Bridgewater Bancshares, Inc. Announces Record Third Quarter 2021 Net Income of $11.5 Million, $0.40 Diluted Earnings Per Common Share

About this update from Bridgewater Bancshares, Inc.

[{"type":"text","content":" ST. LOUIS PARK, Minn. --(BUSINESS WIRE)--\n Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $11.5 million for the third quarter of 2021, a 4.7% increase over net income of $11.0 million for the second quarter of 2021, and a 60.4% increase over net income of $7.2 million for the third quarter of 2020. Net income per diluted common share for the third quarter of 2021 was $0.40 , a 4.8% increase compared to $0.38 per diluted common share for the second quarter of 2021, and a 60.8% increase, compared to $0.25 per diluted common share for the same period in 2020.\n \n“Bridgewater’s third consecutive quarter of record net income was highlighted by a continuation of our robust organic loan growth, as well as two capital raising transactions to support our ongoing growth plans,” said Chairman, Chief Executive Officer, and President, Jerry Baack . “Driven by expanded lending teams, strong brand penetration and M&A-related market disruption, we are generating consistent loan growth by providing our clients with our signature high-touch and responsive level of service. As a result, we have been able to drive continued revenue growth and maintain an adjusted efficiency ratio in the low 40% range, even as we make incremental investments in the business to support our broader growth strategy. With superb asset quality trends and successful subordinated debt and preferred stock issuances during the third quarter, we are well positioned to continue our unique growth story and drive shareholder value going forward.”\n \n Third Quarter 2021 Financial Results \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Diluted \n \n \n \n \n \n \n \n \n \n \n \n Nonperforming \n \n \n \n \n \n \n \n Adjusted \n \n \n \n \n \n ROA \n \n \n \n \n \n \n \n PPNR ROA (1) \n \n \n \n \n \n \n \n ROE \n \n \n \n \n \n \n \n earnings per share \n \n \n \n \n \n \n \n \n \n \n \n assets to total assets \n \n \n \n \n \n \n \n efficiency ratio (1) \n \n \n \n \n \n 1.37 \n \n \n \n % \n \n \n \n \n \n \n \n 2.09 \n \n \n \n % \n \n \n \n \n \n \n \n 13.81 \n \n \n \n % \n \n \n \n \n \n \n \n $ \n \n \n \n 0.40 \n \n \n \n \n \n \n \n \n \n \n \n 0.02 \n \n \n \n % \n \n \n \n \n \n \n \n 41.5 \n \n \n \n % \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(1) Represents a non-GAAP financial measure. See \"Non-GAAP Financial Measures\" for further details.\n \n \n \n \n Third Quarter 2021 Highlights \n \n \nDiluted earnings per common share were $0.40 for the third quarter of 2021, compared to $0.38 per common share for the second quarter of 2021. Adjusted diluted earnings per common share, a non-GAAP financial measure, were $0.41 for the third quarter of 2021, excluding a $582,000 loss, or $0.01 per common share, on the extinguishment of subordinated debt from the partial early redemption of $11.3 million of subordinated debentures issued in July 2017 .\n \n \n \nAnnualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the third quarter of 2021 were 1.37% and 13.81%, compared to ROA and ROE of 1.43% and 15.40%, respectively, for the second quarter of 2021. Annualized return on average tangible common equity, a non-GAAP financial measure, was 15.47% for the third quarter of 2021, compared to 15.58% for the second quarter of 2021.\n \n \n \nPre-provision net revenue (PPNR), a non-GAAP financial measure, was $17.5 million for the third quarter of 2021, an increase of 10.3%, compared to $15.9 million for the second quarter of 2021. PPNR ROA, a non-GAAP financial measure, was 2.09% for the third quarter of 2021, compared to 2.07% for the second quarter of 2021.\n \n \n \nGross loans increased $117.8 million in the third quarter of 2021, or 18.0% annualized, compared to the second quarter of 2021. Gross loans, excluding Paycheck Protection Program (PPP) loans, increased $162.7 million in the third quarter of 2021, or 25.9% annualized, compared to the second quarter of 2021.\n \n \n \nDeposits increased $133.3 million in the third quarter of 2021, or 19.4% annualized, compared to the second quarter of 2021.\n \n \n \nNet interest margin (on a fully tax-equivalent basis) was 3.54% for the third quarter of 2021, compared to 3.52% in the second quarter of 2021.\n \n \n \nThe adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 41.5% for the third quarter of 2021, compared to 41.5% for the second quarter of 2021.\n \n \n \nA loan loss provision of $1.3 million was recorded in the third quarter of 2021 to support strong organic loan growth. The allowance for loan losses to total loans was 1.43% at September 30, 2021 , compared to 1.45% at June 30, 2021 . The allowance for loan losses to total loans, excluding PPP loans, was 1.46% at September 30, 2021 , compared to 1.50% at June 30, 2021 .\n \n \n \nAnnualized net loan charge-offs (recoveries) as a percentage of average loans were 0.00% for the third quarter of 2021, compared to 0.00% for the second quarter of 2021.\n \n \n \nTangible book value per share, a non-GAAP financial measure, increased 3.9%, or $0.40 , to $10.62 at September 30, 2021 , compared to $10.22 at June 30, 2021 .\n \n \n \n \n \n Key Financial Measures \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n June 30 , \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n 2021 \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n 2020 \n \n \n \n \n \n Per Common Share Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBasic Earnings Per Share\n \n \n \n \n \n \n \n$\n \n \n \n0.41\n \n \n \n \n \n \n \n \n$\n \n \n \n0.39\n \n \n \n \n \n \n \n \n$\n \n \n \n0.25\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.18\n \n \n \n \n \n \n \n \n$\n \n \n \n0.77\n \n \n \n \n \n \n \n \n \nDiluted Earnings Per Share\n \n \n \n \n \n \n \n \n \n \n \n0.40\n \n \n \n \n \n \n \n \n \n \n \n \n0.38\n \n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.14\n \n \n \n \n \n \n \n \n \n \n \n \n0.76\n \n \n \n \n \n \n \n \n \nAdjusted Diluted Earnings Per Share (1)\n \n \n \n \n \n \n \n \n \n \n \n0.41\n \n \n \n \n \n \n \n \n \n \n \n \n0.38\n \n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.16\n \n \n \n \n \n \n \n \n \n \n \n \n0.80\n \n \n \n \n \n \n \n \n \nBook Value Per Share\n \n \n \n \n \n \n \n \n \n \n \n10.73\n \n \n \n \n \n \n \n \n \n \n \n \n10.33\n \n \n \n \n \n \n \n \n \n \n \n \n9.25\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10.73\n \n \n \n \n \n \n \n \n \n \n \n \n9.25\n \n \n \n \n \n \n \n \n \nTangible Book Value Per Share (1)\n \n \n \n \n \n \n \n \n \n \n \n10.62\n \n \n \n \n \n \n \n \n \n \n \n \n10.22\n \n \n \n \n \n \n \n \n \n \n \n \n9.13\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10.62\n \n \n \n \n \n \n \n \n \n \n \n \n9.13\n \n \n \n \n \n \n \n \n \nBasic Weighted Average Shares Outstanding\n \n \n \n \n \n \n \n \n \n \n \n28,047,280\n \n \n \n \n \n \n \n \n \n \n \n \n28,040,762\n \n \n \n \n \n \n \n \n \n \n \n \n28,683,855\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,035,246\n \n \n \n \n \n \n \n \n \n \n \n \n28,717,142\n \n \n \n \n \n \n \n \n \nDiluted Weighted Average Shares Outstanding\n \n \n \n \n \n \n \n \n \n \n \n29,110,547\n \n \n \n \n \n \n \n \n \n \n \n \n29,128,181\n \n \n \n \n \n \n \n \n \n \n \n \n29,174,601\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n29,077,850\n \n \n \n \n \n \n \n \n \n \n \n \n29,300,763\n \n \n \n \n \n \n \n \n \nShares Outstanding at Period End\n \n \n \n \n \n \n \n \n \n \n \n28,066,822\n \n \n \n \n \n \n \n \n \n \n \n \n28,162,777\n \n \n \n \n \n \n \n \n \n \n \n \n28,710,775\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,066,822\n \n \n \n \n \n \n \n \n \n \n \n \n28,710,775\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Selected Performance Ratios \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nReturn on Average Assets (Annualized)\n \n \n \n \n \n \n \n \n \n \n \n1.37\n \n \n \n%\n \n \n \n \n \n \n \n \n1.43\n \n \n \n%\n \n \n \n \n \n \n \n \n1.05\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n1.42\n \n \n \n%\n \n \n \n \n \n \n \n \n1.16\n \n \n \n%\n \n \n \n \n \nPre-Provision Net