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What changed in Bridgewater Bancshares Inc's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Bridgewater Bancshares Inc's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+477 added−549 removedSource: 10-K (2026-02-26) vs 10-K (2025-03-06)

Top changes in Bridgewater Bancshares Inc's 2025 10-K

477 paragraphs added · 549 removed · 388 edited across 10 sections

Item 1. Business

Business — how the company describes what it does

153 edited+49 added−45 removed53 unchanged
Biggest changeAs a Minnesota corporation, the Company is subject to the Minnesota Business Corporation Act, as 15 Table of Contents amended, which prohibits the Company from paying a dividend if, after giving effect to the dividend the Company would not be able to pay its debts as the debts become due in the ordinary course of business, or the Company’s total assets would be less than the sum of its total liabilities plus, the amount that would be needed, if the Company were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of shareholders whose preferential rights are superior to those receiving the distribution. ​ As a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should eliminate, defer or significantly reduce dividends to shareholders if: (i) the company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the prospective rate of earnings retention is inconsistent with the company’s capital needs and overall current and prospective financial condition; or (iii) the company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
Biggest changeAs a general matter, the Federal Reserve has indicated that the board of directors of a bank holding company should eliminate, defer or significantly reduce dividends to shareholders if: (i) the company’s net income available to shareholders for the past four quarters, net of dividends previously paid during that period, is not sufficient to fully fund the dividends; (ii) the prospective rate of earnings retention is inconsistent with the company’s capital needs and overall current and prospective financial condition; or (iii) the company will not meet, or is in danger of not meeting, its minimum regulatory capital adequacy ratios.
Banking organizations have been required to hold minimum levels of capital based on guidelines established by the federal banking agencies since 1983.
Capital Levels. Banking organizations have been required to hold minimum levels of capital based on guidelines established by the federal banking agencies since 1983.
The U.S. federal banking agencies adopted the U.S. Basel III regulatory capital reforms, and, at the same time, effected changes required by the Dodd-Frank Act, in regulations that were effective (with certain phase-ins) in 2015 (the “Basel III Rule”).
The U.S. federal banking agencies adopted the U.S. Basel III regulatory capital reforms, and, at the same time, effected changes required by the Dodd-Frank Act, in regulations that were effective in 2015 (with certain phase-ins) (the “Basel III Rule”).
The Company has elected to operate as a financial holding company. In order to maintain its status as a financial holding company, the Company and the Bank must be well-capitalized, well-managed, and the Bank must have a least a satisfactory Community Reinvestment Act (the “CRA”) rating.
The Company has elected to operate as a financial holding company. In order to maintain its status as a financial holding company, the Company and the Bank must be well capitalized and well managed, and the Bank must have a least a satisfactory Community Reinvestment Act (“CRA”) rating.
If the Federal Reserve determines that a financial holding company or any bank subsidiary is not well-capitalized or well-managed, the Federal Reserve will provide a period of time in which to achieve compliance, but, during the period of noncompliance, the Federal Reserve may place any limitations on the Company that it deems appropriate.
If the Federal Reserve determines that a financial holding company or any bank subsidiary is not well capitalized or well managed, the Federal Reserve will provide a period of time in which to achieve compliance, but, during the period of noncompliance, the Federal Reserve may place any limitations on the financial holding company that it deems appropriate.
Furthermore, if the Federal Reserve determines that a financial holding company’s subsidiary bank has not received a satisfactory CRA rating, the Company would not be able to commence any new financial activities or acquire a company that engages in such activities. ​ Change in Control.
Furthermore, if the Federal Reserve determines that a financial holding company’s subsidiary bank has not received a satisfactory CRA rating, such company would not be able to commence any new financial activities or acquire a company that engages in such activities. Change in Control.
The minimum capital levels for banking organizations have been expressed in terms of ratios of “capital” divided by “total assets.” The capital guidelines for U.S. banking organizations beginning in 1989 have been based upon international capital accords (known as “Basel” accords) adopted by the Basel Committee on Banking Supervision, a committee of central banks and bank supervisors that acts as the primary global standard-setter for prudential regulation, as implemented by the U.S. federal banking agencies on an interagency basis.
The minimum capital levels for banking organizations have been expressed in terms of ratios of “capital” divided by “total assets.” The capital guidelines for U.S. banking organizations beginning in 1989 have been based upon international capital accords (known as the “Basel” accords) adopted by the Basel Committee on Banking Supervision, a committee of central banks and bank supervisors that acts as the primary global standard-setter for prudential regulation, as interpreted and implemented by the U.S. federal banking agencies on an interagency basis.
Although capital has historically been one of the key measures of the financial health of both bank holding companies and banks, its role became fundamentally more important in the wake of the global financial crisis, as the banking agencies recognized that the amount and quality of capital held by banking organizations prior to that crisis was insufficient to absorb losses during periods of severe stress. ​ Capital Levels.
Although capital has historically been one of the key measures of the financial health of both bank holding companies and banks, its role became fundamentally more important in the wake of the global financial crisis, as the banking agencies recognized that the amount and quality of capital held by banking organizations prior to that crisis was insufficient to absorb losses during periods of severe stress.
After accessing the website, the filings are available free of charge upon selecting “SEC Filings/Documents.” Reports available include the Company’s proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after the documents and reports are electronically filed with or furnished to the SEC.
After accessing the website, the filings are available free of charge upon selecting “ SEC Filings/Documents.” Reports available include the Company’s proxy statements, annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after the documents and reports are electronically filed with or furnished to the SEC.
Enterprise risk management reports are provided to the full board of directors on a quarterly basis. The Company also has a comprehensive Commercial Real Estate Portfolio Risk Management Policy which implements formal processes and procedures designed to manage and mitigate risk within the commercial real estate portfolio.
Enterprise risk management reports are provided to the board of directors on a quarterly basis. The Company also has a comprehensive Commercial Real Estate Portfolio Risk Management Policy which implements formal processes and procedures designed to manage and mitigate risk within the commercial real estate portfolio.
Depending upon the capital category to which a banking organization is assigned, the banking agencies’ corrective powers include: (i) requiring the institution to submit a capital restoration plan; (ii) limiting the institution’s asset growth and restricting its activities; (iii) requiring the institution to issue additional capital stock (including additional voting stock) or to sell itself; (iv) restricting transactions between the institution and its affiliates; (v) restricting the interest rate that the institution may pay on deposits; (vi) ordering a new election of directors of the institution; (vii) requiring that senior executive officers or directors be dismissed; (viii) prohibiting the institution from accepting deposits from correspondent banks; (ix) requiring the institution to divest certain subsidiaries; (x) prohibiting the payment of principal or interest on subordinated debt; and (xi) ultimately, appointing a receiver for the institution. ​ Community Bank Capital Simplification .
Depending upon the capital category to which a banking organization is assigned, the banking agencies’ corrective powers include: (i) requiring the institution to submit a capital restoration plan; (ii) limiting the institution’s asset growth and restricting its activities; (iii) requiring the institution to issue additional capital stock (including additional voting stock) or to sell itself; (iv) restricting transactions between the institution and its affiliates; (v) restricting the interest rate that the institution may pay on deposits; (vi) ordering a new election of directors of the institution; (vii) requiring that senior executive officers or directors be dismissed; (viii) prohibiting the institution from accepting deposits from correspondent banks; (ix) requiring the institution to divest certain subsidiaries; (x) prohibiting the payment of principal or interest on subordinated debt; and (xi) ultimately, appointing a receiver for the institution.
The Bank has two wholly-owned subsidiaries: BWB Holdings, LLC, which was formed for the purpose of holding repossessed property; and Bridgewater Investment Management, Inc., which was formed for the purposes of holding certain municipal securities and engaging in municipal lending activities. The Bank has nine full-service offices located in Bloomington, Greenwood, Minneapolis (2), Minnetonka (2), Orono, St.
The Bank has two wholly-owned subsidiaries: BWB Holdings, LLC, which was formed for the purpose of holding repossessed property; and Bridgewater Investment Management, Inc., which was formed for the purposes of holding certain municipal securities and engaging in municipal lending activities. The Bank has nine full-service offices located in Bloomington, Greenwood, Minneapolis (2), Minnetonka, Orono, Lake Elmo, St.
The Company believes this lending niche lowers the risk profile of the overall loan portfolio due to its lower historical loss rates when compared to other loan types. In fact, the multifamily portfolio has experienced no net charge-offs over the past five years and only $62,000 of net charge-offs since inception.
The Company believes this lending niche lowers the risk profile of the overall loan portfolio due to its lower historical loss rates when compared to other loan types. In fact, the multifamily portfolio has experienced no net charge-offs over the past three years and only $62,000 of net charge-offs since inception.
These restrictions have not had, and are not currently expected to have, a material impact on the operations of the Bank. ​ The Bank may be required to seek approval from the MDOC, the FDIC and other banking or financial services agencies before engaging in certain acquisitions or mergers under applicable state and federal law.
These restrictions have not had, and are not currently expected to have, a material impact on the operations of the Bank. The Bank may be required to obtain approval from the MDOC, the FDIC and other applicable banking or financial services agencies before engaging in certain acquisitions or mergers under applicable state and federal law.
The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve prior to November 11, 1999 to be “so closely related to banking ... as to be a proper incident thereto.” This authority permits the Company to engage in a variety of banking-related businesses, including the ownership and operation of a savings association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development) and mortgage banking and brokerage services.
The principal exception allows bank holding companies to engage in, and to own shares of companies engaged in, certain businesses found by the Federal Reserve prior to November 11, 1999 to be “so closely related to banking... as to be a proper incident thereto.” This authority permits the Company to engage in a variety of banking-related businesses, including, among other things, the ownership and operation of a savings association, or any entity engaged in consumer finance, equipment leasing, the operation of a computer service bureau (including software development) and mortgage banking and brokerage services.
As of December 31, 2024, the Twin Cities ranked first in median household income in the Midwest and seventh in the nation, when compared to the top 20 MSAs by population size in each area, based on data available on S&P Global Market Intelligence. According to the U.S.
As of December 31, 2025, the Twin Cities ranked first in median household income in the Midwest and seventh in the nation, when compared to the top 20 MSAs by population size in each area, based on data available on S&P Global Market Intelligence. According to the U.S.
Although the Company is technically subject to the special assessment as a banking organization with more than $5 billion of assets as of December 31, 2024, the Bank does not have to pay the special assessment because it had less than $5 billion in estimated uninsured deposits in December 31, 2022. ​ Supervisory Assessments.
Although the Company is technically subject to the special assessment as a banking organization with more than $5 billion of assets as of December 31, 2025, the Bank does not have to pay the special assessment because it had less than $5 billion in estimated uninsured deposits as of December 31, 2022. Supervisory Assessments.
In addition, federal law and regulations may affect the terms on which any person who is a director or officer of the Company or the Bank, or a principal shareholder of the Company, may obtain credit from banks with which the Bank maintains a correspondent relationship. ​ Safety and Soundness Standards/Risk Management.
In addition, federal law and regulations may govern the terms on which any person who is a director or officer of the Company or the Bank, or a principal shareholder of the Company, may obtain credit from banks with which the Bank maintains a correspondent relationship. Safety and Soundness Standards/Risk Management.
SUPERVISION AND REGULATION General ​ FDIC-insured institutions, their holding companies and their affiliates are extensively regulated under federal and state law.
SUPERVISION AND REGULATION General FDIC-insured banking institutions, their holding companies and their affiliates are extensively regulated under federal and state law.
The Company’s Health and Wellness Committee is focused on promoting physical fitness, nutrition, and mental health across the organization, with events including pickleball, a blood drive, a healthy cooking class, and annual step challenge. The Health and Wellness Committee also hosted a series of mental health-related events.
The Company’s Health and Wellness Committee is focused on promoting physical fitness, nutrition, and mental health across the organization, with events including pickleball, a blood drive, a healthy cooking class, and annual step challenge. The Health and Wellness Committee also hosted a series of mental health-related events in 2025.
“Control” is conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company, but may arise under certain circumstances between 10% and 24.99% ownership. ​ Capital Requirements.
“Control” is conclusively determined to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company, but may be presumed to arise under certain circumstances between 10% and 24.99% ownership. Capital Requirements.
Community banking organizations have long raised concerns with federal banking agencies about the regulatory burden, complexity, and costs associated with certain provisions of the Basel III Rule. In response, the U.S. Congress provided an “off-ramp” for institutions, like the Company, with total consolidated assets of less than $10 billion as part of the Regulatory Relief Act.
Community Bank Capital Simplification. Community banking organizations have long raised concerns with federal banking agencies about the regulatory burden, complexity and costs associated with certain provisions of the Basel III Rule. In response, the U.S. Congress provided an “off-ramp” for institutions, like the Company, with total consolidated assets of less than $10 billion as part of the Regulatory Relief Act.
The BHCA does not place territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies.
The BHCA does not place formal territorial restrictions on the domestic activities of nonbank subsidiaries of bank holding companies.
The FDIC regularly assesses the Bank’s record of meeting the credit needs of its communities. The Bank’s CRA ratings derived from these examinations can have significant impacts on the activities in which the Bank and the Company may engage.
The FDIC regularly assesses the Bank’s record of meeting these credit needs of its communities through periodic CRA examinations. The Bank’s CRA ratings derived from these examinations can have significant impacts on the activities in which the Bank and the Company may engage.
Due to their market knowledge and understanding of clients’ businesses, the bankers are well positioned to provide timely and relevant feedback to clients. Management believes the responsive credit culture separates the Company from its competitors. Multifamily Lending Expertise. The Company specializes in multifamily lending, which has historically represented a large portion of the total loan portfolio.
Due to their market knowledge and understanding of clients’ businesses, the bankers are well positioned to provide timely and relevant feedback to clients. Management believes the responsive credit culture separates the Company from its competitors. 7 Table of Contents Multifamily Lending Expertise. The Company specializes in multifamily lending, which has historically represented a large portion of the total loan portfolio.
One test, referred to as the Liquidity Coverage Ratio, or LCR, is designed to ensure that the banking organization has an adequate stock of unencumbered high-quality liquid assets that can be converted easily and immediately in private markets into cash to meet liquidity needs for a 30-calendar day liquidity stress scenario.
One test, referred to as the Liquidity Coverage Ratio (“LCR”) is designed to ensure that the banking organization has an adequate stock of unencumbered high quality liquid assets that can be converted easily and immediately in private markets into cash to meet liquidity needs for a 30-calendar day liquidity stress scenario.
Bureau of Labor Statistics, the population in the Twin Cities MSA was approximately 3.7 million as of December 31, 2024, making it the third largest MSA in the Midwest and 16th largest MSA in the United States.
Bureau of Labor Statistics, the population in the Twin Cities MSA was approximately 3.7 million as of December 31, 2025, making it the third largest MSA in the Midwest and 16th largest MSA in the United States.
As a Minnesota-chartered FDIC-insured bank, the Bank is subject to the examination, supervision, reporting and enforcement requirements of the MDOC, the chartering authority for Minnesota banks, and the FDIC, designated by federal law as the primary federal regulator of insured state banks that, like the Bank, are not members of the Federal Reserve System (nonmember banks). ​ Deposit Insurance .
As a Minnesota-chartered FDIC-insured bank, the Bank is subject to the examination, supervision, reporting and enforcement requirements of the MDOC, the chartering authority for Minnesota banks, and the FDIC, designated by federal law as the primary federal regulator of insured state banks that, like the Bank, are not members of the Federal Reserve System (i.e., nonmember banks). Deposit Insurance Assessments.
Operating in an unsafe or unsound manner will also constitute grounds for other enforcement action by the federal banking agencies, including cease and desist orders and civil money penalty assessments. ​ During the past decade, the banking agencies have increasingly emphasized the importance of sound risk management processes and strong internal controls when evaluating the activities of the FDIC-insured institutions that they supervise.
Operating in an unsafe or unsound manner also will constitute grounds for other enforcement action by the federal banking agencies, including cease and desist orders and civil money penalty assessments. Federal banking agencies have emphasized the importance of sound risk management processes and strong internal controls when evaluating the activities of FDIC-insured institutions that they supervise.
The banking agencies generally have broad discretion to impose restrictions and limitations on the operations of a regulated entity where the agencies determine, among other things, that such operations are unsafe or unsound, fail to comply with applicable law or are otherwise inconsistent with laws and regulations.
The banking agencies generally have broad discretion to impose restrictions and limitations on the operations of a regulated entity where the agencies determine, among other things, that such operations are unsafe or unsound, violate applicable law or are otherwise inconsistent with laws and regulations.
The Dodd-Frank Act permits well-capitalized and well-managed banks to establish new interstate branches or acquire individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) without impediments.
The Dodd-Frank Act permits well capitalized and well managed banks to establish new interstate branches or acquire individual branches of a bank in another state (rather than the acquisition of an out-of-state bank in its entirety) without impediments. Affiliate and Insider Transactions.
The federal banking agencies have also released specific risk management guidance on certain topics, including third party relationships, in response to the proliferation of relationships between banking organizations and fintech companies (although the guidance applies more broadly). ​ Privacy and Cybersecurity .
The federal banking agencies also have issued guidance on specific risk management topics, including third party relationships, in response to the proliferation of relationships between banking organizations and fintech companies (although the guidance applies more broadly). Privacy and Cybersecurity.
The Bank must also comply with certain state consumer protection laws and requirements in the states in which it operates. ​ 22 Table of Contents
The Bank also must comply with certain state consumer protection laws and requirements in the states in which it operates. ​ ​ 23 Table of Contents
Similarly, women and people of color made up 58% and 13% of manager roles, respectively. Employee retention helps the Company operate efficiently and carry out its mission of being the finest entrepreneurial bank in the Twin Cities MSA.
Similarly, women and people of color made up 56% and 13% of manager roles, respectively. Employee retention helps the Company operate efficiently and carry out its mission of being the finest entrepreneurial bank in the Twin Cities.
The other test, known as the Net Stable Funding Ratio, or NSFR, is designed to promote more medium- and long-term funding of the assets and activities of FDIC-insured institutions over a one-year horizon.
The other test, known as the Net Stable Funding Ratio (“NSFR”) is designed to promote more medium- and long-term funding of the assets and activities of FDIC-insured institutions over a one-year horizon.
For example, a banking organization that is well-capitalized may: (i) qualify for exemptions from prior notice or application requirements otherwise applicable to certain types of activities; (ii) qualify for expedited processing of other required notices or applications; and (iii) accept, roll-over or renew brokered deposits.
For example, a well capitalized banking organization may: (i) qualify for exemptions from prior notice or application requirements otherwise applicable to certain activities; (ii) receive expedited processing of other required notices or applications; and (iii) accept, roll-over or renew brokered deposits.
Banks are required to implement liquidity risk management frameworks that ensure they maintain sufficient liquidity, including a cushion of 17 Table of Contents unencumbered, high-quality liquid assets, to withstand a range of stress events.
Banks are required to implement liquidity risk management frameworks that ensure they maintain sufficient liquidity, including a cushion of unencumbered, high quality liquid assets, to withstand a range of stress events.
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018, or Regulatory Relief Act, eliminated questions about the applicability of certain Dodd-Frank Act reforms to community bank systems, including relieving the Company of any requirement to engage in mandatory stress tests, maintain a risk committee or comply with the Volcker Rule’s complicated prohibitions on proprietary trading and ownership of private funds.
The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 (the “Regulatory Relief Act”) eliminated questions about the applicability of certain Dodd-Frank Act reforms to community banking organizations, including relieving the Company of any requirement to engage in mandatory stress tests, maintain a risk committee or comply with the Volcker Rule’s complicated prohibitions on proprietary trading and ownership of private funds.
Section 201 of the Regulatory Relief Act specifically instructed the federal banking agencies to establish a single “Community Bank Leverage Ratio”, or CBLR, of between 8 and 10%.
Section 201 of the Regulatory Relief Act specifically instructed the federal banking agencies to establish a single “Community Bank Leverage Ratio” (“CBLR”) of between 8 and 10%.
As a bank holding company, the Company is registered with, and is subject to regulation supervision and enforcement by, the Federal Reserve under the Bank Holding Company Act of 1956, as amended, or the BHCA.
As a bank holding company, the Company is registered with, and is subject to regulation, supervision and enforcement by, the Federal Reserve under the Bank Holding Company Act of 1956, as amended (the “BHCA”).
In addition to the strategic leadership team, the Company has demonstrated an ability to grow through the recruitment of high performing individuals. The Company seeks to hire people with significant in-market experience who fit the Company’s hard-working, entrepreneurial culture.
In addition to the SLT, the Company has demonstrated an ability to grow through the recruitment of high performing individuals. The Company seeks to hire people with significant in-market experience who fit the Company’s hard-working, entrepreneurial culture.
Furthermore, taxation laws administered by the Internal Revenue Service (“IRS”), and state taxing authorities, accounting rules developed by the FASB, securities laws administered by the SEC and state securities authorities, and anti-money laundering and sanctions laws enforced by the U.S. Department of the Treasury, or Treasury, have an impact on the Company’s business.
Furthermore, taxation laws administered by the Internal Revenue Service 11 Table of Contents (the “IRS”), and state taxing authorities, accounting rules developed by the FASB, securities laws administered by the SEC and state securities authorities and anti-money laundering and sanctions laws enforced by the U.S. Department of the Treasury (the “Treasury”) have an impact on the Company’s business.
Thus, the Bank is deemed to have a concentration in CRE lending. Accordingly, pursuant to the CRE Guidance, the Bank is required to have, and does have, heightened risk management practices in place to account for the heightened degree of risk associated with CRE lending. ​ Consumer Financial Services.
Accordingly, pursuant to the CRE Guidance, the Bank is required to have, and does have, heightened risk management practices in place to account for the heightened degree of risk associated with CRE lending. Consumer Financial Services.
The management-level enterprise risk management committee, comprised of the strategic leadership team and senior representatives from all departments, meets quarterly to identify, assess, measure, monitor, and manage the Company’s overall enterprise risk position and to discuss how the Company’s strategic initiatives may impact the Company’s risk profile.
The 8 Table of Contents management-level enterprise risk management committee, comprised of the strategic leadership team, the Chief Risk Officer and senior representatives from all departments, meets quarterly to identify, assess, measure, monitor, and manage the Company’s overall enterprise risk position and to discuss how the Company’s strategic initiatives may impact the Company’s risk profile.
The Company is required to file with the Federal Reserve periodic reports of the Company’s operations and such additional information regarding the Company and its subsidiaries as the Federal Reserve may require. ​ 14 Table of Contents Acquisitions, Activities and Financial Holding Company Election . The primary purpose of a bank holding company is to control and manage banks.
The Company is required to file with the Federal Reserve periodic reports of the Company’s operations and such additional information regarding the Company and its subsidiaries as the Federal Reserve may require. Acquisitions and Activities. The primary purpose of a bank holding company is to control and manage banks.
They also impact the Bank’s ability to share certain information with affiliates and non-affiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers.
They also limit the Bank’s ability to share certain information with affiliates and nonaffiliates for marketing and/or non-marketing purposes, or to contact customers with marketing offers.
The Twin Cities MSA had an unemployment rate of 2.5%, which was lower than the national average of 4.1%, as of December 31, 2024. These strong labor market fundamentals can be attributed to the significant presence of national and international businesses across diverse industries operating within the Twin Cities MSA.
The Twin Cities MSA had an unemployment rate of 4.3%, which was lower than the national average of 4.4%, as of December 31, 2025. These strong labor market fundamentals can be attributed to the significant presence of national and international businesses across diverse industries operating within the Twin Cities MSA.
As a result, the Company’s growth and earnings performance may be affected not only by management decisions and general economic conditions, but also by the requirements of federal and state statutes and by the regulations and policies of various banking agencies, including the Company’s primary regulator, the Federal Reserve Board of Governors (the “Federal Reserve”) and the Bank’s primary federal regulator, the FDIC, and primary state regulator, the Minnesota Department of Commerce, Financial Institutions Division, or MDOC, and the Consumer Financial Protection Bureau, or CFPB, as the regulator of consumer financial services and their providers.
As a result, the Company’s growth and earnings performance may be affected not only by management decisions and general economic conditions, but also by the requirements of federal and state statutes and by the regulations and policies of various banking agencies, including the Company’s primary regulator, the Federal Reserve Board of Governors (the “Federal Reserve”) and the Bank’s primary federal regulator, the FDIC, and primary state regulator, the Minnesota Department of Commerce, Financial Institutions Division (the “MDOC”), and federal and state consumer financial protection agencies .
The Bank is a Minnesota-chartered bank. The deposit accounts of the Bank are insured by the FDIC’s Deposit Insurance Fund, or DIF, to the maximum extent provided under federal law and FDIC regulations, currently $250,000 per insured depositor category.
The Bank is a Minnesota-chartered, nonmember bank. The deposit accounts of the Bank are insured by the FDIC’s Deposit Insurance Fund (“DIF”) to the maximum extent provided under federal law and FDIC regulations, currently $250,000 per insured depositor, per ownership category.
The capital ratios described above are minimum standards for banking organizations to be considered “adequately capitalized.” Banking agencies uniformly encourage banks to hold more capital and be “well-capitalized” and, to that end, federal law and regulations provide various incentives for banking organizations to maintain regulatory capital at levels in excess of minimum regulatory requirements.
The capital ratios described above represent minimum standards for banking organizations to be considered “adequately capitalized.” Banking agencies uniformly encourage banks to maintain capital levels above these minimums and to be “well capitalized.” To that end, federal law and regulations provide various incentives for banking organizations to maintain regulatory capital at levels in excess of minimum regulatory requirements.
The concept of a banking organization being “well-capitalized” is part of a regulatory enforcement regime that provides the federal banking agencies with broad power to take “prompt corrective action” to resolve the problems of undercapitalized depository institutions based on the capital level of each particular institution.
The concept of a banking organization being “adequately capitalized” or “well capitalized,” as defined above, is part of a regulatory enforcement regime that provides the federal banking agencies with broad power to take “prompt corrective action” to resolve the problems of undercapitalized depository institutions based on the capital level of each particular institution.
As described above, the Bank exceeded its capital requirements under applicable guidelines as of December 31, 2024. Notwithstanding the availability of funds for dividends, however, the FDIC and the MDOC may prohibit the payment of dividends by the Bank if either or both determine such payment would constitute an unsafe or unsound practice.
As described above, the Bank exceeded its capital requirements under applicable guidelines as of December 31, 2025. Notwithstanding the availability of funds for dividends, however, the FDIC and the MDOC may prohibit the payment of dividends by the Bank if either agency determines that such payment would constitute an unsafe or unsound practice.
Federal law and FDIC regulations also prohibit FDIC-insured state banks and their subsidiaries, subject to certain exceptions, from engaging as principal in any activity that is not permitted for a national bank unless the bank meets, and continues to meet, its minimum regulatory capital requirements and the FDIC determines that the activity would not pose a significant risk to the DIF.
Federal law and FDIC regulations also prohibit FDIC-insured state banks and their subsidiaries from engaging as principal in any activity that is not permitted for a national bank unless they meet, and continue to meet, minimum regulatory capital requirements and the FDIC determines that the activity would not pose a significant risk to the DIF.
In reaction to the global financial crisis and particularly following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, or Dodd-Frank Act, the Company experienced heightened regulatory requirements and scrutiny.
In response to the global financial crisis and particularly following the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd Frank Act”), the Company experienced heightened regulatory requirements and scrutiny.
The Basel III Rule also changed the definition of capital by establishing more stringent criteria that instruments must meet to be considered Additional Tier 1 Capital (primarily non-cumulative perpetual preferred stock that meets certain requirements) and Tier 2 Capital (primarily other types of preferred stock and subordinated debt, subject to limitations).
The Basel III Rule also changed the definition of regulatory capital by establishing more stringent criteria for instruments to qualify as Additional Tier 1 Capital (primarily non-cumulative perpetual preferred stock that meets certain requirements) and Tier 2 Capital (primarily other types of preferred stock and subordinated debt, subject to limitations).
The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses. The Company’s simple, highly efficient business model of providing responsive support and simple solutions to clients continues to be the underlying principle that drives the Company’s profitable growth.
The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses. The Company’s simple, highly efficient business model of providing responsive support and simple solutions to clients continues to be the underlying principle that drives the Company’s profitable growth. Market Area and Competition The Company operates in the Minneapolis-St.
The Company plans to increase core deposits over time to support loan growth and build market share by expanding existing client relationships and by developing new deposit-focused clients. The Company plans to continue to expand its footprint through marketing and networking efforts focused on generating deposits.
The Company plans to increase core deposits over time to support loan growth and build market share by expanding existing client relationships and by developing new deposit-focused clients. The Company plans to continue to expand its footprint through marketing and networking efforts focused on generating deposits. The increased focus on affordable housing has also generated strong core deposit growth.
As of December 31, 2024, the Company had 290 full-time equivalent employees, most of which are full-time employees, an increase of 14% from December 31, 2023. None of the Company’s employees is a party to a collective bargaining agreement.
As of December 31, 2025, the Company had 322 full-time equivalent employees, most of which are full-time employees, an increase of 11% from December 31, 2024. None of the Company’s employees is a party to a collective bargaining agreement.
