Bridgewater Bancshares Inc

Previous wording

The following discussion explains the Company’s financial condition and results of operations as of and for the three and six months ended June 30, 2025. Annualized results for these interim periods may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission, or the SEC, on March 6, 2025.

Current wording

The following discussion explains the Company’s financial condition and results of operations as of and for the three and nine months ended September 30, 2025. Annualized results for these interim periods may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission, or the SEC, on March 6, 2025.

Previous wording

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. In addition, past results of operations are not necessarily indicative of future results. Any forward-looking statement made by us in this report is based only on information currently

Current wording

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. In addition, past results of operations are not necessarily indicative of

Previous wording

available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Current wording

future results. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Previous wording

acquisition of FMCB in an all-cash transaction. On the closing date, FMCB merged with and into Bridgewater Bank, with Bridgewater Bank as the surviving entity. The acquisition of FMCB aligns with and accelerates the Company’s strategic priorities, including its focus on continued growth within the Twin Cities market. The acquisition of FMCB added approximately $245.0 million of assets, $225.7 million of deposits, $117.1 million of loans and leases as of December 31, 2024, and two branch locations in Minnetonka, Minnesota. The acquisition also added an investment advisory business that offers nondeposit investment products through a third party arrangement. During the three and six months ended June 30, 2025, the Company incurred merger-related expenses of $540,000 and $1.1 million, respectively, related to the acquisition. The acquisition may impact comparability between periods.

Current wording

acquisition of FMCB in an all-cash transaction. On the closing date, FMCB merged with and into Bridgewater Bank, with Bridgewater Bank as the surviving entity. The acquisition of FMCB aligns with and accelerates the Company’s strategic priorities, including its focus on continued growth within the Twin Cities market. The acquisition of FMCB added approximately $245.0 million of assets, $225.7 million of deposits, $117.1 million of loans and leases as of December 31, 2024, and two branch locations in Minnetonka, Minnesota. The acquisition also added an investment advisory business that offers nondeposit investment products through a third party arrangement. During the three and nine months ended September 30, 2025, the Company incurred merger-related expenses of $530,000 and $1.6 million, respectively. The acquisition may impact comparability between periods.

Previous wording

On June 24, 2025, the Company entered into a Subordinated Note Purchase Agreement with certain institutional accredited investors and qualified institutional buyers pursuant to which the Company sold and issued $80.0 million in aggregate principal amount of its 7.625% Fixed-to-Floating Rate Subordinated Notes due 2035. The Notes were issued by the Company to such purchasers at a price equal to 100% of their face amount. The Company used the net proceeds it received from the sale of the Notes to redeem $50 million of outstanding 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 and for general corporate purposes.

Current wording

On June 24, 2025, the Company entered into a Subordinated Note Purchase Agreement with certain institutional accredited investors and qualified institutional buyers pursuant to which the Company sold and issued $80.0 million of aggregate principal amount of its 7.625% Fixed-to-Floating Rate Subordinated Notes due 2035. The Notes were issued by the Company to such purchasers at a price equal to 100% of their face amount. The Company used the net proceeds it received from the sale of the Notes to redeem $50 million of outstanding 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 and for general corporate purposes.

Previous wording

expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. The Company is currently evaluating the impact on future periods.

Current wording

expenditures, reinstatement of 100% bonus depreciation, and more favorable rules for determining the limitation on business interest expense. The financial impact was immaterial to the financial statements.

Previous wording

Net income was $11.5 million for the second quarter of 2025, compared to net income of $8.1 million for the second quarter of 2024. Earnings per diluted common share for the second quarter of 2025 were $0.38, compared to $0.26 per diluted common share for the second quarter of 2024. Adjusted net income, a non-GAAP financial measure, was $11.3 million for the second quarter of 2025, compared to $7.9 million for the second quarter of 2024. Adjusted earnings per diluted common share, a non-GAAP financial measure, for the second quarter of 2025 were $0.37, compared to $0.25 per diluted common share for the second quarter of 2024.