Revenue Return on Average Assets (Annualized) (1)\n \n \n \n \n \n \n \n \n \n \n \n2.09\n \n \n \n \n \n \n \n \n \n \n \n \n2.07\n \n \n \n \n \n \n \n \n \n \n \n \n1.94\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2.10\n \n \n \n \n \n \n \n \n \n \n \n \n2.01\n \n \n \n \n \n \n \n \n \nReturn on Average Shareholders' Equity (Annualized)\n \n \n \n \n \n \n \n \n \n \n \n13.81\n \n \n \n \n \n \n \n \n \n \n \n \n15.40\n \n \n \n \n \n \n \n \n \n \n \n \n10.84\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n14.95\n \n \n \n \n \n \n \n \n \n \n \n \n11.57\n \n \n \n \n \n \n \n \n \nReturn on Average Tangible Common Equity (Annualized) (1)\n \n \n \n \n \n \n \n \n \n \n \n15.47\n \n \n \n \n \n \n \n \n \n \n \n \n15.58\n \n \n \n \n \n \n \n \n \n \n \n \n10.98\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n15.69\n \n \n \n \n \n \n \n \n \n \n \n \n11.73\n \n \n \n \n \n \n \n \n \nYield on Interest Earning Assets\n \n \n \n \n \n \n \n \n \n \n \n4.14\n \n \n \n \n \n \n \n \n \n \n \n \n4.17\n \n \n \n \n \n \n \n \n \n \n \n \n4.30\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.20\n \n \n \n \n \n \n \n \n \n \n \n \n4.53\n \n \n \n \n \n \n \n \n \nYield on Total Loans, Gross\n \n \n \n \n \n \n \n \n \n \n \n4.65\n \n \n \n \n \n \n \n \n \n \n \n \n4.56\n \n \n \n \n \n \n \n \n \n \n \n \n4.73\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4.65\n \n \n \n \n \n \n \n \n \n \n \n \n4.91\n \n \n \n \n \n \n \n \n \nCost of Interest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n0.88\n \n \n \n \n \n \n \n \n \n \n \n \n0.96\n \n \n \n \n \n \n \n \n \n \n \n \n1.50\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.95\n \n \n \n \n \n \n \n \n \n \n \n \n1.63\n \n \n \n \n \n \n \n \n \nCost of Total Deposits\n \n \n \n \n \n \n \n \n \n \n \n0.48\n \n \n \n \n \n \n \n \n \n \n \n \n0.54\n \n \n \n \n \n \n \n \n \n \n \n \n0.87\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.53\n \n \n \n \n \n \n \n \n \n \n \n \n1.03\n \n \n \n \n \n \n \n \n \nNet Interest Margin (2)\n \n \n \n \n \n \n \n \n \n \n \n3.54\n \n \n \n \n \n \n \n \n \n \n \n \n3.52\n \n \n \n \n \n \n \n \n \n \n \n \n3.28\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.55\n \n \n \n \n \n \n \n \n \n \n \n \n3.41\n \n \n \n \n \n \n \n \n \nCore Net Interest Margin (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n3.22\n \n \n \n \n \n \n \n \n \n \n \n \n3.31\n \n \n \n \n \n \n \n \n \n \n \n \n3.14\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n \n \n \n \n \n \n \n \n \n3.24\n \n \n \n \n \n \n \n \n \nEfficiency Ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n43.9\n \n \n \n \n \n \n \n \n \n \n \n \n42.0\n \n \n \n \n \n \n \n \n \n \n \n \n42.3\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n42.4\n \n \n \n \n \n \n \n \n \n \n \n \n45.1\n \n \n \n \n \n \n \n \n \nAdjusted Efficiency Ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n41.5\n \n \n \n \n \n \n \n \n \n \n \n \n41.5\n \n \n \n \n \n \n \n \n \n \n \n \n41.7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n41.3\n \n \n \n \n \n \n \n \n \n \n \n \n42.0\n \n \n \n \n \n \n \n \n \nNoninterest Expense to Average Assets (Annualized)\n \n \n \n \n \n \n \n \n \n \n \n1.58\n \n \n \n \n \n \n \n \n \n \n \n \n1.50\n \n \n \n \n \n \n \n \n \n \n \n \n1.42\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.53\n \n \n \n \n \n \n \n \n \n \n \n \n1.58\n \n \n \n \n \n \n \n \n \nAdjusted Noninterest Expense to Average Assets (Annualized) (1)\n \n \n \n \n \n \n \n \n \n \n \n1.49\n \n \n \n \n \n \n \n \n \n \n \n \n1.48\n \n \n \n \n \n \n \n \n \n \n \n \n1.40\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1.49\n \n \n \n \n \n \n \n \n \n \n \n \n1.47\n \n \n \n \n \n \n \n \n \nLoan to Deposit Ratio\n \n \n \n \n \n \n \n \n \n \n \n95.0\n \n \n \n \n \n \n \n \n \n \n \n \n95.3\n \n \n \n \n \n \n \n \n \n \n \n \n99.4\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCore Deposits to Total Deposits (3)\n \n \n \n \n \n \n \n \n \n \n \n83.3\n \n \n \n \n \n \n \n \n \n \n \n \n81.2\n \n \n \n \n \n \n \n \n \n \n \n \n77.1\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTangible Common Equity to Tangible Assets (1)\n \n \n \n \n \n \n \n \n \n \n \n8.81\n \n \n \n \n \n \n \n \n \n \n \n \n9.10\n \n \n \n \n \n \n \n \n \n \n \n \n9.46\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Capital Ratios (Bank Only) (4) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTier 1 Leverage Ratio\n \n \n \n \n \n \n \n \n \n \n \n10.96\n \n \n \n%\n \n \n \n \n \n \n \n \n10.57\n \n \n \n%\n \n \n \n \n \n \n \n \n11.24\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommon Equity Tier 1 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n11.88\n \n \n \n \n \n \n \n \n \n \n \n \n11.24\n \n \n \n \n \n \n \n \n \n \n \n \n12.60\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTier 1 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n11.88\n \n \n \n \n \n \n \n \n \n \n \n \n11.24\n \n \n \n \n \n \n \n \n \n \n \n \n12.60\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n13.13\n \n \n \n \n \n \n \n \n \n \n \n \n12.49\n \n \n \n \n \n \n \n \n \n \n \n \n13.85\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Capital Ratios (Consolidated) (4) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTier 1 Leverage Ratio\n \n \n \n \n \n \n \n \n \n \n \n10.70\n \n \n \n%\n \n \n \n \n \n \n \n \n9.08\n \n \n \n%\n \n \n \n \n \n \n \n \n9.83\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommon Equity Tier 1 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n9.47\n \n \n \n \n \n \n \n \n \n \n \n \n9.67\n \n \n \n \n \n \n \n \n \n \n \n \n11.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTier 1 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n11.65\n \n \n \n \n \n \n \n \n \n \n \n \n9.67\n \n \n \n \n \n \n \n \n \n \n \n \n11.03\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n15.93\n \n \n \n \n \n \n \n \n \n \n \n \n13.49\n \n \n \n \n \n \n \n \n \n \n \n \n15.45\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(1) Represents a non-GAAP financial measure. See \"Non-GAAP Financial Measures\" for further details.\n \n \n \n \n \n(2) Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.\n \n \n \n \n \n(3) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000 .\n \n \n \n \n \n(4) Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.\n \n \n \n \n Selected Financial Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n March 31 , \n \n \n \n \n \n \n \n December 31 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n Selected Balance Sheet Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Assets\n \n \n \n \n \n \n \n$\n \n \n \n3,389,125\n \n \n \n \n \n \n \n$\n \n \n \n3,162,612\n \n \n \n \n \n \n \n$\n \n \n \n3,072,359\n \n \n \n \n \n \n \n$\n \n \n \n2,927,345\n \n \n \n \n \n \n \n$\n \n \n \n2,774,564\n \n \n \n \n \nTotal Loans, Gross\n \n \n \n \n \n \n \n \n \n \n \n2,712,012\n \n \n \n \n \n \n \n \n \n \n \n2,594,186\n \n \n \n \n \n \n \n \n \n \n \n2,426,123\n \n \n \n \n \n \n \n \n \n \n \n2,326,428\n \n \n \n \n \n \n \n \n \n \n \n2,259,228\n \n \n \n \n \nAllowance for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n38,901\n \n \n \n \n \n \n \n \n \n \n \n37,591\n \n \n \n \n \n \n \n \n \n \n \n35,987\n \n \n \n \n \n \n \n \n \n \n \n34,841\n \n \n \n \n \n \n \n \n \n \n \n31,381\n \n \n \n \n \n Goodwill and Other Intangibles\n \n \n \n \n \n \n \n \n \n \n \n3,153\n \n \n \n \n \n \n \n \n \n \n \n3,200\n \n \n \n \n \n \n \n \n \n \n \n3,248\n \n \n \n \n \n \n \n \n \n \n \n3,296\n \n \n \n \n \n \n \n \n \n \n \n3,344\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nDeposits\n \n \n \n \n \n \n \n \n \n \n \n2,854,157\n \n \n \n \n \n \n \n \n \n \n \n2,720,906\n \n \n \n \n \n \n \n \n \n \n \n2,638,654\n \n \n \n \n \n \n \n \n \n \n \n2,501,636\n \n \n \n \n \n \n \n \n \n \n \n2,273,044\n \n \n \n \n \nTangible Common Equity (1)\n \n \n \n \n \n \n \n \n \n \n \n298,135\n \n \n \n \n \n \n \n \n \n \n \n287,630\n \n \n \n \n \n \n \n \n \n \n \n275,923\n \n \n \n \n \n \n \n \n \n \n \n262,109\n \n \n \n \n \n \n \n \n \n \n \n262,088\n \n \n \n \n \nTotal Shareholders' Equity\n \n \n \n \n \n \n \n \n \n \n \n367,803\n \n \n \n \n \n \n \n \n \n \n \n290,830\n \n \n \n \n \n \n \n \n \n \n \n279,171\n \n \n \n \n \n \n \n \n \n \n \n265,405\n \n \n \n \n \n \n \n \n \n \n \n265,432\n \n \n \n \n \nAverage Total Assets - Quarter-to-Date\n \n \n \n \n \n \n \n \n \n \n \n3,332,301\n \n \n \n \n \n \n \n \n \n \n \n3,076,712\n \n \n \n \n \n \n \n \n \n \n \n2,940,262\n \n \n \n \n \n \n \n \n \n \n \n2,816,032\n \n \n \n \n \n \n \n \n \n \n \n2,711,755\n \n \n \n \n \nAverage Shareholders' Equity - Quarter-to-Date\n \n \n \n \n \n \n \n \n \n \n \n330,604\n \n \n \n \n \n \n \n \n \n \n \n286,311\n \n \n \n \n \n \n \n \n \n \n \n272,729\n \n \n \n \n \n \n \n \n \n \n \n265,716\n \n \n \n \n \n \n \n \n \n \n \n263,195\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1) Represents a non-GAAP financial measure. See \"Non-GAAP Financial Measures\" for further details. \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n For the Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n Selected Income Statement Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest Income\n \n \n \n \n \n \n \n$\n \n \n \n33,517\n \n \n \n \n \n \n \n$\n \n \n \n31,147\n \n \n \n \n \n \n \n$\n \n \n \n28,493\n \n \n \n \n \n \n \n$\n \n \n \n95,104\n \n \n \n \n \n \n \n$\n \n \n \n84,127\n \n \n \n \n \nInterest Expense\n \n \n \n \n \n \n \n \n \n \n \n4,844\n \n \n \n \n \n \n \n \n \n \n \n4,859\n \n \n \n \n \n \n \n \n \n \n \n6,814\n \n \n \n \n \n \n \n \n \n \n \n14,748\n \n \n \n \n \n \n \n \n \n \n \n21,004\n \n \n \n \n \nNet Interest Income\n \n \n \n \n \n \n \n \n \n \n \n28,673\n \n \n \n \n \n \n \n \n \n \n \n26,288\n \n \n \n \n \n \n \n \n \n \n \n21,679\n \n \n \n \n \n \n \n \n \n \n \n80,356\n \n \n \n \n \n \n \n \n \n \n \n63,123\n \n \n \n \n \nProvision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n1,600\n \n \n \n \n \n \n \n \n \n \n \n3,750\n \n \n \n \n \n \n \n \n \n \n \n4,000\n \n \n \n \n \n \n \n \n \n \n \n8,850\n \n \n \n \n \nNet Interest Income after Provision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n27,373\n \n \n \n \n \n \n \n \n \n \n \n24,688\n \n \n \n \n \n \n \n \n \n \n \n17,929\n \n \n \n \n \n \n \n \n \n \n \n76,356\n \n \n \n \n \n \n \n \n \n \n \n54,273\n \n \n \n \n \nNoninterest Income\n \n \n \n \n \n \n \n \n \n \n \n1,410\n \n \n \n \n \n \n \n \n \n \n \n1,603\n \n \n \n \n \n \n \n \n \n \n \n1,157\n \n \n \n \n \n \n \n \n \n \n \n4,021\n \n \n \n \n \n \n \n \n \n \n \n4,853\n \n \n \n \n \nNoninterest Expense\n \n \n \n \n \n \n \n \n \n \n \n13,236\n \n \n \n \n \n \n \n \n \n \n \n11,477\n \n \n \n \n \n \n \n \n \n \n \n9,672\n \n \n \n \n \n \n \n \n \n \n \n35,636\n \n \n \n \n \n \n \n \n \n \n \n30,129\n \n \n \n \n \nIncome Before Income Taxes\n \n \n \n \n \n \n \n \n \n \n \n15,547\n \n \n \n \n \n \n \n \n \n \n \n14,814\n \n \n \n \n \n \n \n \n \n \n \n9,414\n \n \n \n \n \n \n \n \n \n \n \n44,741\n \n \n \n \n \n \n \n \n \n \n \n28,997\n \n \n \n \n \nProvision for Income Taxes\n \n \n \n \n \n \n \n \n \n \n \n4,038\n \n \n \n \n \n \n \n \n \n \n \n3,821\n \n \n \n \n \n \n \n \n \n \n \n2,240\n \n \n \n \n \n \n \n \n \n \n \n11,568\n \n \n \n \n \n \n \n \n \n \n \n6,782\n \n \n \n \n \nNet Income\n \n \n \n \n \n \n \n$\n \n \n \n11,509\n \n \n \n \n \n \n \n$\n \n \n \n10,993\n \n \n \n \n \n \n \n$\n \n \n \n7,174\n \n \n \n \n \n \n \n$\n \n \n \n33,173\n \n \n \n \n \n \n \n$\n \n \n \n22,215\n \n \n \n \n Income Statement \n \n Net Interest Income \n \nNet interest income was $28.7 million for the third quarter of 2021, an increase of $2.4 million , or 9.1%, from $26.3 million in the second quarter of 2021, and an increase of $7.0 million , or 32.3%, from $21.7 million in the third quarter of 2020. The linked-quarter and year-over-year increases in net interest income were primarily due to robust growth in average interest earning assets, lower rates paid on deposits, and the recognition of PPP loan origination fees, offset partially by declining yields on loans. Average interest earning assets were $3.23 billion for the third quarter of 2021, an increase of $214.9 million , or 7.1%, from $3.02 billion for the second quarter of 2021, and an increase of $578.4 million , or 21.8%, from $2.66 billion for the third quarter of 2020. The linked-quarter increase in average interest earning assets was primarily due to increased cash balances and continued strong organic growth in the loan portfolio, offset partially by the payoff of PPP loans. The year-over-year increase in average interest earning assets was primarily due to increased cash balances, continued purchases of investment securities, and strong organic growth in the loan portfolio, offset partially by the payoff of PPP loans.\n \nNet interest margin (on a fully tax-equivalent basis) for the third quarter of 2021 was 3.54%, a 2 basis point increase from 3.52% in the second quarter of 2021, and a 26 basis point increase from 3.28% in the third quarter of 2020. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, for the third quarter of 2021 was 3.22%, a 9 basis point decline from 3.31% in the second quarter of 2021, and an 8 basis point increase from 3.14% in the third quarter of 2020. Even though the capital raises during the quarter increased capital levels to support future growth, it is worth noting the net proceeds in the near-term compounded excess liquidity and negatively affected the net interest margin by 6 basis points.\n \nWhile the origination volume of PPP loans earning 1.00% has negatively impacted net interest margin, the recognition of fees associated with the originations has benefited net interest margin for each of the past four quarters. The SBA has been forgiving PPP loans, which has accelerated the recognition of PPP fees starting in the fourth quarter of 2020 and continuing into the third quarter of 2021. The Company recognized $1.6 million of PPP origination fees during the third quarter of 2021, compared to $1.4 million during the second quarter of 2021. The elevated fee recognition is illustrated in the 9.15% PPP loan yield for the third quarter of 2021, compared to 4.75% for the second quarter of 2021.\n \nThe following table summarizes PPP loan originations and net origination fees as of September 30, 2021 :\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Originated \n \n \n \n \n \n \n \n Outstanding \n \n \n \n \n \n \n \n Program Lifetime \n \n \n \n \n \n \n \n \n \n \n \n \n \n Number \n \n \n \n \n \n \n \n Principal \n \n \n \n \n \n \n \n Number \n \n \n \n \n \n \n \n Principal \n \n \n \n \n \n \n \n Net Origination \n \n \n \n \n \n \n \n Net Origination \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n of Loans \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n of Loans \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n Fees Generated \n \n \n \n \n \n \n \n Fees Earned \n \n \n \n \n \nRound One PPP Loans\n \n \n \n \n \n \n \n \n \n \n \n1,200\n \n \n \n \n \n \n \n$\n \n \n \n181,600\n \n \n \n \n \n \n \n \n \n \n \n72\n \n \n \n \n \n \n \n$\n \n \n \n6,715\n \n \n \n \n \n \n \n$\n \n \n \n5,706\n \n \n \n \n \n \n \n$\n \n \n \n5,624\n \n \n \n \n \nRound Two PPP Loans\n \n \n \n \n \n \n \n \n \n \n \n651\n \n \n \n \n \n \n \n \n \n \n \n78,386\n \n \n \n \n \n \n \n \n \n \n \n301\n \n \n \n \n \n \n \n \n \n \n \n47,475\n \n \n \n \n \n \n \n \n \n \n \n3,544\n \n \n \n \n \n \n \n \n \n \n \n1,769\n \n \n \n \n \nTotals\n \n \n \n \n \n \n \n \n \n \n \n1,851\n \n \n \n \n \n \n \n$\n \n \n \n259,986\n \n \n \n \n \n \n \n \n \n \n \n373\n \n \n \n \n \n \n \n$\n \n \n \n54,190\n \n \n \n \n \n \n \n$\n \n \n \n9,250\n \n \n \n \n \n \n \n$\n \n \n \n7,393\n \n \n \n \nInterest income was $33.5 million for the third quarter of 2021, an increase of $2.4 million , or 7.6%, from $31.1 million in the second quarter of 2021, and an increase of $5.0 million , or 17.6%, from $28.5 million in the third quarter of 2020. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.14% in the third quarter of 2021, compared to 4.17% in the second quarter of 2021, and 4.30% in the third quarter of 2020. The linked-quarter decrease in the yield on interest earning assets was primarily due to excess cash balances and the historically low interest rate environment resulting in a lower core loan yield, offset partially by $1.6 million of PPP loan origination fees. The year-over-year decline in the yield on interest earning assets was primarily due to excess cash balances and the historically low interest rate environment resulting in lower loan and security yields.