The Company launched an ESG webpage to share a summary of the actions being taken to support the ESG priorities. The webpage is updated periodically to highlight ongoing efforts to support ESG-related initiatives. For more 10 Table of Contents information on the Company’s ESG commitment, please visit the Company’s ESG webpage at www.BWBMN.com/about-bridgewater/esg.
The Company has an ESG webpage to share a summary of the actions being taken to support the ESG priorities. The webpage is updated periodically to highlight ongoing efforts to support ESG-related initiatives. For more information on the Company’s ESG commitment, please visit the Company’s ESG webpage at https://www.bridgewaterbankmn.com/about-bridgewater/esg.
The principal sources of funds for loans and investments are transaction, savings, time, and other deposits, and short-term and long-term borrowings. The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and service charges.
The principal sources of funds for loans and investments are transaction, savings, time, and brokered deposits, and short-term and long-term borrowings. The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and noninterest income, including service charges, letter of credit fees, and swap fees.
These security and privacy policies and procedures are in effect across all business lines and geographic locations. ​ The Bank and the Company also are subject to a number of federal and state laws and regulations requiring notifications and disclosures regarding certain cybersecurity incidents.
These security and privacy policies and procedures are applied consistently across all business lines and geographic locations. The Bank and the Company also are subject to federal and state laws and regulations requiring notifications and disclosures regarding certain cybersecurity incidents.
All advances from the FHLB are required to be fully collateralized as determined by the FHLB. ​ Community Reinvestment Act Requirements. The CRA requires the Bank to have a continuing and affirmative obligation in a safe and sound manner to help meet the credit needs of the entire community, including low- and moderate-income neighborhoods.
All advances from the FHLB are required to be fully collateralized as determined by the FHLB. Community Reinvestment Act Requirements. The CRA imposes on the Bank a continuing and affirmative obligation, consistent with safe and sound operations, to help meet the credit needs of the entire community, including low- and moderate-income neighborhoods.
All Minnesota-chartered banks are required to pay supervisory assessments to the MDOC to fund the operations of that agency. The amount of the assessment is calculated on the basis of the Bank’s total assets. During the year ended December 31, 2024, the Bank paid supervisory assessments to the MDOC totaling approximately $150,700. ​ Capital Requirements.
All Minnesota-chartered banks are required to pay supervisory assessments to the MDOC to fund the operations of that agency. The amount of the assessment is calculated on the basis of the Bank’s total assets or business volume. During the year ended December 31, 2025, the Bank paid supervisory assessments to the MDOC totaling approximately $163,100. Capital Requirements.
The Company’s common stock is registered with the SEC under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Consequently, the Company is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act. ​ 16 Table of Contents Corporate Governance .
The Company’s common stock is registered with the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Consequently, the Company is subject to the information, proxy solicitation, insider trading and other restrictions and requirements of the SEC under the Exchange Act. Corporate Governance/Incentive Compensation.
Bank, together controlled 61.7% of the deposit market share in the Twin Cities MSA as of June 30, 2024, based on FDIC data and as displayed in the table below.
Bank, together controlled 58.96% of the deposit market share in the Twin Cities MSA as of June 30, 2025, based on FDIC data and as displayed in the table below.
The Company recognizes that different perspectives enhance its thinking and improve its employees’ experience by bringing together unique backgrounds, beliefs, cultures, and 9 Table of Contents experiences at the Company. As of December 31, 2024, women and people of color comprised 52% and 22% of the Company’s total workforce, respectively.
The Company recognizes that different perspectives enhance its thinking and improve its employees’ experience by bringing together unique backgrounds, beliefs, cultures, and experiences at the Company. As of December 31, 2025, women and people of color comprised 53% and 21% of the Company’s total workforce, respectively.
The key risk themes identified for 2025 are discussed under “-Risk Factors.” ​ The Bank is expected to have active board of directors and senior management oversight; adequate policies, procedures and limits; adequate risk measurement, monitoring and management information systems; and comprehensive internal controls.
The key risk themes identified for 2025 are discussed under the heading “Risk Factors” below. 20 Table of Contents The Bank is expected to have active board of directors and senior management oversight; adequate policies, procedures and limits; adequate risk measurement, monitoring and management information systems; and comprehensive internal controls.
The Basel III Rule is applicable to all banking 12 Table of Contents organizations that are subject to minimum capital requirements, including national and state banks and savings and loan associations, as well as to most bank and savings and loan holding companies.
The Basel III Rule is applicable to all banking organizations that are subject to minimum capital requirements, including national and state banks and savings and loan associations, as well as to most bank and savings and loan holding companies. The Company and the Bank are each subject to the Basel III Rule as described below.
The primary source of funds for the Company is dividends from the Bank. Under Minnesota law, the Bank cannot declare or pay a cash dividend or dividend in kind unless it will have a surplus amounting to not less than 20% of its capital after payment of the dividend.
Under Minnesota law, the Bank cannot declare or pay a cash dividend or dividend in kind unless it will have a surplus amounting to not less than 20% of its capital after payment of the dividend.
The Company and the Bank are each subject to the Basel III Rule as described below. ​ Not only did the Basel III Rule increase most of the required minimum capital ratios in effect prior to January 1, 2015, but, in requiring that forms of capital be of higher quality to absorb loss, it introduced the concept of Common Equity Tier 1 Capital, which consists primarily of common stock, related surplus (net of Treasury stock), retained earnings, and Common Equity Tier 1 minority interests subject to certain regulatory adjustments.
Not only did the Basel III Rule increase most of the required minimum capital ratios in effect prior to 2015, but, by requiring that capital instruments be of higher quality to absorb loss, it introduced the concept of Common Equity Tier 1 Capital (“CET1”), which consists primarily of common stock, related surplus (net of Treasury stock), retained earnings and CET1 minority interests, subject to certain regulatory adjustments and deductions.
Because of the risks attendant to their business, FDIC-insured institutions, such as banks, as well as their holding companies (i.e., banking organizations), generally are required to hold more capital than other businesses, which directly affects the Company’s earnings capabilities.
The Role of Capital Regulatory capital represents the net assets of a banking organization available to absorb losses. Because of the risks attendant to their business, FDIC-insured institutions, such as banks, as well as their holding companies (i.e., banking organizations), generally are required to hold more capital than other businesses, which directly affects the Company’s earnings capabilities.
In addition to approval from the Federal Reserve that may be required in certain circumstances, prior approval for acquisitions by the Company may be required from other agencies, such as the MDOC or other agencies that regulate the target company of an acquisition. ​ Additionally, bank holding companies that meet certain eligibility requirements prescribed by the BHCA and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance underwriting and sales, merchant banking and any other activity that the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature or incidental to any such financial activity or that the Federal Reserve determines by order to be complementary to any such financial activity, as long as the activity does not pose a substantial risk to the safety or soundness of FDIC-insured institutions or the financial system generally.
Bank holding companies that meet certain BHCA eligibility requirements and elect to operate as financial holding companies may engage in, or own shares in companies engaged in, a wider range of nonbanking activities, including securities and insurance underwriting and sales, merchant banking and any other activity that: (i) the Federal Reserve, in consultation with the Secretary of the Treasury, determines by regulation or order is financial in nature or incidental to any such financial activity; or (ii) the Federal Reserve determines by order to be complementary to any such financial activity, as long as the activity does not pose a substantial risk to the safety or soundness of FDIC-insured institutions or the financial system generally.
By comparison, the Company had a deposit market share of approximately 1.6%, including the acquisition of FMCB completed in December 2024, which ranked the Company ninth in the Twin Cities MSA overall and fourth in the Twin Cities MSA among banks headquartered in Minnesota. 5 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Market ​ ​ ​ ​ State ​ Branch ​ Deposits ​ Share Rank ​ Institution ​ Headquarters ​ Count ​ ($000) ​ (%) 1 U.S.
By comparison, the Company had a deposit market share of 1.84%, which ranked the Company ninth in the Twin Cities MSA overall and third in the Twin Cities MSA among banks headquartered in Minnesota. 5 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total ​ ​ ​ Market ​ ​ ​ ​ State ​ Branch ​ Deposits ​ Share Rank ​ Institution ​ Headquarters ​ Count ​ ($000) ​ (%) 1 U.S.
In addition, banking organizations that want to make capital distributions (including for dividends and repurchases of stock) and pay discretionary bonuses to executive officers without restriction must also maintain 2.5% in Common Equity Tier 1 Capital attributable to a capital conservation buffer.
In addition, banking organizations that want to make capital distributions (including dividends and stock repurchases) and pay discretionary bonuses to executive officers without restriction must maintain 2.5% in the form of CET1 for a capital conservation buffer.
The Company intends to continue to grow its business organically in a focused and strategic manner by leveraging its competitive strengths, including commercial banking expertise, an experienced management team, an efficient business model and strong branding, to capitalize on the opportunities in the Company’s market area.
The Company intends to continue to grow its business organically in a focused and strategic manner by leveraging its competitive strengths, including commercial banking expertise, an experienced banking team, an efficient business model and strong branding, to capitalize on the opportunities in the Company’s market area. This includes the affordable housing strategy which has expanded to a national level.
For this purpose, the reserve ratio is the DIF balance divided by estimated insured deposits. In response to the global financial crisis, the Dodd-Frank Act increased the minimum reserve ratio from 1.15% to 1.35% of the estimated amount of total insured deposits.
In response to the global financial crisis, the Dodd-Frank Act increased the minimum reserve ratio from 1.15% to 1.35% of the estimated amount of total insured deposits.
On December 18, 2015, and again in recent years, the federal banking agencies have issued statements to reinforce prudent risk-management practices related to CRE lending, having observed substantial growth in many CRE asset and lending markets, increased competitive pressures, rising CRE concentrations in banks, and an easing of CRE underwriting standards.
In recent years, the federal banking agencies have issued statements to reinforce prudent risk-management practices related to CRE lending, in response to observed growth in CRE markets, increased competitive pressures, rising CRE concentrations and an easing of CRE underwriting standards.
The effect of these statutes, regulations, regulatory policies and accounting rules are significant to the Company’s operations and results. ​ Federal and state banking laws impose a comprehensive system of supervision, regulation and enforcement on the operations of FDIC-insured institutions, their holding companies and affiliates that is intended primarily for the protection of the FDIC-insured deposits and depositors of banks, rather than shareholders.
Federal and state banking laws impose a comprehensive system of supervision, regulation and enforcement on the operations of FDIC-insured institutions, their holding companies and affiliates that is intended primarily for the protection of the FDIC-insured deposits and depositors of banks, rather than shareholders.
For example, a low CRA rating may impact the review of applications for acquisitions by the Bank or the Company’s financial holding company status. ​ On October 24, 2023, the federal banking agencies issued a final rule to strengthen and modernize the CRA regulations (the “CRA Rule”).
For example, a low CRA rating may impact the review of applications for acquisitions by the Bank or the Company’s financial holding company status. In October 2023, the federal banking agencies issued a final rule intended to strengthen and modernize the CRA regulations (the “CRA Rule”). The CRA Rule was subsequently challenged in court, which prevented it from taking effect.
The acquisition also adds an investment advisory function that offers nondeposit investment products through a third party arrangement. As of December 31, 2024, total assets were $5.07 billion, total gross loans were $3.87 billion, total deposits were $4.09 billion, and total shareholders’ equity was $457.9 million.
The acquisition also added an investment advisory function that offers nondeposit investment products through a third party arrangement. As of December 31, 2025, total assets were $5.41 billion, total gross loans were $4.31 billion, total deposits were $4.32 billion, and total shareholders’ equity was $517.1 million.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, then we may not be able to realize the full value of the collateral that we anticipated at the time of originating the loan, which could force us to take charge-offs or require us to increase our provision for credit losses, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 24 Table of Contents Because a significant portion of our loan portfolio is comprised of real estate loans, negative changes in the economy affecting real estate values and liquidity, as well as environmental factors, could impair the value of collateral securing our real estate loans and result in loan and other losses.
Biggest changeIf the loans that are collateralized by real estate become troubled during a time when market conditions are declining or have declined, then we may not be able to realize the full value of the collateral that we anticipated at the time of originating the 25 Table of Contents loan, which could force us to take charge-offs or require us to increase our provision for credit losses, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Accordingly, pursuant to guidance issued by the federal bank regulatory agencies, we are required to have heightened risk management practices in place to account for the heightened degree of risk associated with commercial real estate lending and may be required to maintain capital in excess of regulatory minimums.
Accordingly, pursuant to guidance issued by the federal bank regulatory agencies, we are required to have heightened risk management practices in place to account for the heightened degree of risk associated with commercial real estate lending and may be required to maintain capital in excess of regulatory minimums.
In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which may be reasonable under the circumstances, yet which may result in our reporting materially different results than would have been reported under a different alternative. 36 Table of Contents Certain accounting policies are critical to presenting our financial condition and results of operations.
In some cases, management must select the accounting policy or method to apply from two or more alternatives, any of which may be reasonable under the circumstances, yet which may result in our reporting materially different results than would have been reported under a different alternative. 37 Table of Contents Certain accounting policies are critical to presenting our financial condition and results of operations.
ITEM 1A. RISK FACTORS Investing in the Company’s common stock involves various risks, many of which are specific to the Company’s business. Before making an investment decision, you should carefully read and consider the risk factors described below as well as the other information included in this report and other documents we file with the SEC.
ITEM 1A. R ISK FACTORS Investing in the Company’s common stock involves various risks, many of which are specific to the Company’s business. Before making an investment decision, you should carefully read and consider the risk factors described below as well as the other information included in this report and other documents we file with the SEC.
These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess 39 Table of Contents civil money penalties, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place us into receivership or conservatorship.
These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil money penalties, to fine or remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place us into receivership or conservatorship.
Legal, Accounting and Compliance Risks ● the effectiveness of the Company’s risk management fra­­mework; ● the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; ● potential impairment to the goodwill the Company recorded in connection with acquisitions; ● the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; ● the impact of recent and future legislative and regulatory changes, including in response to prior bank failures; ● changes to U.S. or state tax laws, regulations and governmental policies concerning the Company’s general business, including changes in interpretation or prioritization and changes in response to prior bank failures; and ● risks related to climate change and the negative impact it may have on our customers and their businesses. ​ Market and Interest Rate Risks ● interest rate risk, including the effects of changes in interest rates; and ● fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates. ​ Credit Risks Our loan portfolio has a concentration of commercial real estate loans, which involve risks specific to real estate values and the health and market dynamics of the real estate market generally.
Legal, Accounting and Compliance Risks ● the effectiveness of the Company’s risk management fra ­­ mework; ● the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; ● potential impairment to the goodwill the Company recorded in connection with acquisitions; ● the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; ● the impact of recent and future legislative and regulatory changes, including in response to prior bank failures; ● changes to U.S. or state tax laws, regulations and governmental policies concerning the Company’s general business; and ● risks related to climate change and the negative impact it may have on our customers and their businesses. ​ Market and Interest Rate Risks ● interest rate risk, including the effects of changes in interest rates; and ● fluctuations in the values of the securities held in our securities portfolio or the values of derivative instruments held in our derivatives portfolio, including as the result of changes in interest rates. ​ Credit Risks Our loan portfolio has a concentration of commercial real estate loans, which involve risks specific to real estate values and the health and market dynamics of the real estate market generally.
As a result, our inability to successfully manage credit risk could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 25 Table of Contents Our allowance for credit losses may prove to be insufficient to absorb potential credit losses in our loan portfolio.
As a result, our inability to successfully manage credit risk could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 26 Table of Contents Our allowance for credit losses may prove to be insufficient to absorb potential credit losses in our loan portfolio.
Moreover, legislators and regulators in the United States are increasingly adopting or revising privacy, information 40 Table of Contents security and data protection laws, including with respect to the use of artificial intelligence by financial institutions and their service providers, that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee information and some of our current or planned business activities.
Moreover, legislators and regulators in the United States are increasingly adopting or revising privacy, information security and data protection laws, including with respect to the use of artificial intelligence by financial institutions and their service providers, that potentially could have a significant impact on our current and planned privacy, data protection and information security-related practices, our collection, use, sharing, retention and safeguarding of consumer or employee information and some of our current or planned business activities.
Treasury, or OFAC. In the normal course of business, from time to time, we have in the past and may in the future be named as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our current or prior business activities.
In the normal course of business, from time to time, we have in the past and may in the future be named as a defendant in various legal actions, including arbitrations, class actions and other litigation, arising in connection with our current or prior business activities.
Credit Risks ● credit risk and risks from concentrations (by type of borrower, geographic area, collateral and industry) within the Company’s loan portfolio or large loans to certain borrowers (including CRE loans); ● the overall health of the local and national real estate market; ● business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of inflation and possible recession; ● the ability to successfully manage credit risk; and ● the ability to maintain an adequate level of allowance for credit losses on loans and leases. ​ Liquidity and Funding Risks ● the ability to successfully manage liquidity risk, which may increase the dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; ● the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; and ● the ability to raise additional capital to implement our business plan. ​ Operational, Strategic and Reputational Risks ● the ability to implement our growth strategy and manage costs effectively; ● the composition of the Company’s senior leadership team and the ability to attract and retain key personnel; ● talent and labor shortages and employee turnover; ● the occurrence of fraudulent activity, breaches or failures of our or our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; ● interruptions involving our information technology and telecommunications systems or third party servicers; ● competition in the financial services industry, including from nonbank competitors such as credit unions, fintech companies and digital asset service providers; and 23 Table of Contents ● severe weather, natural disasters, widespread disease or pandemics, acts of war or terrorism or other adverse external events, including ongoing conflicts in the Middle East and the Russian invasion of Ukraine.
Credit Risks ● credit risk and risks from concentrations (by type of borrower, geographic area, collateral and industry) within the Company’s loan portfolio or large loans to certain borrowers (including CRE loans); ● the overall health of the local and national real estate market; ● business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of interest rates on inflation and possible recession; ● the ability to successfully manage credit risk; and ● the ability to maintain an adequate level of allowance for credit losses on loans and leases. ​ Liquidity and Funding Risks ● the ability to successfully manage liquidity risk, which may increase the dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; ● the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; and ● the ability to raise additional capital to implement our business plan. ​ Operational, Strategic and Reputational Risks ● the ability to implement our growth strategy and manage costs effectively; ● the composition of the Company’s strategic leadership team and the ability to attract and retain key personnel; ● talent and labor shortages and employee turnover; ● the occurrence of fraudulent activity, breaches or failures of our or our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; ● interruptions involving our information technology and telecommunications systems or third party servicers; ● competition in the financial services industry, including from nonbank competitors such as credit unions, fintech companies and digital asset service providers; and 24 Table of Contents ● severe weather, natural disasters, widespread disease or pandemics, acts of war or terrorism or other adverse external events, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine, and recent military actions in Venezuela and Mexico.
We are generally not restricted from issuing additional shares of our common stock, up to the 75,000,000 shares of common stock authorized in our second amended and restated articles of incorporation, which could be increased by a vote of the holders of a majority of our shares of common stock.
We are generally not restricted from issuing additional shares of our common stock, up to the 75,000,000 shares of common stock authorized in our third amended and restated articles of incorporation, which could be increased by a vote of the holders of a majority of our shares of common stock.
According to statements made by the FDIC staff and the leadership of the federal banking agencies, clients with larger uninsured deposit account balances often are small- to mid-sized businesses that rely upon deposit funds for payment of operational expenses and, as a result, are more likely to closely monitor the financial condition and performance of their depository institutions.
According to statements made by the FDIC staff and the leadership of the federal banking agencies, clients with larger uninsured deposit account balances often are small- to mid-sized businesses that rely upon deposit funds 28 Table of Contents for payment of operational expenses and, as a result, are more likely to closely monitor the financial condition and performance of their depository institutions.
As a bank, we are susceptible to fraudulent activity, information security breaches and cybersecurity-related incidents that may be committed against us, third parties and their subservicers, or our clients, which may result in financial losses or increased costs to us, our third party partners or our clients, disclosure or misuse of our information or 31 Table of Contents our client information, misappropriation of assets, privacy breaches against our clients, litigation or damage to our reputation.
As a bank, we are susceptible to fraudulent activity, information security breaches and cybersecurity-related incidents that may be committed against us, third parties and their subservicers, or our clients, which may result in financial losses or increased costs to us, our third party partners or our clients, disclosure or misuse of our information or our client information, misappropriation of assets, privacy breaches against our clients, litigation or damage to our reputation.
If we are unable to access any of these types of funding sources or if our costs related to them increases, our liquidity and ability to support demand for loans could be materially adversely affected. Our high concentration of large depositors may increase our liquidity risk, and the loss of any large depositor may negatively impact our net interest margin.
If we are unable to access any of these types of funding sources or if our costs related to them increases, our liquidity and ability to support demand for loans could be materially adversely affected. 29 Table of Contents Our high concentration of large depositors may increase our liquidity risk, and the loss of any large depositor may negatively impact our net interest margin.
Reliance on inaccurate, incomplete, fraudulent or misleading financial statements, credit reports or other financial or business information, or the failure to receive such information on a timely basis, could result in loan or leases losses, reputational damage or other effects that could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Reliance on inaccurate, incomplete, fraudulent or misleading financial 34 Table of Contents statements, credit reports or other financial or business information, or the failure to receive such information on a timely basis, could result in loan or leases losses, reputational damage or other effects that could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Legal actions could include claims for substantial compensatory or punitive damages or claims for indeterminate amounts of damages. We may also, from time to time, be the subject of subpoenas, requests for information, reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our current or prior business activities.
Legal actions could include claims for substantial compensatory or punitive damages or claims for indeterminate amounts of damages. We 38 Table of Contents may also, from time to time, be the subject of subpoenas, requests for information, reviews, investigations and proceedings (both formal and informal) by governmental agencies regarding our current or prior business activities.
As a result of the foregoing, our ability to conduct business may be adversely affected by any significant disruptions to us or to third parties with whom we interact. Our use of third party vendors and our other ongoing third party business relationships is subject to increasing regulatory requirements and attention.
As a result of the foregoing, our ability to conduct business may be adversely affected by any significant disruptions to us or to third parties with whom we interact. 33 Table of Contents Our use of third party vendors and our other ongoing third party business relationships is subject to increasing regulatory requirements and attention.
Our future success will depend in part upon our ability and 33 Table of Contents the ability of our third party partners to address the needs of our clients by using technology to provide products and services that will satisfy client demands for convenience as well as to create additional efficiencies in our operations as we continue to grow.
Our future success will depend in part upon our ability and the ability of our third party partners to address the needs of our clients by using technology to provide products and services that will satisfy client demands for convenience as well as to create additional efficiencies in our operations as we continue to grow.
If we fail to maintain capital to meet regulatory requirements, or are unable to raise capital to meet our business needs, our business, financial condition, results of operations and growth prospects would be materially and adversely affected. 29 Table of Contents We may be adversely affected by changes in the actual or perceived soundness or condition of other financial institutions.
If we fail to maintain capital to meet regulatory requirements, or are unable to raise capital to meet our business needs, our business, financial condition, results of operations and growth prospects would be materially and adversely affected. We may be adversely affected by changes in the actual or perceived soundness or condition of other financial institutions.
The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including general market and economic conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company.
The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including general market and economic conditions, regulatory requirements, 46 Table of Contents availability of funds, and other relevant considerations, as determined by the Company.
If we pursue strategic acquisitions, it may expose us to financial, execution and operational risks. We plan to grow our business organically but remain open to considering potential bank or other acquisition opportunities that fit within our overall strategy and that we believe make financial and strategic sense, such as the recent acquisition of FMCB.
If we pursue strategic acquisitions, it may expose us to financial, execution and operational risks. We plan to grow our business organically but remain open to considering potential bank or other acquisition opportunities that fit within our overall strategy and that we believe make financial and strategic sense, such as the acquisition of FMCB in late 2024.
Potential partnerships with digital asset companies, moreover, could also entail significant investment. ​ Severe weather, natural disasters, widespread disease or pandemics, acts of war or terrorism or other adverse external events could significantly impact our business.
Potential partnerships with digital asset companies, moreover, could also entail significant investment. 36 Table of Contents Severe weather, natural disasters, widespread disease or pandemics, acts of war or terrorism or other adverse external events could significantly impact our business.
If we choose to raise capital by issuing and selling shares of our 45 Table of Contents common stock for any reason, the issuance would have a dilutive effect on the holders of our common stock and could have a material negative effect on the market price of our common stock.
If we choose to raise capital by issuing and selling shares of our common stock for any reason, the issuance would have a dilutive effect on the holders of our common stock and could have a material negative effect on the market price of our common stock.
Artificial intelligence algorithms may be flawed, for example datasets may contain biased information or otherwise be insufficient, and inappropriate or controversial data practices could impair the acceptance of artificial intelligence solutions and result in burdensome new regulations.
Artificial intelligence algorithms may be flawed, for example datasets may contain biased information or otherwise be 32 Table of Contents insufficient, and inappropriate or controversial data practices could impair the acceptance of artificial intelligence solutions and result in burdensome new regulations.
To manage our credit risk, we must, among other actions, maintain disciplined and prudent underwriting standards and ensure that our lenders follow those standards.
To manage our credit risk, we must, among other actions, maintain disciplined and prudent underwriting standards and ensure that our bankers follow those standards.
As client preferences and expectations continue to evolve, technology has lowered barriers to entry and made it possible for banks to expand their geographic reach by providing services over the internet and for non-banks to offer products and services traditionally provided by banks, such as automatic transfer and automatic payment systems.
As client preferences and expectations continue to evolve, technology has lowered barriers to entry and made it possible for banks to expand their geographic reach by providing services over the internet and for non-banks to offer products and services traditionally provided by banks, such as 35 Table of Contents automatic transfer and automatic payment systems.
An inability to raise funds through deposits, borrowings, the sale of loans or investment 27 Table of Contents securities and from other sources could have a substantial negative effect on our liquidity.
An inability to raise funds through deposits, borrowings, the sale of loans or investment securities and from other sources could have a substantial negative effect on our liquidity.
As such, we need to continue to attract and retain key personnel and to recruit qualified individuals who fit our culture to 30 Table of Contents succeed existing key personnel to ensure the continued growth and successful operation of our business.
As such, we need to continue to attract and retain key personnel and to recruit qualified individuals who fit our culture to succeed existing key personnel to ensure the continued growth and successful operation of our business.
Conversely, attempts to purchase a significant amount of our stock could cause the market price to rise above the reasonable inherent worth of the Company. The price of our common stock could be volatile and other factors could cause our stock price to decline.
Conversely, attempts to purchase a significant amount of our stock could cause the market price to rise above the reasonable inherent worth of the Company. 44 Table of Contents The price of our common stock could be volatile and other factors could cause our stock price to decline.
At December 31, 2024, approximately 85.7% of our total gross loan portfolio was comprised of loans with real estate as a primary component of collateral. As a result, adverse developments affecting real estate values in our market area could increase the credit risk associated with our real estate loan portfolio.
At December 31, 2025, approximately 85.8% of our total gross loan portfolio was comprised of loans with real estate as a primary component of collateral. As a result, adverse developments affecting real estate values in our market area could increase the credit risk associated with our real estate loan portfolio.
We do not intend to pay cash dividends on our common stock in the foreseeable future. Consequently, your ability to achieve a return on your investment will depend on appreciation in the price of our common stock.
We do not intend to pay cash dividends on our common stock in the foreseeable future. Consequently, the ability of shareholders to achieve a return on their investment will depend on appreciation in the price of our common stock.
In any liquidation, dissolution or winding up of the Company, our common stock would rank below all claims of debt holders against us and claims of all of our outstanding shares of preferred stock. As of December 31, 2024, we had $80.0 million of subordinated debentures outstanding and $69.0 million of preferred stock outstanding.
In any liquidation, dissolution or winding up of the Company, our common stock would rank below all claims of debt holders against us and claims of all of our outstanding shares of preferred stock. As of December 31, 2025, we had $110.0 million of subordinated debentures outstanding and $69.0 million of preferred stock outstanding.
The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on our business, financial 35 Table of Contents condition and results of operations.
The loss of these revenue streams and the lower cost deposits as a source of funds could have a material adverse effect on our business, financial condition and results of operations.
These factors include, among other things: ● actual or anticipated variations in our quarterly results of operations; ● recommendations or research reports about us or the financial services industry in general published by securities analysts; ● the failure of securities analysts to cover, or continue to cover us; ● operating and stock price performance of other companies in the industry or that investors or analysts deem comparable to us; ● news reports relating to trends, concerns and other issues in the financial services industry; ● perceptions in the marketplace regarding us, our competitors or other financial institutions; 44 Table of Contents ● future sales of our common stock; ● departure of members of our strategic leadership team or other key personnel; ● new technology used, or services offered, by competitors; ● significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; ● changes or proposed changes in laws or regulations, or differing interpretations of existing laws and regulations, affecting our business, or enforcement of these laws and regulations; ● litigation and governmental investigations; and ● geopolitical conditions such as acts or threats of terrorism or military conflicts.
