10-Q

Table of Contents ​

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

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OR

​

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ________

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Commission File Number 001-38412

BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

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​	​	​
Minnesota (State or other jurisdiction of incorporation or organization)	​	26-0113412 (I.R.S. Employer Identification No.)
​	​	​
4450 Excelsior Boulevard, Suite 100 St. Louis Park , Minnesota (Address of principal executive offices)	​	55416 (Zip Code)

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( 952 ) 893-6868

(Registrant’s telephone number, including area code)

. Securities registered pursuant to Section 12(b) of the Act:

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Title of each class:	Trading Symbol		Name of each exchange on which registered:
Common Stock, 0.01 Par Value	BWB		The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/100th interest in a share of 5.875% Non-Cumulative Perpetual Preferred Stock, Series A, par value 0.01 per share	BWBBP	​	The Nasdaq Stock Market LLC

All values are in US Dollars.

​

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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​<br><br>​	​	​	​
Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
​	Emerging growth company ☐	​	​

​

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

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The number of shares of the Common Stock outstanding as of October 29, 2024 was 27,425,690.

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Table of Contents Table of Contents

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PART I FINANCIAL INFORMATION	3
​	​
Item 1. Consolidated Financial Statements (unaudited)	3
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Consolidated Statements of Comprehensive Income	5
Consolidated Statements of Shareholders’ Equity	6
Consolidated Statements of Cash Flows	8
Notes to Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3. Quantitative and Qualitative Disclosures About Market Risk	65
Item 4. Controls and Procedures	67
​	​
PART II OTHER INFORMATION	68
​	​
Item 1. Legal Proceedings	68
Item 1A. Risk Factors	68
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3. Defaults Upon Senior Securities	69
Item 4. Mine Safety Disclosures	69
Item 5. Other Information	69
Item 6. Exhibits	70
​	​
SIGNATURES	71
​	​

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​ 2

Table of Contents PART 1 – FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except share data)

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
​	****	2024		****	2023
​	​	(Unaudited)		​	​	​
ASSETS	​	​	​	​	​	​
Cash and Cash Equivalents	​	$	191,859	​	$	128,562
Securities Available for Sale, at Fair Value	​		664,715	​		604,104
Loans, Net of Allowance for Credit Losses of $51,018 at September 30, 2024 (unaudited) and $50,494 at December 31, 2023	​	​	3,628,867	​		3,667,215
Federal Home Loan Bank (FHLB) Stock, at Cost	​		18,626	​		17,097
Premises and Equipment, Net	​		47,777	​		48,886
Foreclosed Assets	​	​	434	​	​	—
Accrued Interest	​		16,750	​		16,697
Goodwill	​		2,626	​		2,626
Other Intangible Assets, Net	​		163	​		188
Bank-Owned Life Insurance	​	​	38,219	​	​	34,477
Other Assets	​		81,481	​		92,138
Total Assets	​	$	4,691,517	​	$	4,611,990
​	​	​	​	​	​	​
LIABILITIES AND EQUITY	​			​
LIABILITIES	​			​
Deposits:	​			​
Noninterest Bearing	​	$	713,309	​	$	756,964
Interest Bearing	​		3,034,133	​		2,952,984
Total Deposits	​		3,747,442	​		3,709,948
Notes Payable	​	​	13,750	​	​	13,750
FHLB Advances	​		349,500	​		319,500
Subordinated Debentures, Net of Issuance Costs	​		79,574	​		79,288
Accrued Interest Payable	​		3,458	​		5,282
Other Liabilities	​		45,593	​		58,707
Total Liabilities	​		4,239,317	​		4,186,475
​	​	​	​	​	​	​
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 September 30, 2024 (unaudited) and December 31, 2023	​	​	66,514	​		66,514
Common Stock- $0.01 par value; Authorized 75,000,000	​		​	​		​
Common Stock - Issued and Outstanding 27,425,690 at September 30, 2024 (unaudited) and 27,748,965 at December 31, 2023	​	​	274	​		277
Additional Paid-In Capital	​		94,597	​		96,320
Retained Earnings	​		302,231	​		280,650
Accumulated Other Comprehensive Loss	​		(11,416)	​		(18,246)
Total Shareholders' Equity	​		452,200	​		425,515
Total Liabilities and Equity	​	$	4,691,517	​	$	4,611,990

​

See accompanying notes to consolidated financial statements. 3

Table of Contents Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended
​	​	September 30,		​	September 30,		​	September 30,		​	September 30,
​	****	2024		****	2023		****	2024		****	2023
INTEREST INCOME		​			​			​			​
Loans, Including Fees	​	$	51,895	​	$	48,999	​	$	152,861	​	$	141,675
Investment Securities	​		8,725	​		6,507	​		24,818	​		18,962
Other	​		2,407	​		1,303	​		4,895	​		3,165
Total Interest Income	​		63,027	​		56,809	​		182,574	​		163,802
​	​	​	​	​	​	​	​	​	​	​	​	​
INTEREST EXPENSE	​		​	​		​	​		​	​		​
Deposits	​		34,187	​		27,225	​		95,995	​	​	66,597
Federal Funds Purchased	​	​	2	​	​	548	​	​	1,159	​	​	8,253
Notes Payable	​		296	​		296	​		887	​	​	844
FHLB Advances	​		1,942	​		2,316	​		6,325	​	​	5,269
Subordinated Debentures	​		1,001	​		1,003	​		2,982	​	​	2,979
Total Interest Expense	​		37,428	​		31,388	​		107,348	​		83,942
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INTEREST INCOME	​		25,599	​		25,421	​		75,226	​		79,860
Provision for (Recovery of) Credit Losses	​		—	​		(600)	​		1,350	​	​	75
​	​	​	​	​	​	​	​	​	​	​	​	​
NET INTEREST INCOME AFTER	​			​			​			​
PROVISION FOR (RECOVERY OF) CREDIT LOSSES	​		25,599	​		26,021	​		73,876	​		79,785
​	​	​	​	​	​	​	​	​	​	​	​	​
NONINTEREST INCOME	​			​			​			​
Customer Service Fees	​		373	​	​	379	​		1,081	​	​	1,096
Net Gain (Loss) on Sales of Available for Sale Securities	​		(28)	​	​	—	​		385	​	​	(6)
Letter of Credit Fees	​		424	​	​	315	​		1,127	​	​	1,328
Debit Card Interchange Fees	​	​	152	​	​	150	​	​	448	​	​	443
Bank-Owned Life Insurance	​	​	352	​	​	252	​	​	965	​	​	724
FHLB Prepayment Income	​	​	—	​	​	493	​	​	—	​	​	792
Other Income	​	​	249	​	​	137	​	​	829	​	​	707
Total Noninterest Income	​		1,522	​		1,726	​		4,835	​		5,084
​	​	​	​	​	​	​	​	​	​	​	​	​
NONINTEREST EXPENSE	​			​			​			​
Salaries and Employee Benefits	​		9,851	​	​	9,519	​		28,959	​	​	26,923
Occupancy and Equipment	​		1,069	​	​	1,101	​		3,218	​	​	3,385
FDIC Insurance Assessment	​		750	​	​	1,075	​		2,350	​	​	2,640
Data Processing	​	​	368	​	​	392	​	​	1,252	​	​	1,150
Professional and Consulting Fees	​	​	1,149	​	​	715	​	​	2,890	​	​	2,299
Derivative Collateral Fees	​	​	381	​	​	543	​	​	1,395	​	​	1,327
Information Technology and Telecommunications	​	​	840	​	​	683	​	​	2,448	​	​	2,077
Marketing and Advertising	​	​	367	​	​	222	​	​	1,006	​	​	805
Intangible Asset Amortization	​	​	9	​	​	9	​	​	26	​	​	91
Other Expense	​	​	976	​	​	978	​	​	2,944	​	​	2,883
Total Noninterest Expense	​		15,760	​		15,237	​		46,488	​		43,580
​	​	​	​	​	​	​	​	​	​	​	​	​
INCOME BEFORE INCOME TAXES	​		11,361	​		12,510	​		32,223	​		41,289
Provision for Income Taxes	​		2,686	​		2,881	​		7,602	​		10,202
NET INCOME	​	​	8,675	​	​	9,629	​	​	24,621	​	​	31,087
Preferred Stock Dividends	​	​	(1,013)	​	​	(1,013)	​	​	(3,040)	​	​	(3,040)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	​	$	7,662	​	$	8,616	​	$	21,581	​	$	28,047
​	​	​	​	​	​	​	​	​	​	​	​	​
EARNINGS PER SHARE	​		​	​			​		​	​		​
Basic	​	$	0.28	​	$	0.31	​	$	0.79	​	$	1.01
Diluted	​	​	0.27	​	​	0.30	​	​	0.77	​	​	0.99

​

See accompanying notes to consolidated financial statements. 4

Table of Contents Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(dollars in thousands)

(Unaudited)

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​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended
​	​	September 30,					​	September 30,
​	****	2024		****	2023		****	2024		****	2023
Net Income	​	$	8,675	​	$	9,629	​	$	24,621	​	$	31,087
Other Comprehensive Income (Loss):	​		​	​	​	​	​		​	​	​	​
Unrealized Gains (Losses) on Available for Sale Securities	​	​	14,738	​	​	(10,151)	​	​	16,141	​	​	(14,338)
Unrealized Gains (Losses) on Cash Flow Hedges	​	​	(6,761)	​	​	7,763	​	​	987	​	​	10,167
Reclassification Adjustment for Gains Realized in Income	​	​	(2,498)	​	​	(1,623)	​	​	(7,543)	​	​	(4,004)
Income Tax Impact	​	​	(1,575)	​	​	1,153	​	​	(2,755)	​	​	2,351
Total Other Comprehensive Income (Loss), Net of Tax	​	​	3,904	​	​	(2,858)	​	​	6,830	​	​	(5,824)
Comprehensive Income	​	$	12,579	​	$	6,771	​	$	31,451	​	$	25,263

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See accompanying notes to consolidated financial statements.

​ 5

Table of Contents Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity

Three and Nine Months Ended September 30, 2024 and 2023

(dollars in thousands, except share data)

(Unaudited)

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​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	​	​
​	​	​	​	​	​	​	​	​	​	Additional		​	​	​	​	Other		​	​	​
​	​	Preferred		​	Common Stock				​	Paid-In		​	Retained		​	Comprehensive		​	​	​
Three Months Ended	​	Stock		****	Shares	****	Amount		****	Capital		****	Earnings		****	Income (Loss)		****	Total
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
BALANCE June 30, 2023		$	66,514	​	27,973,995	​	$	280	​	$	99,044	​	$	264,196	​	$	(20,908)	​	$	409,126
Stock-based Compensation		​	—	​	12,588	​	​	—	​	​	997	​	​	—	​	​	—	​		997
Comprehensive Income (Loss)		​	—	​	—	​	​	—	​	​	—	​	​	9,629	​	​	(2,858)	​		6,771
Stock Options Exercised	​	​	—	​	27,000	​	​	—	​	​	90	​	​	—	​	​	—	​	​	90
Vested Restricted Stock Units	​	​	—	​	3,000	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Restricted Shares Withheld for Taxes	​	​	—	​	(1,078)	​	​	—	​	​	(11)	​	​	—	​	​	—	​	​	(11)
Preferred Stock Dividend	​	​	—	​	—	​	​	—	​	​	—	​	​	(1,013)	​	​	—	​	​	(1,013)
BALANCE September 30, 2023		$	66,514	​	28,015,505	​	$	280	​	$	100,120	​	$	272,812	​	$	(23,766)	​	$	415,960
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
BALANCE June 30, 2024		$	66,514	​	27,348,049	​	$	273	​	$	93,205	​	$	294,569	​	$	(15,320)	​	$	439,241
Stock-based Compensation		​	—	​	8,496	​	​	—	​	​	923	​	​	—	​	​	—	​		923
Comprehensive Income		​	—	​	—	​	​	—	​	​	—	​	​	8,675	​	​	3,904	​		12,579
Stock Options Exercised	​	​	—	​	69,856	​	​	1	​	​	517	​	​	—	​	​	—	​	​	518
Vested Restricted Stock Units	​	​	—	​	3,000	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Restricted Shares Withheld for Taxes	​	​	—	​	(3,711)	​	​	—	​	​	(48)	​	​	—	​	​	—	​	​	(48)
Preferred Stock Dividend	​	​	—	​	—	​	​	—	​	​	—	​	​	(1,013)	​	​	—	​	​	(1,013)
BALANCE September 30, 2024		$	66,514	​	27,425,690	​	$	274	​	$	94,597	​	$	302,231	​	$	(11,416)	​	$	452,200

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​ 6

Table of Contents

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	​	​
​	​	​	​	​	​	​	​	​	​	Additional		​	​	​	​	Other		​	​	​
​	​	Preferred		​	Common Stock				​	Paid-In		​	Retained		​	Comprehensive		​	​	​
Nine Months 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 Change in Accounting Principle, Net of Tax	​	​	—	​	—	​	​	—	​	​	—	​	​	(3,920)	​	​	—	​		(3,920)
Balance as of January 1, 2023, as Adjusted for Change in Accounting Principle	​	​	66,514	​	27,751,950	​	​	278	​	​	96,529	​	​	244,765	​	​	(17,942)	​		390,144
Stock-based Compensation		​	—	​	35,460	​	​	—	​	​	2,910	​	​	—	​	​	—	​	​	2,910
Comprehensive Income (Loss)		​	—	​	—	​	​	—	​	​	—	​	​	31,087	​	​	(5,824)	​	​	25,263
Stock Options Exercised	​	​	—	​	226,000	​	​	2	​	​	715	​	​	—	​	​	—	​	​	717
Forfeiture of Restricted Stock Awards	​	​	—	​	(250)	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Vested Restricted Stock Units	​	​	—	​	5,225	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Restricted Shares Withheld for Taxes	​	​	—	​	(2,880)	​	​	—	​	​	(34)	​	​	—	​	​	—	​	​	(34)
Preferred Stock Dividend	​	​	—	​	—	​	​	—	​	​	—	​	​	(3,040)	​	​	—	​	​	(3,040)
BALANCE September 30, 2023		$	66,514	​	28,015,505	​	$	280	​	$	100,120	​	$	272,812	​	$	(23,766)	​	$	415,960
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
BALANCE December 31, 2023	​	$	66,514	​	27,748,965	​	$	277	​	$	96,320	​	$	280,650	​	$	(18,246)	​	$	425,515
Stock-based Compensation		​	—	​	29,832	​	​	—	​	​	2,994	​	​	—	​	​	—	​		2,994
Comprehensive Income		​	—	​	—	​	​	—	​	​	—	​	​	24,621	​	​	6,830	​		31,451
Stock Options Exercised	​	​	—	​	78,356	​	​	1	​	​	586	​	​	—	​	​	—	​	​	587
Stock Repurchases	​	​	—	​	(446,509)	​	​	(4)	​	​	(5,173)	​	​	—	​	​	—	​	​	(5,177)
Vested Restricted Stock Units	​	​	—	​	25,665	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Restricted Shares Withheld for Taxes	​	​	—	​	(10,619)	​	​	—	​	​	(130)	​	​	—	​	​	—	​	​	(130)
Preferred Stock Dividend	​	​	—	​	—	​	​	—	​	​	—	​	​	(3,040)	​	​	—	​	​	(3,040)
BALANCE September 30, 2024		$	66,514	​	27,425,690	​	$	274	​	$	94,597	​	$	302,231	​	$	(11,416)	​	$	452,200

​

See accompanying notes to consolidated financial statements.

​ 7

Table of Contents Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(dollars in thousands)

(Unaudited)

​

​	​	​	​	​	​	​
​	​	Nine Months Ended
​	​	September 30,
​	​	2024		​	2023
CASH FLOWS FROM OPERATING ACTIVITIES	​	​	​	​	​	​
Net Income	​	$	24,621	​	$	31,087
Adjustments to Reconcile Net Income to Net Cash	​		​	​		​
Provided by Operating Activities:	​		​	​		​
Net Amortization on Securities Available for Sale	​		(1,064)	​		196
Net (Gain) Loss on Sales of Securities Available for Sale	​		(385)	​		6
Provision for Credit Losses on Loans	​		1,450	​		2,050
Credit for Credit Losses on Off-Balance Sheet Exposures	​	​	(100)	​	​	(1,975)
Depreciation of Premises and Equipment	​		1,767	​		1,901
Amortization of Other Intangible Assets	​		26	​		91
Amortization of Right-of Use Asset	​	​	117	​	​	396
Amortization of Subordinated Debt Issuance Costs	​	​	286	​	​	287
Stock-based Compensation	​		2,994	​		2,910
Changes in Operating Assets and Liabilities:	​		​	​		​
Accrued Interest Receivable and Other Assets	​		(2,530)	​		(8,923)
Accrued Interest Payable and Other Liabilities	​		(15,383)	​		10,457
Net Cash Provided by Operating Activities	​		11,799	​		38,483
​	​	​	​	​	​	​
CASH FLOWS FROM INVESTING ACTIVITIES	​	****	​	​		​
Increase in Bank-Owned Certificates of Deposit	​		—	​	​	(44)
Proceeds from Sales of Securities Available for Sale	​		101,612	​	​	26,976
Proceeds from Maturities, Paydowns, Payups and Calls of Securities Available for Sale	​		45,219	​	​	23,812
Purchases of Securities Available for Sale	​		(189,344)	​	​	(63,777)
Net Decrease (Increase) in Loans	​		36,464	​	​	(155,123)
Net Decrease (Increase) in FHLB Stock	​		(1,529)	​	​	2,550
Purchases of Premises and Equipment	​		(658)	​	​	(2,787)
Proceeds from Sales of Foreclosed Assets	​		—	​	​	116
Net Cash Used in Investing Activities	​	​	(8,236)	​		(168,277)
​	​	​	​	​	​	​
CASH FLOWS FROM FINANCING ACTIVITIES	​	****	​	​		​
Net Increase in Deposits	​		37,494	​	​	258,966
Net Decrease in Federal Funds Purchased	​	​	—	​	​	(287,000)
Proceeds from FHLB Advances	​		699,000	​	​	486,500
Principal Payments on FHLB Advances	​	​	(669,000)	​	​	(289,000)
Preferred Stock Dividends Paid	​	​	(3,040)	​	​	(3,040)
Stock Options Exercised	​	​	587	​	​	717
Stock Repurchases	​	​	(5,177)	​	​	—
Shares Repurchased for Tax Withholdings Upon Vesting of Restricted Stock-Based Awards	​	​	(94)	​	​	(34)
Shares Repurchased for Tax Withholdings Upon Exercise Stock Options	​	​	(36)	​	​	—
Net Cash Provided by Financing Activities	​		59,734	​		167,109
​	​	​	​	​	​	​
NET CHANGE IN CASH AND CASH EQUIVALENTS	​		63,297	​		37,315
Cash and Cash Equivalents Beginning	​		128,562	​		87,043
Cash and Cash Equivalents Ending	​	$	191,859	​	$	124,358
​	​	​	​	​	​	​
SUPPLEMENTAL CASH FLOW DISCLOSURE	​	****	​	​		​
Cash Paid for Interest	​	$	108,886	​	$	82,670
Cash Paid for Income Taxes	​		5,485	​		8,931
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES	​	​	​	​	​	​
Net Investment Securities Sold but Not Settled	​	​	—	​	​	6,007
Loans Transferred to Foreclosed Assets	​	​	434	​	​	—

​

​	​	​	​	​	​	​<br><br>​<br><br>​

​

See accompanying notes to consolidated financial statements. 8

Table of Contents Bridgewater Bancshares, Inc. and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

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

Organization

Bridgewater Bancshares, Inc. (the “Company”) is a financial holding company whose operations consist of the ownership of its wholly-owned 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 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area. 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 August 28, 2024, the Company and First Minnetonka Bancorporation, Inc. (“FMB”) jointly announced the signing of a definitive merger agreement under which Bridgewater Bank will, subject to the completion of remaining closing conditions, acquire First Minnetonka City Bank, the wholly-owned banking subsidiary of FMB, in an all-cash transaction. First Minnetonka City Bank operates two full-service branches and had approximately $241 million in assets, $129 million in loans, and $215 million in deposits as of September 30, 2024.

Basis of Presentation

The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity and consolidated statements of cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). However, all normal recurring adjustments which are, in the opinion of management, necessary for the fair presentation of the interim financial statements have been included. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results which may be expected for the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2024.

Principles of Consolidation

These consolidated financial statements include the amounts of the Company, the Bank, with locations in Bloomington, Greenwood, Minneapolis (2), St. Louis Park, Orono, 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 judgements 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. 9

Table of Contents Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses, or ACL, calculation of deferred tax assets, fair value of financial instruments, and investment securities impairment.

Deri vative Financial Instruments

The Company enters into fair value hedge relationships 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. For derivatives designated as fair value hedges, the Company assesses hedge effectiveness on qualifying instruments using the shortcut method, whereby the hedges are considered perfectly effective at the onset of the hedge and over the life of the hedging relationship.

Impact of Recently Issued Accounting Guidance

In March 2024, the Financial Accounting Standards Board, or FASB, issued Accounting Standards Update, or ASU, No. 2024-02, Codification Improvements: Amendments to Remove References to the Concepts Statements. The ASU amends the Codification to remove references to various concepts and impacts a variety of topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance, but in most instances the references removed are extraneous and not required to understand or apply the guidance. Generally, the amendments in ASU 2024-02 are not intended to result in significant accounting changes for most entities. ASU 2024-02 is effective January 1, 2025 and is not expected to have a material impact on the Company’s consolidated financial statements.

Subsequent Events

​

Subsequent events have been evaluated through October 31, 2024, which is the date the consolidated financial statements were available to be issued.

​ 10

Table of Contents Note 2: 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 computed 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 three and nine months ended September 30, 2024, stock options and restricted stock units totaling 774,770 and 1,137,208 shares, respectively, were excluded from the calculation because they were deemed to be anti-dilutive. For the three and nine months ended September 30, 2023, stock options, restricted stock awards and restricted stock units totaling 1,152,060 and 1,042,502 shares, respectively, 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 three and nine months ended September 30, 2024 and 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended
​	​	September 30,					​	September 30,
(dollars in thousands, except per share data)	****	2024		****	2023		****	2024		****	2023
Net Income Available to Common Shareholders	​	$	7,662	​	$	8,616	​	$	21,581	​	$	28,047
Weighted Average Common Stock Outstanding:	​	​	​	​	​	​	​	​	​	​	​	​
Weighted Average Common Stock Outstanding (Basic)	​	​	27,382,798	​	​	27,943,409	​	​	27,486,590	​	​	27,853,036
Dilutive Effect of Stock Compensation	​	​	522,112	​	​	368,369	​	​	433,194	​	​	486,816
Weighted Average Common Stock Outstanding (Dilutive)	​	​	27,904,910	​	​	28,311,778	​	​	27,919,784	​	​	28,339,852
​	​	​	​	​	​	​	​	​	​	​	​	​
Basic Earnings per Common Share	​	$	0.28	​	$	0.31	​	$	0.79	​	$	1.01
Diluted Earnings per Common Share	​	​	0.27	​	​	0.30	​	​	0.77	​	​	0.99

​

​

​

Note 3: Securities

The following tables present the amortized cost and estimated fair value of securities with gross unrealized gains and losses at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024
​	​	​	​	​	Gross		​	Gross		​	​	​
​	​	Amortized		​	Unrealized		​	Unrealized		​	​	​
(dollars in thousands)	****	Cost		****	Gains		****	Losses		****	Fair Value
Securities Available for Sale:	​	​	​	​	​	​	​	​	​	​	​	​
U.S. Treasury Securities	​	$	105,998	​	$	—	​	$	(123)	​	$	105,875
Municipal Bonds	​	​	125,423	​	​	74	​	​	(13,610)	​	​	111,887
Mortgage-Backed Securities	​		218,550	​		4,287	​		(12,366)	​		210,471
Corporate Securities	​		144,539	​	​	822	​	​	(7,254)	​		138,107
SBA Securities	​		14,105	​	​	217	​	​	(56)	​	​	14,266
Asset-Backed Securities	​	​	83,964	​	​	193	​	​	(48)	​	​	84,109
Total Securities Available for Sale	​	$	692,579	​	$	5,593	​	$	(33,457)	​	$	664,715

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2023
​	​	​	​	​	Gross		​	Gross		​	​	​
​	​	Amortized		​	Unrealized		​	Unrealized		​	​	​
(dollars in thousands)	****	Cost		****	Gains		****	Losses		****	Fair Value
Securities Available for Sale:	​	​	​	​	​	​	​	​	​	​	​	​
Municipal Bonds	​	$	151,512	​	$	47	​	$	(19,035)	​	$	132,524
Mortgage-Backed Securities	​		249,455	​		2,261	​		(16,401)	​		235,315
Corporate Securities	​		142,098	​	​	386	​	​	(11,879)	​		130,605
SBA Securities	​		18,497	​	​	279	​	​	(102)	​	​	18,674
Asset-Backed Securities	​	​	87,054	​	​	357	​	​	(425)	​	​	86,986
Total Securities Available for Sale	​	$	648,616	​	$	3,330	​	$	(47,842)	​	$	604,104

​ 11

Table of Contents Securities with a carrying value of $150.4 million and $170.7 million were pledged to secure borrowing capacity at the Federal Reserve Discount Window as of September 30, 2024 and December 31, 2023, 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 September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	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
September 30, 2024													​	​	​	​	​	​	​	​
U.S. Treasury Securities	​	1	​	$	105,875	​	$	(123)	​	$	—	​	$	—	​	$	105,875	​	$	(123)
Municipal Bonds	​	169	​	​	—	​	​	—	​	​	101,085	​	​	(13,610)	​	​	101,085	​	​	(13,610)
Mortgage-Backed Securities	​	113	​	​	12,988	​	​	(37)	​	​	120,465	​	​	(12,329)	​		133,453	​		(12,366)
Corporate Securities	​	103	​	​	8,018	​	​	(114)	​	​	101,053	​	​	(7,140)	​		109,071	​		(7,254)
SBA Securities	​	32	​	​	458	​	​	(1)	​	​	4,428	​	​	(55)	​		4,886	​		(56)
Asset-Backed Securities	​	9	​	​	12,807	​	​	(26)	​	​	9,419	​	​	(22)	​	​	22,226	​	​	(48)
Total Securities Available for Sale	​	427	​	$	140,146	​	$	(301)	​	$	336,450	​	$	(33,156)	​	$	476,596	​	$	(33,457)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	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, 2023													​	​	​	​	​	​	​	​
Municipal Bonds	​	212	​	$	4,052	​	$	(17)	​	$	120,527	​	$	(19,018)	​	$	124,579	​	$	(19,035)
Mortgage-Backed Securities	​	128	​	​	35,719	​	​	(310)	​	​	135,829	​	​	(16,091)	​		171,548	​		(16,401)
Corporate Securities	​	110	​	​	14,528	​	​	(756)	​	​	101,311	​	​	(11,123)	​		115,839	​		(11,879)
SBA Securities	​	47	​	​	1,731	​	​	(3)	​	​	7,072	​	​	(99)	​		8,803	​		(102)
Asset-Backed Securities	​	24	​	​	39,011	​	​	(234)	​	​	13,805	​	​	(191)	​	​	52,816	​	​	(425)
Total Securities Available for Sale	​	521	​	$	95,041	​	$	(1,320)	​	$	378,544	​	$	(46,522)	​	$	473,585	​	$	(47,842)

​

At September 30, 2024, 427 debt securities had unrealized losses with aggregate depreciation of approximately 6.6% from the Company’s amortized cost basis. At December 31, 2023, 521 debt securities had unrealized losses with aggregate depreciation of approximately 9.2% 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 September 30, 2024 and December 31, 2023, there was no 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 $6.3 million and $4.9 million at September 30, 2024 and December 31, 2023, respectively, and was excluded from the estimate of credit losses.

