Bridgewater Bancshares Inc
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
BWB$20.28+0.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-03-06.
0001558370-25-002317
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001104659-26-020063
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 157 previous paragraphs and 145 current paragraphs.
66 unchanged; 57 reworded; 15 added; 29 removed; 5 previous and 7 current paragraphs rearranged.
Tables are not compared: 53 previous and 50 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (15)
Current report
ITEM****7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Current report
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”). 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 report
On July 4, 2025, the U.S. government enacted tax legislation commonly referred to as the One Big Beautiful Bill Act. The Company evaluated the impact of the legislation in accordance with ASC 740 and determined that it did not have a material effect on the Company’s consolidated financial statements for the year ended December 31, 2025.
Current report
On December 29, 2025, the Company closed its Country Village branch location, given the close proximity to its other branch locations.
Current report
In February 2026, the Company opened a new branch location in Lake Elmo, Minnesota to expand the Company’s presence in the eastern side of the Twin Cities market.
Current report
Allowance for Credit Losses
Current report
interest bearing liabilities was primarily due to increases in savings and money market deposits, FHLB advances, and interest bearing transaction deposits, offset partially by a decrease in brokered deposits.
Current report
The following table presents a summary of interest, fees, and accretion on loans for the periods indicated:
Current report
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. The cost of total deposits was 3.12% for the year ended December 31, 2025, a 32 basis point decrease, compared to 3.44% for the year ended December 31, 2024. The decrease was primarily due to lower rates paid on deposits following the interest rate cuts in 2024 and 2025 and decreases in brokered deposit balances.
Current report
Interest expense on borrowings was $18.0 million for the year ended December 31, 2025, compared to $14.9 million for the year ended December 31, 2024. The $3.1 million, or 20.8%, increasewas primarily due to an increased utilization of FHLB advances and higher balance and rate of subordinated debentures due to the subordinated debt refinance in the second quarter of 2025.
Current report
Noninterest income was $10.9 million for the year ended December 31, 2025, an increase of $3.5 million, or 48.1%, compared to $7.4 million for the year ended December 31, 2024. The increase was primarily due to higher swap fees, investment advisory fees, and customer service fees.
Current report
Comparison of Results of Operations for the Years Ended December 31, 2024 and 2023
Current report
For a discussion of the Company’s results of operations for 2024 compared to 2023, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in the Company’s 2024 Annual Report on Form 10-K, filed with the SEC on March 6, 2025.
Current report
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. The multifamily, construction and land development, and commercial real estate (“CRE”) nonowner occupied categories contributed most significantly to the $441.0 million of loan growth. As of December 31, 2025, multifamily loans increased $161.7 million, or 11.3%, construction and land development loans increased $118.9 million, or 122.3%, and CRE nonowner occupied loans increased $82.0 million, or 7.6%, when compared to December 31, 2024. The Bank’s pace of loan growth returned to more normalized levels in 2025 compared to the last few years. 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.
Current report
Allowance for Credit Losses
Removed paragraphs (29)
Previous report
ITEM7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Previous report
On December 13, 2024, the Company's wholly-owned banking subsidiary, Bridgewater Bank, completed its acquisition of FMCB in an all-cash transaction. At the closing of the transaction on December 13, 2024, FMCB merged with and into Bridgewater Bank, with Bridgewater Bank as the surviving entity. The acquisition of FMCB aligns with and accelerates Bridgewater’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, and two branch locations in Minnetonka, Minnesota. The acquisition also adds an investment advisory function that offers nondeposit investment products through a third party arrangement.
Previous report
Return on average assets (“ROA”) was 0.70% and 0.89% for the years ended December 31, 2024 and 2023, respectively. Return on average shareholder’s equity (“ROE”) was 7.45% and 9.73% for the years ended December 31, 2024 and 2023, respectively. Adjusted ROA (a non-GAAP financial measure) was 0.71% and 0.89% for the years ended December 31, 2024 and 2023, respectively. Adjusted ROE (a non-GAAP financial measure) was 7.57% and 9.73% for the years ended December 31, 2024 and 2023, respectively.