These factors include, among other things: ● actual or anticipated variations in our quarterly results of operations; ● recommendations or research reports about us or the financial services industry in general published by securities analysts; ● the failure of securities analysts to cover, or continue to cover us; ● operating and stock price performance of other companies in the industry or that investors or analysts deem comparable to us; ● news reports relating to trends, concerns and other issues in the financial services industry; ● perceptions in the marketplace regarding us, our competitors or other financial institutions; ● future sales of our common stock; ● departure of members of our strategic leadership team or other key personnel; ● new technology used, or services offered, by competitors; ● significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; ● changes or proposed changes in laws or regulations, or differing interpretations of existing laws and regulations, affecting our business, or enforcement of these laws and regulations; ● litigation and governmental investigations; ● the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; and ● geopolitical conditions such as acts or threats of terrorism or military conflicts.
Because of changing economic and market conditions affecting interest rates, the financial condition of issuers of the securities and the performance of the underlying collateral, we may recognize realized or unrealized losses in future periods, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. ​ A large percentage of our investment securities classified as available-for-sale have fixed interest rates.
Because of changing economic and market conditions affecting interest rates, the financial condition of issuers of the securities and the performance of the underlying collateral, we may recognize realized or unrealized losses in future periods, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. ​ 43 Table of Contents All of our investment securities classified as available-for-sale have fixed interest rates.
The resolution of nonperforming assets requires significant time commitments from management, which increases our loan administration costs and adversely affects our efficiency ratio (a non-GAAP financial measure) and can be detrimental to the performance of their other responsibilities, and may also involve additional financial resources.
The resolution of nonperforming assets requires significant time commitments from management, which increases our loan administration costs and adversely affects our efficiency ratio (a non-Generally Accepted Accounting Principles (“GAAP”) financial measure) and can be detrimental to the performance of their other responsibilities, and may also involve additional financial resources.
Our business is highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third party servicers, accounting systems, mobile and online banking platforms and 32 Table of Contents financial intermediaries. We outsource to third parties many of our major systems, such as data processing and mobile and online banking.
We outsource to third parties many of our major systems, such as data processing and mobile and online banking, and are highly dependent on the successful and uninterrupted functioning of our information technology and telecommunications systems, third party servicers, accounting systems, mobile and online banking platforms and financial intermediaries.
We have developed relationships with certain individuals and businesses that have resulted in a concentration of large deposits from a small number of clients. As of December 31, 2024, our 10 largest depositor relationships accounted for approximately 17.3% of our total deposits.
We have developed relationships with certain individuals and businesses that have resulted in a concentration of large deposits from a small number of clients. As of December 31, 2025, our 10 largest depositor relationships accounted for approximately 16.2% of our total deposits.
As of December 31, 2024, we had $800.8 million of noninterest bearing deposit accounts and $3.29 billion of interest bearing deposit accounts. We do not know what future market rates will be, and based on recent guidance from the Federal Reserve, we currently expect some level of continued moderation in the federal funds rate in 2025.
As of December 31, 2025, we had $923.1 million of noninterest bearing deposit accounts and $3.40 billion of interest bearing deposit accounts. We do not know what future market rates will be, and based on recent guidance from the Federal Reserve, we currently expect some level of continued moderation in the federal funds rate in 2026.
As of December 31, 2024, approximately 28% of our deposits were uninsured and we rely on these deposits for liquidity. A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2025, 30 Table of Contents approximately 30% of our deposits were uninsured and we rely on these deposits for liquidity. A failure to maintain adequate liquidity could have a material adverse effect on our business, financial condition and results of operations.
As of December 31, 2024, our commercial real estate secured loans represented 462.0% of the Bank’s total risk-based capital. As a result, we are deemed to have a concentration in commercial real estate lending under applicable regulatory guidelines.
As of December 31, 2025, our commercial real estate secured loans represented 473.1% of the Bank’s total risk-based capital. As a result, we are deemed to have a concentration in commercial real estate lending under applicable regulatory guidelines.
Economic events, including changes in interest rates, decreases in office occupancy due to the shift to remote work environments following the COVID-19 pandemic, or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties.
Economic events, including changes in interest rates, decreases in office occupancy due to the shift to remote work environments and developments in artificial intelligence, or governmental regulations outside of the control of the borrower or lender could negatively impact the future cash flow and market values of the affected properties.
The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Adverse outcomes in any of these areas could have a material impact on our results of operations or financial condition. ​ The occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Higher interest rates can also negatively affect our clients’ businesses and financial condition, and the value of collateral securing loans in our portfolio. ​ Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, geopolitical developments such as ongoing conflicts in the Middle East and between Russia and Ukraine, changing labor market conditions as well as fiscal policy and new presidential administration priorities, there is a meaningful risk that the Federal Reserve and other central banks may keep interest rates at or near their current elevated levels, thereby limiting economic growth and potentially causing an economic recession or other political instability.
A neutral level of interest rates can also more positively affect our clients’ businesses and financial condition, and the value of collateral securing loans in our portfolio. ​ Given the complex factors affecting the strength of the U.S. economy, including uncertainties regarding the persistence of inflation, geopolitical developments such as international conflicts and tariffs, changing labor market conditions as well as fiscal policy and the Trump Administration priorities, there is a meaningful risk that the Federal Reserve and other central banks may keep interest rates at or near their current neutral levels, thereby limiting economic growth and potentially causing an economic recession or other political instability.
We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate. As of December 31, 2024, the fair value of our securities portfolio was approximately $768.2 million, or 15.2% of our total assets.
We could recognize losses on securities held in our securities portfolio, particularly if interest rates increase or economic and market conditions deteriorate. As of December 31, 2025, the fair value of our securities portfolio was approximately $776.4 million, or 14.4% of our total assets.
Following a period of no action on interest rates, the FOMC began easing monetary policy by cutting the federal funds rate in September of 2024.
Following a period of no action on interest rates, the FOMC began easing monetary policy by cutting the federal funds rate in September of 2024 and continued to cut rates through the end of 2025.
They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. These critical accounting policies include policies related to the allowance for credit losses, investment securities impairment, fair value of financial instruments and deferred tax assets.
They require management to make difficult, subjective or complex judgments about matters that are uncertain. Materially different amounts could be reported under different conditions or using different assumptions or estimates. These critical accounting policies include policies related to the allowance for credit losses.
Our failure to comply with privacy, data protection and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions and damage to our reputation, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Our failure to comply with privacy, data protection and information security laws could result in potentially significant regulatory or governmental investigations or actions, litigation, fines, sanctions and damage to our reputation, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 41 Table of Contents The Federal Reserve may require us to commit capital resources to support the Bank.
Additionally, we had $196.6 million in loans whose purpose was to finance commercial real estate projects, but were secured by other types of collateral. Commercial real estate secured loans represented 68.5% of our total gross loan portfolio and 462.0% of the Bank’s total risk-based capital at December 31, 2024.
Additionally, we had $227.1 million in loans whose purpose was to finance commercial real estate projects, but were secured by other types of collateral. Commercial real estate secured loans represented 69.9% of our total gross loan portfolio and 473.1% of the Bank’s total risk-based capital at December 31, 2025.
While we do not offer products relating to digital assets, including cryptocurrencies, stablecoins and other similar assets, there has been a significant increase in digital asset adoption globally over the past several years.
While we do not offer products relating to digital assets, including cryptocurrencies, stablecoins and other similar assets, there has been a significant increase in digital asset adoption within the United States and globally over the past several years. In 2025, President Trump signed the GENIUS Act into law.
As of December 31, 2024, we had $2.65 billion of commercial real estate loans, consisting of $1.1 billion of loans secured by nonowner occupied nonfarm nonresidential properties, $1.43 billion of loans secured by multifamily residential properties, $42.0 million of 1-4 family construction loans and $97.3 million of construction and land development loans.
As of December 31, 2025, we had $3.01 billion of commercial real estate loans, consisting of $1.17 billion of loans secured by nonowner occupied nonfarm nonresidential properties, $1.59 billion of loans secured by multifamily residential properties, $45.2 million of 1-4 family construction loans and $216.2 million of construction and land development loans.
Adverse changes affecting real estate values, such as decreases in office occupancy (including as a result of the shift to remote work environments following the COVID-19 pandemic), and the liquidity of real estate in one or more of our markets could increase the credit risk associated with our loan portfolio, significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses, which could result in losses that would adversely affect our profitability.
Adverse changes affecting real estate values, such as shifts in market demand for office space, and the liquidity of real estate in one or more of our markets could increase the credit risk associated with our loan portfolio, significantly impair the value of property pledged as collateral on loans and affect our ability to sell the collateral upon foreclosure without a loss or additional losses, which could adversely affect our profitability.
Monetary policy in recent years has resulted in a significant structural change in prevailing interest rates and, while this has had a negative effect on our net interest income, it also harmed the value of our securities portfolio, which had $27.7 million in unrealized losses, net of tax, in our available for sale investment securities portfolio as of December 31, 2024.
Monetary policy in recent years has resulted in a significant structural change in prevailing interest rates and, while this has had a negative effect during years of higher interest rates, we are beginning to see improvements in our net interest income and the value of our available for sale investment securities portfolio, which had $7.3 million in unrealized losses, net of tax, as of December 31, 2025.
As of December 31, 2024, we had approximately $825.8 million of brokered deposits, which represented approximately 20.2% of our total deposits and $359.5 million of FHLB advances. Unlike traditional deposits from our local clients, there is a higher likelihood that the wholesale deposits will not remain with us after maturity.
As of December 31, 2025, we had approximately $810.5 million of brokered deposits, which represented approximately 18.8% of our total deposits and $399.5 million of FHLB advances. Unlike traditional deposits from our local clients, there is potential that wholesale deposits will not remain with us after maturity.
In addition, political developments, including recent changes in laws and regulations, as well as changes in 38 Table of Contents staffing at the regulatory agencies, introduced by the Trump Administration in the United States, add uncertainty to the implementation, scope and timing of regulatory reforms.
In addition, political developments, including changes in laws and regulations, as well as changes in staffing at the regulatory agencies, add uncertainty to the implementation, scope and timing of regulatory reforms.
The Federal Reserve may require us to commit capital resources to support the Bank. As a matter of policy, the Federal Reserve expects a bank holding company to act as a source of financial and managerial strength to a subsidiary bank and to commit resources to support such subsidiary bank.
As a matter of policy, the Federal Reserve expects a bank holding company to act as a source of financial and managerial strength to a subsidiary bank and to commit resources to support such subsidiary bank. The Dodd-Frank Act codified the Federal Reserve’s policy on serving as a source of financial strength.
Our inability to overcome risks associated with acquisitions could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 34 Table of Contents New lines of business, products, product enhancements or services may subject us to additional risks.
We may not be successful in overcoming these risks or any other problems encountered in connection with acquisitions. Our inability to overcome risks associated with acquisitions could have a material adverse effect on our business, financial condition, results of operations and growth prospects. New lines of business, products, product enhancements or services may subject us to additional risks.
Our interest earning assets and interest bearing liabilities may react in different degrees to changes in market interest rates. Interest rates on some types of assets and liabilities may fluctuate prior to changes in broader market interest rates, while rates on other types of assets and liabilities may lag behind.
Interest rates on some types of assets and liabilities may fluctuate prior to changes in broader market interest rates, while rates on other types of assets and liabilities may lag behind. The result of these changes to rates may cause differing spreads on interest earning assets and interest bearing liabilities.
As of December 31, 2024, our allowance for credit losses as a percentage of total gross loans was 1.35% and as a percentage of total nonperforming loans was 17,367.77%.
As of December 31, 2025, our allowance for credit losses as a percentage of total gross loans was 1.31% and as a percentage of total nonperforming loans was 256.16%.
Even if we are able to report our financial statements accurately and in a timely manner, any failure in our efforts to implement the improvements or disclosure of material weaknesses in our future filings with the SEC could cause our reputation to be harmed and our stock price to decline significantly. 41 Table of Contents Certain banking laws and certain provisions of our third amended and restated articles of incorporation may have an anti-takeover effect.
Even if we are able to report our financial statements accurately and in a timely manner, any failure in our efforts to implement the improvements or disclosure of material weaknesses in our future filings with the SEC could cause our reputation to be harmed and our stock price to decline significantly.
The net deferred tax asset is measured by applying currently-enacted income tax rates to the accounting period during which the tax benefit is expected to be realized. As of December 31, 2024, our net deferred tax asset was $21.9 million.
The net deferred tax asset is measured by applying currently-enacted income tax rates to the accounting period during which the tax benefit is expected to be realized.
Continued elevated levels of inflation could adversely impact our business, financial condition, results of operations and growth prospects. The United States has experienced elevated levels of inflation in recent years, with an annual increase in the consumer price index of approximately 2.9% as of the end of 2024.
Elevated levels of inflation could adversely impact our clients’ businesses, adversely impacting our business, financial condition, results of operations and growth prospects. The United States has experienced elevated levels of inflation in recent years, with the consumer price index increasing approximately 2.7% as of the end of 2025, before seasonal adjustment.
Any of these could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Our risk management processes, internal controls, disclosure controls and corporate governance policies and procedures are based in part on certain assumptions and can provide only reasonable (not absolute) assurances that the objectives of the system are met.
Our risk management processes, internal controls, disclosure controls and corporate governance policies and procedures are based in part on certain assumptions and can provide only reasonable (not absolute) assurances that the objectives of the system are met.
Private parties may also challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Noncompliance with the Bank Secrecy Act and other anti-money laundering statutes and regulations could result in fines or sanctions against us.
Such actions could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 40 Table of Contents Noncompliance with the Bank Secrecy Act and other anti-money laundering statutes and regulations could result in fines or sanctions against us.
We expect that we will retain all earnings, if any, for operating capital, and we do not expect our board of directors to declare any dividends on our common stock in the foreseeable future.
We expect that we will retain all earnings, if any, for operating capital, and we do not expect our board of directors to declare any dividends on our common stock in the foreseeable future. 45 Table of Contents Even if we have earnings in an amount sufficient to pay cash dividends, our board of directors may decide to retain earnings for the purpose of funding growth.
Even the perceived lack of creditworthiness of, or questions about, a counterparty may lead to market-wide liquidity problems and losses or defaults by various institutions. For example, certain community banks experienced deposit outflows following the bank failures in 2023.
Even the perceived lack of creditworthiness of, or questions about, a counterparty may lead to market-wide liquidity problems and losses or defaults by various institutions.
In line with the foregoing, we have experienced and may continue to experience an elevated level of the cost of interest-bearing liabilities, primarily due to higher rates we pay on some of our deposit products to stay competitive within our market and higher borrowing costs from the elevated level of the federal funds rate. ​ 43 Table of Contents At December 31, 2024, we had $27.7 million of unrealized losses, net of tax, in our securities portfolio.
In line with the foregoing, we have experienced and may continue to experience a lower level of the cost of interest-bearing liabilities, primarily due to lower rates we pay on some of our deposit products. ​ At December 31, 2025, we had $7.3 million of unrealized losses, net of tax, in our securities portfolio.
We operate in an environment that imposes income taxes on our operations at both the federal and state levels to varying degrees. We engage in certain strategies to minimize the impact of these taxes. Consequently, any change in tax laws or regulations, or new interpretation of an existing law or regulation, could significantly alter the effectiveness of these strategies.
We engage in certain strategies to minimize the impact of these taxes. Consequently, any change in tax laws or regulations, or new interpretation of an existing law or regulation, could significantly alter the effectiveness of these strategies.
Litigation and regulatory actions, including possible enforcement actions, could subject us to significant fines, penalties, judgments or other requirements resulting in increased expenses or restrictions on our business activities.
Litigation and regulatory actions, including possible enforcement actions, could subject us to significant fines, penalties, judgments or other requirements resulting in increased expenses or restrictions on our business activities. Our business is subject to increased litigation and regulatory risks as a result of a number of factors, including the highly regulated nature of the financial services industry.
On July 23, 2024, the Company’s board of directors extended the expiration date of the program from August 16, 2024 to August 20, 2025.
On July 22, 2025, the Company’s board of directors extended the expiration date of the 2022 Stock Repurchase Program from August 20, 2025 to August 26, 2026.
These factors could negatively affect the volume of loan originations, increase the level of nonperforming assets, increase the rate of foreclosures and reduce the value of the properties securing our loans.
These factors could negatively affect the volume of loan originations, increase the level of nonperforming assets, increase the rate of foreclosures and reduce the value of the properties securing our loans. Any regional or local economic downturn in the Twin Cities MSA, could negatively impact our operations and profitability.
These elevated levels of inflation could have complex effects on our business, financial condition, results of operations and growth prospects, some of which could be materially adverse.
Elevated inflation can have complex and potentially adverse effects on our clients’ business, financial condition, results of operations, and growth prospects.
In addition, we had $1.30 million in accruing loans that were 30-89 days delinquent as of December 31, 2024. Our nonperforming assets adversely affect our net interest income in various ways. We do not record interest income on nonaccrual loans or foreclosed assets, thereby adversely affecting our net income and returns on assets and equity.
Our nonperforming assets adversely affect our net interest income in various ways. We do not record interest income on nonaccrual loans or foreclosed assets, thereby adversely affecting our net income and returns on assets and equity.
Our high concentration of large loans to certain borrowers may increase our credit risk. Our growth over the last several years has been partially attributable to our ability to cultivate relationships with certain individuals and businesses that have resulted in a concentration of large loans to a small number of borrowers.
Our growth over the last several years has been partially attributable to our ability to cultivate relationships with certain individuals and businesses that have resulted in a concentration of large loans to a small number of borrowers. As of December 31, 2025, our 10 largest borrowing relationships accounted for approximately 15.3% of our total gross loan portfolio.
If any one of these borrowers becomes unable to repay its loan obligations as a result of business, economic or market conditions, or personal circumstances, such as divorce or death, our nonaccruing loans and our provision for credit losses could increase significantly, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 26 Table of Contents The small to midsized businesses that we lend to may have fewer resources to weather adverse business developments, which may impair their ability to repay their loans.
If any one of these borrowers becomes unable to repay its loan obligations as a result of business, economic or market conditions, or personal circumstances, such as divorce or death, our nonaccruing loans and our provision for credit losses could increase significantly, which could have a material adverse effect on our business, financial condition, results of operations and growth prospects. 27 Table of Contents Affordable housing loans involve unique risks that could adversely affect our business In recent years, our portfolio of affordable housing loans has grown rapidly in response to intentional growth initiatives and increasing demand for affordable housing.
Each of these third parties may be targets of the same types of fraudulent activity, computer break-ins and other cybersecurity breaches described above, including those employing artificial intelligence, and the cybersecurity measures that they maintain to mitigate the risk of such activity may be different than our own and may be inadequate.
Each of these third parties may be targets of the same types of fraudulent activity, computer break-ins and other cybersecurity breaches described above, including those employing artificial intelligence, and the cybersecurity measures that they maintain to mitigate the risk of such activity may be different than our own and may be inadequate. ​ As a result of financial entities and technology systems becoming more interdependent and complex, a cyber incident, information breach or loss, or technology failure that compromises the systems or data of one or more financial entities could have a material impact on counterparties or other market participants, including ourselves.
As of December 31, 2024, our advances from the FHLB were collateralized by $1.54 billion of real estate and commercial loans. If we are unable to pledge sufficient collateral to secure funding from the FHLB, we may lose access to this source of liquidity that we have historically relied upon.
If we are unable to pledge sufficient collateral to secure funding from the FHLB or FRB, we may lose access to this source of liquidity that we have historically relied upon.
A decline in the business and economic conditions in our market could have a material adverse effect on our business, financial condition, results of operations and growth prospects. Unlike larger banks that are more geographically diversified, we conduct our operations primarily in the Twin Cities MSA.
Such declines and losses would have a material adverse effect on our business, financial condition, results of operations and growth prospects. A decline in the business and economic conditions in our market could have a material adverse effect on our business, financial condition, results of operations and growth prospects.
Leadership changes may occur from time to time, and we cannot predict whether significant retirements or resignations will occur or whether we will be able to recruit additional qualified personnel.
Leadership changes may occur from time to time, and we cannot predict whether significant retirements or resignations will occur or whether we will be able to recruit additional qualified personnel. Compliance with labor and employment laws, including the Family and Medical Leave Act, could increase our costs and negatively affect operations.
Additionally, changes in interest rates also affect our ability to fund our operations with client deposits and the fair value of securities in our investment portfolio and derivatives portfolio. Therefore, any change in general market interest rates, including changes in federal fiscal and monetary policies, can have a significant effect on our net interest income and results of operations.
Additionally, changes in interest rates also affect our ability to fund our operations with client deposits and the fair value of securities in our investment portfolio and derivatives portfolio.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company maintains a vendor risk management program to identify and help manage any third party cybersecurity risks. 46 Table of Contents Additionally, the Company maintains an Information Security Program designed to prevent, detect, and respond to cyberattacks, and maintains a cybersecurity incident response plan designed to enable the Company to respond to cybersecurity incidents, coordinate such responses with law enforcement and other government agencies, and notify clients and customers, as applicable.
Biggest changeAdditionally, the Company maintains an Information Security Program designed to prevent, detect, and respond to cyberattacks, and maintains a cybersecurity incident response plan designed to enable the Company to respond to cybersecurity incidents, coordinate such responses with law enforcement and other government agencies, and notify clients and customers, as applicable.
Management utilizes its Enterprise Risk Management Committee and IT Steering Committee, comprised of senior leaders including the Company’s CRO, CTO, Chief Financial Officer, and other leaders with cybersecurity expertise, to disseminate information and monitor information security efforts throughout the Company.
Management utilizes its Enterprise Risk Management Committee and IT Steering Committee, comprised of senior leaders including the Company’s CRO, CTO, President, Chief Financial Officer, and other leaders with cybersecurity expertise, to disseminate information and monitor information security efforts throughout the Company.
Notwithstanding the comprehensive approach that the Company takes to address cybersecurity risk, the Company may not be successful in preventing or mitigating a future cybersecurity incident that could have a material adverse effect on the Company or its business strategy, results of operations or financial condition.
Notwithstanding the comprehensive approach that the Company takes to address cybersecurity risk, the Company may not be successful in preventing or mitigating a future cybersecurity incident that could have a material adverse effect on the Company or its business strategy, results of operation or financial condition.
This training is mandatory for all employees, and is supplemented by various testing initiatives, including social engineering testing. Finally, the Company provides specialized security training for certain employee roles such as system administrators and all information security training is monitored and reported on by the risk team as well as the Company’s learning and development function.
This training is 47 Table of Contents mandatory for all employees, and is supplemented by various testing initiatives, including social engineering testing. Finally, the Company provides specialized security training for certain employee roles such as system administrators and all information security training is monitored and reported on by the risk team as well as the Company’s learning and development function.
As a result, the Company engages in regular and ongoing reviews and discussions with vendors and clients regarding cybersecurity risks and opportunities to improve the Company’s cybersecurity posture.
As a result, the Company engages in regular and ongoing reviews and discussions with vendors and clients regarding cybersecurity risks and opportunities to improve the Company’s cybersecurity posture. The Company maintains a vendor risk management program to identify and help manage any third party cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changePaul, Minnesota 55102 Leased 7831 East Bush Lake Road, Suite 300, Bloomington, Minnesota 55439 ​ Leased 14550 Excelsior Boulevard., Minnetonka, Minnesota 55345 ​ Owned 11500 Highway 7, Minnetonka, Minnesota 55305 ​ Owned (1) Does not include the leased drive-up property located adjacent to the branch. ​
Biggest changePaul, Minnesota 55102 Leased 7831 East Bush Lake Road, Suite 300, Bloomington, Minnesota 55439 ​ Leased 14550 Excelsior Boulevard., Minnetonka, Minnesota 55345 ​ Owned 11999 Upper 40th Street N., Lake Elmo, Minnesota 55042 (2) ​ Owned (1) Does not include the leased drive-up property located adjacent to the branch. (2) Branch was under construction as of December 31, 2025.
ITEM 2. PROPERTIES Our corporate headquarters is located at 4450 Excelsior Boulevard, Suite 100, St. Louis Park, Minnesota 55416. Including our corporate headquarters, we operate nine full-service branch offices located in the Twin Cities MSA. We currently own five of our branch offices located in Minnetonka (2), Orono, St.
ITEM 2. PROPERTIES Our corporate headquarters is located at 4450 Excelsior Boulevard, Suite 100, St. Louis Park, Minnesota 55416. Including our corporate headquarters, we operate nine full-service branch offices located in the Twin Cities MSA. We currently own five of our branch offices located in Lake Elmo, Minneapolis (Hennepin Avenue), Minnetonka, Orono, and St.
Additional information regarding our locations is set forth below: 47 Table of Contents ​ ​ ​ Address Owned/Leased Headquarters and St. Louis Park Branch: ​ ​ 4450 Excelsior Boulevard, Suite 100, St.
Louis Park, and lease the remaining four locations. Additional information regarding our locations is set forth below: ​ ​ ​ Address Owned/Leased Headquarters and St. Louis Park Branch: ​ ​ 4450 Excelsior Boulevard, Suite 100, St.
Removed
Louis Park and Minneapolis (Hennepin Avenue), and lease the remaining four locations. In February 2023, the Company purchased a parcel of land in Lake Elmo, Minnesota, a portion of which was transferred to the Bank and upon which the Bank intends to construct a branch office.
Added
Construction was completed and branch was opened in February 2026. ​

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeThe Company does not know of any proceeding contemplated by a governmental authority against the Company or any of its subsidiaries. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. ​ PART II
Biggest changeThe Company does not know of any proceeding contemplated by a governmental authority against the Company or any of its subsidiaries. ​ ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 48 Table of Contents ​ ​ PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures ​ 48 ​ ​ ​ PART II ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ 48 ​ ​ ​ Item 6. [Reserved] ​ 51 ​ ​ ​
Biggest changeItem 4. Mine Safety Disclosures ​ 48 ​ ​ ​ PART II ​ ​ ​ Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities ​ 49 ​ ​ ​ Item 6. [Reserved] ​ 51 ​ ​ ​

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeHolders of Record As of February 24, 2025, the Company had 51 holders of record of the Company’s common stock and an estimated 4,913 additional beneficial holders of the Company’s common stock whose stock was held in street name by brokerages or fiduciaries. 48 Table of Contents Issuer Purchases of Equity Securities The following table presents stock purchases made during the fourth quarter of 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Total Number of Shares Purchased (1) ​ Average Price Paid Per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) ​ Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2024 — ​ $ — ​ — ​ $ 15,281,253 November 1 - 30, 2024 315 ​ ​ 14.30 ​ — ​ ​ 15,281,253 December 1 - 31, 2024 37,812 ​ ​ 15.15 ​ — ​ ​ 15,281,253 Total 38,127 ​ $ 15.14 ​ — ​ $ 15,281,253 (1) The total number of shares repurchased during the periods indicated includes shares repurchased as part of the Company’s stock repurchase program and shares withheld for income tax purposes in connection with vesting of restricted stock and stock options.
Biggest changeIssuer Purchases of Equity Securities The following table presents stock purchases made during the fourth quarter of 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Total Number of Shares Purchased (1) ​ Average Price Paid Per Share ​ Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) ​ Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1 - 31, 2025 — ​ $ — ​ — ​ $ 13,089,198 November 1 - 30, 2025 — ​ ​ — ​ — ​ ​ 13,098,198 December 1 - 31, 2025 32,702 ​ ​ 17.89 ​ — ​ ​ 13,098,198 Total 32,702 ​ $ 17.89 ​ — ​ $ 13,098,198 (1) The total number of shares repurchased during the periods indicated includes shares withheld for income tax purposes in connection with vesting of restricted stock and stock options.
Any future determination relating to the Company’s common stock dividend policy will be made by the board of directors and will depend on a number of factors, including historic and projected financial condition, liquidity and results of operations, capital levels and needs, tax considerations, any acquisitions or potential acquisitions that may be pursued, statutory and regulatory prohibitions and other limitations, the terms of any credit agreements or other borrowing arrangements that restrict the ability to pay cash dividends, general economic conditions and other factors deemed relevant by the board of 50 Table of Contents directors.
Any future determination relating to the Company’s common stock dividend policy will be made by the board of directors and will depend on a number of factors, including historic and projected financial condition, liquidity and results of operations, capital levels and needs, tax considerations, any acquisitions or potential acquisitions that may be pursued, statutory and regulatory prohibitions and other limitations, the terms of any credit agreements or other borrowing 50 Table of Contents arrangements that restrict the ability to pay cash dividends, general economic conditions and other factors deemed relevant by the board of directors.
The shares were purchased or otherwise valued at the closing price of the Company’s common stock on the date of purchase and/or withholding. (2) On August 17, 2022, the Company’s board of directors approved the 2022 Stock Repurchase Program which authorizes the Company to repurchase up to $25.0 million of its common stock, subject to certain limitations and conditions.
The shares were purchased or otherwise valued at the closing price of the Company’s common stock on the date of withholding. (2) On August 17, 2022, the Company’s board of directors approved the 2022 Stock Repurchase Program which authorizes the Company to repurchase up to $25.0 million of its common stock, subject to certain limitations and conditions.