\n \nLoan interest income and loan fees remain the primary contributing factors to the changes in yield on interest earning assets. The aggregate loan yield, excluding PPP loans, decreased to 4.51% in the third quarter of 2021, which was 3 basis points lower than 4.54% in the second quarter of 2021, and 42 basis points lower than 4.93% in the third quarter of 2020. While loan fees have maintained a relatively stable contribution to the aggregate loan yield, the historically low yield curve has resulted in a declining core yield on loans in comparison to both prior periods.\n \nA summary of interest and fees recognized on loans, excluding PPP loans, for the periods indicated is as follows:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n March 31, 2021 \n \n \n \n \n \n \n \n December 31, 2020 \n \n \n \n \n \n \n \n September 30, 2020 \n \n \n \n \n \nInterest\n \n \n \n \n \n \n \n4.28\n \n \n \n%\n \n \n \n \n \n \n \n4.37\n \n \n \n%\n \n \n \n \n \n \n \n4.50\n \n \n \n%\n \n \n \n \n \n \n \n4.59\n \n \n \n%\n \n \n \n \n \n \n \n4.69\n \n \n \n%\n \n \n \n \n \nFees\n \n \n \n \n \n \n \n0.23\n \n \n \n \n \n \n \n \n \n \n \n0.17\n \n \n \n \n \n \n \n \n \n \n \n0.22\n \n \n \n \n \n \n \n \n \n \n \n0.28\n \n \n \n \n \n \n \n \n \n \n \n0.24\n \n \n \n \n \n \n \n \n \nYield on Loans, Excluding PPP Loans\n \n \n \n \n \n \n \n4.51\n \n \n \n%\n \n \n \n \n \n \n \n4.54\n \n \n \n%\n \n \n \n \n \n \n \n4.72\n \n \n \n%\n \n \n \n \n \n \n \n4.87\n \n \n \n%\n \n \n \n \n \n \n \n4.93\n \n \n \n%\n \n \n \n \nInterest expense was $4.8 million for the third quarter of 2021, a decrease of $15,000 , or 0.3%, from $4.9 million in the second quarter of 2021, and a decrease of $2.0 million , or 28.9%, from $6.8 million in the third quarter of 2020. The cost of interest bearing liabilities declined 8 basis points on a linked-quarter basis from 0.96% in the second quarter of 2021 to 0.88% in the third quarter of 2021, primarily due to lower rates paid on deposits, offset partially by additional subordinated debentures. On a year-over-year basis, the cost of interest bearing liabilities decreased 62 basis points from 1.50% in the third quarter of 2020 to 0.88% in the third quarter of 2021, primarily due to lower rates paid on deposits, the payoff of the Company’s notes payable, and the early extinguishment of $94.0 million of longer term FHLB advances, offset partially by strong growth of interest bearing deposits and additional subordinated debentures.\n \nInterest expense on deposits was $3.4 million for the third quarter of 2021, a decrease of $96,000 , or 2.7%, from $3.5 million in the second quarter of 2021, and a decrease of $1.4 million , or 29.4%, from $4.8 million in the third quarter of 2020. The cost of total deposits declined 6 basis points on a linked-quarter basis from 0.54% in the second quarter of 2021, and declined 39 basis points on a year-over-year basis from 0.87% in the third quarter of 2020, to 0.48% in the third quarter of 2021, primarily due to deposit rate cuts consistent with a lower rate environment and the continued downward repricing of time deposits.\n \nA summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended September 30, 2021 , June 30, 2021 , and September 30, 2020 is as follows:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n For the Three Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n June 30, 2021 \n \n \n \n \n September 30, 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Yield/ \n \n \n \n \n Average \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Yield/ \n \n \n \n \n Average \n \n \n \n \n \n \n \n Interest \n \n \n \n \n \n \n \n Yield/ \n \n \n \n \n \n \n \n \n \n \n \n \n \n Balance \n \n \n \n \n \n \n \n & Fees \n \n \n \n \n \n \n \n Rate \n \n \n \n \n Balance \n \n \n \n \n \n \n \n & Fees \n \n \n \n \n \n \n \n Rate \n \n \n \n \n Balance \n \n \n \n \n \n \n \n & Fees \n \n \n \n \n \n \n \n Rate \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest Earning Assets: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCash Investments\n \n \n \n \n \n \n \n$\n \n \n \n187,405\n \n \n \n \n \n \n \n$\n \n \n \n67\n \n \n \n \n \n \n \n \n \n \n \n0.14\n \n \n \n%\n \n \n \n \n$\n \n \n \n88,067\n \n \n \n \n \n \n \n$\n \n \n \n33\n \n \n \n \n \n \n \n \n \n \n \n0.15\n \n \n \n%\n \n \n \n \n$\n \n \n \n101,787\n \n \n \n \n \n \n \n$\n \n \n \n42\n \n \n \n \n \n \n \n \n \n \n \n0.16\n \n \n \n%\n \n \n \n \n \n Investment Securities :\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Taxable Investment Securities \n \n \n \n \n \n \n \n \n \n \n \n314,367\n \n \n \n \n \n \n \n \n \n \n \n1,751\n \n \n \n \n \n \n \n \n \n \n \n2.21\n \n \n \n \n \n \n \n \n \n \n \n \n314,049\n \n \n \n \n \n \n \n \n \n \n \n1,647\n \n \n \n \n \n \n \n \n \n \n \n2.10\n \n \n \n \n \n \n \n \n \n \n \n \n256,808\n \n \n \n \n \n \n \n \n \n \n \n1,389\n \n \n \n \n \n \n \n \n \n \n \n2.15\n \n \n \n \n \n \n \n \n \n Tax-Exempt Investment Securities (1)\n \n \n \n \n \n \n \n \n \n \n \n71,801\n \n \n \n \n \n \n \n \n \n \n \n737\n \n \n \n \n \n \n \n \n \n \n \n4.07\n \n \n \n \n \n \n \n \n \n \n \n \n77,029\n \n \n \n \n \n \n \n \n \n \n \n842\n \n \n \n \n \n \n \n \n \n \n \n4.38\n \n \n \n \n \n \n \n \n \n \n \n \n82,579\n \n \n \n \n \n \n \n \n \n \n \n900\n \n \n \n \n \n \n \n \n \n \n \n4.33\n \n \n \n \n \n \n \n \n \n Total Investment Securities \n \n \n \n \n \n \n \n \n \n \n \n386,168\n \n \n \n \n \n \n \n \n \n \n \n2,488\n \n \n \n \n \n \n \n \n \n \n \n2.56\n \n \n \n \n \n \n \n \n \n \n \n \n391,078\n \n \n \n \n \n \n \n \n \n \n \n2,489\n \n \n \n \n \n \n \n \n \n \n \n2.55\n \n \n \n \n \n \n \n \n \n \n \n \n339,387\n \n \n \n \n \n \n \n \n \n \n \n2,289\n \n \n \n \n \n \n \n \n \n \n \n2.68\n \n \n \n \n \n \n \n \n \nPaycheck Protection Program Loans (2)\n \n \n \n \n \n \n \n \n \n \n \n76,006\n \n \n \n \n \n \n \n \n \n \n \n1,753\n \n \n \n \n \n \n \n \n \n \n \n9.15\n \n \n \n \n \n \n \n \n \n \n \n \n149,312\n \n \n \n \n \n \n \n \n \n \n \n1,767\n \n \n \n \n \n \n \n \n \n \n \n4.75\n \n \n \n \n \n \n \n \n \n \n \n \n181,397\n \n \n \n \n \n \n \n \n \n \n \n1,173\n \n \n \n \n \n \n \n \n \n \n \n2.57\n \n \n \n \n \n \n \n \n \nLoans (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n2,579,021\n \n \n \n \n \n \n \n \n \n \n \n29,348\n \n \n \n \n \n \n \n \n \n \n \n4.51\n \n \n \n \n \n \n \n \n \n \n \n \n2,384,759\n \n \n \n \n \n \n \n \n \n \n \n27,011\n \n \n \n \n \n \n \n \n \n \n \n4.54\n \n \n \n \n \n \n \n \n \n \n \n \n2,025,410\n \n \n \n \n \n \n \n \n \n \n \n25,081\n \n \n \n \n \n \n \n \n \n \n \n4.93\n \n \n \n \n \n \n \n \n \nTotal Loans\n \n \n \n \n \n \n \n \n \n \n \n2,655,027\n \n \n \n \n \n \n \n \n \n \n \n31,101\n \n \n \n \n \n \n \n \n \n \n \n4.65\n \n \n \n \n \n \n \n \n \n \n \n \n2,534,071\n \n \n \n \n \n \n \n \n \n \n \n28,778\n \n \n \n \n \n \n \n \n \n \n \n4.56\n \n \n \n \n \n \n \n \n \n \n \n \n2,206,807\n \n \n \n \n \n \n \n \n \n \n \n26,254\n \n \n \n \n \n \n \n \n \n \n \n4.73\n \n \n \n \n \n \n \n \n \nFederal Home Loan Bank Stock \n \n \n \n \n \n \n \n \n \n \n \n5,701\n \n \n \n \n \n \n \n \n \n \n \n68\n \n \n \n \n \n \n \n \n \n \n \n4.65\n \n \n \n \n \n \n \n \n \n \n \n \n6,221\n \n \n \n \n \n \n \n \n \n \n \n54\n \n \n \n \n \n \n \n \n \n \n \n3.51\n \n \n \n \n \n \n \n \n \n \n \n \n7,901\n \n \n \n \n \n \n \n \n \n \n \n127\n \n \n \n \n \n \n \n \n \n \n \n6.38\n \n \n \n \n \n \n \n \n \nTotal Interest Earning Assets\n \n \n \n \n \n \n \n \n \n \n \n3,234,301\n \n \n \n \n \n \n \n \n \n \n \n33,724\n \n \n \n \n \n \n \n \n \n \n \n4.14\n \n \n \n%\n \n \n \n \n \n \n \n \n3,019,437\n \n \n \n \n \n \n \n \n \n \n \n31,354\n \n \n \n \n \n \n \n \n \n \n \n4.17\n \n \n \n%\n \n \n \n \n \n \n \n \n2,655,882\n \n \n \n \n \n \n \n \n \n \n \n28,712\n \n \n \n \n \n \n \n \n \n \n \n4.30\n \n \n \n%\n \n \n \n \n \nNoninterest Earning Assets\n \n \n \n \n \n \n \n \n \n \n \n98,000\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n57,275\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n55,873\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Assets\n \n \n \n \n \n \n \n$\n \n \n \n3,332,301\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,076,712\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,711,755\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest Bearing Liabilities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nDeposits:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nInterest Bearing Transaction Deposits\n \n \n \n \n \n \n \n$\n \n \n \n479,580\n \n \n \n \n \n \n \n$\n \n \n \n562\n \n \n \n \n \n \n \n \n \n \n \n0.47\n \n \n \n%\n \n \n \n \n$\n \n \n \n421,132\n \n \n \n \n \n \n \n$\n \n \n \n520\n \n \n \n \n \n \n \n \n \n \n \n0.50\n \n \n \n%\n \n \n \n \n$\n \n \n \n306,162\n \n \n \n \n \n \n \n$\n \n \n \n400\n \n \n \n \n \n \n \n \n \n \n \n0.52\n \n \n \n%\n \n \n \n \n \nSavings and Money Market Deposits\n \n \n \n \n \n \n \n \n \n \n \n801,354\n \n \n \n \n \n \n \n \n \n \n \n904\n \n \n \n \n \n \n \n \n \n \n \n0.45\n \n \n \n \n \n \n \n \n \n \n \n \n764,632\n \n \n \n \n \n \n \n \n \n \n \n940\n \n \n \n \n \n \n \n \n \n \n \n0.49\n \n \n \n \n \n \n \n \n \n \n \n \n501,246\n \n \n \n \n \n \n \n \n \n \n \n1,106\n \n \n \n \n \n \n \n \n \n \n \n0.88\n \n \n \n \n \n \n \n \n \nTime Deposits\n \n \n \n \n \n \n \n \n \n \n \n318,222\n \n \n \n \n \n \n \n \n \n \n \n928\n \n \n \n \n \n \n \n \n \n \n \n1.16\n \n \n \n \n \n \n \n \n \n \n \n \n332,346\n \n \n \n \n \n \n \n \n \n \n \n1,075\n \n \n \n \n \n \n \n \n \n \n \n1.30\n \n \n \n \n \n \n \n \n \n \n \n \n369,975\n \n \n \n \n \n \n \n \n \n \n \n1,899\n \n \n \n \n \n \n \n \n \n \n \n2.04\n \n \n \n \n \n \n \n \n \nBrokered Deposits\n \n \n \n \n \n \n \n \n \n \n \n440,167\n \n \n \n \n \n \n \n \n \n \n \n1,023\n \n \n \n \n \n \n \n \n \n \n \n0.92\n \n \n \n \n \n \n \n \n \n \n \n \n379,768\n \n \n \n \n \n \n \n \n \n \n \n978\n \n \n \n \n \n \n \n \n \n \n \n1.03\n \n \n \n \n \n \n \n \n \n \n \n \n419,744\n \n \n \n \n \n \n \n \n \n \n \n1,435\n \n \n \n \n \n \n \n \n \n \n \n1.36\n \n \n \n \n \n \n \n \n \nTotal Interest Bearing Deposits\n \n \n \n \n \n \n \n \n \n \n \n2,039,323\n \n \n \n \n \n \n \n \n \n \n \n3,417\n \n \n \n \n \n \n \n \n \n \n \n0.66\n \n \n \n \n \n \n \n \n \n \n \n \n1,897,878\n \n \n \n \n \n \n \n \n \n \n \n3,513\n \n \n \n \n \n \n \n \n \n \n \n0.74\n \n \n \n \n \n \n \n \n \n \n \n \n1,597,127\n \n \n \n \n \n \n \n \n \n \n \n4,840\n \n \n \n \n \n \n \n \n \n \n \n1.21\n \n \n \n \n \n \n \n \n \nFederal Funds Purchased\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n9,932\n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n0.24\n \n \n \n \n \n \n \n \n \n \n \n \n152\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n0.33\n \n \n \n \n \n \n \n \n \nNotes Payable\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n11,500\n \n \n \n \n \n \n \n \n \n \n \n108\n \n \n \n \n \n \n \n \n \n \n \n3.74\n \n \n \n \n \n \n \n \n \nFHLB Advances\n \n \n \n \n \n \n \n \n \n \n \n54,130\n \n \n \n \n \n \n \n \n \n \n \n213\n \n \n \n \n \n \n \n \n \n \n \n1.56\n \n \n \n \n \n \n \n \n \n \n \n \n57,500\n \n \n \n \n \n \n \n \n \n \n \n228\n \n \n \n \n \n \n \n \n \n \n \n1.59\n \n \n \n \n \n \n \n \n \n \n \n \n129,457\n \n \n \n \n \n \n \n \n \n \n \n748\n \n \n \n \n \n \n \n \n \n \n \n2.30\n \n \n \n \n \n \n \n \n \nSubordinated Debentures\n \n \n \n \n \n \n \n \n \n \n \n91,337\n \n \n \n \n \n \n \n \n \n \n \n1,214\n \n \n \n \n \n \n \n \n \n \n \n5.27\n \n \n \n \n \n \n \n \n \n \n \n \n73,862\n \n \n \n \n \n \n \n \n \n \n \n1,112\n \n \n \n \n \n \n \n \n \n \n \n6.04\n \n \n \n \n \n \n \n \n \n \n \n \n73,649\n \n \n \n \n \n \n \n \n \n \n \n1,118\n \n \n \n \n \n \n \n \n \n \n \n6.04\n \n \n \n \n \n \n \n \n \nTotal Interest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,184,790\n \n \n \n \n \n \n \n \n \n \n \n4,844\n \n \n \n \n \n \n \n \n \n \n \n0.88\n \n \n \n%\n \n \n \n \n \n \n \n \n2,039,172\n \n \n \n \n \n \n \n \n \n \n \n4,859\n \n \n \n \n \n \n \n \n \n \n \n0.96\n \n \n \n%\n \n \n \n \n \n \n \n \n1,811,885\n \n \n \n \n \n \n \n \n \n \n \n6,814\n \n \n \n \n \n \n \n \n \n \n \n1.50\n \n \n \n%\n \n \n \n \n \n Noninterest Bearing Liabilities: \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNoninterest Bearing Transaction Deposits\n \n \n \n \n \n \n \n \n \n \n \n784,148\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n732,299\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n615,214\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nOther Noninterest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n32,759\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n18,930\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,461\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Noninterest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n816,907\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n751,229\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n636,675\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nShareholders' Equity\n \n \n \n \n \n \n \n \n \n \n \n330,604\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n286,311\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n263,195\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Liabilities and Shareholders' Equity\n \n \n \n \n \n \n \n$\n \n \n \n3,332,301\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,076,712\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,711,755\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet Interest Income / Interest Rate Spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,880\n \n \n \n \n \n \n \n \n \n \n \n3.26\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n26,495\n \n \n \n \n \n \n \n \n \n \n \n3.21\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n21,898\n \n \n \n \n \n \n \n \n \n \n \n2.80\n \n \n \n%\n \n \n \n \n \nNet Interest Margin (3)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.54\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.52\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.28\n \n \n \n%\n \n \n \n \n \nTaxable Equivalent Adjustment:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Tax-Exempt Investment Securities and Loans\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(207\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(207\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(219\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n \n \nNet Interest Income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n28,673\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n26,288\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n21,679\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1) Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%. \n \n \n (2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. \n \n \n (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. \n \n \n Provision for Loan Losses \n \nThe provision for loan losses was $1.3 million for the third quarter of 2021, a decrease of $300,000 from $1.6 million for the second quarter of 2021, and a decrease of $2.5 million from $3.8 million for the third quarter of 2020. The provision recorded in the third quarter of 2021 was attributable to growth of the loan portfolio. The allowance for loan losses to total loans was 1.43% at September 30, 2021 , compared to 1.45% at June 30, 2021 , and 1.39% at September 30, 2020 . The allowance for loan losses to total loans, excluding PPP loans, was 1.46% at September 30, 2021 , compared to 1.50% at June 30, 2021 , and 1.51% at September 30, 2020 .\n \nAs an emerging growth company, the Company is not subject to Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,“ or CECL, until January 1, 2023 .