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Bridgewater Bancshares Inc

For the period ended Dec 31, 2025. Filed Feb 26, 2026.

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About 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$20.64+0.2%Stored close · as of Nov 10, 2026

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Reports of Independent Registered Public Accounting Firm

Report of Independent Register****ed Public Accounting Firm

To the Shareholders and the Board of Directors of Bridgewater Bancshares, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Bridgewater Bancshares, Inc. and its subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes to the consolidated financial statements (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013, and our report dated February 25, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for credit losses on loans

As described in Notes 1 and Note 6 to the consolidated financial statements, the allowance for credit losses on loans (allowance) totaled $56.4 million at December 31, 2025. The allowance is a valuation account that is deducted from the Company’s amortized cost basis of loans to present the net amount of loans for investment expected to be collected over their contractual life. The allowance is measured on a collective or pooled basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis at the balance sheet date. At December 31, 2025 the general reserve on loans collectively evaluated for impairment totaled $52.6 million and there was $3.8 million on loans individually evaluated.

The measurement of the allowance is based on relevant available information from internal and external sources, related to past events, current conditions and reasonable and supportable forecasts. The Company uses the weighted-average

remaining maturity (WARM) method as a basis for estimated expected credit loss. The WARM method uses a historical average annual charge off rate. This average annual charge off rate contains loss content over a historical lookback period and is used as a foundation for estimating the allowance for the remaining outstanding balances of loans by segment at the balance sheet date. The average annual charge off rate is applied to the contractual term to determine the unadjusted historical charge off rate. The calculation of the unadjusted historical charge off rate is then adjusted for current conditions and for reasonable and supportable forecast periods through qualitative factors prior to being applied to the current balance of the loan segments.

Forecast adjustments to the historical loss rate are based on a forecast of the U.S. national unemployment rate, a forecast of the difference between the 10-year and 3-month treasury rates, and the most recent available BBB rated corporate bond spreads to U.S. Treasury securities, or BBB Spread. The forecast overlay adjustment for the reasonable and supportable forecast assumes an immediate reversion after a one-year forecast period to historical loss rates for the remaining life of the respective loan segment. Qualitative factors are used to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative (historical loss factors) analysis or the forecasts described above. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in the historic loss factors. Each qualitative loss factor, for each loan segment within the portfolio, incorporates consideration for a minimal to maximum range for loss factors. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses and are applied to each loan segment. The qualitative factors applied to each loan segment include changes in lending policies and procedures, general economic and business conditions, the nature, volume and terms of the loans, the experience, depth and ability of lending staff, quality of the loan review function, the value of underlying collateral, competition, legal and regulatory factors, the volume and severity of watchlist and past due loans and the level of concentrations.

We identified the qualitative factors and forecasted adjustments applied to the allowance as a critical audit matter as auditing management’s determination of the qualitative factors required significant auditor judgement as the estimate is highly sensitive to changes in significant assumptions.

Our audit procedures related to the Company’s qualitative factors and forecasted adjustments applied to the allowance included the following, among others:

●We obtained an understanding of the relevant controls related to the qualitative factors and forecasted adjustments applied to the allowance and tested such controls for design and operating effectiveness, including controls relating to management’s review and approval of the qualitative factors, forecasted adjustments and the underlying data used in determining those factors.
●We tested management’s process and evaluated the reasonableness of their judgments and assumptions to develop the qualitative factors and forecasted adjustments, which included:
oTesting the accuracy and relevancy of the data inputs used by management as a basis for the adjustments for qualitative factors and forecasted adjustments by comparing to internal and external source data.
oEvaluating the reasonableness of the magnitude and directional consistency of the adjustments for such.
oEvaluating whether management’s conclusions were consistent with Company provided internal data and external, independently sourced data and agreeing the impact to the allowance calculation

/s/RSM US LLP

We have served as the Company’s auditor since 2022.

Des Moines, Iowa

February 25, 2026

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Bridgewater Bancshares, Inc.

Opinion on the Internal Control Over Financial Reporting

We have audited Bridgewater Bancshares, Inc.’s (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established inInternal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission in 2013.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets as of December 31, 2025 and 2024, the consolidated statements of income, comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes to the consolidated financial statements of the Company and our report dated February 25, 2026 expressed an unqualified opinion.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ RSM US LLP

Des Moines, Iowa

February 25, 2026

Bridgewater Bancshares, Inc. and Subsidiaries**

Consolidated Balance Sheets

**(dollars in thousands, except share data)

​​​​​​​
​ · ​ · December 31, · ​ · December 31,
​ · ​ ​ ​ · 2025 · ​ ​ ​ · 2024
ASSETS​​​​​​
Cash and Cash Equivalents​$123,511​$229,760
Bank-Owned Certificates of Deposit​—​4,377
Securities Available for Sale, at Fair Value​776,441​768,247
Loans, Net of Allowance for Credit Losses of $56,443 at December 31, 2025, and $52,277 at December 31, 2024​​4,244,108​3,809,436
Federal Home Loan Bank (FHLB) Stock, at Cost​21,122​19,297
Premises and Equipment, Net​51,576​49,533
Accrued Interest​18,929​17,711
Goodwill​11,982​11,982
Other Intangible Assets, Net​6,930​7,850
Bank-Owned Life Insurance​​46,576​​44,646
Other Assets​105,827​103,403
Total Assets​$5,407,002​$5,066,242
​​​​​​​
LIABILITIES AND EQUITY​​​​
LIABILITIES​​​​
Deposits:​​​​
Noninterest Bearing​$923,070​$800,763
Interest Bearing​3,397,299​3,286,004
Total Deposits​4,320,369​4,086,767
Notes Payable​—​13,750
FHLB Advances​399,500​359,500
Subordinated Debentures, Net of Issuance Costs​108,677​79,670
Accrued Interest Payable​3,227​4,008
Other Liabilities​58,134​64,612
Total Liabilities​4,889,907​4,608,307
​​​​​​​
SHAREHOLDERS' EQUITY​​​​
Preferred Stock- $0.01 par value; Authorized 10,000,000​​​​​​
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at December 31, 2025 and 2024​​66,514​66,514
Common Stock- $0.01 par value; Authorized 75,000,000​​​​
Common Stock - Issued and Outstanding 27,759,970 at December 31, 2025 and 27,552,449 at December 31, 2024​​278​276
Additional Paid-In Capital​98,287​95,088
Retained Earnings​351,455​309,421
Accumulated Other Comprehensive Income Gain (Loss)​561​(13,364)
Total Shareholders' Equity​517,095​457,935
Total Liabilities and Equity​$5,407,002​$5,066,242

Consolidated Statements of Income

(dollars in thousands, except per share data)

​​​​​​​​​
​Year Ended
​ · December 31, · ​ · December 31, · ​ · December 31,
​ · 2025 · ​ ​ ​ · 2024 · ​ ​ ​ · 2023
INTEREST INCOME · ​ · ​ · ​ · ​ · ​ · ​
Loans, Including Fees$233,190​$204,731​$191,402
Investment Securities38,688​33,927​26,245
Other9,970​7,240​4,708
Total Interest Income281,848​245,898​222,355
​​​​​​​​​
INTEREST EXPENSE​​​​​
Deposits131,418​​128,805​​96,045
Federal Funds Purchased​21​​1,201​​8,521
Notes Payable624​​1,162​​1,143
FHLB Advances11,465​​8,554​​7,489
Subordinated Debentures5,882​​3,983​​3,983
Total Interest Expense149,410​143,705​117,181
​​​​​​​​​
NET INTEREST INCOME132,438​102,193​105,174
Provision for (Recovery of) Credit Losses6,050​​3,525​​(175)
​​​​​​​​​
NET INTEREST INCOME AFTER​​​​​
PROVISION FOR (RECOVERY OF) CREDIT LOSSES126,388​98,668​105,349
​​​​​​​​​
NONINTEREST INCOME​​​​​
Customer Service Fees2,013​​1,475​​1,455
Net Gain (Loss) on Sales of Available for Sale Securities614​​385​​(33)
Net Gain on Sales of Foreclosed Assets​—​​62​​—
Letters of Credit Fees​1,829​​1,976​​1,746
Debit Card Interchange Fees​640​​593​​595
Swap Fees​1,631​​547​​—
Bank-Owned Life Insurance​1,661​​1,327​​992
Investment Advisory Fees​973​​—​​—
FHLB Prepayment Income​301​​—​​792
Other Income1,253​​1,003​​946
Total Noninterest Income10,915​7,368​6,493
​​​​​​​​​
NONINTEREST EXPENSE​​​​​
Salaries and Employee Benefits47,397​​39,564​​36,538
Occupancy and Equipment4,945​​4,399​​4,447
FDIC Insurance Assessment​2,745​​2,959​​3,690
Data Processing​2,519​​1,697​​1,574
Professional and Consulting Fees​4,769​​3,879​​3,081
Derivative Collateral Fees​1,369​​1,821​​1,900
Information Technology and Telecommunications​3,891​​3,325​​2,889
Marketing and Advertising​2,138​​1,485​​1,129
Intangible Asset Amortization​921​​78​​100
Other Expense6,577​​4,093​​3,972
Total Noninterest Expense77,271​63,300​59,320
​​​​​​​​​
INCOME BEFORE INCOME TAXES60,032​42,736​52,522
Provision for Income Taxes13,944​9,911​12,562
NET INCOME​46,088​​32,825​​39,960
Preferred Stock Dividends​(4,054)​​(4,054)​​(4,054)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS$42,034​$28,771​$35,906
​​​​​​​​​
EARNINGS PER SHARE​​​​​
Basic$1.53​$1.05​$1.29
Diluted​1.49​​1.03​​1.27
Dividends Paid Per Common Share​—​​—​​—

Consolidated Statements of Comprehensive Income

​​​​​​​​​​
​ · ​ · Year Ended
​ · ​ · December 31, · ​ · December 31, · ​ · December 31,
​ · ​ ​ ​ · 2025 · ​ ​ ​ · 2024 · ​ ​ ​ · 2023
Net Income​$46,088​$32,825​$39,960
Other Comprehensive Income (Loss):​​​​​​​
Unrealized Gains on Available for Sale Securities​​29,313​​5,967​​3,339
Unrealized Gains (Losses) on Cash Flow Hedges​​(2,673)​​10,515​​2,299
Reclassification Adjustment for Gains Realized in Income​​(7,098)​​(9,630)​​(6,069)
Income Tax Impact​​(5,617)​​(1,970)​​127
Total Other Comprehensive Income (Loss), Net of Tax​​13,925​​4,882​​(304)
Comprehensive Income​$60,013​$37,707​$39,656

Consolidated Statements of Shareholders’ Equity

(amounts in thousands, except share data)

​​​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Accumulated · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Additional · ​ · ​ · ​ · ​ · Other · ​ · ​ · ​
​ · ​ · Preferred · ​ · Common Stock · ​ · Paid-In · ​ · Retained · ​ · Comprehensive · ​ · ​ · ​
Year Ended · ​ ​ ​ · Stock · ​ ​ ​ · Shares · ​ ​ ​ · Amount · ​ ​ ​ · Capital · ​ ​ ​ · Earnings · ​ ​ ​ · Income (Loss) · ​ ​ ​ · Total
BALANCE December 31, 2022$66,514​27,751,950​$278​$96,529​$248,685​$(17,942)​$394,064
Cumulative Effect of the Adoption of ASU 2016-13​​—​—​​—​​—​​(3,920)​​—​​(3,920)
Cumulative Effect of the Adoption of ASU 2023-02​​—​—​​—​​—​​(21)​​—​​(21)
Balance as of January 1, 2023, as Adjusted for Change in Accounting Principles​​66,514​27,751,950​​278​​96,529​​244,744​​(17,942)​​390,123
Stock-based Compensation​—​44,753​​—​​3,954​​—​​—​​3,954
Comprehensive Income (Loss)​—​—​​—​​—​​39,960​​(304)​39,656
Stock Options Exercised​​—​305,950​​3​​960​​—​​—​​963
Stock Repurchases​​—​(423,749)​​(4)​​(4,537)​​—​​—​​(4,541)
Forfeiture of Restricted Stock Awards​​—​(250)​​—​​—​​—​​—​​—
Vested Restricted Stock Units​​—​121,603​​1​​(1)​​—​​—​​—
Restricted Shares Withheld for Taxes​​—​(51,292)​​(1)​​(585)​​—​​—​​(586)
Preferred Stock Dividend​​—​—​​—​​—​​(4,054)​​—​​(4,054)
BALANCE December 31, 2023​66,514​27,748,965​​277​​96,320​​280,650​​(18,246)​​425,515
Stock-based Compensation​—​38,724​​—​​3,905​​—​​—​​3,905
Comprehensive Income​—​—​​—​​—​​32,825​​4,882​37,707
Stock Options Exercised​​—​99,385​​1​​762​​—​​—​​763
Stock Repurchases​​—​(446,509)​​(4)​​(5,190)​​—​​—​​(5,194)
Vested Restricted Stock Units​​—​160,630​​2​​(2)​​—​​—​​—
Restricted Shares Withheld for Taxes​​—​(48,746)​​—​​(707)​​—​​—​​(707)
Preferred Stock Dividend​​—​—​​—​​—​​(4,054)​​—​​(4,054)
BALANCE December 31, 2024​66,514​27,552,449​​276​​95,088​​309,421​​(13,364)​​457,935
Stock-based Compensation​—​30,728​​—​​4,199​​—​​—​​4,199
Comprehensive Income​—​—​​—​​—​​46,088​​13,925​60,013
Stock Options Exercised​​—​233,934​​2​​1,937​​—​​—​​1,939
Stock Repurchases​​—​(167,709)​​(1)​​(2,190)​​—​​—​​(2,191)
Vested Restricted Stock Units​​—​154,473​​2​​(2)​​—​​—​​—
Restricted Shares Withheld for Taxes​​—​(43,905)​​(1)​​(745)​​—​​—​​(746)
Preferred Stock Dividend​​—​—​​—​​—​​(4,054)​​—​​(4,054)
BALANCE December 31, 2025$66,514​27,759,970​$278​$98,287​$351,455​$561​$517,095

Consolidated Statements of Cash Flows

​​​​​​​​​​
​ · ​ · December 31, 2025 · ​ · December 31, 2024 · ​ · December 31, 2023
CASH FLOWS FROM OPERATING ACTIVITIES​​​​​​​​​
Net Income​$46,088​$32,825​$39,960
Adjustments to Reconcile Net Income to Net Cash​​​​​​
Provided by Operating Activities:​​​​​​
Net Amortization on Securities Available for Sale​(3,639)​(1,358)​10
Net (Gain) Loss on Sales of Securities Available for Sale​(614)​(385)​33
Provision for Credit Losses on Loans and Leases​5,650​2,900​2,050
Provision (Credit) for Off-Balance Sheet Exposures​​400​625​(2,225)
Loan Discount Accretion​​(1,693)​​—​​—
Depreciation of Premises and Equipment​2,468​2,368​2,509
Loss on Disposal of Premises and Equipment​​6​​—​​20
Amortization of Other Intangible Assets​921​78​100
Amortization of Right-of use Asset​​558​​559​​534
Cash Surrender Value of Bank-Owned Life Insurance​​(1,661)​​(1,326)​​(992)
Amortization of Subordinated Debt Issuance Costs​​402​​382​​383
Net Gain on Sales of Foreclosed Assets​​—​​(62)​​—
Stock-based Compensation​4,199​3,905​3,954
Deferred Income Taxes​​(2,004)​​24​​676
Remeasurement of Interest Rate Swap​​(30)​​—​​—
Changes in Operating Assets and Liabilities:​​​​​​
Accrued Interest Receivable and Other Assets​(13,947)​2,364​(20,902)
Accrued Interest Payable and Other Liabilities​(9,292)​3,477​3,905
Net Cash Provided by Operating Activities​27,812​46,376​30,015
​​​​​​​​​​
CASH FLOWS FROM INVESTING ACTIVITIES​​​​​​
Decrease in Bank-Owned Certificates of Deposit​4,377​​—​​1,181
Proceeds from Sales of Securities Available for Sale​76,953​​101,612​​28,756
Proceeds from Maturities, Paydowns, Payups and Calls of Securities Available for Sale​153,875​​65,600​​32,747
Purchases of Securities Available for Sale​(206,101)​​(245,175)​​(113,648)
Net Increase in Loans​(438,814)​​(26,247)​​(157,874)
Purchase of FHLB Stock​(59,690)​​(88,772)​​(87,091)
Redemption of FHLB Stock​​57,865​​86,824​​89,600
Purchases of Premises and Equipment​(5,847)​​(4,080)​​(2,970)
Proceeds from Sales of Foreclosed Assets​185​​496​​116
Cash Received, Net of Cash Paid for Acquisition​​—​​17,284​​—
Purchase of Bank-Owned Life Insurance​​(4,630)​​(2,778)​​—
Redemption of Bank-owned Life Insurance​​4,361​​—​​—
Net Cash Used in Investing Activities​​(417,466)​(95,236)​(209,183)
​​​​​​​​​​
CASH FLOWS FROM FINANCING ACTIVITIES​​​​​​
Net Increase in Deposits​233,602​​119,250​​293,405
Net Decrease in Federal Funds Purchased​​—​​—​​(287,000)
Principal Payment on Notes Payable​(13,750)​​—​​—
Proceeds from FHLB Advances​1,234,500​​997,000​​679,500
Principal Payments on FHLB Advances​​(1,194,500)​​(957,000)​​(457,000)
Issuance of Subordinated Debt, net of Issuance Costs​​78,605​​—​​—
Redemption of Subordinated Debt​​(50,000)​​—​​—
Preferred Stock Dividends Paid​​(4,054)​​(4,054)​​(4,054)
Stock Options Exercised​​1,939​​763​​963
Stock Repurchases​​(2,191)​​(5,194)​​(4,541)
Shares Repurchased for Tax Withholdings Upon Vesting of Restricted Stock-Based Awards​​(713)​​(634)​​(457)
Shares Repurchased for Tax Withholdings Upon Exercise of Stock Options​​(33)​​(73)​​(129)
Net Cash Provided by Financing Activities​283,405​150,058​220,687
​​​​​​​​​​
NET CHANGE IN CASH AND CASH EQUIVALENTS​(106,249)​101,198​41,519
Cash and Cash Equivalents Beginning​229,760​128,562​87,043
Cash and Cash Equivalents Ending​$123,511​$229,760​$128,562

Consolidated Statements of Cash Flows

​​​​​​​​​​
​ · ​ · December 31, 2025 · ​ · December 31, 2024 · ​ · December 31, 2023
SUPPLEMENTAL CASH FLOW DISCLOSURE​​​​​​​​​
Cash Paid for Interest​$149,789​$144,596​$114,347
Cash Paid for Income Taxes​​​​​​​​
Federal​$8,300​$2,850​$5,650
Minnesota​​5,748​​2,766​​4,639
Other States (1)​​235​​137​​99
Total Cash Paid for Income Taxes​$14,283​$5,753​$10,388
​​​​​​​​​​
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES​​​​​​​​​
Loans Transferred to Foreclosed Assets​$185​$434​$116
Premises and Equipment Transferred to Other Assets​​1,330​​—​​—
Acquisition:​​​​​​​​​
Fair Value of Assets Acquired​$—​$282,229​$—
Fair Value of Liabilities Assumed​​—​​258,489​​—
Net Assets Acquired​$—​$23,740​$—
(1)Jurisdiction below the 5 percent of total income taxes paid (net of refunds) threshold for the periods presented.