Current wording

Net income was $11.6 million for the third quarter of 2025, compared to net income of $8.7 million for the third quarter of 2024. Earnings per diluted common share for the third quarter of 2025 were $0.38, compared to $0.27 per diluted common share for the third quarter of 2024. Adjusted net income, a non-GAAP financial measure, was $12.0 million for the third quarter of 2025, compared to $8.9 million for the third quarter of 2024. Adjusted earnings per diluted common share, a non-GAAP financial measure, for the third quarter of 2025 were $0.39, compared to $0.28 per diluted common share for the third quarter of 2024.

Previous wording

The following tables present, for the three and six months ended June 30, 2025 and 2024, the average balances of each principal category of assets, liabilities and shareholders’ equity, and an analysis of net interest income. 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. These tables are presented on a tax-equivalent basis, if applicable.

Current wording

The following tables present, for the three and nine months ended September 30, 2025 and 2024, the average balances of each principal category of assets, liabilities and shareholders’ equity, and an analysis of net interest income. 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. These tables are presented on a tax-equivalent basis, if applicable.

Previous wording

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. The following table presents the effect that these factors had on the interest earned on interest earning assets and the interest incurred on interest bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. The changes not attributable specifically to either volume or rate have been allocated to the changes due to volume. The following tables present the changes in the volume and rate of interest bearing assets and liabilities for the three months ended June 30, 2025, compared to the three months ended June 30, 2024, and for the six months ended June 30, 2025, compared to the six months ended June 30, 2024:

Current wording

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. The following table presents the effect that these factors had on the interest earned on interest earning assets and the interest incurred on interest bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. The changes not attributable specifically to either volume or rate have been allocated to the changes due to volume. The following tables present the changes in the volume and rate of interest bearing assets and liabilities for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, and for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024:

Previous wording

Net interest income was $32.5 million for the second quarter of 2025, an increase of $7.5 million compared to $25.0 million for the second quarter of 2024. The increase in net interest income was primarily due to growth and higher yields in the loan portfolio.

Current wording

Net interest income was $34.1 million for the third quarter of 2025, an increase of $8.5 million compared to $25.6 million for the third quarter of 2024. The increase in net interest income was primarily due to growth and higher yields in the loan and securities portfolios and purchase accounting accretion, offset partially by higher deposit balances.

Previous wording

Net interest margin (on a fully tax-equivalent basis) for the second quarter of 2025 was 2.62%, a 38 basis point increase from 2.24% in the second quarter of 2024. 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, was 2.49% for the second quarter of 2025, a 32 basis point increase from 2.17% in the second quarter of 2024. The increase in the margin was primarily due to higher core loan yields, the impact of purchase accounting accretion, and lower costs of deposits.

Current wording

Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2025 was 2.63%, a 39 basis point increase from 2.24% in the third quarter of 2024. 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, was 2.52% for the third quarter of 2025, a 36 basis point increase from 2.16% in the third quarter of 2024. The increase in the margin was primarily due to higher earning asset yields and purchase accounting accretion, offset partially by the effects of the subordinated debt refinance completed in the second quarter of 2025.

Previous wording

Average interest earning assets were $5.02 billion for the second quarter of 2025, an increase of $473.1 million, or 10.4%, compared to $4.55 billion for the second quarter of 2024. This increase in average interest earning assets was primarily due to organic loan growth, higher average cash balances, and the FMCB acquisition. Average interest bearing liabilities were $3.85 billion for the second quarter of 2025, an increase of $402.7 million, or 11.7%, compared to $3.45 billion for the second quarter of 2024. The increase in average interest bearing liabilities was primarily due to deposit growth and deposits acquired, offset partially by a decrease in brokered deposits.

Current wording

Average interest earning assets were $5.22 billion for the third quarter of 2025, an increase of $627.6 million, or 13.7%, compared to $4.60 billion for the third quarter of 2024. This increase in average interest earning assets was primarily due to growth in the loan and securities portfolios, higher average cash balances, and the FMCB acquisition. Average interest bearing liabilities were $4.04 billion for the third quarter of 2025, an increase of $544.5 million, or 15.6%, compared to $3.49 billion for the third quarter of 2024. The increase in average interest bearing liabilities was primarily due to deposit growth and deposits acquired, offset partially by a decrease in brokered deposits.