​

The Company has entered into a fair value hedging transaction to mitigate the impact of changing interest rates on the fair value of U.S. treasury securities. See Note 6 – Derivative Instruments and Hedging Activities for disclosure of the gains and losses recognized on derivative instruments and the cumulative fair value hedging adjustments to the carrying amount of the hedged securities. 12

Table of Contents The following table presents a summary of the amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of September 30, 2024. Call date is used when a call of the debt security is expected, as 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, SBA 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
September 30, 2024	​	​	​	​	​	​
Due in One Year or Less	​	$	31,330	​	$	31,668
Due After One Year Through Five Years	​		48,487	​		46,985
Due After Five Years Through 10 Years	​		166,585	​		151,981
Due After 10 Years	​		129,558	​		125,235
Subtotal	​		375,960	​		355,869
Mortgage-Backed Securities	​		218,550	​		210,471
SBA Securities	​		14,105	​		14,266
Asset-Backed Securities	​	​	83,964	​	​	84,109
Totals	​	$	692,579	​	$	664,715

​

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 three and nine months ended September 30, 2024 and 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended
​	​	September 30,					​	September 30,
(dollars in thousands)	****	2024		****	2023		****	2024		****	2023
Proceeds From Sales of Securities	​	$	50,779	​	$	—	​	$	101,612	​	$	26,976
Gross Gains on Sales	​		488	​		—	​		1,594	​		247
Gross Losses on Sales	​		(516)	​		—	​		(1,209)	​		(253)

​

​

Note 4: Loans and Allowance for Credit Losses

The following table presents the components of the loan portfolio at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
(dollars in thousands)	****	2024		****	2023
Commercial	​	$	493,403	​	$	464,061
Construction and Land Development	​		118,596	​		232,804
1-4 Family Construction	​	​	45,822	​	​	65,087
Real Estate Mortgage:	​		​	​		​
1-4 Family Mortgage	​		421,179	​		402,396
Multifamily	​		1,379,814	​		1,388,541
CRE Owner Occupied	​	​	182,239	​	​	175,783
CRE Nonowner Occupied	​	​	1,032,142	​	​	987,306
Total Real Estate Mortgage Loans	​	​	3,015,374	​	​	2,954,026
Consumer and Other	​	​	12,395	​	​	8,304
Total Loans, Gross	​		3,685,590	​		3,724,282
Allowance for Credit Losses	​		(51,018)	​		(50,494)
Net Deferred Loan Fees	​		(5,705)	​		(6,573)
Total Loans, Net	​	$	3,628,867	​	$	3,667,215

​ 13

Table of Contents The following tables present the aging in past due loans and loans on nonaccrual status, with and without an ACL by loan segment as of September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Accruing Interest								​	​	​	​	​	​	​	​	​
​	​	​	​	​	30-89 Days		​	90 Days or		​	Nonaccrual		​	Nonaccrual		​	​	​
(dollars in thousands)	****	Current		****	Past Due		****	More Past Due		****	with ACL		****	without ACL		****	Total
September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Commercial	​	$	493,338	​	$	65	​	$	—	​	$	—	​	$	—	​	$	493,403
Construction and Land Development	​		118,532	​	​	—	​	​	—	​	​	—	​	​	64	​		118,596
1-4 Family Construction	​	​	45,822	​	​	—	​	​	—	​	​	—	​	​	—	​	​	45,822
Real Estate Mortgage:	​		​	​	​	​	​	​	​	​	​	​	​	​	​	​		​
1-4 Family Mortgage	​		421,179	​	​	—	​	​	—	​	​	—	​	​	—	​		421,179
Multifamily	​		1,379,814	​	​	—	​	​	—	​	​	—	​	​	—	​		1,379,814
CRE Owner Occupied	​		182,239	​	​	—	​	​	—	​	​	—	​	​	—	​		182,239
CRE Nonowner Occupied	​		1,023,828	​	​	—	​	​	—	​	​	—	​	​	8,314	​		1,032,142
Consumer and Other	​		12,395	​	​	—	​	​	—	​	​	—	​	​	—	​		12,395
Totals	​	$	3,677,147	​	$	65	​	$	—	​	$	—	​	$	8,378	​	$	3,685,590

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	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, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Commercial	​	$	463,966	​	$	—	​	$	—	​	$	—	​	$	95	​	$	464,061
Construction and Land Development	​		232,724	​	​	—	​	​	—	​	​	—	​	​	80	​	​	232,804
1-4 Family Construction	​	​	64,838	​	​	—	​	​	—	​	​	—	​	​	249	​	​	65,087
Real Estate Mortgage:	​		​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Mortgage	​		402,396	​	​	—	​	​	—	​	​	—	​	​	—	​	​	402,396
Multifamily	​		1,373,431	​	​	15,110	​	​	—	​	​	—	​	​	—	​	​	1,388,541
CRE Owner Occupied	​		175,289	​	​	—	​	​	—	​	​	—	​	​	494	​	​	175,783
CRE Nonowner Occupied	​		987,306	​	​	—	​	​	—	​	​	—	​	​	—	​	​	987,306
Consumer and Other	​		8,303	​	​	—	​	​	—	​	​	—	​	​	1	​	​	8,304
Totals	​	$	3,708,253	​	$	15,110	​	$	—	​	$	—	​	$	919	​	$	3,724,282

​

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 five 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 potential weakness that deserves management’s close attention. If left uncorrected, this potential weakness may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Watch loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

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. 14

Table of Contents 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. 15

Table of Contents The following tables present loan balances classified by credit quality indicators by year of origination as of September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024
(dollars in thousands)	​	2024	​	​	2023	​	​	2022	​	​	2021	​	​	2020	​	​	Prior	​	​	Revolving	​	​	Total
Commercial	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	$	89,609	​	$	66,265	​	$	81,681	​	$	27,568	​	$	14,641	​	$	20,026	​	$	178,919	​	$	478,709
Watch	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	495	​	​	495
Substandard	​	—	​	​	44	​	​	10,458	​	​	—	​	​	—	​	​	—	​	​	3,697	​	​	14,199
Total Commercial	​	89,609	​	​	66,309	​	​	92,139	​	​	27,568	​	​	14,641	​	​	20,026	​	​	183,111	​	​	493,403
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Construction and Land Development	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	44,342	​	​	59,852	​	​	5,640	​	​	610	​	​	28	​	​	—	​	​	8,060	​	​	118,532
Substandard	​	—	​	​	—	​	​	64	​	​	—	​	​	—	​	​	—	​	​	—	​	​	64
Total Construction and Land Development	​	44,342	​	​	59,852	​	​	5,704	​	​	610	​	​	28	​	​	—	​	​	8,060	​	​	118,596
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Construction	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	27,554	​	​	3,144	​	​	4,574	​	​	760	​	​	—	​	​	—	​	​	9,790	​	​	45,822
Total 1-4 Family Construction	​	27,554	​	​	3,144	​	​	4,574	​	​	760	​	​	—	​	​	—	​	​	9,790	​	​	45,822
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Real Estate Mortgage:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Mortgage	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	69,363	​	​	54,020	​	​	98,356	​	​	74,281	​	​	49,254	​	​	11,785	​	​	62,646	​	​	419,705
Watch	​	—	​	​	197	​	​	—	​	​	302	​	​	327	​	​	—	​	​	—	​	​	826
Substandard	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	648	​	​	—	​	​	648
Total 1-4 Family Mortgage	​	69,363	​	​	54,217	​	​	98,356	​	​	74,583	​	​	49,581	​	​	12,433	​	​	62,646	​	​	421,179
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Multifamily	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	169,306	​	​	105,433	​	​	498,422	​	​	365,638	​	​	162,839	​	​	59,454	​	​	5,844	​	​	1,366,936
Watch	​	—	​	​	12,878	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	12,878
Total Multifamily	​	169,306	​	​	118,311	​	​	498,422	​	​	365,638	​	​	162,839	​	​	59,454	​	​	5,844	​	​	1,379,814
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
CRE Owner Occupied	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	17,714	​	​	30,824	​	​	63,452	​	​	35,215	​	​	19,759	​	​	10,322	​	​	2,251	​	​	179,537
Watch	​	—	​	​	—	​	​	—	​	​	1,725	​	​	—	​	​	—	​	​	—	​	​	1,725
Substandard	​	—	​	​	977	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	977
Total CRE Owner Occupied	​	17,714	​	​	31,801	​	​	63,452	​	​	36,940	​	​	19,759	​	​	10,322	​	​	2,251	​	​	182,239
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
CRE Nonowner Occupied	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	178,443	​	​	137,938	​	​	315,481	​	​	189,778	​	​	73,685	​	​	100,341	​	​	4,660	​	​	1,000,326
Watch	​	9,677	​	​	3,679	​	​	—	​	​	2,711	​	​	—	​	​	—	​	​	—	​	​	16,067
Substandard	​	10,231	​	​	5,518	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	15,749
Total CRE Nonowner Occupied	​	198,351	​	​	147,135	​	​	315,481	​	​	192,489	​	​	73,685	​	​	100,341	​	​	4,660	​	​	1,032,142
Current Period Gross Write-offs	​	935	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	935
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Real Estate Mortgage Loans	​	454,734	​	​	351,464	​	​	975,711	​	​	669,650	​	​	305,864	​	​	182,550	​	​	75,401	​	​	3,015,374
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Consumer and Other	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	235	​	​	2,717	​	​	164	​	​	1	​	​	1,279	​	​	—	​	​	7,999	​	​	12,395
Total Consumer and Other	​	235	​	​	2,717	​	​	164	​	​	1	​	​	1,279	​	​	—	​	​	7,999	​	​	12,395
Current Period Gross Write-offs	​	11	​	​	2	​	​	—	​	​	—	​	​	—	​	​	—	​	​	1	​	​	14
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Period Gross Write-offs	​	946	​	​	2	​	​	—	​	​	—	​	​	—	​	​	—	​	​	1	​	​	949
Total Loans	$	616,474	​	$	483,486	​	$	1,078,292	​	$	698,589	​	$	321,812	​	$	202,576	​	$	284,361	​	$	3,685,590

16

Table of Contents ​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2023
(dollars in thousands)	​	2023	​	​	2022	​	​	2021	​	​	2020	​	​	2019	​	​	Prior	​	​	Revolving	​	​	Total
Commercial	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	$	93,299	​	$	121,274	​	$	37,056	​	$	19,297	​	$	18,594	​	$	4,507	​	$	149,836	​	$	443,863
Watch	​	1,700	​	​	318	​	​	34	​	​	—	​	​	—	​	​	—	​	​	2,003	​	​	4,055
Substandard	​	3	​	​	11,299	​	​	—	​	​	—	​	​	—	​	​	50	​	​	4,791	​	​	16,143
Total Commercial	​	95,002	​	​	132,891	​	​	37,090	​	​	19,297	​	​	18,594	​	​	4,557	​	​	156,630	​	​	464,061
Current Period Gross Write-offs	​	72	​	​	96	​	​	12	​	​	—	​	​	—	​	​	—	​	​	—	​	​	180
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Construction and Land Development	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	87,402	​	​	99,133	​	​	34,122	​	​	46	​	​	—	​	​	—	​	​	12,021	​	​	232,724
Substandard	​	—	​	​	80	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	80
Total Construction and Land Development	​	87,402	​	​	99,213	​	​	34,122	​	​	46	​	​	—	​	​	—	​	​	12,021	​	​	232,804
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Construction	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	35,172	​	​	16,156	​	​	941	​	​	355	​	​	—	​	​	—	​	​	12,214	​	​	64,838
Substandard	​	249	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	249
Total 1-4 Family Construction	​	35,421	​	​	16,156	​	​	941	​	​	355	​	​	—	​	​	—	​	​	12,214	​	​	65,087
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Real Estate Mortgage:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Mortgage	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	74,602	​	​	106,085	​	​	83,525	​	​	52,813	​	​	18,789	​	​	3,403	​	​	62,490	​	​	401,707
Substandard	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	659	​	​	30	​	​	689
Total 1-4 Family Mortgage	​	74,602	​	​	106,085	​	​	83,525	​	​	52,813	​	​	18,789	​	​	4,062	​	​	62,520	​	​	402,396
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Multifamily	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	192,078	​	​	456,179	​	​	444,162	​	​	196,784	​	​	41,998	​	​	45,847	​	​	8,577	​	​	1,385,625
Watch	​	2,916	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	2,916
Total Multifamily	​	194,994	​	​	456,179	​	​	444,162	​	​	196,784	​	​	41,998	​	​	45,847	​	​	8,577	​	​	1,388,541
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
CRE Owner Occupied	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	36,255	​	​	61,724	​	​	40,748	​	​	20,610	​	​	4,903	​	​	8,312	​	​	1,672	​	​	174,224
Substandard	​	194	​	​	—	​	​	494	​	​	—	​	​	—	​	​	871	​	​	—	​	​	1,559
Total CRE Owner Occupied	​	36,449	​	​	61,724	​	​	41,242	​	​	20,610	​	​	4,903	​	​	9,183	​	​	1,672	​	​	175,783
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
CRE Nonowner Occupied	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	164,226	​	​	305,749	​	​	253,683	​	​	77,618	​	​	78,288	​	​	66,569	​	​	4,521	​	​	950,654
Watch	​	16,301	​	​	—	​	​	3,213	​	​	—	​	​	—	​	​	—	​	​	—	​	​	19,514
Substandard	​	15,183	​	​	1,955	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	17,138
Total CRE Nonowner Occupied	​	195,710	​	​	307,704	​	​	256,896	​	​	77,618	​	​	78,288	​	​	66,569	​	​	4,521	​	​	987,306
Current Period Gross Write-offs	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Real Estate Mortgage Loans	​	501,755	​	​	931,692	​	​	825,825	​	​	347,825	​	​	143,978	​	​	125,661	​	​	77,290	​	​	2,954,026
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Consumer and Other	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pass	​	2,908	​	​	256	​	​	9	​	​	1,460	​	​	6	​	​	—	​	​	3,665	​	​	8,304
Total Consumer and Other	​	2,908	​	​	256	​	​	9	​	​	1,460	​	​	6	​	​	—	​	​	3,665	​	​	8,304
Current Period Gross Write-offs	​	42	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	2	​	​	44
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Period Gross Write-offs	​	114	​	​	96	​	​	12	​	​	—	​	​	—	​	​	—	​	​	2	​	​	224
Total Loans	$	722,488	​	$	1,180,208	​	$	897,987	​	$	368,983	​	$	162,578	​	$	130,218	​	$	261,820	​	$	3,724,282

​ 17

Table of Contents The following tables present the activity in the ACL, by segment, for the three and nine months ended September 30, 2024 and 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Construction		​	​		​	​		​	​	​	​	CRE		​	CRE		​	​		​	​	​
​	​	​	​	​	and Land		​	1-4 Family		​	1--4 Family		​	​	​	​	Owner		​	Non-owner		​	Consumer		​	​	​
(dollars in thousands)	****	Commercial		****	Development		****	Construction		****	Mortgage		****	Multifamil y		****	Occupied		****	Occupied		****	and Other		****	Total
Three Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance for Credit Losses for Loans:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Beginning Balance	​	$	6,018	​	$	1,220	​	$	522	​	$	2,774	​	$	22,480	​	$	1,258	​	$	17,581	​	$	96	​	$	51,949
Provision for (Recovery of) Credit Losses for Loans	​	​	(350)	​	​	(141)	​	​	(128)	​	​	5	​	​	(125)	​	​	(25)	​	​	730	​	​	34	​		—
Loans Charged-off	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(935)	​	​	(2)	​		(937)
Recoveries of Loans	​	​	5	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	1	​		6
Total Ending Allowance Balance	​	$	5,673	​	$	1,079	​	$	394	​	$	2,779	​	$	22,355	​	$	1,233	​	$	17,376	​	$	129	​	$	51,018
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance for Credit Losses for Loans:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Beginning Balance	​	$	5,398	​	$	2,156	​	$	558	​	$	2,651	​	$	22,217	​	$	1,184	​	$	16,225	​	$	105	​	$	50,494
Provision for (Recovery of) Credit Losses for Loans	​	​	265	​	​	(1,077)	​	​	(164)	​	​	125	​	​	138	​	​	49	​	​	2,086	​	​	28	​		1,450
Loans Charged-off	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(935)	​	​	(14)	​		(949)
Recoveries of Loans	​	​	10	​	​	—	​	​	—	​	​	3	​	​	—	​	​	—	​	​	​	​	​	10	​		23
Total Ending Allowance Balance	​	$	5,673	​	$	1,079	​	$	394	​	$	2,779	​	$	22,355	​	$	1,233	​	$	17,376	​	$	129	​	$	51,018

​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Construction		​	​		​	​		​	​	​	​	CRE		​	CRE		​	​		​	​	​	​	​	​
​	​	​	​	​	and Land		​	1-4 Family		​	1--4 Family		​	​	​	​	Owner		​	Non-owner		​	Consumer		​	​	​	​	​	​
(dollars in thousands)	****	Commercial		****	Development		****	Construction		****	Mortgage		****	Multifamily		****	Occupied		****	Occupied		****	and Other		****	Unallocated		****	Total
Three Months Ended September 30, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance for Credit Losses for Loans:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Beginning Balance	​	$	5,439	​	$	3,476	​	$	654	​	$	2,836	​	$	21,164	​	$	1,086	​	$	15,976	​	$	70	​	$	—	​	$	50,701
Provision for (Recovery of) Credit Losses for Loans	​	​	151	​	​	(704)	​	​	(80)	​	​	22	​	​	1,052	​	​	3	​	​	(464)	​	​	20	​	​	—	​		—
Loans Charged-off	​	​	(96)	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(26)	​	​	—	​		(122)
Recoveries of Loans	​	​	2	​	​	—	​	​	—	​	​	2	​	​	—	​	​	—	​	​	—	​	​	2	​	​	—	​		6
Total Ending Allowance Balance	​	$	5,496	​	$	2,772	​	$	574	​	$	2,860	​	$	22,216	​	$	1,089	​	$	15,512	​	$	66	​	$	—	​	$	50,585
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Allowance for Credit Losses for Loans:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Beginning Balance, Prior to Adoption of CECL	​	$	6,501	​	$	3,911	​	$	845	​	$	4,325	​	$	17,459	​	$	1,965	​	$	12,576	​	$	151	​	$	263	​	$	47,996
Impact of Adopting CECL	​	​	(1,158)	​	​	(1,070)	​	​	(235)	​	​	(1,778)	​	​	3,318	​	​	(943)	​	​	2,869	​	​	(90)	​	​	(263)	​	​	650
Balance as of January 1, 2023, as Adjusted for Adoption of CECL	​	​	5,343	​	​	2,841	​	​	610	​	​	2,547	​	​	20,777	​	​	1,022	​	​	15,445	​	​	61	​	​	—	​	​	48,646
Provision for (Recovery of) Credit Losses for Loans	​	​	242	​	​	(69)	​	​	(36)	​	​	309	​	​	1,439	​	​	67	​	​	67	​	​	31	​	​	—	​		2,050
Loans Charged-off	​	​	(96)	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(33)	​	​	—	​		(129)
Recoveries of Loans	​	​	7	​	​	—	​	​	—	​	​	4	​	​	—	​	​	—	​	​	—	​	​	7	​	​	—	​		18
Total Ending Allowance Balance	​	$	5,496	​	$	2,772	​	$	574	​	$	2,860	​	$	22,216	​	$	1,089	​	$	15,512	​	$	66	​	$	—	​	$	50,585

​

The following tables present the balance in the ACL and the recorded investment in loans, by segment, as of September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​		​	Construction		​	​		​	​	​	​	​	​	​	CRE		​	CRE		​	​	​	​	​	​
​	​	​		​	and Land		​	1-4 Family		​	1--4 Family		​	​	​	​	Owner		​	Non-owner		​	Consumer		​	​	​
(dollars in thousands)	****	Commercial		****	Development		****	Construction		****	Mortgage		****	Multifamil y		****	Occupied		****	Occupied		****	and Other		****	Total
ACL at September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Individually Evaluated for Impairment	​	$	11	​	$	—	​	$	—	​	$	—	​	$	—	​	$	—	​	$	—	​	$	—	​	$	11
Collectively Evaluated for Impairment	​	​	5,662	​	​	1,079	​	​	394	​	​	2,779	​	​	22,355	​	​	1,233	​	​	17,376	​	​	129	​		51,007
Totals	​	$	5,673	​	$	1,079	​	$	394	​	$	2,779	​	$	22,355	​	$	1,233	​	$	17,376	​	$	129	​	$	51,018

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​		​	Construction		​	​		​	​	​	​	​	​	​	CRE		​	CRE		​	​	​	​	​	​
​	​	​		​	and Land		​	1-4 Family		​	1--4 Family		​	​	​	​	Owner		​	Non-owner		​	Consumer		​	​	​
(dollars in thousands)	****	Commercial		****	Development		****	Construction		****	Mortgage		****	Multifamil y		****	Occupied		****	Occupied		****	and Other		****	Total
ACL at December 31, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Individually Evaluated for Impairment	​	$	8	​	$	—	​	$	—	​	$	—	​	$	—	​	$	—	​	$	95	​	$	—	​	$	103
Collectively Evaluated for Impairment	​		5,390	​	​	2,156	​	​	558	​	​	2,651	​	​	22,217	​	​	1,184	​	​	16,130	​	​	105	​		50,391
Totals	​	$	5,398	​	$	2,156	​	$	558	​	$	2,651	​	$	22,217	​	$	1,184	​	$	16,225	​	$	105	​	$	50,494

​ 18

Table of Contents

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​		​	Construction		​	​		​	​	​	​	​	​	​	CRE		​	CRE		​	​	​	​	​	​
​	​	​		​	and Land		​	1-4 Family		​	1--4 Family		​	​	​	​	Owner		​	Non-owner		​	Consumer		​	​	​
(dollars in thousands)	****	Commercial		****	Development		****	Construction		****	Mortgage		****	Multifamily		****	Occupied		****	Occupied		****	and Other		****	Total
Loans at September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Individually Evaluated for Impairment	​	$	14,199	​	$	64	​	$	—	​	$	648	​	$	—	​	$	977	​	$	15,749	​	$	—	​	$	31,637
Collectively Evaluated for Impairment	​		479,204	​	​	118,532	​	​	45,822	​	​	420,531	​	​	1,379,814	​	​	181,262	​	​	1,016,393	​	​	12,395	​		3,653,953
Totals	​	$	493,403	​	$	118,596	​	$	45,822	​	$	421,179	​	$	1,379,814	​	$	182,239	​	$	1,032,142	​	$	12,395	​	$	3,685,590
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans at December 31, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Individually Evaluated for Impairment	​	$	16,143	​	$	80	​	$	249	​	$	689	​	$	—	​	$	1,559	​	$	17,138	​	$	—	​	$	35,858
Collectively Evaluated for Impairment	​		447,918	​	​	232,724	​	​	64,838	​	​	401,707	​	​	1,388,541	​	​	174,224	​	​	970,168	​	​	8,304	​		3,688,424
Totals	​	$	464,061	​	$	232,804	​	$	65,087	​	$	402,396	​	$	1,388,541	​	$	175,783	​	$	987,306	​	$	8,304	​	$	3,724,282

​

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 September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Primary Type of Collateral								​	​	​	​	​	​
​	​	​	​	​	Business		​	​		​	​	​	​	ACL
(dollars in thousands)	****	Real Estate		****	Assets		****	Other		****	Total		****	Allocation
September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Commercial	​	$	—	​	$	3,841	​	$	10,358	​	$	14,199	​	$	11
Construction and Land Development	​		64	​	​	—	​	​	—	​	​	64	​	​	—
Real Estate Mortgage:	​		​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Mortgage	​		648	​	​	—	​	​	—	​	​	648	​	​	—
CRE Owner Occupied	​		977	​	​	—	​	​	—	​	​	977	​	​	—
CRE Nonowner Occupied	​		15,749	​	​	—	​	​	—	​	​	15,749	​	​	—
Totals	​	$	17,438	​	$	3,841	​	$	10,358	​	$	31,637	​	$	11

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Primary Type of Collateral								​	​	​	​	​	​
​	​	​	​	​	Business		​	​		​	​	​	​	ACL
(dollars in thousands)	****	Real Estate		****	Assets		****	Other		****	Total		****	Allocation
December 31, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Commercial	​	$	—	​	$	5,782	​	$	10,361	​	$	16,143	​	$	8
Construction and Land Development	​		80	​	​	—	​	​	—	​	​	80	​	​	—
1-4 Family Construction	​	​	249	​	​	—	​	​	—	​	​	249	​	​	—
Real Estate Mortgage:	​		​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Mortgage	​		689	​	​	—	​	​	—	​	​	689	​	​	—
CRE Owner Occupied	​		1,559	​	​	—	​	​	—	​	​	1,559	​	​	—
CRE Nonowner Occupied	​		17,138	​	​	—	​	​	—	​	​	17,138	​	​	95
Totals	​	$	19,715	​	$	5,782	​	$	10,361	​	$	35,858	​	$	103

​

Accrued interest receivable on loans, which is recorded within accrued interest on the balance sheet, totaled $10.0 million and $11.8 million at September 30, 2024 and December 31, 2023, respectively, and was excluded from the estimate of credit losses.