\n \nThe following table presents the activity in the Company’s allowance for loan losses for the periods indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \nBalance at Beginning of Period\n \n \n \n \n \n \n \n$\n \n \n \n37,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,987\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n27,633\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n34,841\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n22,526\n \n \n \n \n \n \n \n \n \nProvision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,600\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3,750\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,000\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,850\n \n \n \n \n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n \n \n \n \n(20\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(3\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(6\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(37\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(54\n \n \n \n)\n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n \n \n \n \n30\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n97\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n59\n \n \n \n \n \n \n \n \n \nBalance at End of Period\n \n \n \n \n \n \n \n$\n \n \n \n38,901\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n37,591\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n31,381\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n38,901\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n31,381\n \n \n \n \n \n \n \n \n Noninterest Income \n \nNoninterest income was $1.4 million for the third quarter of 2021, a decrease of $193,000 from $1.6 million for the second quarter of 2021, and an increase of $253,000 from $1.2 million for the third quarter of 2020. The linked-quarter decrease was primarily due to decreased gains on sales of securities, offset partially by an increase in letter of credit fees. The year-over-year increase was primarily due to increased letter of credit fees and bank-owned life insurance income.\n \nThe following table presents the major components of noninterest income for the periods indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \nNoninterest Income:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCustomer Service Fees\n \n \n \n \n \n \n \n$\n \n \n \n268\n \n \n \n \n \n \n \n$\n \n \n \n231\n \n \n \n \n \n \n \n$\n \n \n \n200\n \n \n \n \n \n \n \n$\n \n \n \n733\n \n \n \n \n \n \n \n$\n \n \n \n575\n \n \n \n \n \n Net Gain on Sales of Securities\n \n \n \n \n \n \n \n \n \n \n \n48\n \n \n \n \n \n \n \n \n \n \n \n702\n \n \n \n \n \n \n \n \n \n \n \n109\n \n \n \n \n \n \n \n \n \n \n \n750\n \n \n \n \n \n \n \n \n \n \n \n1,473\n \n \n \n \n \nLetter of Credit Fees\n \n \n \n \n \n \n \n \n \n \n \n577\n \n \n \n \n \n \n \n \n \n \n \n231\n \n \n \n \n \n \n \n \n \n \n \n487\n \n \n \n \n \n \n \n \n \n \n \n1,135\n \n \n \n \n \n \n \n \n \n \n \n1,026\n \n \n \n \n \nDebit Card Interchange Fees\n \n \n \n \n \n \n \n \n \n \n \n143\n \n \n \n \n \n \n \n \n \n \n \n141\n \n \n \n \n \n \n \n \n \n \n \n119\n \n \n \n \n \n \n \n \n \n \n \n414\n \n \n \n \n \n \n \n \n \n \n \n310\n \n \n \n \n \nSwap Fees\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n907\n \n \n \n \n \nOther Income\n \n \n \n \n \n \n \n \n \n \n \n374\n \n \n \n \n \n \n \n \n \n \n \n298\n \n \n \n \n \n \n \n \n \n \n \n242\n \n \n \n \n \n \n \n \n \n \n \n989\n \n \n \n \n \n \n \n \n \n \n \n562\n \n \n \n \n \nTotals\n \n \n \n \n \n \n \n$\n \n \n \n1,410\n \n \n \n \n \n \n \n$\n \n \n \n1,603\n \n \n \n \n \n \n \n$\n \n \n \n1,157\n \n \n \n \n \n \n \n$\n \n \n \n4,021\n \n \n \n \n \n \n \n$\n \n \n \n4,853\n \n \n \n \n Noninterest Expense \n \nNoninterest expense was $13.2 million for the third quarter of 2021, an increase of $1.8 million from $11.5 million for the second quarter of 2021, and an increase of $3.6 million from $9.7 million for the third quarter of 2020. The increase in both periods was primarily due to increases in salaries and employee benefits, professional and consulting fees, marketing and advertising, and $582,000 of prepayment fees associated with a partial early redemption of $11.3 million of subordinated debentures issued in July 2017 . The linked-quarter increase in salaries and employee benefits reflects both annual merit increases and a full quarter of salaries expense related to the significant net FTE growth experienced during the second quarter of 2021.\n \nThe following table presents the major components of noninterest expense for the periods indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \nNoninterest Expense:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nSalaries and Employee Benefits\n \n \n \n \n \n \n \n$\n \n \n \n8,309\n \n \n \n \n \n \n \n$\n \n \n \n7,512\n \n \n \n \n \n \n \n$\n \n \n \n6,550\n \n \n \n \n \n \n \n$\n \n \n \n22,923\n \n \n \n \n \n \n \n$\n \n \n \n19,352\n \n \n \n \n \nOccupancy and Equipment\n \n \n \n \n \n \n \n \n \n \n \n942\n \n \n \n \n \n \n \n \n \n \n \n980\n \n \n \n \n \n \n \n \n \n \n \n894\n \n \n \n \n \n \n \n \n \n \n \n2,977\n \n \n \n \n \n \n \n \n \n \n \n2,279\n \n \n \n \n \nFDIC Insurance Assessment\n \n \n \n \n \n \n \n \n \n \n \n355\n \n \n \n \n \n \n \n \n \n \n \n290\n \n \n \n \n \n \n \n \n \n \n \n160\n \n \n \n \n \n \n \n \n \n \n \n960\n \n \n \n \n \n \n \n \n \n \n \n518\n \n \n \n \n \nData Processing\n \n \n \n \n \n \n \n \n \n \n \n325\n \n \n \n \n \n \n \n \n \n \n \n300\n \n \n \n \n \n \n \n \n \n \n \n267\n \n \n \n \n \n \n \n \n \n \n \n916\n \n \n \n \n \n \n \n \n \n \n \n734\n \n \n \n \n \nProfessional and Consulting Fees\n \n \n \n \n \n \n \n \n \n \n \n708\n \n \n \n \n \n \n \n \n \n \n \n552\n \n \n \n \n \n \n \n \n \n \n \n492\n \n \n \n \n \n \n \n \n \n \n \n1,804\n \n \n \n \n \n \n \n \n \n \n \n1,400\n \n \n \n \n \nInformation Technology and Telecommunications\n \n \n \n \n \n \n \n \n \n \n \n598\n \n \n \n \n \n \n \n \n \n \n \n549\n \n \n \n \n \n \n \n \n \n \n \n385\n \n \n \n \n \n \n \n \n \n \n \n1,609\n \n \n \n \n \n \n \n \n \n \n \n977\n \n \n \n \n \nMarketing and Advertising\n \n \n \n \n \n \n \n \n \n \n \n418\n \n \n \n \n \n \n \n \n \n \n \n314\n \n \n \n \n \n \n \n \n \n \n \n94\n \n \n \n \n \n \n \n \n \n \n \n1,018\n \n \n \n \n \n \n \n \n \n \n \n645\n \n \n \n \n \nIntangible Asset Amortization\n \n \n \n \n \n \n \n \n \n \n \n48\n \n \n \n \n \n \n \n \n \n \n \n47\n \n \n \n \n \n \n \n \n \n \n \n48\n \n \n \n \n \n \n \n \n \n \n \n143\n \n \n \n \n \n \n \n \n \n \n \n143\n \n \n \n \n \nAmortization of Tax Credit Investments\n \n \n \n \n \n \n \n \n \n \n \n152\n \n \n \n \n \n \n \n \n \n \n \n140\n \n \n \n \n \n \n \n \n \n \n \n145\n \n \n \n \n \n \n \n \n \n \n \n410\n \n \n \n \n \n \n \n \n \n \n \n592\n \n \n \n \n \nDebt Prepayment Fees\n \n \n \n \n \n \n \n \n \n \n \n582\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n582\n \n \n \n \n \n \n \n \n \n \n \n1,430\n \n \n \n \n \nOther Expense\n \n \n \n \n \n \n \n \n \n \n \n799\n \n \n \n \n \n \n \n \n \n \n \n793\n \n \n \n \n \n \n \n \n \n \n \n637\n \n \n \n \n \n \n \n \n \n \n \n2,294\n \n \n \n \n \n \n \n \n \n \n \n2,059\n \n \n \n \n \nTotals\n \n \n \n \n \n \n \n$\n \n \n \n13,236\n \n \n \n \n \n \n \n$\n \n \n \n11,477\n \n \n \n \n \n \n \n$\n \n \n \n9,672\n \n \n \n \n \n \n \n$\n \n \n \n35,636\n \n \n \n \n \n \n \n$\n \n \n \n30,129\n \n \n \n \nThe Company continues to make hires, reaching 219 full-time equivalent employees at September 30, 2021 , compared to 214 employees at June 30, 2021 , and 180 employees at September 30, 2020 .\n \nThe efficiency ratio, a non-GAAP financial measure, was 43.9% for the third quarter of 2021, compared to 42.0% for the second quarter of 2021, and 42.3% for the third quarter of 2020. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 41.5% for the third quarter of 2021, 41.5% for the second quarter of 2021 and 41.7% for the third quarter of 2020. The efficiencies of the Company’s “branch-light” model have positioned the Company well, and going forward, provide more flexibility for the Company to make significant investments in technology as the industry adapts to evolving client behavior.\n \n Income Taxes \n \nThe effective combined federal and state income tax rate for the third quarter of 2021 was 26.0%, an increase from 25.8% for the second quarter of 2021 and an increase from 23.8% for the third quarter of 2020. The effective combined federal and state income tax rate for the nine months ended September 30, 2021 was 25.9%, compared to 23.4% for the nine months ended September 30, 2020 .