Previous wording

due to growth and repricing of the loan portfolio and purchase accounting accretion attributable to the acquisition of FMCB. The average rate paid on interest bearing liabilities was 3.83% for the second quarter of 2025, compared to 4.19% for the second quarter of 2024. The decrease was primarilydue to lower rates paid on deposits.

Current wording

Average interest earning assets produced a tax-equivalent yield of 5.63% for the third quarter of 2025, compared to 5.48% for the third quarter of 2024. The increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios and purchase accounting accretion attributable to the acquisition of FMCB. The average rate paid on interest bearing liabilities was 3.89% for the third quarter of 2025, compared to 4.27% for the third quarter of 2024. The decrease was primarilydue to lower rates paid on deposits.

Previous wording

*Interest Income.*Total interest income, on a tax-equivalent basis, was $69.5 million for the second quarter of 2025, compared to $61.2 million for the second quarter of 2024. The $8.3 million, or 13.6%, increase in total interest income on a tax-equivalent basis was primarily due to growth of the loan portfolio and higher earning asset yields.

Current wording

*Interest Income.*Total interest income, on a tax-equivalent basis, was $74.2 million for the third quarter of 2025, compared to $63.3 million for the third quarter of 2024. The $10.8 million, or 17.1%, increase in total interest income on a tax-equivalent basis was primarily due to growth of the loan and securities portfolios and higher earning asset yields.

Previous wording

Interest income on the investment securities portfolio, on a tax-equivalent basis, increased $1.0 million for the second quarter of 2025, compared to the second quarter of 2024, primarily due to a $93.9 million, or 14.0%, increase in average balances between the two periods primarily attributable to the acquisition of FMCB.

Current wording

Interest income on the investment securities portfolio, on a tax-equivalent basis, increased $1.8 million for the third quarter of 2025, compared to the third quarter of 2024, primarily due to a $112.7 million, or 16.1%, increase in average balances between the two periods primarily attributable to purchases of investment securities, offset partially by securities sales.

Previous wording

Interest income on loans, on a tax-equivalent basis, was $58.1 million for the second quarter of 2025, compared to $51.6 million for the second quarter of 2024. The $6.5 million increase was primarily due to growth and repricing of the loan portfolio in the higher interest rate environment.

Current wording

Interest income on loans, on a tax-equivalent basis, was $60.3 million for the third quarter of 2025, compared to $52.1 million for the third quarter of 2024. The $8.2 million, or 15.7%, increase was primarily due to growth and repricing of the loan portfolio in the higher interest rate environment.

Previous wording

Loan interest income and loan fees remained one of the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield increased to 5.74% in the second quarter of 2025, which was 24 basis points higher than 5.50% in the second quarter of 2024. Core loan yield continued to rise as new loans originated at higher yields and the existing portfolio repriced in the higher interest rate environment.

Current wording

The aggregate loan yield increased to 5.79% in the third quarter of 2025, which was 22 basis points higher than 5.57% in the third quarter of 2024. Core loan yield, a non-GAAP financial measure, continued to rise as new loans originated at higher yields and the existing portfolio repriced in the higher interest rate environment.

Previous wording

*Interest Expense.*Interest expense on interest bearing liabilities was $36.7 million for the second quarter of 2025, an increase of $864,000, from $35.9 million for the second quarter of 2024. The increase was primarily due to growth of the deposit portfolio and increased utilization of FHLB advances, offset partially by a decrease in utilization of federal funds purchased.

Current wording

*Interest Expense.*Interest expense on interest bearing liabilities was $39.5 million for the third quarter of 2025, an increase of $2.1 million, from $37.4 million for the third quarter of 2024. The increase was primarily due to growth of the deposit portfolio, increased utilization of FHLB advances, and higher balance and rate of subordinated debentures following the payoff of $50.0 million of outstanding subordinated notes and the issuance of $80.0 million of new subordinated notes at the end of the second quarter, offset partially by a decrease in rates paid on deposits.

