Bank7 (BSVN) risk factors, FY2024 10-K

Risks Relating to Our Business and Market

1. 01Our business is concentrated in, and largely dependent upon, the continued growth and welfare of our markets, and adverse economic conditions in these markets could negatively impact our operations and customers
2. 02Our business is primarily affected by the economies of Oklahoma, Texas and to a smaller degree the State of Kansas. Our success depends to a significant extent upon the business activity, population, income levels, employment trends, deposits and real estate activity in these markets
3. 03We have credit exposure to the energy industry
4. 04We have credit exposure to the hospitality industry
5. 05We have a concentration in commercial real estate lending that could cause our regulators to restrict our ability to grow
6. 06Because a portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity could impair the value of collateral securing our real estate loans and result in loan and other losses
7. 07Many of our loans are to commercial borrowers, which have a higher degree of risk than other types of loans
8. 08Our largest loan relationships make up a material percentage of our total loan portfolio
9. 09Our largest deposit relationships currently make up a material percentage of our deposits and the withdrawal of deposits by our largest depositors could force us to fund our business through more expensive and less stable sources
10. 10A substantial portion of our loan portfolio consists of loans maturing within one year, and there is no guarantee that these loans will be replaced upon maturity or renewed on the same terms or at all
11. 11Our allowance for Credit losses may not be adequate to cover our actual credit losses, which could adversely affect our earnings
12. 12Our profitability depends on interest rates generally, and we may be adversely affected by changes in market interest rates
13. 13We rely on short-term funding, which can be adversely affected by local and general economic conditions
14. 14Liquidity risk could impair our ability to fund operations and meet our obligations as they become due and could jeopardize our financial condition
15. 15Our operations could be interrupted if our third-party service providers experience difficulty, terminate their services or fail to comply with banking regulations
16. 16We may be exposed to risk of environmental liabilities with respect to properties to which we take title
17. 17Inflationary pressures and rising prices may affect our results of operations and financial condition
18. 18A natural disaster affecting our market areas could adversely affect the Company’s financial condition and results of operations

Risks Relating to Our Regulatory Environment

1. 19We are subject to extensive regulation, which increases the cost and expense of compliance and could limit or restrict our activities, which in turn may adversely impact our earnings and ability to grow
2. 20Monetary policy and other economic factors could affect our profitability adversely
3. 21Regulations relating to privacy, information security and data protection could increase our costs, affect or limit how we collect and use personal information and adversely affect our business opportunities

Risks Related to Our Common Stock

1. 22Shares of certain shareholders may be sold into the public market. This could cause the market price of our common stock to drop significantly
2. 23We are controlled by insiders, whose interests may not coincide with our other shareholders
3. 24We are a bank holding company and our only source of cash, other than further issuances of securities, is distributions from the Bank