\n \n Balance Sheet \n \nTotal assets at September 30, 2021 were $3.39 billion , a 7.2% increase from $3.16 billion at June 30, 2021 , and a 22.1% increase from $2.77 billion at September 30, 2020 . The linked-quarter increase in total assets was primarily due to strong organic loan growth and increased on-balance sheet liquidity. The year-over-year increase in total assets was primarily due to increased cash balances, robust organic loan growth, as well as continued purchases of investment securities.\n \nTotal gross loans at September 30, 2021 were $2.71 billion , an increase of $117.8 million , or 4.5%, over total gross loans of $2.59 billion at June 30, 2021 , and an increase of $452.8 million , or 20.0%, over total gross loans of $2.26 billion at September 30, 2020 . The increase in the loan portfolio during the third quarter of 2021 was primarily due to growth in the commercial, multifamily and CRE nonowner occupied segments, offset partially by the payoff of PPP loans. When excluding the PPP loans altogether, gross loans grew $162.7 million during the third quarter of 2021, or 25.9% on an annualized basis. The Company's continued strong loan growth has been driven by the expansion of the talented lending teams, PPP-related client acquisition opportunities, the strong and growing brand of the Bank in the Twin Cities market and the M&A-related market disruption in the Twin Cities resulting in client and banker acquisition opportunities.\n \nThe following table presents the dollar composition of the Company’s loan portfolio, by category, at the dates indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n March 31, 2021 \n \n \n \n \n \n \n \n December 31, 2020 \n \n \n \n \n \n \n \n September 30, 2020 \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial\n \n \n \n \n \n \n \n$\n \n \n \n350,081\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n321,474\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n301,023\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n304,220\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n287,254\n \n \n \n \n \n \n \n \n \nPaycheck Protection Program\n \n \n \n \n \n \n \n \n \n \n \n54,190\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n99,072\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n163,258\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n138,454\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n181,596\n \n \n \n \n \n \n \n \n \nConstruction and Land Development \n \n \n \n \n \n \n \n \n \n \n \n257,167\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n251,573\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n193,372\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n170,217\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n175,882\n \n \n \n \n \n \n \n \n \nReal Estate Mortgage:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1 - 4 Family Mortgage\n \n \n \n \n \n \n \n \n \n \n \n290,535\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n277,943\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n294,964\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n294,479\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n286,089\n \n \n \n \n \n \n \n \n \nMultifamily\n \n \n \n \n \n \n \n \n \n \n \n865,172\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n790,275\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n665,415\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n626,465\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n585,814\n \n \n \n \n \n \n \n \n \nCRE Owner Occupied\n \n \n \n \n \n \n \n \n \n \n \n101,834\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n87,507\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n79,665\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n75,604\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n75,963\n \n \n \n \n \n \n \n \n \nCRE Nonowner Occupied\n \n \n \n \n \n \n \n \n \n \n \n786,271\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n758,101\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n720,396\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n709,300\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n660,058\n \n \n \n \n \n \n \n \n \nTotal Real Estate Mortgage Loans\n \n \n \n \n \n \n \n \n \n \n \n2,043,812\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,913,826\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,760,440\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,705,848\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n1,607,924\n \n \n \n \n \n \n \n \n \nConsumer and Other\n \n \n \n \n \n \n \n \n \n \n \n6,762\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,241\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n8,030\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n7,689\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n6,572\n \n \n \n \n \n \n \n \n \nTotal Loans, Gross\n \n \n \n \n \n \n \n \n \n \n \n2,712,012\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,594,186\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,426,123\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,326,428\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n2,259,228\n \n \n \n \n \n \n \n \n \nAllowance for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n(38,901\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(37,591\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(35,987\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(34,841\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(31,381\n \n \n \n)\n \n \n \n \n \nNet Deferred Loan Fees\n \n \n \n \n \n \n \n \n \n \n \n(10,199\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(11,450\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(11,273\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(9,151\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(10,367\n \n \n \n)\n \n \n \n \n \nTotal Loans, Net\n \n \n \n \n \n \n \n$\n \n \n \n2,662,912\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,545,145\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,378,863\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,282,436\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n2,217,480\n \n \n \n \n \n \n \n \nTotal deposits at September 30, 2021 were $2.85 billion , an increase of $133.3 million , or 4.9%, over total deposits of $2.72 billion at June 30, 2021 , and an increase of $581.1 million , or 25.6%, over total deposits of $2.27 billion at September 30, 2020 . Deposit growth in the third quarter of 2021 was primarily due to an increase in noninterest bearing and interest bearing transaction deposits and savings and money market deposits, offset partially by a decline in time deposits and brokered deposits. Similar to the loan portfolio, the growth in core deposits has been a result of successful new client and banker acquisition initiatives and the strong, growing brand of the Bank in the Twin Cities market.\n \nThe following table presents the dollar composition of the Company’s deposit portfolio, by category, at the dates indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n June 30, 2021 \n \n \n \n \n \n \n \n March 31, 2021 \n \n \n \n \n \n \n \n December 31, 2020 \n \n \n \n \n \n \n \n September 30, 2020 \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNoninterest Bearing Transaction Deposits\n \n \n \n \n \n \n \n$\n \n \n \n846,490\n \n \n \n \n \n \n \n$\n \n \n \n758,023\n \n \n \n \n \n \n \n$\n \n \n \n712,999\n \n \n \n \n \n \n \n$\n \n \n \n671,903\n \n \n \n \n \n \n \n$\n \n \n \n685,773\n \n \n \n \n \nInterest Bearing Transaction Deposits\n \n \n \n \n \n \n \n \n \n \n \n488,785\n \n \n \n \n \n \n \n \n \n \n \n432,123\n \n \n \n \n \n \n \n \n \n \n \n433,344\n \n \n \n \n \n \n \n \n \n \n \n366,290\n \n \n \n \n \n \n \n \n \n \n \n322,253\n \n \n \n \n \nSavings and Money Market Deposits\n \n \n \n \n \n \n \n \n \n \n \n791,861\n \n \n \n \n \n \n \n \n \n \n \n761,485\n \n \n \n \n \n \n \n \n \n \n \n791,583\n \n \n \n \n \n \n \n \n \n \n \n657,617\n \n \n \n \n \n \n \n \n \n \n \n498,397\n \n \n \n \n \nTime Deposits\n \n \n \n \n \n \n \n \n \n \n \n309,824\n \n \n \n \n \n \n \n \n \n \n \n321,857\n \n \n \n \n \n \n \n \n \n \n \n344,581\n \n \n \n \n \n \n \n \n \n \n \n353,543\n \n \n \n \n \n \n \n \n \n \n \n363,897\n \n \n \n \n \nBrokered Deposits\n \n \n \n \n \n \n \n \n \n \n \n417,197\n \n \n \n \n \n \n \n \n \n \n \n447,418\n \n \n \n \n \n \n \n \n \n \n \n356,147\n \n \n \n \n \n \n \n \n \n \n \n452,283\n \n \n \n \n \n \n \n \n \n \n \n402,724\n \n \n \n \n \nTotal Deposits\n \n \n \n \n \n \n \n$\n \n \n \n2,854,157\n \n \n \n \n \n \n \n$\n \n \n \n2,720,906\n \n \n \n \n \n \n \n$\n \n \n \n2,638,654\n \n \n \n \n \n \n \n$\n \n \n \n2,501,636\n \n \n \n \n \n \n \n$\n \n \n \n2,273,044\n \n \n \n \n Capital \n \nOn July 8, 2021 , the Company announced the completion of a private placement of $30.0 million in aggregate principal amount of 3.25% fixed-to-floating rate subordinated debentures due 2031. The Company intends to use the net proceeds of the private placement for general corporate purposes, including support for organic growth plans, support for bank level capital ratios and possible redemption or repurchase of outstanding indebtedness.