​

For both the three months ended September 30, 2024 and September 30, 2023, there were no loans modified to borrowers experiencing financial difficulty. For the nine months ended September 30, 2024, there were no loans modified to borrowers experiencing financial difficulty. For the nine months ended September 30, 2023, the Company modified one commercial real estate, or CRE, nonowner occupied loan, with an outstanding balance of $9.6 million, for a borrower experiencing financial difficulty by granting a 12-month extension at a below market rate. There was no forgiveness of principal and this loan was current with its modified terms as of September 30, 2023. 19

Table of Contents Note 5: Deposits

The following table presents the composition of deposits at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
(dollars in thousands)	****	2024		****	2023
Transaction Deposits	​	$	1,519,065	​	$	1,449,765
Savings and Money Market Deposits	​		980,345	​		935,091
Time Deposits	​		347,080	​		300,651
Brokered Deposits	​		900,952	​		1,024,441
Totals	​	$	3,747,442	​	$	3,709,948

​ ​ ​ ​​

Brokered deposits included brokered transaction and money market accounts of $139.5 million and $174.0 million as of September 30, 2024 and December 31, 2023, respectively.

​

The following table presents the scheduled maturities of brokered and time deposits at September 30, 2024:

​

​	​	​	​
​	​	September 30,
(dollars in thousands)		2024
Less than 1 Year	​	$	335,002
1 to 2 Years	​	​	444,829
2 to 3 Years	​	​	141,353
3 to 4 Years	​	​	106,399
4 to 5 Years	​	​	68,212
Greater than 5 Years	​	​	12,755
Totals	​	$	1,108,550

​

The aggregate amount of time deposits greater than $250,000 was approximately $168.2 million and $138.4 million at September 30, 2024 and December 31, 2023, respectively.

​

​

Note 6: 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.

​

Non-hedge Derivatives

​

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. 20

Table of Contents The following table presents a summary of the Company’s interest rate swaps to facilitate customer transactions as of September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024					​	December 31, 2023
​	​	Notional		​	Estimated		​	Notional		​	Estimated
(dollars in thousands)	​	Amount		​	Fair Value		​	Amount		​	Fair Value
Interest rate swap agreements:	​	​	​	​	​	​	​	​	​	​	​	​
Assets	​	$	66,189	​	$	5,791	​	$	63,814	​	$	6,981
Liabilities	​		66,189	​		(5,791)	​		63,814	​		(6,981)
Total	​	$	132,378	​	$	—	​	$	127,628	​	$	—

​

Cash Flow Hedging Derivatives

​

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 $5.1 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 September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​
(dollars in thousands)	****	September 30, 2024		****	December 31, 2023		​
Notional Amount	​	$	183,000	​	$	183,000	​
Weighted Average Pay Rate	​	​	2.18	%	​	2.00	%
Weighted Average Receive Rate	​	​	5.31	%	​	5.48	%
Weighted Average Maturity (Years)	​	​	4.15	​	​	4.04	​
Net Unrealized Gain	​	$	1,342	​	$	5,271	​

​

The Company purchases interest rate caps, designated as cash flow hedges, of certain deposit 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 three and nine months ended September 30, 2024, the Company recognized amortization expense on the interest rate caps of $204,000 and $600,000, respectively, which was recorded as a component of interest expense on brokered deposits and Federal Home Loan Bank, or FHLB, advances. For the three and nine months ended September 30, 2023, the Company recognized amortization expense on the interest rate caps of $198,000 and $593,000, respectively, which was recorded as a component of interest expense on brokered deposits FHLB advances.

​

The following table presents a summary of the Company’s interest rate caps designated as cash flow hedges as of September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​
(dollars in thousands)	****	September 30, 2024		****	December 31, 2023		​
Notional Amount	​	$	125,000	​	$	125,000	​
Unamortized Premium Paid	​	​	4,481	​	​	5,081	​
Weighted Average Strike Rate	​	​	0.96	%	​	0.96	%
Weighted Average Maturity (Years)	​	​	5.59	​	​	6.34	​

​ 21

Table of Contents The following table presents the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income for the three and nine months ended September 30, 2024 and 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Three Months Ended September 30,					​	Nine Months Ended September 30,
(dollars in thousands)			​	2024		​	2023		​	2024		​	2023
Derivatives in	​	Location of Gain (Loss)	​	Gain (Loss)					​	Gain (Loss)
Cash Flow Hedging	​	Reclassified	​	Reclassified from					​	Reclassified from
Relationships	​	from AOCI into Income	​	AOCI into Earnings					​	AOCI into Earnings
Interest rate swaps	​	Interest expense	​	$	1,478	​	$	1,575	​	$	4,549	​	$	4,169
Interest rate caps	​	Interest expense	​	​	1,048	​	​	48	​	​	2,609	​	​	(159)

​

No amounts were reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness for these derivatives during the three and nine months ended September 30, 2024 and 2023, and no amounts are expected to be reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness over the next twelve months.

Fair Value Hedging Derivatives

​

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 SOFR.

​

The following table presents a summary of the Company’s interest rate swaps designated as fair flow hedges as of September 30, 2024:

​

​	​	​	​	​
(dollars in thousands)	****	September 30, 2024		​
Notional Amount	​	$	97,650	​
Weighted Average Pay Rate	​	​	3.46	%
Weighted Average Receive Rate	​	​	5.24	​
Weighted Average Maturity (Years)	​	​	19.64	​

​

The Company had no interest rate swaps designated as fair value hedges as of December 31, 2023.

​

The effects of the Company’s fair value hedge relationships on the income statement during the three and nine months ended September 30, 2024 and 2023 were as follows:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	Amount of Gain (Loss) Recognized in Income
(dollars in thousands)			​	Three Months Ended September 30,					​	Nine Months Ended September 30,
Securities	​	Location of Gain (Loss)	​	2024		​	2023		​	2024		​	2023
Interest Rate Swaps	​	Interest Income	​	$	893	​	​	—	​	​	893	​	​	—
Securities Available for Sale	​	Interest Income	​	​	(893)	​	​	—	​	​	(893)	​	​	—

​

The following table presents amounts that were recorded on the balance sheet related to cumulative basis adjustments for fair value hedges at September 30, 2024:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	Cumulative Amount of Fair Value Hedging Adjustment
​	​	​	​	​	​	​	​	​	Included in the Carrying Amount of the Hedged
(dollars in thousands)	​	Carrying Amount of The Hedged Assets/Liabilities					​	​	Assets/Liabilities
Line Item on the Balance Sheet	​	September 30, 2024		​	December 31, 2023		​	September 30, 2024		​	December 31, 2023
Securities Available for Sale	​	$	96,757	​	​	—	​	$	893	​	​	—

​ 22

Table of Contents The following table presents a summary of the Company’s interest rate contracts as of September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024					​	December 31, 2023
​	​	Notional		​	Estimated		​	Notional		​	Estimated
(dollars in thousands)	​	Amount		​	Fair Value		​	Amount		​	Fair Value
Interest Rate Swap Agreements - Borrowings:	​	​	​	​	​	​	​	​	​	​	​	​
Assets	​	$	95,000	​	$	3,803	​	$	135,000	​	$	6,891
Liabilities	​	​	88,000	​	​	(2,461)	​	​	48,000	​	​	(1,620)
Interest Rate Swap Agreements - Securities:	​	​	​	​	​	​	​	​	​	​	​	​
Liabilities	​	​	97,650	​	​	(893)	​	​	—	​	​	—
Interest Rate Cap Agreements:	​	​	​	​	​	​	​	​	​	​	​	​
Assets	​	​	125,000	​	​	15,875	​	​	125,000	​	​	18,717

​

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 September 30, 2024 and December 31, 2023, the Company pledged no cash collateral for the Company’s derivative contracts. As of September 30, 2024 and December 31, 2023, the Company’s counterparties pledged cash collateral to the Company of $23.0 million and $31.8 million, respectively.

​

The following table summarizes gross and net information about derivative instruments that are eligible for offset in the balance sheet at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	Gross Amounts Not Offset in the Balance Sheet					​	​	​
​	​	​	​	​	​	​	​	Net Amounts of		​	​					​	​	​
​	​	Gross Amounts		​	Gross Amounts		​	Assets (Liabilities)		​	​					​	​	​
​	​	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)
September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Assets	​	$	25,469	​	$	—	​	$	25,469	​	$	—	​	$	22,973	​	$	2,496
Liabilities	​		(9,145)	​		—	​		(9,145)	​		—	​		—	​		(9,145)
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
December 31, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Assets	​	$	32,589	​	$	—	​	$	32,589	​	$	—	​	$	31,783	​	$	806
Liabilities	​	​	(8,601)	​	​	—	​	​	(8,601)	​	​	—	​	​	—	​	​	(8,601)

​

​

​

​

Note 7: 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 with aggregate principal balances of $1.49 billion and $1.45 billion at September 30, 2024 and December 31, 2023, 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 $509.2 million and $498.7 million at September 30, 2024 and December 31, 2023, respectively. 23

Table of Contents The following table presents information regarding FHLB advances, by maturity, at September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024				​	December 31, 2023
​	****	Weighted	****	​		****	Weighted	****	​
​	​	Average	​	Total		​	Average	​	Total
(dollars in thousands)	​	Rate	​	Outstanding		​	Rate	​	Outstanding
Less than 1 Year	​	5.22	%	$	278,000	​	5.31	%	$	233,000
1 to 2 Years	​	4.06	​	​	17,500	​	4.31	​	​	25,000
2 to 3 Years	​	3.71	​	​	31,500	​	3.45	​	​	21,500
3 to 4 Years	​	4.01	​	​	22,500	​	3.94	​	​	17,500
4 to 5 Years	​	—	​	​	—	​	4.01	​	​	22,500
Totals	​	​	​	$	349,500	​	​	​	$	319,500

​

Line of Credit. The Company has a 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 note contains customary representations, warranties, and covenants, including certain financial covenants and capital ratio requirements. The Company believes it was in compliance with all covenants as of September 30, 2024 and December 31, 2023.

The following table presents information regarding the revolving line of credit at September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	Total Debt	​	​	Total Debt	​	​	​	​	​
​	​	​	​	​	Outstanding	​	​	Outstanding	​	Interest	​	​	​
Name	​	Maturity Date	​	​	September 30, 2024	​	​	December 31, 2023	​	Rate	​	​	Coupon Structure
(dollars in thousands)	​	​	​	​	​	​	​	​	​	​	​	​	​
Revolving Credit Facility	​	September 1, 2026	​	$	13,750	​	$	13,750	​	8.00	%	​	Variable with Floor ^(1)^
(1)	The line of credit was renewed on September 1, 2024 for an additional 2 year term. The variable interest rate on the new note is equal to the greater of Wall Street Journal Prime Rate in effect or a floor of 4.50%.
---	---

​

​

Note 8: Subordinated Debentures

The following table presents a summary of the Company’s subordinated debentures as of September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	Total Debt	​	​	Total Debt	​	​	​	​	​
​	​	Date	​	​	First	​	Maturity	​	Outstanding	​	​	Outstanding	​	Interest	​	​	​
Name	​	Established	​	​	Redemption Date	​	Date	​	September 30, 2024	​	​	December 31, 2023	​	Rate	​	​	Coupon Structure
(dollars in thousands)	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
2030 Notes	​	June 19, 2020	​	​	July 1, 2025	​	July 1, 2030	$	50,000	​	$	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)^
Subordinated Debentures	​	​	​	​	​	​	​	​	80,000	​	​	80,000	​	​	​	​	​
Debt Issuance Costs	​	​	​	​	​	​	​	​	(426)	​	​	(712)	​	​	​	​	​
Subordinated Debentures, Net of Issuance Costs	​	​	​	​	​	​	​	$	79,574	​	$	79,288	​	​	​	​	​
(1)	Migrates to three month term SOFR + 5.13% beginning July 1, 2025 until either the early redemption date or the maturity date.
---	---
(2)	Migrates to three month term SOFR + 2.52% beginning July 15, 2026 until either the early redemption date or the maturity date.
---	---

​

Note 9: Tax Credit Investments

​

The Company invests in qualified affordable housing projects and federal historic projects for the purposes 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.

​ 24

Table of Contents The following table presents a summary of the Company’s investments in qualified affordable housing projects and other tax credit investments at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
(dollars in thousands)	​	September 30, 2024					​	December 31, 2023
Investment Type	​	​	Investment	​	​	Unfunded Commitments ^(1)^	​	​	Investment	​	​	Unfunded Commitments ^(1)^
Low Income Housing Tax Credit (LIHTC)	​	$	15,426	​	$	340	​	$	16,897	​	$	7,579
Federal Historic Tax Credit (FHTC)	​	​	3,076	​	​	2,541	​	​	3,403	​	​	2,353
Total	​	$	18,502	​	$	2,881	​	$	20,300	​	$	9,932
(1)	All commitments are expected to be paid by the Company by September 30, 2025.
---	---

​

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 the three and nine months ended September 30, 2024 and 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended
​	​	September 30,					​	September 30,
(dollars in thousands)	​	2024		****	2023		****	2024		****	2023
Amortization Expense^(1)^	​	​	​	​	​	​	​	​	​	​	​	​
LIHTC	​	$	503	​	$	279	​	$	1,483	​	$	927
FHTC	​	​	190	​	​	108	​	​	515	​	​	325
Total	​	$	693	​	$	387	​	$	1,998	​	$	1,252
Tax Benefit Recognized^(2)^	​	​	​	​	​	​	​	​	​	​	​	​
LIHTC	​	$	(671)	​	$	(374)	​	$	(2,012)	​	$	(1,123)
FHTC	​	​	(250)	​	​	(152)	​	​	(681)	​	​	(455)
Total	​	$	(921)	​	$	(526)	​	$	(2,693)	​	$	(1,578)
(1)	The amortization expense for the LIHTC and FHTC investments are included in income tax expense.
---	---
(2)	All of the tax benefits recognized are included in income tax expense.
---	---

​

​

Note 10: 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. 25

Table of Contents The following table presents information regarding commitments outstanding at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​
​	​	September 30,		​	December 31,
(dollars in thousands)	****	2024		****	2023
Unfunded Commitments Under Lines of Credit	​	$	523,698	​	$	546,632
Letters of Credit	​		112,069	​		103,289
Totals	​	$	635,767	​	$	649,921

​

The Company had outstanding letters of credit with the FHLB of $133.9 million and $114.4 million at September 30, 2024 and December 31, 2023, respectively, on behalf of customers and to secure public deposits.

The ACL for off-balance sheet credit exposures was $2.9 million and $3.0 million at September 30, 2024 and December 31, 2023, 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 three and nine months ended September 30, 2024 and 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	Three Months Ended				​	​	Nine Months Ended
​	​	​	September 30,				​	​	September 30,
(dollars in thousands)	​	​	2024	​	​	2023	​	​	2024	​	​	2023
Allowance for Credit Losses:	​	​	​	​	​	​	​	​	​	​	​	​
Beginning Balance	​	$	2,885	​	$	3,835	​	$	2,985	​	$	360
Impact of Adopting CECL	​	​	—	​	​	—	​	​	—	​	​	4,850
Recovery of Off-Balance Sheet Credit Exposures	​	​	—	​	​	(600)	​	​	(100)	​	​	(1,975)
Total Ending Balance	​	$	2,885	​	$	3,235	​	$	2,885	​	$	3,235

​

Legal Contingencies

Neither the Company nor any of its subsidiaries is a party, and no property of these entities is subject, to any material pending legal proceedings, other than ordinary routine litigation incidental to the Bank’s business. The Company does not know of any material proceeding contemplated by a governmental authority against the Company or any of its subsidiaries.

​

Note 11: 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 is ten years. All outstanding options have been granted with vesting periods of four or five 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 is ten years. All outstanding options have been granted with vesting periods of four or five years. As of September 30, 2024 and December 31, 2023, there were 30,000 and 5,000 shares, respectively, of the Company’s common stock reserved for future option grants under the 2017 Plan. 26

Table of Contents 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 is ten years. All outstanding awards have been granted with a vesting period of four years. As of September 30, 2024 and December 31, 2023, there were 34,700 and -0- 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 is ten years. All outstanding awards have been granted with a vesting period of four years. As of September 30, 2024 and December 31, 2023, there were 1,026,564 and 1,107,752 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 the fact 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 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 60 banks in the index ranging in market capitalization from $500 million up to $4.0 billion.

The weighted average assumptions used in the model for valuing stock options grants for the nine months ended September 30, 2024, are as follows:

​

​	​	​	​
​	​	September 30,	​
​	****	2024	****
Dividend Yield		—	%
Expected Life		7	Years
Expected Volatility		30.32	%
Risk-Free Interest Rate		3.89	%

​

​ 27

Table of Contents The following table presents a summary of the status of the Company’s outstanding stock options for the nine months ended September 30, 2024:

​

​	​	​	​	​	​
​	​	September 30, 2024
​	****	****	****	Weighted
​	​	​	​	Average
​	​	Shares	​	Exercise Price
Outstanding at Beginning of Year		2,014,994	​	$	10.57
Granted		10,000	​		13.17
Exercised		(78,356)	​		7.50
Forfeitures		(50,000)	​		12.03
Outstanding at Period End		1,896,638	​	$	10.67
​	​	​	​	​	​
Options Exercisable at Period End		1,404,762	​	$	9.90

​

For the three months ended September 30, 2024 and 2023, the Company recognized compensation expense for stock options of $227,000 and $230,000, respectively. For the nine months ended September 30, 2024 and 2023, the Company recognized compensation expense for stock options of $712,000 and $601,000, respectively.

The following table presents information pertaining to options outstanding at September 30, 2024:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	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 - 7.99		840,649		$	7.47		3.0		840,649		$	7.47
​	8.00 - 8.99		10,461		​	8.76		5.5		10,461		​	8.76
​	10.00 - 10.99	​	224,000	​	​	10.63	​	8.7	​	59,749	​	​	10.55
​	11.00 - 11.99	​	257,500	​	​	11.16	​	7.7	​	85,000	​	​	11.27
​	12.00 - 12.99	​	263,528	​	​	12.90	​	4.8	​	263,528	​	​	12.90
​	13.00 - 13.99	​	10,000	​	​	13.17	​	9.8	​	—	​	​	—
​	17.00 - 17.99	​	290,500	​	​	17.50	​	7.3	​	145,375	​	​	17.50
​	Totals		1,896,638	​	$	10.67	​	5.3		1,404,762	​	$	9.90

​

As of September 30, 2024, there was $2.0 million of total unrecognized compensation cost related to nonvested stock options that is expected to be recognized over a weighted-average period of 2.5 years.

The following table presents an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the nine months ended September 30, 2024:

​

​	​	​	​	​	​
​	****	****	****	Weighted
​	​	Number of	​	Average Grant
​	​	Shares	​	Date Fair Value
Nonvested Options at December 31, 2023		666,250	​	$	5.09
Granted		10,000	​	​	5.35
Vested		(159,374)	​	​	5.07
Forfeited	​	(25,000)	​	​	5.07
Nonvested Options at September 30, 2024		491,876	​	$	5.11

​ 28

Table of Contents Restricted Stock Awards

In 2019 and 2020, the Company granted restricted stock awards out of the 2019 EIP. These awards vest in equal annual installments on the first four anniversaries of the date of the grant. Nonvested restricted stock awards are classified as outstanding shares with forfeitable voting and dividend rights.

The following table presents an analysis of nonvested restricted stock awards outstanding for the nine months ended September 30, 2024:

​	​	​	​	​	​
​	****	****	****	Weighted
​	​	Number of	​	Average Grant
​	​	Shares	​	Date Fair Value
Nonvested at December 31, 2023		3,411	​	$	10.53
Granted		—	​	​	—
Vested		(2,786)	​	​	10.32
Forfeited	​	—	​	​	—
Nonvested at September 30, 2024		625	​	$	11.47

​

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 three months ended September 30, 2024 and 2023, the Company recognized compensation expense for restricted stock awards of $2,000 and $112,000, respectively. For the nine months ended September 30, 2024 and 2023, the Company recognized compensation expense for restricted stock awards of $12,000 and $333,000, respectively.

​

As of September 30, 2024, there was $1,000 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the 2019 EIP that is expected to be recognized over a weighted-average period of 0.1 years.

In addition, during the nine months ended September 30, 2024, the Company issued 29,832 shares of unrestricted common stock to non-employee 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 non-employee directors of $368,000 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 receive one 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 vesting. 29

Table of Contents The following table presents an analysis of nonvested restricted stock units outstanding for the nine months ended September 30, 2024:

​	​	​	​	​	​
​	****	****	****	Weighted
​	​	Number of	​	Average Grant
​	​	Units	​	Date Fair Value
Nonvested at December 31, 2023		441,015	​	$	14.71
Granted		63,184	​	​	11.89
Vested		(25,665)	​	​	15.69
Forfeited	​	(31,528)	​	​	14.70
Nonvested at September 30, 2024		447,006	​	$	14.25

​

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 three months ended September 30, 2024 and 2023, the Company recognized compensation expense for restricted stock units of $574,000 and $535,000, respectively. For the nine months ended September 30, 2024 and 2023, the Company recognized compensation expense for the restricted stock of $1.9 million and $1.6 million, respectively.

​

As of September 30, 2024, there was $4.1 million of total unrecognized compensation cost related to nonvested restricted stock units granted under the 2019 EIP and 2023 EIP that is expected to be recognized over a weighted-average period of 2.3 years.