Previous report
Net income was $40.0 million for the year ended December 31, 2023, compared to net income of $53.4 million for the year ended December 31, 2022. Earnings per diluted common share for the year ended December 31, 2023 were $1.27, compared to $1.72 per diluted common share for the year ended December 31, 2022. ROA was 0.89% and 1.38% for the years ended December 31, 2023 and 2022, respectively. ROE was 9.73% and 13.90% for the years ended December 31, 2023 and 2022, respectively.
Previous report
December 31, 2024 was 2.19%, a 15 basis point decline from 2.34% for the year ended December 31, 2023. The decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.
Previous report
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:
Previous report
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. The $32.8 million, or 34.1%, increase in interest expense on deposits was primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment and the average balance of interest bearing deposits increasing by $293.7 million, or 10.7%. The cost of total deposits was 3.44% for the year ended December 31, 2024, a 71 basis point increase, compared to 2.73% for the year ended December 31, 2023. The increase was primarily due tothe upward repricing of the deposit portfolio in the higher interest rate environment.
Previous report
Interest expense on borrowings was $14.9 million for the year ended December 31, 2024, compared to $21.1 million for the year ended December 31, 2023. The $6.2 million, or 29.5%, decreasewas primarily due to the decreased utilization of federal funds purchased.
Previous report
Net interest income was $105.2 million for the year ended December 31, 2023, a decrease of $24.5 million compared to $129.7 million for the year ended December 31, 2022. The decrease in net interest income was due to increased volumes and higher rates paid on interest bearing liabilities in the rising interest rate environment, offset partially by higher rates earned on increased volumes of securities and loans.
Previous report
Average interest earning assets were $4.40 billion for the year ended December 31, 2023, an increase of $614.1 million, or 16.2%, compared to $3.79 billion for the year ended December 31, 2022. The increase in average interest earning assets was primarily due to growth in the loan portfolio and purchases of investment securities. Average interest bearing liabilities were $3.25 billion for the year ended December 31, 2023, an increase of $717.8 million, or 28.4%, compared to $2.53 billion for the year ended December 31, 2022. The increase in average interest bearing liabilities was primarily due to an increase in interest bearing transaction deposits, brokered deposits and FHLB advances.
Previous report
Average interest earning assets produced a fully tax-equivalent yield of 5.08% for the year ended December 31, 2023, compared to 4.35% for the year ended December 31, 2022. The increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment. The cost of interest bearing liabilities was 3.61% for the year ended December 31, 2023, compared to 1.34% for the year ended December 31, 2022, primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.
Previous report
*Interest Income.*Total interest income on a tax-equivalent basis was $223.9 million for the year ended December 31, 2023, compared to $164.9 million for the year ended December 31, 2022. The $59 million, or 35.8%, increase in total interest income on a tax-equivalent basis, was primarily due to strong organic growth in the loan portfolio, purchases of investment securities, and higher earning asset yields in the rising interest rate environment.
Previous report
Interest income on cash investments increased $2.6 million, or 430.7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to the interest rate increases during the year. Interest
Previous report
income on the investment securities portfolio on a fully-tax equivalent basis increased $9.5 million, or 55.5%, for the
Previous report
year ended December 31, 2023, compared to the year ended December 31, 2022, primarily due to an $85.2 million, or 16.4%, increase in average balances between the two periods and higher rates earned on securities.
Previous report
Interest income on loans, on a fully-tax equivalent basis, for the year ended December 31, 2023 was $192.7 million, compared to $146.8 million for the year ended December 31, 2022. The $45.9 million, or 31.2%, increase was primarily due to a $508.5 million, or 15.9%, increase in the average balance of loans outstanding from continued organic loan growth and a rising yield in the higher interest rate environment.
Previous report
*Interest Expense.*Interest expense on interest bearing liabilities was $117.2 million, an increase of $83.2 million, or 244.7%, for the year ended December 31, 2023, compared to $34.0 million for the year ended December 31, 2022. The increase was primarily due to growth and upward repricing of the deposit and FHLB advances portfolios in the higher interest rate environment.
