARO liability, a

corresponding adjustment is made to the oil and gas property balance.

Notes to Consolidated Financial Statements

Parent-only Financial Statements

Condensed Balance Sheets

Balance Sheets

Cash and due from banks

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Total liabilities and shareholders’ equity

Condensed Statements of Comprehensive Income

Statements of Comprehensive Income

For the Years Ended December 31,

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Other Comprehensive Income

Equity in other comprehensive (loss) income of subsidiary

Other comprehensive gain(loss)

Equity in other comprehensive income of subsidiary

Other comprehensive gain

Comprehensive Income

Notes to Consolidated Financial Statements

Condensed Statements of Cash Flows

Statements of Cash Flows

For the Years Ended December 31,

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What changed 10-K

Item 8. Financial Statements and Supplementary Data