In addition, under the terms of the subordinated notes issued in June of 2020 and July of 2021, and the related subordinated note purchase agreements, the Company is not permitted to declare or pay any dividends on capital stock if an event of default occurs under the terms of the subordinated notes, excluding any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of our common stock and any declaration of a non-cash dividend in connection with the implementation of a shareholders' rights plan. ​
In addition, under the terms of the subordinated notes issued in July of 2021 and June 2025 and the related subordinated note purchase agreements, the Company is not permitted to declare or pay any dividends on capital stock if an event of default occurs under the terms of the subordinated notes, excluding any dividends or distributions in shares of, or options, warrants or rights to subscribe for or purchase shares of, any class of our common stock and any declaration of a non-cash dividend in connection with the implementation of a shareholders' rights plan. ​
This comparison assumes $100.00 was invested on December 31, 2019 and assumes the reinvestment of all cash dividends, if any, prior to any tax effect and retention of all stock dividends. There is no assurance that the Company's common stock performance will continue in the future with the same or similar results as shown in the graph.
This comparison assumes $100.00 was invested on December 31, 2020 and assumes the reinvestment of all cash dividends, if any, prior to any tax effect and retention of all stock dividends. There is no assurance that the Company's common stock performance will continue in the future with the same or similar results as shown in the graph.
On July 23, 2024, the Company’s board of directors extended the expiration date of the 2022 Stock Repurchase Program from August 16, 2024 to August 20, 2025.
On July 22, 2025, the Company’s board of directors extended the expiration date of the 2022 Stock Repurchase Program from August 20, 2025 to August 26, 2026.
The program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so. Under the program, the Company may repurchase shares of common stock from time to time in open market or privately negotiated transactions.
The 2022 Stock Repurchase Program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so. 49 Table of Contents Performance Graph The following graph compares the percentage change in the cumulative shareholder return of the Company’s common stock between December 31, 2020 and December 31, 2025, with the cumulative return of the Nasdaq Composite Index and the total return of the Nasdaq Bank Index.
Removed
The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including general market and economic conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company.
Added
Holders of Record As of February 19, 2026, the Company had 45 holders of record of the Company’s common stock and an estimated 10,459 additional beneficial holders of the Company’s common stock whose stock was held in street name by brokerages or fiduciaries.
Removed
The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the program’s expiration, without any prior notice. 49 Table of Contents Performance Graph The following graph compares the percentage change in the cumulative shareholder return of the Company’s common stock between December 31, 2019 and December 31, 2024, with the cumulative return of the Nasdaq Composite Index and the total return of the Nasdaq Bank Index.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeThe following reconciliation table provides a more detailed analysis of these non-GAAP financial measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 2023 ​ 2022 Pre-Provision Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Income ​ $ 7,368 ​ $ 6,493 ​ $ 6,332 ​ Less: (Gain) Loss on Sales of Securities ​ ​ (385) ​ ​ 33 ​ ​ (82) ​ Less: FHLB Advance Prepayment Income ​ ​ — ​ ​ (792) ​ ​ — ​ Total Operating Noninterest Income ​ ​ 6,983 ​ ​ 5,734 ​ ​ 6,250 ​ Plus: Net Interest Income ​ ​ 102,193 ​ ​ 105,174 ​ ​ 129,698 ​ Net Operating Revenue ​ $ 109,176 ​ $ 110,908 ​ $ 135,948 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 63,300 ​ $ 59,320 ​ $ 56,620 ​ Less: Amortization of Tax Credit Investments ​ ​ — ​ ​ — ​ ​ (408) ​ Less: Debt Prepayment Fees ​ ​ — ​ ​ — ​ ​ — ​ Total Operating Noninterest Expense ​ $ 63,300 ​ $ 59,320 ​ $ 56,212 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-Provision Net Revenue ​ $ 45,876 ​ $ 51,588 ​ $ 79,736 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plus: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Operating Revenue Adjustments ​ ​ 385 ​ ​ 759 ​ ​ 82 ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (Recovery of) for Credit Losses ​ ​ 3,525 ​ ​ (175) ​ ​ 7,700 ​ Non-Operating Expense Adjustments ​ ​ — ​ ​ — ​ ​ 408 ​ Provision for Income Taxes ​ ​ 9,911 ​ ​ 12,562 ​ ​ 18,318 ​ Net Income ​ $ 32,825 ​ $ 39,960 ​ $ 53,392 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Assets ​ $ 4,683,144 ​ $ 4,490,804 ​ $ 3,866,480 ​ Pre-Provision Net Revenue Return on Average Assets ​ ​ 0.98 % ​ 1.15 % ​ 2.06 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Pre-Provision Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Operating Revenue ​ $ 109,176 ​ $ 110,908 ​ $ 135,948 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 63,300 ​ $ 59,320 ​ $ 56,620 ​ Less: Merger-related Expenses ​ ​ (712) ​ ​ — ​ ​ — ​ Less: Amortization of Tax Credit Investments ​ ​ — ​ ​ — ​ ​ (408) ​ Less: Debt Prepayment Fees ​ ​ — ​ ​ — ​ ​ — ​ Adjusted Total Operating Noninterest Expense ​ $ 62,588 ​ $ 59,320 ​ $ 56,212 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Pre-Provision Net Revenue ​ $ 46,588 ​ $ 51,588 ​ $ 79,736 ​ Adjusted Pre-Provision Net Revenue Return on Average Assets ​ ​ 0.99 % ​ 1.15 % ​ 2.06 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 ​ 2023 ​ 2022 ​ Core Net Interest Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income (Tax-Equivalent Basis) ​ $ 103,440 ​ $ 106,730 ​ $ 130,920 ​ Less: Loan Fees ​ ​ (3,090) ​ ​ (3,604) ​ ​ (6,273) ​ Less: PPP Interest and Fees ​ ​ NM ​ ​ NM ​ ​ (970) ​ Core Net Interest Income ​ $ 100,350 ​ $ 103,126 ​ $ 123,677 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Interest Earning Assets ​ ​ 4,579,597 ​ ​ 4,404,366 ​ ​ 3,790,291 ​ Less: Average PPP Loans ​ ​ NM ​ ​ NM ​ ​ (7,441) ​ Core Average Interest Earning Assets ​ $ 4,579,597 ​ $ 4,404,366 ​ $ 3,782,850 ​ Core Net Interest Margin ​ 2.19 % 2.34 % 3.27 % ​ 77 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 2023 2022 Efficiency Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 63,300 ​ $ 59,320 ​ $ 56,620 ​ Less: Amortization of Intangible Assets ​ ​ (78) ​ ​ (100) ​ ​ (191) ​ Adjusted Noninterest Expense ​ $ 63,222 ​ $ 59,220 ​ $ 56,429 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 102,193 ​ $ 105,174 ​ $ 129,698 ​ Noninterest Income ​ ​ 7,368 ​ ​ 6,493 ​ ​ 6,332 ​ Less: (Gain) Loss on Sales of Securities ​ ​ (385) ​ ​ 33 ​ ​ (82) ​ Adjusted Operating Revenue ​ $ 109,176 ​ $ 111,700 ​ $ 135,948 ​ Efficiency Ratio ​ 57.9 % 53.0 % 41.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Efficiency Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 63,300 ​ $ 59,320 ​ $ 56,620 ​ Less: Amortization of Intangible Assets ​ ​ (78) ​ ​ (100) ​ ​ (191) ​ Less: Amortization of Tax Credit Investments ​ ​ — ​ ​ — ​ ​ (408) ​ Less: Merger-related Expenses ​ ​ (712) ​ ​ — ​ ​ — ​ Adjusted Noninterest Expense ​ $ 62,510 ​ $ 59,220 ​ $ 56,021 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 102,193 ​ $ 105,174 ​ $ 129,698 ​ Noninterest Income ​ ​ 7,368 ​ ​ 6,493 ​ ​ 6,332 ​ Less: (Gain) Loss on Sales of Securities ​ ​ (385) ​ ​ 33 ​ ​ (82) ​ Adjusted Operating Revenue ​ $ 109,176 ​ $ 111,700 ​ $ 135,948 ​ Adjusted Efficiency Ratio ​ 57.3 % 53.0 % 41.2 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 2023 ​ 2022 Adjusted Noninterest Expense to Average Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 63,300 ​ $ 59,320 ​ $ 56,620 ​ Less: Amortization of Tax Credit Investments ​ ​ — ​ ​ — ​ ​ (408) ​ Less: Merger-related Expenses ​ ​ (712) ​ ​ — ​ ​ — ​ Adjusted Noninterest Expense ​ $ 62,588 ​ $ 59,320 ​ $ 56,212 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Assets ​ $ 4,683,144 ​ $ 4,490,804 ​ $ 3,866,480 ​ Adjusted Noninterest Expense to Average Assets ​ ​ 1.34 % ​ 1.32 % ​ 1.45 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 ​ 2023 ​ 2022 ​ Tangible Common Equity and Tangible Common Equity/Tangible Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareholders' Equity ​ $ 457,935 ​ $ 425,515 ​ $ 394,064 ​ Less: Preferred Stock ​ ​ (66,514) ​ ​ (66,514) ​ ​ (66,514) ​ Total Common Shareholders' Equity ​ ​ 391,421 ​ ​ 359,001 ​ ​ 327,550 ​ Less: Intangible Assets ​ ​ (19,832) ​ ​ (2,814) ​ ​ (2,914) ​ Tangible Common Equity ​ $ 371,589 ​ $ 356,187 ​ $ 324,636 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 5,066,242 ​ $ 4,611,990 ​ $ 4,345,662 ​ Less: Intangible Assets ​ ​ (19,832) ​ ​ (2,814) ​ ​ (2,914) ​ Tangible Assets ​ $ 5,046,410 ​ $ 4,609,176 ​ $ 4,342,748 ​ Tangible Common Equity/Tangible Assets ​ ​ 7.36 % 7.73 % 7.48 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible Book Value Per Share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Book Value Per Common Share ​ $ 14.21 ​ $ 12.94 ​ $ 11.80 ​ Less: Effects of Intangible Assets ​ ​ (0.72) ​ ​ (0.10) ​ ​ (0.11) ​ Tangible Book Value Per Common Share ​ $ 13.49 ​ $ 12.84 ​ $ 11.69 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income Available to Common Shareholders ​ $ 28,771 ​ $ 35,906 ​ $ 49,338 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Shareholders' Equity ​ $ 440,763 ​ $ 410,478 ​ $ 384,033 ​ Less: Average Preferred Stock ​ ​ (66,514) ​ ​ (66,514) ​ ​ (66,514) ​ Average Common Equity ​ ​ 374,249 ​ ​ 343,964 ​ ​ 317,519 ​ Less: Effects of Average Intangible Assets ​ ​ (3,207) ​ ​ (2,847) ​ ​ (3,012) ​ Average Tangible Common Equity ​ $ 371,042 ​ $ 341,117 ​ $ 314,507 ​ Return on Average Tangible Common Equity ​ ​ 7.75 % ​ 10.53 % ​ 15.69 % ​ ​ ​ ​ 78 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 ​ 2023 ​ 2022 ​ Adjusted Diluted Earnings Per Common Share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income Available to Common Shareholders ​ $ 28,771 ​ $ 35,906 ​ $ 49,338 ​ Add: Merger-related Expenses ​ ​ 712 ​ ​ — ​ ​ — ​ Less: Tax Impact ​ ​ (165) ​ ​ — ​ ​ — ​ Net Income Available to Common Shareholders, Excluding Impact of Merger-related Expenses ​ $ 29,318 ​ $ 35,906 ​ $ 49,338 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted Weighted Average Shares Outstanding ​ ​ 27,943,343 ​ ​ 28,315,587 ​ ​ 28,668,177 ​ Adjusted Diluted Earnings Per Common Share ​ $ 1.05 ​ $ 1.27 ​ $ 1.72 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ $ 32,825 ​ $ 39,960 ​ $ 53,392 ​ Add: Merger-related Expenses ​ ​ 712 ​ ​ — ​ ​ — ​ Less: Tax Impact ​ ​ (165) ​ ​ — ​ ​ — ​ Net Income, Excluding Impact of Merger-related Expenses ​ $ 33,372 ​ $ 39,960 ​ $ 53,392 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Assets ​ $ 4,683,144 ​ $ 4,490,804 ​ $ 3,866,480 ​ Adjusted Return on Average Assets ​ ​ 0.71 % ​ 0.89 % ​ 1.38 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Shareholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income, Excluding Impact of Merger-related Expenses ​ $ 33,372 ​ $ 39,960 ​ $ 53,392 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Shareholders' Equity ​ $ 440,763 ​ $ 410,478 ​ $ 384,033 ​ Adjusted Return on Average Shareholders' Equity ​ ​ 7.57 % ​ 9.73 % ​ 13.90 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income Available to Common Shareholders, Excluding Impact of Merger-related Expenses ​ $ 29,318 ​ $ 35,906 ​ $ 49,338 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Tangible Common Equity ​ $ 371,042 ​ $ 341,117 ​ $ 314,507 ​ Adjusted Return on Average Tangible Common Equity ​ ​ 7.90 % ​ 10.53 % ​ 15.69 % ​ ​ ​ 79 Table of Contents ­­
Biggest changeThe following reconciliation table provides a more detailed analysis of these non-GAAP financial measures: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2025 ​ ​ ​ 2024 ​ 2023 ​ ​ ​ Pre-Provision Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Income ​ $ 10,915 ​ $ 7,368 ​ $ 6,493 ​ Less: (Gain) Loss on Sales of Securities ​ ​ (614) ​ ​ (385) ​ ​ 33 ​ Less: FHLB Advance Prepayment Income ​ ​ (301) ​ ​ — ​ ​ (792) ​ Total Operating Noninterest Income ​ ​ 10,000 ​ ​ 6,983 ​ ​ 5,734 ​ Plus: Net Interest Income ​ ​ 132,438 ​ ​ 102,193 ​ ​ 105,174 ​ Net Operating Revenue ​ $ 142,438 ​ $ 109,176 ​ $ 110,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 77,271 ​ $ 63,300 ​ $ 59,320 ​ Total Operating Noninterest Expense ​ $ 77,271 ​ $ 63,300 ​ $ 59,320 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Pre-Provision Net Revenue ​ $ 65,167 ​ $ 45,876 ​ $ 51,588 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Plus: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Non-Operating Revenue Adjustments ​ ​ 915 ​ ​ 385 ​ ​ 759 ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Provision (Recovery of) for Credit Losses ​ ​ 6,050 ​ ​ 3,525 ​ ​ (175) ​ Provision for Income Taxes ​ ​ 13,944 ​ ​ 9,911 ​ ​ 12,562 ​ Net Income ​ $ 46,088 ​ $ 32,825 ​ $ 39,960 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Assets ​ $ 5,268,553 ​ $ 4,683,144 ​ $ 4,490,804 ​ Pre-Provision Net Revenue Return on Average Assets ​ ​ 1.24 % ​ 0.98 % ​ 1.15 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Pre-Provision Net Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Operating Revenue ​ $ 142,438 ​ $ 109,176 ​ $ 110,908 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 77,271 ​ $ 63,300 ​ $ 59,320 ​ Less: Merger-related Expenses ​ ​ (1,981) ​ ​ (712) ​ ​ — ​ Adjusted Total Operating Noninterest Expense ​ $ 75,290 ​ $ 62,588 ​ $ 59,320 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Pre-Provision Net Revenue ​ $ 67,148 ​ $ 46,588 ​ $ 51,588 ​ Adjusted Pre-Provision Net Revenue Return on Average Assets ​ ​ 1.27 % ​ 0.99 % ​ 1.15 % ​ 75 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2025 ​ ​ ​ 2024 ​ 2023 ​ Core Net Interest Margin ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income (Tax-Equivalent Basis) ​ $ 134,296 ​ $ 103,440 ​ $ 106,730 ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan Fees ​ ​ (3,745) ​ ​ (3,090) ​ ​ (3,604) ​ Purchase Accounting Accretion: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan Accretion ​ ​ (1,693) ​ ​ — ​ ​ — ​ Bond Accretion ​ ​ (852) ​ ​ (91) ​ ​ — ​ Bank-Owned Certificates of Deposit Accretion ​ ​ (33) ​ ​ — ​ ​ — ​ Deposit Certificates of Deposit Accretion ​ ​ (88) ​ ​ — ​ ​ — ​ Total Purchase Accounting Accretion ​ ​ (2,666) ​ ​ (91) ​ ​ — ​ Core Net Interest Income (Tax-Equivalent Basis) ​ $ 127,885 ​ $ 100,259 ​ $ 103,126 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Interest Earning Assets ​ $ 5,114,143 ​ $ 4,579,597 ​ $ 4,404,366 ​ Core Net Interest Margin ​ 2.50 % 2.19 % 2.34 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Core Loan Yield ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan Interest Income (Tax-equivalent Basis) ​ $ 234,164 ​ $ 205,646 ​ $ 192,679 ​ Less: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loan Fees ​ ​ (3,745) ​ ​ (3,090) ​ ​ (3,604) ​ Loan Accretion ​ ​ (1,693) ​ ​ — ​ ​ — ​ Core Loan Interest Income ​ $ 228,726 ​ $ 202,556 ​ $ 189,075 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Loans ​ $ 4,088,601 ​ $ 3,738,260 ​ $ 3,699,252 ​ Core Loan Yield ​ ​ 5.59 % ​ 5.42 % ​ 5.11 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Efficiency Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 77,271 ​ $ 63,300 ​ $ 59,320 ​ Less: Amortization of Intangible Assets ​ ​ (921) ​ ​ (78) ​ ​ (100) ​ Adjusted Noninterest Expense ​ $ 76,350 ​ $ 63,222 ​ $ 59,220 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 132,438 ​ $ 102,193 ​ $ 105,174 ​ Noninterest Income ​ ​ 10,915 ​ ​ 7,368 ​ ​ 6,493 ​ Less: (Gain) Loss on Sales of Securities ​ ​ (614) ​ ​ (385) ​ ​ 33 ​ Adjusted Operating Revenue ​ $ 142,739 ​ $ 109,176 ​ $ 111,700 ​ Efficiency Ratio ​ 53.5 % 57.9 % 53.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Efficiency Ratio ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 77,271 ​ $ 63,300 ​ $ 59,320 ​ Less: Amortization of Intangible Assets ​ ​ (921) ​ ​ (78) ​ ​ (100) ​ Less: Merger-related Expenses ​ ​ (1,981) ​ ​ (712) ​ ​ — ​ Adjusted Noninterest Expense ​ $ 74,369 ​ $ 62,510 ​ $ 59,220 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 132,438 ​ $ 102,193 ​ $ 105,174 ​ Noninterest Income ​ ​ 10,915 ​ ​ 7,368 ​ ​ 6,493 ​ Less: (Gain) Loss on Sales of Securities ​ ​ (614) ​ ​ (385) ​ ​ 33 ​ Less: FHLB Advance Prepayment Income ​ ​ (301) ​ ​ — ​ ​ (792) ​ Adjusted Operating Revenue ​ $ 142,438 ​ $ 109,176 ​ $ 110,908 ​ Adjusted Efficiency Ratio ​ 52.2 % 57.3 % 53.4 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Noninterest Expense to Average Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Expense ​ $ 77,271 ​ $ 63,300 ​ $ 59,320 ​ Less: Merger-related Expenses ​ ​ (1,981) ​ ​ (712) ​ ​ — ​ Adjusted Noninterest Expense ​ $ 75,290 ​ $ 62,588 ​ $ 59,320 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Assets ​ $ 5,268,553 ​ $ 4,683,144 ​ $ 4,490,804 ​ Adjusted Noninterest Expense to Average Assets ​ ​ 1.43 % ​ 1.34 % ​ 1.32 % ​ 76 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2025 ​ ​ ​ 2024 ​ 2023 ​ Tangible Common Equity and Tangible Common Equity/Tangible Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Shareholders' Equity ​ $ 517,095 ​ $ 457,935 ​ $ 425,515 ​ Less: Preferred Stock ​ ​ (66,514) ​ ​ (66,514) ​ ​ (66,514) ​ Total Common Shareholders' Equity ​ ​ 450,581 ​ ​ 391,421 ​ ​ 359,001 ​ Less: Intangible Assets ​ ​ (18,912) ​ ​ (19,832) ​ ​ (2,814) ​ Tangible Common Equity ​ $ 431,669 ​ $ 371,589 ​ $ 356,187 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 5,407,002 ​ $ 5,066,242 ​ $ 4,611,990 ​ Less: Intangible Assets ​ ​ (18,912) ​ ​ (19,832) ​ ​ (2,814) ​ Tangible Assets ​ $ 5,388,090 ​ $ 5,046,410 ​ $ 4,609,176 ​ Tangible Common Equity/Tangible Assets ​ ​ 8.01 % 7.36 % 7.73 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tangible Book Value Per Share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Book Value Per Common Share ​ $ 16.23 ​ $ 14.21 ​ $ 12.94 ​ Less: Effects of Intangible Assets ​ ​ (0.68) ​ ​ (0.72) ​ ​ (0.10) ​ Tangible Book Value Per Common Share ​ $ 15.55 ​ $ 13.49 ​ $ 12.84 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income Available to Common Shareholders ​ $ 42,034 ​ $ 28,771 ​ $ 35,906 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Shareholders' Equity ​ $ 483,828 ​ $ 440,763 ​ $ 410,478 ​ Less: Average Preferred Stock ​ ​ (66,514) ​ ​ (66,514) ​ ​ (66,514) ​ Average Common Equity ​ ​ 417,314 ​ ​ 374,249 ​ ​ 343,964 ​ Less: Effects of Average Intangible Assets ​ ​ (19,387) ​ ​ (3,207) ​ ​ (2,847) ​ Average Tangible Common Equity ​ $ 397,927 ​ $ 371,042 ​ $ 341,117 ​ Return on Average Tangible Common Equity ​ ​ 10.56 % ​ 7.75 % ​ 10.53 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Diluted Earnings Per Common Share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income Available to Common Shareholders ​ $ 42,034 ​ $ 28,771 ​ $ 35,906 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Add: Merger-related Expenses ​ ​ 1,981 ​ ​ 712 ​ ​ — ​ Less: FHLB Advance Prepayment Income ​ ​ (301) ​ ​ — ​ ​ (792) ​ Less: (Gain) Loss on Sales of Securities ​ ​ (614) ​ ​ (385) ​ ​ 33 ​ Total Adjustments ​ ​ 1,066 ​ ​ 327 ​ ​ (759) ​ Less: Tax Impact of Adjustments ​ ​ (247) ​ ​ (76) ​ ​ 181 ​ Adjusted Net Income Available to Common Shareholders ​ $ 42,853 ​ $ 29,022 ​ $ 35,328 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Diluted Weighted Average Shares Outstanding ​ ​ 28,169,857 ​ ​ 27,943,342 ​ ​ 28,315,587 ​ Adjusted Diluted Earnings Per Common Share ​ $ 1.52 ​ $ 1.04 ​ $ 1.25 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Assets ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Income ​ $ 46,088 ​ $ 32,825 ​ $ 39,960 ​ Add: Total Adjustments ​ ​ 1,066 ​ ​ 327 ​ ​ (759) ​ Less: Tax Impact of Adjustments ​ ​ (247) ​ ​ (76) ​ ​ 181 ​ Adjusted Net Income ​ $ 46,907 ​ $ 33,076 ​ $ 39,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Assets ​ $ 5,268,553 ​ $ 4,683,144 ​ $ 4,490,804 ​ Adjusted Return on Average Assets ​ ​ 0.89 % ​ 0.71 % ​ 0.88 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Shareholders' Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Net Income ​ $ 46,907 ​ $ 33,076 ​ $ 39,382 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Shareholders' Equity ​ $ 483,828 ​ $ 440,763 ​ $ 410,478 ​ Adjusted Return on Average Shareholders' Equity ​ ​ 9.69 % ​ 7.50 % ​ 9.59 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Tangible Common Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Net Income Available to Common Shareholders ​ $ 42,853 ​ $ 29,022 ​ $ 35,328 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Tangible Common Equity ​ $ 397,927 ​ $ 371,042 ​ $ 341,117 ​ Adjusted Return on Average Tangible Common Equity ​ ​ 10.77 % ​ 7.82 % ​ 10.36 % ​ ​ 77 Table of Contents ­­
The amount of collateral obtained, if deemed necessary by us upon extension of credit, is based on our management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. ​ Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party.
The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management’s credit evaluation. Collateral held varies but may include accounts receivable, inventory, property, plant and equipment, and income-producing commercial properties. ​ Standby letters of credit are conditional commitments issued by us to guarantee the performance of a customer to a third party.
Readers of the Company’s Annual Report on Form 10-K should consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on forward-looking statements. ​ 51 Table of Contents The following consolidated selected financial data is derived from the Company’s audited consolidated financial statements as of and for the three years ended December 31, 2024.
Readers of the Company’s Annual Report on Form 10-K should 51 Table of Contents consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on forward-looking statements. ​ The following consolidated selected financial data is derived from the Company’s audited consolidated financial statements as of and for the three years ended December 31, 2025.
At December 31, 2024, the ratios for the Company and the Bank were sufficient to meet the conservation buffer. Off-Balance Sheet Arrangements In the normal course of business, the Company enters into various transactions to meet the financing needs of clients, which, in accordance with GAAP, are not included in the consolidated balance sheets.
At December 31, 2025, the ratios for the Company and the Bank were sufficient to meet the conservation buffer. Off-Balance Sheet Arrangements In the normal course of business, the Company enters into various transactions to meet the financing needs of clients, which, in accordance with GAAP, are not included in the consolidated balance sheets.
Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “watch.” The following table presents information on loan classifications at December 31, 2024.
Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “watch.” The following table presents information on loan classifications at December 31, 2025.
The following table presents the amortized cost and fair value of securities available for sale, by type, at December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ Amortized ​ Fair ​ ​ ​ Amortized ​ Fair ​ ​ ​ (dollars in thousands) Cost Value Percent ​ Cost Value Percent ​ U.S.
The following table presents the amortized cost and fair value of securities available for sale, by type, at December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ Amortized ​ Fair ​ ​ ​ Amortized ​ Fair ​ ​ ​ (dollars in thousands) ​ ​ ​ Cost ​ ​ ​ Value ​ ​ ​ Percent ​ Cost ​ ​ ​ Value ​ ​ ​ Percent ​ U.S.
Most of these commitments mature within two years and the standby letters of credit are expected to expire 73 Table of Contents without being drawn upon. All off-balance sheet commitments are included in the determination of the amount of risk-based capital that the Company and the Bank are required to hold.
Most of these commitments mature within two years and the standby letters of credit are expected to expire without being drawn upon. All off-balance sheet commitments are included in the determination of the amount of risk-based capital that the Company and the Bank are required to hold.
Such commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. We evaluate each customer’s creditworthiness on a case-by-case basis.
Such commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis.
Federal regulations and internal policies require the use of an asset classification system as a means of managing and reporting problem and potential problem assets. The Company has incorporated an internal asset classification system, substantially consistent 66 Table of Contents with federal banking regulations, as a part of the credit monitoring system.
Federal regulations and internal policies require the use of an asset classification system as a means of managing and reporting problem and potential problem assets. The Company has incorporated an internal asset classification system, substantially consistent with federal banking regulations, as a part of the credit monitoring system.
The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit, standby letters of credit, and commercial letters of credit is represented by the contractual or notional amount of those instruments.
The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit, standby letters of credit, and commercial letters of credit is represented 71 Table of Contents by the contractual or notional amount of those instruments.
Management believes this non-GAAP financial measure provides a meaningful comparison of operational performance and facilitates investors’ assessments of business performance and trends in comparison to peers in the banking industry. The efficiency ratio was 57.9% for the year ended December 31, 2024, compared to 53.0% for the year ended December 31, 2023.
Management believes this non-GAAP financial measure provides a meaningful comparison of operational performance and facilitates investors’ assessments of business performance and trends in comparison to peers in the banking industry. The efficiency ratio was 53.5% for the year ended December 31, 2025, compared to 57.9% for the year ended December 31, 2024.
Investment balances in the investment securities portfolio are subject to change over time based on funding needs and interest rate risk management objectives. The liquidity levels take into account anticipated future cash flows and are maintained at levels management believes are appropriate to ensure future flexibility in meeting anticipated funding needs.
Investment balances in the investment securities portfolio are subject to change over time 61 Table of Contents based on funding needs and interest rate risk management objectives. The liquidity levels take into account anticipated future cash flows and are maintained at levels management believes are appropriate to ensure future flexibility in meeting anticipated funding needs.
The Company had no outstanding federal funds purchased as of each of December 31, 2024 and 2023. Other Borrowings At December 31, 2024, the Company had outstanding FHLB advances of $359.5 million, compared to $319.5 million at December 31, 2023. The Company’s borrowing capacity at the FHLB is determined based on collateral pledged, generally consisting of loans.
The Company had no outstanding federal funds purchased as of each of December 31, 2025 and 2024. Other Borrowings At December 31, 2025, the Company had outstanding FHLB advances of $399.5 million, compared to $359.5 million at December 31, 2024. The Company’s borrowing capacity at the FHLB is determined based on collateral pledged, generally consisting of loans.
As of December 31, 2024, the Company was in compliance with all established liquidity guidelines in the policy. 75 Table of Contents GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures Some of the financial data included in this report are not measures of financial performance recognized by GAAP.
As of December 31, 2025, the Company was in compliance with all established liquidity guidelines in the policy. 73 Table of Contents GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures Some of the financial data included in this report are not measures of financial performance recognized by GAAP.