Previous wording

Interest expense on deposits was $32.5 million for the second quarter of 2025, an increase of $879,000, from $31.6 million for the second quarter of 2024. Theincrease in interest expense on deposits was primarily due to higher balances in savings and money market deposits and interest bearing transaction deposits. The cost of total deposits was 3.16% in the second quarter of 2025, a 30 basis point decrease, compared to 3.46% in the second quarter of 2024. The decrease was primarily due to lower rates paid on deposits following interest rate cuts in 2024 and decreased average balance of brokered deposits.

Current wording

Interest expense on deposits was $34.6 million for the third quarter of 2025, an increase of $428,000, from $34.2 million for the third quarter of 2024. Theincrease in interest expense on deposits was primarily due to higher balances in savings and money market deposits and interest bearing transaction deposits, offset partially by a decrease in rates paid on those deposit account types. The cost of total deposits was 3.19% in the third quarter of 2025, a 39 basis point decrease, compared to 3.58% in the third quarter of 2024. The decrease was primarily due to lower rates paid on deposits following interest rate cuts in 2024 and 2025 and decreases in average brokered deposit balances.

Previous wording

Net interest income was $62.7 million for the six months ended June 30, 2025, an increase of $13.0 million, or 26.3%, compared to $49.7 million for the six months ended June 30, 2024. The increase in net interest income was primarily due to growth and higher yields in the loan portfolio, offset partially by higher interest bearing liability balances.

Current wording

Net interest income was $96.8 million for the nine months ended September 30, 2025, an increase of $21.5 million, or 28.6%, compared to $75.2 million for the nine months ended September 30, 2024. The increase in net interest income was primarily due to growth and higher yields in the loan and securities portfolios, offset partially by higher interest bearing liability balances.

Previous wording

Net interest margin (on a fully tax-equivalent basis) for the six months ended June 30, 2025 was 2.56%, a 32 basis point increase from 2.24% for the six months ended June 30, 2024. Core net interest margin (on a fully tax equivalent basis), a non-GAAP financial measure which excludes the impact of loan feesand purchase accounting accretion, was 2.43% for the six months ended June 30, 2025, a 25 basis point increase from 2.18% for the six months ended June 30, 2024.

Current wording

Net interest margin (on a fully tax-equivalent basis) for the nine months ended September 30, 2025 was 2.59%, a 35 basis point increase from 2.24% for the nine months ended September 30, 2024. Core net interest margin (on a fully tax equivalent basis), a non-GAAP financial measure which excludes the impact of loan feesand purchase accounting accretion, was 2.46% for the nine months ended September 30, 2025, a 29 basis point increase from 2.17% for the nine months ended September 30, 2024.

Previous wording

Average interest earning assets were $4.97 billion for the six months ended June 30, 2025, an increase of $454.5 million, or 10.1%, compared to $4.52 billion for the six months ended June 30, 2024. This increase in average interest earning assets was primarily due to organic growth in the loan portfolio, higher average cash balances, and the FMCB acquisition. Average interest bearing liabilities were $3.81 billion for the six months ended June 30, 2025, an increase of $388.0 million, or 11.3%, compared to $3.42 billion for six months ended June 30, 2024. The increase in average interest bearing liabilities was primarily due to an increase in savings and money market deposits and interest bearing transaction deposits, offset partially by a decrease in brokered deposits.

Current wording

Average interest earning assets were $5.06 billion for the nine months ended September 30, 2025, an increase of $515.4 million, or 11.3%, compared to $4.54 billion for the nine months ended September 30, 2024. This increase in average interest earning assets was primarily due to higher average cash balances, growth in the loan and securities portfolios, and the FMCB acquisition. Average interest bearing liabilities were $3.89 billion for the nine months ended September 30, 2025, an increase of $442.1 million, or 12.8%, compared to $3.44 billion for nine months ended September 30, 2024. The increase in average interest bearing liabilities was primarily due to an increase in savings and money market deposits and interest bearing transaction deposits, offset partially by a decrease in brokered deposits.

Previous wording

Average interest earning assets produced a tax-equivalent yield of 5.49% for the six months ended June 30, 2025, compared to 5.35% for the six months ended June 30, 2024. The average rate paid on interest bearing liabilities was 3.82% for the six months ended June 30, 2025, compared to 4.11% for the six months ended June 30, 2024.