Previous report
Interest expense on deposits was $96.0 million for the year ended December 31, 2023, compared to $23.4 million for the year ended December 31, 2022. The $72.7 million, or 310.8%, increase in interest expense on deposits was primarily due to the upward repricing of the deposit portfolio in the higher rate environment and the average balance of interest bearing deposits increasing by $523.6 million, or 23.6%. The cost of total deposits was 2.73% for the year ended December 31, 2023, a 198 basis point increase, compared to 0.75% for the year ended December 31, 2022. The increase was primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.
Previous report
Interest expense on borrowings was $21.1 million for the year ended December 31, 2023, an increase of $10.5 million, compared to $10.6 million for the year ended December 31, 2022. This increase was primarily due to the increased utilization of federal funds purchased and FHLB advances in the rising interest rate environment.
Previous report
On January 1, 2023, the Company adopted ASU No. 2016-13*“Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,”more commonly referred to as “CECL.” Upon adoption of CECL, the Company’s allowance for credit losses on loans increased $650,000 and the allowance for off-balance *sheet credit exposures increased $4.9 million. The tax-effected impact of these two items totaled $3.9 million and was recorded as an adjustment to retained earnings as of January 1, 2023.
Previous report
The allowance for credit losses on loans increased $2.5 million as of December 31, 2023, compared to December 31, 2022, reflecting the impact of adopting CECL of $650,000, a provision for credit losses of $2.1 million and net charge-offs of $202,000 during 2023. The provision for credit losses on loans was $2.1 million for the year ended December 31, 2023, a decrease of $5.7 million, compared to the provision for credit losses on loans of $7.7 million for the year ended December 31, 2022. The decrease in the provision for credit losses on loans was due to continued strong asset quality and a more managed pace of loan growth. The allowance for credit losses on loans to total loans was 1.36% at December 31, 2023, compared to 1.34% at December 31, 2022.
Previous report
The provision for credit losses for off-balance sheet credit exposures was a negative provision of $2.2 million for the year ended December 31, 2023, compared to $-0- for the year ended December 31, 2022. The negative provision for the year ended December 31, 2023 was due to a reduction in outstanding unfunded commitments primarily attributable to the migration of unfunded commitments to funded loans, as well as a moderation of volume of newly originated projects with unfunded commitments. 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.
Previous report
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 increase was primarily due to gains on sales of securities, higher letter of credit fees, higher swap fees and bank-owned life insurance income, offset partially by FHLB prepayment income recognized in the previous year which did not reoccur. There was no material stub period impact from the FMCB transaction in the fourth quarter of 2024.
Previous report
Noninterest income was $6.5 million for the year ended December 31, 2023, compared to $6.3 million for the year ended December 31, 2022, an increase of $161,000, or 2.5%. 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.
Previous report
Noninterest expense totaled $59.3 million for the year ended December 31, 2023, a $2.7 million, or 4.8%, increase from $56.6 million for the year ended December 31, 2022. The increase was primarily driven by a $2.3 million increase in the FDIC insurance assessment as the result of industry-wide increases, a $1.2 million increase in derivative collateral fees, and a $417,000 increase in professional and consulting fees, offset partially by decreases in salaries and employee benefits, marketing and advertising expenses, and the amortization of tax credit investments due to the early adoption of ASU 2023-02. The Company early adopted ASU 2023-02 applying the modified retrospective method which reclassified noninterest expense to income tax expense effective January 1, 2023, impacting comparability to prior years.
Previous report
The efficiency ratio was 53.0% for the year ended December 31, 2023, compared to 41.5% for the year ended December 31, 2022.
Previous report
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. The effective combined federal and state income tax rate for the year ended December 31, 2023 was 23.9%, compared to 25.5% for the year ended December 31, 2022. The lower effective tax rate was primarily due to an increase in tax credits recognized. The Company early adopted ASU 2023-02 applying the modified retrospective method which reclassified noninterest expense to income tax expense effective January 1, 2023.
Previous report
The investment securities portfolio consists primarily of U.S. treasury securities, U.S. government agency mortgage-backed securities, municipal securities, and corporate securities comprised primarily of subordinated debentures of banks and financial holding companies. In addition, the Company also holds other mortgage backed and other debt securities, all with varying contractual maturities. These maturities do not necessarily represent the expected life of the securities as the securities may be called or paid down without penalty prior to their stated maturities. All investment securities are held as available for sale.