​

​

Note 12: 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. 30

Table of Contents The following tables present the capital amounts and ratios for the Company, on a consolidated basis, and the Bank as of September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	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	​
September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Company (Consolidated):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	589,088	​	14.62	%	$	322,278	​	8.00	%	$	422,990	​	10.50	%	​	N/A	​	N/A	​
Tier 1 Risk-based Capital	​	​	460,827	​	11.44	​	​	241,709	​	6.00	​	​	342,420	​	8.50	​	​	N/A	​	N/A	​
Common Equity Tier 1 Capital	​	​	394,313	​	9.79	​	​	181,281	​	4.50	​	​	281,993	​	7.00	​	​	N/A	​	N/A	​
Tier 1 Leverage Ratio	​	​	460,827	​	9.75	​	​	189,109	​	4.00	​	​	189,109	​	4.00	​	​	N/A	​	N/A	​
Bank:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	573,720	​	14.27	%	$	321,749	​	8.00	%	$	422,296	​	10.50	%	$	402,187	​	10.00	%
Tier 1 Risk-based Capital	​	​	525,114	​	13.06	​	​	241,312	​	6.00	​	​	341,859	​	8.50	​	​	321,749	​	8.00	​
Common Equity Tier 1 Capital	​	​	525,114	​	13.06	​	​	180,984	​	4.50	​	​	281,531	​	7.00	​	​	261,421	​	6.50	​
Tier 1 Leverage Ratio	​	​	525,114	​	11.12	​	​	188,832	​	4.00	​	​	188,832	​	4.00	​	​	236,040	​	5.00	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Minimum Required				​	For Capital Adequacy				​	To be Well Capitalized				​
​	​	​	​	​	​	​	For Capital Adequacy				​	Purposes Plus Capital				​	Under Prompt Corrective				​
​	​	Actual				​	Purposes				​	Conservation Buffer				​	Action Regulations				​
(dollars in thousands)	****	Amount		****	Ratio	****	Amount		****	Ratio	****	Amount		****	Ratio	​	Amount		****	Ratio	​
December 31, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Company (Consolidated):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	570,770	​	13.97	%	$	326,872	​	8.00	%	$	429,019	​	10.50	%	​	N/A	​	N/A	​
Tier 1 Risk-based Capital	​	​	440,947	​	10.79	​	​	245,154	​	6.00	​	​	347,301	​	8.50	​	​	N/A	​	N/A	​
Common Equity Tier 1 Capital	​	​	374,433	​	9.16	​	​	183,865	​	4.50	​	​	286,013	​	7.00	​	​	N/A	​	N/A	​
Tier 1 Leverage Ratio	​	​	440,947	​	9.57	​	​	184,383	​	4.00	​	​	184,383	​	4.00	​	​	N/A	​	N/A	​
Bank:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	554,269	​	13.58	%	$	326,528	​	8.00	%	$	428,568	​	10.50	%	$	408,160	​	10.00	%
Tier 1 Risk-based Capital	​	​	503,787	​	12.34	​	​	244,896	​	6.00	​	​	346,936	​	8.50	​	​	326,528	​	8.00	​
Common Equity Tier 1 Capital	​	​	503,787	​	12.34	​	​	183,672	​	4.50	​	​	285,712	​	7.00	​	​	265,304	​	6.50	​
Tier 1 Leverage Ratio	​	​	503,787	​	10.95	​	​	184,037	​	4.00	​	​	184,037	​	4.00	​	​	230,047	​	5.00	​

​

The Company and the Bank 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.

​

Note 13: 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 31

Table of Contents 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 methodologies used as of September 30, 2024. The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024
(dollars in thousands)	****	Level 1		****	Level 2		****	Level 3		****	Total
Fair Value of Financial Assets:	​	​	​	​	​	​	​	​	​	​	​	​
Securities Available for Sale:	​	​	​	​	​	​	​	​	​	​	​	​
U.S. Treasury Securities	​	$	105,875	​	$	—	​	$	—	​	$	105,875
Municipal Bonds	​	​	—	​	​	111,887	​	​	—	​	​	111,887
Mortgage-Backed Securities	​	​	—	​	​	210,471	​	​	—	​	​	210,471
Corporate Securities	​	​	—	​	​	138,107	​	​	—	​	​	138,107
SBA Securities	​	​	—	​	​	14,266	​	​	—	​	​	14,266
Asset-Backed Securities	​	​	—	​	​	84,109	​	​	—	​	​	84,109
Interest Rate Caps	​	​	—	​	​	15,875	​	​	—	​	​	15,875
Interest Rate Swaps	​	​	—	​	​	9,594	​	​	—	​	​	9,594
Total Fair Value of Financial Assets	​	$	105,875	​	$	584,309	​	$	—	​	$	690,184
Fair Value of Financial Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​
Interest Rate Swaps	​	$	—	​	$	9,145	​	$	—	​	$	9,145
Total Fair Value of Financial Liabilities	​	$	—	​	$	9,145	​	$	—	​	$	9,145

​ 32

Table of Contents

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2023
(dollars in thousands)	****	Level 1		****	Level 2		****	Level 3		****	Total
Fair Value of Financial Assets:	​	​	​	​	​	​	​	​	​	​	​	​
Securities Available for Sale:	​	​	​	​	​	​	​	​	​	​	​	​
Municipal Bonds	​	$	—	​	$	132,524	​	$	—	​	$	132,524
Mortgage-Backed Securities	​	​	—	​	​	235,315	​	​	—	​	​	235,315
Corporate Securities	​	​	—	​	​	130,605	​	​	—	​	​	130,605
SBA Securities	​	​	—	​	​	18,674	​	​	—	​	​	18,674
Asset-Backed Securities	​	​	—	​	​	86,986	​	​	—	​	​	86,986
Interest Rate Caps	​	​	—	​	​	18,717	​	​	—	​	​	18,717
Interest Rate Swaps	​	​	—	​	​	13,872	​	​	—	​	​	13,872
Total Fair Value of Financial Assets	​	$	—	​	$	636,693	​	$	—	​	$	636,693
Fair Value of Financial Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​
Interest Rate Swaps	​	$	—	​	$	8,601	​	$	—	​	$	8,601
Total Fair Value of Financial Liabilities	​	$	—	​	$	8,601	​	$	—	​	$	8,601

​

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.

Interest Rate Caps

The fair value of the caps is 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.

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. 33

Table of Contents The following tables present net credit losses related to nonrecurring fair value measurements of certain assets at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024
(dollars in thousands)	****	Level 1		****	Level 2		****	Level 3		****	Loss
Individually Evaluated Loans	​	$	—	​	$	—	​	$	8,374	​	$	946
Totals	​	$	—	​	$	—	​	$	8,374	​	$	946

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	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 September 30, 2024, 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 4-10%. 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 above 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. 34

Table of Contents The following tables present the carrying amounts and estimated fair values of financial instruments at September 30, 2024 and December 31, 2023:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 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	​	$	191,859	​	$	191,859	​	$	—	​	$	—	​	$	191,859
Securities Available for Sale	​	​	664,715	​	​	105,875	​	​	558,840	​	​	—	​	​	664,715
FHLB Stock, at Cost	​	​	18,626	​	​	—	​	​	18,626	​	​	—	​	​	18,626
Loans, Net	​	​	3,628,867	​	​	—	​	​	3,564,137	​	​	8,374	​	​	3,572,511
Accrued Interest Receivable	​	​	16,750	​	​	—	​	​	16,750	​	​	—	​	​	16,750
Interest Rate Caps	​	​	15,875	​	​	—	​	​	15,875	​	​	—	​	​	15,875
Interest Rate Swaps	​	​	9,594	​	​	—	​	​	9,594	​	​	—	​	​	9,594
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Financial Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Deposits	​	$	3,747,442	​	$	—	​	$	3,755,621	​	$	—	​	$	3,755,621
Notes Payable	​	​	13,750	​	​	—	​	​	14,035	​	​	—	​	​	14,035
FHLB Advances	​	​	349,500	​	​	—	​	​	349,690	​	​	—	​	​	349,690
Subordinated Debentures	​	​	79,574	​	​	—	​	​	78,698	​	​	—	​	​	78,698
Accrued Interest Payable	​	​	3,458	​	​	—	​	​	3,458	​	​	—	​	​	3,458
Interest Rate Swaps	​	​	9,145	​	​	—	​	​	9,145	​	​	—	​	​	9,145

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	December 31, 2023
​	​	​	​	​	Fair Value Hierarchy								​	​	​
​	​	Carrying		​	​	​	​	​	​	​	​	​	​	Estimated
(dollars in thousands)	****	Amount		****	Level 1		****	Level 2		****	Level 3		****	Fair Value
Financial Assets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Cash and Due From Banks	​	$	128,562	​	$	128,562	​	$	—	​	$	—	​	$	128,562
Securities Available for Sale	​	​	604,104	​	​	—	​	​	604,104	​	​	—	​	​	604,104
FHLB Stock, at Cost	​	​	17,097	​	​	—	​	​	17,097	​	​	—	​	​	17,097
Loans, Net	​	​	3,667,215	​	​	—	​	​	3,579,583	​	​	9,602	​	​	3,589,185
Accrued Interest Receivable	​	​	16,697	​	​	—	​	​	16,697	​	​	—	​	​	16,697
Interest Rate Caps	​	​	18,717	​	​	—	​	​	18,717	​	​	—	​	​	18,717
Interest Rate Swaps	​	​	13,872	​	​	—	​	​	13,872	​	​	—	​	​	13,872
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Financial Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Deposits	​	$	3,709,948	​	$	—	​	$	3,709,086	​	$	—	​	$	3,709,086
Notes Payable	​	​	13,750	​	​	—	​	​	13,805	​	​	—	​	​	13,805
FHLB Advances	​	​	319,500	​	​	—	​	​	319,305	​	​	—	​	​	319,305
Subordinated Debentures	​	​	79,288	​	​	—	​	​	77,557	​	​	—	​	​	77,557
Accrued Interest Payable	​	​	5,282	​	​	—	​	​	5,282	​	​	—	​	​	5,282
Interest Rate Swaps	​	​	8,601	​	​	—	​	​	8,601	​	​	—	​	​	8,601

​

The following methods and assumptions were used by the Company to estimate fair value of financial instruments not previously discussed.

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

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. 35

Table of Contents 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.

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 September 30, 2024 and December 31, 2023.

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.

​ 36

Table of Contents Note 14: Accumulated Other Comprehensive Income

The following tables present the components of other comprehensive income for the three and nine months ended September 30, 2024 and 2023:

​	​	​	​	​	​	​	​	​	​
(dollars in thousands)	​	Before Tax		​	Tax Effect		​	Net of Tax
Three Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​
Net Unrealized Gain on Available for Sale Securities	​	$	14,738	​	$	(4,236)	​	$	10,502
Less: Reclassification Adjustment for Net Losses Included in Net Income	​	​	28	​	​	(8)	​	​	20
Total Unrealized Gain	​	​	14,766	​	​	(4,244)	​	​	10,522
​	​	​	​	​	​	​	​	​	​
Net Unrealized Loss on Cash Flow Hedge	​	​	(6,761)	​	​	1,943	​	​	(4,818)
Less: Reclassification Adjustment for Gains Included in Net Income	​	​	(2,526)	​	​	726	​	​	(1,800)
Total Unrealized Loss	​	​	(9,287)	​	​	2,669	​	​	(6,618)
​	​	​	​	​	​	​	​	​	​
Other Comprehensive Income	​	$	5,479	​	$	(1,575)	​	$	3,904
​	​	​	​	​	​	​	​	​	​
Three Months Ended September 30, 2023	​	​	​	​	​	​	​	​	​
Net Unrealized Loss on Available for Sale Securities	​	$	(10,151)	​	$	2,917	​	$	(7,234)
Less: Reclassification Adjustment for Net Gains Included in Net Income	​	​	—	​	​	—	​	​	—
Total Unrealized Loss	​	​	(10,151)	​	​	2,917	​	​	(7,234)
​	​	​	​	​	​	​	​	​	​
Net Unrealized Gain on Cash Flow Hedge	​	​	7,763	​	​	(2,231)	​	​	5,532
Less: Reclassification Adjustment for Gains Included in Net Income	​	​	(1,623)	​	​	467	​	​	(1,156)
Total Unrealized Gain	​	​	6,140	​	​	(1,764)	​	​	4,376
​	​	​	​	​	​	​	​	​	​
Other Comprehensive Loss	​	$	(4,011)	​	$	1,153	​	$	(2,858)

​

​	​	​	​	​	​	​	​	​	​
(dollars in thousands)	​	Before Tax		​	Tax Effect		​	Net of Tax
Nine Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​
Net Unrealized Gain on Available for Sale Securities	​	$	16,141	​	$	(4,639)	​	$	11,502
Less: Reclassification Adjustment for Net Gains Included in Net Income	​	​	(385)	​	​	111	​	​	(274)
Total Unrealized Gain	​	​	15,756	​	​	(4,528)	​	​	11,228
​	​	​	​	​	​	​	​	​	​
Net Unrealized Gain on Cash Flow Hedge	​	​	987	​	​	(284)	​	​	703
Less: Reclassification Adjustment for Gains Included in Net Income	​	​	(7,158)	​	​	2,057	​	​	(5,101)
Total Unrealized Loss	​	​	(6,171)	​	​	1,773	​	​	(4,398)
​	​	​	​	​	​	​	​	​	​
Other Comprehensive Income	​	$	9,585	​	$	(2,755)	​	$	6,830
​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2023	​	​	​	​	​	​	​	​	​
Net Unrealized Loss on Available for Sale Securities	​	$	(14,338)	​	$	4,121	​	$	(10,217)
Less: Reclassification Adjustment for Net Losses Included in Net Income	​	​	6	​	​	(2)	​	​	4
Total Unrealized Loss	​	​	(14,332)	​	​	4,119	​	​	(10,213)
​	​	​	​	​	​	​	​	​	​
Net Unrealized Gain on Cash Flow Hedge	​	​	10,167	​	​	(2,921)	​	​	7,246
Less: Reclassification Adjustment for Gains Included in Net Income	​	​	(4,010)	​	​	1,153	​	​	(2,857)
Total Unrealized Gain	​	​	6,157	​	​	(1,768)	​	​	4,389
​	​	​	​	​	​	​	​	​	​
Other Comprehensive Loss	​	$	(8,175)	​	$	2,351	​	$	(5,824)

​ 37

Table of Contents The following tables present the changes in each component of accumulated other comprehensive income, net of tax, for the three and nine months ended September 30, 2024 and 2023:

​	​	​	​	​	​	​	​	​	​
​	​	​		​	​		​	Accumulated
​	​	Available For		​	​	​	​	Other Comprehensive
(dollars in thousands)	​	Sale Securities		​	Cash Flow Hedge		​	Income (Loss)
Three Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​
Balance at Beginning of Period	​	$	(31,014)	​	$	15,694	​	$	(15,320)
Other Comprehensive Income Before Reclassifications	​	​	10,502	​	​	(4,818)	​	​	5,684
Amounts Reclassified from Accumulated Other Comprehensive Income	​	​	20	​	​	(1,800)	​	​	(1,780)
Net Other Comprehensive Income During Period	​	​	10,522	​	​	(6,618)	​	​	3,904
Balance at End of Period	​	$	(20,492)	​	$	9,076	​	$	(11,416)
​	​	​	​	​	​	​	​	​	​
Three Months Ended September 30, 2023	​	​	​	​	​	​	​	​	​
Balance at Beginning of Period	​	$	(37,103)	​	$	16,195	​	$	(20,908)
Other Comprehensive Income (Loss) Before Reclassifications	​	​	(7,234)	​	​	5,532	​	​	(1,702)
Amounts Reclassified from Accumulated Other Comprehensive Income	​	​	—	​	​	(1,156)	​	​	(1,156)
Net Other Comprehensive Income (Loss) During Period	​	​	(7,234)	​	​	4,376	​	​	(2,858)
Balance at End of Period	​	$	(44,337)	​	$	20,571	​	$	(23,766)

​

​	​	​	​	​	​	​	​	​	​
​	​	​		​	​		​	Accumulated
​	​	Available For		​	​	​	​	Other Comprehensive
(dollars in thousands)	​	Sale Securities		​	Cash Flow Hedge		​	Income (Loss)
Nine Months Ended September 30, 2024	​	​	​	​	​	​	​	​	​
Balance at Beginning of Period	​	$	(31,720)	​	$	13,474	​	$	(18,246)
Other Comprehensive Income Before Reclassifications	​	​	11,502	​	​	703	​	​	12,205
Amounts Reclassified from Accumulated Other Comprehensive Income	​	​	(274)	​	​	(5,101)	​	​	(5,375)
Net Other Comprehensive Income During Period	​	​	11,228	​	​	(4,398)	​	​	6,830
Balance at End of Period	​	$	(20,492)	​	$	9,076	​	$	(11,416)
​	​	​	​	​	​	​	​	​	​
Nine Months Ended September 30, 2023	​	​	​	​	​	​	​	​	​
Balance at Beginning of Period	​	$	(34,124)	​	$	16,182	​	$	(17,942)
Other Comprehensive Income (Loss) Before Reclassifications	​	​	(10,217)	​	​	7,246	​	​	(2,971)
Amounts Reclassified from Accumulated Other Comprehensive Income	​	​	4	​	​	(2,857)	​	​	(2,853)
Net Other Comprehensive Income (Loss) During Period	​	​	(10,213)	​	​	4,389	​	​	(5,824)
Balance at End of Period	​	$	(44,337)	​	$	20,571	​	$	(23,766)

​

​

​

​

​

Note 15: Subsequent Events

On October 23, 2024, the Company’s Board of Directors announced a quarterly cash dividend of $36.72 per share ($0.3672 per depositary share) on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”), payable on December 2, 2024, to shareholders of record on the Series A Preferred Stock at the close of business on November 15, 2024. 38

Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion explains the Company’s financial condition and results of operations as of and for the three and nine months ended September 30, 2024. Annualized results for these interim periods may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission, or the SEC, on March 7, 2024.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

​

●	interest rate risk, including the effects of changes in the interest rate environment;
●	fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates;
---	---
●	business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of inflation and possible recession;
---	---
●	the effects of developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in recent bank failures;
---	---
●	loan concentrations in our loan portfolio;
---	---
●	the overall health of the local and national real estate market;
---	---
●	the ability to successfully manage credit risk;
---	---
●	the ability to maintain an adequate level of allowance for credit losses on loans;
---	---
●	new or revised accounting standards;
---	---
●	the concentration of large loans to certain borrowers;
---	---
●	the concentration of large deposits from certain clients, including those who have balances above current Federal Deposit Insurance Corporation (“FDIC”) insurance limits;
---	---
●	the ability to successfully manage liquidity risk, which may increase the dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds;
---	---
●	the ability to raise additional capital to implement our business plan;
---	---
●	the ability to implement our growth strategy and manage costs effectively;
---	---
●	the composition of the Company’s senior leadership team and the ability to attract and retain key personnel;
---	---

39

Table of Contents

●	talent and labor shortages and employee turnover;
●	the occurrence of fraudulent activity, breaches or failures of our third party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools;
---	---
●	interruptions involving our information technology and telecommunications systems or third-party servicers;
---	---
●	competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies;
---	---
●	the effectiveness of the risk management fra­­mework;
---	---
●	the commencement and outcome of litigation and other legal proceedings and regulatory actions against us;
---	---
●	the impact of recent and future legislative and regulatory changes, including in response to recent bank failures;
---	---
●	risks related to climate change and the negative impact it may have on our clients and their businesses;
---	---
●	the imposition of other governmental policies impacting the value of products produced by our commercial borrowers;
---	---
●	severe weather, natural disasters, wide spread disease or pandemics, acts of war or terrorism, or other adverse external events, including the ongoing conflict in the Middle East and the Russian invasion of Ukraine;
---	---
●	potential impairment to the goodwill the Company recorded in connection with acquisitions;
---	---
●	the risks associated with our ongoing acquisition of First Minnetonka City Bank, including the possibility that the merger may be more difficult or expensive to accomplish than anticipated, diversion of management's attention from daily operations and the effect of the proposed merger on the Company’s customer and employee relationships and operating results;
---	---
●	changes to U.S. or state tax laws, regulations and guidance;
---	---
●	potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; and
---	---
●	any other risks described in the “Risk Factors” section of this report and in other reports filed by Bridgewater Bancshares, Inc. with the Securities and Exchange Commission. <br>​
---	---

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. In addition, past results of operations are not necessarily indicative of future results. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Overview

The Company is a financial holding company headquartered in St. Louis Park, Minnesota. The principal sources of funds for loans and investments are transaction, savings, time, and other deposits, and short-term and long-term borrowings. The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and service charges. The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses. The Company’s simple, efficient business model of providing responsive support and unconventional experiences to clients continues to be the underlying principle that drives the Company’s profitable growth. 40

Table of Contents Critical Accounting Policies and Estimates

The consolidated financial statements of the Company are prepared based on the application of certain accounting policies, the most significant of which are described in “Note 1 – Description of the Business and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements included as a part of the Company’s most recent Annual Report on Form 10-K, filed with the SEC on March 7, 2024. There have been no significant changes in the critical accounting policies or the assumptions and judgments utilized in applying these policies since December 31, 2023. Certain policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to variation and may significantly affect the reported results and financial position for the current period or in future periods. The use of estimates, assumptions, and judgments are necessary when financial assets and liabilities are required to be recorded or adjusted to reflect fair value. Assets carried at fair value inherently result in more financial statement volatility. Fair values and information used to record valuation adjustments for certain assets and liabilities are based on either quoted market prices or are provided by other independent third-party sources, when available. When such information is not available, management estimates valuation adjustments. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on the future financial condition and results of operations. Management has discussed each critical accounting policy and the methodology for the identification and determination of critical accounting policies with the Company’s Audit Committee.

Recent Developments

On August 28, 2024, the Company and FMB jointly announced the signing of a definitive merger agreement under which Bridgewater Bank will acquire First Minnetonka City Bank, the wholly-owned banking subsidiary of FMB, in an all-cash transaction.

On October 23, 2024, the Company announced the receipt of all necessary regulatory approvals for the transaction. The acquisition is expected to close in the fourth quarter of 2024, subject to the satisfaction of remaining closing conditions. At the closing of the transaction, First Minnetonka City Bank will merge with and into Bridgewater Bank, with Bridgewater Bank as the surviving entity. The combined organization is expected to have approximately $4.9 billion in total assets, $4.0 billion in deposits, $3.9 billion in loans and leases, and nine full-service branches across the Twin Cities. 41

Table of Contents Operating Results Overview

The following table summarizes certain key financial results as of and for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of and for the Three Months Ended														​
​	​	September 30,		​	June 30		​	March 31,		​	December 31,		​	September 30,		​
(dollars in thousands, except per share data)	​	2024		​	2024		​	2024		​	2023		​	2023		​
Income Statement	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net Interest Income	​	$	25,599	​	$	24,996	​	$	24,631	​	$	25,314	​	$	25,421	​
Provision for (Recovery of) Credit Losses	​	​	—	​	​	600	​	​	750	​	​	(250)	​	​	(600)	​
Noninterest Income	​	​	1,522	​	​	1,763	​	​	1,550	​	​	1,409	​	​	1,726	​
Noninterest Expense	​	​	15,760	​	​	15,539	​	​	15,189	​	​	15,740	​	​	15,237	​
Net Income	​	​	8,675	​	​	8,115	​	​	7,831	​	​	8,873	​	​	9,629	​
Net Income Available to Common Shareholders	​	​	7,662	​	​	7,101	​	​	6,818	​	​	7,859	​	​	8,616	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Per Common Share Data	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Basic Earnings Per Share	​	$	0.28	​	$	0.26	​	$	0.25	​	$	0.28	​	$	0.31	​
Diluted Earnings Per Share	​	​	0.27	​	​	0.26	​	​	0.24	​	​	0.28	​	​	0.30	​
Book Value Per Share	​	​	14.06	​	​	13.63	​	​	13.30	​	​	12.94	​	​	12.47	​
Tangible Book Value Per Share ^(1)^	​	​	13.96	​	​	13.53	​	​	13.20	​	​	12.84	​	​	12.37	​
Basic Weighted Average Shares Outstanding	​	​	27,382,798	​	​	27,386,713	​	​	27,691,401	​	​	27,870,430	​	​	27,943,409	​
Diluted Weighted Average Shares Outstanding	​	​	27,904,910	​	​	27,748,184	​	​	28,089,805	​	​	28,238,056	​	​	28,311,778	​
Shares Outstanding at Period End	​	​	27,425,690	​	​	27,348,049	​	​	27,589,827	​	​	27,748,965	​	​	28,015,505	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Selected Performance Ratios	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Return on Average Assets ^(2)^	​	​	0.73	%	​	0.70	%	​	0.69	%	​	0.77	%	​	0.85	%
Pre-Provision Net Revenue Return on Average Assets ^(1)(2)^	​	​	0.96	​	​	0.94	​	​	0.95	​	​	0.96	​	​	1.01	​
Return on Average Shareholders' Equity ^(2)^	​	​	7.79	​	​	7.49	​	​	7.35	​	​	8.43	​	​	9.23	​
Return on Average Tangible Common Equity^(1)(2)^	​	​	8.16	​	​	7.80	​	​	7.64	​	​	8.95	​	​	9.92	​
Average Shareholders' Equity to Average Assets	​	​	9.42	​	​	9.37	​	​	9.32	​	​	9.15	​	​	9.19	​
Net Interest Margin ^(3)^	​	​	2.24	​	​	2.24	​	​	2.24	​	​	2.27	​	​	2.32	​
Core Net Interest Margin ^(1)(3)^	​	​	2.16	​	​	2.17	​	​	2.18	​	​	2.21	​	​	2.24	​
Yield on Interest Earning Assets^(3)^	​	​	5.48	​	​	5.41	​	​	5.28	​	​	5.22	​	​	5.14	​
Yield on Total Loans, Gross^(3)^	​	​	5.57	​	​	5.50	​	​	5.38	​	​	5.33	​	​	5.26	​
Cost of Interest Bearing Liabilities	​	​	4.27	​	​	4.19	​	​	4.03	​	​	3.97	​	​	3.81	​
Cost of Total Deposits	​	​	3.58	​	​	3.46	​	​	3.32	​	​	3.19	​	​	2.99	​
Cost of Funds	​	​	3.54	​	​	3.49	​	​	3.34	​	​	3.23	​	​	3.10	​
Efficiency Ratio^(1)^	​	​	58.0	​	​	58.7	​	​	58.2	​	​	58.8	​	​	56.1	​
Noninterest Expense to Average Assets ^(2)^	​	​	1.33	​	​	1.35	​	​	1.33	​	​	1.37	​	​	1.34	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Balance Sheet	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Assets	​	$	4,691,517	​	$	4,687,035	​	$	4,723,109	​	$	4,611,990	​	$	4,557,070	​
Total Loans, Gross	​	​	3,685,590	​	​	3,800,385	​	​	3,784,205	​	​	3,724,282	​	​	3,722,271	​
Deposits	​	​	3,747,442	​	​	3,807,712	​	​	3,807,225	​	​	3,709,948	​	​	3,675,509	​
Total Shareholders' Equity	​	​	452,200	​	​	439,241	​	​	433,611	​	​	425,515	​	​	415,960	​
Loan to Deposit Ratio	​	​	98.3	%	​	99.8	%	​	99.4	%	​	100.4	%	​	101.3	%
Core Deposits to Total Deposits ^(4)^	​	​	71.5	​	​	67.9	​	​	69.3	​	​	68.7	​	​	70.3	​
Uninsured Deposits to Total Deposits	​	​	25.0	​	​	22.5	​	​	26.0	​	​	24.3	​	​	22.2	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Capital Ratios (Consolidated) ^(6)^	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tier 1 Leverage Ratio	​	​	9.75	%	​	9.66	%	​	9.66	%	​	9.57	%	​	9.62	%
Common Equity Tier 1 Risk-based Capital Ratio	​	​	9.79	​	​	9.41	​	​	9.21	​	​	9.16	​	​	9.07	​
Tier 1 Risk-based Capital Ratio	​	​	11.44	​	​	11.03	​	​	10.83	​	​	10.79	​	​	10.69	​
Total Risk-based Capital Ratio	​	​	14.62	​	​	14.16	​	​	14.00	​	​	13.97	​	​	13.88	​
Tangible Common Equity to Tangible Assets ^(1)^	​	​	8.17	​	​	7.90	​	​	7.72	​	​	7.73	​	​	7.61	​