Notes to Consolidated Financial Statements

Note 1: Description of the Business and Summary of Significant Accounting Policies

Organization

Bridgewater Bancshares, Inc. (the “Company”) is a financial holding company headquartered in St. Louis Park, Minnesota, whose operations consist of the ownership of its wholly-owned banking subsidiary: Bridgewater Bank (the “Bank”). The Bank commenced operations in 2005 and provides retail and commercial loan and deposit services, principally to customers within the Twin Cities MSA. In 2008, the Bank formed BWB Holdings, LLC, a wholly owned subsidiary of the Bank, for the purpose of holding repossessed property. In 2018, the Bank formed Bridgewater Investment Management, Inc., a wholly owned subsidiary of the Bank, for the purpose of holding certain municipal securities and to engage in municipal lending activities.

Recent Developments

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.

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.

On September 30, 2025, the Company announced its plan to close its Country Village branch location, effective December 29, 2025, given the close proximity to its other locations.

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.

Principles of Consolidation

The consolidated financial statements include the amounts of the Company, the Bank, with locations in Bloomington, Greenwood, Minneapolis (2), Minnetonka, Orono, St. Louis Park, and St. Paul, Minnesota, BWB Holdings, LLC, and Bridgewater Investment Management, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates in Preparation of Financial Statements

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Information available which could affect judgments includes, but is not limited to, changes in interest rates, changes in the performance of the economy, including elevated levels of inflation and possible recession, and changes in the financial condition of borrowers.

Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses (“ACL”).

Business Combinations

Business combinations are accounted for under the acquisition method of accounting in accordance with ASC 805, Business Combinations. Under the acquisition method, the acquiring entity in a business combination recognizes all of the acquired assets and assumed liabilities at their estimated fair values as of the date of acquisition. Any excess of the purchase price over the fair value of net assets and other identifiable intangible assets acquired is recorded as goodwill. To the extent the fair value of net assets acquired, including identified intangible assets, exceeds the purchase price, a bargain purchase gain is recognized. Assets acquired and liabilities assumed from contingencies are also recognized at fair value if the fair value can be determined during the measurement period. Results of operations of an acquired business are included in the Consolidated Statements of Income from the date of acquisition. Acquisition-related costs, including conversion and restructuring charges, are expensed as incurred.

Cash and Cash Equivalents

For purpose of the consolidated statements of cash flows, cash and cash equivalents include cash, both interest bearing and noninterest bearing balances due from banks and federal funds sold, all of which mature within 90 days. Cash flows from loans, deposits, federal funds purchased and notes payable are reported net.

Bank-Owned Certificates of Deposit

Bank-owned certificates of deposit mature within five years and are carried at cost.

Securities Available for Sale

Debt securities are classified as available for sale and are carried at fair value with unrealized gains and losses reported in other comprehensive income (loss). Realized gains and losses on securities available for sale are included in noninterest income and, when applicable, are reported as a reclassification adjustment, net of tax, in other comprehensive income (loss). Gains and losses on sales of securities are determined using the specific identification method on the trade date. The amortization of premiums and accretion of discounts are recognized in interest income over the estimated life (earliest call date, maturity, or estimated life) using a prospective method that approximates level yield.

Loans

Loans that management has the intent and ability to hold for the foreseeable future or until maturity or pay-off generally are reported at their outstanding unpaid balances adjusted for charge-offs, the allowance for credit losses, any deferred fees or costs on originated loans, and premiums or discounts on purchased loans.

Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, as well as premiums and discounts, are deferred and recognized as an adjustment of the related loan yield using the interest method. Amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status.

The accrual of interest on all loans is discontinued if the loan is 90 days past due unless the credit is well-secured and in process of collection. Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual or charged-off at an earlier date if collection of principal or interest is considered doubtful.

All interest accrued, but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income and amortization of related deferred loan fees or costs is suspended. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. The cash-basis is used when a determination has been made that the principal and interest of the loan is collectible. If collectability of the principal and interest is in doubt, payments are applied to loan principal. The determination of ultimate collectability is supported by a current, well documented credit evaluation of the borrower’s financial condition and prospects for repayment, including consideration of the borrower’s sustained historical repayment performance and other relevant factors. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, the borrower has demonstrated a period of sustained performance, and future payments are reasonably assured. A sustained period of repayment performance generally would be a minimum of six months.

Loans – Acquired

Loans purchased in acquisition transactions are acquired loans, and are recorded at their estimated fair value on the acquisition date. Acquired loans that have evidence of more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At acquisition, an estimate of expected credit losses is made for PCD loans. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair value to establish the initial amortized cost basis of the PCD loans. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors, resulting in a discount or premium that is amortized to interest income. For acquired loans not deemed PCD loans at acquisition, the difference between the initial fair value mark and the unpaid principal balance are recognized in interest income over the estimated life of the loans. In addition, an initial allowance for expected credit losses is estimated and recorded as provision expense at the acquisition date. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

Allowance for Credit Losses

Securities Available for Sale

For any securities classified as available for sale that are in an unrealized loss position at the balance sheet date, the Company assesses whether or not it intends to sell the security, or if it is more likely than not it will be required to sell the security, before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through income with the establishment of an allowance. For securities that do not meet the aforementioned criteria, the Company evaluates whether any portion of the decline in fair value is the result of credit deterioration. In making this assessment, management considers the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security, among other factors. If the assessment indicates that a credit loss exists, an allowance for credit losses is recorded for the amount by which the amortized cost basis of the security exceeds the present value of cash flows expected to be collected, limited by the amount by which the amortized cost exceeds fair value. Any credit loss not recognized in the allowance for credit losses is recognized in other comprehensive income.

Changes in the ACL on securities are recorded as a provision for (or recovery of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on securities available for sale is excluded from the estimate of credit losses.

Loans

The ACL on loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over their contractual life. The contractual term does not consider

extensions, renewals or modifications. Loans are charged off against the ACL on loans when management believes the uncollectibility of a loan balance has been confirmed. Recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off. Subsequent recoveries, if any, are credited to the ACL on loans.

The ACL on loans is measured on a collective or pooled basis when similar risk characteristics exist. The Company’s pooling method is primarily based on loan purpose and collateral type and generally follows the Company’s loan segmentation for regulatory reporting. The Company has identified the following pools of loans with similar risk characteristics for measuring the ACL on loans:

*Commercial:*Commercial loans generally are loans to sole proprietorships, partnerships, corporations, and other business enterprises to finance working capital, capital investment, or for other business related purposes. Collateral generally consists of pledges of business assets or interests, including but not limited to accounts receivable, inventory, plant and equipment, and real estate interests, if applicable. The primary repayment sources for commercial loans are the cash flow of the operating businesses which can be adversely affected by company, industry and economic business cycles. Commercial loans may be secured or unsecured.

*Leases:*The lease portfolio consists primarily of business purpose auto loans, managed through a select number of third parties. Leases are generally secured by an assignment of the lease. Repayment of leases is highly reliant on employment income. The primary risk characteristics associated with leases typically include major changes to the borrower’s financial or personal circumstances, including unemployment or other loss of income, significant unexpected expenses, such as major medical expenses, catastrophic events, divorce or death.

*Construction and Land Development:*Construction and land development loans are generally loans to finance land development or the construction of industrial, commercial, or multifamily buildings. Construction loans can include construction of new structures, additions or alterations to existing structures, or the demolition of existing structures to make way for new structures. Construction loans are generally secured by real estate. The primary risk characteristics are specific to the uncertainty on whether the construction will be completed according to the specifications and schedules and the reliance on the sale of the completed project as the primary repayment source for the loan. Factors that may influence the completion of construction may be customer specific, such as the quality and depth of property management, or related to changes in general economic conditions. Trends in the commercial and residential construction industries can significantly impact the credit quality of these loans due to supply and demand imbalances. In addition, fluctuations in real estate values can significantly impact the credit quality of these loans, as property values may determine the economic viability of construction projects and adversely impact the value of the collateral securing the loan.

*1-4 Family Construction:*1-4 family construction loans are generally loans to finance the construction of new structures, additions or alterations to existing structures, or the demolition of existing structures to make way for new structures. 1-4 family construction loans are generally secured by real estate. The primary risk characteristics are specific to the uncertainty on whether the construction will be completed according to the specifications and schedules. Factors that may influence the completion of 1-4 family construction may be customer specific or related to changes in general economic conditions.

*1-4 Family Mortgage:*1-4 family mortgage loans are generally loans to finance loans on owner occupied and nonowner occupied properties. 1-4 family mortgage loans are secured by first or second liens on the property. The degree of risk in residential mortgage lending involving owner occupied properties depends primarily on the borrower’s ability to repay and the loan amount in relation to collateral value. Economic trends determined by unemployment rates and other key economic indicators are closely correlated to the credit quality of these loans. Weak economic trends indicate that the borrower’s capacity to repay their obligations may be deteriorating. 1-4 family mortgage loans include credits to finance nonowner occupied properties used as rentals. These loans can involve additional risks as the borrower’s ability to repay is based on the net operating income from the property which can be

impacted by occupancy levels, rental rates, and operating expenses. Declines in net operating income can negatively impact the value of the property which increases the credit risk in the event of default.

*Multifamily:*Multifamily loans are loans to finance multifamily properties. The primary source of repayment for multifamily loans is the cash flows of the underlying property. The primary risk characteristics include increases in vacancy rates, overbuilt supply, interest rates or changes in general economic conditions. Economic factors such as unemployment, wage growth and home affordability can impact vacancy rates and property cash flow.

*Commercial Real Estate (CRE) Owner Occupied:*Owner occupied commercial real estate loans are properties that are owned and operated by the borrower and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower’s business. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and positive cash flow. Also, certain types of businesses also may require specialized facilities that can increase costs and may not be economically feasible to an alternative user, which could adversely impact the market value of the collateral. Factors that may influence a borrower's ability to repay their loan include demand for the business’ products or services, the quality and depth of management, the degree of competition, regulatory changes, and general economic conditions.

*Commercial Real Estate (CRE) Nonowner Occupied:*Nonowner occupied commercial real estate loans are investment properties and the primary source for repayment of the loan is derived from rental income associated with the property or proceeds of the sale of the property. Nonowner occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. The primary risk characteristics include impacts of overall leasing rates, absorption timelines, levels of vacancy rates and operating expenses, and general economic conditions. Banks that are concentrated in commercial real estate lending are subject to additional regulatory scrutiny and must employ enhanced risk management practices.

*Consumer and Other:*Consumer and other loans generally include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as auto loans, debt consolidation loans, personal expense loans or overdraft protection. The primary risk characteristics associated with consumer and other loans typically include major changes to the borrower’s financial or personal circumstances, including unemployment or other loss of income, significant unexpected expenses, such as major medical expenses, catastrophic events, divorce or death.

Management assesses the adequacy of the ACL on loans on a quarterly basis. Management estimates the ACL on loans using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Company uses the weighted-average remaining maturity, or WARM, method as the basis for estimating expected credit losses. The WARM method uses a historical average annual charge-off rate. This average annual charge-off rate contains loss content over a historical lookback period and is used as a foundation for estimating the ACL on loans for the remaining outstanding balances of loans by segment at the balance sheet date. The average annual charge-off rate is applied to the contractual term to determine the unadjusted historical charge-off rate. The calculation of the unadjusted historical charge-off rate is then adjusted for current conditions and for reasonable and supportable forecast periods through qualitative factors prior to being applied to the current balance of the loan segments. Accrued interest receivable on loans available for sale is excluded from the estimate of credit losses.

Forecast adjustments to the historical loss rate are based on a forecast of the U.S. national unemployment rate, a forecast of the difference between the 10-year and 3-month treasury rates, and the most recent available BBB rated corporate bond spreads to U.S. Treasury securities, or BBB Spread. The forecast overlay adjustment for the reasonable and supportable forecast assumes an immediate reversion after a one-year forecast period to historical loss rates for the remaining life of the respective loan segment.

Qualitative factors are used to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in the historic loss factors. Each qualitative loss factor, for each loan segment within the portfolio, incorporates consideration for a minimum to maximum range for loss factors. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses and are applied to each loan segment. The qualitative factors applied to each loan segment include changes in lending policies and procedures, general economic and business conditions, the nature, volume and terms of loans, the experience, depth and ability of lending staff, the quality of the loan review function, the value of underlying collateral, competition, legal and regulatory factors, the volume and severity of watchlist and past due loans, and the level of concentrations.

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the pooled evaluations and typically represent collateral dependent loans but may also include other nonperforming loans or modifications. The Company has elected to use the practical expedient to measure individually evaluated loans as collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. The credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the underlying collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale of the collateral.

Management may also adjust its assumptions to account for differences between expected and actual losses from period to period. The variability of management’s assumptions could alter the ACL on loans materially and impact future results of operations and financial condition. The loss estimation models and methods used to determine the allowance for credit losses are continually refined and enhanced.

Off-Balance Sheet Credit Exposures

The Company maintains a separate ACL on off-balance sheet credit exposures, including unfunded loan commitments, financial guarantees, and letters of credit, which is included in other liabilities on the consolidated balance sheet, unless the obligation is unconditionally cancellable. The ACL on off-balance sheet credit exposures is adjusted as a provision for (or recovery of) credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the estimated life of such commitments. The allowance is calculated using the same aggregate reserve rates calculated for the funded portion of the loan segment and applied to the amount of commitments expected to fund.

Federal Home Loan Bank Stock

The Bank is a member of FHLB Des Moines. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts. Restricted stock is carried at cost and periodically evaluated for impairment. Because this stock is viewed as a long-term investment, impairment is based on ultimate recovery at par value. Both cash and stock dividends are reported as income.

Premises and Equipment

Land is stated at cost. Premises and equipment are stated at cost less accumulated depreciation on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are depreciated over the shorter of the estimated useful life or lease term for leasehold improvements. Premises and equipment are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Maintenance and repairs are expensed as incurred while major additions and improvements are capitalized. Gains and losses on dispositions are included in current operations.

Construction in Process

The Company capitalizes costs associated with assets under construction. Construction in progress (“CIP”) represents expenditures for projects that are not yet ready for their intended use as of the balance sheet date. CIP is recorded at cost and is not depreciated until the related asset is placed into service. Upon completion, accumulated CIP balances are transferred to the appropriate premises and equipment category and depreciated over the asset’s estimated useful life.

Foreclosed Assets

Assets acquired through, or in lieu of, loan foreclosure are held for sale and are initially recorded at fair value less estimated selling cost at the date of foreclosure, establishing a new cost basis. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the allowance. Subsequent to foreclosure, valuations are periodically performed by management and the assets held for sale are carried at the lower of the new cost basis or fair value less cost to sell. This evaluation is inherently subjective and requires estimates that are susceptible to significant revisions as more information becomes available.

Impairment losses on assets to be held and used are measured at the amount by which the carrying amount of a property exceeds its fair value. Costs relating to holding and improving assets are expensed. Revenues and expenses from operations are included in other noninterest income and expense on the income statement.

Goodwill and Intangible Assets

Intangible assets attributed to the value of core deposits and favorable lease terms are stated at cost less accumulated amortization and reported in other intangible assets in the consolidated balance sheets. Intangible assets are amortized on a straight-line basis over the estimated lives of the assets.

The excess of purchase price over fair value of net assets acquired is recorded as goodwill and is not amortized.

The Company conducts an annual impairment test of goodwill in the third quarter of each year, or more frequently if events or changes in circumstances indicate that is is more likely than not that the fair value of a reporting unit or asset is below its carrying amount. The Company evaluates goodwill for impairment using a method that incorporates a qualitative assessment and, when necessary, a quantitative fair value analysis. There have been no indications or triggering events during the year ended December 31, 2025, for which management believes is more likely than not that goodwill is impaired.

Leases

Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease team. The Company includes lease extension and termination options in the lease term if, after considering relevant economic factors, it is reasonably certain the Company will exercise the extension or termination option.

Right-of-use (ROU) assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. The Company's ROU asset is included in other assets and its lease liability is included in other liabilities in the accompanying consolidated balance sheets. The Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments when the rate implicit in a lease is not known. The Company's incremental borrowing rate is based on the FHLB amortizing advance rate, adjusted for the lease term

and other factors. The Company has elected not to recognize leases with original terms of 12 months or less on the consolidated balance sheet.

Bank-Owned Life Insurance

The Company has purchased life insurance policies on certain key executives. Bank owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement.

Transfers of Financial Assets and Participating Interests

Transfers of an entire financial asset or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before maturity.

The transfer of a participating interest in an entire financial asset must also meet the definition of a participating interest. A participating interest in a financial asset has all of the following characteristics: (1) from the date of transfer, it must represent a proportionate (pro rata) ownership interest in the financial asset, (2) from the date of transfer, all cash flows received, except any cash flows allocated as any compensation for servicing or other services performed, must be divided proportionately among participating interest holders in the amount equal to their share ownership, (3) the rights of each participating interest holder must have the same priority, and (4) no party has the right to pledge or exchange the entire financial asset unless all participating interest holders agree to do so.

Advertising

Advertising costs are expensed as incurred.

Income Taxes

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

These calculations are based on many factors including estimates of the timing of reversals of temporary differences, the interpretation of federal and state income tax laws, and a determination of the differences between the tax and the financial reporting basis of assets and liabilities. Actual results could differ significantly from the estimates and interpretations used in determining the current and deferred income tax liabilities.

Under GAAP, a valuation allowance is required to be recognized if it is “more likely than not” that the deferred tax asset will not be realized. The determination of the realizability of the deferred tax assets is highly subjective and dependent upon judgment concerning management’s evaluation of both positive and negative evidence, the forecasts of future income, applicable tax planning strategies, and assessments of the current and future economic and business conditions.

In preparation of the income tax returns, tax positions are taken based on interpretation of federal and state income tax laws. Management periodically reviews and evaluates the status of uncertain tax positions and makes

estimates of amounts ultimately due or owed. The Company can recognize in financial statements the impact of a tax position taken, or expected to be taken, if it is more likely than not that the position will be sustained on audit based on the technical merit of the position. The Company recognizes both interest and penalties as a component of other noninterest expense.

The amount of the uncertain tax positions was not deemed to be material. It is not expected that the unrecognized tax benefit will be material within the next 12 months. The Company did not recognize any interest or penalties for the years ended December 31, 2025, 2024 and 2023.

Tax Credit Investments

The Company invests in qualified affordable housing projects and federal historic projects for the purpose of community reinvestment and obtaining tax credits. These investments are included in other assets on the balance sheet, with any unfunded commitments included within other liabilities. The qualified affordable housing projects and federal historic projects are accounted for under the proportional amortization method. Under the proportional amortization method, the initial cost of the investment is recognized over the period that the Company expects to receive the tax credits, with the expense included within income tax expense on the consolidated statements of income. Management analyzes these investments for potential impairment when events or changes in circumstances indicate that it is more likely than not that the carrying amount of the investment will not be realized. An impairment loss is measured as the amount by which the carrying amount of an investment exceeds its fair value.

The Company is not required to consolidate variable interest entities in which it has concluded it does not have a controlling financial interest and is not the primary beneficiary. The Company's maximum exposure to loss related to its investments in these unconsolidated variable interest entities is limited to the carrying amount of the investment, net of any unfunded capital commitments and previously recorded tax credits which remain subject to recapture by taxing authorities based on compliance features required to be met at the project level.

Comprehensive Income

Recognized revenue, expenses, gains, and losses are included in net income. Certain changes in assets and liabilities, such as unrealized gains and losses on securities available for sale and changes in the fair value of derivative instruments designated as a cash flow hedge, are reported as a separate component of the equity section of the consolidated balance sheets, such items, along with net income, are components of comprehensive income.