Maintaining an adequate level of liquidity depends on the Company’s ability to efficiently meet both expected and unexpected cash flows and collateral needs without adversely affecting either daily operations or financial condition. The Bank’s ALM Committee, is responsible for managing commitments to meet the needs of customers while achieving the Company’s financial objectives.
Maintaining an adequate level of liquidity depends on the Company’s ability to efficiently meet both expected and unexpected cash flows and collateral needs without adversely affecting either daily operations or financial condition. The Bank’s Asset Liability Management (“ALM”) Committee, is responsible for managing commitments to meet the needs of customers while achieving the Company’s financial objectives.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. ​ The Company had outstanding letters of credit with the FHLB in the amount of $103.2 million and $114.4 million at December 31, 2024 and 2023, respectively, on behalf of customers and to secure public deposits. ​ Liquidity Liquidity is the Company’s capacity to meet cash and collateral obligations at a reasonable cost.
The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. ​ The Company had outstanding letters of credit with the FHLB in the amount of $109.0 million and $103.2 million at December 31, 2025 and 2024, respectively, on behalf of customers and to secure public deposits. ​ Liquidity Liquidity is the Company’s capacity to meet cash and collateral obligations at a reasonable cost.
Loans that warranted a substandard risk rating at December 31, 2024 totaled $21.8 million, compared to $35.9 million at December 31, 2023. Management continues to actively work with these borrowers and closely monitor substandard credits. Nonperforming Assets Nonperforming loans include loans accounted for on a nonaccrual basis and loans 90 days past due and still accruing.
Loans that warranted a substandard risk rating at December 31, 2025 totaled $53.0 million, compared to $21.8 million at December 31, 2024. Management continues to actively work with these borrowers and closely monitor substandard credits. Nonperforming Assets Nonperforming loans include loans accounted for on a nonaccrual basis and loans 90 days past due and still accruing.
The Company had additional borrowing capacity under this credit facility of $483.2 million and $498.7 million at December 31, 2024 and 2023, respectively. The Company has an outstanding Loan and Security Agreement and revolving note with a third party correspondent lender, which is secured by 100% of the issued and outstanding stock of the Bank.
The Company had additional borrowing capacity under this credit facility of $611.3 million and $483.2 million at December 31, 2025 and 2024, respectively. The Company has an outstanding Loan and Security Agreement and revolving note with a third party correspondent lender, which is secured by 100% of the issued and outstanding stock of the Bank.
The regulatory capital ratios for the Company and the Bank to meet the minimum capital adequacy standards and for the Bank to be considered well capitalized under the prompt corrective action framework are set forth in the following tables.
The regulatory capital ratios for the Company and the Bank to meet the minimum 70 Table of Contents capital adequacy standards and for the Bank to be considered well capitalized under the prompt corrective action framework are set forth in the following tables.
In our judgment, the adjustments to earnings remove the volatility that is associated with certain one-time items unrelated to our core business. 76 Table of Contents The Company believes these non-GAAP financial measures provide useful information to management and investors that is supplementary to the financial condition, results of operations and cash flows computed in accordance with GAAP; however, the Company acknowledges that these non-GAAP financial measures have a number of limitations.
In management’s judgement, the adjustments to earnings remove the volatility that is associated with certain one-time items unrelated to the Company’s core business. ​ The Company believes these non-GAAP financial measures provide useful information to management and investors that is supplementary to the financial condition, results of operations and cash flows computed in accordance with GAAP; however, the Company acknowledges that these non-GAAP financial measures have a number of limitations.
Although management strives to maintain an allowance it deems adequate, future economic changes, deterioration of borrowers’ creditworthiness, and the impact of examinations by regulatory agencies, among other factors, all could cause changes to the allowance for credit losses on loans and leases. ​ At December 31, 2024, the allowance for credit losses on loans and leases was $52.3 million, an increase of $1.8 million from $50.5 million at December 31, 2023.
Although management strives to maintain an allowance it deems adequate, future economic changes, deterioration of borrowers’ creditworthiness, and the impact of examinations by regulatory agencies, among other factors, all could cause changes to the allowance for credit losses on loans and leases. ​ At December 31, 2025, the allowance for credit losses on loans and leases was $56.4 million, an increase of $4.2 million from $52.3 million at December 31, 2024.
At December 31, 2024, core deposits totaled approximately $3.11 billion and represented 76.0% of total deposits. These core deposits are normally less volatile, often with customer relationships tied to other products offered by the Company, which promote long-standing relationships and stable funding sources.
At December 31, 2025, core deposits totaled approximately $3.35 billion and represented 77.6% of total deposits. These core deposits are normally less volatile, often with customer relationships tied to other products offered by the Company, which promote long-standing relationships and stable funding sources.
There were also no foreclosed assets as of December 31, 2024 and 2023. 67 Table of Contents The following table presents a summary of nonperforming assets, by category, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ (dollars in thousands) 2024 2023 ​ Total Nonaccrual Loans ​ $ 301 ​ $ 919 ​ Total Nonperforming Loans ​ $ 301 ​ $ 919 ​ Total Nonperforming Assets (1) ​ $ 301 ​ $ 919 ​ Total Modified Accruing Loans ​ — ​ 9,609 ​ Total Nonperforming Assets and Modified Accruing Loans ​ $ 301 ​ $ 10,528 ​ Nonaccrual Loans to Total Loans ​ 0.01 % 0.02 % Nonperforming Loans to Total Loans ​ 0.01 ​ 0.02 ​ Nonperforming Assets to Total Loans Plus Foreclosed Assets (1) ​ 0.01 ​ 0.02 ​ (1) Nonperforming assets are defined as nonaccrual loans and loans greater than 90 days past due still accruing plus foreclosed assets.
There were also no foreclosed assets as of December 31, 2025 and 2024. 65 Table of Contents The following table presents a summary of nonperforming assets, by category, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ (dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ Total Nonaccrual Loans ​ $ 22,034 ​ $ 301 ​ Total Nonperforming Loans ​ $ 22,034 ​ $ 301 ​ Total Nonperforming Assets (1) ​ $ 22,034 ​ $ 301 ​ Total Nonperforming Assets and Modified Accruing Loans ​ $ 22,034 ​ $ 301 ​ Nonaccrual Loans to Total Loans ​ 0.51 % 0.01 % Nonperforming Loans to Total Loans ​ 0.51 ​ 0.01 ​ Nonperforming Assets to Total Loans Plus Foreclosed Assets (1) ​ 0.51 ​ 0.01 ​ (1) Nonperforming assets are defined as nonaccrual loans and loans greater than 90 days past due still accruing plus foreclosed assets.
This information should be read in connection with our audited consolidated financial statements and related notes appearing elsewhere in this report. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands, except per share data) ​ 2024 ​ 2023 ​ 2022 ​ Income Statement ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 102,193 ​ $ 105,174 ​ $ 129,698 ​ Provision for (Recovery of) Credit Losses ​ ​ 3,525 ​ ​ (175) ​ ​ 7,700 ​ Noninterest Income ​ ​ 7,368 ​ ​ 6,493 ​ ​ 6,332 ​ Noninterest Expense ​ ​ 63,300 ​ ​ 59,320 ​ ​ 56,620 ​ Net Income ​ ​ 32,825 ​ ​ 39,960 ​ ​ 53,392 ​ Net Income Available to Common Shareholders ​ ​ 28,771 ​ ​ 35,906 ​ ​ 49,338 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Per Common Share Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Share ​ $ 1.05 ​ $ 1.29 ​ $ 1.78 ​ Diluted Earnings Per Share ​ ​ 1.03 ​ ​ 1.27 ​ ​ 1.72 ​ Adjusted Diluted Earnings Per Share (1) ​ ​ 1.05 ​ ​ 1.27 ​ ​ 1.72 ​ Book Value Per Share ​ ​ 14.21 ​ ​ 12.94 ​ ​ 11.80 ​ Tangible Book Value Per Share (1) ​ ​ 13.49 ​ ​ 12.84 ​ ​ 11.69 ​ Basic Weighted Average Shares Outstanding ​ ​ 27,479,764 ​ ​ 27,857,420 ​ ​ 27,758,336 ​ Diluted Weighted Average Shares Outstanding ​ ​ 27,943,342 ​ ​ 28,315,587 ​ ​ 28,668,177 ​ Shares Outstanding at Period End ​ ​ 27,552,449 ​ ​ 27,748,965 ​ ​ 27,751,950 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Performance Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Average Assets (ROA) ​ ​ 0.70 % ​ 0.89 % ​ 1.38 % Pre-Provision Net Revenue Return on Average Assets (PPNR ROA) (2) ​ ​ 0.98 ​ ​ 1.15 ​ ​ 2.06 ​ Return on Average Shareholders' Equity (ROE) ​ ​ 7.45 ​ ​ 9.73 ​ ​ 13.90 ​ Return on Average Tangible Common Equity (1) ​ ​ 7.75 ​ ​ 10.53 ​ ​ 15.69 ​ Net Interest Margin (3) ​ ​ 2.26 ​ ​ 2.42 ​ ​ 3.45 ​ Core Net Interest Margin (1)(3) ​ ​ 2.19 ​ ​ 2.34 ​ ​ 3.27 ​ Yield on Interest Earning Assets ​ ​ 5.40 ​ ​ 5.08 ​ ​ 4.35 ​ Yield on Total Loans, Gross ​ ​ 5.50 ​ ​ 5.21 ​ ​ 4.60 ​ Cost of Interest Bearing Liabilities ​ ​ 4.14 ​ ​ 3.61 ​ ​ 1.34 ​ Cost of Total Deposits ​ ​ 3.44 ​ ​ 2.73 ​ ​ 0.75 ​ Cost of Funds ​ ​ 3.44 ​ ​ 2.92 ​ ​ 0.99 ​ Efficiency Ratio (1) ​ ​ 57.9 ​ ​ 53.0 ​ ​ 41.5 ​ Noninterest Expense to Average Assets ​ ​ 1.35 ​ ​ 1.32 ​ ​ 1.46 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Financial Ratios (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Assets ​ ​ 0.71 % ​ 0.89 % ​ 1.38 % Adjusted Pre-Provision Net Revenue Return on Average Assets (2) ​ ​ 0.99 ​ ​ 1.15 ​ ​ 2.06 ​ Adjusted Return on Average Shareholders' Equity ​ ​ 7.57 ​ ​ 9.73 ​ ​ 13.90 ​ Adjusted Return on Average Tangible Common Equity ​ ​ 7.90 ​ ​ 10.53 ​ ​ 15.69 ​ Adjusted Efficiency Ratio ​ ​ 57.3 ​ ​ 53.0 ​ ​ 41.5 ​ Adjusted Noninterest Expense to Average Assets ​ ​ 1.34 ​ ​ 1.32 ​ ​ 1.46 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 5,066,242 ​ $ 4,611,990 ​ $ 4,345,662 ​ Total Loans, Gross ​ ​ 3,868,514 ​ ​ 3,724,282 ​ ​ 3,569,446 ​ Deposits ​ ​ 4,086,767 ​ ​ 3,709,948 ​ ​ 3,416,543 ​ Total Shareholders' Equity ​ ​ 457,935 ​ ​ 425,515 ​ ​ 394,064 ​ Average Shareholders' Equity to Average Assets ​ ​ 9.41 % ​ 9.14 % ​ 9.93 % Loan to Deposit Ratio ​ ​ 94.7 ​ ​ 100.4 ​ ​ 104.5 ​ Core Deposits to Total Deposits (5) ​ ​ 76.0 ​ ​ 68.7 ​ ​ 74.6 ​ Uninsured Deposits to Total Deposits ​ ​ 27.7 ​ ​ 24.3 ​ ​ 38.5 ​ 52 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, (dollars in thousands, except per share data) ​ 2024 ​ 2023 ​ 2022 ​ Capital Ratios (Consolidated) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Leverage Ratio ​ ​ 9.44 % ​ 9.57 % ​ 9.55 % Common Equity Tier 1 Risk-based Capital Ratio ​ ​ 9.08 ​ ​ 9.16 ​ ​ 8.40 ​ Tier 1 Risk-based Capital Ratio ​ ​ 10.64 ​ ​ 10.79 ​ ​ 10.03 ​ Total Risk-based Capital Ratio ​ ​ 13.76 ​ ​ 13.97 ​ ​ 13.15 ​ Tangible Common Equity to Tangible Assets (1) ​ ​ 7.36 ​ ​ 7.73 ​ ​ 7.48 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Growth Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage Change in Total Assets ​ ​ 9.8 % ​ 6.1 % ​ 25.0 % Percentage Change in Total Loans, Gross ​ ​ 3.9 ​ ​ 4.3 ​ ​ 26.6 ​ Percentage Change in Total Deposits ​ ​ 10.2 ​ ​ 8.6 ​ ​ 16.0 ​ Percentage Change in Shareholders' Equity ​ ​ 7.6 ​ ​ 8.0 ​ ​ 3.9 ​ Percentage Change in Net Income ​ ​ (17.9) ​ ​ (25.2) ​ ​ 16.9 ​ Percentage Change in Diluted Earnings Per Share ​ ​ (18.8) ​ ​ (26.3) ​ ​ 12.0 ​ Percentage Change in Tangible Book Value Per Share (1) ​ ​ 5.1 ​ ​ 9.8 ​ ​ 6.5 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Asset Quality Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans 30-89 Days Past Due ​ $ 1,291 ​ $ 15,110 ​ $ 186 ​ Loans 30-89 Days Past Due to Total Loans ​ ​ 0.03 % ​ 0.41 % ​ 0.01 % Nonperforming Loans ​ $ 301 ​ $ 919 ​ $ 639 ​ Nonperforming Loans to Total Loans ​ ​ 0.01 % ​ 0.02 % ​ 0.02 % Nonaccrual Loans to Total Loans ​ ​ 0.01 % ​ 0.02 % ​ 0.02 % Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans ​ ​ 0.01 ​ ​ 0.02 ​ ​ 0.02 ​ Foreclosed Assets ​ $ — ​ $ — ​ $ — ​ Nonperforming Assets (4) ​ ​ 301 ​ ​ 919 ​ ​ 639 ​ Nonperforming Assets to Total Assets (4) ​ ​ 0.01 % ​ 0.02 % ​ 0.01 % Allowance for Credit Losses on Loans and Leases to Total Loans ​ ​ 1.35 ​ ​ 1.36 ​ ​ 1.34 ​ Allowance for Credit Losses on Loans and Leases to Nonaccrual Loans ​ ​ 17,367.77 ​ ​ 5,494.45 ​ ​ 7,511.11 ​ Net Loan Charge-Offs to Average Loans ​ ​ 0.03 ​ ​ 0.01 ​ ​ (0.01) ​ (1) Represents a non-GAAP financial measure.
This information should be read in connection with our audited consolidated financial statements and related notes appearing elsewhere in this report. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands, except per share data) ​ 2025 ​ 2024 ​ 2023 ​ Income Statement ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Interest Income ​ $ 132,438 ​ $ 102,193 ​ $ 105,174 ​ Provision for (Recovery of) Credit Losses ​ ​ 6,050 ​ ​ 3,525 ​ ​ (175) ​ Noninterest Income ​ ​ 10,915 ​ ​ 7,368 ​ ​ 6,493 ​ Noninterest Expense ​ ​ 77,271 ​ ​ 63,300 ​ ​ 59,320 ​ Net Income ​ ​ 46,088 ​ ​ 32,825 ​ ​ 39,960 ​ Net Income Available to Common Shareholders ​ ​ 42,034 ​ ​ 28,771 ​ ​ 35,906 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Per Common Share Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic Earnings Per Share ​ $ 1.53 ​ $ 1.05 ​ $ 1.29 ​ Diluted Earnings Per Share ​ ​ 1.49 ​ ​ 1.03 ​ ​ 1.27 ​ Adjusted Diluted Earnings Per Share (1) ​ ​ 1.52 ​ ​ 1.04 ​ ​ 1.25 ​ Book Value Per Share ​ ​ 16.23 ​ ​ 14.21 ​ ​ 12.94 ​ Tangible Book Value Per Share (1) ​ ​ 15.55 ​ ​ 13.49 ​ ​ 12.84 ​ Basic Weighted Average Shares Outstanding ​ ​ 27,544,024 ​ ​ 27,479,764 ​ ​ 27,857,420 ​ Diluted Weighted Average Shares Outstanding ​ ​ 28,169,857 ​ ​ 27,943,342 ​ ​ 28,315,587 ​ Shares Outstanding at Period End ​ ​ 27,759,970 ​ ​ 27,552,449 ​ ​ 27,748,965 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Performance Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Return on Average Assets (ROA) ​ ​ 0.87 % ​ 0.70 % ​ 0.89 % Pre-Provision Net Revenue Return on Average Assets (PPNR ROA) (1) ​ ​ 1.24 ​ ​ 0.98 ​ ​ 1.15 ​ Return on Average Shareholders' Equity (ROE) ​ ​ 9.53 ​ ​ 7.45 ​ ​ 9.73 ​ Return on Average Tangible Common Equity (1) ​ ​ 10.56 ​ ​ 7.75 ​ ​ 10.53 ​ Net Interest Margin (2) ​ ​ 2.63 ​ ​ 2.26 ​ ​ 2.42 ​ Core Net Interest Margin (1)(2) ​ ​ 2.50 ​ ​ 2.19 ​ ​ 2.34 ​ Yield on Interest Earning Assets ​ ​ 5.55 ​ ​ 5.40 ​ ​ 5.08 ​ Yield on Total Loans, Gross ​ ​ 5.73 ​ ​ 5.50 ​ ​ 5.21 ​ Cost of Interest Bearing Liabilities ​ ​ 3.81 ​ ​ 4.14 ​ ​ 3.61 ​ Cost of Total Deposits ​ ​ 3.12 ​ ​ 3.44 ​ ​ 2.73 ​ Cost of Funds ​ ​ 3.17 ​ ​ 3.44 ​ ​ 2.92 ​ Efficiency Ratio (1) ​ ​ 53.5 ​ ​ 57.9 ​ ​ 53.0 ​ Noninterest Expense to Average Assets ​ ​ 1.47 ​ ​ 1.35 ​ ​ 1.32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Financial Ratios (1) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Adjusted Return on Average Assets ​ ​ 0.89 % ​ 0.71 % ​ 0.88 % Adjusted Pre-Provision Net Revenue Return on Average Assets ​ ​ 1.27 ​ ​ 0.99 ​ ​ 1.15 ​ Adjusted Return on Average Shareholders' Equity ​ ​ 9.69 ​ ​ 7.50 ​ ​ 9.59 ​ Adjusted Return on Average Tangible Common Equity ​ ​ 10.77 ​ ​ 7.82 ​ ​ 10.36 ​ Adjusted Efficiency Ratio ​ ​ 52.2 ​ ​ 57.3 ​ ​ 53.4 ​ Adjusted Noninterest Expense to Average Assets ​ ​ 1.43 ​ ​ 1.34 ​ ​ 1.32 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance Sheet ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Assets ​ $ 5,407,002 ​ $ 5,066,242 ​ $ 4,611,990 ​ Total Loans, Gross ​ ​ 4,309,517 ​ ​ 3,868,514 ​ ​ 3,724,282 ​ Deposits ​ ​ 4,320,369 ​ ​ 4,086,767 ​ ​ 3,709,948 ​ Total Shareholders' Equity ​ ​ 517,095 ​ ​ 457,935 ​ ​ 425,515 ​ Average Shareholders' Equity to Average Assets ​ ​ 9.18 % ​ 9.41 % ​ 9.14 % Loan to Deposit Ratio ​ ​ 99.7 ​ ​ 94.7 ​ ​ 100.4 ​ Core Deposits to Total Deposits (4) ​ ​ 77.6 ​ ​ 76.0 ​ ​ 68.7 ​ Uninsured Deposits to Total Deposits ​ ​ 29.8 ​ ​ 27.7 ​ ​ 24.3 ​ 52 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands, except per share data) ​ 2025 ​ 2024 ​ 2023 ​ Capital Ratios (Consolidated) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tier 1 Leverage Ratio ​ ​ 9.20 % ​ 9.44 % ​ 9.57 % Common Equity Tier 1 Risk-based Capital Ratio ​ ​ 9.17 ​ ​ 9.08 ​ ​ 9.16 ​ Tier 1 Risk-based Capital Ratio ​ ​ 10.57 ​ ​ 10.64 ​ ​ 10.79 ​ Total Risk-based Capital Ratio ​ ​ 14.12 ​ ​ 13.76 ​ ​ 13.97 ​ Tangible Common Equity to Tangible Assets (1) ​ ​ 8.01 ​ ​ 7.36 ​ ​ 7.73 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Growth Ratios ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Percentage Change in Total Assets ​ ​ 6.7 % ​ 9.8 % ​ 6.1 % Percentage Change in Total Loans, Gross ​ ​ 11.4 ​ ​ 3.9 ​ ​ 4.3 ​ Percentage Change in Total Deposits ​ ​ 5.7 ​ ​ 10.2 ​ ​ 8.6 ​ Percentage Change in Shareholders' Equity ​ ​ 12.9 ​ ​ 7.6 ​ ​ 8.0 ​ Percentage Change in Net Income ​ ​ 40.4 ​ ​ (17.9) ​ ​ (25.2) ​ Percentage Change in Diluted Earnings Per Share ​ ​ 44.9 ​ ​ (18.8) ​ ​ (26.3) ​ Percentage Change in Tangible Book Value Per Share (1) ​ ​ 15.3 ​ ​ 5.1 ​ ​ 9.8 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Selected Asset Quality Data ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans 30-89 Days Past Due ​ $ 968 ​ $ 1,291 ​ $ 15,110 ​ Loans 30-89 Days Past Due to Total Loans ​ ​ 0.02 % ​ 0.03 % ​ 0.41 % Nonperforming Loans ​ $ 22,034 ​ $ 301 ​ $ 919 ​ Nonperforming Loans to Total Loans ​ ​ 0.51 % ​ 0.01 % ​ 0.02 % Nonaccrual Loans to Total Loans ​ ​ 0.51 ​ ​ 0.01 ​ ​ 0.02 ​ Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans ​ ​ 0.51 ​ ​ 0.01 ​ ​ 0.02 ​ Foreclosed Assets ​ $ — ​ $ — ​ $ — ​ Nonperforming Assets (3) ​ ​ 22,034 ​ ​ 301 ​ ​ 919 ​ Nonperforming Assets to Total Assets (3) ​ ​ 0.41 % ​ 0.01 % ​ 0.02 % Allowance for Credit Losses on Loans and Leases to Total Loans ​ ​ 1.31 ​ ​ 1.35 ​ ​ 1.36 ​ Allowance for Credit Losses on Loans and Leases to Nonaccrual Loans ​ ​ 256.16 ​ ​ 17,367.77 ​ ​ 5,494.45 ​ Net Loan Charge-Offs to Average Loans ​ ​ 0.04 ​ ​ 0.03 ​ ​ 0.01 ​ (1) Represents a non-GAAP financial measure.
Nonperforming assets consist of nonperforming loans plus foreclosed assets (i.e., real or personal property acquired through foreclosure). Nonaccrual loans totaled $301,000 at December 31, 2024 and $919,000 at December 31, 2023, a decrease of $618,000. There were no loans 90 days past due and still accruing as of December 31, 2024 and 2023.
Nonperforming assets consist of nonperforming loans plus foreclosed assets (i.e., real or personal property acquired through foreclosure). Nonaccrual loans totaled $22.0 million at December 31, 2025, compared to $301,000 at December 31, 2024. There were no loans 90 days past due and still accruing as of December 31, 2025 and 2024.
The processes and procedures include board of directors and management oversight, commercial real estate exposure limits, portfolio monitoring tools, management information systems, market reports, underwriting standards, internal and external loan review, and stress testing. Total gross loans increased $144.2 million, or 3.9%, to $3.87 billion at December 31, 2024, compared to $3.72 billion at December 31, 2023.
The processes and procedures include board of directors and management oversight, commercial real estate exposure limits, portfolio monitoring tools, management information systems, market reports, underwriting standards, internal and external loan review, and stress testing. Total gross loans were $4.31 billion at December 31, 2025, an increase of $441.0 million, or 11.4%, compared to $3.87 billion at December 31, 2024.
Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.
“Substandard” assets include those characterized by the “distinct possibility” that the financial institution will sustain “some loss” if the deficiencies are not corrected. 64 Table of Contents Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.
Earnings per diluted common share for the year ended December 31, 2024 were $1.03, compared to $1.27 per diluted common share for the year ended December 31, 2023. Adjusted net income (a non-GAAP financial measure) was $33.4 million for the year ended December 31, 2024, compared to $40.0 million for the year ended December 31, 2023.
Earnings per diluted common share for the year ended December 31, 2025 were $1.49, compared to $1.03 per diluted common share for the year ended December 31, 2024. Adjusted net income (a non-GAAP financial measure) was $46.9 million for the year ended December 31, 2025, compared to $33.1 million for the year ended December 31, 2024.
All investment securities are held as available for sale. ​ Securities available for sale were $768.2 million at December 31, 2024, an increase of $164.1 million, or 27.2%, compared to $604.1 million at December 31, 2023.
All investment securities are held as available for sale. ​ Securities available for sale were $776.4 million at December 31, 2025, an increase of $8.2 million, or 1.1%, compared to $768.2 million at December 31, 2024.
Treasury Securities ​ $ 179,835 ​ $ 167,748 ​ 21.8 % $ — ​ $ — ​ — % U.S Government Agency Securities ​ ​ 22,053 ​ ​ 22,082 ​ 2.9 ​ ​ 18,497 ​ ​ 18,674 ​ 3.1 ​ Mortgage-Backed Securities Issued or Guaranteed by U.S.
Treasury Securities ​ $ 155,863 ​ $ 146,206 ​ 18.8 % $ 179,835 ​ $ 167,748 ​ 21.8 % U.S Government Agency Securities ​ ​ 8,664 ​ ​ 8,707 ​ 1.1 ​ ​ 22,053 ​ ​ 22,082 ​ 2.9 ​ Mortgage-Backed Securities Issued or Guaranteed by U.S.
The Company uses brokered deposits, the availability of which is uncertain and subject to competitive market forces and regulation, for liquidity and interest rate risk management purposes. At December 31, 2024, brokered deposits totaled $825.8 million, consisting of $698.3 million of brokered time deposits and $127.4 million of non-maturity brokered money market and transaction accounts.
The Company uses brokered deposits, the availability of which is uncertain and subject to competitive market forces and regulation, for liquidity and interest rate risk management purposes. At December 31, 2025, brokered deposits totaled $810.5 million, consisting of $665.0 million of brokered time deposits and $145.5 million of non-maturity brokered money market and transaction accounts.
The impact of the noninterest bearing sources of funds is captured in the net interest margin, which is calculated as net interest income divided by average earning assets.
Noninterest bearing sources of funds, such as demand deposits and shareholders’ equity, also support earning assets. The impact of the noninterest bearing sources of funds is captured in the net interest margin, which is calculated as net interest income divided by average earning assets.
Management uses these non-GAAP financial measures in the analysis of performance: ​ ● “Pre-Provision Net Revenue” is defined as net interest income plus total noninterest income (excluding all gains and losses on sales of assets or extinguishments or prepayments of liabilities) minus total noninterest expense, excluding the amortization of tax credit investments and debt prepayment fees. ● “Adjusted Pre-Provision Net Revenue” is defined as net interest income plus total noninterest income (excluding all gains and losses on sales of assets or extinguishments or prepayments of liabilities) minus total noninterest expense, excluding the amortization of tax credit investments, debt prepayment fees and one-time merger-related expenses. ● “Core Net Interest Margin” is defined as the ratio of net interest income (on a fully tax-equivalent basis), reduced by loan fees and PPP interest and fees, divided by interest earning assets, excluding average PPP loans. ● “Efficiency ratio” is defined as noninterest expense less the amortization of intangibles divided by our operating revenue, which is equal to net interest income plus noninterest income excluding gains and losses on sales of assets.
Management uses these non-GAAP financial measures in the analysis of performance: ​ ● “Pre-Provision Net Revenue” is defined as net interest income plus total noninterest income (excluding all gains and losses on sales of assets or extinguishments or prepayments of liabilities) minus total noninterest expense. ● “Adjusted Pre-Provision Net Revenue” is defined as net interest income plus total noninterest income (excluding all gains and losses on sales of assets or extinguishments or prepayments of liabilities) minus total noninterest expense, excluding merger-related expenses. ● “Core Net Interest Margin” is defined as the ratio of net interest income (on a fully tax-equivalent basis), reduced by loan fees and purchase accounting accretion, divided by interest earning assets. ● “Core Loan Yield” is defined as loan interest income (on fully tax-equivalent basis), reduced by loan fees and loan accretion, divided by average loans. ● “Efficiency Ratio” is defined as noninterest expense less the amortization of intangibles divided by our operating revenue, which is equal to net interest income plus noninterest income excluding gains and losses on sales of assets. ● “Adjusted Efficiency Ratio” is defined as the efficiency ratio adjusted to exclude merger-related expenses from noninterest expense and exclude FHLB prepayment income from operating revenue. ● “Adjusted Noninterest Expense to Average Assets” is defined as the ratio of noninterest expense adjusted to exclude merger-related expenses divided by average assets. ● “Tangible Common Equity” is defined as shareholders’ equity reduced by preferred stock, goodwill and other intangible assets.