Previous report
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 total gross loan balances included $117.1 million of loans at amortized cost acquired in the FMCB transaction. Excluding loans acquired in the FMCB transaction, total gross loans increased 0.7% for the year ended December 31, 2024. The Bank’s pace of loan growth moderated in 2024 compared to historical levels as the Company actively managed the balance sheet to better align loan growth with the funding outlook and ultimately the impact of the higher interest rate environment on the number of prospective deals that meet underwriting standards. The 1-4 family and leases growth is primarily attributable to the FMCB transaction.
Reworded paragraphs (57)
Previous wording
The following discussion and analysis of the Company’s results of operations and financial condition should be read in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected in the forward-looking statements. The Company assumes no obligation to update any of these forward-looking statements. 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.
Current wording
The following discussion and analysis of the Company’s results of operations and financial condition should be read in conjunction with the Company’s consolidated financial statements and related notes included elsewhere in this report. In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Certain risks, uncertainties and other factors, including but not limited to those set forth under “Forward-Looking Statements,” “Risk Factors” and elsewhere in this report, may cause actual results to differ materially from those projected in the forward-looking statements. The Company assumes no obligation to update any of these forward-looking statements. Readers of the Company’s Annual Report on Form 10-K should
Previous wording
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. 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. 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.
Current wording
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. 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. 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.
Previous wording
The amount of each allowance account represents management's best estimate of current expected credit losses on such financial instruments using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. The allowance for credit losses on loans and leases is measured on a collective basis for portfolios of loans when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. For determining the appropriate allowance for credit losses on a collective basis, the loan portfolio is segmented into pools based upon similar risk characteristics and a lifetime loss-rate model is utilized. Management qualitatively adjusts model results for reasonable and supportable forecasts and risk factors that are not considered within the modeling processes but are relevant in assessing the expected credit losses within the loan segment. 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. Volatility in certain credit metrics and variations between expected and actual outcomes are likely.
Current wording
The amount of each allowance account represents management's best estimate of current expected credit losses on such financial instruments using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. The allowance for credit losses on loans and leases is measured on a collective basis for portfolios of loans when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. For determining the appropriate allowance for credit losses on a collective basis, the loan portfolio is segmented into pools based upon similar risk characteristics and a lifetime loss-rate model is utilized. Management qualitatively adjusts model results for reasonable and supportable forecasts and risk factors that are not considered within the modeling processes but are relevant in assessing the expected credit losses within the loan segment. 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
Previous wording
Net income was $32.8 million for the year ended December 31, 2024, compared to net income of $40.0 million for the year ended December 31, 2023. 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. 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.
Current wording
Net income was $46.1 million for the year ended December 31, 2025, compared to net income of $32.8 million for the year ended December 31, 2024. 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. 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.
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 table presents the changes in the volume and rate of interest bearing assets and liabilities 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:
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 table presents the changes in
Previous wording
Net interest income was $102.2 million for the year ended December 31, 2024, a decrease of $3.0 million compared to $105.2 million for the year ended December 31, 2023. 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.
Current wording
Net interest income was $132.4 million for the year ended December 31, 2025, an increase of $30.2 million compared to $102.2 million for the year ended December 31, 2024. 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.
Previous wording
Net interest margin (on a fully tax-equivalent basis) for the year ended December 31, 2023 was 2.42%, a 103 basis point decline from 3.45% for the year ended December 31, 2022. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, and prior to 2023, PPP balances, interest, and fees, for the year ended December 31, 2023 was 2.34%, a 93 basis point decline from 3.27% for the year ended December 31, 2022. The decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.
Current wording
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. 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. The increase in the margin was primarily due to growth in the loan and securities portfolios at higher yields and purchase accounting accretion, offset partially by higher balances and rates paid on FHLB advances, as well as the refinancing of subordinated debt at the end of the second quarter of 2025.
Previous wording
Average interest earning assets were $4.58 billion for the year ended December 31, 2024, an increase of $175.2 million, or 4.0%, compared to $4.40 billion for the year ended December 31, 2023. 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. The increase in average interest bearing liabilities was primarily due to increases in all deposit types and FHLB advances, offset partially by a decrease in federal funds purchased.
