Bank7(BSVN) - 2025 Q1 - Quarterly Report

Loans and Deposits - Total loans increased to $1.42 billion as of March 31, 2025, up by $49.9 million or 3.6% from the previous year[136] - Total deposits decreased to $1.55 billion, a decline of $28.9 million or 1.8% compared to March 31, 2024[136] - Total deposits increased to $1.55 billion as of March 31, 2025, up from $1.52 billion on December 31, 2024, representing a growth of 1.97%[179] - Brokered deposits decreased slightly to $334.2 million as of March 31, 2025, compared to $336.7 million as of December 31, 2024, a decline of 0.74%[180] - Uninsured deposits rose to $377.9 million, accounting for approximately 24.4% of total deposits as of March 31, 2025, compared to $354.2 million or 23.4% as of December 31, 2024[181] - Noninterest-bearing demand deposits increased to $327.5 million, representing 21.1% of total deposits as of March 31, 2025, up from 20.7% at the end of 2024[183] Financial Performance - Pre-tax net income for Q1 2025 was $13.7 million, down $1.2 million or 7.9% from $14.9 million in Q1 2024[136] - Net interest income for Q1 2025 was $20.8 million, a decrease of $1.2 million or 5.5% from $22.0 million in Q1 2024[139] - Noninterest income for Q1 2025 was $1.8 million, a decrease of $251,000 or 12.5% from $2.0 million in Q1 2024[151] - Total noninterest expense for Q1 2025 was $8.9 million, down $253,000 or 2.8% from $9.1 million in Q1 2024[153] - Salaries and employee benefits slightly decreased by $9,000, or 0.17%, from $5.289 million in Q1 2024 to $5.280 million in Q1 2025[153] Asset Quality - The allowance for credit losses as a percentage of total loans decreased by 15 basis points to 1.28%[149] - Nonaccrual loans decreased to $5,897,000 as of March 31, 2025, down from $7,170,000 as of December 31, 2024, resulting in a nonperforming assets ratio of 0.33%[169] - The ratio of allowance for credit losses to total loans remained stable at 1.28% as of March 31, 2025[169] - Total charge-offs for the period were $200,000, while total recoveries amounted to $444,000, resulting in net recoveries of $244,000[164] - The ratio of nonperforming loans to total loans improved to 0.41% as of March 31, 2025, down from 0.51% as of December 31, 2024[169] Capital and Liquidity - Total shareholders' equity increased by $8.4 million to $221.7 million as of March 31, 2025, compared to $213.2 million as of December 31, 2024[190] - The Bank maintained a total capital ratio of 15.25% as of March 31, 2025, exceeding the minimum requirement of 10.50% to be considered "well-capitalized"[190] - The Company and the Bank met all capital adequacy requirements under the Basel III Capital Rules as of March 31, 2025[189] - Liquidity position is supported by $206.8 million in borrowing availability with the FHLB as of March 31, 2025, an increase from $190.9 million as of December 31, 2024[187] - The Company expects to meet contractual obligations through adequate cash levels maintained via profitability and continued deposit gathering activities[192] Loan Portfolio Composition - Construction and development loans increased to $187.4 million, representing 13.1% of the total loan portfolio as of March 31, 2025, up from 12.0% in the previous period[157] - Commercial real estate loans accounted for 59.2% of the total loan portfolio as of March 31, 2025, compared to 57.2% as of December 31, 2024[157] - The company maintains internal concentration limits for various loan types, ensuring all loan types are within established limits[158] - The percentage of allowance allocated to commercial real estate - other increased to 39.5% as of March 31, 2025, compared to 39.0% as of December 31, 2024[164] Interest Rate Risk Management - The estimated net interest income at risk for a -100 basis point shift is projected to decline by no more than 4.00%[219] - A +400 basis point increase in interest rates is expected to result in a 19.34% increase in net interest income as of March 31, 2025[219] - The company does not engage in leveraged derivatives or financial options to mitigate interest rate risk[214] - Interest rate risk is managed by the Asset/Liability Committee, which regularly reviews the sensitivity of assets and liabilities to interest rate changes[215] Strategic Plans - The company plans to grow organically by selectively opening additional branches and pursuing strategic acquisitions[134] - The company continues to monitor loans categorized as "Watch" and "Special mention" for potential risks, with total amounts of $2,499,000 and $31,232,000 respectively as of March 31, 2025[177]