The increase in goodwill was due to the FMCB acquisition on December 13, 2024. Goodwill is not amortized but is subject to, at a minimum, an annual test for impairment. Other intangible assets consist of core deposit relationships and favorable lease term intangibles. Total other intangible assets at December 31, 2024 and 2023 were $7.9 million and $188,000, respectively.
Goodwill is not amortized but is subject to, at a minimum, an annual test for impairment. Other intangible assets consist of core deposit relationships and favorable lease term intangibles. Total other intangible assets at December 31, 2025 and 2024 were $6.9 million and $7.9 million, respectively.
The increase in other intangible assets is attributable to core deposits assumed in the FMCB transaction. Other intangible assets are amortized over their estimated useful life. 69 Table of Contents Deposits The principal sources of funds for the Company are deposits, consisting of demand deposits, money market accounts, savings accounts, and certificates of deposit.
Other intangible assets are amortized over their estimated useful life. 67 Table of Contents Deposits The principal sources of funds for the Company are deposits, consisting of demand deposits, money market accounts, savings accounts, and certificates of deposit.
Net interest margin (on a fully tax-equivalent basis) for the year ended December 31, 2024 was 2.26%, a 16 basis point decline from 2.42% for the year ended December 31, 2023.
Net interest margin (on a fully tax-equivalent basis) for the year ended December 31, 2025 was 2.63%, a 37 basis point increase from 2.26% for the year ended December 31, 2024.
The provision for the year ended December 31, 2024 was due to an increase in the volume of newly originated loans with unfunded commitments in the commercial and construction and land development segments.
The provision for the year ended December 31, 2025 was due to an increase in the volume of newly originated loans with unfunded commitments.
The increase in the provision for credit losses on loans and leases was primarily attributable to the acquisition of FMCB and growth in the loan portfolio.
The increase in the provision for credit losses on loans and leases was primarily attributable to growth in the loan portfolio and an increase in historical loss rates.
Additionally, the Company has borrowing capacity from other sources. As of December 31, 2024, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets pledged as collateral as of the applicable date, the Bank’s borrowing availability was approximately $925.8 million and $979.4 million at December 31, 2024 and 2023, respectively.
As of December 31, 2025, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets pledged as collateral as of the applicable date, the Bank’s borrowing availability was approximately $1.03 billion and $925.8 million at December 31, 2025 and 2024, respectively.
The allowance for credit losses on off-balance sheet credit exposures was $3.0 million as of December 31, 2023, compared to $360,000 as of December 31, 2022. ​ The following table presents a summary of the activity in the allowance for credit losses on loans and leases for the years ended December 31, 2024, 2023, and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (dollars in thousands) ​ 2024 2023 2022 Balance at Beginning of Period ​ $ 50,494 ​ $ 47,996 ​ $ 40,020 Impact of Adopting CECL ​ ​ — ​ ​ 650 ​ ​ — Day 1 PCD Allowance ​ ​ 114 ​ ​ — ​ ​ — Provision for Credit Losses (1) ​ ​ 2,900 ​ ​ 2,050 ​ ​ 7,700 Charge-offs ​ ​ (1,266) ​ ​ (224) ​ ​ (37) Recoveries ​ ​ 35 ​ ​ 22 ​ ​ 313 Balance at End of Period ​ $ 52,277 ​ $ 50,494 ​ $ 47,996 (1) Include s an initial provision for credit losses for non-PCD loans acquired in the FMCB transaction of $950,000 for the year ended December 31, 2024. ​ The following table presents a summary of the activity in the provision for credit losses for the years ended December 31, 2024, 2023, and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (dollars in thousands) ​ 2024 2023 2022 Provision for Credit Losses on Loans and Leases ​ $ 2,900 ​ $ 2,050 ​ $ 7,700 Provision for (Recovery of ) Credit Losses for Off-Balance Sheet Credit Exposures ​ ​ 625 ​ ​ (2,225) ​ ​ — Provision for (Recovery of) Credit Losses ​ $ 3,525 ​ $ (175) ​ $ 7,700 ​ Noninterest Income 2024 Compared to 2023 Noninterest income was $7.4 million for the year ended December 31, 2024, compared to $6.5 million for the year ended December 31, 2023, an increase of $875,000, or 13.5%.
The allowance for credit losses on loans and leases to total loans was 1.31% at December 31, 2025, compared to 1.35% at December 31, 2024. ​ The following table presents a summary of the activity in the allowance for credit losses on loans and leases for the years ended December 31, 2025, 2024, and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended December 31, (dollars in thousands) ​ 2025 ​ ​ ​ 2024 ​ ​ ​ 2023 Balance at Beginning of Period ​ $ 52,277 ​ $ 50,494 ​ $ 47,996 Impact of Adopting CECL ​ ​ — ​ ​ — ​ ​ 650 Day 1 PCD Allowance ​ ​ — ​ ​ 114 ​ ​ — Provision for Credit Losses (1) ​ ​ 5,650 ​ ​ 2,900 ​ ​ 2,050 Charge-offs ​ ​ (1,553) ​ ​ (1,266) ​ ​ (224) Recoveries ​ ​ 69 ​ ​ 35 ​ ​ 22 Balance at End of Period ​ $ 56,443 ​ $ 52,277 ​ $ 50,494 (1) Include s an initial provision for credit losses for non-PCD loans acquired in the FMCB transaction of $950,000 for the year ended December 31, 2024. ​ The provision for credit losses for off-balance sheet credit exposures was $400,000 for the year ended December 31, 2025, compared to $625,000 for the year ended December 31, 2024.
The following table presents credit arrangements and financial instruments whose contract amounts represent credit risk as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ Fixed Variable Fixed Variable (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unfunded Commitments Under Lines of Credit ​ $ 174,273 ​ $ 504,791 ​ $ 164,880 ​ $ 381,752 Letters of Credit ​ 9,012 ​ 115,385 ​ 6,780 ​ 96,509 Totals ​ $ 183,285 ​ $ 620,176 ​ $ 171,660 ​ $ 478,261 ​ Commitments to extend credit beyond current funding are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
The following table presents credit arrangements and financial instruments whose contract amounts represent credit risk as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ Fixed ​ ​ ​ Variable ​ ​ ​ Fixed ​ ​ ​ Variable (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unfunded Commitments Under Lines of Credit ​ $ 245,571 ​ $ 551,272 ​ $ 174,273 ​ $ 504,791 Letters of Credit ​ 13,074 ​ 111,763 ​ 9,012 ​ 115,385 Totals ​ $ 258,645 ​ $ 663,035 ​ $ 183,285 ​ $ 620,176 ​ Commitments to extend credit beyond current funding are agreements to lend to a customer as long as there is no violation of any condition established in the contract.
The effective combined federal and state income tax rate for the year ended December 31, 2024 was 23.2%, compared to 23.9% for the year ended December 31, 2023. 2023 Compared to 2022 Income tax expense was $12.6 million for the year ended December 31, 2023, compared to $18.3 million for the year ended December 31, 2022.
Income tax expense was $13.9 million for the year ended December 31, 2025, compared to $9.9 million for the year ended December 31, 2024. The effective combined federal and state income tax rate for both the years ended December 31, 2025 and December 31, 2024 was 23.2%.
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by federal banking regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s business. Management believes the Company and the Bank met all capital adequacy requirements to which they were subject as of December 31, 2024.
The Company and the Bank are subject to various regulatory capital requirements administered by federal banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by federal banking regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s business.
As of December 31, 2024, investor CRE loans totaled $2.65 billion, consisting of $1.08 billion of loans secured by nonowner occupied CRE, $1.43 billion of loans secured by multifamily residential properties, $42.0 million of 1-4 family construction loans and $97.3 million of construction and land development loans.
As of December 31, 2025, investor CRE loans totaled $3.01 billion, consisting of $1.59 billion of loans secured by multifamily residential properties, $1.17 billion of loans secured by CRE nonowner occupied, $216.2 million of construction and land development loans, and $45.2 million of 1-4 family construction loans.
The allowance for credit losses on loans and leases as a percentage of total loans was 1.35% at December 31, 2024, compared to 1.36% at December 31, 2023. 68 Table of Contents The following table presents a summary of net charge-offs for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2024 2023 Net Charge-offs (Recoveries) ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ (22) ​ $ 170 ​ Leases ​ ​ 11 ​ ​ — ​ Real Estate Mortgage: ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ (3) ​ (5) ​ CRE Nonowner Occupied ​ 1,236 ​ — ​ Total Real Estate Mortgage Loans ​ 1,233 ​ (5) ​ Consumer and Other ​ 9 ​ ​ 37 ​ Total Net Charge-offs ​ $ 1,231 ​ $ 202 ​ Net Charge-offs (Recoveries) to Average Loans ​ ​ ​ Commercial ​ 0.00 % ​ 0.04 % Leases ​ ​ 0.48 ​ ​ 0.00 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 0.00 ​ ​ 0.00 ​ CRE Nonowner Occupied ​ 0.12 ​ ​ 0.00 ​ Total Real Estate Mortgage Loans ​ 0.04 ​ ​ 0.00 ​ Consumer and Other ​ (0.09) ​ ​ 0.40 ​ Total Net Charge-offs to Average Loans ​ 0.03 % 0.01 % Gross Loans, End of Period ​ $ 3,868,514 ​ $ 3,724,282 ​ Average Loans ​ ​ 3,738,260 ​ 3,699,252 ​ Allowance to Total Gross Loans ​ 1.35 % 1.36 % ​ The following table presents a summary of the allocation of the allowance for credit losses on loans and leases by loan portfolio segment as of the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2024 ​ 2023 ​ (dollars in thousands) Amount Percent Amount Percent ​ Commercial ​ $ 5,630 ​ 10.8 % $ 5,398 ​ 10.7 % Leases ​ ​ 368 ​ 0.7 ​ ​ — ​ — ​ Construction and Land Development ​ 866 ​ 1.7 ​ 2,156 ​ 4.3 ​ 1-4 Family Construction ​ ​ 331 ​ 0.6 ​ ​ 558 ​ 1.1 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 2,795 ​ 5.3 ​ 2,651 ​ 5.3 ​ Multifamily ​ 23,120 ​ 44.2 ​ 22,217 ​ 44.0 ​ CRE Owner Occupied ​ 1,290 ​ 2.5 ​ 1,184 ​ 2.3 ​ CRE Nonowner Occupied ​ 17,735 ​ 33.9 ​ 16,225 ​ 32.1 ​ Total Real Estate Mortgage Loans ​ 44,940 85.9 ​ 42,277 83.7 ​ Consumer and Other ​ 142 ​ 0.3 ​ 105 ​ 0.2 ​ Total Allowance for Credit Losses ​ $ 52,277 100.0 % $ 50,494 100.0 % ​ Goodwill and Other Intangible Assets Goodwill was $12.0 million at December 31, 2024, an increase of $9.4 million compared to $2.6 million at December 31, 2023.
The allowance for credit losses on loans and leases as a percentage of total loans was 1.31% at December 31, 2025 , compared to 1.35% at December 31, 2024. 66 Table of Contents The following table presents a summary of net charge-offs for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the year ended December 31, ​ (dollars in thousands) ​ 2025 ​ ​ ​ 2024 Net Charge-offs (Recoveries) ​ ​ ​ ​ ​ ​ ​ Commercial ​ $ 1,501 ​ $ (22) ​ Leases ​ ​ 14 ​ ​ 11 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ (12) ​ (3) ​ CRE Nonowner Occupied ​ (44) ​ 1,236 ​ Total Real Estate Mortgage Loans ​ (56) ​ 1,233 ​ Consumer and Other ​ 25 ​ ​ 9 ​ Total Net Charge-offs ​ $ 1,484 ​ $ 1,231 ​ Net Charge-offs (Recoveries) to Average Loans ​ ​ ​ ​ ​ Commercial ​ 0.29 % ​ 0.00 % Leases ​ ​ 0.03 ​ ​ 0.48 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 0.00 ​ ​ 0.00 ​ CRE Nonowner Occupied ​ 0.00 ​ ​ 0.12 ​ Total Real Estate Mortgage Loans ​ 0.00 ​ ​ 0.04 ​ Consumer and Other ​ 0.15 ​ ​ (0.04) ​ Total Net Charge-offs to Average Loans ​ 0.04 % 0.03 % Gross Loans, End of Period ​ $ 4,309,517 ​ $ 3,868,514 ​ Average Loans ​ ​ 4,088,601 ​ 3,738,260 ​ Allowance for Credit Losses to Total Gross Loans ​ 1.31 % 1.35 % ​ The following table presents a summary of the allocation of the allowance for credit losses on loans and leases by loan portfolio segment as of the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ ​ ​ 2025 ​ 2024 ​ (dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent ​ Commercial ​ $ 5,982 ​ 10.6 % $ 5,630 ​ 10.8 % Leases ​ ​ 352 ​ 0.6 ​ ​ 368 ​ 0.7 ​ Construction and Land Development ​ 1,687 ​ 3.0 ​ 866 ​ 1.7 ​ 1-4 Family Construction ​ ​ 316 ​ 0.6 ​ ​ 331 ​ 0.6 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 2,475 ​ 4.4 ​ 2,795 ​ 5.3 ​ Multifamily ​ 23,775 ​ 42.1 ​ 23,120 ​ 44.2 ​ CRE Owner Occupied ​ 1,080 ​ 1.9 ​ 1,290 ​ 2.5 ​ CRE Nonowner Occupied ​ 20,595 ​ 36.5 ​ 17,735 ​ 33.9 ​ Total Real Estate Mortgage Loans ​ 47,925 84.9 ​ 44,940 85.9 ​ Consumer and Other ​ 181 ​ 0.3 ​ 142 ​ 0.3 ​ Total Allowance for Credit Losses ​ $ 56,443 100.0 % $ 52,277 100.0 % ​ Goodwill and Other Intangible Assets Goodwill was $12.0 million at both December 31, 2025 and 2024.
Interest income on loans includes the effects of net deferred loan origination fees and costs accounted for as yield adjustments.
The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of net deferred loan origination fees and costs accounted for as yield adjustments.
Net charge-offs totaled $1.2 million during the year ended December 31, 2024 and $202,000 during the year ended December 31, 2023.
Net charge-offs totaled $1.5 million for the year ended December 31, 2025 and $1.2 million for the year ended December 31, 2024.
The following table presents the dollar and percentage composition of the deposit portfolio, by category, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ (dollars in thousands) Amount Percent Amount Percent Noninterest Bearing Transaction Deposits ​ $ 800,763 ​ 19.6 % $ 756,964 ​ 20.4 % Interest Bearing Transaction Deposits ​ 862,242 ​ 21.1 ​ 692,801 ​ 18.7 ​ Savings and Money Market Deposits ​ 1,259,503 ​ 30.8 ​ 935,091 ​ 25.2 ​ Time Deposits ​ 338,506 ​ 8.3 ​ 300,651 ​ 8.1 ​ Brokered Deposits ​ 825,753 ​ 20.2 ​ 1,024,441 ​ 27.6 ​ Total Deposits ​ $ 4,086,767 ​ 100.0 % $ 3,709,948 ​ 100.0 % ​ Total deposits at December 31, 2024 were $4.09 billion, an increase of $376.8 million, or 10.2%, compared to total deposits of $3.71 billion at December 31, 2023.
The following table presents the dollar and percentage composition of the deposit portfolio, by category, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ (dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Noninterest Bearing Transaction Deposits ​ $ 923,070 ​ 21.4 % $ 800,763 ​ 19.6 % Interest Bearing Transaction Deposits ​ 893,740 ​ 20.7 ​ 862,242 ​ 21.1 ​ Savings and Money Market Deposits ​ 1,380,922 ​ 31.9 ​ 1,259,503 ​ 30.8 ​ Time Deposits ​ 312,154 ​ 7.2 ​ 338,506 ​ 8.3 ​ Brokered Deposits ​ 810,483 ​ 18.8 ​ 825,753 ​ 20.2 ​ Total Deposits ​ $ 4,320,369 ​ 100.0 % $ 4,086,767 ​ 100.0 % ​ Total deposits at December 31, 2025 were $4.32 billion, an increase of $233.6 million, or 5.7%, compared to total deposits of $4.09 billion at December 31, 2024.
A financial institution with assets classified as “special mention” is not expected to sustain losses of principal or interest from these assets and should not classify assets under this category for more than a year. “Substandard” assets include those characterized by the “distinct possibility” that the financial institution will sustain “some loss” if the deficiencies are not corrected.
A financial institution with assets classified as “special mention” is not expected to sustain losses of principal or interest from these assets and should not classify assets under this category for more than a year.
The increase in average interest earning assets was primarily due to growth in the loan portfolio, purchases of investment securities and an increase in cash balances. Average interest bearing liabilities were $3.47 billion for the year ended December 31, 2024, an increase of $228.4 million, or 7.0%, compared to $3.25 billion for the year ended December 31, 2023.
Average interest earning assets were $5.11 billion for the year ended December 31, 2025, an increase of $534.5 million, or 11.7%, compared to $4.58 billion for the year ended December 31, 2024. The increase in average interest earning assets was primarily due to growth in the loan and securities portfolios and an increase in cash balances.
(3) Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period. 56 Table of Contents Interest Rates and Operating Interest Differential Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest earning assets and interest bearing liabilities, as well as changes in average interest rates.
(3) Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
This table is presented on a tax-equivalent basis, if applicable. 55 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 December 31, 2022 ​ ​ Average ​ Interest ​ Yield/ ​ Average ​ Interest ​ Yield/ Average ​ Interest ​ Yield/ ​ Balance & Fees Rate Balance & Fees Rate Balance & Fees Rate (dollars in thousands) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Earning Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Investments ​ $ 124,205 ​ $ 5,690 ​ 4.58 % $ 77,759 ​ $ 3,170 ​ 4.08 % $ 66,072 ​ $ 597 ​ 0.90 % Investment Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable Investment Securities ​ 668,012 ​ 32,681 ​ 4.89 ​ 577,102 ​ 25,199 ​ 4.37 ​ 448,500 ​ 13,960 ​ 3.11 ​ Tax-Exempt Investment Securities (1) ​ 30,864 ​ 1,577 ​ 5.11 ​ 29,004 ​ 1,325 ​ 4.57 ​ 72,379 ​ 3,101 ​ 4.29 ​ Total Investment Securities ​ 698,876 ​ 34,258 ​ 4.90 ​ 606,106 ​ 26,524 ​ 4.38 ​ 520,879 ​ 17,061 ​ 3.28 ​ Paycheck Protection Program Loans (2) ​ NM ​ ​ NM ​ NM ​ NM ​ ​ NM ​ NM ​ 7,441 ​ ​ 970 ​ 13.03 ​ Loans (1)(2) ​ 3,738,260 ​ ​ 205,646 ​ 5.50 ​ 3,699,252 ​ ​ 192,679 ​ 5.21 ​ 3,183,271 ​ ​ 145,857 ​ 4.58 ​ Total Loans ​ ​ 3,738,260 ​ 205,646 ​ 5.50 ​ ​ 3,699,252 ​ 192,679 ​ 5.21 ​ ​ 3,190,712 ​ 146,827 ​ 4.60 ​ Federal Home Loan Bank Stock ​ 18,256 ​ ​ 1,550 ​ 8.49 ​ 21,249 ​ ​ 1,538 ​ 7.24 ​ 12,628 ​ ​ 432 ​ 3.42 ​ Total Interest Earning Assets ​ 4,579,597 ​ 247,144 ​ 5.40 % 4,404,366 ​ 223,911 ​ 5.08 % 3,790,291 ​ 164,917 ​ 4.35 % Noninterest Earning Assets ​ ​ 103,547 ​ ​ ​ ​ ​ ​ ​ 86,438 ​ ​ ​ ​ ​ ​ ​ 76,189 ​ ​ ​ ​ ​ ​ Total Assets ​ $ 4,683,144 ​ ​ ​ ​ ​ ​ $ 4,490,804 ​ ​ ​ ​ ​ ​ $ 3,866,480 ​ ​ ​ ​ ​ ​ Interest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Bearing Transaction Deposits ​ $ 776,768 ​ $ 34,294 ​ 4.41 % $ 650,028 ​ $ 23,379 ​ 3.60 % $ 524,968 ​ $ 4,336 ​ 0.83 % Savings and Money Market Deposits ​ 956,300 ​ 39,297 ​ 4.11 ​ 922,799 ​ 30,639 ​ 3.32 ​ 963,096 ​ 9,129 ​ 0.95 ​ Time Deposits ​ 342,582 ​ 14,585 ​ 4.26 ​ 263,161 ​ 7,064 ​ 2.68 ​ 284,868 ​ 3,264 ​ 1.15 ​ Brokered Deposits ​ 963,676 ​ 40,629 ​ 4.22 ​ 909,662 ​ 34,963 ​ 3.84 ​ 449,095 ​ 6,650 ​ 1.48 ​ Total Interest Bearing Deposits ​ ​ 3,039,326 ​ ​ 128,805 ​ 4.24 ​ ​ 2,745,650 ​ ​ 96,045 ​ 3.50 ​ ​ 2,222,027 ​ ​ 23,379 ​ 1.05 ​ Federal Funds Purchased ​ 21,493 ​ 1,201 ​ 5.59 ​ 169,645 ​ 8,521 ​ 5.02 ​ 149,608 ​ 4,507 ​ 3.01 ​ Notes Payable ​ 13,750 ​ 1,162 ​ 8.45 ​ 13,750 ​ 1,143 ​ 8.31 ​ 2,863 ​ 202 ​ 7.04 ​ FHLB Advances ​ 320,497 ​ 8,554 ​ 2.67 ​ 238,000 ​ 7,489 ​ 3.15 ​ 64,278 ​ 1,221 ​ 1.90 ​ Subordinated Debentures ​ 79,473 ​ 3,983 ​ 5.01 ​ 79,090 ​ 3,983 ​ 5.04 ​ 89,584 ​ 4,688 ​ 5.23 ​ Total Interest Bearing Liabilities ​ 3,474,539 ​ 143,705 ​ 4.14 % 3,246,135 ​ 117,181 ​ 3.61 % 2,528,360 ​ 33,997 ​ 1.34 % Noninterest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Bearing Transaction Deposits ​ 705,247 ​ ​ ​ ​ ​ ​ 768,428 ​ ​ ​ ​ ​ ​ 910,490 ​ ​ ​ ​ ​ ​ Other Noninterest Bearing Liabilities ​ ​ 62,595 ​ ​ ​ ​ ​ ​ ​ 65,763 ​ ​ ​ ​ ​ ​ ​ 43,597 ​ ​ ​ ​ ​ ​ Total Noninterest Bearing Liabilities ​ 767,842 ​ ​ ​ ​ ​ ​ 834,191 ​ ​ ​ ​ ​ ​ 954,087 ​ ​ ​ ​ ​ ​ Shareholders' Equity ​ ​ 440,763 ​ ​ ​ ​ ​ ​ ​ 410,478 ​ ​ ​ ​ ​ ​ 384,033 ​ ​ ​ ​ ​ ​ Total Liabilities and Shareholders' Equity ​ $ 4,683,144 ​ ​ ​ ​ ​ ​ $ 4,490,804 ​ ​ ​ ​ ​ ​ $ 3,866,480 ​ ​ ​ ​ ​ ​ Net Interest Income / Interest Rate Spread ​ ​ ​ ​ 103,439 ​ 1.26 % ​ ​ ​ 106,730 ​ 1.47 % ​ ​ ​ 130,920 ​ 3.01 % Net Interest Margin (3) ​ ​ ​ ​ ​ ​ ​ 2.26 % ​ ​ ​ ​ ​ ​ 2.42 % ​ ​ ​ ​ ​ ​ 3.45 % Taxable Equivalent Adjustment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-Exempt Investment Securities and Loans ​ ​ ​ ​ (1,246) ​ ​ ​ ​ ​ ​ (1,556) ​ ​ ​ ​ ​ ​ (1,222) ​ ​ ​ Net Interest Income ​ ​ ​ ​ $ 102,193 ​ ​ ​ ​ ​ ​ $ 105,174 ​ ​ ​ ​ ​ ​ $ 129,698 ​ ​ ​ ​ (1) Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%.
This table is presented on a tax-equivalent basis, if applicable. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 December 31, 2023 ​ ​ Average ​ Interest ​ Yield/ ​ Average ​ Interest ​ Yield/ Average ​ Interest ​ Yield/ (dollars in thousands) ​ ​ ​ Balance ​ ​ ​ & Fees ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ & Fees ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ & Fees ​ ​ ​ Rate ​ ​ ​ Interest Earning Assets: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash Investments ​ $ 203,433 ​ $ 8,118 ​ 3.99 % $ 124,205 ​ $ 5,690 ​ 4.58 % $ 77,759 ​ $ 3,170 ​ 4.08 % Investment Securities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Taxable Investment Securities ​ 726,164 ​ 35,365 ​ 4.87 ​ 668,012 ​ 32,681 ​ 4.89 ​ 577,102 ​ 25,199 ​ 4.37 ​ Tax-Exempt Investment Securities (1) ​ 74,649 ​ 4,207 ​ 5.64 ​ 30,864 ​ 1,577 ​ 5.11 ​ 29,004 ​ 1,325 ​ 4.57 ​ Total Investment Securities ​ 800,813 ​ 39,572 ​ 4.94 ​ 698,876 ​ 34,258 ​ 4.90 ​ 606,106 ​ 26,524 ​ 4.38 ​ Loans (1)(2) ​ 4,088,601 ​ ​ 234,164 ​ 5.73 ​ 3,738,260 ​ ​ 205,646 ​ 5.50 ​ 3,699,252 ​ ​ 192,679 ​ 5.21 ​ Federal Home Loan Bank Stock ​ 21,296 ​ ​ 1,852 ​ 8.70 ​ 18,256 ​ ​ 1,550 ​ 8.49 ​ 21,249 ​ ​ 1,538 ​ 7.24 ​ Total Interest Earning Assets ​ 5,114,143 ​ 283,706 ​ 5.55 % 4,579,597 ​ 247,144 ​ 5.40 % 4,404,366 ​ 223,911 ​ 5.08 % Noninterest Earning Assets ​ ​ 154,410 ​ ​ ​ ​ ​ ​ ​ 103,547 ​ ​ ​ ​ ​ ​ ​ 86,438 ​ ​ ​ ​ ​ ​ Total Assets ​ $ 5,268,553 ​ ​ ​ ​ ​ ​ $ 4,683,144 ​ ​ ​ ​ ​ ​ $ 4,490,804 ​ ​ ​ ​ ​ ​ Interest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Deposits: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Interest Bearing Transaction Deposits ​ $ 852,426 ​ $ 31,907 ​ 3.74 % $ 776,768 ​ $ 34,294 ​ 4.41 % $ 650,028 ​ $ 23,379 ​ 3.60 % Savings and Money Market Deposits ​ 1,401,187 ​ 50,689 ​ 3.62 ​ 956,300 ​ 39,297 ​ 4.11 ​ 922,799 ​ 30,639 ​ 3.32 ​ Time Deposits ​ 334,003 ​ 13,562 ​ 4.06 ​ 342,582 ​ 14,585 ​ 4.26 ​ 263,161 ​ 7,064 ​ 2.68 ​ Brokered Deposits ​ 825,114 ​ 35,260 ​ 4.27 ​ 963,676 ​ 40,629 ​ 4.22 ​ 909,662 ​ 34,963 ​ 3.84 ​ Total Interest Bearing Deposits ​ ​ 3,412,730 ​ ​ 131,418 ​ 3.85 ​ ​ 3,039,326 ​ ​ 128,805 ​ 4.24 ​ ​ 2,745,650 ​ ​ 96,045 ​ 3.50 ​ Federal Funds Purchased ​ 466 ​ 21 ​ 4.53 ​ 21,493 ​ 1,201 ​ 5.59 ​ 169,645 ​ 8,521 ​ 5.02 ​ Notes Payable ​ 8,250 ​ 624 ​ 7.57 ​ 13,750 ​ 1,162 ​ 8.45 ​ 13,750 ​ 1,143 ​ 8.31 ​ FHLB Advances ​ 403,411 ​ 11,465 ​ 2.84 ​ 320,497 ​ 8,554 ​ 2.67 ​ 238,000 ​ 7,489 ​ 3.15 ​ Subordinated Debentures ​ 95,334 ​ 5,882 ​ 6.17 ​ 79,473 ​ 3,983 ​ 5.01 ​ 79,090 ​ 3,983 ​ 5.04 ​ Total Interest Bearing Liabilities ​ 3,920,191 ​ 149,410 ​ 3.81 % 3,474,539 ​ 143,705 ​ 4.14 % 3,246,135 ​ 117,181 ​ 3.61 % Noninterest Bearing Liabilities: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Noninterest Bearing Transaction Deposits ​ 799,099 ​ ​ ​ ​ ​ ​ 705,247 ​ ​ ​ ​ ​ ​ 768,428 ​ ​ ​ ​ ​ ​ Other Noninterest Bearing Liabilities ​ ​ 65,435 ​ ​ ​ ​ ​ ​ ​ 62,595 ​ ​ ​ ​ ​ ​ ​ 65,763 ​ ​ ​ ​ ​ ​ Total Noninterest Bearing Liabilities ​ 864,534 ​ ​ ​ ​ ​ ​ 767,842 ​ ​ ​ ​ ​ ​ 834,191 ​ ​ ​ ​ ​ ​ Shareholders' Equity ​ ​ 483,828 ​ ​ ​ ​ ​ ​ ​ 440,763 ​ ​ ​ ​ ​ ​ 410,478 ​ ​ ​ ​ ​ ​ Total Liabilities and Shareholders' Equity ​ $ 5,268,553 ​ ​ ​ ​ ​ ​ $ 4,683,144 ​ ​ ​ ​ ​ ​ $ 4,490,804 ​ ​ ​ ​ ​ ​ Net Interest Income / Interest Rate Spread ​ ​ ​ ​ 134,296 ​ 1.74 % ​ ​ ​ 103,439 ​ 1.26 % ​ ​ ​ 106,730 ​ 1.47 % Net Interest Margin (3) ​ ​ ​ ​ ​ ​ ​ 2.63 % ​ ​ ​ ​ ​ ​ 2.26 % ​ ​ ​ ​ ​ ​ 2.42 % Taxable Equivalent Adjustment: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Tax-Exempt Investment Securities and Loans ​ ​ ​ ​ (1,858) ​ ​ ​ ​ ​ ​ (1,246) ​ ​ ​ ​ ​ ​ (1,556) ​ ​ ​ Net Interest Income ​ ​ ​ ​ $ 132,438 ​ ​ ​ ​ ​ ​ $ 102,193 ​ ​ ​ ​ ​ ​ $ 105,174 ​ ​ ​ (1) Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%.