Derivative Financial Instruments

The Company uses derivative financial instruments, which consist ofinterest rate swaps, interest rate caps and fair value swaps, to assist in its interest rate risk management. All derivatives are measured and reported at fair value on the Company’s consolidated balance sheet as other assets or other liabilities. The accounting for changes in fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship. If the derivative instrument is not designated as a hedge, changes in the fair value of the derivative instrument are recognized in earnings, specifically in noninterest income. The Company does not use derivative instruments for trading or speculative purposes.

The Company enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Company enters into offsetting positions with large U.S. and international financial institutions in order to minimize the risk to the Company. These swaps are derivatives, but are not designated as hedging instruments.

Cash flow hedges represent a hedge of a forecasted transaction or the variability of cash flows to be received or paid related to a recognized asset or liability. The Company prepares written hedge documentation for all

derivatives which are designed as hedges. The written hedge documentation includes identification of, among other items, the risk management objective, hedging instrument, hedged item and methodologies for assessing and measuring hedge effectiveness and ineffectiveness, along with support for management's assertion that the hedge will be highly effective. Assessments of hedge effectiveness and measurements of hedge ineffectiveness are performed at least quarterly. For a cash flow hedge that is effective, the gain or loss on the derivative is reported as a component in other comprehensive income (loss) and is reclassified into earnings in the same periods during which the hedged transaction affects earnings. The changes in the fair value of derivatives that are not highly effective in hedging the changes in expected cash flows of the hedged item are recognized immediately in current earnings. To determine fair value, the Company uses third party pricing models that incorporate assumptions about market conditions and risks that are current at the reporting date.

The Company enters into fair value hedges to mitigate the effect of changing interest rates on the fair value of fixed rate available for sale securities. The gain or loss on a given derivative instrument, as well as the offsetting loss or gain on the hedged asset or liability attributable to the hedged risk, are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the corresponding hedged item. The Company prepares written hedge documentation for all derivatives which are designed as hedges. The written hedge documentation includes identification of, among other items, the risk management objective, hedging instrument, hedged item and methodologies for assessing and measuring hedge effectiveness and ineffectiveness, along with support for management's assertion that the hedge will be highly effective.

Net cash settlements on derivatives that qualify for hedge accounting are recorded in interest income or interest expense, based on the item being hedged. Net cash settlements on derivatives that do not qualify for hedge accounting are reported in noninterest income.

Hedge accounting is discontinued prospectively when a derivative no longer qualifies for hedge accounting, including when the hedging relationship is determined to be ineffective, the derivative instrument is terminated, or the Company removes the hedge designation. Upon discontinuance of a fair value hedge, the derivative instrument continues to be recognized at fair value in the consolidated balance sheets, with subsequent changes in fair value recognized in earnings. The cumulative basis adjustment to the carrying amount of the hedged item resulting from the hedge relationship is amortized to earnings over the remaining life of the hedged item, as applicable. If the hedged item is sold or otherwise derecognized, any remaining unamortized basis adjustment is recognized in earnings as part of the gain or loss on sale.

Upon discontinuance of a cash flow hedge, amounts previously recorded in accumulated other comprehensive income remain in accumulated other comprehensive income and are reclassified into earnings in the same periods during which the hedged forecasted transactions affect earnings. If the hedged forecasted transaction is no longer probable of occurring, the related amounts in accumulated other comprehensive income are immediately reclassified into earnings.

Stock-based Compensation

The Company’s stock-based compensation plans provide for awards of stock options, restricted stock units, and other stock awards to the Company’s directors, officers, and employees. The cost of services received in exchange for awards of equity instruments is based on the grant-date fair value of those awards. Compensation cost is recognized over the requisite service period as a component of compensation expense. Compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Forfeitures are recognized as they occur. The Company uses the Black-Scholes model to estimate the fair value of stock options, while the market

price of the Company’s common stock at the date of grant is used for restricted stock awards and restricted stock units.

Earnings per Share

Basic earnings per common share are computed by dividing net income available to common shareholdersby the weighted average number of common shares outstanding for the period. Diluted earnings common per share are calculated by dividing net income by the weighted average number of shares adjusted for the dilutive effect of stock compensation using the treasury stock method.

Segment Reporting

An operating segment is generally defined as a component of a business for which discrete financial information is available and whose operating results are regularly reviewed by the chief operating decision maker (“CODM’). Substantially all of the Company’s operations involve the delivery of loan and deposit products to clients. The Company’s CODM makes operating decisions and assesses performance based on an ongoing review of the banking activities, which constitute the Company’s only operating segment for financial reporting purposes. The Company’ssingle segment is managed on a consolidated basis by the CODM who is the Chief Executive Officer.

The accounting policies of this segment are the same as those described throughout these significant accounting policies. The CODM assesses performance of the segment and determines the allocation of resources based on consolidated net income, which is reported in the Consolidated Statements of Income. Consolidated net income is used in deciding where to deploy capital and to monitor budget vs. actual results. It is also used in benchmarking performance measures to Company peers for compensation related analysis. The measure of segment assets is reported on the Consolidated Balance Sheets as total consolidated assets.

Reclassifications

Certain reclassifications have been made to the 2024 consolidated financial statements to conform to the 2025 classifications.

Impact of Recently Adopted Accounting Guidance

On January 1, 2025, the Company adopted Accounting Standards Update (“ASU”) 2023-09, Income Taxes

(Topic ASC 740) Income Taxes. The ASU improves the transparency of income tax disclosures by requiring (1)

consistent categories and greater disaggregation of information in rate reconciliation and (2) disaggregation of income

taxes paid by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax

disclosures. The amendments in ASU 2023-09 are effective for fiscal years beginning after December 15, 2024. The

Company adopted this standard on a prospective basis and did not have a material impact on the Company’s consolidated financial statements.

Impact of Recently Issued Accounting Standards

The following ASUs have been issued by FASB and may impact the Company’s consolidated financial statements in future reporting periods.

On November 4 2024, the FASB issued ASU 2024-03,*Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.*The ASU requires disclosure, in the notes of the financial statements, of specific information about costs and expenses. The amendments require an entity to: (1) disclose the amounts of (a) purchases of inventory, (b) employee compensation, (c) depreciation, (d) intangible asset amortization, and (e) depreciation, depletion, and amortization (“DD&A”)

recognized as part of oil-and gas-producing activities included in each relevant expense caption; (2) include certain amounts already required to be disclosed by GAAP in the same disclosure as the other disaggregated requirements; (3) disclose a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively; and (4) disclose the total amount of selling expenses and an entity's definition of selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the provisions of the amendments and the impact on its future* *consolidated statements.

On September 18, 2025, the FASB issued ASU 2025-06,Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The ASU removes all references to a prescriptive and sequential software development method (referred to as “project stages”) throughout Subtopic 350-40. The amendments require an entity to start capitalizing software costs when management has authorized and committed to funding the software project and it is probable that the project will be completed and the software will be used to perform the function intended. The amendments are effective for annual reporting periods beginning after December 15, 2027 and for interim reporting within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact of ASU 2025-06.

On November 25, 2025 the FASB issued ASU 2025-09,Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. The ASU clarifies certain aspects of hedge accounting guidance and addresses incremental hedge accounting issues arising from the global reference rate reform initiative. The ASU addresses five key issues and aims to align hedge accounting more closely with the economics of an entity’s risk management activities, enabling entities to achieve and maintain hedge accounting for highly effective economic hedges of forecasted transactions. The amendments are effective for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. Entities should apply the amendments on a prospective basis. Early adoption is permitted for both interim and annual reporting periods. The Company is currently evaluating the impact of ASU 2025-09.

On December 8, 2025 the FASB issued ASU 2025-11,Interim Reporting (Topic 270): Narrow-Scope Improvements. The ASU aims to enhance the clarity and navigability of guidance in Topic 270,Interim Reporting, and specifies the disclosures required during interim reporting periods. The amendments clarify that Topic 270 applies to all entities that provide interim financial statements and notes in accordance with GAAP. The ASU provides a comprehensive list of interim disclosures required by GAAP, which is intended to improve efficiency in using the Codification. The list clarifies existing requirements and does not aim to expand or reduce current interim disclosure obligations. The amendments are effective for interim reporting periods within annual reporting periods beginning after December 15, 2026. Early adoption is permitted and can be applied prospectively or retrospectively. Company is currently evaluating the impact of ASU 2025-11.

On December 17, 2025 the FASB issued ASU 2025-12,Codification Improvements. The ASU addresses various technical corrections, clarifications, and minor improvements to the FASB Accounting Standards Codification. The amendments are varied in nature and may impact the application of guidance in areas where the original guidance was unclear. The amendments are effective for annual reporting periods beginning after December 15, 2026, and for interim periods within those annual reporting periods. Early adoption is permitted for both interim and annual reporting periods. Entities may elect to early adopt the amendments on a issue-by-issue basis. The Company is currently evaluating the impact of ASU 2025-12.

Note 2: Business Combination

On December 13, 2024, the Bank completed its acquisition of FMCB in an all-cash transaction with total consideration of$33.1 million. The primary reasons for the acquisition were for continued growth and to increase the Company's presence in the Twin Cities market. Immediately following the completion of the acquisition, FMCB was merged with and into the Bank, with the Bank as the surviving entity. Net interest income and net income for FMCB were$408,000 and$373,000, respectively, since the date of acquisition through December 31, 2024 and were included in the Company's Consolidated Statements of Income. Merger-related expenses of$712,000 and$2.0 million are reflected in noninterest expense on the Consolidated Statements of Income for the year ended December 31, 2024, and December 31, 2025, respectively. The pro forma information has not been included as it is impracticable due to the lack of available historical U.S. GAAP financial data and the proximity between closing on the transaction to the end of the year.

Goodwill of$9.4 million was recorded in connection with the acquisition, which reflects expected synergies from combining the operations of the companies and is fully deductible for tax purposes over fifteen years.

The following table presents a summary of the fair values of assets acquired and liabilities assumed as of the acquisition date:

​​​​
(dollars in thousands) · ​ ​ ​ · December 31, 2024
Assets​​​
Cash and Cash Equivalents​$50,380
Bank-Owned Certificates of Deposits​​4,375
Securities Available for Sale​​89,345
Loans, Net of PCD Allowance​​119,308
FHLB Stock​​252
Premises and Equipment​​3,674
Accrued Interest​​847
Core Deposit Intangible​​7,740
Bank-Owned Life Insurance​​6,065
Other Assets​​243
Total Assets Acquired​$282,229
​​​​
Liabilities​​​
Deposits​$257,569
Accrued Interest Payable​​865
Other Liabilities​​55
Total Liabilities Assumed​​258,489
Net Assets Acquired​$23,740
Consideration Paid​​​
Cash Paid​​33,096
Total Consideration Paid​​33,096
Goodwill​$9,356

The Company acquired loans both with and without evidence of credit quality deterioration since origination. Acquired loans are recorded at their fair value at the time of acquisition with no carryover from the acquired institution’s previously recorded allowance for loan and lease losses. Acquired loans are accounted for under ASC 326 - Measurement of Credit Losses on Financial Instruments.

The fair value of acquired loans recorded at the time of acquisition is based upon several factors, including the timing and payment of expected cash flows, as adjusted for estimated credit losses and prepayments, and then discounting these cash flows using comparable market rates. The resulting fair value adjustment is recorded in the form of a premium or discount to the unpaid principal balance of the respective loans. As it relates to PCD loans, the net premium or net discount is adjusted to reflect the Company’s allowance for credit losses recorded for PCD loans at the time of acquisition, and the remaining fair value adjustment is accreted or amortized into interest income over the

remaining life of the respective loans. As it relates to non-PCD loans, the credit loss and yield components of their fair value adjustment are aggregated, and the resulting net premium or net discount is accreted or amortized into interest income over the remaining life of the respective loans.

The following table presents a summary of PCD loans at acquisition:

​​​​
(dollars in thousands) · ​ ​ ​ · December 31, 2024
Purchase Price of PCD Loans at Acquisition​$2,987
Allowance for Credit Losses on PCD Loans at Acquisition​​114
Non-credit Discount at Acquisition​​75
Par Value of PCD Loans at Acquisition​$3,176

Note 3: Earnings Per Share

Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share are calculated by dividing net income available to common shareholders by the weighted average number of common shares adjusted for the dilutive effect of stock compensation. For the years ended December 31, 2025, 2024 and 2023,557,832,786,830 and 1,096,472, respectively, of stock options and restricted stock units were excluded from the calculation because they were deemed to be antidilutive.

The following table presents the numerators and denominators for basic and diluted earnings per share computations for the years ended December 31, 2025, 2024 and 2023:

​​​​​​​​​​
​ · ​ · Year Ended December 31,
(dollars in thousands, except per share data) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024 · ​ ​ ​ · 2023
Net Income Available to Common Shareholders​$42,034​$28,771​$35,906
Weighted Average Common Stock Outstanding:​​​​​​​​​
Weighted Average Common Stock Outstanding (Basic)​​27,544,024​​27,479,764​​27,857,420
Dilutive Effect of Stock Compensation​​625,833​​463,578​​458,167
Weighted Average Common Stock Outstanding (Dilutive)​​28,169,857​​27,943,342​​28,315,587
​​​​​​​​​​
Basic Earnings per Common Share​$1.53​$1.05​$1.29
Diluted Earnings per Common Share​​1.49​​1.03​​1.27

Note 4: Bank-Owned Certificates of Deposit

Certificates of deposit in other financial institutions by maturity are as follows:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​​​December 31,​December 31,
(dollars in thousands)​ ​ ​​2025​ ​ ​2024
Certificates of Deposit at Cost Maturing in: · ​ · ​ · ​ · ​ · ​ · ​ · ​
One Year or Less​​$—​$1,225
After One Year Through Five Years​​—​3,152
​​​$—​$4,377

Note 5: Securities

The following tables present the amortized cost and estimated fair value of securities with gross unrealized gains and losses at December 31, 2025 and 2024:

​​​​​​​​​​​​​
​ · ​ · December 31, 2025
​ · ​ · ​ · ​ · ​ · Gross · ​ · Gross · ​ · ​ · ​
​ · ​ · Amortized · ​ · Unrealized · ​ · Unrealized · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Cost · ​ ​ ​ · Gains · ​ ​ ​ · Losses · ​ ​ ​ · Fair Value
Securities Available for Sale:​​​​​​​​​​​​
U.S. Treasury Securities​$155,863​$—​$(9,657)​$146,206
Municipal Bonds​​242,995​​8,686​​(12,513)​​239,168
Mortgage-Backed Securities​252,291​3,442​(10,061)​245,672
Corporate Securities​93,080​​1,958​​(2,631)​​92,407
U.S Government Agency Securities​8,664​​73​​(30)​​8,707
Asset-Backed Securities​​44,298​​20​​(37)​​44,281
Total Securities Available for Sale​$797,191​$14,179​$(34,929)​$776,441
​​​​​​​​​​​​​
​ · ​ · December 31, 2024
​ · ​ · ​ · ​ · ​ · Gross · ​ · Gross · ​ · ​ · ​
​ · ​ · Amortized · ​ · Unrealized · ​ · Unrealized · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Cost · ​ ​ ​ · Gains · ​ ​ ​ · Losses · ​ ​ ​ · Fair Value
Securities Available for Sale:​​​​​​​​​​​​
U.S. Treasury Securities​$179,835​$3​$(12,090)​$167,748
Municipal Bonds​​139,891​​23​​(17,649)​​122,265
Mortgage-Backed Securities​259,833​882​(15,825)​244,890
Corporate Securities​139,161​​1,041​​(6,016)​​134,186
U.S Government Agency Securities​22,053​​85​​(56)​​22,082
Asset-Backed Securities​​76,891​​211​​(26)​​77,076
Total Securities Available for Sale​$817,664​$2,245​$(51,662)​$768,247

Securities with a carrying value of$254.3 million and$289.9 million were pledged to secure public fund deposits and borrowing capacity at the Federal Reserve Discount Window as of December 31, 2025 and 2024, respectively.

The following tables present the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · Less Than 12 Months · ​ · 12 Months or Greater · ​ · Total
​ · ​ · Number of · ​ · ​ · ​ · ​ · Unrealized · ​ · ​ · ​ · ​ · Unrealized · ​ · ​ · ​ · ​ · Unrealized
(dollars in thousands, except number of holdings) · ​ ​ ​ · Holdings · ​ ​ ​ · Fair Value · ​ ​ ​ · Losses · ​ ​ ​ · Fair Value · ​ ​ ​ · Losses · ​ ​ ​ · Fair Value · ​ ​ ​ · Losses
December 31, 2025
U.S. Treasury Securities​2​$—​$—​$146,206​$(9,657)​$146,206​$(9,657)
Municipal Bonds​185​​22,430​​(354)​​94,839​​(12,159)​​117,269​​(12,513)
Mortgage-Backed Securities​108​​4,701​​(14)​​110,265​​(10,047)​114,966​(10,061)
Corporate Securities​45​​10,341​​(68)​​39,318​​(2,563)​49,659​(2,631)
U.S Government Agency Securities​25​​800​​(3)​​1,884​​(27)​2,684​(30)
Asset-Backed Securities​7​​13,024​​(31)​​6,150​​(6)​​19,174​​(37)
Total Securities Available for Sale​372​$51,296​$(470)​$398,662​$(34,459)​$449,958​$(34,929)
​​​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · Less Than 12 Months · ​ · 12 Months or Greater · ​ · Total
​ · ​ · Number of · ​ · ​ · ​ · ​ · Unrealized · ​ · ​ · ​ · ​ · Unrealized · ​ · ​ · ​ · ​ · Unrealized
(dollars in thousands, except number of holdings) · ​ ​ ​ · Holdings · ​ ​ ​ · Fair Value · ​ ​ ​ · Losses · ​ ​ ​ · Fair Value · ​ ​ ​ · Losses · ​ ​ ​ · Fair Value · ​ ​ ​ · Losses
December 31, 2024 · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
U.S. Treasury Securities​14​$157,091​$(12,090)​$—​$—​$157,091​$(12,090)
Municipal Bonds​236​​21,329​​(120)​​95,774​​(17,529)​​117,103​​(17,649)
Mortgage-Backed Securities​168​​47,636​​(391)​​118,824​​(15,434)​166,460​(15,825)
Corporate Securities​93​​6,860​​(75)​​91,666​​(5,941)​98,526​(6,016)
U.S Government Agency Securities​38​​5,878​​(5)​​4,071​​(51)​9,949​(56)
Asset-Backed Securities​7​​5,735​​(5)​​10,161​​(21)​​15,896​​(26)
Total Securities Available for Sale​556​$244,529​$(12,686)​$320,496​$(38,976)​$565,025​$(51,662)

At December 31, 2025 and 2024,372 and 556 debt securities had unrealized losses with aggregate depreciation of approximately 7.2% and 8.4%, respectively, from the Company’s amortized cost basis. These unrealized losses have not been recognized into income because management does not intend to sell these securities, and it is not more likely than not it will be required to sell the securities before recovery of its amortized cost basis. Furthermore, the unrealized losses are due to changes in interest rates and other market conditions and were not reflective of credit events. To make this determination, consideration is given to such factors as the credit rating of the issuer, level of credit enhancement, changes in credit ratings, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. As of December 31, 2025 and 2024, there wasno allowance for credit losses carried on the Company’s securities portfolio.

Accrued interest receivable on securities, which is recorded within accrued interest on the balance sheet, totaled $6.2 million at both December 31, 2025 and 2024, and was excluded from the estimate of credit losses.

The Company has entered into fair value hedging transactions to mitigate the impact of changing interest rates on the fair value of securities within the portfolio. See Note 11 – Derivative Instruments and Hedging Activities for additional information.