Current wording

Average interest earning assets produced a tax-equivalent yield of 5.54% for the nine months ended September 30, 2025, compared to 5.39% for the nine months ended September 30, 2024. The average rate paid on interest bearing liabilities was 3.85% for the nine months ended September 30, 2025, compared to 4.16% for the nine months ended September 30, 2024.

Previous wording

*Interest Income.*Total interest income on a tax-equivalent basis was $135.5 million for the six months ended June 30, 2025, compared to $120.2 million for the six months ended June 30, 2024. The $15.3 million increase in total interest income on a tax-equivalent basis was primarily due to growth in the loan and investment securities portfolios and higher earning asset yields.

Current wording

*Interest Income.*Total interest income on a tax-equivalent basis was $209.6 million for the nine months ended September 30, 2025, compared to $183.5 million for the nine months ended September 30, 2024. The $26.1 million increase in total interest income on a tax-equivalent basis was primarily due to growth in the loan and securities portfolios and higher earning asset yields.

Previous wording

Interest income on the investment securities portfolio, on a tax-equivalent basis, increased $2.5 million during the six months ended June 30, 2025, compared to the six months ended June 30, 2024, primarily due to a $113.8 million, or 16.9%, increase in average balances between the two periods primarily attributable to the FMCB acquisition.

Current wording

Interest income on the investment securities portfolio, on a tax-equivalent basis, was $29.4 million for the nine months ended September 30, 2025, compared to $25.1 million for the nine months ended September 30, 2024. The $4.3 million increase in total interest income on the investment securities portfolio was primarily due to a $113.5 million, or 16.7%, increase in average balances between the two periods primarily attributable to purchases of investment securities.

Previous wording

Interest income on loans, on a tax-equivalent basis, for the six months ended June 30, 2025 was $112.1 million, compared to $101.5 million for the six months ended June 30, 2024. The $10.7 million increase was primarily due to growth and repricing of the loan portfolio in the higher interest rate environment.

Current wording

Interest income on loans, on a tax-equivalent basis, for the nine months ended September 30, 2025 was $172.4 million, compared to $153.6 million for the nine months ended September 30, 2024. The $18.9 million increase was primarily due to growth and repricing of the loan portfolio in the higher interest rate environment.

Previous wording

*Interest Expense.*Interest expense on interest bearing liabilities was $72.2 million for the six months ended June 30, 2025, an increase of $2.3 million, compared to $69.9 million for the six months ended June 30, 2024. The increase was primarily due to growth of the deposit portfolio.

Current wording

*Interest Expense.*Interest expense on interest bearing liabilities was $111.8 million for the nine months ended September 30, 2025, compared to $107.3 million for the nine months ended September 30, 2024. The $4.4 million increase was primarily due to growth of the deposit portfolio.

Previous wording

Interest expense on deposits increased to $64.6 million for the six months ended June 30, 2025, compared to $61.8 million for the six months ended June 30, 2024. The $2.8 million increase in interest expense on deposits was primarily due to higher balances in savings and money market deposits and interest bearing transaction deposits, offset partially by lower rates paid on deposits.

Current wording

Interest expense on deposits increased to $99.2 million for the nine months ended September 30, 2025, compared to $96.0 million for the nine months ended September 30, 2024. The $3.2 million increase in interest expense on deposits was primarily due to higher balances in savings and money market deposits and interest bearing transaction deposits, offset partially by a decrease in brokered deposits and lower rates paid on deposits.

Previous wording

Interest expense on borrowings was $7.6 million for the six months ended June 30, 2025, compared to $8.1 million for the six months ended June 30, 2024. This decrease was primarily due to lower average balances of federal funds purchased, offset partially by higher average balances of FHLB advances.

Current wording

Interest expense on borrowings was $12.6 million for the nine months ended September 30, 2025, compared to $11.4 million for the nine months ended September 30, 2024. This $1.2 million increase was primarily due to higher average balances of FHLB advances and subordinated debentures, offset partially by lower average balances of federal funds purchased.