The following table presents the average balance and average rate paid on each of the following deposit categories for the years ended December 31, 2024, 2023, and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the ​ As of and for the ​ As of and for the ​ ​ ​ Year Ended ​ Year Ended ​ Year Ended ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ December 31, 2022 ​ ​ ​ Average ​ Average ​ Average ​ Average ​ Average ​ Average ​ (dollars in thousands) Balance Rate Balance Rate ​ Balance Rate ​ Noninterest Bearing Transaction Deposits ​ $ 705,247 ​ — % $ 768,428 ​ — % $ 910,490 — % Interest Bearing Transaction Deposits ​ 776,768 ​ 4.41 ​ 650,028 ​ 3.60 ​ 524,968 0.83 ​ Savings and Money Market Deposits ​ 956,300 ​ 4.11 ​ 922,799 ​ 3.32 ​ 963,096 0.95 ​ Time Deposits ​ 178,541 ​ 3.78 ​ 179,242 ​ 2.33 ​ 215,419 1.00 ​ Time Deposits > $250,000 ​ 164,041 ​ 4.78 ​ 83,919 ​ 3.45 ​ 69,449 1.61 ​ Brokered Deposits ​ 963,676 ​ 4.22 ​ 909,662 ​ 3.84 ​ 449,095 1.48 ​ Total Deposits ​ $ 3,744,573 3.44 % $ 3,514,078 2.73 % $ 3,132,517 0.75 % ​ 70 Table of Contents The following table presents time deposits, including brokered time deposits, that are in excess of the FDIC insurance limit, currently $250,000, by time remaining until maturity: ​ ​ ​ ​ ​ ​ December 31, (dollars in thousands) ​ 2024 Three Months or Less ​ $ 69,581 Over Three Months through Six Months ​ ​ 16,566 Over Six Months through 12 Months ​ ​ 26,046 Over 12 Months ​ ​ 42,846 Totals ​ $ 155,039 ​ The Company’s total uninsured deposits, which are the amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.14 billion, or 28% of total deposits, at December 31, 2024 and $900.0 million, or 24% of total deposits, at December 31, 2023.
The following table presents the average balance and average rate paid on each of the following deposit categories for the years ended December 31, 2025, 2024, and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of and for the ​ As of and for the ​ As of and for the ​ ​ ​ Year Ended ​ Year Ended ​ Year Ended ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ December 31, 2023 ​ ​ ​ Average ​ Average ​ Average ​ Average ​ Average ​ Average ​ (dollars in thousands) ​ ​ ​ Balance ​ ​ ​ Rate ​ ​ ​ Balance ​ ​ ​ Rate ​ Balance ​ ​ ​ Rate ​ Noninterest Bearing Transaction Deposits ​ $ 799,099 ​ — % $ 705,247 ​ — % $ 768,428 ​ — % Interest Bearing Transaction Deposits ​ 852,426 ​ 3.74 ​ 776,768 ​ 4.41 ​ 650,028 ​ 3.60 ​ Savings and Money Market Deposits ​ 1,401,187 ​ 3.62 ​ 956,300 ​ 4.11 ​ 922,799 ​ 3.32 ​ Time Deposits ​ 172,758 ​ 3.78 ​ 178,541 ​ 3.78 ​ 179,242 ​ 2.33 ​ Time Deposits > $250,000 ​ 161,245 ​ 4.34 ​ 164,041 ​ 4.78 ​ 83,919 ​ 3.45 ​ Brokered Deposits ​ 825,114 ​ 4.27 ​ 963,676 ​ 4.22 ​ 909,662 ​ 3.84 ​ Total Deposits ​ $ 4,211,829 3.12 % $ 3,744,573 3.44 % $ 3,514,078 2.73 % ​ 68 Table of Contents The following table presents time deposits, including brokered time deposits, that are in excess of the FDIC insurance limit, currently $250,000, by time remaining until maturity: ​ ​ ​ ​ ​ ​ December 31, (dollars in thousands) ​ 2025 Three Months or Less ​ $ 106,553 Over Three Months through Six Months ​ ​ 18,210 Over Six Months through 12 Months ​ ​ 25,903 Over 12 Months ​ ​ 8,007 Totals ​ $ 158,673 ​ The Company’s total uninsured deposits, which are the amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $1.29 billion, or 30% of total deposits, at December 31, 2025 and $1.14 billion, or 28% of total deposits, at December 31, 2024.
The provision for credit losses on loans and leases was $2.9 million for the year ended December 31, 2024, an increase of $850,000, compared to a provision for credit losses on loans and leases of $2.1 million for the year ended December 31, 2023.
Provision for Credit Losses The provision for credit losses on loans and leases was $5.7 million for the year ended December 31, 2025, compared to $2.9 million for the year ended December 31, 2024.
The following table presents a summary of interest and fees recognized on loans for the years ended December 31, 2024 and 2023, and interest and fees recognized on loans, excluding PPP loans, for the year ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2024 ​ ​ 2023 ​ ​ 2022 ​ Interest ​ 5.42 % ​ 5.11 % ​ 4.38 % Fees ​ 0.08 ​ ​ 0.10 ​ ​ 0.20 ​ Yield on Loans ​ 5.50 % ​ 5.21 % ​ 4.58 % Interest Expense.
The following table presents a summary of interest, fees, and accretion on loans for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ For the year ended December 31, ​ ​ 2025 ​ ​ 2024 ​ ​ 2023 ​ Interest ​ 5.59 % ​ 5.42 % ​ 5.11 % Fees ​ 0.10 ​ ​ 0.08 ​ ​ 0.10 ​ Accretion ​ 0.04 ​ ​ — ​ ​ — ​ Yield on Loans ​ 5.73 % ​ 5.50 % ​ 5.21 % Interest Expense.
Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, for the year ended 57 Table of Contents December 31, 2024 was 2.19%, a 15 basis point decline from 2.34% for the year ended December 31, 2023.
Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and purchase accounting accretion attributable to the acquisition of FMCB, for the year ended December 31, 2025 was 2.50%, a 31 basis point increase from 2.19% for the year ended December 31, 2024.
Total on- and off-balance sheet liquidity was $2.30 billion as of December 31, 2024, compared to $2.23 billion at December 31, 2023. 74 Table of Contents The following tables present a summary of primary and secondary liquidity levels as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ Primary Liquidity—On-Balance Sheet December 31, 2024 December 31, 2023 (dollars in thousands) ​ ​ ​ ​ ​ ​ Cash and Cash Equivalents ​ $ 188,884 ​ $ 96,594 ​ Securities Available for Sale ​ 768,247 ​ 604,104 ​ Less: Pledged Securities ​ ​ (289,903) ​ ​ (170,727) ​ Total Primary Liquidity ​ $ 667,228 ​ $ 529,971 ​ Ratio of Primary Liquidity to Total Deposits ​ 16.3 % 14.3 % ​ ​ ​ ​ ​ ​ ​ ​ Secondary Liquidity—Off-Balance Sheet Borrowing Capacity ​ ​ ​ ​ ​ ​ ​ Net Secured Borrowing Capacity with the FHLB ​ $ 483,245 ​ $ 498,736 ​ Net Secured Borrowing Capacity with the Federal Reserve Bank ​ 925,798 ​ 979,448 ​ Unsecured Borrowing Capacity with Correspondent Lenders ​ 200,000 ​ 200,000 ​ Secured Borrowing Capacity with Correspondent Lender ​ ​ 19,855 ​ ​ 26,250 ​ Total Secondary Liquidity ​ $ 1,628,898 ​ $ 1,704,434 ​ Total Primary and Secondary Liquidity ​ $ 2,296,126 ​ $ 2,234,405 ​ Ratio of Primary and Secondary Liquidity to Total Deposits ​ 56.2 % 60.2 % ​ During the year ended December 31, 2024, primary liquidity increased $137.3 million due to an increase in cash and cash equivalents of $92.3 million and an increase in securities available for sale of $164.1 million, offset partially by a $119.2 million increase in pledged securities.
Total on- and off-balance sheet liquidity was $2.51 billion as of December 31, 2025, compared to $2.30 billion at December 31, 2024. 72 Table of Contents The following tables present a summary of primary and secondary liquidity levels as of the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ Primary Liquidity—On-Balance Sheet ​ ​ ​ December 31, 2025 ​ ​ ​ December 31, 2024 (dollars in thousands) ​ ​ ​ ​ ​ ​ Cash and Cash Equivalents ​ $ 96,997 ​ $ 188,884 ​ Securities Available for Sale ​ 776,441 ​ 768,247 ​ Less: Pledged Securities ​ ​ (254,334) ​ ​ (289,903) ​ Total Primary Liquidity ​ $ 619,104 ​ $ 667,228 ​ Ratio of Primary Liquidity to Total Deposits ​ 14.3 % 16.3 % ​ ​ ​ ​ ​ ​ ​ ​ Secondary Liquidity—Off-Balance Sheet Borrowing Capacity ​ ​ ​ ​ ​ ​ ​ Net Secured Borrowing Capacity with the FHLB ​ $ 611,349 ​ $ 483,245 ​ Net Secured Borrowing Capacity with the Federal Reserve Bank ​ 1,026,415 ​ 925,798 ​ Unsecured Borrowing Capacity with Correspondent Lenders ​ 220,000 ​ 200,000 ​ Secured Borrowing Capacity with Correspondent Lender ​ ​ 33,605 ​ ​ 19,855 ​ Total Secondary Liquidity ​ $ 1,891,369 ​ $ 1,628,898 ​ Total Primary and Secondary Liquidity ​ $ 2,510,473 ​ $ 2,296,126 ​ Ratio of Primary and Secondary Liquidity to Total Deposits ​ 58.1 % 56.2 % ​ During the year ended December 31, 2025, primary liquidity decreased $48.1 million due to a decrease in cash and cash equivalents of $91.9 million, offset partially by a $35.6 million decrease in pledged securities and an increase in securities available for sale of $8.2 million.
The growth in deposits was primarily due to an increase in interest bearing transaction deposits and the addition of $225.7 million deposits from the FMCB transaction, offset partially by a decrease in brokered deposits. The Company relies on increasing the deposit base to fund loans and other asset growth.
Growth in deposits was primarily due to an increase in noninterest bearing transaction deposits and savings and money market accounts, offset partially by a decrease in time deposits and br okered deposits. The Company relies on increasing the deposit base to fund loans and other asset growth.
The increase was primarily due to increases in customer service fees, bank-owned life insurance income and FHLB prepayment income, offset partially by lower swap fees and other income. ​ 61 Table of Contents The following table presents the major components of noninterest income for the year ended December 31, 2024, compared to the year ended December 31, 2023, and for the year ended December 31, 2023, compared to the year ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ December 31, ​ Increase/ (dollars in thousands) 2024 2023 (Decrease) 2023 2022 (Decrease) Noninterest Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer Service Fees ​ $ 1,475 ​ $ 1,455 ​ $ 20 ​ $ 1,455 ​ $ 1,236 ​ $ 219 Net Gain (Loss) on Sales of Securities ​ ​ 385 ​ ​ (33) ​ ​ 418 ​ ​ (33) ​ ​ 82 ​ ​ (115) Net Gain on Sales of Foreclosed Assets ​ ​ 62 ​ ​ — ​ ​ 62 ​ ​ ​ ​ ​ ​ ​ ​ ​ Letter of Credit Fees ​ ​ 1,976 ​ ​ 1,746 ​ ​ 230 ​ ​ 1,746 ​ ​ 1,592 ​ ​ 154 Debit Card Interchange Fees ​ ​ 593 ​ ​ 595 ​ ​ (2) ​ ​ 595 ​ ​ 586 ​ ​ 9 Swap Fees ​ ​ 547 ​ ​ — ​ ​ 547 ​ ​ — ​ ​ 557 ​ ​ (557) Bank-Owned Life Insurance ​ ​ 1,327 ​ ​ 992 ​ ​ 335 ​ ​ 992 ​ ​ 762 ​ ​ 230 FHLB Prepayment Income ​ ​ — ​ ​ 792 ​ ​ (792) ​ ​ 792 ​ ​ — ​ ​ 792 Other Income ​ ​ 1,003 ​ ​ 946 ​ ​ 57 ​ ​ 946 ​ ​ 1,517 ​ ​ (571) Totals ​ $ 7,368 ​ $ 6,493 ​ $ 875 ​ $ 6,493 ​ $ 6,332 ​ $ 161 ​ Noninterest Expense 2024 Compared to 2023 Noninterest expense totaled $63.3 million for the year ended December 31, 2024, a $4.0 million, or 6.7%, increase from $59.3 million for the year ended December 31, 2023.
The following table presents the major components of noninterest income for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ December 31, ​ Increase/ (dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ (Decrease) ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ (Decrease) Noninterest Income: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Customer Service Fees ​ $ 2,013 ​ $ 1,475 ​ $ 538 ​ $ 1,475 ​ $ 1,455 ​ $ 20 Net Gain (Loss) on Sales of Securities ​ ​ 614 ​ ​ 385 ​ ​ 229 ​ ​ 385 ​ ​ (33) ​ ​ 418 Net Gain on Sales of Foreclosed Assets ​ ​ — ​ ​ 62 ​ ​ (62) ​ ​ 62 ​ ​ — ​ ​ 62 Letter of Credit Fees ​ ​ 1,829 ​ ​ 1,976 ​ ​ (147) ​ ​ 1,976 ​ ​ 1,746 ​ ​ 230 Debit Card Interchange Fees ​ ​ 640 ​ ​ 593 ​ ​ 47 ​ ​ 593 ​ ​ 595 ​ ​ (2) Swap Fees ​ ​ 1,631 ​ ​ 547 ​ ​ 1,084 ​ ​ 547 ​ ​ — ​ ​ 547 Bank-Owned Life Insurance ​ ​ 1,661 ​ ​ 1,327 ​ ​ 334 ​ ​ 1,327 ​ ​ 992 ​ ​ 335 Investment Advisory Fees ​ ​ 973 ​ ​ — ​ ​ 973 ​ ​ — ​ ​ — ​ ​ — FHLB Prepayment Income ​ ​ 301 ​ ​ — ​ ​ 301 ​ ​ — ​ ​ 792 ​ ​ (792) Other Income ​ ​ 1,253 ​ ​ 1,003 ​ ​ 250 ​ ​ 1,003 ​ ​ 946 ​ ​ 57 Totals ​ $ 10,915 ​ $ 7,368 ​ $ 3,547 ​ $ 7,368 ​ $ 6,493 ​ $ 875 ​ Noninterest Expense Noninterest expense totaled $77.3 million for the year ended December 31, 2025, a $14.0 million, or 22.1%, increase compared to $63.3 million for the year ended December 31, 2024.
Interest income on the investment securities portfolio on a fully-tax equivalent basis increased $7.7 million, or 29.2%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to a $92.8 million, or 15.3%, increase in average balances between the two periods and higher rates earned on securities.
The $5.3 million increase in total interest income on the investment securities portfolio was primarily due to a $101.9 million, or 14.6%, increase in average balances between the two periods. Interest income on loans, on a fully-tax equivalent basis, for the year ended December 31, 2025 was $234.2 million, compared to $205.6 million for the year ended December 31, 2024.
These qualitative factor adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk. Due to the subjective nature of these estimates the various components of the calculation require significant management judgment and certain assumptions are highly subjective.
These qualitative factor adjustments may increase or decrease management's estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk.
Interest income on loans, on a fully-tax equivalent basis, for the year ended December 31, 2024 was $205.6 million, compared to $192.7 million for the year ended December 31, 2023. The $13.0 million, or 6.7%, increase was primarily due to loan growth and the repricing of the loan portfolio in the higher interest rate environment.
The $28.5 million, or 13.9%, increase was primarily due to loan growth and the repricing of the loan portfolio in the higher interest rate environment. The aggregate loan yield, on a fully-tax equivalent basis, increased to 5.73% for the year ended December 31, 2025, which was a 23 basis point increase from 5.50% for the year ended December 31, 2024.
The Company had 290 full-time equivalent employees at December 31, 2024, compared to 255 employees at December 31, 2023. The increase during the year was largely driven by the addition of 25 new employees from the acquisition of FMCB. Efficiency Ratio.
The Company had 322 full-time equivalent employees at December 31, 2025, compared to 290 employees at December 31, 2024. The increase during the year was largely driven by the hiring of key talent in roles across the organization. Efficiency Ratio.
As of December 31, 2024, over 80% of the Bank’s real estate loan balances were secured by properties located in the Twin Cities MSA. 65 Table of Contents The following table provides a breakdown of CRE nonowner occupied loans by collateral types as of December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ December 31, 2023 ​ ​ ​ ​ ​ ​ Percent of ​ Percent of ​ ​ ​ ​ Percent of ​ Percent of ​ ​ ​ ​ ​ ​ CRE Nonowner ​ Total Loan ​ ​ ​ ​ ​ CRE Nonowner ​ Total Loan ​ (dollars in thousands) ​ Balance ​ Occupied Portfolio ​ Portfolio ​ ​ Balance ​ Occupied Portfolio ​ Portfolio ​ Collateral Type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Industrial ​ $ 285,594 ​ 26.4 % 7.4 % ​ $ 247,569 ​ 25.1 % 6.6 % Office ​ ​ 191,638 ​ 17.7 ​ 5.0 ​ ​ ​ 194,359 ​ 19.7 ​ 5.2 ​ Retail ​ ​ 172,530 ​ 15.9 ​ 4.5 ​ ​ ​ 151,949 ​ 15.4 ​ 4.1 ​ Nursing/Assisted Living ​ ​ 111,705 ​ 10.3 ​ 2.9 ​ ​ ​ 136,192 ​ 13.8 ​ 3.7 ​ Mini Storage Facility ​ ​ 110,486 ​ 10.2 ​ 2.9 ​ ​ ​ 92,527 ​ 9.4 ​ 2.5 ​ Medical Office ​ ​ 108,452 ​ 10.0 ​ 2.8 ​ ​ ​ 88,719 ​ 9.0 ​ 2.4 ​ Other ​ ​ 102,703 ​ 9.5 ​ 2.5 ​ ​ ​ 75,991 ​ 7.6 ​ 2.0 ​ Total CRE Nonowner Occupied ​ $ 1,083,108 ​ 100.0 % 28.0 % ​ $ 987,306 ​ 100.0 % 26.5 % ​ The following tables present time to contractual maturity and sensitivity to interest rate changes for the loan portfolio at December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ Due in One Year More Than One More Than Five ​ After (dollars in thousands) ​ or Less ​ Year to Five Years ​ Years to Fifteen Years ​ Fifteen Years Commercial ​ $ 170,588 ​ $ 248,695 ​ $ 75,467 ​ $ 2,912 Leases ​ ​ 4,998 ​ ​ 38,641 ​ ​ 652 ​ ​ — Construction and Land Development ​ 53,373 ​ 42,002 ​ 1,880 ​ — 1-4 Family Construction ​ ​ 38,996 ​ ​ 2,764 ​ ​ 201 ​ ​ — Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 74,914 ​ 297,516 ​ 76,647 ​ 25,306 Multifamily ​ 206,913 ​ 637,012 ​ 513,194 ​ 68,491 CRE Owner Occupied ​ 4,704 ​ 112,223 ​ 69,742 ​ 4,579 CRE Nonowner Occupied ​ 264,947 ​ 602,380 ​ 214,971 ​ 810 Total Real Estate Mortgage Loans ​ 551,478 ​ 1,649,131 ​ 874,554 ​ 99,186 Consumer and Other ​ 8,813 ​ ​ 3,776 ​ ​ 174 ​ ​ 233 Total Loans, Gross ​ $ 828,246 ​ $ 1,985,009 ​ $ 952,928 ​ $ 102,331 Interest Rate Sensitivity: ​ ​ ​ ​ ​ Fixed Interest Rates ​ $ 580,854 ​ $ 1,622,161 ​ $ 475,264 ​ $ 32,271 Floating or Adjustable Rates ​ 247,392 ​ 362,848 ​ 477,664 ​ 70,060 Total Loans, Gross ​ $ 828,246 ​ $ 1,985,009 ​ $ 952,928 ​ $ 102,331 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2023 ​ Due in One Year More Than One More Than Five ​ After (dollars in thousands) ​ or Less ​ Year to Five Years ​ Years to Fifteen Years ​ Fifteen Years Commercial ​ $ 157,047 ​ $ 206,460 ​ $ 96,826 ​ $ 3,728 Construction and Land Development ​ 99,183 ​ 93,013 ​ 40,608 ​ — 1-4 Family Construction ​ ​ 46,601 ​ ​ 9,476 ​ ​ 9,010 ​ ​ — Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 59,962 ​ 262,468 ​ 79,320 ​ 646 Multifamily ​ 242,291 ​ 482,380 ​ 576,348 ​ 87,522 CRE Owner Occupied ​ 8,271 ​ 83,280 ​ 84,232 ​ — CRE Nonowner Occupied ​ 204,297 ​ 503,196 ​ 279,813 ​ — Total Real Estate Mortgage Loans ​ 514,821 ​ 1,331,324 ​ 1,019,713 ​ 88,168 Consumer and Other ​ 2,568 ​ ​ 5,533 ​ ​ — ​ ​ 203 Total Loans, Gross ​ $ 820,220 ​ $ 1,645,806 ​ $ 1,166,157 ​ $ 92,099 Interest Rate Sensitivity: ​ ​ ​ ​ ​ Fixed Interest Rates ​ $ 502,454 ​ $ 1,414,656 ​ $ 673,563 ​ $ 26,172 Floating or Adjustable Rates ​ 317,766 ​ 231,150 ​ 492,594 ​ 65,927 Total Loans, Gross ​ $ 820,220 ​ $ 1,645,806 ​ $ 1,166,157 ​ $ 92,099 ​ ​ Asset Quality The Company emphasizes credit quality in the originating and monitoring of the loan portfolio, and success in underwriting is measured by the levels of classified and nonperforming assets and net charge-offs.
The following table provides a breakdown of CRE nonowner occupied loans by collateral types as of December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ December 31, 2024 ​ ​ ​ ​ ​ ​ Percent of ​ Percent of ​ ​ ​ ​ Percent of ​ Percent of ​ ​ ​ ​ ​ ​ CRE Nonowner ​ Total Loan ​ ​ ​ ​ ​ CRE Nonowner ​ Total Loan ​ (dollars in thousands) ​ Balance ​ Occupied Portfolio ​ Portfolio ​ ​ Balance ​ Occupied Portfolio ​ Portfolio ​ Collateral Type: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Industrial ​ $ 320,107 ​ 27.5 % 7.4 % ​ $ 285,594 ​ 26.4 % 7.4 % Office ​ ​ 212,926 ​ 18.3 ​ 4.9 ​ ​ ​ 191,638 ​ 17.7 ​ 5.0 ​ Retail ​ ​ 202,904 ​ 17.4 ​ 4.7 ​ ​ ​ 172,530 ​ 15.9 ​ 4.5 ​ Nursing/Assisted Living ​ ​ 119,738 ​ 10.3 ​ 2.8 ​ ​ ​ 111,705 ​ 10.3 ​ 2.9 ​ Mini Storage Facility ​ ​ 109,324 ​ 9.4 ​ 2.5 ​ ​ ​ 110,486 ​ 10.2 ​ 2.9 ​ Medical Office ​ ​ 65,527 ​ 5.6 ​ 1.5 ​ ​ ​ 108,452 ​ 10.0 ​ 2.8 ​ Other ​ ​ 134,578 ​ 11.5 ​ 3.2 ​ ​ ​ 102,703 ​ 9.5 ​ 2.5 ​ Total CRE Nonowner Occupied ​ $ 1,165,104 ​ 100.0 % 27.0 % ​ $ 1,083,108 ​ 100.0 % 28.0 % 63 Table of Contents ​ The following tables present time to contractual maturity and sensitivity to interest rate changes for the loan portfolio at December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2025 ​ ​ ​ ​ Due in One Year ​ ​ ​ More Than One ​ ​ ​ More Than Five ​ After (dollars in thousands) ​ or Less ​ Year to Five Years ​ Years to Fifteen Years ​ Fifteen Years Commercial ​ $ 231,121 ​ $ 237,328 ​ $ 75,966 ​ $ 2,830 Leases ​ ​ 4,514 ​ ​ 38,351 ​ ​ 542 ​ ​ — Construction and Land Development ​ 123,801 ​ 82,397 ​ 9,965 ​ — 1-4 Family Construction ​ ​ 37,784 ​ ​ 7,171 ​ ​ 197 ​ ​ — Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 105,250 ​ 308,347 ​ 59,085 ​ 23,460 Multifamily ​ 202,007 ​ 891,088 ​ 408,779 ​ 85,464 CRE Owner Occupied ​ 13,483 ​ 123,336 ​ 50,239 ​ 2,696 CRE Nonowner Occupied ​ 274,244 ​ 693,610 ​ 196,828 ​ 422 Total Real Estate Mortgage Loans ​ 594,984 ​ 2,016,381 ​ 714,931 ​ 112,042 Consumer and Other ​ 9,594 ​ ​ 9,149 ​ ​ 156 ​ ​ 313 Total Loans, Gross ​ $ 1,001,798 ​ $ 2,390,777 ​ $ 801,757 ​ $ 115,185 Interest Rate Sensitivity: ​ ​ ​ ​ ​ ​ ​ ​ Fixed Interest Rates ​ $ 636,867 ​ $ 1,772,310 ​ $ 389,099 ​ $ 23,773 Floating or Adjustable Rates ​ 364,931 ​ 618,467 ​ 412,658 ​ 91,412 Total Loans, Gross ​ $ 1,001,798 ​ $ 2,390,777 ​ $ 801,757 ​ $ 115,185 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of December 31, 2024 ​ ​ ​ ​ Due in One Year ​ ​ ​ More Than One ​ ​ ​ More Than Five ​ After (dollars in thousands) ​ or Less ​ Year to Five Years ​ Years to Fifteen Years ​ Fifteen Years Commercial ​ $ 170,588 ​ $ 248,695 ​ $ 75,467 ​ $ 2,912 Leases ​ ​ 4,998 ​ ​ 38,641 ​ ​ 652 ​ ​ — Construction and Land Development ​ 53,373 ​ 42,002 ​ 1,880 ​ — 1-4 Family Construction ​ ​ 38,996 ​ ​ 2,764 ​ ​ 201 ​ ​ — Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ 74,914 ​ 297,516 ​ 76,647 ​ 25,306 Multifamily ​ 206,913 ​ 637,012 ​ 513,194 ​ 68,491 CRE Owner Occupied ​ 4,704 ​ 112,223 ​ 69,742 ​ 4,579 CRE Nonowner Occupied ​ 264,947 ​ 602,380 ​ 214,971 ​ 810 Total Real Estate Mortgage Loans ​ 551,478 ​ 1,649,131 ​ 874,554 ​ 99,186 Consumer and Other ​ 8,813 ​ ​ 3,776 ​ ​ 174 ​ ​ 233 Total Loans, Gross ​ $ 828,246 ​ $ 1,985,009 ​ $ 952,928 ​ $ 102,331 Interest Rate Sensitivity: ​ ​ ​ ​ ​ ​ ​ ​ Fixed Interest Rates ​ $ 580,854 ​ $ 1,622,161 ​ $ 475,264 ​ $ 32,271 Floating or Adjustable Rates ​ 247,392 ​ 362,848 ​ 477,664 ​ 70,060 Total Loans, Gross ​ $ 828,246 ​ $ 1,985,009 ​ $ 952,928 ​ $ 102,331 ​ ​ Asset Quality The Company emphasizes credit quality in the originating and monitoring of the loan portfolio, and success in underwriting is measured by the levels of classified and nonperforming assets and net charge-offs.