​ 42

Table of Contents ​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of and for the Three Months Ended														​
​	​	September 30,		​	June 30		​	March 31,		​	December 31,		​	September 30,		​
(dollars in thousands)	​	2024		​	2024		​	2024		​	2023		​	2023		​
Selected Asset Quality Data	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Loans 30-89 Days Past Due	​	$	65	​	$	502	​	$	—	​	$	15,110	​	$	11	​
Loans 30-89 Days Past Due to Total Loans	​	​	0.00	%	​	0.01	%	​	0.00	%	​	0.41	%	​	0.00	%
Nonperforming Loans	​	$	8,378	​	$	678	​	$	249	​	$	919	​	$	749	​
Nonperforming Loans to Total Loans	​	​	0.23	%	​	0.02	%	​	0.01	%	​	0.02	%	​	0.02	%
Nonaccrual Loans to Total Loans	​	​	0.23	​	​	0.02	​	​	0.01	​	​	0.02	​	​	0.02	​
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans	​	​	0.23	​	​	0.02	​	​	0.01	​	​	0.02	​	​	0.02	​
Foreclosed Assets	​	$	434	​	$	—	​	$	20	​	$	—	​	$	—	​
Nonperforming Assets ^(5)^	​	​	8,812	​	​	678	​	​	269	​	​	919	​	​	749	​
Nonperforming Assets to Total Assets ^(5)^	​	​	0.19	%	​	0.01	%	​	0.01	%	​	0.02	%	​	0.02	%
Allowance for Credit Losses on Loans to Total Loans	​	​	1.38	​	​	1.37	​	​	1.36	​	​	1.36	​	​	1.36	​
Allowance for Credit Losses on Loans to Nonaccrual Loans	​	​	608.95	​	​	7,662.09	​	​	20,621.29	​	​	5,494.45	​	​	6,753.67	​
Net Loan Charge-Offs to Average Loans ^(2)^	​	​	0.10	​	​	0.00	​	​	0.00	​	​	0.01	​	​	0.01	​
Watchlist Risk Rating Loans	​	$	31,991	​	$	30,436	​	$	21,624	​	$	26,485	​	$	26,877	​
Substandard Risk Rating Loans	​	​	31,637	​	​	33,908	​	​	33,829	​	​	33,858	​	​	35,621	​
(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
---	---
(2)	Annualized.
---	---
(3)	Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
---	---
(4)	Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
---	---
(5)	Nonperforming assets are defined as nonaccrual loans plus 90 days past due plus foreclosed assets.
---	---

Discussion and Analysis of Results of Operations

Net Income

Net income was $8.7 million for the third quarter of 2024, compared to net income of $9.6 million for the third quarter of 2023. Earnings per diluted common share for the third quarter of 2024 were $0.27, compared to $0.30 per diluted common share for the third quarter of 2023. Net income was $24.6 million for the nine months ended September 30, 2024, compared to net income of $31.1 million for the nine months ended September 30, 2023. Earnings per diluted common share for the nine months ended September 30, 2024 were $0.77, compared to $0.99 per diluted common share for the nine months ended September 30, 2023.

Net Interest Income

The Company’s primary source of revenue is net interest income, which is impacted by the level of interest earning assets and related funding sources, as well as changes in interest rates. The difference between the average yield on earning assets and the average rate paid for interest bearing liabilities is the net interest spread. Noninterest bearing sources of funds, such as demand deposits and shareholders’ equity, also support earning assets. The impact of the noninterest bearing sources of funds is captured in the net interest margin, which is calculated as net interest income divided by average earning assets. Both the net interest margin and net interest spread are presented on a tax-equivalent basis, which means that tax-free interest income has been adjusted to pretax-equivalent income, assuming a 21% federal tax rate. Management’s ability to respond to changes in interest rates by using effective asset-liability management techniques is critical to managing net interest margin and the Company’s primary source of earnings. 43

Table of Contents Average Balances and Yields

The following tables present, for the three and nine months ended September 30, 2024 and 2023, the average balances of each principal category of assets, liabilities and shareholders’ equity, and an analysis of net interest income. The average balances are principally daily averages and, for loans, include both performing and nonperforming balances. Interest income on loans includes the effects of net deferred loan origination fees and costs accounted for as yield adjustments. These tables are presented on a tax-equivalent basis, if applicable.

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended															****
​	​	September 30, 2024							​	September 30, 2023							****
​	​	Average		​	Interest		​	Yield/	​	Average		​	Interest		​	Yield/	****
​	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest Earning Assets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Cash Investments	​	$	157,114	​	$	1,971	​	4.99	%	$	81,038	​	$	903	​	4.42	%
Investment Securities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Taxable Investment Securities	​		668,429	​		8,406	​	5.00	​		565,008	​		6,234	​	4.38	​
Tax-Exempt Investment Securities^(1)^	​		31,496	​		402	​	5.08	​		29,955	​		346	​	4.58	​
Total Investment Securities	​		699,925	​		8,808	​	5.01	​		594,963	​		6,580	​	4.39	​
Loans ^(1)(2)^	​		3,721,654	​	​	52,118	​	5.57	​		3,722,594	​	​	49,326	​	5.26	​
Federal Home Loan Bank Stock	​		16,828	​	​	436	​	10.31	​		17,829	​	​	400	​	8.89	​
Total Interest Earning Assets	​		4,595,521	​		63,333	​	5.48	%		4,416,424	​		57,209	​	5.14	%
Noninterest Earning Assets	​	​	108,283	​	​	​	​	​	​	​	88,513	​	​	​	​	​	​
Total Assets	​	$	4,703,804	​	​	​	​	​	​	$	4,504,937	​	​	​	​	​	​
Interest Bearing Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Deposits:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest Bearing Transaction Deposits	​	$	804,161	​	$	9,369	​	4.63	%	$	730,244	​	$	7,136	​	3.88	%
Savings and Money Market Deposits	​		939,665	​	​	10,262	​	4.34	​		874,612	​	​	8,089	​	3.67	​
Time Deposits	​		355,050	​	​	3,918	​	4.39	​		266,635	​	​	1,962	​	2.92	​
Brokered Deposits	​		989,712	​	​	10,638	​	4.28	​		985,276	​	​	10,038	​	4.04	​
Total Interest Bearing Deposits	​	​	3,088,588	​	​	34,187	​	4.40	​	​	2,856,767	​	​	27,225	​	3.78	​
Federal Funds Purchased	​		141	​	​	2	​	5.72	​		39,641	​	​	548	​	5.48	​
Notes Payable	​		13,750	​	​	296	​	8.58	​		13,750	​	​	296	​	8.58	​
FHLB Advances	​		309,120	​	​	1,942	​	2.50	​		275,261	​	​	2,316	​	3.34	​
Subordinated Debentures	​		79,519	​	​	1,001	​	5.01	​		79,137	​	​	1,003	​	5.03	​
Total Interest Bearing Liabilities	​		3,491,118	​		37,428	​	4.27	%		3,264,556	​		31,388	​	3.81	%
Noninterest Bearing Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest Bearing Transaction Deposits	​		710,192	​	​	​	​	​	​		754,567	​	​	​	​	​	​
Other Noninterest Bearing Liabilities	​	​	59,417	​	​	​	​	​	​	​	71,767	​	​	​	​	​	​
Total Noninterest Bearing Liabilities	​		769,609	​	​	​	​	​	​		826,334	​	​	​	​	​	​
Shareholders' Equity	​	​	443,077	​	​	​	​	​	​	​	414,047	​	​	​	​	​	​
Total Liabilities and Shareholders' Equity	​	$	4,703,804	​	​	​	​	​	​	$	4,504,937	​	​	​	​	​	​
Net Interest Income / Interest Rate Spread	​	​	​	​		25,905	​	1.21	%	​	​	​		25,821	​	1.33	%
Net Interest Margin ^(3)^	​	​	​	​	​	​	​	2.24	%	​	​	​	​	​	​	2.32	%
Taxable Equivalent Adjustment:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tax-Exempt Investment Securities and Loans	​	​	​	​		(306)	​	​	​	​	​	​		(400)	​	​	​
Net Interest Income	​	​	​	​	$	25,599	​	​	​	​	​	​	$	25,421	​	​	​
(1)	Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%.
---	---
(2)	Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
---	---
(3)	Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
---	---

​ 44

Table of Contents ​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Nine Months Ended															****
​	​	September 30, 2024							​	September 30, 2023							****
​	​	Average		​	Interest		​	Yield/	​	Average		​	Interest		​	Yield/	​
​	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest Earning Assets:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Cash Investments	​	$	104,831	​	$	3,722	​	4.74	%	$	68,150	​	$	1,937	​	3.80	%
Investment Securities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Taxable Investment Securities	​		649,538	​		23,867	​	4.91	​		569,097	​		18,192	​	4.27	​
Tax-Exempt Investment Securities^(1)^	​		31,597	​		1,203	​	5.09	​		28,947	​		975	​	4.50	​
Total Investment Securities	​		681,135	​		25,070	​	4.92	​		598,044	​		19,167	​	4.29	​
Loans ^(1)(2)^	​		3,740,855	​		153,568	​	5.48	​		3,690,196	​	​	142,659	​	5.17	​
Federal Home Loan Bank Stock	​		18,111	​	​	1,173	​	8.65	​		22,343	​	​	1,228	​	7.34	​
Total Interest Earning Assets	​		4,544,932	​		183,533	​	5.39	%		4,378,733	​		164,991	​	5.04	%
Noninterest Earning Assets	​	​	102,993	​	​	​	​	​	​	​	86,243	​	​	​	​	​	​
Total Assets	​	$	4,647,925	​	​	​	​	​	​	$	4,464,976	​	​	​	​	​	​
Interest Bearing Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Deposits:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Interest Bearing Transaction Deposits	​	$	757,409	​	$	25,332	​	4.47	%	$	625,531	​	$	15,833	​	3.38	%
Savings and Money Market Deposits	​		917,051	​	​	28,502	​	4.15	​		926,494	​	​	21,636	​	3.12	​
Time Deposits	​		344,484	​	​	10,935	​	4.24	​		261,474	​	​	4,734	​	2.42	​
Brokered Deposits	​		993,445	​	​	31,226	​	4.20	​		876,130	​	​	24,394	​	3.72	​
Total Interest Bearing Deposits	​	​	3,012,389	​	​	95,995	​	4.26	​	​	2,689,629	​	​	66,597	​	3.31	​
Federal Funds Purchased	​		27,605	​	​	1,159	​	5.61	​		220,434	​	​	8,253	​	5.01	​
Notes Payable	​		13,750	​	​	887	​	8.62	​		13,750	​	​	844	​	8.21	​
FHLB Advances	​		311,380	​	​	6,325	​	2.71	​		215,938	​	​	5,269	​	3.26	​
Subordinated Debentures	​		79,424	​	​	2,982	​	5.02	​		79,042	​	​	2,979	​	5.04	​
Total Interest Bearing Liabilities	​		3,444,548	​		107,348	​	4.16	%		3,218,793	​		83,942	​	3.49	%
Noninterest Bearing Liabilities:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest Bearing Transaction Deposits	​		700,308	​	​	​	​	​	​		774,523	​	​	​	​	​	​
Other Noninterest Bearing Liabilities	​	​	67,405	​	​	​	​	​	​	​	63,646	​	​	​	​	​	​
Total Noninterest Bearing Liabilities	​		767,713	​	​	​	​	​	​		838,169	​	​	​	​	​	​
Shareholders' Equity	​	​	435,664	​	​	​	​	​	​	​	408,014	​	​	​	​	​	​
Total Liabilities and Shareholders' Equity	​	$	4,647,925	​	​	​	​	​	​	$	4,464,976	​	​	​	​	​	​
Net Interest Income / Interest Rate Spread	​	​	​	​		76,185	​	1.23	%	​	​	​		81,049	​	1.55	%
Net Interest Margin ^(3)^	​	​	​	​	​	​	​	2.24	%	​	​	​	​	​	​	2.47	%
Taxable Equivalent Adjustment:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tax-Exempt Investment Securities and Loans	​	​	​	​		(959)	​	​	​	​	​	​		(1,189)	​	​	​
Net Interest Income	​	​	​	​	$	75,226	​	​	​	​	​	​	$	79,860	​	​	​
(1)	Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a federal income tax rate of 21%.
---	---
(2)	Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
---	---
(3)	Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
---	---

​ 45

Table of Contents Interest Rates and Operating Interest Differential

Increases and decreases in interest income and interest expense result from changes in average balances (volume) of interest earning assets and interest bearing liabilities, as well as changes in average interest rates. The following table presents the effect that these factors had on the interest earned on interest earning assets and the interest incurred on interest bearing liabilities. The effect of changes in volume is determined by multiplying the change in volume by the previous period’s average rate. Similarly, the effect of rate changes is calculated by multiplying the change in average rate by the previous period’s volume. The changes not attributable specifically to either volume or rate have been allocated to the changes due to volume. The following tables present the changes in the volume and rate of interest bearing assets and liabilities for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, and for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023:

​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended September 30, 2024
​	​	Compared with
​	​	Three Months Ended September 30, 2023
​	​	Change Due To:					​	Interest
(dollars in thousands)	****	Volume		****	Rate		****	Variance
Interest Earning Assets:	​	​	​	​	​	​	​	​	​
Cash Investments	​	$	952	​	$	116	​	$	1,068
Investment Securities:	​	​	​	​	​	​	​	​	​
Taxable Investment Securities	​	​	1,283	​	​	889	​	​	2,172
Tax-Exempt Investment Securities	​	​	18	​	​	38	​	​	56
Total Securities	​	​	1,301	​	​	927	​	​	2,228
Loans	​	​	(143)	​	​	2,935	​	​	2,792
Federal Home Loan Bank Stock	​	​	(27)	​	​	63	​	​	36
Total Interest Earning Assets	​	$	2,083	​	$	4,041	​	$	6,124
​	​	​	​	​	​	​	​	​	​
Interest Bearing Liabilities:	​	​	​	​	​	​	​	​	​
Interest Bearing Transaction Deposits	​	$	842	​	$	1,391	​	$	2,233
Savings and Money Market Deposits	​	​	689	​	​	1,484	​	​	2,173
Time Deposits	​	​	970	​	​	986	​	​	1,956
Brokered Deposits	​	​	19	​	​	581	​	​	600
Total Deposits	​	​	2,520	​	​	4,442	​	​	6,962
Federal Funds Purchased	​	​	(569)	​	​	23	​	​	(546)
Notes Payable	​	​	—	​	​	—	​	​	—
FHLB Advances	​	​	204	​	​	(578)	​	​	(374)
Subordinated Debentures	​	​	3	​	​	(5)	​	​	(2)
Total Interest Bearing Liabilities	​	​	2,158	​	​	3,882	​	​	6,040
Net Interest Income	​	$	(75)	​	$	159	​	$	84

​

​ 46

Table of Contents ​

​	​	​	​	​	​	​	​	​	​
​	​	​	Nine Months Ended September 30, 2024
​	​	​	Compared with
​	​	​	Nine Months Ended September 30, 2023
​	​	​	Change Due To:				​	​	Interest
(dollars in thousands)	****	​	Volume	****	​	Rate	****	​	Variance
Interest Earning Assets:	​	​	​	​	​	​	​	​	​
Cash Investments	​	$	1,305	​	$	480	​	$	1,785
Investment Securities:	​	​	​	​	​	​	​	​	​
Taxable Investment Securities	​	​	2,972	​	​	2,703	​	​	5,675
Tax-Exempt Investment Securities	​	​	102	​	​	126	​	​	228
Total Securities	​	​	3,074	​	​	2,829	​	​	5,903
Loans	​	​	2,223	​	​	8,686	​	​	10,909
Federal Home Loan Bank Stock	​	​	(274)	​	​	219	​	​	(55)
Total Interest Earning Assets	​	$	6,328	​	$	12,214	​	$	18,542
​	​	​	​	​	​	​	​	​	​
Interest Bearing Liabilities:	​	​	​	​	​	​	​	​	​
Interest Bearing Transaction Deposits	​	$	4,426	​	$	5,073	​	$	9,499
Savings and Money Market Deposits	​	​	(273)	​	​	7,139	​	​	6,866
Time Deposits	​	​	2,639	​	​	3,562	​	​	6,201
Brokered Deposits	​	​	3,709	​	​	3,123	​	​	6,832
Total Deposits	​	​	10,501	​	​	18,897	​	​	29,398
Federal Funds Purchased	​	​	(8,087)	​	​	993	​	​	(7,094)
Notes Payable	​	​	—	​	​	43	​	​	43
FHLB Advances	​	​	1,943	​	​	(887)	​	​	1,056
Subordinated Debentures	​	​	18	​	​	(15)	​	​	3
Total Interest Bearing Liabilities	​	​	4,375	​	​	19,031	​	​	23,406
Net Interest Income	​	$	1,953	​	$	(6,817)	​	$	(4,864)

​

​

Comparison of Net Interest Margin, Interest Income, and Interest Expense

Third Quarter of 2024 Compared to Third Quarter of 2023

Net interest income was $25.6 million for the third quarter of 2024, an increase of $178,000 compared to $25.4 million for the third quarter of 2023. The increase in net interest income was primarily due to increased cash balances, growth and higher yields in the securities portfolio, and higher yields on loans, offset partially by growth and higher rates on deposits.

Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2024 was 2.24%, an eight basis point decline from 2.32% in the third quarter of 2023. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, was 2.16% for the third quarter of 2024, an eight basis point decline from 2.24% in the third quarter of 2023. The decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.

Average interest earning assets were $4.60 billion for the third quarter of 2024, an increase of $179.1 million, or 4.1%, compared to $4.42 billion for the third quarter of 2023. This increase in average interest earning assets was primarily due to increased cash balances and purchases of investment securities. Average interest bearing liabilities were $3.49 billion for the third quarter of 2024, an increase of $226.6 million, or 6.9%, compared to $3.26 billion for the third quarter of 2023. The increase in average interest bearing liabilities was primarily due to an increase in all deposit types and FHLB advances, offset partially by a decrease in federal funds purchased.

Average interest earning assets produced a tax-equivalent yield of 5.48% for the third quarter of 2024, compared to 5.14% for the third quarter of 2023. The increase in the yield on interest earning assets was primarily due to the purchase of higher yielding securities and the repricing of the loan and securities portfolios in the higher interest rate environment. The average rate paid on interest bearing liabilities was 4.27% for the third quarter of 2024, compared to 47

Table of Contents 3.81% for the third quarter of 2023. The increase was primarily due to continued deposit repricing in the higher rate environment.

Interest Income. Total interest income, on a tax-equivalent basis, was $63.3 million for the third quarter of 2024, compared to $57.2 million for the third quarter of 2023. The $6.1 million, or 10.7%, increase in total interest income on a tax-equivalent basis was primarily due to purchases of investment securities and higher earning asset yields in the higher interest rate environment.

Interest income on the investment securities portfolio, on a tax-equivalent basis, increased $2.2 million for the third quarter of 2024, compared to the third quarter of 2023, primarily due to a $105.0 million, or 17.6%, increase in average balances between the two periods and higher rates earned on securities.

Interest income on loans, on a tax-equivalent basis, was $52.1 million for the third quarter of 2024, compared to $49.3 million for the third quarter of 2023. The $2.8 million increase was primarily due to the repricing of the loan portfolio in the higher interest rate environment.

Loan interest income and loan fees remained one of the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield increased to 5.57% in the third quarter of 2024, which was 31 basis points higher than 5.26% in the third quarter of 2023. The core loan yield continued to rise as new loans originated at higher yields and the existing portfolio reprice in the higher rate environment.

​

The following table presents a summary of interest and fees recognized on loans for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended
​	​	September 30, 2024	​	​	June 30, 2024	​	​	March 31, 2024	​	​	December 31, 2023	​	​	September 30, 2023	​	​
Interest	​	5.47	%	​	5.42	%	​	5.31	%	​	5.25	%	​	5.16	%	​
Fees	​	0.10	​	​	0.08	​	​	0.07	​	​	0.08	​	​	0.10	​	​
Yield on Loans	​	5.57	%	​	5.50	%	​	5.38	%	​	5.33	%	​	5.26	%	​

​

Interest Expense. Interest expense on interest bearing liabilities was $37.4 million for the third quarter of 2024, an increase of $6.0 million, from $31.4 million for the third quarter of 2023. The increase was primarily due to growth and upward repricing of the deposit portfolio in the higher interest rate environment.

Interest expense on deposits was $34.2 million for the third quarter of 2024, an increase of $7.0 million, from $27.2 million for the third quarter of 2023. The increase in interest expense on deposits was primarily due to upward repricing of the deposit portfolio in the higher interest rate environment and the average balance of interest bearing deposits increasing by $231.8 million, or 8.1%. The cost of total deposits was 3.58% in the third quarter of 2024, a 59 basis point increase, compared to 2.99% in the third quarter of 2023. The increase was primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.

Interest expense on borrowings was $3.2 million for the third quarter of 2024, a decrease of $921,000, compared to $4.2 million for the third quarter of 2023. The decrease was primarily due to a decreased utilization of federal funds purchased and a decrease in the rate on FHLB advances.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

Net interest income was $75.2 million for the nine months ended September 30, 2024, a decrease of $4.6 million, or 5.8%, compared to $79.9 million for the nine months ended September 30, 2023. The decrease in net interest income was primarily due to growth and higher rates paid on deposits, offset partially by growth and higher earning asset yields in the higher interest rate environment.

​

Net interest margin (on a fully tax-equivalent basis) for the nine months ended September 30, 2024 was 2.24%, a 23 basis point decline from 2.47% for the nine months ended September 30, 2023. Core net interest margin (on a fully 48

Table of Contents tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, was 2.17% for the nine months ended September 30, 2024, a 22 basis point decline from 2.39% for the nine months ended September 30, 2023.

​

Average interest earning assets were $4.54 billion for the nine months ended September 30, 2024, an increase of $166.2 million, or 3.8%, compared to $4.38 billion for the nine months ended September 30, 2023. This increase in average interest earning assets was primarily due to organic growth in the loan portfolio, continued purchases of investment securities, and an increase in cash balances. Average interest bearing liabilities were $3.44 billion for the nine months ended September 30, 2024, an increase of $225.8 million, or 7.0%, compared to $3.22 billion for the nine months ended September 30, 2023. The increase in average interest bearing liabilities was primarily due to an increase in interest bearing transaction deposits, time deposits, brokered deposits, and FHLB advances, offset partially by a decrease in federal funds purchased.

