Bank7 Corp.BSVN
Bank7 Corp. Fair Value Disclosure
Note 15: 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. There is a hierarchy of three levels of inputs that may be used to measure fair value:
| Level 1 |
Quoted prices in active markets for identical assets or liabilities
|
| Level 2 |
Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; 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
|
| Level 3 |
Unobservable inputs supported by little or no market activity and significant to the fair value of the assets or liabilities
|
Recurring Measurements
Assets and liabilities measured at fair value on a recurring basis include the following:
Available-for-sale securities: 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. S. 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.
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, 2025 and December 31, 2024 (dollars in thousands):
|
|
Fair Value
|
(Level 1)
|
(Level 2)
|
(Level 3)
|
||||||||||||
|
December 31, 2025
|
||||||||||||||||
|
Collateral-dependent loans
|
$
|
369 |
$
|
- |
$
|
- |
$
|
369 |
||||||||
|
|
||||||||||||||||
|
December 31, 2024
|
||||||||||||||||
|
Collateral-dependent loans
|
$
|
3,209 |
$
|
- |
$
|
- |
$
|
3,209 |
||||||||
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 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.
|
|
Valuation
|
Unobservable
|
|||||
|
|
Fair Value
|
Technique
|
Inputs
|
||||
|
December 31, 2025
|
|
|
|||||
|
Collateral-dependent loans
|
$
|
369 |
Estimated cash to be received pending liquidation of collateral
|
Estimated cost to sell
|
|||
|
|
|
|
|||||
|
December 31, 2024
|
|
|
|||||
|
Collateral-dependent loans
|
$
|
3,209 |
Estimated cash to be received pending liquidation of collateral
|
Estimated cost to sell
|
|||
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):
|
Carrying
|
Fair Value Measurements
|
|||||||||||||||||||
|
Amount
|
Level 1
|
Level 2
|
Level 3
|
Total
|
||||||||||||||||
|
December 31, 2025
|
||||||||||||||||||||
|
Financial Assets
|
||||||||||||||||||||
|
Cash and due from banks
|
$
|
244,635 |
$
|
244,635 |
$
|
- |
$
|
- |
$
|
244,635 |
||||||||||
|
Interest-bearing timedeposits in other banks
|
10,457 |
- |
10,457 |
- |
10,457 |
|||||||||||||||
|
Loans, net
|
1,587,024 |
- |
1,605,518 |
369 |
1,605,887 |
|||||||||||||||
|
Loans held for sale
|
2,078 |
- |
2,078 |
- |
2,078 |
|||||||||||||||
|
Nonmarketable equity securities
|
1,165 |
- |
1,165 |
- |
1,165 |
|||||||||||||||
|
Interest receivable
|
8,822 |
- |
8,822 |
- |
8,822 |
|||||||||||||||
|
Financial Liabilities
|
||||||||||||||||||||
|
Deposits
|
$
|
1,700,833 |
$
|
- |
$
|
1,700,646 |
$
|
- |
$
|
1,700,646 |
||||||||||
|
Interest payable
|
1,122 |
- |
1,122 |
- |
1,122 |
|||||||||||||||
|
December 31, 2024
|
||||||||||||||||||||
|
Financial Assets
|
||||||||||||||||||||
|
Cash and due from banks
|
$
|
234,196 |
$
|
234,196 |
$
|
- |
$
|
- |
$
|
234,196 |
||||||||||
|
Interest-bearing time
|
||||||||||||||||||||
|
deposits in other banks
|
6,719 |
- |
6,719 |
- |
6,719 |
|||||||||||||||
|
Loans, net
|
1,379,465 |
- |
1,392,299 |
3,209 |
1,395,508 |
|||||||||||||||
|
Nonmarketable equity securities
|
1,283 |
- |
1,283 |
- |
1,283 |
|||||||||||||||
|
Interest receivable
|
8,841 |
- |
8,841 |
- |
8,841 |
|||||||||||||||
|
Financial Liabilities
|
||||||||||||||||||||
|
Deposits
|
$
|
1,515,471 |
$
|
- |
$
|
1,515,023 |
$
|
- |
$
|
1,515,023 |
||||||||||
|
Interest payable
|
1,182 |
- |
1,182 |
- |
1,182 |
|||||||||||||||
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
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
Deposits include demand deposits, savings accounts, NOW accounts and certain money market deposits. 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, 2025 or December 31, 2024.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 17, 2026 | Showing above |
| 2024 | Mar 12, 2025 | |
| 2023 | Mar 25, 2024 | |
| 2022 | Mar 24, 2023 | |
| 2021 | Mar 31, 2022 | |
| 2020 | Mar 25, 2021 | |
| 2019 | Mar 30, 2020 | |
| 2018 | Mar 29, 2019 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.