Previous wording

The provision for credit losses on loans and leases was $2.0 million for the second quarter of 2025, compared to $600,000 for the second quarter of 2024. The provision for credit losses on loans and leases was $3.5 million for the six months ended June 30, 2025, compared to $1.5 million for the six months ended June 30, 2024. The provision for credit losses on loans and leases recorded in the second quarter of 2025 was primarily attributable to increased growth in the loan portfolio and an increase in specific reserves for loans individually evaluated. The allowance for credit losses on loans and leases to total loans was 1.35% at June 30, 2025, compared to 1.37% at June 30, 2024.

Current wording

The provision for credit losses on loans and leases was $900,000 for the third quarter of 2025, compared to $-0- for the third quarter of 2024. The provision for credit losses on loans and leases was $4.4 million for the nine months ended September 30, 2025, compared to $1.5 million for the nine months ended September 30, 2024. The provision for credit losses on loans and leases recorded in the third quarter of 2025 was primarily attributable to growth in the loan portfolio and an increase in specific reserves for loans individually evaluated. The allowance for credit losses on loans and leases to total loans was 1.34% at September 30, 2025, compared to 1.38% at September 30, 2024.

Previous wording

The provision for credit losses for off-balance sheet credit exposures was $-0- for each of the second quarter of 2025 and the second quarter of 2024. No provision was recorded during the second quarter of 2025 due to unfunded commitments remaining stable as the migration to funded loans was offset by the volume of newly originated loans with unfunded commitments. The provision for credit losses for off-balance sheet credit exposures was $-0- for the six months ended June 30, 2025, compared to a negative provision of $100,000 for the six months ended June 30, 2024. The allowance for credit losses on off-balance sheet credit exposures was $3.6 million as of June 30, 2025 and December 31, 2024.

Current wording

The provision for credit losses for off-balance sheet credit exposures was $200,000 for the third quarter of 2025, compared to $-0- for the third quarter of 2024. The provision recorded during the third quarter of 2025 was primarilydue 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 credit losses for off-balance sheet credit exposures was $200,000 for the nine months ended September 30, 2025, compared to a negative provision of $100,000 for the nine months ended September 30, 2024. The allowance for credit losses on off-balance sheet credit exposures was $3.8 million as of September 30, 2025, compared to $2.9 million as of September 30, 2024.

Previous wording

Noninterest expense was $18.9 million for the second quarter of 2025, an increase of $3.4 million from $15.5 million for the second quarter of 2024. The increase was primarily attributable to increases in salaries and employee benefits, increased operating costs related to the acquisition, and merger-related expenses, offset partially by a decrease in derivative collateral fees.

Current wording

Noninterest expense was $20.0 million for the third quarter of 2025, an increase of $4.2 million from $15.8 million for the third quarter of 2024. The increase was primarily attributable to increases in salaries and employee benefits, marketing and advertising, operating costs related to the FMCB acquisition, and merger-related expenses.

Previous wording

Noninterest expense was $37.1 million for the six months ended June 30, 2025, an increase of $6.3 million, from $30.7 million for the six months ended June 30, 2024. The increase was primarily attributable to increases in salaries and employee benefits, increased operating costs related to the acquisition of FMCB, and merger related expenses.

Current wording

Noninterest expense was $57.0 million for the nine months ended September 30, 2025, an increase of $10.5 million, from $46.5 million for the nine months ended September 30, 2024. The increase was primarily attributable to increases in salaries and employee benefits, increased operating costs related to the FMCB acquisition, and merger-related expenses.

Previous wording

The Company had 308 full-time equivalent employees at the end of the second quarter of 2025, compared to 258 at the end of the second quarter of 2024. The year-over-year increase was largely driven by the addition of employees from the acquisition of FMCB.

Current wording

The Company had 325 full-time equivalent employees at September 30, 2025, compared to 308 at June 30, 2025, and 265 at September 30, 2024. The year-over-year increase was largely driven by the addition of employees from the acquisition of FMCB and the hiring of key talent across the organization.

Previous wording

The efficiency ratio was 52.6% for the second quarter of 2025, compared to 58.7% for the second quarter of 2024. The efficiency ratio was 53.9% and 58.5%, respectively for the six months ended June 30, 2025 and June 30, 2024. The Company’s efficiency has remained consistently below the industry median due in part to its “branch-light” model.