​

Average interest earning assets produced a tax-equivalent yield of 5.39% for the nine months ended September 30, 2024, compared to 5.04% for the nine months ended September 30, 2023. The average rate paid on interest bearing liabilities was 4.16% for the nine months ended September 30, 2024, compared to 3.49% for the nine months ended September 30, 2023.

​

Interest Income. Total interest income on a tax-equivalent basis was $183.5 million for the nine months ended September 30, 2024, compared to $165.0 million for the nine months ended September 30, 2023. The $18.5 million increase in total interest income on a tax-equivalent basis was primarily due to an increase in cash balances, organic growth in the loan portfolio, purchases of investment securities and higher earning asset yields in the higher interest rate environment.

​

Interest income on the investment securities portfolio, on a tax-equivalent basis, increased $5.9 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to a $83.1 million, or 13.9%, increase in average balances and a 63 basis point increase in yield between the periods.

​

Interest income on loans, on a tax-equivalent basis, was $153.6 million for the nine months ended September 30, 2024, compared to $142.7 million for the nine months ended September 30, 2023. The $10.9 million increase was primarily due to a 1.4% increase in the average balances of loans outstanding and a 31 basis point increase in yield.

​

Interest Expense. Interest expense on interest bearing liabilities was $107.3 million for the nine months ended September 30, 2024, an increase of $23.4 million, compared to $83.9 million for the nine months ended September 30, 2023. The increase was primarily due to growth and continued deposit repricing in the higher interest rate environment, offset partially by decreased utilization of federal funds purchased.

​

Interest expense on deposits increased to $96.0 million for the nine months ended September 30, 2024, compared to $66.6 million for the nine months ended September 30, 2023. The $29.4 million increase in interest expense on deposits was primarily due to upward repricing of the deposit portfolio in the higher interest rate environment.

​

Interest expense on borrowings was $11.4 million for the nine months ended September 30, 2024, compared to $17.3 million for the nine months ended September 30, 2023. This decrease was primarily due to lower average balances of federal funds purchased.

​

Provision for Credit Losses

The provision for credit losses on loans was $-0- for both the third quarter of 2024 and the third quarter of 2023. The provision for credit losses on loans was $1.5 million for the nine months ended September 30, 2024, compared to $2.1 million for the nine months ended September 30, 2023. Although loans decreased during the quarter, increased loss rates and other qualitative factor adjustments resulted in no provision for the quarter. The allowance for credit losses on loans to total loans was 1.38% at September 30, 2024, compared to 1.36% at December 31, 2023. 49

Table of Contents The following table presents a summary of the activity in the allowance for credit losses on loans for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended
​	​	September 30,					​	September 30,
(dollars in thousands)	​	2024		****	2023		​	2024		****	2023
Balance at Beginning of Period	​	$	51,949	​	$	50,701	​	$	50,494	​	$	47,996
Impact of Adopting CECL	​	​	—	​	​	—	​	​	—	​	​	650
Provision for Credit Losses	​	​	—	​	​	—	​	​	1,450	​	​	2,050
Charge-offs	​	​	(937)	​	​	(122)	​	​	(949)	​	​	(129)
Recoveries	​	​	6	​	​	6	​	​	23	​	​	18
Balance at End of Period	​	$	51,018	​	$	50,585	​	$	51,018	​	$	50,585

​

The provision for credit losses for off-balance sheet credit exposures was $-0- for the third quarter of 2024, compared to a negative provision of $600,000 for the third quarter of 2023. No provision was recorded during the third quarter of 2024 due to unfunded commitments remaining stable as the migration to funded loans was offset by the volume of newly originated loans with unfunded commitments. The provision for credit losses for off-balance sheet exposures was a negative provision of $100,000 for the nine months ended September 30, 2024, compared to a negative provision of $2.0 million for the nine months ended September 30, 2023. The negative provision for both periods was due to a reduction in outstanding unfunded commitments. The allowance for credit losses on off-balance sheet credit exposures was $2.9 million as of September 30, 2024, compared to $3.0 million as of December 31, 2023.

The following table presents a summary of the activity in the provision for credit losses for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​	​	Nine Months Ended					​	​	​
​	​	September 30,					​	Increase/		​	September 30,					​	Increase/
(dollars in thousands)	​	2024		****	2023		****	(Decrease)		​	2024		****	2023		****	(Decrease)
Provision for Credit Losses on Loans	​	$	—	​	$	—	​	$	—	​	$	1,450	​	$	2,050	​	$	(600)
Provision for (Recovery of) Credit Losses for Off-Balance Sheet Credit Exposures	​	​	—	​	​	(600)	​	​	600	​	​	(100)	​	​	(1,975)	​	​	1,875
Provision for (Recovery of) Credit Losses	​	$	—	​	$	(600)	​	$	600	​	$	1,350	​	$	75	​	$	1,275

​

Noninterest Income

Noninterest income was $1.5 million for the third quarter of 2024, a decrease of $204,000 from $1.7 million for the third quarter of 2023. The decrease was primarily due to $493,000 of FHLB prepayment income recognized in the previous year which did not reoccur, offset partially by higher letter of credit fees, an increase in the cash surrender value of bank-owned life insurance and an increase in other income. Noninterest income was $4.8 million for the nine months ended September 30, 2024, a decrease of $249,000 from $5.1 million for the nine months ended September 30, 2023. The decrease was primarily due to lower letter of credit fees and $792,000 of FHLB prepayment income recognized in the previous year which did not reoccur, offset partially by an increase in net gain on sale of securities and an increase in the cash surrender value of bank-owned life insurance. 50

Table of Contents The following table presents the major components of noninterest income for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​	​	Nine Months Ended					​	​	​
​	​	September 30,					​	Increase/		​	September 30,					​	Increase/
(dollars in thousands)	​	2024		****	2023		****	(Decrease)		****	2024		****	2023		****	(Decrease)
Noninterest Income:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Customer Service Fees	​	$	373	​	$	379	​	$	(6)	​	$	1,081	​	$	1,096	​	$	(15)
Net Gain (Loss) on Sales of Securities	​	​	(28)	​	​	—	​	​	(28)	​	​	385	​	​	(6)	​	​	391
Letter of Credit Fees	​	​	424	​	​	315	​	​	109	​	​	1,127	​	​	1,328	​	​	(201)
Debit Card Interchange Fees	​	​	152	​	​	150	​	​	2	​	​	448	​	​	443	​	​	5
Bank-Owned Life Insurance	​	​	352	​	​	252	​	​	100	​	​	965	​	​	724	​	​	241
FHLB Prepayment Income	​	​	—	​	​	493	​	​	(493)	​	​	—	​	​	792	​	​	(792)
Other Income	​	​	249	​	​	137	​	​	112	​	​	829	​	​	707	​	​	122
Totals	​	$	1,522	​	$	1,726	​	$	(204)	​	$	4,835	​	$	5,084	​	$	(249)

​

Noninterest Expense

Third Quarter of 2024 Compared to Third Quarter of 2023

Noninterest expense was $15.8 million for the third quarter of 2024, an increase of $523,000 from $15.2 million for the third quarter of 2023. The increase was primarily attributable to increases in salaries and employee benefits, higher professional and consulting fees relating to the acquisition of First Minnetonka City Bank, increases in information technology and telecommunications, and marketing and advertising expense, offset partially by a decrease in the FDIC insurance assessment and lower derivative collateral fees.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023

​

Noninterest expense was $46.5 million for the nine months ended September 30, 2024, an increase of $2.9 million, from $43.6 million for the nine months ended September 30, 2023. The increase was primarily attributable to increases in salaries and employee benefits and higher professional and consulting fees driven by the acquisition of First Minnetonka City Bank.

The Company had 265 full-time equivalent employees at the end of the third quarter of 2024, compared to 255 at the end of the third quarter of 2023.

Efficiency Ratio. The efficiency ratio, a non-GAAP financial measure, reports total noninterest expense, less amortization of intangible assets, as a percentage of net interest income plus total noninterest income, less gains (losses) on sales of securities. Management believes this non-GAAP financial measure provides a meaningful comparison of operational performance and facilitates investors’ assessments of business performance and trends in comparison to peers in the banking industry.

The efficiency ratio was 58.0% for the third quarter of 2024, compared to 56.1% for the third quarter of 2023. The efficiency ratio for the nine months ended September 30, 2024 and 2023 was 58.3% and 51.2%, respectively. The efficiencies of the Company’s “branch-light” model have positioned the Company well to continue navigating a challenging environment for a more spread-based revenue model. 51

Table of Contents The following table presents the major components of noninterest expense for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	​	​	​	Nine Months Ended					​	​	​
​	​	September 30,					​	Increase/		​	September 30,					​	Increase/
(dollars in thousands)	​	2024		****	2023		****	(Decrease)		****	2024		****	2023		****	(Decrease)
Noninterest Expense:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Salaries and Employee Benefits	​	$	9,851	​	$	9,519	​	$	332	​	$	28,959	​	$	26,923	​	$	2,036
Occupancy and Equipment	​	​	1,069	​	​	1,101	​	​	(32)	​	​	3,218	​	​	3,385	​	​	(167)
FDIC Insurance Assessment	​	​	750	​	​	1,075	​	​	(325)	​	​	2,350	​	​	2,640	​	​	(290)
Data Processing	​	​	368	​	​	392	​	​	(24)	​	​	1,252	​	​	1,150	​	​	102
Professional and Consulting Fees	​	​	1,149	​	​	715	​	​	434	​	​	2,890	​	​	2,299	​	​	591
Derivative Collateral Fees	​	​	381	​	​	543	​	​	(162)	​	​	1,395	​	​	1,327	​	​	68
Information Technology and Telecommunications	​	​	840	​	​	683	​	​	157	​	​	2,448	​	​	2,077	​	​	371
Marketing and Advertising	​	​	367	​	​	222	​	​	145	​	​	1,006	​	​	805	​	​	201
Intangible Asset Amortization	​	​	9	​	​	9	​	​	—	​	​	26	​	​	91	​	​	(65)
Other Expense	​	​	976	​	​	978	​	​	(2)	​	​	2,944	​	​	2,883	​	​	61
Totals	​	$	15,760	​	$	15,237	​	$	523	​	$	46,488	​	$	43,580	​	$	2,908

​

Income Tax Expense

The provision for income taxes includes both federal and state taxes. Fluctuations in effective tax rates reflect the differences in the inclusion or deductibility of certain income and expenses for income tax purposes and the recognition of tax credits. The Company’s future effective income tax rate will fluctuate based on the mix of taxable and tax-free investments and loans, the recognition and availability of tax credit investments, and overall taxable income.

Income tax expense was $2.7 million for the third quarter of 2024, compared to $2.9 million for the third quarter of 2023. The effective combined federal and state income tax rate for the third quarter of 2024 was 23.6%, compared to 23.0% for the third quarter of 2023. Income tax expense was $7.6 million for the nine months ended September 30, 2024, compared to $10.2 million for the nine months ended September 30, 2023. The effective combined federal and state income tax rate for the nine months ended September 30, 2024 and 2023 was 23.6% and 24.7%, respectively. The fluctuations in the effective tax rate across both periods was primarily due to the timing and delivery of tax credits.

​

Financial Condition

Assets

Total assets at September 30, 2024 were $4.69 billion, an increase of $79.5 million, or 1.7%, over total assets of $4.61 billion at December 31, 2023, and an increase of $134.4 million, or 3.0%, over total assets of $4.56 billion at September 30, 2023. The year-to-date and year-over-year growth were primarily due to an increase in cash and cash equivalents and purchases of investment securities.

Investment Securities Portfolio

The investment securities portfolio is used to make various term investments and is intended to provide the Company with adequate liquidity, a source of stable income, and at times, serve as collateral for certain types of deposits or borrowings. Investment balances in the investment securities portfolio are subject to change over time based on funding needs and interest rate risk management objectives. The liquidity levels take into account anticipated future cash flows and are maintained at levels management believes are appropriate to ensure future flexibility in meeting anticipated funding needs.

The investment securities portfolio consists primarily of U.S. government agency mortgage backed securities, municipal securities, and corporate securities comprised primarily of subordinated debentures of banks and financial holding companies. In addition, the Company also holds U.S. treasury securities, other mortgage backed and other debt 52

Table of Contents securities. The investment securities portfolio has varying contractual maturities, some of these maturities do not necessarily represent the expected life of the securities as the securities may be called or paid down without penalty prior to their stated maturities. All investment securities are held as available for sale.

Securities available for sale were $664.7 million at September 30, 2024, compared to $604.1 million at December 31, 2023, an increase of $60.6 million, or 10.0%. At September 30, 2024, U.S. government agency mortgage-backed securities represented 15.5% of the portfolio, municipal securities represented 16.8% of the portfolio, corporate securities represented 20.8% of the portfolio, U.S. treasury securities represented 15.9% of the portfolio, SBA securities represented 2.2% of the portfolio, other mortgage-backed securities represented 16.1% of the portfolio, and asset-backed securities represented 12.7% of the portfolio.

The following table presents the amortized cost and fair value of securities available for sale, by type, at September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	September 30, 2024					****	December 31, 2023
​	​	Amortized		​	Fair		​	Amortized		​	Fair
(dollars in thousands)	****	Cost		****	Value		****	Cost		****	Value
U.S. Treasury Securities	​	$	105,998	​	$	105,875	​	$	—	​	$	—
SBA Securities	​	​	14,105	​	​	14,266	​	​	18,497	​	​	18,674
Mortgage-Backed Securities Issued or Guaranteed by U.S. Agencies (MBS):	​		​	​		​	​		​	​		​
Residential Pass-Through:	​		​	​		​	​		​	​		​
Guaranteed by GNMA	​		6,947	​		6,484	​		45,256	​		44,188
Issued by FNMA and FHLMC	​		23,117	​		20,970	​		24,319	​		21,687
Other Residential Mortgage-Backed Securities	​		73,153	​		65,738	​		74,832	​		65,617
Commercial Mortgage-Backed Securities	​		10,316	​		9,975	​		10,811	​		10,292
All Other Commercial MBS	​		105,017	​		107,304	​		94,237	​		93,531
Total MBS	​		218,550	​		210,471	​		249,455	​		235,315
Municipal Securities	​		125,423	​	​	111,887	​	​	151,512	​	​	132,524
Corporate Securities	​		144,539	​	​	138,107	​	​	142,098	​	​	130,605
Asset-Backed Securities	​	​	83,964	​	​	84,109	​	​	87,054	​	​	86,986
Total	​	$	692,579	​	$	664,715	​	$	648,616	​	$	604,104

​

Loan Portfolio

The Company focuses on lending to borrowers located or investing in the Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area across a diverse range of industries and property types. The Company lends primarily to commercial customers, consisting of loans secured by nonfarm, nonresidential properties, multifamily residential properties, land, and non-real estate business assets. Responsive service, local decision making, and an efficient turnaround time from application to closing have been significant factors in growing the loan portfolio.

The Company manages concentrations of credit exposure through a risk management program which implements formalized processes and procedures specifically for managing and mitigating risk within the loan portfolio. The processes and procedures include board and management oversight, commercial real estate exposure limits, portfolio monitoring tools, management information systems, market reports, underwriting standards, internal and external loan review, and stress testing.

Total gross loans at September 30, 2024 were $3.69 billion, a decrease of $38.7 million, or 1.0%, over total gross loans of $3.72 billion at December 31, 2023, and a decrease of $36.7 million, or 1.0%, over total gross loans of $3.72 billion at September 30, 2023. The decrease in the loan portfolio during both periods was primarily due to elevated loan payoffs, offset partially by loan originations. The pace of loan growth has moderated in recent quarters, when compared to historical levels, due to active balance sheet management to continue to align loan growth with the funding outlook and ultimately the impact of the higher interest rate environment on the number of prospective deals that meet underwriting standards. 53

Table of Contents The following table presents the dollar and percentage composition of the loan portfolio by category, at the dates indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024				​	June 30, 2024				​	March 31, 2024				​	December 31, 2023				​	September 30, 2023
(dollars in thousands)	****	Amount		****	Percent	****	Amount		****	Percent	****	Amount		****	Percent	****	Amount		****	Percent	****	Amount		****	Percent	****
Commercial	​	$	493,403	​	13.4	%	$	518,762	​	13.6	%	$	483,069	​	12.8	%	$	464,061	​	12.4	%	$	459,854	​	12.3	%
Construction and Land Development	​	​	118,596	​	3.2	​	​	134,096	​	3.5	​	​	200,970	​	5.3	​	​	232,804	​	6.3	​	​	294,818	​	7.9	​
1-4 Family Construction	​	​	45,822	​	1.3	​	​	60,551	​	1.6	​	​	65,606	​	1.7	​	​	65,087	​	1.8	​	​	64,463	​	1.7	​
Real Estate Mortgage:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
1-4 Family Mortgage	​	​	421,179	​	11.4	​	​	416,944	​	11.0	​	​	417,773	​	11.0	​	​	402,396	​	10.8	​	​	404,716	​	10.9	​
Multifamily	​	​	1,379,814	​	37.4	​	​	1,404,835	​	37.0	​	​	1,389,345	​	36.7	​	​	1,388,541	​	37.3	​	​	1,378,669	​	37.0	​
CRE Owner Occupied	​	​	182,239	​	5.0	​	​	185,988	​	4.9	​	​	182,589	​	4.8	​	​	175,783	​	4.7	​	​	159,485	​	4.3	​
CRE Nonowner Occupied	​	​	1,032,142	​	28.0	​	​	1,070,050	​	28.2	​	​	1,035,702	​	27.4	​	​	987,306	​	26.5	​	​	951,263	​	25.6	​
Total Real Estate Mortgage Loans	​		3,015,374	​	81.8	​		3,077,817	​	81.1	​		3,025,409	​	79.9	​		2,954,026	​	79.3	​		2,894,133	​	77.8	​
Consumer and Other	​	​	12,395	​	0.3	​	​	9,159	​	0.2	​	​	9,151	​	0.3	​	​	8,304	​	0.2	​	​	9,003	​	0.3	​
Total Loans, Gross	​		3,685,590	​	100.0	%		3,800,385	​	100.0	%		3,784,205	​	100.0	%		3,724,282	​	100.0	%		3,722,271	​	100.0	%
Allowance for Credit Losses	​	​	(51,018)	​	​	​	​	(51,949)	​	​	​	​	(51,347)	​	​	​	​	(50,494)	​	​	​	​	(50,585)	​	​	​
Net Deferred Loan Fees	​	​	(5,705)	​	​	​	​	(6,214)	​	​	​	​	(6,356)	​	​	​	​	(6,573)	​	​	​	​	(7,222)	​	​	​
Total Loans, Net	​	$	3,628,867	​	​	​	$	3,742,222	​	​	​	$	3,726,502	​	​	​	$	3,667,215	​	​	​	$	3,664,464	​	​	​

​

The Company primarily focuses on real estate mortgage lending, which constituted 81.8% of the portfolio at September 30, 2024. The composition of the portfolio has remained relatively consistent with prior periods and the Company does not expect any significant changes in the composition of the loan portfolio or the emphasis on real estate lending in the foreseeable future.

​

As of September 30, 2024, investor CRE loans totaled $2.58 billion, consisting of $1.03 billion of loans secured by nonowner occupied CRE, $1.38 billion of loans secured by multifamily residential properties, $45.8 million of 1-4 family construction loans and $118.6 million of construction and land development loans. Investor CRE loans represented 69.9% of the total gross loan portfolio and 449.1% of the Bank’s total risk-based capital at September 30, 2024, compared to 71.8% and 482.4%, respectively, at December 31, 2023.

The following table provides a breakdown of CRE nonowner occupied loans by collateral types as of September 30, 2024:

​	​	​	​	​	​	​	​	​
​	​	​	​	​	Percent of	​	Percent of	​
​	​	​	​	**** ​	CRE Nonowner	​	Total Loan	​
(dollars in thousands)	**** ​	Balance		**** ​	Occupied Portfolio	**** ​	Portfolio	​
Collateral Type:	​	​	​	​	​	​	​	​
Industrial	​	$	251,428	​	24.4	%	6.8	%
Office	​	​	197,309	​	19.1	​	5.4	​
Retail	​	​	168,750	​	16.3	​	4.6	​
Nursing/Assisted Living	​	​	108,846	​	10.6	​	2.9	​
Mini Storage Facility	​	​	107,473	​	10.4	​	2.9	​
Medical Office	​	​	98,551	​	9.6	​	2.7	​
Other	​	​	99,785	​	9.6	​	2.7	​
Total CRE Nonowner Occupied	​	$	1,032,142	​	100.0	%	28.0	%

​ 54

Table of Contents The following tables present time to contractual maturity and sensitivity to interest rate changes for the loan portfolio as of September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of September 30, 2024
​	****	Due in One Year		****	More Than One		****	More Than Five		​	After
(dollars in thousands)	​	or Less		​	Year to Five Years		​	Year to Fifteen Years		​	Fifteen Years
Commercial	​	$	201,028	​	$	220,303	​	$	68,399	​	$	3,673
Construction and Land Development	​		50,820	​		65,868	​		1,908	​		—
1-4 Family Construction	​	​	37,959	​	​	7,662	​	​	201	​	​	—
Real Estate Mortgage:	​		​	​		​	​		​	​		​
1-4 Family Mortgage	​		67,910	​		279,126	​		73,509	​		634
Multifamily	​		223,731	​		563,634	​		505,554	​		86,895
CRE Owner Occupied	​		5,793	​		112,218	​		64,228	​		—
CRE Nonowner Occupied	​		267,106	​		505,874	​		259,162	​		—
Total Real Estate Mortgage Loans	​		564,540	​		1,460,852	​		902,453	​		87,529
Consumer and Other	​		8,760	​	​	3,408	​	​	—	​	​	227
Total Loans, Gross	​	$	863,107	​	$	1,758,093	​	$	972,961	​	$	91,429
Interest Rate Sensitivity:	​			​			​			​		​
Fixed Interest Rates	​	$	557,598	​	$	1,463,797	​	$	481,866	​	$	26,531
Floating or Adjustable Rates	​		305,509	​		294,296	​		491,095	​		64,898
Total Loans, Gross	​	$	863,107	​	$	1,758,093	​	$	972,961	​	$	91,429

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of December 31, 2023
​	****	Due in One Year		****	More Than One		****	More Than Five		​	After
(dollars in thousands)	​	or Less		​	Year to Five Years		​	Year to Fifteen Years		​	Fifteen Years
Commercial	​	$	157,047	​	$	206,460	​	$	96,826	​	$	3,728
Construction and Land Development	​		99,183	​		93,013	​		40,608	​		—
1-4 Family Construction	​	​	46,601	​	​	9,476	​	​	9,010	​	​	—
Real Estate Mortgage:	​		​	​		​	​		​	​		​
1-4 Family Mortgage	​		59,962	​		262,468	​		79,320	​		646
Multifamily	​		242,291	​		482,380	​		576,348	​		87,522
CRE Owner Occupied	​		8,271	​		83,280	​		84,232	​		—
CRE Nonowner Occupied	​		204,297	​		503,196	​		279,813	​		—
Total Real Estate Mortgage Loans	​		514,821	​		1,331,324	​		1,019,713	​		88,168
Consumer and Other	​		2,568	​	​	5,533	​	​	—	​	​	203
Total Loans, Gross	​	$	820,220	​	$	1,645,806	​	$	1,166,157	​	$	92,099
Interest Rate Sensitivity:	​			​			​			​		​
Fixed Interest Rates	​	$	502,454	​	$	1,414,656	​	$	673,563	​	$	26,172
Floating or Adjustable Rates	​		317,766	​		231,150	​		492,594	​		65,927
Total Loans, Gross	​	$	820,220	​	$	1,645,806	​	$	1,166,157	​	$	92,099

​

Asset Quality

The Company emphasizes credit quality in the originating and monitoring of the loan portfolio, and success in underwriting is measured by the levels of classified and nonperforming assets and net charge-offs. Federal regulations and internal policies require the use of an asset classification system as a means of managing and reporting problem and potential problem assets. The Company has incorporated an internal asset classification system, substantially consistent with federal banking regulations, as a part of the credit monitoring system. Federal banking regulations set forth a classification scheme for problem and potential problem assets as “substandard,” “doubtful” or “loss” assets. An asset is considered “substandard” if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. “Substandard” assets include those characterized by the “distinct possibility” that the financial institution will sustain “some loss” if the deficiencies are not corrected. Assets classified as “doubtful” have all of the weaknesses inherent in those classified “substandard” with the added characteristic that the weaknesses present make “collection or liquidation in full,” on the basis of currently existing facts, conditions, and values, “highly 55

Table of Contents questionable and improbable.” Assets classified as “loss” are those considered “uncollectible” and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted. Assets which do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories but possess weaknesses are required to be designated “watch.”

The following table presents information on loan classifications at September 30, 2024. The Company had no assets classified as doubtful or loss at September 30, 2024.