The following table presents a summary of amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of December 31, 2025. Call date is used when a call of the debt security is expected, determined by the Company when the security has a market value above its amortized cost. Contractual maturities will differ from expected maturities for mortgage-backed, U.S. government agency securities and asset-backed securities because borrowers may have the right to call or prepay obligations without penalties.

​​​​​​​
(dollars in thousands) · ​ ​ ​ · Amortized Cost · ​ ​ ​ · Fair Value
December 31, 2025​​​​​​
Due in One Year or Less​$26,639​$27,543
Due After One Year Through Five Years​120,988​125,871
Due After Five Years Through 10 Years​160,258​152,042
Due After 10 Years​184,053​172,325
Subtotal​491,938​477,781
Mortgage-Backed Securities​252,291​245,672
U.S Government Agency Securities​8,664​8,707
Asset-Backed Securities​​44,298​​44,281
Totals​$797,191​$776,441

The following table presents a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the years ended December 31, 2025, 2024, and 2023:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · Year Ended December 31,
(dollars in thousands)​ ​ ​2025​ ​ ​2024​ ​ ​2023
Proceeds From Sales of Securities​$76,953​$101,612​$28,756
Gross Gains on Sales​632​1,594​247
Gross Losses on Sales​(18)​(1,209)​(280)

Note 6: Loans and Leases

The following table presents the components of the loan portfolio at December 31, 2025 and 2024:

​​​​​​​
​ · ​ · December 31, · ​ · December 31,
(dollars in thousands) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024
Commercial​$547,245​$497,662
Leases​​43,407​​44,291
Construction and Land Development​216,163​97,255
1-4 Family Construction​​45,152​​41,961
Real Estate Mortgage:​​​​
1-4 Family Mortgage​496,142​474,383
Multifamily​1,587,338​1,425,610
CRE Owner Occupied​​189,754​​191,248
CRE Nonowner Occupied​​1,165,104​​1,083,108
Total Real Estate Mortgage Loans​​3,438,338​​3,174,349
Consumer and Other​​19,212​​12,996
Total Loans, Gross​4,309,517​3,868,514
Allowance for Credit Losses​(56,443)​(52,277)
Net Deferred Loan Fees​(8,966)​(6,801)
Total Loans, Net​$4,244,108​$3,809,436

The following tables present the aging in past due loans and nonaccrual status, with and without an ACL, by loan segment as of December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​​​​
​ · ​ · Accruing Interest · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · 30-89 Days · ​ · 90 Days or · ​ · Nonaccrual · ​ · Nonaccrual · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Current · ​ ​ ​ · Past Due · ​ ​ ​ · More Past Due · ​ ​ ​ · with ACL · ​ ​ ​ · without ACL · ​ ​ ​ · Total
December 31, 2025​​​​​​​​​​​​​​​​​​
Commercial​$546,499​$746​$—​$—​$—​$547,245
Leases​​43,407​​—​​—​​—​​—​​43,407
Construction and Land Development​216,129​​—​​—​​—​​34​216,163
1-4 Family Construction​​45,152​​—​​—​​—​​—​​45,152
Real Estate Mortgage:​​​​​​​​​​​​​​​​
1-4 Family Mortgage​495,922​​164​​—​​—​​56​496,142
Multifamily​1,574,043​​—​​—​​13,295​​—​1,587,338
CRE Owner Occupied​189,754​​—​​—​​—​​—​189,754
CRE Nonowner Occupied​1,156,397​​58​​—​​8,649​​—​1,165,104
Consumer and Other​19,212​​—​​—​​—​​—​19,212
Totals​$4,286,515​$968​$—​$21,944​$90​$4,309,517
​​​​​​​​​​​​​​​​​​​
​ · ​ · Accruing Interest · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · 30-89 Days · ​ · 90 Days or · ​ · Nonaccrual · ​ · Nonaccrual · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Current · ​ ​ ​ · Past Due · ​ ​ ​ · More Past Due · ​ ​ ​ · with ACL · ​ ​ ​ · without ACL · ​ ​ ​ · Total
December 31, 2024​​​​​​​​​​​​​​​​​​
Commercial​$497,432​$59​$—​$171​$—​$497,662
Leases​​44,257​​—​​—​​34​​—​​44,291
Construction and Land Development​97,197​​—​​—​​—​​58​97,255
1-4 Family Construction​​41,961​​—​​—​​—​​—​​41,961
Real Estate Mortgage:​​​​​​​​​​​​​​​​
1-4 Family Mortgage​474,185​​178​​—​​—​​20​474,383
Multifamily​1,425,610​​—​​—​​—​​—​1,425,610
CRE Owner Occupied​190,197​​1,051​​—​​—​​—​191,248
CRE Nonowner Occupied​1,083,108​​—​​—​​—​​—​1,083,108
Consumer and Other​12,975​​3​​—​​18​​—​12,996
Totals​$3,866,922​$1,291​$—​$223​$78​$3,868,514

The Company aggregates loans into credit quality indicators based on relevant information about the ability of borrowers to service their debt by using internal reviews in which management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate, and the fair values of collateral securing the loans. The Company analyzes all loans individually to assign a risk rating, grouped into six major categories defined as follows:

Pass: A pass loan is a credit with no known or existing potential weaknesses deserving of management’s close attention.

Watch:** Loans classified as watch have a credit where the borrower’s financial strength and performance has been declining and may pose an elevated level of risk. Watch loans have been identified as having minor deterioration in loan quality or other credit weaknesses/circumstances meriting closer attention of management. **Watch loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Special Mention: Loans classified as special mention have a potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects

for the loan of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This is a transitional rating and loans should not be classified special mention for more than one year.

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Well defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss: Loans classified as loss are considered uncollectible and charged-off immediately.

The following tables present loan balances classified by credit quality indicators by year of origination as of December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​​​​​​​​​
​ · ​ · December 31, 2025
(dollars in thousands)​2025​​2024​​2023​​2022​​2021​​Prior​​Revolving​​Total
Commercial​​​​​​​​​​​​​​​​​​​​​​​
Pass$163,333​$83,059​$17,582​$28,653​$14,774​$25,668​$201,739​$534,808
Watch/Special Mention​—​​—​​584​​165​​—​​—​​1,234​​1,983
Substandard​—​​135​​—​​10,313​​6​​—​​—​​10,454
Total Commercial​163,333​​83,194​​18,166​​39,131​​14,780​​25,668​​202,973​​547,245
Current Period Gross Write-offs​21​​—​​1,239​​58​​186​​—​​—​​1,504
​​​​​​​​​​​​​​​​​​​​​​​​
Leases​​​​​​​​​​​​​​​​​​​​​​​
Pass​15,721​​11,057​​8,412​​5,390​​1,749​​1,078​​—​​43,407
Total Leases​15,721​​11,057​​8,412​​5,390​​1,749​​1,078​​—​​43,407
Current Period Gross Write-offs​—​​—​​—​​15​​—​​—​​—​​15
​​​​​​​​​​​​​​​​​​​​​​​​
Construction and Land Development​​​​​​​​​​​​​​​​​​​​​​​
Pass​158,592​​42,019​​1,598​​222​​412​​—​​13,286​​216,129
Substandard​—​​34​​—​​—​​—​​—​​—​​34
Total Construction and Land Development​158,592​​42,053​​1,598​​222​​412​​—​​13,286​​216,163
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
1-4 Family Construction​​​​​​​​​​​​​​​​​​​​​​​
Pass​29,621​​2,910​​—​​196​​186​​—​​12,239​​45,152
Total 1-4 Family Construction​29,621​​2,910​​—​​196​​186​​—​​12,239​​45,152
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
Real Estate Mortgage:​​​​​​​​​​​​​​​​​​​​​​​
1-4 Family Mortgage​​​​​​​​​​​​​​​​​​​​​​​
Pass​98,718​​68,467​​43,294​​85,577​​66,080​​47,581​​85,425​​495,142
Substandard​944​​—​​—​​56​​—​​—​​—​​1,000
Total 1-4 Family Mortgage​99,662​​68,467​​43,294​​85,633​​66,080​​47,581​​85,425​​496,142
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
Multifamily​​​​​​​​​​​​​​​​​​​​​​​
Pass​440,012​​166,790​​77,979​​405,405​​304,191​​124,609​​10,647​​1,529,633
Watch/Special Mention​31,728​​—​​2,201​​—​​—​​—​​—​​33,929
Substandard​13,296​​—​​—​​10,480​​—​​—​​—​​23,776
Total Multifamily​485,036​​166,790​​80,180​​415,885​​304,191​​124,609​​10,647​​1,587,338
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
CRE Owner Occupied​​​​​​​​​​​​​​​​​​​​​​​
Pass​22,102​​20,740​​23,532​​52,754​​28,295​​26,910​​1,932​​176,265
Watch/Special Mention​—​​—​​1,510​​5,823​​432​​2,171​​1,842​​11,778
Substandard​—​​—​​—​​—​​1,711​​—​​—​​1,711
Total CRE Owner Occupied​22,102​​20,740​​25,042​​58,577​​30,438​​29,081​​3,774​​189,754
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
CRE Nonowner Occupied​​​​​​​​​​​​​​​​​​​​​​​
Pass​367,117​​252,912​​70,464​​216,814​​123,618​​113,955​​4,110​​1,148,990
Watch/Special Mention​—​​—​​—​​—​​—​​133​​—​​133
Substandard​15,080​​901​​—​​—​​—​​—​​—​​15,981
Total CRE Nonowner Occupied​382,197​​253,813​​70,464​​216,814​​123,618​​114,088​​4,110​​1,165,104
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
Total Real Estate Mortgage Loans​988,997​​509,810​​218,980​​776,909​​524,327​​315,359​​103,956​​3,438,338
​​​​​​​​​​​​​​​​​​​​​​​​
Consumer and Other​​​​​​​​​​​​​​​​​​​​​​​
Pass​3,046​​198​​306​​269​​44​​1,074​​14,275​​19,212
Substandard​—​​—​​—​​—​​—​​—​​—​​—
Total Consumer and Other​3,046​​198​​306​​269​​44​​1,074​​14,275​​19,212
Current Period Gross Write-offs​—​​—​​4​​—​​—​​—​​30​​34
​​​​​​​​​​​​​​​​​​​​​​​​
Total Period Gross Write-offs​21​​—​​1,243​​73​​186​​—​​30​​1,553
Total Loans$1,359,310​$649,222​$247,462​$822,117​$541,498​$343,179​$346,729​$4,309,517
​​​​​​​​​​​​​​​​​​​​​​​​
​ · ​ · December 31, 2024
(dollars in thousands)​2024​​2023​​2022​​2021​​2020​​Prior​​Revolving​​Total
Commercial​​​​​​​​​​​​​​​​​​​​​​​
Pass$135,665​$45,089​$67,579​$23,353​$13,349​$19,794​$178,293​$483,122
Watch/Special Mention​—​​—​​76​​96​​29​​—​​1,716​​1,917
Substandard​110​​44​​10,491​​—​​65​​—​​1,913​​12,623
Total Commercial​135,775​​45,133​​78,146​​23,449​​13,443​​19,794​​181,922​​497,662
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
Leases​​​​​​​​​​​​​​​​​​​​​​​
Pass​15,128​​12,684​​9,736​​4,057​​1,504​​1,148​​—​​44,257
Substandard​—​​—​​34​​—​​—​​—​​—​​34
Total Leases​15,128​​12,684​​9,770​​4,057​​1,504​​1,148​​—​​44,291
Current Period Gross Write-offs​—​​—​​—​​—​​11​​—​​—​​11
​​​​​​​​​​​​​​​​​​​​​​​​
Construction and Land Development​​​​​​​​​​​​​​​​​​​​​​​
Pass​74,967​​6,027​​6,791​​585​​—​​—​​8,827​​97,197
Substandard​58​​—​​—​​—​​—​​—​​—​​58
Total Construction and Land Development​75,025​​6,027​​6,791​​585​​—​​—​​8,827​​97,255
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
1-4 Family Construction​​​​​​​​​​​​​​​​​​​​​​​
Pass​29,378​​488​​1,164​​363​​—​​—​​10,568​​41,961
Total 1-4 Family Construction​29,378​​488​​1,164​​363​​—​​—​​10,568​​41,961
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
Real Estate Mortgage:​​​​​​​​​​​​​​​​​​​​​​​
1-4 Family Mortgage​​​​​​​​​​​​​​​​​​​​​​​
Pass​89,561​​58,054​​102,627​​77,293​​55,936​​18,289​​71,097​​472,857
Watch/Special Mention​298​​196​​—​​—​​324​​—​​—​​818
Substandard​20​​45​​—​​—​​—​​643​​—​​708
Total 1-4 Family Mortgage​89,879​​58,295​​102,627​​77,293​​56,260​​18,932​​71,097​​474,383
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
Multifamily​​​​​​​​​​​​​​​​​​​​​​​
Pass​219,162​​133,916​​486,854​​336,859​​161,626​​57,679​​6,624​​1,402,720
Watch/Special Mention​9,953​​2,245​​10,692​​—​​—​​—​​—​​22,890
Total Multifamily​229,115​​136,161​​497,546​​336,859​​161,626​​57,679​​6,624​​1,425,610
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
CRE Owner Occupied​​​​​​​​​​​​​​​​​​​​​​​
Pass​22,761​​31,402​​62,522​​34,228​​17,801​​15,355​​2,121​​186,190
Watch/Special Mention​—​​—​​—​​1,759​​1,739​​—​​593​​4,091
Substandard​—​​967​​—​​—​​—​​—​​—​​967
Total CRE Owner Occupied​22,761​​32,369​​62,522​​35,987​​19,540​​15,355​​2,714​​191,248
Current Period Gross Write-offs​—​​—​​—​​—​​—​​—​​—​​—
​​​​​​​​​​​​​​​​​​​​​​​​
CRE Nonowner Occupied​​​​​​​​​​​​​​​​​​​​​​​
Pass​356,582​​113,973​​261,827​​148,866​​73,300​​97,350​​6,962​​1,058,860
Watch/Special Mention​9,622​​3,659​​—​​2,690​​—​​894​​—​​16,865
Substandard​7,261​​122​​—​​—​​—​​—​​—​​7,383
Total CRE Nonowner Occupied​373,465​​117,754​​261,827​​151,556​​73,300​​98,244​​6,962​​1,083,108
Current Period Gross Write-offs​1,236​​—​​—​​—​​—​​—​​—​​1,236
​​​​​​​​​​​​​​​​​​​​​​​​
Total Real Estate Mortgage Loans​715,220​​344,579​​924,522​​601,695​​310,726​​190,210​​87,397​​3,174,349
​​​​​​​​​​​​​​​​​​​​​​​​
Consumer and Other​​​​​​​​​​​​​​​​​​​​​​​
Pass​921​​3,061​​498​​157​​1,301​​5​​7,035​​12,978
Substandard​—​​18​​—​​—​​—​​—​​—​​18
Total Consumer and Other​921​​3,079​​498​​157​​1,301​​5​​7,035​​12,996
Current Period Gross Write-offs​17​​—​​—​​—​​—​​—​​2​​19
​​​​​​​​​​​​​​​​​​​​​​​​
Total Period Gross Write-offs​1,253​​—​​—​​—​​11​​—​​2​​1,266
Total Loans$971,447​$411,990​$1,020,891​$630,306​$326,974​$211,157​$295,749​$3,868,514

The Company recorded a$5.7 million,$2.9 million, and$2.1 million provision for credit losses on loans and leases for the years ended December 31, 2025, 2024, and 2023, respectively. The following table presents the activity in the allowance for credit losses, by segment, for the year ended December 31, 2025, 2024, and 2023:

​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · Provision for · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · (Recovery of) · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · Credit Losses · ​ · Loans and · ​ · Recoveries · ​ · Total Ending
​ · ​ · Beginning · ​ · for Loans · ​ · Leases · ​ · of Loans · ​ · Allowance
(dollars in thousands) · ​ ​ ​ · Balance · ​ · and Leases · ​ · Charged-off · ​ · and Leases · ​ · Balance
For the year ended December 31, 2025​​​​​​​​​​​​​​​
Commercial​$5,630​$1,853​$(1,504)​$3​$5,982
Leases​​368​​(2)​​(15)​​1​​352
Construction and Land Development​866​821​—​—​1,687
1-4 Family Construction​​331​​(15)​​—​​—​​316
Real Estate Mortgage:​​​​​​​​​​
1-4 Family Mortgage​2,795​(332)​—​12​2,475
Multifamily​23,120​655​—​—​23,775
CRE Owner Occupied​​1,290​​(210)​​—​​—​​1,080
CRE Nonowner Occupied​​17,735​​2,816​​—​​44​​20,595
Total Real Estate Mortgage Loans​​44,940​​2,929​​—​​56​​47,925
Consumer and Other​​142​​64​​(34)​​9​​181
Total​$52,277​$5,650​$(1,553)​$69​$56,443
​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Provision for · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · (Recovery of) · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Credit Losses · ​ · Loans and · ​ · Recoveries · ​ · Total Ending
​ · ​ · Beginning · ​ · Day 1 PCD · ​ · for Loans · ​ · Leases · ​ · of Loans · ​ · Allowance
(dollars in thousands) · ​ ​ ​ · Balance · ​ · Allowance · ​ · and Leases (1) · ​ · Charged-off · ​ · and Leases · ​ · Balance
For the year ended December 31, 2024​​​​​​​​​​​​​​​​​​
Commercial​$5,398​$90​$120​$—​$22​$5,630
Leases​​—​​20​​359​​(11)​​—​​368
Construction and Land Development​2,156​—​(1,290)​—​—​866
1-4 Family Construction​​558​​—​​(227)​​—​​—​​331
Real Estate Mortgage:​​​​​​​​​​​​
1-4 Family Mortgage​2,651​—​141​—​3​2,795
Multifamily​22,217​—​903​—​—​23,120
CRE Owner Occupied​​1,184​​—​​106​​—​​—​​1,290
CRE Nonowner Occupied​​16,225​​—​​2,746​​(1,236)​​—​​17,735
Total Real Estate Mortgage Loans​​42,277​​—​​3,896​​(1,236)​​3​​44,940
Consumer and Other​​105​​4​​42​​(19)​​10​​142
Total​$50,494​$114​$2,900​$(1,266)​$35​$52,277

(1) Includes an initial provision for credit losses for non-PCD loans acquired in the FMCB transaction of$950,000 for the year ended December 31, 2024.