Current wording
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. Average interest bearing liabilities were $3.92 billion for the year ended December 31, 2025, an increase of $445.7 million, or 12.8%, compared to $3.47 billion for the year ended December 31, 2024. The increase in average
Previous wording
Average interest earning assets produced a tax-equivalent yield of 5.40% for the year ended December 31, 2024, compared to 5.08% for the year ended December 31, 2023. The increase in the yield on interest earning assets was primarily due to the purchase of higher yielding securities and the repricing of the loan and securities portfolios in the higher interest rate environment. The cost of interest bearing liabilities was 4.14% for the year ended December 31, 2024, compared to 3.61% for the year ended December 31, 2023. The increase was primarily due to continued deposit repricing in the higher interest rate environment.
Current wording
Average interest earning assets produced a tax-equivalent yield of 5.55% for the year ended December 31, 2025, compared to 5.40% for the year ended December 31, 2024. The cost of interest bearing liabilities was 3.81% for the year ended December 31, 2025, compared to 4.14% for the year ended December 31, 2024.
Previous wording
*Interest Income.*Total interest income on a tax-equivalent basis was $247.1 million for the year ended December 31, 2024, compared to $223.9 million for the year ended December 31, 2023. 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.
Current wording
*Interest Income.*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.
Previous wording
Interest income on cash investments increased $2.5 million, or 79.5%, for the year ended December 31, 2024, compared to the year ended December 31, 2023, primarily due to higher balances during the year. 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.
Current wording
Interest income on cash investments was $8.1 million for the year ended December 31, 2025, compared to $5.7 million for the year ended December 31, 2024. The $2.4 million increase in total interest income on cash investments was primarily due to higher balances during the year, offset partially by a decrease in rates. Interest income on the investment securities portfolio, on a fully-tax equivalent basis, was $39.6 million for the year ended December 31, 2025, compared to $34.3 million for the year ended December 31, 2024. 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.
Previous wording
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.
Current wording
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. 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.
Previous wording
Loan interest income and loan fees remained one of the primary contributing factors to the changes in yield on interest earning assets. The aggregate loan yield increased to 5.50% for the year ended December 31, 2024, which was 29 basis points higher than 5.21% for the year ended December 31, 2023. While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods saw fewer loan prepayment fees. Despite the overall decrease in fee recognition, the Company is encouraged that the core loan yield continued to rise as new loans originated at higher yields and the existing portfolio repriced in the higher rate environment.
Current wording
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. Core loan yield, a non-GAAP financial measure, continued to rise as new loans originated at higher yields and the existing fixed rate portfolio repriced in the higher rate environment.
Previous wording
*Interest Expense.*Interest expense on interest bearing liabilities was $143.7 million for the year ended December 31, 2024, compared to $117.2 million for the year ended December 31, 2023. The $26.5 million, or 22.6%, increase wasprimarily due to growth and upward repricing of the deposit portfolio in the higher interest rate environment.
Current wording
*Interest Expense.*Interest expense on interest bearing liabilities was $149.4 million for the year ended December 31, 2025, compared to $143.7 million for the year ended December 31, 2024. The $5.7 million, or 4.0%, increase wasprimarily due to growth of the deposit portfolio.
Previous wording
The allowance for credit losses on loans and leases increased $1.8 million as of December 31, 2024, compared to December 31, 2023, reflecting a $950,000 day 1 provision for non-purchase credit deteriorated (“PCD”) loans acquired in the FMCB transaction, a $114,000 allowance for PCD loans acquired in the FMCB transaction, a provision of $2.0 million and net charge-offs of $1.2 million during 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. The increase in the provision for credit losses on loans and leases was primarily attributableto the acquisition of FMCB and growth in the loan portfolio. The allowance for credit losses on loans and leases to total loans was 1.35% at December 31, 2024, compared to 1.36% at December 31, 2023.
Current wording
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 increase in the provision for credit losses on loans and leases was primarily attributableto growth in the loan portfolio and an increase in historical loss rates. 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.