​	​	​	​	​	​	​	​	​	​
​	​	Risk Category					****	​
(dollars in thousands)	​	Watch		​	Substandard		​	Total
Commercial	​	$	495	​	$	14,199	​	$	14,694
Construction and Land Development		​	—		​	64		​	64
Real Estate Mortgage:		​	​	​	​	​	​	​	​
1-4 Family Mortgage		​	826		​	648		​	1,474
Multifamily		​	12,878		​	—		​	12,878
CRE Owner Occupied		​	1,725		​	977		​	2,702
CRE Nonowner Occupied		​	16,067		​	15,749		​	31,816
Total Real Estate Mortgage Loans		​	31,496		​	17,374		​	48,870
Totals	​	$	31,991	​	$	31,637	​	$	63,628

​

Loans that have potential weaknesses that warranted a watchlist risk rating at September 30, 2024 totaled $32.0 million, compared to $26.5 million at December 31, 2023. Loans that warranted a substandard risk rating at September 30, 2024 totaled $31.6 million, compared to $35.9 million at December 31, 2023. Management continues to actively work with these borrowers and closely monitor substandard credits.

Nonperforming Assets

Nonperforming loans include loans accounted for on a nonaccrual basis and loans 90 days past due and still accruing. Nonaccrual loans totaled $8.4 million as of September 30, 2024 and $919,000 as of December 31, 2023. There were no loans 90 days past due and still accruing as of September 30, 2024 or December 31, 2023. As of September 30, 2024, there were $434,000 of foreclosed assets. There were no foreclosed assets as of December 31, 2023. The overall increase in nonperforming assets was primarily due to one central business district office loan, which previously had a substandard risk rating.

​

The following table presents a summary of nonperforming assets, by category, at the dates indicated:

​	​	​	​	​	​	​	​
​	​	September 30,		​	December 31,		​
(dollars in thousands)		2024			2023		​
Total Nonaccrual Loans	​	$	8,378	​	$	919	​
Total Nonperforming Loans	​	$	8,378	​	$	919	​
Plus: Foreclosed Assets	​		434	​		—	​
Total Nonperforming Assets ^(1)^	​	$	8,812	​	$	919	​
Nonaccrual Loans to Total Loans	​		0.23	%		0.02	%
Nonperforming Loans to Total Loans	​		0.23	​		0.02	​
Nonperforming Assets to Total Loans Plus Foreclosed Assets ^(1)^	​		0.24	​		0.02	​
(1)	Nonperforming assets are defined as nonaccrual loans and loans greater than 90 days past due still accruing plus foreclosed assets. There were no loans greater than 90 days past due still accruing for any period shown.
---	---

​

The balance of nonperforming assets can fluctuate due to changes in economic conditions. The Company has established a policy to discontinue accruing interest on a loan (that is, to place the loan on nonaccrual status) after it has become 90 days delinquent as to payment of principal or interest, unless the loan is considered to be well-collateralized and is actively in the process of collection. In addition, a loan will be placed on nonaccrual status before it becomes 90 days delinquent unless management believes that the collection of interest is expected. Interest previously accrued but 56

Table of Contents uncollected on such loans is reversed and charged against current income when the receivable is determined to be uncollectible. If management believes that a loan will not be collected in full, an increase to the allowance for credit losses on loans is recorded to reflect management’s estimate of any potential exposure or loss. Generally, payments received on nonaccrual loans are applied directly to principal. For the three and nine months ended September 30, 2024, the gross income that would have been recorded on nonaccrual loans was $116,000 and $152,000, respectively. For the three and nine months ended September 30, 2023, gross income that would have been recorded on nonacrrual loans was $20,000 and $51,000, respectively.

Allowance for Credit Losses

The allowance for credit losses on loans is a reserve established through charges to earnings in the form of a provision for credit losses. The Company maintains an allowance for credit losses at a level management considers adequate to provide for expected lifetime losses in the portfolio. Although management strives to maintain an allowance it deems adequate, future economic changes, deterioration of borrowers’ creditworthiness, and the impact of examinations by regulatory agencies, among other factors, all could cause changes to the allowance for credit losses on loans.

At September 30, 2024, the allowance for credit losses on loans was $51.0 million, an increase of $524,000 from $50.5 million at December 31, 2023. Net charge-offs totaled $931,000 during the third quarter of 2024 and $116,000 during the third quarter of 2023. Net charge-offs totaled $926,000 for the nine months ended September 30, 2024 and $111,000 for the nine months ended September 30, 2023. The allowance for credit losses on loans as a percentage of total loans was 1.38% at September 30, 2024, compared to 1.36% at December 31, 2023.

The following table presents a summary of net charge-offs for the periods indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Three Months Ended					​	Nine Months Ended					​
​	​	September 30,					​	September 30,					​
(dollars in thousands)	****	2024		****	2023		​	2024		****	2023		****
Net Charge-offs (Recoveries)	​	​	​	​	​	​	​	​	​	​	​	​	​
Commercial	​	$	(5)	​	$	94	​	$	(10)	​	$	89	​
Real Estate Mortgage:	​		​	​		​	​		​	​		​	​
1-4 Family Mortgage	​		—	​		(2)	​		(3)	​		(4)	​
CRE Nonowner Occupied	​		935	​		—	​		935	​		—	​
Total Real Estate Mortgage Loans	​		935	​		(2)	​		932	​		(4)	​
Consumer and Other	​		1	​		24	​		4	​	​	26	​
Total Net Charge-offs (Recoveries)	​	$	931	​	$	116	​	$	926	​	$	111	​
Net Charge-offs to Average Loans	​			​			​			​			​
Commercial	​		0.00	%		0.08	%		0.00	%	​	0.03	%
Real Estate Mortgage:	​		​	​		​	​		​	​	​	​	​
1-4 Family Mortgage	​		0.00	​		0.00	​		0.00	​	​	0.00	​
CRE Nonowner Occupied	​		0.35	​		0.00	​		0.12	​	​	0.00	​
Total Real Estate Mortgage Loans	​		0.12	​		0.00	​		0.04	​	​	0.00	​
Consumer and Other	​		0.04	​		1.02	​		0.05	​	​	0.36	​
Total Net Charge-offs (Recoveries) (Annualized) to Average Loans	​		0.10	%		0.01	%		0.03	%		0.00	%
Gross Loans, End of Period	​	$	3,685,590	​	$	3,722,271	​	$	3,685,590	​	$	3,722,271	​
Average Loans	​	​	3,721,654	​		3,722,594	​	​	3,740,855	​		3,690,196	​
Allowance for Credit Losses to Total Gross Loans	​		1.38	%		1.36	%		1.38	%		1.36	%

​ 57

Table of Contents The following table presents a summary of the allocation of the allowance for credit losses on loans by loan portfolio segment as of the dates indicated:

​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30,				​	December 31,				​
​	​	2024				​	2023				​
(dollars in thousands)	****	Amount		****	Percent	****	Amount		****	Percent	​
Commercial	​	$	5,673	​	11.1	%	$	5,398	​	10.7	%
Construction and Land Development	​		1,079	​	2.1	​		2,156	​	4.3	​
1-4 Family Construction	​		394	​	0.8	​		558	​	1.1	​
Real Estate Mortgage:	​		​	​	​	​		​	​	​	​
1 - 4 Family Mortgage	​		2,779	​	5.4	​		2,651	​	5.3	​
Multifamily	​		22,355	​	43.8	​		22,217	​	44.0	​
CRE Owner Occupied	​		1,233	​	2.4	​		1,184	​	2.3	​
CRE Nonowner Occupied	​		17,376	​	34.1	​		16,225	​	32.1	​
Total Real Estate Mortgage Loans	​		43,743		85.7	​		42,277		83.7	​
Consumer and Other	​		129	​	0.3	​		105	​	0.2	​
Total Allowance for Credit Losses	​	$	51,018		100.0	%	$	50,494		100.0	%

​

Deposits

The principal sources of funds for the Company are deposits, consisting of demand deposits, money market accounts, savings accounts, and certificates of deposit. The following table presents the dollar and percentage composition of the deposit portfolio, by category, at the dates indicated:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024				​	​	June 30, 2024				​	​	March 31, 2024				​	​	December 31, 2023				​	​	September 30, 2023				​	​
(dollars in thousands)	****	Amount		****	Percent	****	​	Amount		****	Percent	****	​	Amount		****	Percent	****	​	Amount		****	Percent	****	​	Amount		****	Percent	****	​
Noninterest Bearing Transaction Deposits	​	$	713,309	​	19.0	%	​	$	705,175	​	18.5	%	​	$	698,432	​	18.3	%	​	$	756,964	​	20.4	%	​	$	754,297	​	20.5	%	​
Interest Bearing Transaction Deposits	​		805,756	​	21.5	​	​		752,568	​	19.8	​	​		783,736	​	20.6	​	​		692,801	​	18.7	​	​		780,863	​	21.3	​	​
Savings and Money Market Deposits	​		980,345	​	26.2	​	​		943,994	​	24.8	​	​		979,773	​	25.7	​	​		935,091	​	25.2	​	​		872,534	​	23.7	​	​
Time Deposits	​		347,080	​	9.3	​	​		373,713	​	9.8	​	​		352,510	​	9.3	​	​		300,651	​	8.1	​	​		265,737	​	7.2	​	​
Brokered Deposits	​		900,952	​	24.0	​	​		1,032,262	​	27.1	​	​		992,774	​	26.1	​	​		1,024,441	​	27.6	​	​		1,002,078	​	27.3	​	​
Total Deposits	​	$	3,747,442	​	100.0	%	​	$	3,807,712	​	100.0	%	​	$	3,807,225	​	100.0	%	​	$	3,709,948	​	100.0	%	​	$	3,675,509	​	100.0	%	​

​

Total deposits at September 30, 2024 were $3.75 billion, an increase of $37.5 million, or 1.0%, compared to total deposits of $3.71 billion at December 31, 2023, and an increase of $71.9 million, or 2.0%, over total deposits of $3.68 billion at September 30, 2023. Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, increased $131.2 million, or 6.9% annualized, from December 31, 2023. Growth in core deposits was primarily due to increased balances of existing clients and new client acquisitions. Based on the nature of the Company’s client base, management believes core deposits could fluctuate in future periods as deposit growth is not always linear.

​

The Company relies on increasing the deposit base to fund loans and other asset growth. The Company is in a highly competitive market and competes for local deposits by offering attractive products with competitive rates. The Company expects to have a higher average cost of funds for local deposits compared to competitor banks due to the lack of an extensive branch network. The Company’s strategy is to offset the higher cost of funding with a lower level of operating expense. When appropriate, the Company utilizes alternative funding sources such as brokered deposits. The brokered deposit market provides flexibility in structure, optionality and efficiency not afforded in traditional retail deposit channels. As of September 30, 2024, total brokered deposits were $901.0 million, a decrease of $123.5 million, compared to total brokered deposits of $1.02 billion at December 31, 2023. Brokered deposits continue to be used as a supplemental funding source, as needed, to support loan portfolio growth.

​ 58

Table of Contents The following table presents the average balance and average rate paid on each of the following deposit categories as of and for the three months ended September 30, 2024 and 2023:

​	​	​	​	​	​	​	​	​	​	​	​
​	​	As of and for the				​	As of and for the				​
​	​	Three Months Ended				​	Three Months Ended				​
​	​	September 30, 2024				​	September 30, 2023				​
​	​	Average		​	Average	​	Average		​	Average	​
(dollars in thousands)	****	Balance		****	Rate	****	Balance		****	Rate	​
Noninterest Bearing Transaction Deposits	​	$	710,192	​	—	%	$	754,567	​	—	%
Interest Bearing Transaction Deposits	​		804,161	​	4.63	​		730,244	​	3.88	​
Savings and Money Market Deposits	​		939,665	​	4.34	​		874,612	​	3.67	​
Time Deposits < $250,000	​		184,397	​	4.01	​		181,689	​	2.56	​
Time Deposits > $250,000	​		170,653	​	4.80	​		84,946	​	3.70	​
Brokered Deposits	​		989,712	​	4.28	​		985,276	​	4.04	​
Total Deposits	​	$	3,798,780		3.58	%	$	3,611,334		2.99	%

​

The Company’s total uninsured deposits, which are the amounts of deposit accounts that exceed the FDIC insurance limit, currently $250,000, were approximately $944.0 million, or 25.0% of total deposits, at September 30, 2024 and $900.0 million, or 24.3% of total deposits, at December 31, 2023. These amounts were estimated based on the same methodologies and assumptions used for regulatory reporting purposes.

Borrowed Funds

Other Borrowings

At September 30, 2024, the Company had outstanding FHLB advances of $349.5 million, compared to $319.5 million at December 31, 2023. The Company’s borrowing capacity at the FHLB is determined based on collateral pledged, generally consisting of loans. The Company had additional borrowing capacity under this credit facility of $509.2 million and $498.7 million at September 30, 2024 and December 31, 2023, respectively.

The Company has an outstanding Loan and Security Agreement and revolving note with a third party correspondent lender, which is secured by 100% of the issued and outstanding stock of the Bank. On September 1, 2024, the Company entered into a third amendment to the agreement which extended the maturity date of the Company’s existing revolving line of credit with a maximum principal amount of $40.0 million from September 1, 2024 to September 1, 2026. The amendment also increased the floor rate from 3.85% to 4.50%. As of both September 30, 2024 and December 31, 2023, the Company had $13.8 million of outstanding balances under the revolving line of credit.

Additionally, the Company has borrowing capacity from other sources. As of September 30, 2024, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets pledged as collateral as of the applicable date, the Bank’s borrowing availability was approximately $868.0 million and $979.4 million at September 30, 2024 and December 31, 2023, respectively. As of September 30, 2024 and December 31, 2023, the Company had no outstanding advances from the discount window.

Subordinated Debentures

As of September 30, 2024 and December 31, 2023, the Company had subordinated debentures, net of issuance costs, of $79.6 million and $79.3 million, respectively.

For additional information, see “Note 8 – Subordinated Debentures” of the Company’s Consolidated Financial Statements included as part of this report. 59

Table of Contents Contractual Obligations

The following table presents supplemental information regarding total contractual obligations at September 30, 2024:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	Within		****	One to		****	Three to		****	After		****	​
(dollars in thousands)	​	One Year		​	Three Years		​	Five Years		​	Five Years		​	Total
Deposits Without a Stated Maturity	​	$	2,638,892	​	$	—	​	$	—	​	$	—	​	$	2,638,892
Time Deposits	​		335,002	​	​	586,182	​	​	174,611	​	​	12,755	​	​	1,108,550
Notes Payable	​	​	—	​	​	13,750	​	​	—	​	​	—	​	​	13,750
FHLB Advances	​		278,000	​	​	49,000	​	​	22,500	​	​	—	​	​	349,500
Subordinated Debentures	​		—	​	​	—	​	​	—	​	​	80,000	​	​	80,000
Commitment to Fund Tax Credit Investments	​	​	2,881	​	​	—	​	​	—	​	​	—	​	​	2,881
Operating Lease Obligations	​		596	​	​	811	​	​	370	​	​	—	​	​	1,777
Totals	​	$	3,255,371	​	$	649,743	​	$	197,481	​	$	92,755	​	$	4,195,350

​

The Company believes that it will be able to meet all contractual obligations as they come due through the maintenance of adequate cash levels. The Company expects to maintain adequate cash levels through earnings, loan and securities repayments and maturity activity and continued deposit gathering activities. As described above, the Company has in place various borrowing mechanisms for both short-term and long-term liquidity needs.

Capital

Total shareholders’ equity at September 30, 2024 was $452.2 million, an increase of $26.7 million, or 6.3%, compared to total shareholders’ equity of $425.5 million at December 31, 2023. The increase was primarily due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio, preferred stock dividends, and stock repurchases.

Tangible book value per share, a non-GAAP financial measure, was $13.96 as of September 30, 2024, an increase of 8.8% from $12.84 as of December 31, 2023. Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 8.17% at September 30, 2024, compared to 7.73% at December 31, 2023.

Stock Repurchase Program. During the three months ended September 30, 2024, the Company repurchased no shares of its common stock. During the nine months ended September 30, 2024, the Company repurchased 446,509 shares of its common stock, representing 1.6% of the Company’s issued and outstanding shares at that time. Shares were repurchased during this period at a weighted average price of $11.60 per share, for a total of $5.2 million. All shares repurchased under the stock repurchase program were converted to authorized but unissued shares.

On July 23, 2024, the Company’s Board of Directors extended the expiration date of the Company’s previously announced stock repurchase program (the “2022 Stock Repurchase Program”) from August 16, 2024 to August 20, 2025. As of September 30, 2024, the remaining amount that could be used to repurchase shares under the stock repurchase program was $15.3 million. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program based on various factors including valuation, capital levels and other uses of capital.

Regulatory Capital. The Company and the Bank are subject to various regulatory capital requirements administered by federal banking regulators. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by federal banking regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s business. 60

Table of Contents Management believes the Company and the Bank met all capital adequacy requirements to which they were subject as of September 30, 2024. The regulatory capital ratios for the Company and the Bank to meet the minimum capital adequacy standards and for the Bank to be considered well capitalized under the prompt corrective action framework are set forth in the following tables. The Company’s and the Bank’s actual capital amounts and ratios as of the dates indicated are presented in the following tables:

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	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	​
September 30, 2024	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Company (Consolidated):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	589,088	​	14.62	%	$	322,278	​	8.00	%	$	422,990	​	10.50	%	​	N/A	​	N/A	​
Tier 1 Risk-based Capital	​	​	460,827	​	11.44	​	​	241,709	​	6.00	​	​	342,420	​	8.50	​	​	N/A	​	N/A	​
Common Equity Tier 1 Capital	​	​	394,313	​	9.79	​	​	181,281	​	4.50	​	​	281,993	​	7.00	​	​	N/A	​	N/A	​
Tier 1 Leverage Ratio	​	​	460,827	​	9.75	​	​	189,109	​	4.00	​	​	189,109	​	4.00	​	​	N/A	​	N/A	​
Bank:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	573,720	​	14.27	%	$	321,749	​	8.00	%	$	422,296	​	10.50	%	$	402,187	​	10.00	%
Tier 1 Risk-based Capital	​	​	525,114	​	13.06	​	​	241,312	​	6.00	​	​	341,859	​	8.50	​	​	321,749	​	8.00	​
Common Equity Tier 1 Capital	​	​	525,114	​	13.06	​	​	180,984	​	4.50	​	​	281,531	​	7.00	​	​	261,421	​	6.50	​
Tier 1 Leverage Ratio	​	​	525,114	​	11.12	​	​	188,832	​	4.00	​	​	188,832	​	4.00	​	​	236,040	​	5.00	​

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Minimum Required				​	For Capital Adequacy				​	To be Well Capitalized				​
​	​	​	​	​	​	​	For Capital Adequacy				​	Purposes Plus Capital				​	Under Prompt Corrective				​
​	​	Actual				​	Purposes				​	Conservation Buffer				​	Action Regulations				​
(dollars in thousands)	****	Amount		****	Ratio	****	Amount		****	Ratio	****	Amount		****	Ratio	​	Amount		****	Ratio	​
December 31, 2023	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Company (Consolidated):	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	570,770	​	13.97	%	$	326,872	​	8.00	%	$	429,019	​	10.50	%	​	N/A	​	N/A	​
Tier 1 Risk-based Capital	​	​	440,947	​	10.79	​	​	245,154	​	6.00	​	​	347,301	​	8.50	​	​	N/A	​	N/A	​
Common Equity Tier 1 Capital	​	​	374,433	​	9.16	​	​	183,865	​	4.50	​	​	286,013	​	7.00	​	​	N/A	​	N/A	​
Tier 1 Leverage Ratio	​	​	440,947	​	9.57	​	​	184,383	​	4.00	​	​	184,383	​	4.00	​	​	N/A	​	N/A	​
Bank:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Risk-based Capital	​	$	554,269	​	13.58	%	$	326,528	​	8.00	%	$	428,568	​	10.50	%	$	408,160	​	10.00	%
Tier 1 Risk-based Capital	​	​	503,787	​	12.34	​	​	244,896	​	6.00	​	​	346,936	​	8.50	​	​	326,528	​	8.00	​
Common Equity Tier 1 Capital	​	​	503,787	​	12.34	​	​	183,672	​	4.50	​	​	285,712	​	7.00	​	​	265,304	​	6.50	​
Tier 1 Leverage Ratio	​	​	503,787	​	10.95	​	​	184,037	​	4.00	​	​	184,037	​	4.00	​	​	230,047	​	5.00	​

​

Regulations include a capital conservation buffer of 2.5% that was added to the minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount is subject to limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers. At September 30, 2024, the ratios for the Company and the Bank were sufficient to meet the conservation buffer.

Off-Balance Sheet Arrangements

In the normal course of business, the Company enters into various transactions to meet the financing needs of clients, which, in accordance with GAAP, are not included in the consolidated balance sheets. These transactions include commitments to extend credit, standby letters of credit, and commercial letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. Most of these commitments mature within two years and the standby letters of credit are expected to expire without being drawn upon. All off-balance sheet commitments are included in the determination of the amount of risk-based capital that the Company and the Bank are required to hold. 61

Table of Contents The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument for commitments to extend credit, standby letters of credit, and commercial letters of credit is represented by the contractual or notional amount of those instruments. The Company decreases its exposure to losses under these commitments by subjecting them to credit approval and monitoring procedures. The Company assesses the credit risk associated with certain commitments to extend credit and establishes a liability for probable credit losses.

The following table presents credit arrangements and financial instruments whose contract amounts represented credit risk as of September 30, 2024 and December 31, 2023:

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	September 30, 2024					​	December 31, 2023
​	****	Fixed		****	Variable		****	Fixed		****	Variable
(dollars in thousands)	​	​	​	​	​	​	​	​	​	​	​	​
Unfunded Commitments Under Lines of Credit	​	$	162,664	​	$	361,034	​	$	164,880	​	$	381,752
Letters of Credit	​		5,745	​		106,324	​		6,780	​		96,509
Totals	​	$	168,409	​	$	467,358	​	$	171,660	​	$	478,261

​

The Company had outstanding letters of credit with the FHLB of $133.9 million and $114.4 million at September 30, 2024 and December 31, 2023, respectively, on behalf of customers and to secure public deposits.

Liquidity

Liquidity is the Company’s capacity to meet cash and collateral obligations at a reasonable cost. Maintaining an adequate level of liquidity depends on the Company’s ability to efficiently meet both expected and unexpected cash flow and collateral needs without adversely affecting either daily operations or financial condition. The Bank’s Asset Liability Management, or ALM, Committee, which is comprised of members of senior management, is responsible for managing commitments to meet the needs of customers while achieving the Company’s financial objectives. The ALM Committee meets regularly to review balance sheet composition, funding capacities, and current and forecasted loan demand.

The Company manages liquidity by maintaining adequate levels of cash and other assets from on- and off-balance sheet arrangements. Specifically, on-balance sheet liquidity consists of cash and due from banks and unpledged investment securities available for sale, which are referred to as primary liquidity. In regards to off-balance sheet capacity, the Company maintains available borrowing capacity under secured borrowing lines with the FHLB, the Federal Reserve Bank of Minneapolis, and a correspondent lender, as well as unsecured lines of credit for the purpose of overnight funds with various correspondent banks, which the Company refers to as secondary liquidity. During the second quarter of 2024, the Company elected not to renew its membership and discontinued its use of the American Financial Exchange, or AFX. This had no impact on liquidity ratios as the availability of funds changed daily and therefore was not previously included in secondary liquidity. The Company had no borrowings outstanding through the AFX as of December 31, 2023.

Total on- and off-balance sheet liquidity was $2.29 billion as of September 30, 2024, compared to $2.23 billion at December 31, 2023. The Company did not utilize the Federal Reserve Discount Window during the nine months ended September 30, 2024.

​ 62

Table of Contents The following tables present a summary of primary and secondary liquidity levels as of the dates indicated:

​	​	​	​	​	​	​	​
Primary Liquidity—On-Balance Sheet	****	September 30, 2024		****	December 31, 2023		****
(dollars in thousands)	​	​	​	​	​	​	****
Cash and Cash Equivalents	​	$	167,869	​	$	96,594	​
Securities Available for Sale	​		664,715	​		604,104	​
Less: Pledged Securities	​	​	(146,144)	​	​	(170,727)	​
Total Primary Liquidity	​	$	686,440	​	$	529,971	​
Ratio of Primary Liquidity to Total Deposits	​		18.3	%		14.3	%
​	​	​	​	​	​	​	​
Secondary Liquidity—Off-Balance Sheet	​	​		​	​		****
Net Secured Borrowing Capacity with the FHLB	​	$	509,223	​	$	498,736	​
Net Secured Borrowing Capacity with the Federal Reserve Bank	​		867,955	​		979,448	​
Unsecured Borrowing Capacity with Correspondent Lenders	​		200,000	​		200,000	​
Secured Borrowing Capacity with Correspondent Lender	​	​	26,250	​	​	26,250	​
Total Secondary Liquidity	​	​	1,603,428	​	​	1,704,434	​
Total Primary and Secondary Liquidity	​	$	2,289,868	​	$	2,234,405	​
Ratio of Primary and Secondary Liquidity to Total Deposits	​		61.1	%		60.2	%

​

​

During the nine months ended September 30, 2024, primary liquidity increased by $156.5 million due to a $71.3 million increase in cash and cash equivalents, a $60.6 million increase in securities available for sale and a $24.6 million decrease in pledged securities, when compared to December 31, 2023. Secondary liquidity decreased by $101.0 million as of September 30, 2024, when compared to December 31, 2023, due to a $111.5 million decrease in the borrowing capacity with the Federal Reserve Bank, offset partially by a $10.5 million increase in the borrowing capacity with the FHLB.