​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Provision for · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · (Recovery of) · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · Impact of · ​ · Credit Losses · ​ · Loans and · ​ · Recoveries · ​ · Total Ending
​ · ​ · Beginning · ​ · Adopting · ​ · for Loans · ​ · Leases · ​ · of Loans · ​ · Allowance
(dollars in thousands) · ​ ​ ​ · Balance · ​ · CECL · ​ · and Leases · ​ · Charged-off · ​ · and Leases · ​ · Balance
For the year ended December 31, 2023​​​​​​​​​​​​​​​​​​
Commercial​$6,501​$(1,158)​$225​$(180)​$10​$5,398
Leases​​—​​—​​—​​—​​—​​—
Construction and Land Development​3,911​(1,070)​(685)​—​—​2,156
1-4 Family Construction​​845​​(235)​​(52)​​—​​—​​558
Real Estate Mortgage:​​​​​​​​​​​​
1-4 Family Mortgage​4,325​(1,778)​99​—​5​2,651
Multifamily​17,459​3,318​1,440​—​—​22,217
CRE Owner Occupied​​1,965​​(943)​​162​​—​​—​​1,184
CRE Nonowner Occupied​​12,576​​2,869​​780​​—​​—​​16,225
Total Real Estate Mortgage Loans​​36,325​​3,466​​2,481​​—​​5​​42,277
Consumer and Other​​151​​(90)​​81​​(44)​​7​​105
Unallocated​​263​​(263)​​—​​—​​—​​—
Total​$47,996​$650​$2,050​$(224)​$22​$50,494

The following tables present the balance in the allowance for credit losses and the recorded investment in loans, by segment as of December 31, 2025 and 2024:

​​​​​​​​​​
​ · ​ · Individually · ​ · Collectively · ​ · ​ · ​
​ · ​ · Evaluated for · ​ · Evaluated for · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Credit Loss · ​ · Credit Loss · ​ · Total
ACL at December 31, 2025​​​​​​​​​
Commercial​$134​$5,848​$5,982
Leases​​—​​352​​352
Construction and Land Development​—​1,687​1,687
1-4 Family Construction​​—​​316​​316
Real Estate Mortgage:​​​​​​
1-4 Family Mortgage​—​2,475​2,475
Multifamily​789​22,986​23,775
CRE Owner Occupied​​—​​1,080​​1,080
CRE Nonowner Occupied​​2,889​​17,706​​20,595
Total Real Estate Mortgage Loans​​3,678​​44,247​​47,925
Consumer and Other​​—​​181​​181
Total​$3,812​$52,631​$56,443
​​​​​​​​​​
​ · ​ · Individually · ​ · Collectively · ​ · ​ · ​
​ · ​ · Evaluated for · ​ · Evaluated for · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Credit Loss · ​ · Credit Loss · ​ · Total
ACL at December 31, 2024​​​​​​​​​
Commercial​$133​$5,497​$5,630
Leases​​6​​362​​368
Construction and Land Development​—​866​866
1-4 Family Construction​​—​​331​​331
Real Estate Mortgage:​​​​​​
1-4 Family Mortgage​—​2,795​2,795
Multifamily​—​23,120​23,120
CRE Owner Occupied​​—​​1,290​​1,290
CRE Nonowner Occupied​​—​​17,735​​17,735
Total Real Estate Mortgage Loans​​—​​44,940​​44,940
Consumer and Other​​5​​137​​142
Total​$144​$52,133​$52,277
​​​​​​​​​​
​ · ​ · Individually · ​ · Collectively · ​ · ​ · ​
​ · ​ · Evaluated for · ​ · Evaluated for · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Credit Loss · ​ · Credit Loss · ​ · Total
Loans at December 31, 2025​​​​​​​​​
Commercial​$10,527​$536,718​$547,245
Leases​​—​​43,407​​43,407
Construction and Land Development​34​216,129​216,163
1-4 Family Construction​​—​​45,152​​45,152
Real Estate Mortgage:​​​​​​
1-4 Family Mortgage​1,000​495,142​496,142
Multifamily​23,776​1,563,562​1,587,338
CRE Owner Occupied​​3,553​​186,201​​189,754
CRE Nonowner Occupied​​16,867​​1,148,237​​1,165,104
Total Real Estate Mortgage Loans​​45,196​​3,393,142​​3,438,338
Consumer and Other​​—​​19,212​​19,212
Total​$55,757​$4,253,760​$4,309,517
​​​​​​​​​​
​ · ​ · Individually · ​ · Collectively · ​ · ​ · ​
​ · ​ · Evaluated for · ​ · Evaluated for · ​ · ​ · ​
(dollars in thousands) · ​ ​ ​ · Credit Loss · ​ · Credit Loss · ​ · Total
Loans at December 31, 2024​​​​​​​​​
Commercial​$14,045​$483,617​$497,662
Leases​​34​​44,257​​44,291
Construction and Land Development​58​97,197​97,255
1-4 Family Construction​​—​​41,961​​41,961
Real Estate Mortgage:​​​​​​
1-4 Family Mortgage​708​473,675​474,383
Multifamily​—​1,425,610​1,425,610
CRE Owner Occupied​​1,558​​189,690​​191,248
CRE Nonowner Occupied​​8,278​​1,074,830​​1,083,108
Total Real Estate Mortgage Loans​​10,544​​3,163,805​​3,174,349
Consumer and Other​​18​​12,978​​12,996
Total​$24,699​$3,843,815​$3,868,514

The following tables present the amortized cost basis of collateral dependent loans by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​
​ · ​ · Primary Type of Collateral · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · Business · ​ · ​ · ​ · ​ · ​ · ​ · ACL
(dollars in thousands) · ​ ​ ​ · Real Estate · ​ ​ ​ · Assets · ​ ​ ​ · Other · ​ ​ ​ · Total · ​ ​ ​ · Allocation
December 31, 2025​​​​​​​​​​​​​​​
Commercial​$72​$159​$10,296​$10,527​$134
Construction and Land Development​34​​—​​—​​34​​—
Real Estate Mortgage:​​​​​​​​​​​​​​
1-4 Family Mortgage​1,000​​—​​—​​1,000​​—
Multifamily​23,776​​—​​​​​23,776​​789
CRE Owner Occupied​3,553​​—​​—​​3,553​​—
CRE Nonowner Occupied​16,867​​—​​—​​16,867​​2,889
Total Real Estate Mortgage Loans​​45,196​​—​​—​​45,196​​3,678
Totals​$45,302​$159​$10,296​$55,757​$3,812
​​​​​​​​​​​​​​​​
​ · ​ · Primary Type of Collateral · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · ​ · Business · ​ · ​ · ​ · ​ · ​ · ​ · ACL
(dollars in thousands) · ​ ​ ​ · Real Estate · ​ ​ ​ · Assets · ​ ​ ​ · Other · ​ ​ ​ · Total · ​ ​ ​ · Allocation
December 31, 2024​​​​​​​​​​​​​​​
Commercial​$—​$3,688​$10,357​$14,045​$133
Leases​​—​​—​​34​​34​​6
Construction and Land Development​58​​—​​—​​58​​—
Real Estate Mortgage:​​​​​​​​​​​​​​
1-4 Family Mortgage​708​​—​​—​​708​​—
CRE Owner Occupied​1,558​​—​​—​​1,558​​—
CRE Nonowner Occupied​8,278​​—​​—​​8,278​​—
Total Real Estate Mortgage Loans​​10,544​​—​​—​​10,544​​—
Consumer and Other​—​​—​​18​​18​​5
Totals​$10,602​$3,688​$10,409​$24,699​$144

Accrued interest receivable on loans, which is recorded within accrued interest on the balance sheet, totaled $12.7 million and$11.4 million at December 31, 2025 and 2024, respectively, and was excluded from the estimate of credit losses. For the twelve months ended December 31, 2025, the Company modified one CRE nonowner occupied loan, with an outstanding balance of$8.6 million, for a borrower experiencing financial difficulty by granting a 3-year extension of the loan at a below market rate. There were no instances of subsequent default on the loan modified during the period. For the twelve months ended December 31, 2024, there wereno loans modified to borrowers experiencing financial difficulty.

Note 7: Premises and Equipment

Premises and equipment are summarized as follows for the years ended December 31, 2025 and 2024:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​​Range of​December 31,​December 31,
(dollars in thousands)​Useful Lives​ ​ ​2025​ ​ ​2024
Land​N/A​$7,848​$8,145
Building​15 - 39 Years​43,333​43,580
Leasehold Improvements​3 ‑ 15 Years​2,022​2,022
Furniture and Equipment​2 ‑ 5 Years​7,419​6,411
Construction in Progress​N/A​4,210​357
Subtotal​​​64,832​60,515
Accumulated Depreciation​​​(13,256)​(10,982)
Totals​​​$51,576​$49,533

Depreciation and amortization expense charged to noninterest expense for the years ended December 31, 2025, 2024 and 2023, totaled$2.5 million,$2.4 million and$2.5 million, respectively. Construction in progress represents amounts paid for the construction of the Bank’s new branch building in Lake Elmo, Minnesota. Construction was completed in February 2026.

Note 8: Goodwill and Other Intangible Assets

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 terms.

The following table presents a summary of other intangible assets at December 31, 2025 and 2024:

​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · December 31,
(dollars in thousands)​ ​ ​2025​ ​ ​2024
Core Deposit Intangible​$7,740​$7,740
Favorable Lease​445​445
Subtotal​8,185​8,185
Accumulated Amortization​(1,255)​(335)
Totals​$6,930​$7,850

Amortization expense of other intangible assets for the years ended December 31, 2025, 2024 and 2023 was$921,000,$78,000 and$100,000, respectively. The core deposit intangible asset is amortized over its estimated useful life often years.

The following table presents the estimated future amortization of the core deposit intangible and favorable lease asset for the next five years and thereafter. The projections of amortization expense are based on existing asset balances as of December 31, 2025.

​ · ​ · ​ · ​ · ​ · ​ · ​
​​Core Deposit​Favorable
(dollars in thousands)​Intangible​ ​ ​Lease
2026​$871​34
2027​852​34
2028​830​34
2029​803​18
2030​773​—
Thereafter​2,681​—
Totals​$6,810​$120

Note 9: Leases

The Company’s operating leases are real estate leases which are comprised of bank branches and office space with terms extending through 2030. Operating lease agreements are required to be recognized on the consolidated balance sheets as an ROU asset and a corresponding lease liability. The Company’s lease agreements often include one or more options to renew at the Company’s discretion. If at lease inception, the Company considers the exercising of a renewal option to be reasonably certain, the Company will include the extended term in the calculation of the ROU asset and lease liability.

Operating lease ROU assets represent the Company’s right to use the underlying asset during the lease term and operating lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and operating lease liabilities are recognized at lease commencement based on the present value of the remaining lease payments using the rate implicit in the lease. As the rate implicit in the lease is rarely determinable, the Company uses its incremental borrowing rate at lease commencement to calculate the present value of lease payments. The Company's incremental borrowing rate is based on the FHLB amortizing advance rate, adjusted for the lease term and other factors.

As the Company elected not to separate lease and non-lease components and instead to account for them as a single lease component, the variable lease cost primarily represents variable payments such as common area maintenance, property taxes and other costs associated with the lease. These variable payments are not included in the lease liability and are expensed as incurred.

The following table presents the components of lease expense and cash flow information related to operating leases as of the periods indicated:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · December 31,
(dollars in thousands)​2025​2024​2023
Operating Lease Cost​$595​$593​$557
Variable Lease Cost​269​265​262
Total Lease Cost​$864​$858​$819

The following table presents other information on the Company’s operating leases for the years ended December 31, 2025 and 2024:

​​​​​​​​​
​ · ​ · December 31, · ​
(dollars in thousands) · ​ · 2025 · ​ · ​ · 2024 · ​
Operating Lease Right-of-Use Assets​$1,374​​$1,540​
Operating Lease Liabilities​​1,446​​​1,580​
Weighted Average Remaining Lease Term (in Years)​​3.41​​​3.34​
Weighted Average Discount Rate​​2.55%​​1.91%
​​​​​​​​​
Other Information​​​​​​​​
Cash paid for amounts included in the measurement of lease liabilities:​​​​​​​​
Operating cash flows from operating leases​$599​​$587​

The following table presents the future expected operating lease payments under the Company's operating lease agreements as of December 31, 2025:

​​​​
​ · ​ · December 31,
(dollars in thousands) · ​ · 2025
2026​$543
2027​​380
2028​​353
2029​​148
2030​​89
Thereafter​​—
Total Undiscounted Lease Payments​​1,513
Discount for Present Value of Expected Cash Flows​​(67)
Total Lease Liability​$1,446

The Greenwood location is leased pursuant to the terms of a non‑cancelable lease agreement with Bridgewater Properties Greenwood, LLC, a related party through common ownership, in effect at December 31, 2025. The lease containsone remaining option to extend the lease for a period offive years. Future minimum rent commitments under the operating lease are listed below at December 31, 2025.

​ · ​ · ​ · ​
(dollars in thousands)​ ​ ​2025
2026​$108
Total​$108

The Company receives rents from the lease of office and retail space in its corporate headquarters building and itstwo office buildings in Minnetonka. Rental income is included in noninterest expense as an offset to rental expense. Future minimum rental income under these leases are listed below at December 31, 2025.

​​​​
(dollars in thousands) · ​ ​ ​ · 2025
2026​$735
2027​​727
2028​​650
2029​​525
2030​​433
Thereafter​​124
Total​$3,194

Rental income, which is included in occupancy and equipment expense, including common area maintenance pertaining to banking premises for the years ended December 31, 2025, 2024 and 2023, totaled$1.2 million,$919,000 and$894,000, respectively.

Note 10: Deposits

The following table presents the composition of deposits at December 31, 2025 and 2024:

​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · December 31,
(dollars in thousands)​ ​ ​2025​ ​ ​2024
Transaction Deposits​$1,816,810​$1,663,005
Savings and Money Market Deposits​1,380,922​1,259,503
Time Deposits​312,154​338,506
Brokered Deposits​810,483​825,753
Totals​$4,320,369​$4,086,767

Brokered deposits contained brokered transaction and money market accounts of$145.5 million and$127.4 million as of December 31, 2025 and 2024, respectively.

The following table presents the scheduled maturities of brokered and customer time deposits at December 31, 2025:

​​​​
​ · ​ · December 31,
(dollars in thousands) · ​ ​ ​ · 2025
Less than 1 Year​$630,296
1 to 2 Years​​64,427
2 to 3 Years​​77,885
3 to 4 Years​​65,104
4 to 5 Years​​139,471
Greater than 5 Years​​—
Totals​$977,183

The aggregate amount of time deposits greater than $250,000 was$158.7 million and$155.0 million at December 31, 2025 and 2024, respectively.

Note 11: Derivative Instruments and Hedging Activities

The Company uses derivative financial instruments, which consist of interest rate swaps and interest rate caps, to assist in its interest rate risk management. The notional amount does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative financial instruments are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship and classification as either a cash flow hedge or fair value hedge for those derivatives which are designated as part of a hedging relationship. For derivatives not designated as hedges, the gain or loss is recognized in current earnings.

Derivatives Designated as Hedging Instruments

The Company uses derivative instruments to hedge its exposure to economic risks, including interest rate, liquidity and credit risk. Certain hedging relationships are formally designated and qualify for hedge accounting under GAAP. On the date the Company enters into a derivative contract designated as a hedging instrument, the derivative is designated as either a fair value hedge, cash flow hedge, or a net investment hedge. When a derivative is designated as a fair value, cash flow, or net investment hedge, the Company performs an assessment, at inception, and at a minimum, quarterly thereafter, to determine the effectiveness of the derivative in offsetting changes in the value or cash flows of the hedged item(s). As of December 31, 2025 and 2024, the Company only used fair value and cash flow hedges.

Fair value hedges: For derivative instruments that are designated and qualify as a fair value hedge, the gain or loss on the derivative instrument as well as the offsetting gain or loss on the hedged asset or liability attributable to the hedged risk are recognized in current earnings. The gain or loss on the derivative instrument is presented on the same income statement line item as the earnings effect of the hedged item. The Company utilizes fair value hedges to mitigate the effect of changing interest rates on the fair values of fixed rate available for sale securities. The hedging strategy converts the fixed interest rates to variable interest rates based on Secured Overnight Financing Rate (“SOFR”).

The following table presents a summary of the Company’s interest rate swaps designated as fair value hedges as of December 31, 2025 and 2024:

​​​​​​​​
(dollars in thousands) · ​ ​ ​ · December 31, 2025 · ​ · December 31, 2024 · ​
Notional Amount​$242,314​$145,850​
Weighted Average Pay Rate​​3.55%​3.52%
Weighted Average Receive Rate​​4.20​​4.82​
Weighted Average Maturity (Years)​​14.54​​19.47​

Cash flow hedges: For derivative instruments that are designated and qualify as a cash flow hedge, the aggregate fair value of the derivative instrument is recorded in other assets or other liabilities with any gain or loss related to changes in fair value recorded in accumulated other comprehensive income, net of tax. The gain or loss is reclassified into earnings in the same period during which the hedged asset or liability affects earnings and is presented in the same income statement line item as the earnings effect of the hedged asset or liability. The Company utilizes cash flow hedges to manage interest rate exposure for the brokered deposit and wholesale borrowing portfolios. During the next 12 months, the Company estimates that$3.3 million will be reclassified to interest expense, as a reduction of the expense.

The following table presents a summary of the Company’s interest rate swaps designated as cash flow hedges as of December 31, 2025 and 2024:

​​​​​​​​
(dollars in thousands) · ​ ​ ​ · December 31, 2025 · ​ ​ ​ · December 31, 2024 · ​
Notional Amount​$263,000​$178,000​
Weighted Average Pay Rate​​2.96%​2.20%
Weighted Average Receive Rate​​3.94%​4.80%
Weighted Average Maturity (Years)​​3.90​​4.02​
Net Unrealized Gain​$1,286​$5,139​

The Company purchases interest rate caps, designated as cash flow hedges, of certain funding liabilities. The interest rate caps require receipt of variable amounts from the counterparties when interest rates rise above the strike price in the contracts. For the years ended December 31, 2025, 2024, and 2023, the Company recognized amortization expense on the interest rate caps of$793,000,$800,000, and$791,000, respectively, which was recorded as a component of interest expense on brokered deposits and FHLB advances.

The following table presents a summary of the Company’s interest rate caps designated as cash flow hedges as of December 31, 2025 and 2024:

​​​​​​​​
(dollars in thousands) · ​ ​ ​ · December 31, 2025 · ​ ​ ​ · December 31, 2024 · ​
Notional Amount​$125,000​$125,000​
Unamortized Premium Paid​​3,488​​4,281​
Weighted Average Strike Rate​​0.96%​0.96%
Weighted Average Maturity (Years)​​4.34​​5.34​

Derivatives Not Designated as Hedging Instruments

Interest rate swaps: The Company enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Company enters into offsetting positions with large U.S. financial institutions in order to minimize the risk to the Company. These swaps are derivatives, but are not designated as hedging instruments. Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or client owes the Company, and results in credit risk to the Company. When the fair value of a derivative instrument contract is negative, the Company owes the client or counterparty and therefore, the Company has no credit risk.

Risk participation agreements (“RPA”): The Company has entered into RPAs to share credit exposure with a counterparty in connection with an interest rate swap associated with a loan participation. Under an RPA, the Company either assumes or sells a portion of the underlying credit exposure and, in exchange, pays or receives an upfront fee. When the Company assumes credit exposure, it is entitled to receive payment from the counterparty in the event of a borrower default. Conversely, when the Company sells credit exposure, it is obligated to make a payment to the counterparty if the underlying borrower defaults on its obligations. The notional amount of the RPA reflects the Company’s pro-rata share of the derivative instrument consistent with its share of the related participated loan.