Previous wording
The provision for credit losses for off-balance sheet credit exposures was $625,000 for the year ended December 31, 2024, compared to a negative provision of $2.2 million for the year ended December 31, 2023. 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 allowance for credit losses on off-balance sheet credit exposures was $3.6 million as of December 31, 2024, compared to $3.0 million as of December 31, 2023.
Current wording
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 provision for the year ended December 31, 2025 was due to an increase in the volume of newly originated loans with unfunded commitments. The allowance for credit losses on off-balance sheet credit exposures was $4.0 million as of December 31, 2025, compared to $3.6 million as of December 31, 2024.
Previous wording
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:
Current wording
The following table presents the major components of noninterest income for the periods indicated:
Previous wording
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 increase was primarily attributable to increases in salaries and employee benefits and merger-related expenses, offset partially by a decrease in the FDIC insurance assessment. Merger-related expenses totaled $712,000 for the year ended December 31, 2024. The stub period impact from the FMCB transaction to noninterest expense, excluding merger-related expenses, was $199,000 for the year ended December 31, 2024.
Current wording
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. The increase was primarily attributable to increases in salaries and employee benefits, professional and consulting fees, data processing, marketing and advertising, intangible asset amortization, operating costs related to the FMCB acquisition, and merger-related expenses. Merger-related expenses totaled $2.0 million for the year ended December 31, 2025, compared to $712,000 for theyear ended December 31, 2024.
Previous wording
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.
Current wording
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.
Previous wording
The efficiency ratio was 57.9% for the year ended December 31, 2024, compared to 53.0% for the year ended December 31, 2023. The Company’s efficiency ratio has remained consistently below the industry median due in part to its “branch-light” model.
Current wording
The efficiency ratio was 53.5% for the year ended December 31, 2025, compared to 57.9% for the year ended December 31, 2024. The Company’s efficiency ratio has remained consistently below the industry median due in part to its “branch-light” model.
Previous wording
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:
Current wording
The following table presents the major components of noninterest expense for the periods indicated:
Previous wording
Income tax expense was $9.9 million for the year ended December 31, 2024, compared to $12.6 million for the year ended December 31, 2023. 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.
Current wording
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%.
Previous wording
Total assets at December 31, 2024 were $5.07 billion, an increase of $454.3 million, or 9.8%, compared to $4.61 billion at December 31, 2023. The increase in total assets was primarily due to an increase in cash and cash equivalents, organic loan growth, purchases of investment securities, and the addition of assets purchased in the FMCB transaction. Total gross loans at December 31, 2024 were $3.87 billion, an increase of $144.2 million, or 3.9%, compared to December 31, 2023.
Current wording
Total assets at December 31, 2025 were $5.41 billion, an increase of $340.8 million, or 6.7%, compared to $5.07 billion at December 31, 2024. The increase in total assets was primarily due to organic loan growth, offset partially by a decrease in cash and cash equivalents. Total gross loans at December 31, 2025 were $4.31 billion, an increase of $441.0 million, or 11.4%, compared to $3.87 billion at December 31, 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
Previous wording
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.
Current wording
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.
Previous wording
The Company focuses on lending to borrowers located or investing in the Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area across a diverse range of industries and property types. The Company lends primarily to commercial clients, consisting of loans secured by nonfarm, nonresidential properties, multifamily residential properties, land, and non-real estate business assets. Responsive service, local decision making, and an efficient turnaround time from application to closing have been significant factors in growing the loan portfolio.
Current wording
The Company focuses on lending to borrowers located or investing in the Twin Cities MSA across a diverse range of industries and property types. The Company lends primarily to commercial clients, consisting of loans secured by nonfarm, nonresidential properties, multifamily residential properties, land, and non-real estate business assets. Responsive service, local decision making, and an efficient turnaround time from application to closing have been significant factors in growing the loan portfolio.
Previous wording
The Company primarily focuses on real estate mortgage lending, which constituted 82.1% of the portfolio as of December 31, 2024. The composition of the portfolio has remained relatively consistent with prior periods and the Company does not expect any significant changes in the foreseeable future in the composition of the loan portfolio or in the emphasis on real estate lending.
