Bank7 Corp. Q1 2026 10-Q Summary
Business Context and Reporting Period
Bank7 Corp. (BSVN) is a bank holding company headquartered in Oklahoma City, operating twelve full-service branches in Oklahoma, Texas, and Kansas. The company provides a full range of banking and financial services to individual and corporate customers. This report covers the quarterly period ended March 31, 2026.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 | Change |
|---|---|---|---|
| Net Income | $12.0 million | $10.3 million | +16.1% |
| Earnings Per Share (Diluted) | $1.25 | $1.08 | +15.7% |
| Total Assets | $1.95 billion | $1.74 billion (Q1 2025 avg) | -1.0% (vs Q4 2025) |
| Total Loans (Gross) | $1.60 billion | $1.42 billion (Q1 2025 avg) | +11.9% (vs Q1 2025) |
| Total Deposits | $1.67 billion | $1.55 billion (Q1 2025 avg) | +7.7% (vs Q1 2025) |
| Net Interest Income | $24.2 million | $20.8 million | +16.1% |
| Net Interest Margin | 5.27% | 4.98% | +29 bps |
| Noninterest Expense | $10.3 million | $8.9 million | +16.4% |
| Efficiency Ratio | 39.64% | 39.45% | +19 bps |
| Allowance for Credit Losses | $19.5 million | $18.2 million | +7.1% |
| Nonperforming Assets | $9.3 million | $6.5 million | +43.1% |
Material Changes vs. Prior Period
- Profitability Growth: Net income increased by $1.7 million year-over-year, driven primarily by a $3.4 million increase in net interest income. Loan yields improved by 11 basis points to 8.03%, while deposit costs decreased, expanding the net interest margin to 5.27%.
- Expense Increases: Noninterest expenses rose $1.5 million, largely due to a $1.1 million increase in salaries and employee benefits (19.9% increase) and a $480,000 increase in accounting, marketing, and legal fees.
- Asset Quality: Nonaccrual loans increased to $9.3 million from $6.5 million in the prior quarter, primarily driven by a $7.5 million increase in construction and development loans and a decrease in commercial and industrial nonaccruals. However, there were no charge-offs in Q1 2026, compared to $200,000 in Q1 2025.
- Loan Portfolio: Gross loans increased $170 million year-over-year. Commercial real estate loans remain the largest segment at 60.2% of the portfolio.
Guidance, Outlook, Risks, and Unusual Items
- Subsequent Event (Oil & Gas Sale): On April 10, 2026, the company sold its oil and gas assets for $5.2 million. This resulted in a pre-tax loss of $2.1 million in April 2026. However, management notes that the total cash recovery from the asset ($20.1 million) exceeded the initial cash outlay ($16.5 million) by $3.7 million over the holding period.
- Capital Position: The company remains "well-capitalized" under regulatory standards. Total capital to risk-weighted assets was 15.96%, and Tier 1 capital to risk-weighted assets was 14.78% as of March 31, 2026.
- Internal Control Weaknesses: Management concluded that disclosure controls and procedures were not effective as of March 31, 2026, due to material weaknesses previously disclosed in the 2025 10-K. These weaknesses relate to deposit operations, related party transactions, reconciliations, and IT general controls. Remediation efforts are ongoing.
- Concentrations: Hospitality loans represent 19.0% of gross loans ($302.7 million), and energy loans represent 8.1% ($128.6 million).
Investor Verification Checklist
- Remediation Progress: Verify the timeline and specific milestones for remediating the material weaknesses in internal controls over financial reporting.
- Oil & Gas Asset Disposition: Confirm the final accounting treatment and cash flow impact of the April 2026 sale of oil and gas assets in the Q2 2026 filing.
- Nonaccrual Loan Migration: Monitor the $8.0 million in construction and development loans currently on nonaccrual status to assess potential future charge-offs.
- Expense Management: Track the sustainability of the 19.9% increase in salary and benefit expenses relative to revenue growth.
- Deposit Stability: Review the composition of deposits, noting that brokered deposits decreased to $135.1 million from $205.6 million in the prior year, while reciprocal deposits increased.