The following table presents the total notional amounts and gross fair values of the Company’s derivatives as of December 31, 2025 and 2024:

​​​​​​​​​​​​​
​ · ​ · Derivative Assets · ​ · Derivative Liabilities
​ · ​ · Notional · ​ · Estimated · ​ · Notional · ​ · Estimated
(dollars in thousands) · ​ · Amount · ​ · Fair Value · ​ · Amount · ​ · Fair Value
December 31, 2025​​​​​​​​​​​​
Designated as hedging instruments:​​​​​​​​​​​​
Fair Value hedges:​​​​​​​​​​​​
Interest rate swaps​$145,850​$10,968​$96,464​$419
Cash flow hedges:​​​​​​​​​​​​
Interest rate swaps​​185,500​​2,012​​77,500​​725
Interest rate caps​​125,000​​13,221​​—​​—
Total derivatives designated as hedging instruments​$456,350​$26,201​$173,964​$1,144
Not designated as hedging instruments:​​​​​​​​​​​​
Interest rate swaps​$267,831​$8,699​$267,831​$8,699
Risk Participation Agreements​​12,851​​1​​9,902​​13
Total derivatives not designated as hedging instruments​$280,682​$8,700​$277,733​$8,712
​​​​​​​​​​​​​
December 31, 2024​​​​​​​​​​​​
Designated as hedging instruments:​​​​​​​​​​​​
Fair Value hedges:​​​​​​​​​​​​
Interest rate swaps​$145,850​$10,487​$—​$—
Cash flow hedges:​​​​​​​​​​​​
Interest rate swaps​​178,000​​5,139​​—​​—
Interest rate caps​​125,000​​19,319​​—​​—
Total derivatives designated as hedging instruments​$448,850​$34,945​$—​$—
Not designated as hedging instruments:​​​​​​​​​​​​
Interest rate swaps​$115,577​$8,210​$115,577​$8,210
Total derivatives not designated as hedging instruments​$115,577​$8,210​$115,577​$8,210

The Company is party to collateral support agreements with certain derivative counterparties. These agreements require that the Company maintain collateral based on the fair values of derivative transactions. In the event of default by the Company, the counterparty would be entitled to the collateral. As of both December 31, 2025 and 2024, the Company pledgedno cash collateral for the Company’s derivative contracts. As of December 31, 2025 and 2024, the Company’s derivative counterparties pledged cash collateral to the Company of$26.2 million and$44.2 million, respectively.

The following table presents the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income for the years ended December 31, 2025, 2024 and 2023:

​​​​​​​
​ · ​ · Gains (Losses) · ​ · Gains (Losses)
​ · ​ · Recognized in · ​ · Reclassified from
(dollars in thousands) · ​ · OCI · ​ · OCI into Earnings
December 31, 2025​​​​​​
Cash flow hedges:​​​​​​
Interest rate swaps​$3,852​$2,955
Interest rate caps​​5,305​​3,529
December 31, 2024​​​​​​
Cash flow hedges:​​​​​​
Interest rate swaps​$132​$5,721
Interest rate caps​​(1,402)​​3,524
December 31, 2023​​​​​​
Cash flow hedges:​​​​​​
Interest rate swaps​$3,904​$5,783
Interest rate caps​​(101)​​319

No amounts were reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness for these derivatives during the years ended December 31, 2025, 2024 and 2023, andno amounts are expected to be reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness over the next twelve months.

The effects of the Company’s hedging relationships on the income statement during the year ending December 31, 2025 and 2024 were as follows:

​​​​​​​​​​
​ · ​ · Location and Amount of Gains (Losses) Recognized in Income
​ · ​ · Interest Income · ​ · Interest Expense
​ · ​ · Investment · ​ · ​
​ · ​ · securities - · ​ · ​
(dollars in thousands) · ​ · taxable · ​ · Deposits · ​ · FHLB Advances
December 31, 2025​​​​​​​​​
Total amounts in the Consolidated Statements of Income​$38,688​$131,418​$11,465
Fair value hedges:​​​​​​​​​
Interest rate swaps​​31​​—​​—
Cash flow hedges:​​​​​​​​​
Interest rate swaps​​—​​234​​2,721
Interest rate caps​​—​​192​​3,337
December 31, 2024​​​​​​​​​
Total amounts in the Consolidated Statements of Income​$33,927​$128,805​$8,554
Fair value hedges:​​​​​​​​​
Interest rate swaps​​10,487​​—​​—
Cash flow hedges:​​​​​​​​​
Interest rate swaps​​—​​1,482​​4,239
Interest rate caps​​—​​382​​3,142
December 31, 2023​​​​​​​​​
Total amounts in the Consolidated Statements of Income​$26,245​$96,045​$7,489
Fair value hedges:​​​​​​​​​
Interest rate swaps​​—​​—​​—
Cash flow hedges:​​​​​​​​​
Interest rate swaps​​—​​2,611​​3,172
Interest rate caps​​—​​(260)​​579

The following table presents amounts that were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges at December 31, 2025 and 2024:

​​​​​​​​​​
​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Cumulative Fair
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Value Hedging
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Adjustment in the
​ · ​ · ​ · ​ · ​ · Carrying Amount · ​ · Carrying Amount of
​ · ​ · Notional · ​ · of Hedged Assets/ · ​ · Hedged Assets/
(dollars in thousands) · ​ · Amount · ​ · Liabilities · ​ · Liabilities
December 31, 2025​​​​​​​​​
Available for sale securities​$242,314​$252,863​$10,549
​​​​​​​​​​
December 31, 2024​​​​​​​​​
Available for sale securities​$145,850​$156,337​$10,487

The gain recognized on derivatives not designated as hedging relationships for the years ended December 31, 2025, 2024, and 2023 was as follows:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
(dollars in thousands) · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
Derivatives not designated · Consolidated Statements · ​ · Year Ended December 31,
as hedging Instrumentsof Income Location​2025​2024​2023
Risk participation agreementsOther Income​$11​$—​$—

The following table summarizes gross and net information about derivative instruments that are eligible for offset on the balance sheet at December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Net Amounts of · ​ · ​ · ​ · ​ · ​
​ · ​ · Gross Amounts · ​ · Gross Amounts · ​ · Assets (Liabilities) · ​ · Gross Amounts Not Offset in the Balance Sheet · ​ · ​ · ​
​ · ​ · of Recognized · ​ · Offset in the · ​ · Presented in the · ​ · Financial · ​ · Cash Collateral · ​ · Net Assets
(dollars in thousands) · ​ · Assets (Liabilities) · ​ · Balance Sheet · ​ · Balance Sheet · ​ · Instruments · ​ · Received (Paid) · ​ · (Liabilities)
December 31, 2025​​​​​​​​​​​​​​​​​​
Assets​$34,900​$—​$34,900​$—​$26,183​$8,717
Liabilities​(9,844)​—​(9,844)​—​—​(9,844)
​​​​​​​​​​​​​​​​​​​
December 31, 2024​​​​​​​​​​​​​​​​​​
Assets​$43,155​$—​$43,155​$—​$44,233​$(1,078)
Liabilities​​(8,210)​—​(8,210)​—​—​(8,210)

Note 12: Federal Home Loan Bank Advances and Other Borrowings

Federal Home Loan Bank Advances. The Company has entered into an Advances, Pledge, and Security Agreement with the FHLB whereby specific mortgage loans of the Bank’s with principal balances of$1.62 billion and$1.54 billion at December 31, 2025 and 2024, respectively, were pledged to the FHLB as collateral. FHLB advances are also secured with FHLB stock owned by the Company. Total remaining available capacity under the agreement was$611.3 million and$483.2 million at December 31, 2025 and 2024, respectively.

The following table presents FHLB advances, by maturity, at December 31, 2025 and 2024:

​​​​​​​​​​​
​ · ​ · December 31, 2025 · ​ · December 31, 2024
​ · ​ ​ ​ · Weighted · ​ ​ ​ · ​ · ​ ​ ​ · Weighted · ​ ​ ​ · ​
​ · ​ · Average · ​ · Total · ​ · Average · ​ · Total
(dollars in thousands) · ​ · Rate · ​ · Outstanding · ​ · Rate · ​ · Outstanding
Less than 1 Year​4.04%$319,500​4.62%$288,000
1 to 2 Years​4.13​​27,500​3.45​​21,500
2 to 3 Years​4.02​​30,000​4.13​​27,500
3 to 4 Years​4.10​​15,000​4.01​​22,500
4 to 5 Years​4.09​​7,500​—​​—
Totals​​​$399,500​​​$359,500

Federal Reserve Discount Window. At December 31, 2025 and 2024, the Company had the ability to draw additional borrowings of$1.03 billion and$925.8 million, respectively, from the Federal Reserve Bank of Minneapolis. The ability to draw borrowings was based on loan collateral pledged with principal balances of$963.5 million and investment securities collateral pledged with fair value of$254.3 million as of December 31, 2025, subject to the approval from the Board of Governors of the Federal Reserve System. As of December 31, 2024, the ability to draw borrowings was based on loan collateral pledged with principal balances of$815.5 million and investment securities pledged with fair value of$289.9 million. There wereno Federal Reserve borrowings outstanding as of either December 31, 2025 or 2024.

Federal Funds Purchased. Federal funds purchased matureone business day from the transaction date. There were $-0- federal funds purchased outstanding as of each of December 31, 2025 and 2024.

*Line of Credit.*The Company has an outstanding Loan and Security Agreement and related revolving note with an unaffiliated financial institution that 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. As of both December 31, 2025 and 2024, the Company hadtwo outstanding letters of credit totaling$6.4 million under this facility. The note contains customary representations, warranties, and covenants, including certain financial covenants and capital ratio requirements. As of December 31, 2025, the Company believes it was in compliance with all such covenants and capital ratio requirements.

The following table presents the revolving line of credit at December 31, 2025 and 2024:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · Total Debt · ​ · Total Debt · ​ · ​ · ​ · ​ · ​
​ · ​ · ​ · ​ · Outstanding · ​ · Outstanding · ​ · Interest · ​ · ​ · ​
Name · ​ · Maturity Date · ​ · December 31, 2025 · ​ · December 31, 2024 · ​ · Rate · ​ · ​ · Coupon Structure
Revolving Credit Facility​September 1, 2026​$—​$13,750​6.75%​Variable with Floor (1)
(1)The variable interest rate is equal to the greater of the Wall Street Journal Prime Rate in effect or a floor rate of 4.50%.

Note 13: Subordinated Debentures

The following presents a summary of the Company’s subordinated debentures as of December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​​​​
​​​​​​​​​​Total Debt​​Total Debt​​​​​
​​Date​​First​​Maturity​Outstanding​​Outstanding​Interest​​​
Name​Established​​Redemption Date​​Date​December 31, 2025​​December 31, 2024​Rate​​Coupon Structure
(dollars in thousands)​​​​​​​​​​​​​​​​​​
2030 Notes​June 19, 2020​​July 1, 2025​​July 1, 2030$—​$50,000​5.25%​Fixed-to-Floating (1)
2031 Notes​July 8, 2021​​July 15, 2026​​July 15, 2031​30,000​​30,000​3.25%​Fixed-to-Floating (2)
2035 Notes​June 24, 2025​​June 30, 2030​​June 30, 2035​80,000​​—​7.625%​Fixed-to-Floating (3)
Subordinated Debentures​​​​​​​​​110,000​​80,000​​​​​
Debt Issuance Costs​​​​​​​​​(1,323)​​(330)​​​​​
Subordinated Debentures, Net of Issuance Costs​​​​​​​​$108,677​$79,670​​​​​
(1)Notes fully redeemed as of June 30, 2025.
(2)Migrates to three month term SOFR + 2.52% beginning July 15, 2026 until either the maturity date or earlier redemption date.
(3)Migrates to three month term SOFR + 3.88% beginning June 30, 2030 until either the maturity date or earlier redemption date.

Note 14: Related-Party Transactions

In the ordinary course of business, the Company has granted loans to executive officers, directors, principal shareholders, and their affiliates (together, “related parties”). The following table presents the activity associated with loans made between related parties for the years ended December 31, 2025 and 2024:

​ · ​ · ​ · ​ · ​ · ​ · ​
(dollars in thousands)​ ​ ​2025​ ​ ​2024
Beginning Balance​$9,319​$31,840
New Loans and Advances​11,289​6,598
Repayments​(10,244)​(29,119)
Totals​$10,364​$9,319

Deposits from related parties held by the Company at December 31, 2025 and 2024 were$16.6 million and$18.4 million, respectively.

The Company has a lease agreement with a related party which is disclosed in “Note 9 – Leases”.

Note 15: Income Taxes

The following table presents the allocation of federal and state income taxes between current and deferred portions as of December 31, 2025:

​​​​
(dollars in thousands) · ​ ​ ​ · 2025
Current Tax Provision​​​
Federal​$10,321
State​​5,627
Total Current Tax Provision​$15,948
Deferred Tax Benefit​​​
Federal​$(1,500)
State​​(504)
Total Deferred Tax Benefit​$(2,004)
Total Income Tax Provision​​​
Federal​$8,821
State​​5,123
Total Income Tax Provision​$13,944

The Company does not have pretax income from continuing foreign operations or foreign tax expense.

The following table presents the allocation of federal and state income taxes between current and deferred portions as of December 31, 2024 and 2023 before the adoption of ASU 2023-09:

​ · ​ · ​ · ​ · ​ · ​ · ​
(dollars in thousands)​2024​2023
Current Tax Provision​$9,887​$11,886
Deferred Tax Expense​24​676
Total Income Tax Provision​$9,911​$12,562

The reasons for the differences between the statutory federal income tax rate and the effective tax rates are summarized as follows as of December 31, 2025:

​​​​​​​
​ · ​ · 2025 · ​
(dollars in thousands) · ​ ​ ​ · Amount · ​ ​ ​ · Percent · ​ ​ ​
Amount of Statutory Rate​$12,607​21.0%
State Income Taxes (Net of Federal Income Tax Benefit) (1)​4,047​6.7​
Tax Credits​​​​​​
Low Income Housing​​(2,347)​(3.9)​
Rehabilitation​​(815)​(1.4)​
Nontaxable or Nondeductible Items​​​​​​
Interest on Investment Securities and Loans Exempt from Federal Income Tax​​(1,468)​(2.4)​
Other​​(183)​(0.3)​
Other Adjustments​​​​​​
Proportional Amortization​​2,451​4.1​
Other​​(348)​(0.6)​
Totals​$13,944​23.2%
(1)State taxes in Minnesota made up the majority (greater than 50 percent) of the tax effect in this category.

The reasons for the differences between the statutory federal income tax rate and the effective tax rates are summarized as follows as of December 31, 2024 and 2023 before the adoption of ASU 2023-09:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · 2024 · ​ · 2023
(dollars in thousands) · ​ · Amount · ​ ​ ​ · Percent · ​ · ​ · Amount · ​ ​ ​ · Percent · ​
Amount of Statutory Rate​$8,974​21.0%​$11,030​21.0%
State Income Taxes (Net of Federal Income Tax Benefit) (1)​2,920​6.8​​​3,511​6.6​
Interest on Investment Securities and Loans Exempt From Federal Income Tax​(984)​(2.3)​​​(1,175)​(2.3)​
Tax Credits​(360)​(0.8)​​​(91)​0.0​
Other Differences​(639)​(1.5)​​​(713)​(1.4)​
Totals​$9,911​23.2%​​12,562​23.9%
(1)State taxes in Minnesota made up the majority (greater than 50 percent) of the tax effect in this category.

The Company’s effective tax rate may fluctuate as it is impacted by the level and timing of the Company’s utilization of historic tax credits, low-income housing tax credits, the level of tax-exempt investments and loans, and the overall level of pre-tax income.

The following table presents the components of the net deferred tax asset included in other assets, as of December 31, 2025 and 2024:

​​​​​​​
(dollars in thousands) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024
Depreciation​$(832)​$(834)
Allowance for Credit Losses​15,764​14,559
Unrealized Loss on Securities Available for Sale​2,940​11,189
Unrealized Gain on Cash Flow Hedges​(3,167)​(5,799)
Intangibles​​(443)​​(315)
Deferred Loan Fees​​2,503​​1,912
Reserve for Off-Balance Sheet Credit Exposures​​1,120​​1,015
Other​436​207
Totals​$18,321​$21,934

Note 16: Tax Credit Investments

The Company invests in qualified affordable housing projects and federal historic projects for the purpose of community reinvestment and obtaining tax credits. The Company’s tax credit investments are limited to existing lending relationships with well-known developers and projects within the Company’s market area.

The following table presents a summary of the Company’s investments in qualified affordable housing projects and other tax credit investments at December 31, 2025 and 2024:

​​​​​​​​​​​​​​​
(dollars in thousands) · ​ · ​ · ​ · December 31, 2025 · ​ · December 31, 2024
Investment​Accounting Method​​Investment​​Unfunded Commitment (1)​​Investment​​Unfunded Commitment
Low Income Housing Tax Credit (LIHTC)​Proportional Amortization​$24,767​$10,887​$14,922​$340
Federal Historic Tax Credit (FHTC)​Proportional Amortization​​2,005​​493​​2,872​​2,541
Total​​​$26,772​$11,380​$17,794​$2,881
(1)All commitments are expected to be paid by the Company by December 31, 2026.

The following table presents a summary of the amortization expense and tax benefit recognized for the Company’s qualified affordable housing projects and other tax credit investments during 2025, 2024 and 2023:

​​​​​​​​​​
​ · ​ · Year Ended
​ · ​ · December 31,
(dollars in thousands) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024 · ​ ​ ​ · 2023
Amortization Expense (1)​​​​​​​​​
LIHTC​$1,875​$1,991​$1,810
FHTC​​576​​719​​668
Total​$2,451​$2,710​$2,478
Tax Benefit Recognized (2)​​​​​​​​​
LIHTC​$(2,347)​$(2,347)​$(1,693)
FHTC​​(829)​​(885)​​(912)
Total​$(3,176)​$(3,232)​$(2,605)
(1)The amortization expense for the LIHTC investments are included in income tax expense.
(2)All of the tax benefits recognized are included in income tax expense.

Note 17: Commitments, Contingencies and Credit Risk

Financial Instruments with Off-Balance Sheet Credit Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets.

The Company’s exposure to credit loss is represented by the contractual, or notional, amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments. Since some of the commitments are expected to expire without being drawn upon and some of the commitments may not be drawn upon to the total extent of the commitment, the notional amount of these commitments does not necessarily represent future cash requirements.

The following commitments were outstanding at December 31, 2025 and 2024:

​ · ​ · ​ · ​ · ​ · ​ · ​
​​December 31,​December 31,
(dollars in thousands)​ ​ ​2025​ ​ ​2024
Unfunded Commitments Under Lines of Credit​$796,843​$679,064
Letters of Credit​124,837​124,397
Totals​$921,680​$803,461

Commitments to extend credit are agreements to lend to a customer at fixed or variable rates as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The amount of collateral obtained upon extension of credit is based on management’s credit evaluation of the customer. Collateral held varies but may include accounts receivable; inventory; property, plant, and equipment; real estate; and stocks and bonds. Unfunded commitments under commercial lines of credit, home equity lines of credit, and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit may or may not require collateral and may or may not contain a specific maturity date.

Standby letters of credit are conditional lending commitments issued by the Company to guarantee the performance of a customer to a third party. Generally, all standby letters of credit issued have expiration dates within two years. The credit risk involved in issuing standby letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company generally holds collateral supporting these commitments.

The Company had outstanding letters of credit with the FHLB in total amounts of$109.0 million and$103.2 million at December 31, 2025 and 2024, respectively, on behalf of customers and to secure public deposits.

The ACL for off-balance sheet credit exposures was$4.0 million and$3.6 million at December 31, 2025 and 2024, respectively, and is separately classified on the balance sheet within other liabilities.

The following table presents the balance and activity in the ACL for off-balance sheet credit exposures for the year ended December 31, 2025 and 2024:

​​​​​​​
(dollars in thousands) · ​ · December 31, 2025 · ​ · ​ · December 31, 2024
Allowance for Credit Losses:​​​​​​
Beginning Balance​$3,610​$2,985
Provision for Off-Balance Sheet Credit Exposures​​400​​625
Total Ending Balance​$4,010​$3,610

Legal Contingencies

Various legal claims arise from time to time in the normal course of business. In the opinion of management, any liability resulting from such proceedings would not have a material impact on the consolidated financial statements.