Current wording
The Company primarily focuses on real estate mortgage lending, which constituted 79.7% of the portfolio as of December 31, 2025. The composition of the portfolio has remained relatively consistent with prior periods and the Company does not expect any significant changes in the foreseeable future in the composition of the loan portfolio or in the emphasis on real estate lending.
Previous wording
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. Investor CRE loans represented 68.4% of the total gross loan portfolio and 462.0% of the Bank’s total risk-based capital at December 31, 2024, compared to 71.8% and 482.4%, respectively, at December 31, 2023.
Current wording
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. Investor CRE loans represented 69.9% of the total gross loan portfolio and 473.1% of the Bank’s total risk-based capital at December 31, 2025, compared to 68.4% and 462.0%, respectively, at December 31, 2024.
Previous wording
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.
Current wording
As of December 31, 2025, over 75% of the Bank’s real estate loan balances were secured by properties located in the Twin Cities MSA.
Previous wording
with federal banking regulations, as a part of the credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “special mention,” “substandard,” “doubtful” or “loss” assets. An asset identified as “special mention” is not adversely classified but has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the payment prospects of the asset. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. 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. 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. 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.”
Current wording
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. 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. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “special mention,” “substandard,” “doubtful” or “loss” assets. An asset identified as “special mention” is not adversely classified but has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the payment prospects of the asset. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. 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.
Previous wording
Loans that have potential weaknesses that warranted a watch or special mention rating at December 31, 2024 totaled $46.6 million, compared to $26.5 million at December 31, 2023. 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.
Current wording
Loans that have potential weaknesses that warranted a watch or special mention rating at December 31, 2025 totaled $47.8 million, compared to $46.6 million at December 31, 2024. 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.
Previous wording
Nonperforming loans include loans accounted for on a nonaccrual basis and loans 90 days past due and still accruing. 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. There were also no foreclosed assets as of December 31, 2024 and 2023.
Current wording
Nonperforming loans include loans accounted for on a nonaccrual basis and loans 90 days past due and still accruing. 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. There were also no foreclosed assets as of December 31, 2025 and 2024.
Previous wording
The balance of nonperforming assets can fluctuate due to changes in economic conditions. The Company has established a policy to discontinue accruing interest on a loan (that is, place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-collateralized and is actively in the process of collection. In addition, a loan will be placed on nonaccrual status before it becomes 90 days delinquent unless management believes that the collection of interest is expected. Interest previously accrued but uncollected on such loans is reversed and charged against current income when the receivable is determined to be uncollectible. If management believes that a loan will not be collected in full, an increase to the allowance for credit losses on loans and leases is recorded to reflect management’s estimate of any potential exposure or loss. Generally, payments received on nonaccrual loans are applied directly to principal. 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. Due to the low levels of nonaccrual loans, gross income that would have been recorded on nonaccrual loans during the years ended December 31, 2024 and 2023 was approximately $163,000 and $79,000, respectively.
Current wording
The balance of nonperforming assets can fluctuate due to changes in economic conditions. The Company has established a policy to discontinue accruing interest on a loan (that is, place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-collateralized and is actively in the process of collection. In addition, a loan will be placed on nonaccrual status before it becomes 90 days delinquent unless management believes that the collection of interest is expected. Interest previously accrued but uncollected on such loans is reversed and charged against current income when the receivable is determined to be uncollectible. If management believes that a loan will not be collected in full, an increase to the allowance for credit losses on loans and leases is recorded to reflect management’s estimate of any potential exposure or loss. Generally, payments received on nonaccrual loans are applied directly to principal. 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.
Previous wording
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. Net charge-offs totaled $1.2 million during the year ended December 31, 2024 and $202,000 during the year ended December 31, 2023. 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.
Current wording
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. 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 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.
Previous wording
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 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. 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.
Current wording
Goodwill was $12.0 million at both December 31, 2025 and 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, 2025 and 2024 were $6.9 million and $7.9 million, respectively. Other intangible assets are amortized over their estimated useful life.
Previous wording
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 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.
Current wording
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. Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, were $3.35 billion at December 31, 2025, an increase of $244.6 million, or 7.9%, compared to $3.11 billion at December 31,2024. 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 brokered deposits.