In addition to primary liquidity, the Company generates liquidity from cash flows from the loan and securities portfolios and from the large base of core deposits, defined as noninterest bearing transaction, interest bearing transaction, savings, non-brokered money market accounts and non-brokered time deposits less than $250,000. At September 30, 2024, core deposits totaled approximately $2.68 billion and represented 71.5% of total deposits. These core deposits are normally less volatile, often with customer relationships tied to other products offered by the Company, which promote long-standing relationships and stable funding sources.

The Company uses brokered deposits, the availability of which is uncertain and subject to competitive market forces and regulation, for liquidity and interest rate risk management purposes. At September 30, 2024, brokered deposits totaled $901.0 million, consisting of $761.5 million of brokered time deposits and $139.5 million of non-maturity brokered money market and transaction accounts. At December 31, 2023, brokered deposits totaled $1.02 billion, consisting of $850.5 million of brokered time deposits and $174.0 million of non-maturity brokered money market and transaction accounts.

The Company’s liquidity policy includes guidelines for On-Balance Sheet Liquidity (a measurement of primary liquidity to total deposits plus borrowings), Total On-Balance Sheet Liquidity with Borrowing Capacity (a measurement of primary and secondary liquidity to total deposits plus borrowings), Wholesale Funding Ratio (a measurement of total wholesale funding to total deposits plus borrowings), and other guidelines developed for measuring and maintaining liquidity.

​ 63

Table of Contents Non-GAAP Financial Measures

In addition to financial measures presented in accordance with GAAP, the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this report to the comparable GAAP measures are provided in the following tables:

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended														​	For the Nine Months Ended					​
​	​	September 30,		​	June 30,		​	March 31,		​	December 31,		​	September 30,		​	September 30,		​	September 30,		​
(dollars in thousands)	​	2024		****	2024		****	2024		****	2023		​	2023		​	2024		****	2023		​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pre-Provision Net Revenue	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest Income	​	$	1,522	​	$	1,763	​	$	1,550	​	$	1,409	​	$	1,726	​	$	4,835	​	$	5,084	​
Less: (Gain) Loss on Sales of Securities	​	​	28	​	​	(320)	​	​	(93)	​	​	27	​	​	—	​	​	(385)	​	​	6	​
Less: FHLB Advance Prepayment Income	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(493)	​	​	—	​	​	(792)	​
Total Operating Noninterest Income	​	​	1,550	​	​	1,443	​	​	1,457	​	​	1,436	​	​	1,233	​	​	4,450	​	​	4,298	​
Plus: Net Interest Income	​	​	25,599	​	​	24,996	​	​	24,631	​	​	25,314	​	​	25,421	​	​	75,226	​	​	79,860	​
Net Operating Revenue	​	$	27,149	​	$	26,439	​	$	26,088	​	$	26,750	​	$	26,654	​	$	79,676	​	$	84,158	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest Expense	​	$	15,760	​	$	15,539	​	$	15,189	​	$	15,740	​	$	15,237	​	$	46,488	​	$	43,580	​
Total Operating Noninterest Expense	​	$	15,760	​	$	15,539	​	$	15,189	​	$	15,740	​	$	15,237	​	$	46,488	​	$	43,580	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Pre-Provision Net Revenue	​	$	11,389	​	$	10,900	​	$	10,899	​	$	11,010	​	$	11,417	​	$	33,188	​	$	40,578	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Plus:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Non-Operating Revenue Adjustments	​	​	(28)	​	​	320	​	​	93	​	​	(27)	​	​	493	​	​	385	​	​	786	​
Less:	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Provision for (Recovery of) Credit Losses	​	​	—	​	​	600	​	​	750	​	​	(250)	​	​	(600)	​	​	1,350	​	​	75	​
Provision for Income Taxes	​	​	2,686	​	​	2,505	​	​	2,411	​	​	2,360	​	​	2,881	​	​	7,602	​	​	10,202	​
Net Income	​	$	8,675	​	$	8,115	​	$	7,831	​	$	8,873	​	$	9,629	​	$	24,621	​	$	31,087	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average Assets	​	$	4,703,804	​	$	4,646,517	​	$	4,592,838	​	$	4,567,446	​	$	4,504,937	​	$	4,647,925	​	$	4,464,976	​
Pre-Provision Net Revenue Return on Average Assets	​	​	0.96	%	​	0.94	%	​	0.95	%	​	0.96	%	​	1.01	%	​	0.95	%	​	1.22	%

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended														​	For the Nine Months Ended					​
​	​	September 30,		​	June 30,		​	March 31,		​	December 31,		​	September 30,		​	September 30,		​	September 30,		​
(dollars in thousands)	​	2024		****	2024		****	2024		****	2023		​	2023		****	2024		****	2023		​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Core Net Interest Margin	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net Interest Income (Tax-equivalent Basis)		$	25,905	​	$	25,288	​	$	24,992	​	$	25,683	​	$	25,822	​	$	76,185	​	$	81,049	​
Less: Loan Fees	​	​	(968)	​	​	(767)	​	​	(608)	​	​	(751)	​	​	(914)	​	​	(2,342)	​	​	(2,853)	​
Core Net Interest Income	​	$	24,937	​	$	24,521	​	$	24,384	​	$	24,932	​	$	24,908	​	$	73,843	​	$	78,196	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average Interest Earning Assets	​	$	4,595,521	​	$	4,545,920	​	$	4,492,756	​	$	4,480,428	​	$	4,416,424	​	$	4,544,932	​	$	4,378,733	​
Core Net Interest Margin	​	​	2.16	%	​	2.17	%	​	2.18	%	​	2.21	%	​	2.24	%		2.17	%		2.39	%

​ 64

Table of Contents

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended														​	For the Nine Months Ended					​
​	​	September 30,		​	June 30,		​	March 31,		​	December 31,		​	September 30,		​	September 30,		​	September 30,		​
(dollars in thousands)	​	2024		****	2024		****	2024		****	2023		​	2023		​	2024		****	2023		****
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Efficiency Ratio	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Noninterest Expense		$	15,760	​	$	15,539	​	$	15,189	​	$	15,740	​	$	15,237	​	$	46,488	​	$	43,580	​
Less: Amortization of Intangible Assets	​	​	(9)	​	​	(8)	​	​	(9)	​	​	(9)	​	​	(9)	​	​	(26)	​	​	(91)	​
Adjusted Noninterest Expense	​	$	15,751	​	$	15,531	​	$	15,180	​	$	15,731	​	$	15,228	​	$	46,462	​	$	43,489	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net Interest Income	​	$	25,599	​	$	24,996	​	$	24,631	​	$	25,314	​	$	25,421	​	​	75,226	​	​	79,860	​
Noninterest Income	​	​	1,522	​	​	1,763	​	​	1,550	​	​	1,409	​	​	1,726	​	​	4,835	​	​	5,084	​
Less: Gain (Loss) on Sales of Securities	​	​	28	​	​	(320)	​	​	(93)	​	​	27	​	​	—	​	​	(385)	​	​	6	​
Adjusted Operating Revenue	​	$	27,149	​	$	26,439	​	$	26,088	​	$	26,750	​	$	27,147	​	$	79,676	​	$	84,950	​
Efficiency Ratio	​		58.0	%		58.7	%		58.2	%		58.8	%		56.1	%		58.3	%		51.2	%

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended														​	For the Nine Months Ended					​
​	​	September 30,		​	June 30,		​	March 31,		​	December 31,		​	September 30,		​	September 30,		​	September 30,		​
(dollars in thousands)	​	2024		****	2024		****	2024		****	2023		​	2023		****	2024		****	2023		​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tangible Common Equity and Tangible Common Equity/Tangible Assets	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Shareholders' Equity	​	$	452,200	​	$	439,241	​	$	433,611	​	$	425,515	​	$	415,960	​	​	​	​	​	​	​
Less: Preferred Stock	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	​	​	​	​	​
Total Common Shareholders' Equity	​	​	385,686	​	​	372,727	​	​	367,097	​	​	359,001	​	​	349,446	​	​	​	​	​	​	​
Less: Intangible Assets	​	​	(2,789)	​	​	(2,797)	​	​	(2,806)	​	​	(2,814)	​	​	(2,823)	​	​	​	​	​	​	​
Tangible Common Equity	​	$	382,897	​	$	369,930	​	$	364,291	​	$	356,187	​	$	346,623	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Total Assets	​	$	4,691,517	​	$	4,687,035	​	$	4,723,109	​	$	4,611,990	​	$	4,557,070	​	​	​	​	​	​	​
Less: Intangible Assets	​	​	(2,789)	​	​	(2,797)	​	​	(2,806)	​	​	(2,814)	​	​	(2,823)	​	​	​	​	​	​	​
Tangible Assets	​	$	4,688,728	​	$	4,684,238	​	$	4,720,303	​	$	4,609,176	​	$	4,554,247	​	​	​	​	​	​	​
Tangible Common Equity/Tangible Assets	​		8.17	%		7.90	%		7.72	%		7.73	%		7.61	%	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Tangible Book Value Per Share	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Book Value Per Common Share	​	$	14.06	​	$	13.63	​	$	13.30	​	$	12.94	​	$	12.47	​	​	​	​	​	​	​
Less: Effects of Intangible Assets	​	​	(0.10)	​	​	(0.10)	​	​	(0.10)	​	​	(0.10)	​	​	(0.10)	​	​	​	​	​	​	​
Tangible Book Value Per Common Share	​	$	13.96	​	$	13.53	​	$	13.20	​	$	12.84	​	$	12.37	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Return on Average Tangible Common Equity	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Net Income Available to Common Shareholders	​	$	7,662	​	$	7,101	​	$	6,818	​	$	7,859	​	$	8,616	​	$	21,581	​	$	28,047	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Average Shareholders' Equity	​	$	443,077	​	$	435,585	​	$	428,248	​	$	417,789	​	$	414,047	​	$	435,664	​	$	408,014	​
Less: Average Preferred Stock	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​	​	(66,514)	​
Average Common Equity	​	​	376,563	​	​	369,071	​	​	361,734	​	​	351,275	​	​	347,533	​	​	369,150	​	​	341,500	​
Less: Effects of Average Intangible Assets	​	​	(2,794)	​	​	(2,802)	​	​	(2,811)	​	​	(2,819)	​	​	(2,828)	​	​	(2,802)	​	​	(2,856)	​
Average Tangible Common Equity	​	$	373,769	​	$	366,269	​	$	358,923	​	$	348,456	​	$	344,705	​	$	366,348	​	$	338,644	​
Return on Average Tangible Common Equity	​	​	8.16	%	​	7.80	%	​	7.64	%	​	8.95	%	​	9.92	%	​	7.87	%	​	11.07	%

​

​

​

​

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Interest Rate Risk

As a financial institution, the Company’s primary market risk is interest rate risk, which is defined as the risk of loss of net interest income or net interest margin because of changes in interest rates. The Company continually seeks to measure and manage the potential impact of interest rate risk. Interest rate risk occurs when interest earning assets and interest bearing liabilities mature or re-price at different times, on a different basis or in unequal amounts. Interest rate risk also arises when assets and liabilities each respond differently to changes in interest rates.

The Company’s management of interest rate risk is overseen by its ALM Committee, based on a risk management infrastructure approved by the board of directors that outlines reporting and measurement requirements. In particular, this infrastructure sets limits and management targets for various metrics, including net interest income simulation involving parallel shifts in interest rate curves, steepening and flattening yield curves, and various prepayment and deposit duration assumptions. The Company’s risk management infrastructure also requires a periodic review of all key assumptions used, such as identifying appropriate interest rate scenarios, setting loan prepayment rates 65

Table of Contents based on historical analysis and noninterest bearing and interest bearing transaction deposit durations based on historical analysis. The Company does not engage in speculative trading activities relating to interest rates, foreign exchange rates, commodity prices, equities or credit.

The Company manages the interest rate risk associated with interest earning assets by managing the interest rates and terms associated with the investment securities portfolio by purchasing and selling investment securities from time to time. The Company manages the interest rate risk associated with interest bearing liabilities by managing the interest rates and terms associated with wholesale borrowings and deposits from customers which the Company relies on for funding. For example, the Company occasionally uses special offers on deposits to alter the interest rates and terms associated with interest bearing liabilities.

The Company has entered into certain hedging transactions including interest rate swaps and caps, which are designed to lessen elements of the Company’s interest rate exposure. Cash flow hedge relationships mitigate exposure to the variability of future cash flows or other forecasted transactions. The Company utilizes cash flow hedges to manage interest rate exposure for the brokered deposit and wholesale borrowing portfolios. At both September 30, 2024 and December 31, 2023, these cash flow hedges had a total notional amount of $308.0 million. Fair value hedge relationships mitigate exposure to changes in the fair value of a recognized asset or value. The Company utilizes fair value hedges to manage fair value exposure for the U.S. treasury security portfolio. At September 30, 2024, these fair value hedges had a total notional amount of $97.7 million. There were no fair value hedges at December 31, 2023. In the event that interest rates do not change in the manner anticipated, such transactions may adversely affect the Company’s results of operations.

Net Interest Income Simulation

The Company uses a net interest income simulation model to measure and evaluate potential changes in net interest income that would result over the next 12 months from immediate and sustained changes in interest rates as of the measurement date. This model has inherent limitations and the results are based on a given set of rate changes and assumptions as of a certain point in time. For purposes of the simulation, the Company assumes no growth in either interest-sensitive assets or liabilities over the next 12 months; therefore, the model’s results reflect an interest rate shock to a static balance sheet. The simulation model also incorporates various other assumptions, which the Company believes are reasonable but which may have a significant impact on results, such as: (1) the timing of changes in interest rates, (2) shifts or rotations in the yield curve, (3) re-pricing characteristics for market-rate-sensitive instruments, (4) differing sensitivities of financial instruments due to differing underlying rate indices, (5) varying loan prepayment speeds for different interest rate scenarios, (6) the effect of interest rate limitations in assets, such as floors and caps, and (7) overall growth and repayment rates and product mix of assets and liabilities. Because of the limitations inherent in any approach used to measure interest rate risk, simulation results are not intended as a forecast of the actual effect of a change in market interest rates on the results, but rather as a means to better plan and execute appropriate asset-liability management strategies and to manage interest rate risk.

Potential changes to the Company’s net interest income in hypothetical rising and declining rate scenarios calculated as of September 30, 2024 and December 31, 2023 are presented in the table below. The projections assume an immediate, parallel shift downward of the yield curve of 100, 200, and 300 basis points and immediate, parallel shifts 66

Table of Contents upward of the yield curve of 100, 200, 300 and 400 basis points. In the current interest rate environment, a downward shift of the yield curve of 400 basis points does not provide us with meaningful results and thus is not presented.

​	​	​	​	​	​	​	​	​	​	​	​	​
(dollars in thousands)	​	September 30, 2024					​	December 31, 2023
Change (basis points)	​	Forecasted		​	Percentage		​	Forecasted		​	Percentage
in Interest Rates	****	Net Interest		​	Change		****	Net Interest		​	Change
(12-Month Projection)	​	Income		​	from Base		​	Income		​	from Base
+400	​	$	109,509	​	(6.58)	%	​	$	118,597	​	(2.39)	%
+300	​		110,994	​	(5.31)	​	​		118,983	​	(2.08)	​
+200	​		112,118	​	(4.35)	​	​		119,395	​	(1.74)	​
+100	​		114,416	​	(2.39)	​	​		119,916	​	(1.31)	​
0	​		117,218	​	—	​	​		121,504	​	—	​
−100	​	​	120,865	​	3.11	​	​	​	125,138	​	2.99	​
−200	​	​	124,853	​	6.51	​	​	​	128,643	​	5.87	​
−300	​	​	130,226	​	11.10	​	​	​	132,269	​	8.86	​

​

The table above indicates that as of September 30, 2024, in the event of an immediate and sustained 400 basis point increase in interest rates, the Company would experience a 6.58% decrease in net interest income. In the event of an immediate 300 basis point decrease in interest rates, the Company would experience an 11.10% increase in net interest income.

The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. For example, if the timing and magnitude of interest rate changes differ from those projected, net interest income might vary significantly. Non-parallel yield curve shifts such as a flattening or steepening of the yield curve or changes in interest rate spreads would also cause net interest income to be different from that depicted. An increasing interest rate environment could reduce projected net interest income if deposits and other short-term liabilities re-price faster than expected or re-price faster than the Company’s assets. Actual results could differ from those projected if the Company grows assets and liabilities faster or slower than estimated, if the Company experienced a net outflow of deposit liabilities, or if the mix of assets and liabilities otherwise changes. Actual results could also differ from those projected if the Company experienced substantially different repayment speeds in the loan portfolio than those assumed in the simulation model. Finally, these simulation results do not contemplate all the actions that the Company may undertake in response to potential or actual changes in interest rates, such as changes to the Company’s loan, investment, deposit, or funding strategies.

​

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of the design and operation of the Company’s “disclosure controls and procedures” (as that term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, or the Exchange Act) as of September 30, 2024, the end of the fiscal quarter covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2024, the Company’s disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and is accumulated and communicated to the Company’s management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

​

Changes in Internal Control Over Financial Reporting

There has been no change in the Company’s internal control over financial reporting that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. 67

Table of Contents ​

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

Neither the Company nor any of its subsidiaries is a party, and no property of these entities is subject, to any material pending legal proceedings, other than ordinary routine litigation incidental to the Bank’s business. The Company does not know of any proceeding contemplated by a governmental authority against the Company or any of its subsidiaries.

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Item 1.A. Risk Factors

Other than disclosed below, there have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K filed with the SEC on March 7, 2024.

Transaction-Related Risks

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The Company May Fail to Realize the Anticipated Benefits of the Proposed Merger with First Minnetonka City Bank.

Bridgewater Bank and First Minnetonka City Bank have operated and, until the consummation of the proposed merger, will continue to operate, independently. The success of the merger, including anticipated benefits and cost savings, will depend on, among other things, the Company’s ability to combine the businesses of Bridgewater Bank and First Minnetonka City Bank in a manner that permits growth opportunities, including, among other things, enhanced revenues and revenue synergies, an expanded market reach and operating efficiencies, and does not materially disrupt the existing customer relationships of Bridgewater Bank and First Minnetonka City Bank nor result in decreased revenues due to any loss of customers. If the Company is not able to successfully achieve these objectives, the anticipated benefits of the merger may not be realized fully or at all or may take longer to realize than expected. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could have an adverse effect on the surviving corporation’s business, financial condition, operating results, prospects and stock price.

While individuals employed by First Minnetonka City Bank immediately prior to the effective time will automatically become employees of Bridgewater Bank following the merger, certain employees may not be retained by Bridgewater Bank after the merger. In addition, certain employees that the Company wishes to retain may elect to terminate their employment as a result of the merger, which could delay or disrupt the integration process. It is possible that the integration process could result in the disruption of the Company’s or FMB’s ongoing businesses or cause inconsistencies in standards, controls, procedures and policies that adversely affect the ability of Bridgewater Bank and First Minnetonka City Bank to maintain relationships with customers and employees or to achieve the anticipated benefits and cost savings of the merger.

Among the factors considered by the boards of directors of both the Company and FMB in connection with their respective approvals of the merger agreement were the anticipated benefits that could result from the merger. There can be no assurance that these benefits will be realized within the time periods contemplated or at all. 68

Table of Contents Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Repurchases of Equity Securities

The following table presents stock purchases made during the third quarter of 2024:

​	​	​	​	​	​	​	​	​	​
Period	Total Number of Shares Purchased ^(1)^	​	Average Price Paid Per Share		​	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs ^(2)^	​	Maximum Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
July 1 - 31, 2024	1,078	​	$	11.52	​	—	​	$	15,281,253
August 1 - 31, 2024	—	​	​	—	​	—	​	​	15,281,253
September 1 - 30, 2024	2,633	​	​	13.60	​	—	​	​	15,281,253
Total	3,711	​	$	13.00	​	—	​	$	15,281,253
(1)	The total number of shares repurchased during the periods indicated includes shares repurchased as part of the Company’s stock repurchase program and shares withheld for income tax purposes in connection with vesting of restricted stock and stock options. The shares were purchased or otherwise valued at the closing price of the Company’s common stock on the date of purchase and/or withholding.
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​

(2)

On August 17, 2022, the Company’s board of directors approved a stock repurchase program which authorizes the Company to repurchase up to $25.0 million of its common stock, subject to certain limitations and conditions. On July 23, 2024, the Company’s Board of Directors extended the expiration date of the stock repurchase program from August 16, 2024 to August 20, 2025. The stock repurchase program does not obligate the Company to repurchase any shares of its common stock, and other than repurchases that have been completed to date, there is no assurance that the Company will do so. Under the stock repurchase program, the Company may repurchase shares of common stock from time to time in open market or privately negotiated transactions. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including general market and economic conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company. The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the Program’s expiration, without any prior notice.

​ Unregistered Sales of Equity Securities

None.

Use of Proceeds from Registered Securities

None.

​

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the quarter ended September 30, 2024, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule10b5-1(c) or any non-Rule 10b5-1 trading arrangement.

​ 69

Table of Contents Item 6. Exhibits

	​
Exhibit Number	****	Description
3.1	​	Third Amended and Restated Articles of Incorporation of Bridgewater Bancshares, Inc. (incorporated herein by reference to Exhibit 3.1 on Form 8-K filed on April 27, 2023)
3.2	​	Second Amended and Restated Bylaws of Bridgewater Bancshares, Inc. (incorporated herein by reference to Exhibit 3.2 on Form 8-K filed on April 27, 2023)
3.3	​	Statement of Designation of 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (incorporated herein by reference to Exhibit 3.1 on Form 8-K filed on August 17, 2021)
10.1	​	Third Amendment to Loan and Security Agreement, dated as of September 1, 2024, by and between Bridgewater Bancshares, Inc., as Borrower, and ServisFirst Bank, as Lender (incorporated herein by reference to Exhibit 10.1 on Form 8-K filed on September 6, 2024).
10.2	​	Amended and Restated Revolving Note, dated as of September 1, 2024, made by Bridgewater Bancshares, Inc., as Borrower, to and in favor of ServisFirst Bank, as Lender (incorporated herein by reference to Exhibit 10.2 on Form 8-K filed on September 6, 2024).
31.1	​	Certification of the Chief Executive Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, and Section 302 of the Sarbanes-Oxley Act of 2002
31.2	​	Certification of the Chief Financial Officer required by Rule 13a-14(a) of the Securities Exchange Act of 1934, and Section 302 of the Sarbanes-Oxley Act of 2002
32.1	​	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	​	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.1	​	Financial information from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, formatted in inline XBRL interactive data files pursuant to Rule 405 of Regulation S-T: (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements
104	​	The cover page for Bridgewater Bancshares, Inc’s Form 10-Q Report for the quarterly period ended September 30, 2024 formatted in inline XBRL and contained in Exhibit 101

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​ 70

Table of Contents SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

​
​	Bridgewater Bancshares, Inc.
​	​
Date: October 31, 2024	By:	/s/ Jerry J. Baack
​	Name:	Jerry J. Baack
​	Title:	Chairman and Chief Executive Officer<br>(Principal Executive Officer)
​	​
Date: October 31, 2024	By:	/s/ Joe M. Chybowski
​	Name:	Joe M. Chybowski
​	Title:	President and Chief Financial Officer(Principal Financial Officer)
​	​

​

​

​

​ 71

Exhibit 31.1

Certification of Chief Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jerry J. Baack, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Bridgewater Bancshares, Inc.;

​

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

​

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

​

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

​

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

​

b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

​

c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

​

d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

​

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

​

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

​

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

​

​
October 31, 2024
​
​
/s/ Jerry J. Baack	​
Jerry J. Baack
Chairman and Chief Executive Officer

​

Exhibit 31.2

Certification of Chief Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Joe M. Chybowski, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Bridgewater Bancshares, Inc.;

​

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

​

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

​

4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

​

a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

​

b.	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

​

c.	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

​

d.	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

​

5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

​

a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

​

b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

​

	​
October 31, 2024
​
​
/s/ Joe M. Chybowski	​
Joe M. Chybowski
President and Chief Financial Officer

​

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

​

In connection with the Quarterly Report of Bridgewater Bancshares, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jerry J. Baack, Chairman and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

​

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and <br>​
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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​

​

Dated: October 31, 2024	/s/ Jerry J. Baack
​	Jerry J. Baack
​	Chairman and Chief Executive Officer

​

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350 as Adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

​

In connection with the Quarterly Report of Bridgewater Bancshares, Inc. (the “Company”) on Form 10-Q for the quarter ended September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joe M. Chybowski, President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

​

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and <br>​
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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​

​

Dated: October 31, 2024	/s/ Joe M. Chybowski
​	Joe M. Chybowski
​	President and Chief Financial Officer<br><br>​

​