Current wording

The efficiency ratio was 54.7% for the third quarter of 2025, compared to 58.0% for the third quarter of 2024. The efficiency ratio was 54.2% and 58.3%, respectively for the nine months ended September 30, 2025 and

Previous wording

Income tax expense was $3.6 million for the second quarter of 2025, compared to $2.5 million for the second quarter of 2024. The effective combined federal and state income tax rate for the second quarter of 2025 was 23.9%, compared to 23.6% for the second quarter of 2024. Income tax expense was $6.6 million for the six months ended June 30, 2025, compared to $4.9 million for the six months ended June 30, 2024. The effective combined federal and state income tax rate for the six months ended June 30, 2025 and 2024 was 23.9% and 23.6%, respectively. The effective tax rate remained stable across both periods.

Current wording

Income tax expense was $3.5 million for the third quarter of 2025, compared to $2.7 million for the third quarter of 2024. The effective combined federal and state income tax rate for the third quarter of 2025 was 23.2%, compared to 23.6% for the third quarter of 2024. Income tax expense was $10.1 million for the nine months ended September 30, 2025, compared to $7.6 million for the nine months ended September 30, 2024. The effective combined federal and state income tax rate for both the nine months ended September 30, 2025 and 2024 was 23.6%.

Previous wording

Total assets at June 30, 2025 were $5.30 billion, an increase of $230.4 million, or 4.5%, over total assets of $5.07 billion at December 31, 2024, and an increase of $609.6 million, or 13.0%, over total assets of $4.69 billion at June 30, 2024. The year-to-date increase was primarily due to organic growth in the loan portfolio. The year-over-year increase was primarily due to growth in the loan portfolio driven by organic growth and the acquisition of FMCB in the fourth quarter of 2024.

Current wording

Total assets at September 30, 2025 were $5.36 billion, an increase of $293.8 million, or 5.8%, over total assets of $5.07 billion at December 31, 2024, and an increase of $668.5 million, or 14.2%, over total assets of $4.69 billion at September 30, 2024. The year-to-date increase was primarily due to organic growth in the loan portfolio. The year-over-year increase was primarily due to growth in the loan and securities portfolios driven by organic growth and the acquisition of FMCB in the fourth quarter of 2024.

Previous wording

The investment securities portfolio is used to make various term investments and is intended to provide the Company with adequate liquidity, a source of stable income, and at times, serve as collateral for certain types of deposits or borrowings. 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.

Current wording

The investment securities portfolio is used to make various term investments and is intended to provide the Company with adequate liquidity, a source of stable income, and at times, serve as collateral for certain types of deposits or borrowings. 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

Previous wording

Securities available for sale were $743.9 million at June 30, 2025, a decrease of $24.4 million, or 3.2%, compared to $768.2 million at December 31, 2024. The decrease was primarily due to the sale of $58.5 million of securities acquired in the FMCB acquisition.

Current wording

Securities available for sale were $826.5 million at September 30, 2025, an increase of $58.2 million, or 7.6%, compared to $768.2 million at December 31, 2024. The increase was primarily due to purchases of investment securities and improvements in the overall securities market.

Previous wording

Total gross loans at June 30, 2025 were $4.15 billion, an increase $277.3 million, or 7.2%, over total gross loans of $3.87 billion at December 31, 2024, and an increase of $345.4 million, or 9.1%, over total gross loans of $3.80 billion at June 30, 2024. The year-to-date increase in the loan portfolio was primarily due to increased loan originations and lower loan payoffs. The year-over-year increase was primarily attributable to increased loan originations and the acquisition of FMCB during the fourth quarter of 2024.

Current wording

Total gross loans at September 30, 2025 were $4.21 billion, an increase $346.0 million, or 8.9%, over total gross loans of $3.87 billion at December 31, 2024, and an increase of $529.0 million, or 14.4%, over total gross loans of $3.69 billion at September 30, 2024. The year-to-date increase in the loan portfolio was primarily due to increased loan originations and lower loan payoffs. The year-over-year increase was primarily attributable to increased loan originations and the acquisition of FMCB during the fourth quarter of 2024.