Previous wording
The Company relies on increasing the deposit base to fund loans and other asset growth. The Company is in a highly competitive market and competes for local deposits by offering attractive products with competitive rates. The Company expects to have a higher average cost of funds for local deposits compared to competitor banks due to the lack of an extensive branch network. The Company’s strategy is to offset the higher cost of funding with a lower level of operating expense. When appropriate, the Company utilizes alternative funding sources such as brokered deposits. The brokered deposit market provides flexibility in structure, optionality and efficiency not afforded in traditional retail deposit channels. At December 31, 2024, total brokered deposits were $825.8 million, a decrease of $198.7 million, compared to total brokered deposits of $1.02 billion at December 31, 2023.
Current wording
The Company relies on increasing the deposit base to fund loans and other asset growth. The Company is in a highly competitive market and competes for local deposits by offering attractive products with competitive rates. The Company expects to have a higher average cost of funds for local deposits compared to competitor banks due to the lack of an extensive branch network. The Company’s strategy is to offset the higher cost of funding with a lower level of operating expense. When appropriate, the Company utilizes alternative funding sources such as brokered deposits. The brokered deposit market provides flexibility in structure, optionality and efficiency not afforded in traditional retail deposit channels. At December 31, 2025, total brokered deposits were $810.5 million, a decrease of $15.3 million, or 1.8%, compared to total brokered deposits of $825.8 million at December 31, 2024. Brokered deposits continue to be used as a supplemental funding source, as needed, to support loan portfolio growth.
Previous wording
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. These amounts were estimated based on the same methodologies and assumptions used for regulatory reporting purposes.
Current wording
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. These amounts were estimated based on the same methodologies and assumptions used for regulatory reporting purposes.
Previous wording
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 additional borrowing capacity under this credit facility of $483.2 million and $498.7 million at December 31, 2024 and 2023, respectively.
Current wording
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. 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.
Previous wording
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 maximum principal amount of the Company’s revolving line of credit is $40.0 million. On September 1, 2024, the Company entered into an amendment to the agreement which extended the maturity date from September 1, 2024 to September 1, 2026. As of December 31, 2024 and 2023, the Company had $13.8 million of outstanding balances under the revolving line of credit. As of December 31, 2024, the Company has two outstanding letters of credit totaling $6.4 million under this facility. There were no outstanding letters of credit as of December 31, 2023.
Current wording
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 maximum principal amount of the Company’s revolving line of credit is $40.0 million, and the facility matures on September 1, 2026. As of December 31, 2025, the Company had no outstanding balances under the revolving line of credit, compared to $13.8 million as of December 31, 2024. The Company had two outstanding letters of credit totaling $6.4 million under this facility as of December 31, 2025 and 2024, which reduce the availability under the facility by the amounts of the letters of credit so long as they remain outstanding.
Showing the first 40 of 57 pairs. Open the source sections for the rest.
Rearranged current paragraphs (7)
Current report — wording carried from elsewhere
consider these risks and uncertainties in evaluating forward-looking statements and should not place undue reliance on forward-looking statements.
Current report — wording carried from elsewhere
these estimates the various components of the calculation require significant management judgment and certain assumptions are highly subjective.
Current report — wording carried from elsewhere
the volume and rate of interest bearing assets and liabilities for the year ended December 31, 2025, compared to the year ended December 31, 2024, and for the year ended December 31, 2024, compared to the year ended December 31, 2023:
Current report — wording carried from elsewhere
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. All investment securities are held as available for sale.
Current report — wording carried from elsewhere
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. 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.”
Current report — wording carried from elsewhere
Management believes the Company and the Bank met all capital adequacy requirements to which they were subject as of December 31, 2025. The regulatory capital ratios for the Company and the Bank to meet the minimum
Current report — wording carried from elsewhere
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
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
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. 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
Previous report — wording carried elsewhere
The Company had 255 full-time equivalent employees at December 31, 2023, compared to 246 employees at December 31, 2022.
Previous report — wording carried elsewhere
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. 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
Previous report — wording carried elsewhere
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. As of December 31, 2024, the remaining amount that could be used to repurchase shares under the stock repurchase program was $15.3 million. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program based on various factors, including valuation, capital levels and other uses of capital.
Previous report — wording carried elsewhere
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.