Note 18: Stock Options and Restricted Stock

In 2012, the Company adopted the Bridgewater Bancshares, Inc. 2012 Combined Incentive and Non-Statutory Stock Option Plan (the “2012 Plan”) under which the Company was able to grant options to its directors, officers, and employees for up to 750,000 shares of common stock. Both incentive stock options and nonqualified stock options were granted under the 2012 Plan. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant, and the maximum term of each outstanding option isten years. All outstanding options

have been granted with vesting periods offour orfive years. The 2012 Plan expired in March 2022, and awards are no longer able to be granted under the 2012 Plan.

In 2017, the Company adopted the Bridgewater Bancshares, Inc. 2017 Combined Incentive and Non-Statutory Stock Option Plan (the “2017 Plan”). Under the 2017 Plan, the Company may grant options to its directors, officers, employees and consultants for up to 1,500,000 shares of common stock. Both incentive stock options and nonqualified stock options may be granted under the 2017 Plan. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each outstanding option isten years. All outstanding options have been granted with vesting periods offour orfive years. As of December 31, 2025 and 2024, there were 10,000 and 30,000 shares, respectively, of the Company’s common stock reserved for future option grants under the 2017 Plan.

In 2019, the Company adopted the Bridgewater Bancshares, Inc. 2019 Equity Incentive Plan (the “2019 EIP”). The types of awards which may be granted under the 2019 EIP include incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, restricted stock and cash incentive awards. The Company may grant these awards to its directors, officers, employees and certain other service providers for up to 1,000,000 shares of common stock. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each award isten years. All outstanding awards have been granted with vesting periods offour years. As of December 31, 2025, and 2024, there were 2,192 and 87 shares, respectively, of the Company’s common stock reserved for future grants under the 2019 EIP.

In 2023, the Company adopted the Bridgewater Bancshares, Inc. 2023 Equity Incentive Plan (the “2023 EIP”). Under the 2023 EIP, the Company may grant incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, restricted stock and cash incentive awards. The Company may grant these awards to its directors, officers, employees and certain other service providers for up to 1,500,000 shares of common stock. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each award isten years. All outstanding awards have been granted with a vesting period offour years. As of December 31, 2025, and 2024, there were 464,751 and 972,460 shares, respectively, of the Company’s common stock reserved for future grants under the 2023 EIP.

Stock Options

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on an industry index as described below. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. Historically, the Company has not paid a dividend on its common stock and does not expect to do so in the near future.

The Company used the S&P 600 CM Bank Index as its historical volatility index. The S&P 600 CM Bank Index is an index of publicly traded small capitalization, regional, commercial banks located throughout the United States. There were 56 banks in the index ranging in market capitalization from$600.0 million up to$5.0 billion.

The weighted average assumptions used in the model for valuing stock option grants in 2025 is as follows:

​ · ​ · ​ · ​
​ · ​ · December 31, · ​
​ · ​ ​ ​ · 2025 · ​ ​ ​
Dividend Yield—%
Expected Life7Years
Expected Volatility30.86%
Risk-Free Interest Rate4.33%

The following table presents a summary of the status of the Company’s outstanding stock options for the years ended December 31, 2025 and 2024:

​​​​​​​​​​​
​ · ​ · December 31, 2025 · ​ · December 31, 2024
​ · ​ ​ ​ · ​ ​ ​ · ​ ​ ​ · Weighted · ​ ​ ​ · ​ ​ ​ · ​ ​ ​ · Weighted
​ · ​ · ​ · ​ · Average · ​ · ​ · ​ · Average
​ · ​ · Shares · ​ · Exercise Price · ​ · Shares · ​ · Exercise Price
Outstanding at Beginning of Year1,860,609​$10.692,014,994​$10.57
Granted325,000​14.4310,000​13.17
Exercised(233,934)​8.29(99,385)​7.68
Forfeitures(16,500)​12.94(65,000)​11.81
Outstanding at Period End1,935,175​$11.591,860,609​$10.69
​​​​​​​​​​​
Options Exercisable at Period End1,350,924​$10.691,423,108​$9.95

For the years ended December 31, 2025, 2024 and 2023, the Company recognized compensation expense for stock options of$1.2 million,$917,000 and$851,000, respectively.

The following table presents information pertaining to options outstanding at December 31, 2025:

​​​​​​​​​​​​​​
​ · ​ · ​ · Options Outstanding · ​ · Options Exercisable
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Weighted Average · ​ · ​ · ​ · ​
​ · ​ · ​ · Number of · ​ · Weighted Average · ​ · Remaining Contractual · ​ · Number of · ​ · Weighted Average
Range of Exercise Prices · ​ ​ ​ · Options · ​ ​ ​ · Exercise Price · ​ · Life in Years · ​ · Options · ​ ​ ​ · Exercise Price
$7.00 - 7.99642,792$7.471.8642,792$7.47
​8.00 - 8.992,961​8.764.32,961​8.76
​10.00 - 10.99​202,500​​10.62​7.4​94,749​​10.59
​11.00 - 11.99​221,125​​11.16​6.2​148,375​​11.20
​12.00 - 12.99​245,297​​12.91​3.6​245,297​​12.91
​13.00 - 13.99​285,000​​13.75​9.1​2,500​​13.17
​17.00 - 17.99​285,500​​17.50​6.1​214,250​​17.50
​18.00 - 18.99​50,000​​18.03​9.9​—​​—
​Totals1,935,175​$11.59​5.01,350,924​$10.69

As of December 31, 2025, there was$2.5 million of total unrecognized compensation cost related to nonvested stock options that is expected to be recognized over a weighted-average period of 2.3 years.

The following table presents an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the year ended December 31, 2025:

​​​​​​
​ · ​ ​ ​ · ​ ​ ​ · ​ ​ ​ · Weighted
​ · ​ · Number of · ​ · Average Grant
​ · ​ · Shares · ​ · Date Fair Value
Nonvested Options at December 31, 2024437,501​$5.18
Granted325,000​​6.08
Vested(168,375)​​5.15
Forfeited​(9,875)​​4.85
Nonvested Options at December 31, 2025584,251​$5.69

Restricted Stock Awards

There was no restricted stock award granting activity for the year ended December 31, 2025. Compensation expense associated with the restricted stock awards is recognized on a straight-line basis over the period that the restrictions associated with the awards lapse based on the total cost of the award at the grant date. For the years ended December 31,2025, 2024 and 2023, the Company recognized compensation expense for restricted stock awards of $-0-,$13,000 and$417,000, respectively.

In addition, during the year ended December 31, 2025, the Company issued 30,728 shares of common stock to directors as a part of their compensation for their annual services on the Company’s board of directors. The aggregate value of the shares issued to directors of$496,000 was included in stock-based compensation expense in the accompanying consolidated statements of shareholders’ equity.

Restricted Stock Units

The Company has granted restricted stock units out of the 2019 EIP and 2023 EIP. Restricted stock units represent the right to receiveone share of Company stock upon vesting and vest in equal annual installments on the first four anniversaries of the date of the grant. Nonvested restricted stock units have no voting or dividend rights and are not considered outstanding until vested and settled.

The following table presents an analysis of nonvested restricted stock units outstanding for the years ended December 31, 2025 and 2024:

​​​​​​​​​​​
​ · ​ · December 31, 2025 · ​ · December 31, 2024
​ · ​ ​ ​ · ​ ​ ​ · ​ ​ ​ · Weighted · ​ ​ ​ · ​ ​ ​ · ​ ​ ​ · Weighted
​ · ​ · Number of · ​ · Average Grant · ​ · Number of · ​ · Average Grant
​ · ​ · Shares · ​ · Date Fair Value · ​ · Shares · ​ · Date Fair Value
Nonvested at Beginning of Year415,758​$14.46​441,015​$14.71
Granted194,774​​16.82​178,010​​14.06
Vested(154,473)​​15.18​(160,630)​​14.67
Forfeited​(8,398)​​14.39​(42,637)​​14.59
Nonvested at Year End447,661​$15.24​415,758​$14.46

Compensation expense associated with the restricted stock units is recognized on a straight-line basis over the period that the restrictions associated with the units lapse based on the total cost of the unit at the grant date. For the years ended December 31,2025, 2024 and 2023, the Company recognized compensation expense for restricted stock units of$2.5 million,$2.5 million and$2.2 million, respectively.

As of December 31, 2025, there was$6.1 million of total unrecognized compensation cost related to nonvested restricted stock units granted under the 2019 EIP or 2023 EIP that is expected to be recognized over a weighted-average period of 2.8 years.

Note 19: Profit Sharing Plan

The Company has a combined profit sharing 401(k) plan which provides that an annual contribution up to 100% of each participating employee’s total pay, may be contributed to the plan. Employees are eligible to participate after meeting certain eligibility requirements as defined in the plan and are allowed to make pre-tax contributions up to the maximum amount allowed by the Internal Revenue Service. The terms of the 401(k) plan require employer match contributions equal to 100% of the employee contributions up to 4% of pay. In addition, the terms of the plan allow for discretionary profit sharing contributions as determined by the Company and approved by the board of directors.

The employer match contributions for the 401(k) plan were$1.2 million,$1.1 million, and$1.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. The total employer discretionary profit sharing contributions to the plan were$1.0 million,$840,000, and$824,000 for the years ended December 31, 2025, 2024 and 2023, respectively.

Note 20: Deferred Compensation Plan

In 2013, the Company implemented a deferred compensation plan for certain employees which allows the Company to make a discretionary contribution to the account of any employee designated as a participant in the plan based upon the participant’s performance for the calendar year. Company contributions to the plan vest on the fourth anniversary of the last day of the calendar year for which the contribution was made to the plan and accrue interest at a rate equal to the Bank’s return on average equity for the immediately preceding calendar year, or an alternative rate set by the Company’s board of directors. Distribution of amounts contributed under the plan, including accrued interest, is made in a lump sum cash payment within 75 days following the date such amounts become vested. As of each of December 31, 2025 and 2024, the Company had a liability of $-0- recorded on the consolidated balance sheets. There wereno new contributions made to the plan during the years ended December 31, 2025 and 2024.

Note 21: Preferred Stock

In 2021, the Company announced the closing of its underwritten public offering of 2,400,000 depositary shares, each representing a 1/100 th interest in a share of the Company’s 5.875% Non-Cumulative Perpetual Preferred Stock, Series A,$0.01 par value per share (“Series A Preferred Stock”). The underwriters of the offering exercised in full their option to purchase 360,000 additional depositary shares to cover over-allotments. As a result, the gross proceeds from the offering totaled$69.0 million. Dividends on the Series A Preferred Stock will be non-cumulative and, if declared, accrue and are payable quarterly, in arrears, at a rate of 5.875% per annum. The Series A Preferred Stock qualifies as additional Tier 1 capital for the purposes of the regulatory capital calculations. The net proceeds from the issuance and sale of the depositary shares, each representing a 1/100 th ownership interest in the Series A Preferred Stock, after deducting$2.5 million of issuance costs, including the underwriting discount and professional service fees, were$66.5 million.

Note 22: Regulatory Capital

The Company and the Bank are subject to various regulatory requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank must also meet certain specific capital guidelines under the regulatory framework for prompt corrective action. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets (referred to as the “leverage ratio”), as defined under the applicable regulatory capital rules.

The following tables present the capital amounts and ratios for the Company, on a consolidated basis, and the Bank as of December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · Minimum Required · ​ · For Capital Adequacy · ​ · To be Well Capitalized · ​
​ · ​ · ​ · ​ · ​ · ​ · ​ · For Capital Adequacy · ​ · Purposes Plus Capital · ​ · Under Prompt Corrective · ​
​ · ​ · Actual · ​ · Purposes · ​ · Conservation Buffer · ​ · Action Regulations · ​
(dollars in thousands) · ​ ​ ​ · Amount · ​ ​ ​ · Ratio · ​ ​ ​ · Amount · ​ ​ ​ · Ratio · ​ ​ ​ · Amount · ​ ​ ​ · Ratio · ​ · Amount · ​ ​ ​ · Ratio · ​
December 31, 2025​​​​​​​​​​​​​​​​​​​​​
Company (Consolidated):​​​​​​​​​​​​​​​​​​​​​
Total Risk-based Capital​$667,814​14.12%$378,356​8.00%$496,593​10.50%​N/A​N/A​
Tier 1 Risk-based Capital​​500,002​10.57​​283,767​6.00​​402,004​8.50​​N/A​N/A​
Common Equity Tier 1 Capital​​433,488​9.17​​212,825​4.50​​331,062​7.00​​N/A​N/A​
Tier 1 Leverage Ratio​​500,002​9.20​​217,505​4.00​​217,505​4.00​​N/A​N/A​
Bank:​​​​​​​​​​​​​​​​​​​​​
Total Risk-based Capital​$636,973​13.49%$377,687​8.00%$495,715​10.50%$472,109​10.00%
Tier 1 Risk-based Capital​​577,942​12.24​​283,266​6.00​​401,293​8.50​​377,687​8.00​
Common Equity Tier 1 Capital​​577,942​12.24​​212,449​4.50​​330,477​7.00​​306,871​6.50​
Tier 1 Leverage Ratio​​577,942​10.65​​217,116​4.00​​217,116​4.00​​271,395​5.00​
​​​​​​​​​​​​​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · ​ · Minimum Required · ​ · For Capital Adequacy · ​ · To be Well Capitalized · ​
​ · ​ · ​ · ​ · ​ · ​ · ​ · For Capital Adequacy · ​ · Purposes Plus Capital · ​ · Under Prompt Corrective · ​
​ · ​ · Actual · ​ · Purposes · ​ · Conservation Buffer · ​ · Action Regulations · ​
(dollars in thousands) · ​ ​ ​ · Amount · ​ ​ ​ · Ratio · ​ ​ ​ · Amount · ​ ​ ​ · Ratio · ​ ​ ​ · Amount · ​ ​ ​ · Ratio · ​ · Amount · ​ ​ ​ · Ratio · ​
December 31, 2024​​​​​​​​​​​​​​​​​​​​​
Company (Consolidated):​​​​​​​​​​​​​​​​​​​​​
Total Risk-based Capital​$585,966​13.76%$340,581​8.00%$447,013​10.50%​N/A​N/A​
Tier 1 Risk-based Capital​​453,049​10.64​​255,436​6.00​​361,867​8.50​​N/A​N/A​
Common Equity Tier 1 Capital​​386,535​9.08​​191,577​4.50​​298,008​7.00​​N/A​N/A​
Tier 1 Leverage Ratio​​453,049​9.44​​191,878​4.00​​191,878​4.00​​N/A​N/A​
Bank:​​​​​​​​​​​​​​​​​​​​​
Total Risk-based Capital​$573,158​13.49%$340,003​8.00%$446,254​10.50%$425,004​10.00%
Tier 1 Risk-based Capital​​520,000​12.24​​255,002​6.00​​361,253​8.50​​340,003​8.00​
Common Equity Tier 1 Capital​​520,000​12.24​​191,252​4.50​​297,503​7.00​​276,253​6.50​
Tier 1 Leverage Ratio​​520,000​10.86​​191,593​4.00​​191,593​4.00​​239,491​5.00​

The Company and the Bank must maintain a capital conservation buffer as defined by regulatory guidelines, in order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers.

As of December 31, 2025 and 2024, the capital ratios of the Company and the Bank were in excess of the quantitative capital ratio standards applicable on those dates.

Note 23: Fair Value Measurement

The Company categorizes its assets and liabilities measured at fair value into a three-level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. Assets and liabilities valued at fair value are categorized based on the inputs to the valuation techniques as follows:

Level 1 – Inputs that utilized quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access.

Level 2 – Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows.

Level 3 – Inputs that are unobservable for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

Subsequent to initial recognition, the Company may re-measure the carrying value of assets and liabilities measured on a nonrecurring basis to fair value. Adjustments to fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their fair value.

Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company adopted the policy to value certain financial instruments at fair value. The Company has not elected to measure any existing financial instruments at fair value; however, it may elect to measure newly acquired financial instruments at fair value in the future.

Recurring Basis

The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. There have been no changes in the methodologies used at December 31,

  1. The following table presents the balances of the assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024:
​​​​​​​​​​​​​
​ · ​ · December 31, 2025
(dollars in thousands) · ​ ​ ​ · Level 1 · ​ ​ ​ · Level 2 · ​ ​ ​ · Level 3 · ​ ​ ​ · Total
Fair Value of Financial Assets:​​​​​​​​​​​​
Securities Available for Sale:​​​​​​​​​​​​
U.S. Treasury Securities​$146,206​$—​$—​$146,206
Municipal Bonds​​—​​239,168​​—​​239,168
Mortgage-Backed Securities​​—​​245,672​​—​​245,672
Corporate Securities​​—​​92,407​​—​​92,407
U.S. Government Agency Securities​​—​​8,707​​—​​8,707
Asset-Backed Securities​​—​​44,281​​—​​44,281
Fair Value Swaps​​—​​10,968​​—​​10,968
Interest Rate Caps​​—​​13,221​​—​​13,221
Interest Rate Swaps​​—​​10,711​​—​​10,711
Risk Participation Agreements​​—​​—​​1​​1
Total Fair Value of Financial Assets​$146,206​$665,135​$1​$811,342
Fair Value of Financial Liabilities:​​​​​​​​​​​​
Fair Value Swaps​$—​$419​$—​$419
Interest Rate Swaps​​—​​9,424​​—​​9,424
Risk Participation Agreements​​—​​—​​13​​13
Total Fair Value of Financial Liabilities​$—​$9,843​$13​$9,856
​​​​​​​​​​​​​
​ · ​ · December 31, 2024
(dollars in thousands) · ​ ​ ​ · Level 1 · ​ ​ ​ · Level 2 · ​ ​ ​ · Level 3 · ​ ​ ​ · Total
Fair Value of Financial Assets:​​​​​​​​​​​​
Securities Available for Sale:​​​​​​​​​​​​
U.S. Treasury Securities​$167,748​$—​$—​$167,748
Municipal Bonds​​—​​122,265​​—​​122,265
Mortgage-Backed Securities​​—​​244,890​​—​​244,890
Corporate Securities​​—​​134,186​​—​​134,186
U.S. Government Agency Securities​​—​​22,082​​—​​22,082
Asset-Backed Securities​​—​​77,076​​—​​77,076
Fair Value Swaps​​—​​10,487​​—​​10,487
Interest Rate Caps​​—​​19,319​​—​​19,319
Interest Rate Swaps​​—​​13,349​​—​​13,349
Total Fair Value of Financial Assets​$167,748​$643,654​$—​$811,402
Fair Value of Financial Liabilities:​​​​​​​​​​​​
Interest Rate Swaps​$—​$8,210​$—​$8,210
Total Fair Value of Financial Liabilities​$—​$8,210​$—​$8,210

Investment Securities

When available, the Company uses quoted market prices to determine the fair value of investment securities; such items are classified in Level 1 of the fair value hierarchy.

For the Company’s investments, when quoted prices are not available for identical securities in an active market, the Company determines fair value utilizing vendors who apply matrix pricing for similar bonds where no price is observable or may compile prices from various sources. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates,

loss severity, current market, and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially, all of these assumptions are observable in the marketplace and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Fair values from these models are verified, where possible, against quoted market prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2. However, when prices from independent sources vary, or cannot be obtained or corroborated, a security is generally classified as Level 3.

Fair Value Swaps

Fair value swaps** **are traded in over-the-counter markets where quoted market prices are not readily available. For those fair value swaps, fair value is determined using internally developed models of a third party that uses primarily market observable inputs, such as yield curves and option volatilities, and accordingly are valued using Level 2 inputs.