Shares were repurchased during this period at a weighted average price of $11.60 for a total of $5.2 million. All shares repurchased under the stock repurchase program were converted to authorized but unissued shares.
During the year ended December 31, 2025 , the Company repurchased 167,709 shares of its common stock, representing 0.6% of the Company’s outstanding shares. Shares were repurchased during this period at a weighted average price of $13.07 for a total of $2.2 million. All shares repurchased under the stock repurchase program were converted to authorized but unissued shares.
(4) Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due plus foreclosed assets. (5) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000. ​ Overview The Company is a financial holding company headquartered in St. Louis Park, Minnesota.
(4) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000. ​ Overview The Company is a financial holding company headquartered in St. Louis Park, Minnesota. The principal sources of funds for loans and investments are transaction, savings, time, and other deposits, and short-term and long-term borrowings.
Fluctuations in effective tax rates reflect the differences in the inclusion or deductibility of certain income and expenses for income tax purposes and the recognition of tax credits.
Fluctuations in effective tax rates reflect the differences in the inclusion or deductibility of certain income and expenses for income tax purposes and the recognition of tax credits. The Company’s future effective income tax rate will fluctuate based on the mix of taxable and tax-free investments and loans, the recognition and availability of tax credit investments, and overall taxable income.
The following table presents the major components of noninterest expense for the year ended December 31, 2024, compared to the year ended December 31, 2023, and for the year ended December 31, 2023, compared to the year ended December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ December 31, ​ Increase/ (dollars in thousands) 2024 2023 (Decrease) 2023 2022 (Decrease) Noninterest Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and Employee Benefits ​ $ 39,564 ​ $ 36,538 ​ $ 3,026 ​ $ 36,538 ​ $ 36,941 ​ $ (403) Occupancy and Equipment ​ ​ 4,399 ​ ​ 4,447 ​ ​ (48) ​ ​ 4,447 ​ ​ 4,390 ​ ​ 57 FDIC Insurance Assessment ​ ​ 2,959 ​ ​ 3,690 ​ ​ (731) ​ ​ 3,690 ​ ​ 1,365 ​ ​ 2,325 Data Processing ​ ​ 1,697 ​ ​ 1,574 ​ ​ 123 ​ ​ 1,574 ​ ​ 1,396 ​ ​ 178 Professional and Consulting Fees ​ ​ 3,879 ​ ​ 3,081 ​ ​ 798 ​ ​ 3,081 ​ ​ 2,664 ​ ​ 417 Derivative Collateral Fees ​ ​ 1,821 ​ ​ 1,900 ​ ​ (79) ​ ​ 1,900 ​ ​ 687 ​ ​ 1,213 Information Technology and Telecommunications ​ ​ 3,325 ​ ​ 2,889 ​ ​ 436 ​ ​ 2,889 ​ ​ 2,495 ​ ​ 394 Marketing and Advertising ​ ​ 1,485 ​ ​ 1,129 ​ ​ 356 ​ ​ 1,129 ​ ​ 2,032 ​ ​ (903) Intangible Asset Amortization ​ ​ 78 ​ ​ 100 ​ ​ (22) ​ ​ 100 ​ ​ 191 ​ ​ (91) Amortization of Tax Credit Investments ​ ​ — ​ ​ — ​ ​ — ​ ​ — ​ ​ 408 ​ ​ (408) Other Expense ​ ​ 4,093 ​ ​ 3,972 ​ ​ 121 ​ ​ 3,972 ​ ​ 4,051 ​ ​ (79) Totals ​ $ 63,300 ​ $ 59,320 ​ $ 3,980 ​ $ 59,320 ​ $ 56,620 ​ $ 2,700 ​ Income Tax Expense The provision for income taxes includes both federal and state taxes.
The Company’s efficiency ratio has remained consistently below the industry median due in part to its “branch-light” model. 60 Table of Contents The following table presents the major components of noninterest expense for the periods indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year Ended ​ ​ ​ ​ Year Ended ​ ​ ​ ​ ​ December 31, ​ Increase/ ​ December 31, ​ Increase/ (dollars in thousands) ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ (Decrease) ​ ​ ​ 2024 ​ ​ ​ 2023 ​ ​ ​ (Decrease) Noninterest Expense: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Salaries and Employee Benefits ​ $ 47,397 ​ $ 39,564 ​ $ 7,833 ​ $ 39,564 ​ $ 36,538 ​ $ 3,026 Occupancy and Equipment ​ ​ 4,945 ​ ​ 4,399 ​ ​ 546 ​ ​ 4,399 ​ ​ 4,447 ​ ​ (48) FDIC Insurance Assessment ​ ​ 2,745 ​ ​ 2,959 ​ ​ (214) ​ ​ 2,959 ​ ​ 3,690 ​ ​ (731) Data Processing ​ ​ 2,519 ​ ​ 1,697 ​ ​ 822 ​ ​ 1,697 ​ ​ 1,574 ​ ​ 123 Professional and Consulting Fees ​ ​ 4,769 ​ ​ 3,879 ​ ​ 890 ​ ​ 3,879 ​ ​ 3,081 ​ ​ 798 Derivative Collateral Fees ​ ​ 1,369 ​ ​ 1,821 ​ ​ (452) ​ ​ 1,821 ​ ​ 1,900 ​ ​ (79) Information Technology and Telecommunications ​ ​ 3,891 ​ ​ 3,325 ​ ​ 566 ​ ​ 3,325 ​ ​ 2,889 ​ ​ 436 Marketing and Advertising ​ ​ 2,138 ​ ​ 1,485 ​ ​ 653 ​ ​ 1,485 ​ ​ 1,129 ​ ​ 356 Intangible Asset Amortization ​ ​ 921 ​ ​ 78 ​ ​ 843 ​ ​ 78 ​ ​ 100 ​ ​ (22) Other Expense ​ ​ 6,577 ​ ​ 4,093 ​ ​ 2,484 ​ ​ 4,093 ​ ​ 3,972 ​ ​ 121 Totals ​ $ 77,271 ​ $ 63,300 ​ $ 13,971 ​ $ 63,300 ​ $ 59,320 ​ $ 3,980 ​ Income Tax Expense The provision for income taxes includes both federal and state taxes.
The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses. The Company’s simple, efficient business model of providing responsive support and unconventional experiences to clients continues to be the underlying principle that drives the Company’s profitable growth.
The Company’s simple, efficient business model of providing responsive support and simple solutions to clients continues to be the underlying principle that drives the Company’s profitable growth.
The Company’s and the Bank’s actual capital amounts and ratios are as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Required ​ For Capital Adequacy ​ To be Well Capitalized ​ ​ ​ ​ ​ ​ ​ ​ For Capital Adequacy ​ Purposes Plus Capital ​ Under Prompt Corrective ​ ​ ​ Actual ​ Purposes ​ Conservation Buffer ​ Action Regulations ​ (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio ​ Amount Ratio ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company (Consolidated): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 585,966 ​ 13.76 % $ 340,581 ​ 8.00 % $ 447,013 ​ 10.50 % ​ N/A ​ N/A ​ Tier 1 Risk-based Capital ​ ​ 453,049 ​ 10.64 ​ ​ 255,436 ​ 6.00 ​ ​ 361,867 ​ 8.50 ​ ​ N/A ​ N/A ​ Common Equity Tier 1 Capital ​ ​ 386,535 ​ 9.08 ​ ​ 191,577 ​ 4.50 ​ ​ 298,008 ​ 7.00 ​ ​ N/A ​ N/A ​ Tier 1 Leverage Ratio ​ ​ 453,049 ​ 9.44 ​ ​ 191,878 ​ 4.00 ​ ​ 191,878 ​ 4.00 ​ ​ N/A ​ N/A ​ Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 573,158 ​ 13.49 % $ 340,003 ​ 8.00 % $ 446,254 ​ 10.50 % $ 425,004 ​ 10.00 % Tier 1 Risk-based Capital ​ ​ 520,000 ​ 12.24 ​ ​ 255,002 ​ 6.00 ​ ​ 361,253 ​ 8.50 ​ ​ 340,003 ​ 8.00 ​ Common Equity Tier 1 Capital ​ ​ 520,000 ​ 12.24 ​ ​ 191,252 ​ 4.50 ​ ​ 297,503 ​ 7.00 ​ ​ 276,253 ​ 6.50 ​ Tier 1 Leverage Ratio ​ ​ 520,000 ​ 10.86 ​ ​ 191,593 ​ 4.00 ​ ​ 191,593 ​ 4.00 ​ ​ 239,491 ​ 5.00 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Required ​ For Capital Adequacy ​ To be Well Capitalized ​ ​ ​ ​ ​ ​ ​ ​ For Capital Adequacy ​ Purposes Plus Capital ​ Under Prompt Corrective ​ ​ ​ Actual ​ Purposes ​ Conservation Buffer ​ Action Regulations ​ (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio ​ Amount Ratio ​ December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company (Consolidated): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 570,770 ​ 13.97 % $ 326,872 ​ 8.00 % $ 429,019 ​ 10.50 % ​ N/A ​ N/A ​ Tier 1 Risk-based Capital ​ ​ 440,947 ​ 10.79 ​ ​ 245,154 ​ 6.00 ​ ​ 347,301 ​ 8.50 ​ ​ N/A ​ N/A ​ Common Equity Tier 1 Capital ​ ​ 374,433 ​ 9.16 ​ ​ 183,865 ​ 4.50 ​ ​ 286,013 ​ 7.00 ​ ​ N/A ​ N/A ​ Tier 1 Leverage Ratio ​ ​ 440,947 ​ 9.57 ​ ​ 184,383 ​ 4.00 ​ ​ 184,383 ​ 4.00 ​ ​ N/A ​ N/A ​ Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 554,269 ​ 13.58 % $ 326,528 ​ 8.00 % $ 428,568 ​ 10.50 % $ 408,160 ​ 10.00 % Tier 1 Risk-based Capital ​ ​ 503,787 ​ 12.34 ​ ​ 244,896 ​ 6.00 ​ ​ 346,936 ​ 8.50 ​ ​ 326,528 ​ 8.00 ​ Common Equity Tier 1 Capital ​ ​ 503,787 ​ 12.34 ​ ​ 183,672 ​ 4.50 ​ ​ 285,712 ​ 7.00 ​ ​ 265,304 ​ 6.50 ​ Tier 1 Leverage Ratio ​ ​ 503,787 ​ 10.95 ​ ​ 184,037 ​ 4.00 ​ ​ 184,037 ​ 4.00 ​ ​ 230,047 ​ 5.00 ​ ​ The Company and the Bank are subject to the rules of the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act.
The Company’s and the Bank’s actual capital amounts and ratios are as of the dates indicated. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Required ​ For Capital Adequacy ​ To be Well Capitalized ​ ​ ​ ​ ​ ​ ​ ​ For Capital Adequacy ​ Purposes Plus Capital ​ Under Prompt Corrective ​ ​ ​ Actual ​ Purposes ​ Conservation Buffer ​ Action Regulations ​ (dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Ratio ​ ​ ​ Amount ​ ​ ​ Ratio ​ ​ ​ Amount ​ ​ ​ Ratio ​ Amount ​ ​ ​ Ratio ​ December 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company (Consolidated): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 667,814 ​ 14.12 % $ 378,356 ​ 8.00 % $ 496,593 ​ 10.50 % ​ N/A ​ N/A ​ Tier 1 Risk-based Capital ​ ​ 500,002 ​ 10.57 ​ ​ 283,767 ​ 6.00 ​ ​ 402,004 ​ 8.50 ​ ​ N/A ​ N/A ​ Common Equity Tier 1 Capital ​ ​ 433,488 ​ 9.17 ​ ​ 212,825 ​ 4.50 ​ ​ 331,062 ​ 7.00 ​ ​ N/A ​ N/A ​ Tier 1 Leverage Ratio ​ ​ 500,002 ​ 9.20 ​ ​ 217,505 ​ 4.00 ​ ​ 217,505 ​ 4.00 ​ ​ N/A ​ N/A ​ Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 636,973 ​ 13.49 % $ 377,687 ​ 8.00 % $ 495,715 ​ 10.50 % $ 472,109 ​ 10.00 % Tier 1 Risk-based Capital ​ ​ 577,942 ​ 12.24 ​ ​ 283,266 ​ 6.00 ​ ​ 401,293 ​ 8.50 ​ ​ 377,687 ​ 8.00 ​ Common Equity Tier 1 Capital ​ ​ 577,942 ​ 12.24 ​ ​ 212,449 ​ 4.50 ​ ​ 330,477 ​ 7.00 ​ ​ 306,871 ​ 6.50 ​ Tier 1 Leverage Ratio ​ ​ 577,942 ​ 10.65 ​ ​ 217,116 ​ 4.00 ​ ​ 217,116 ​ 4.00 ​ ​ 271,395 ​ 5.00 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Minimum Required ​ For Capital Adequacy ​ To be Well Capitalized ​ ​ ​ ​ ​ ​ ​ ​ For Capital Adequacy ​ Purposes Plus Capital ​ Under Prompt Corrective ​ ​ ​ Actual ​ Purposes ​ Conservation Buffer ​ Action Regulations ​ (dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Ratio ​ ​ ​ Amount ​ ​ ​ Ratio ​ ​ ​ Amount ​ ​ ​ Ratio ​ Amount ​ ​ ​ Ratio ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Company (Consolidated): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 585,966 ​ 13.76 % $ 340,581 ​ 8.00 % $ 447,013 ​ 10.50 % ​ N/A ​ N/A ​ Tier 1 Risk-based Capital ​ ​ 453,049 ​ 10.64 ​ ​ 255,436 ​ 6.00 ​ ​ 361,867 ​ 8.50 ​ ​ N/A ​ N/A ​ Common Equity Tier 1 Capital ​ ​ 386,535 ​ 9.08 ​ ​ 191,577 ​ 4.50 ​ ​ 298,008 ​ 7.00 ​ ​ N/A ​ N/A ​ Tier 1 Leverage Ratio ​ ​ 453,049 ​ 9.44 ​ ​ 191,878 ​ 4.00 ​ ​ 191,878 ​ 4.00 ​ ​ N/A ​ N/A ​ Bank: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Risk-based Capital ​ $ 573,158 ​ 13.49 % $ 340,003 ​ 8.00 % $ 446,254 ​ 10.50 % $ 425,004 ​ 10.00 % Tier 1 Risk-based Capital ​ ​ 520,000 ​ 12.24 ​ ​ 255,002 ​ 6.00 ​ ​ 361,253 ​ 8.50 ​ ​ 340,003 ​ 8.00 ​ Common Equity Tier 1 Capital ​ ​ 520,000 ​ 12.24 ​ ​ 191,252 ​ 4.50 ​ ​ 297,503 ​ 7.00 ​ ​ 276,253 ​ 6.50 ​ Tier 1 Leverage Ratio ​ ​ 520,000 ​ 10.86 ​ ​ 191,593 ​ 4.00 ​ ​ 191,593 ​ 4.00 ​ ​ 239,491 ​ 5.00 ​ ​ The Company and the Bank are subject to stringent regulatory capital requirements and related Dodd-Frank Wall Street Reform and Consumer Protection Act regulations.
There are no loans, outside of those included in the tables above, that cause management to have serious doubts as to the ability of borrowers to comply with present repayment terms.
There are no loans, outside of those included in the tables above, that cause management to have serious doubts as to the ability of borrowers to comply with present repayment terms. Gross income that would have been recorded on nonaccrual loans during the years ended December 31, 2025 and 2024 was approximately $556,000 and $163,000, respectively.
Management believes that this measure is important to many investors in the marketplace because it measures the return on common equity, exclusive of the effects of preferred stock and intangible assets on earnings and capital. ● “Adjusted diluted earnings per common share” is defined as net income available to common shareholders excluding the impact of one-time merger-related expenses divided by diluted weighted average common shares outstanding.
Management believes that this measure is important to many investors in the marketplace because it measures the return on common equity, exclusive of the effects of preferred stock and intangible assets on earnings and capital. 74 Table of Contents ● “Adjusted Diluted Earnings per Common Share,” “Adjusted Return on Average Assets,” “Adjusted Return on Average Shareholders’ Equity,” and “Adjusted Return on Tangible Common Equity” are defined as ratios adjusted to exclude the impact of merger-related expenses, FHLB prepayment income, and all gains or losses on sales of securities.
The following table presents the dollar amount and percentage composition of the loan portfolio by category, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ December 31, 2023 ​ (dollars in thousands) Amount Percent Amount Percent Commercial ​ $ 497,662 ​ 12.9 % $ 464,061 ​ 12.4 % Leases ​ ​ 44,291 ​ 1.1 ​ ​ — ​ — ​ Construction and Land Development ​ ​ 97,255 ​ 2.5 ​ ​ 232,804 ​ 6.3 ​ 1-4 Family Construction ​ ​ 41,961 ​ 1.1 ​ ​ 65,087 ​ 1.8 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ ​ 474,383 ​ 12.3 ​ ​ 402,396 ​ 10.8 ​ Multifamily ​ ​ 1,425,610 ​ 36.9 ​ ​ 1,388,541 ​ 37.3 ​ CRE Owner Occupied ​ ​ 191,248 ​ 4.9 ​ ​ 175,783 ​ 4.7 ​ CRE Nonowner Occupied ​ ​ 1,083,108 ​ 28.0 ​ ​ 987,306 ​ 26.5 ​ Total Real Estate Mortgage Loans ​ 3,174,349 ​ 82.1 ​ 2,954,026 ​ 79.3 ​ Consumer and Other ​ ​ 12,996 ​ 0.3 ​ ​ 8,304 ​ 0.2 ​ Total Loans, Gross ​ 3,868,514 ​ 100.0 % 3,724,282 ​ 100.0 % Allowance for Credit Losses ​ ​ (52,277) ​ ​ ​ ​ (50,494) ​ ​ ​ Net Deferred Loan Fees ​ ​ (6,801) ​ ​ ​ ​ (6,573) ​ ​ ​ Total Loans, Net ​ $ 3,809,436 ​ ​ ​ $ 3,667,215 ​ ​ ​ ​ The Company primarily focuses on real estate mortgage lending, which constituted 82.1% of the portfolio as of December 31, 2024.
The Company’s loan growth was driven by the strong brand of the Bank in the Twin Cities market and the MSA-related market disruption resulting in client and banker acquisition opportunities, as well as favorable market conditions. 62 Table of Contents The following table presents the dollar amount and percentage composition of the loan portfolio by category, at the dates indicated: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ (dollars in thousands) ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Amount ​ ​ ​ Percent ​ ​ ​ Commercial ​ $ 547,245 ​ 12.7 % $ 497,662 ​ 12.9 % Leases ​ ​ 43,407 ​ 1.0 ​ ​ 44,291 ​ 1.1 ​ Construction and Land Development ​ ​ 216,163 ​ 5.0 ​ ​ 97,255 ​ 2.5 ​ 1-4 Family Construction ​ ​ 45,152 ​ 1.1 ​ ​ 41,961 ​ 1.1 ​ Real Estate Mortgage: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 1-4 Family Mortgage ​ ​ 496,142 ​ 11.5 ​ ​ 474,383 ​ 12.3 ​ Multifamily ​ ​ 1,587,338 ​ 36.8 ​ ​ 1,425,610 ​ 36.9 ​ CRE Owner Occupied ​ ​ 189,754 ​ 4.4 ​ ​ 191,248 ​ 4.9 ​ CRE Nonowner Occupied ​ ​ 1,165,104 ​ 27.0 ​ ​ 1,083,108 ​ 28.0 ​ Total Real Estate Mortgage Loans ​ 3,438,338 ​ 79.7 ​ 3,174,349 ​ 82.1 ​ Consumer and Other ​ ​ 19,212 ​ 0.5 ​ ​ 12,996 ​ 0.3 ​ Total Loans, Gross ​ 4,309,517 ​ 100.0 % 3,868,514 ​ 100.0 % Allowance for Credit Losses ​ ​ (56,443) ​ ​ ​ ​ (52,277) ​ ​ ​ Net Deferred Loan Fees ​ ​ (8,966) ​ ​ ​ ​ (6,801) ​ ​ ​ Total Loans, Net ​ $ 4,244,108 ​ ​ ​ $ 3,809,436 ​ ​ ​ ​ The Company primarily focuses on real estate mortgage lending, which constituted 79.7% of the portfolio as of December 31, 2025.
See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” for further details. (2) Ratio excludes the amortization of tax credit investments, debt prepayment fees and represents a non-GAAP financial measure. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” for further details. (3) Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” for further details. (2) Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%. (3) Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due plus foreclosed assets.
The decrease in net interest income was primarily due to growth and higher rates paid on deposits, offset partially by growth and higher earning asset yields in the higher interest rate environment.
The increase in net interest income was primarily due to higher cash and securities balances, growth and higher yields in the loan portfolio, lower rates paid on deposits, and purchase accounting accretion, offset partially by growth in deposit balances.
The principal sources of funds for loans and investments are transaction, savings, time, and other deposits, and short-term and long-term borrowings. The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and service charges.
The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and service charges. The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses.
Adjusted earnings per diluted common share (a non-GAAP financial measure) were $1.05 for the year ended December 31, 2024, compared to $1.27 for the year ended December 31, 2023. Return on average assets (“ROA”) was 0.70% and 0.89% for the years ended December 31, 2024 and 2023, respectively.
Adjusted earnings per diluted common share (a non-GAAP financial measure) were $1.52 for the year ended December 31, 2025, compared to $1.04 for the year ended December 31, 2024.
The $23.2 million, or 10.4%, increase in total interest income on a tax-equivalent basis was primarily due to growth and higher yields in the securities and loan portfolios.
Total interest income on a tax-equivalent basis was $283.7 million for the year ended December 31, 2025, compared to $247.1 million for the year ended December 31, 2024. The $36.6 million, or 14.8%, increase in total interest income on a tax-equivalent basis was primarily due to growth and higher yields in the loan and securities portfolios.
Capital Total shareholders’ equity at December 31, 2024 was $457.9 million, an increase of $32.4 million, or 7.6%, over shareholders’ equity of $425.5 million at December 31, 2023, primarily due to net income retained, a decrease in unrealized losses in the securities portfolio, and an increase in unrealized gains in the derivatives portfolio, offset partially by preferred stock dividends and stock repurchases.
The increase was primarily due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio, preferred stock dividends, and stock repurchases.
The $26.5 million, or 22.6%, increase was primarily due to growth and upward repricing of the deposit portfolio in the higher interest rate environment. 58 Table of Contents Interest expense on deposits was $128.8 million for the year ended December 31, 2024, compared to $96.0 million for the year ended December 31, 2023.
Interest expense on deposits was $131.4 million for the year ended December 31, 2025, compared to $128.8 million for the year ended December 31, 2024. The $2.6 million, or 2.0%, increase in interest expense on deposits was primarily due to growth of the deposit portfolio, offset partially by lower rates paid on deposits.

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Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFinancial Statements and Supplementary Data ​ 82 ​ ​ ​ Reports of Independent Registered Public Accounting Firm (CliftonLarsonAllen LLP, Auditor Firm ID: 655) ​ 82 ​ ​ ​ Reports of Independent Registered Public Accounting Firm ( RSM US LLP , Auditor Firm ID: 49 ) ​ 83 ​ ​ ​
Biggest changeFinancial Statements and Supplementary Data ​ 80 ​ ​ ​ Reports of Independent Registered Public Accounting Firm ( RSM US LLP , Auditor Firm ID: 49 ) ​ 80 ​ ​ ​
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 51 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 80 ​ ​ ​ Item 8.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 51 ​ ​ ​ Item 7A. Quantitative and Qualitative Disclosures About Market Risk ​ 78 ​ ​ ​ Item 8.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeIn the 2023 rate environment, a downward shift of the yield curve of 400 basis points did not provide meaningful results and thus was not presented. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ December 31, 2024 ​ December 31, 2023 Change (basis points) ​ Forecasted ​ Percentage ​ Forecasted ​ Percentage in Interest Rates Net Interest ​ Change Net Interest ​ Change (12-Month Projection) ​ Income ​ from Base ​ Income ​ from Base +400 ​ $ 130,390 ​ (6.00) % ​ $ 118,597 ​ (2.39) % +300 ​ 132,605 ​ (4.40) ​ ​ 118,983 ​ (2.08) ​ +200 ​ 134,355 ​ (3.14) ​ ​ 119,395 ​ (1.74) ​ +100 ​ 136,411 ​ (1.66) ​ ​ 119,916 ​ (1.31) ​ 0 ​ 138,708 ​ — ​ ​ 121,504 ​ — ​ −100 ​ ​ 143,038 ​ 3.12 ​ ​ ​ 125,138 ​ 2.99 ​ −200 ​ ​ 147,997 ​ 6.70 ​ ​ ​ 128,643 ​ 5.87 ​ −300 ​ ​ 153,515 ​ 10.67 ​ ​ ​ 132,269 ​ 8.86 ​ −400 ​ ​ 158,778 ​ 14.47 ​ ​ ​ NM ​ NM ​ ​ The table above indicates that as of December 31, 2024, in the event of an immediate and sustained 400 basis point increase in interest rates, the Company would experience a 6.00% decrease in net interest income.
Biggest changeThe projections assume an immediate, parallel shift downward of the yield curve of 100, 200, 300, and 400 basis points and immediate, parallel shifts upward of the yield curve of 100, 200, 300 and 400 basis points. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (dollars in thousands) ​ December 31, 2025 ​ December 31, 2024 Change (basis points) ​ Forecasted ​ Percentage ​ Forecasted ​ Percentage in Interest Rates ​ ​ ​ Net Interest ​ Change ​ ​ ​ Net Interest ​ Change (12-Month Projection) ​ Income ​ from Base ​ Income ​ from Base +400 ​ $ 156,625 ​ (6.09) % ​ $ 130,390 ​ (6.00) % +300 ​ 159,606 ​ (4.30) ​ ​ 132,605 ​ (4.40) ​ +200 ​ 162,132 ​ (2.79) ​ ​ 134,355 ​ (3.14) ​ +100 ​ 164,454 ​ (1.40) ​ ​ 136,411 ​ (1.66) ​ 0 ​ 166,785 ​ — ​ ​ 138,708 ​ — ​ −100 ​ ​ 173,029 ​ 3.74 ​ ​ ​ 143,038 ​ 3.12 ​ −200 ​ ​ 182,394 ​ 9.36 ​ ​ ​ 147,997 ​ 6.70 ​ −300 ​ ​ 193,779 ​ 16.18 ​ ​ ​ 153,515 ​ 10.67 ​ −400 ​ ​ 199,357 ​ 19.53 ​ ​ ​ 158,778 ​ 14.47 ​ ​ The table above indicates that as of December 31, 2025, in the event of an immediate and sustained 400 basis point increase in interest rates, the Company would experience a 6.09% decrease in net interest income.
Finally, these simulation results do not contemplate all the actions that the Company may undertake in response to potential or actual changes in interest rates, such as changes to the Company’s loan, investment, deposit, or funding strategies. ​ 81 Table of Contents
Finally, these simulation results do not contemplate all the actions that the Company may undertake in response to potential or actual changes in interest rates, such as changes to the Company’s loan, investment, deposit, or funding strategies. ​ 79 Table of Contents
At December 31, 2024 and 2023, these cash flow hedges had a total notional amount of $303.0 million and $308.0 million, respectively. In the event that interest rates do not change in the manner anticipated, such transactions may adversely affect the Company’s results of operations.
At December 31, 2025 and 2024, these cash flow hedges had a total notional amount of $388.0 million and $303.0 million, respectively. In the event that interest rates do not change in the manner anticipated, such transactions may adversely affect the Company’s results of operations.
In the event of an immediate 400 basis point decrease in interest rates, the Company would experience an 14.47% increase in net interest income. The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted.
In the event of an immediate 400 basis point decrease in interest rates, the Company would experience a 19.53% increase in net interest income. The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted.
At December 31, 2024 and 2023, these fair value hedges had a total notional amount of $145.9 million and $0, respectively. Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company utilizes cash flow hedges to manage interest rate exposure for the brokered deposit and wholesale borrowing portfolios.
At December 31, 2025 and 2024, these fair value hedges had a total notional amount of $242.3 million and $145.9 million, respectively. Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company utilizes cash flow hedges to manage interest rate exposure for the brokered deposit and wholesale borrowing portfolios.
Because of the limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a forecast of the actual effect of a change in market interest rates on the results, but rather as a means to better plan and execute appropriate asset-liability management strategies and to manage interest rate risk. 80 Table of Contents Potential changes to the Company’s net interest income in hypothetical rising and declining rate scenarios calculated as of December 31, 2024 and 2023, are presented in the table below.
Because of the limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a 78 Table of Contents forecast of the actual effect of a change in market interest rates on the results, but rather as a means to better plan and execute appropriate asset-liability management strategies and to manage interest rate risk.
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The projections assume an immediate, parallel shift downward of the yield curve of 100, 200, 300, and 400 basis points and immediate, parallel shifts upward of the yield curve of 100, 200, 300 and 400 basis points.
Added
Potential changes to the Company’s net interest income in hypothetical rising and declining rate scenarios calculated as of December 31, 2025 and 2024, are presented in the table below.

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