Interest Rate Caps

The fair value of the caps are calculated by determining the total expected asset or liability exposure of the derivatives. Total expected exposure incorporates both the current and potential future exposure of the derivative, derived from using observable inputs, such as yield curves and volatilities, and accordingly are valued using Level 2 inputs.

Interest Rate Swaps

Interest rate swaps are traded in over-the-counter markets where quoted market prices are not readily available. For those interest rate swaps, fair value is determined using internally developed models of a third party that uses primarily market observable inputs, such as yield curves and option volatilities, and accordingly are valued using Level 2 inputs.

Risk Participation Agreements

The fair value of RPAs is calculated by determining the total expected asset or liability exposure using observable inputs, such as yield curves and volatilities, of the derivative to the borrower and applying an unobservable credit default probability to that exposure, and accordingly are valued using level 3 inputs.

Nonrecurring Basis

Certain assets are measured at fair value on a nonrecurring basis. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment.

The following tables present nonrecurring fair value measurements of certain assets for the periods ended December 31, 2025, 2024 and 2023:

​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · December 31, 2025
(dollars in thousands)​ ​ ​Level 1​ ​ ​Level 2​ ​ ​Level 3​ ​ ​Loss
Individually Evaluated Loans​$—​$—​$39,043​$3,812
Totals​$—​$—​$39,043​$3,812
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · December 31, 2024
(dollars in thousands)​ ​ ​Level 1​ ​ ​Level 2​ ​ ​Level 3​ ​ ​Loss
Individually Evaluated Loans​$—​$—​$91​$44
Totals​$—​$—​$91​$44
​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​
​ · ​ · December 31, 2023
(dollars in thousands)​ ​ ​Level 1​ ​ ​Level 2​ ​ ​Level 3​ ​ ​Loss
Individually Evaluated Loans​$—​$—​$9,602​$199
Totals​$—​$—​$9,602​$199

Individually Evaluated Loans

The Company records certain loans at fair value on a non-recurring basis. Individually evaluated loans for which an allowance is established, or a write-down has occurred during the period, based on the fair value of collateral require classification in the fair value hierarchy. The fair value of the loan’s collateral is determined by appraisals, independent valuation and other techniques. When the fair value of the loan’s collateral is based on an observable market price the Company classifies the fair value of the individually evaluated loans within Level 2 of the valuation hierarchy. For loans in which the valuation has unobservable inputs, the Company classifies these within the Level 3 of the valuation hierarchy. As of December 31, 2025, collateral values were estimated using a combination of observable inputs, including recent appraisals, and unobservable inputs, including internally determined values based on cost adjusted for depreciation and customized discounting criteria on appraisals which ranged from 4-25%. Due to the significance of unobservable inputs, fair values of individually evaluated loans have been classified as Level 3.

Fair Value

Disclosure of fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases where quoted market prices are not available, fair values are based on estimates using present value of cash flow or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments with a fair value that is not practicable to estimate and all non-financial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value of the Company.

Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters that could affect the estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business. Deposits with no stated maturities are defined as

having a fair value equivalent to the amount payable on demand. This prohibits adjusting fair value derived from retaining those deposits for an expected future period of time. This component, commonly referred to as a deposit base intangible, is neither considered in the below amounts nor is it recorded as an intangible asset on the balance sheet. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

The following tables present the carrying amounts and estimated fair values of financial instruments at December 31, 2025 and 2024:

​​​​​​​​​​​​​​​​
​ · ​ · December 31, 2025
​ · ​ · ​ · ​ · ​ · Fair Value Hierarchy · ​ · ​ · ​
​ · ​ · Carrying · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Estimated
(dollars in thousands) · ​ ​ ​ · Amount · ​ ​ ​ · Level 1 · ​ ​ ​ · Level 2 · ​ ​ ​ · Level 3 · ​ ​ ​ · Fair Value
Financial Assets:​​​​​​​​​​​​​​​
Cash and Due From Banks​$123,511​$123,511​$—​$—​$123,511
Securities Available for Sale​​776,441​​146,206​​630,235​​—​​776,441
FHLB Stock, at Cost​​21,122​​—​​21,122​​—​​21,122
Loans, Net​​4,244,108​​—​​4,142,794​​39,043​​4,181,837
Accrued Interest Receivable​​18,929​​—​​18,929​​—​​18,929
Fair Value Swaps​​10,968​​—​​10,968​​—​​10,968
Interest Rate Caps​​13,221​​—​​13,221​​—​​13,221
Interest Rate Swaps​​10,711​​—​​10,711​​—​​10,711
Risk Participation Agreements​​1​​—​​—​​1​​1
​​​​​​​​​​​​​​​​
Financial Liabilities:​​​​​​​​​​​​​​​
Deposits​$4,320,369​$—​$4,324,551​$—​$4,324,551
FHLB Advances​​399,500​​—​​399,760​​—​​399,760
Subordinated Debentures​​108,677​​—​​102,579​​—​​102,579
Accrued Interest Payable​​3,227​​—​​3,227​​—​​3,227
Fair Value Swaps​​419​​—​​419​​—​​419
Interest Rate Swaps​​9,424​​—​​9,424​​—​​9,424
Risk Participation Agreements​​13​​—​​—​​13​​13
​​​​​​​​​​​​​​​​
​ · ​ · December 31, 2024
​ · ​ · ​ · ​ · ​ · Fair Value Hierarchy · ​ · ​ · ​
​ · ​ · Carrying · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · ​ · Estimated
(dollars in thousands) · ​ ​ ​ · Amount · ​ ​ ​ · Level 1 · ​ ​ ​ · Level 2 · ​ ​ ​ · Level 3 · ​ ​ ​ · Fair Value
Financial Assets:​​​​​​​​​​​​​​​
Cash and Due From Banks​$229,760​$229,760​$—​$—​$229,760
Bank-Owned Certificates of Deposit​​4,377​​—​​4,370​​—​​4,370
Securities Available for Sale​​768,247​​167,748​​600,499​​—​​768,247
FHLB Stock, at Cost​​19,297​​—​​19,297​​—​​19,297
Loans, Net​​3,809,436​​—​​3,709,775​​91​​3,709,866
Accrued Interest Receivable​​17,711​​—​​17,711​​—​​17,711
Fair Value Swaps​​10,487​​—​​10,487​​—​​10,487
Interest Rate Caps​​19,319​​—​​19,319​​—​​19,319
Interest Rate Swaps​​13,349​​—​​13,349​​—​​13,349
​​​​​​​​​​​​​​​​
Financial Liabilities:​​​​​​​​​​​​​​​
Deposits​$4,086,767​$—​$4,131,298​$—​$4,131,298
Notes Payable​​13,750​​—​​13,775​​—​​13,775
FHLB Advances​​359,500​​—​​358,759​​—​​358,759
Subordinated Debentures​​79,670​​—​​76,056​​—​​76,056
Accrued Interest Payable​​4,008​​—​​4,008​​—​​4,008
Interest Rate Swaps​​8,210​​—​​8,210​​—​​8,210

The following methods and assumptions were used by the Company to estimate fair value of consolidated financial statements not previously discussed:

Cash and due from banks – The carrying amount of cash and cash equivalents approximates their fair value.

Bank-owned certificates of deposit – Fair values of bank-owned certificates of deposit are estimated using the discounted cash flow analysis based on current rates for similar types of deposits.

FHLB stock – The carrying amount of FHLB stock approximates its fair value.

Loans, net – Fair values for loans are estimated based on discounted cash flows, using interest rates currently being offered for loans with similar terms to borrowers with similar credit quality.

Accrued interest receivable – The carrying amount of accrued interest receivable approximates its fair value since it is short term in nature and does not present anticipated credit concerns.

Deposits – The fair values disclosed for demand deposits without stated maturities (interest and noninterest transaction, savings, and money market accounts) are equal to the amount payable on demand at the reporting date (their carrying amounts). Fair values for the fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Federal Funds purchased – The carrying amount of federal funds purchased approximates the fair value.

Notes payable and subordinated debentures – The fair values of the Company’s notes payable and subordinated debentures are estimated using a discounted cash flow analysis, based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements.

FHLB advances – The fair values of the Company’s FHLB advances are estimated using discounted cash flow analysis based on the Company’s current incremental borrowing rates for similar types of borrowing agreements.

Accrued interest payable – The carrying amount of accrued interest payable approximates its fair value since it is short term in nature.

Off-balance sheet instruments – Fair values of the Company’s off-balance sheet instruments (lending commitments and unused lines of credit) are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the counterparties’ credit standing and discounted cash flow analysis. The fair value of these off-balance sheet items approximates the recorded amounts of the related fees and was not material at December 31, 2025 and 2024.

Limitations – The fair value of a financial instrument is the current amount that would be exchanged between market participants, other than in a forced liquidation. Fair value is best determined based upon quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, the fair value estimates may not be realized in an immediate settlement of the instrument. Consequently, the aggregate fair value amounts presented may not necessarily represent the underlying fair value of the Company.

Note 24: Revenue Recognition

The Company recognizes revenue from contracts with customers in accordance with ASC Topic 606,Revenue from Contracts with Customers. The core principle requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration it expects to be entitled to receive in exchange for those goods or services recognized as performance obligations are satisfied.

Substantially all of the Company’s revenue is generated from financial instruments, including interest income related to loans and investment securities, letters of credit, and derivatives, which are not within the scope of Topic 606 as these activities are subject to other GAAP discussed elsewhere within the Company’s disclosures. The following is a summary of revenue-generating activities that are within the scope of Topic 606, which are presented in the Company’s income statements as components of noninterest income:

Service charges on deposit accounts. These represent general service fees for monthly account maintenance and activity and transaction-based fees such as wire transfer fees, check cashing fees, check printing fees, stop payment fees and ATM and card replacement fees. Revenue is recognized when the Company’s performance obligation is completed, which is generally monthly for account maintenance services or when a transaction has been completed. Payments for these performance obligations are generally received at the time the performance obligations are satisfied. The adoption of Topic 606 had no impact on the Company’s revenue recognition practice for these services.

Debit card interchange fees. When a debit card issued by the Company is used to purchase goods or services from a merchant, the Company earns an interchange fee. The performance obligation is completed and the fees are recognized as the service is provided (i.e., when the customer uses the debit card). The adoption of Topic 606 had no impact on the Company’s revenue recognition related to debit card interchange fees.

Gain on sales of other real estate. ASU 2014-09 also created Topic 610-20, under which a gain on sale should be recognized when a contract for sale exists and control of the asset has been transferred to the buyer. Topic 606 list several criteria which must exist to conclude that a contract for sale exists, including a determination that the institution will collect substantially all of the consideration to which it is entitled.

Note 25: Accumulated Other Comprehensive Income (Loss)

The following table presents the components of other comprehensive income (loss) for the years ended December 31, 2025, 2024 and 2023:

​​​​​​​​​​
(dollars in thousands) · ​ · Before Tax · ​ · Tax Effect · ​ · Net of Tax
Year Ended December 31, 2025​​​​​​​​​
Net Unrealized Gain on Available for Sale Securities​$29,313​$(8,425)​$20,888
Less: Reclassification Adjustment for Net Gains Included in Net Income​​(614)​​176​​(438)
Total Unrealized Gain​​28,699​​(8,249)​​20,450
​​​​​​​​​​
Net Unrealized Loss on Cash Flow Hedge​​(2,673)​​768​​(1,905)
Less: Reclassification Adjustment for Gains Included in Net Income​​(6,484)​​1,864​​(4,620)
Total Unrealized Loss​​(9,157)​​2,632​​(6,525)
​​​​​​​​​​
Other Comprehensive Gain​$19,542​$(5,617)​$13,925
​​​​​​​​​​
Year Ended December 31, 2024​​​​​​​​​
Net Unrealized Gain on Available for Sale Securities​$5,967​$(1,716)​$4,251
Less: Reclassification Adjustment for Net Gains Included in Net Income​​(385)​​111​​(274)
Total Unrealized Gain​​5,582​​(1,605)​​3,977
​​​​​​​​​​
Net Unrealized Gain on Cash Flow Hedge​​10,515​​(3,022)​​7,493
Less: Reclassification Adjustment for Gains Included in Net Income​​(9,245)​​2,657​​(6,588)
Total Unrealized Gain​​1,270​​(365)​​905
​​​​​​​​​​
Other Comprehensive Gain​$6,852​$(1,970)​$4,882
​​​​​​​​​​
Year Ended December 31, 2023​​​​​​​​​
Net Unrealized Gain on Available for Sale Securities​$3,339​$(959)​$2,380
Less: Reclassification Adjustment for Net Losses Included in Net Income​​33​​(9)​​24
Total Unrealized Gain​​3,372​​(968)​​2,404
​​​​​​​​​​
Net Unrealized Gain on Cash Flow Hedge​​2,299​​(660)​​1,639
Less: Reclassification Adjustment for Gains Included in Net Income​​(6,102)​​1,755​​(4,347)
Total Unrealized Loss​​(3,803)​​1,095​​(2,708)
​​​​​​​​​​
Other Comprehensive Loss​$(431)​$127​$(304)

The following table presents the changes in each component of accumulated other comprehensive income (loss), net of tax, for the years ended December 31, 2025, 2024 and 2023:

​​​​​​​​​​
​ · ​ · ​ · ​ · ​ · ​ · Accumulated
​ · ​ · Available For · ​ · ​ · ​ · ​ · Other Comprehensive
(dollars in thousands) · ​ · Sale Securities · ​ · Cash Flow Hedge · ​ · Income (Loss)
Year Ended December 31, 2025​​​​​​​​​
Balance at Beginning of Year​$(27,743)​$14,379​$(13,364)
Other Comprehensive Income Before Reclassifications​​20,888​​(1,905)​​18,983
Amounts Reclassified from Accumulated Other Comprehensive Income​​(438)​​(4,620)​​(5,058)
Net Other Comprehensive Income During Period​​20,450​​(6,525)​​13,925
Balance at End of Year​$(7,293)​$7,854​$561
​​​​​​​​​​
Year Ended December 31, 2024​​​​​​​​​
Balance at Beginning of Year​$(31,720)​$13,474​$(18,246)
Other Comprehensive Income Before Reclassifications​​4,251​​7,493​​11,744
Amounts Reclassified from Accumulated Other Comprehensive Income​​(274)​​(6,588)​​(6,862)
Net Other Comprehensive Income During Period​​3,977​​905​​4,882
Balance at End of Year​$(27,743)​$14,379​$(13,364)
​​​​​​​​​​
Year Ended December 31, 2023​​​​​​​​​
Balance at Beginning of Year​$(34,124)​$16,182​$(17,942)
Other Comprehensive Income Before Reclassifications​​2,380​​1,639​​4,019
Amounts Reclassified from Accumulated Other Comprehensive Income​​24​​(4,347)​​(4,323)
Net Other Comprehensive Income (Loss) During Period​​2,404​​(2,708)​​(304)
Balance at End of Year​$(31,720)​$13,474​$(18,246)

Note 26: Parent Company Financial Information

The following information presents the condensed balance sheets of the Company as of December 31, 2025 and 2024, and the condensed statements of income and cash flows of the Company for the years ended December 31, 2025, 2024 and 2023:

Condensed Balance Sheets

​​​​​​​
​ · ​ · December 31, · ​ · December 31,
(dollars in thousands) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024
ASSETS​​​​​​
Cash and Cash Equivalents​$23,039​$20,008
Investment in Subsidiaries​595,035​524,886
Premises and Equipment, Net​755​785
Other Assets​11,412​8,882
Total Assets​$630,241​$554,561
LIABILITIES AND EQUITY​​​​​​
LIABILITIES​​​​​​
Notes Payable​$—​$13,750
Subordinated Debentures, Net of Issuance Costs​108,677​79,670
Accrued Interest Payable​493​452
Other Liabilities​3,976​2,754
Total Liabilities​113,146​96,626
SHAREHOLDERS’ EQUITY​​​​​​
Preferred Stock—$0.01 par value​​​​​​
Preferred Stock—Authorized 10,000,000​​66,514​​66,514
Common Stock—$0.01 par value​​​​​​
Voting Common Stock—Authorized 75,000,000​278​276
Additional Paid‑In Capital​98,287​95,088
Retained Earnings​351,455​309,421
Accumulated Other Comprehensive Income (Loss)​561​(13,364)
Total Shareholders’ Equity​517,095​457,935
Total Liabilities and Shareholders' Equity​$630,241​$554,561

Condensed Statements of Income

​​​​​​​​​​
​ · ​ · December 31, · ​ · December 31, · ​ · December 31,
(dollars in thousands) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024 · ​ · 2023
INCOME​​​​​​​​​
Dividend Income​$—​$10,000​$—
Interest Income​2​13​3
Other Income​118​115​118
Total Income​120​10,128​121
EXPENSE​​​​​​​​​
Interest Expense​6,507​5,144​5,126
Other Expenses​1,819​1,805​1,757
Total Interest Expense​8,326​6,949​6,883
INCOME (LOSS) BEFORE INCOME TAX BENEFIT AND EQUITY IN UNDISTRIBUTED EARNINGS​(8,206)​3,179​(6,762)
Income Tax Benefit​2,269​1,902​1,894
INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED EARNINGS​(5,937)​5,081​(4,868)
Equity in Undistributed Earnings​52,025​27,744​44,828
NET INCOME​$46,088​$32,825​$39,960

Condensed Statements of Cash Flows

​​​​​​​​​​
​ · ​ · December 31, · ​ · December 31, · ​ · December 31,
(dollars in thousands) · ​ ​ ​ · 2025 · ​ ​ ​ · 2024 · ​ · 2023
CASH FLOWS FROM OPERATING ACTIVITIES​​​​​​​​​
Net Income​$46,088​$32,825​$39,960
Adjustments to Reconcile Net Income to Net Cash Provided (Used) by Operating Activities:​​​​​​​​​
Equity in Undistributed Earnings of Subsidiaries​(52,025)​(27,744)​(44,828)
Changes in Other Assets and Liabilities​(835)​(3,614)​(738)
Net Cash Provided (Used) by Operating Activities​(6,772)​1,467​(5,606)
CASH FLOWS FROM INVESTING ACTIVITIES​​​​​​​​​
Investment in Subsidiaries​—​—​—
Proceeds from Bridgewater Risk Management, Inc. Liquidation​​—​​—​​4,143
Net Cash Provided (Used) by Investing Activities​—​—​4,143
CASH FLOWS FROM FINANCING ACTIVITIES​​​​​​​​​
Principal Payments on Notes Payable​(13,750)​—​—
Proceeds from Notes Payable​​—​​—​​—
Proceeds from Issuance of Subordinated Debt​78,605​—​—
Redemption of Subordinated Debt​​(50,000)​​—​​—
Stock Options Exercised​​1,939​​763​​963
Stock Repurchases and Repurchases for Tax Withholding on Equity Awards​​(2,937)​​(5,901)​​(5,127)
Preferred Stock Dividends Paid​​(4,054)​​(4,054)​​(4,054)
Net Cash Provided (Used) by Financing Activities​9,803​(9,192)​(8,218)
NET CHANGE IN CASH AND CASH EQUIVALENTS​3,031​(7,725)​(9,681)
Cash and Cash Equivalents Beginning​20,008​27,733​37,414
Cash and Cash Equivalents Ending​$23,039​$20,008​$27,733

Note 27: Subsequent Events

On January 27, 2026, the Company’s board of directors declared a quarterly cash dividend of$36.72 per share ($0.3672 per depositary share) on the Series A Preferred Stock, payable on March 2, 2026, to shareholders of record on the Series A Preferred Stock at the close of business on February 13, 2026.

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The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.