\n \nIn July of 2021, the Company redeemed $11.3 million of the $25.0 million outstanding of its fixed-to-floating rate subordinated debentures due in 2027. The early redemption of the subordinated debentures was recorded as a loss on the extinguishment of subordinated debt, included in noninterest expense, in the amount of $582,000 , consisting of $532,000 in prepayment penalties and $50,000 in unamortized issuance costs.\n \nOn August 17, 2021 , the Company announced the closing of its underwritten public offering of 2,400,000 depositary shares, each representing a 1/100th interest in a share of the Company’s 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”). On August 20, 2021 , the underwriters of the offering exercised in full their option to purchase 360,000 additional depositary shares to cover over-allotments. As a result, the gross proceeds from the offering totaled $69.0 million . The Company intends to use the net proceeds from the offering for general corporate purposes, including support for organic growth plans, support for bank level capital ratios and possible redemption or repurchase of outstanding indebtedness. On October 26, 2021 , the Company’s Board of Directors declared a quarterly cash dividend on the Series A Preferred Stock, payable on December 1, 2021 to shareholders of record on the Series A Preferred Stock at the close of business on November 15, 2021 .\n \nTotal shareholders’ equity at September 30, 2021 was $367.8 million , an increase of $77.0 million , or 26.5%, over total shareholders’ equity of $290.8 million at June 30, 2021 , and an increase of $102.4 million , or 38.6%, over total shareholders’ equity of $265.4 million at September 30, 2020 . The linked-quarter increase was due to net income retained and the issuance of preferred stock, offset partially by stock repurchases made under the Company’s stock repurchase program. The year-over-year increase was due to net income retained, the issuance of preferred stock and an increase in unrealized gains in the securities and derivatives portfolios, offset partially by stock repurchases made under the Company’s stock repurchase program. The consolidated tier 1 leverage ratio increased to 10.70% at September 30, 2021 , compared to 9.08% at June 30, 2021 , primarily due to the preferred stock issuance.\n \nStrong earnings and capital growth coupled with better asset quality visibility as loan modifications expired, supported management’s decision to resume repurchases under the Company’s stock repurchase program. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program in this fluid economic environment. During the third quarter of 2021, the Company repurchased 126,507 shares of its common stock. Shares were repurchased at a weighted average price of $16.11 for a total of $2.0 million .\n \nTangible book value per share, a non-GAAP financial measure, was $10.62 as of September 30, 2021 , an increase of 3.9% from $10.22 as of June 30, 2021 , and an increase of 16.4% from $9.13 as of September 30, 2020 . Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 8.81% at September 30, 2021 , compared to 9.10% at June 30, 2021 .\n \n Asset Quality \n \nAnnualized net charge-offs as a percent of average loans for the third quarter of 2021 were 0.00%, consistent with 0.00% for the second quarter of 2021 and the third quarter of 2020. At September 30, 2021 , the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $734,000 , or 0.02% of total assets, as compared to $761,000 , or 0.02% of total assets at June 30, 2021 , and $433,000 or 0.02% of total assets at September 30, 2020 .\n \nThe Company has increased oversight and analysis of all segments of the loan portfolio in response to the COVID-19 pandemic, especially in vulnerable industries such as hospitality and restaurants, to proactively monitor evolving credit risk. Loans that have potential weaknesses that warrant a watchlist risk rating at September 30, 2021 totaled $67.4 million , compared to $56.7 million at June 30, 2021 , and $50.9 million at September 30, 2020 . As the COVID-19 pandemic continues to evolve, the length and extent of the economic uncertainty may result in further watchlist or adverse classifications in the loan portfolio. Loans that warranted a substandard risk rating at September 30, 2021 totaled $7.7 million , compared to $7.2 million at June 30, 2021 , and $16.1 million at September 30, 2020 .\n \nThe following table presents a summary of asset quality measurements at the dates indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n June 30 , \n \n \n \n \n March 31 , \n \n \n \n \n December 31 , \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n 2021 \n \n \n \n \n 2021 \n \n \n \n \n 2020 \n \n \n \n \n 2020 \n \n \n \n \n \n Selected Asset Quality Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nLoans 30-89 Days Past Due\n \n \n \n \n \n \n \n$\n \n \n \n18\n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n$\n \n \n \n13\n \n \n \n \n \n \n \n \n$\n \n \n \n458\n \n \n \n \n \n \n \n \n \nLoans 30-89 Days Past Due to Total Loans\n \n \n \n \n \n \n \n \n \n \n \n0.00\n \n \n \n%\n \n \n \n \n \n \n \n \n0.00\n \n \n \n%\n \n \n \n \n \n \n \n \n0.00\n \n \n \n%\n \n \n \n \n \n \n \n \n0.00\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \nNonperforming Loans\n \n \n \n \n \n \n \n$\n \n \n \n734\n \n \n \n \n \n \n \n \n$\n \n \n \n761\n \n \n \n \n \n \n \n \n$\n \n \n \n770\n \n \n \n \n \n \n \n \n$\n \n \n \n775\n \n \n \n \n \n \n \n \n$\n \n \n \n433\n \n \n \n \n \n \n \n \n \nNonperforming Loans to Total Loans\n \n \n \n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \nForeclosed Assets\n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n$\n \n \n \n—\n \n \n \n \n \n \n \n \n \nNonaccrual Loans to Total Loans\n \n \n \n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \nNonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans\n \n \n \n \n \n \n \n \n \n \n \n0.03\n \n \n \n \n \n \n \n \n \n \n \n \n0.03\n \n \n \n \n \n \n \n \n \n \n \n \n0.03\n \n \n \n \n \n \n \n \n \n \n \n \n0.03\n \n \n \n \n \n \n \n \n \n \n \n \n0.02\n \n \n \n \n \n \n \n \n \nNonperforming Assets (1)\n \n \n \n \n \n \n \n$\n \n \n \n734\n \n \n \n \n \n \n \n \n$\n \n \n \n761\n \n \n \n \n \n \n \n \n$\n \n \n \n770\n \n \n \n \n \n \n \n \n$\n \n \n \n775\n \n \n \n \n \n \n \n \n$\n \n \n \n433\n \n \n \n \n \n \n \n \n \nNonperforming Assets to Total Assets (1)\n \n \n \n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \nAllowance for Loan Losses to Total Loans\n \n \n \n \n \n \n \n \n \n \n \n1.43\n \n \n \n \n \n \n \n \n \n \n \n \n1.45\n \n \n \n \n \n \n \n \n \n \n \n \n1.48\n \n \n \n \n \n \n \n \n \n \n \n \n1.50\n \n \n \n \n \n \n \n \n \n \n \n \n1.39\n \n \n \n \n \n \n \n \n \nAllowance for Loan Losses to Total Loans, Excluding PPP Loans\n \n \n \n \n \n \n \n \n \n \n \n1.46\n \n \n \n \n \n \n \n \n \n \n \n \n1.50\n \n \n \n \n \n \n \n \n \n \n \n \n1.59\n \n \n \n \n \n \n \n \n \n \n \n \n1.59\n \n \n \n \n \n \n \n \n \n \n \n \n1.51\n \n \n \n \n \n \n \n \n \nAllowance for Loans Losses to Nonperforming Loans\n \n \n \n \n \n \n \n \n \n \n \n5,299.86\n \n \n \n \n \n \n \n \n \n \n \n \n4,939.68\n \n \n \n \n \n \n \n \n \n \n \n \n4,673.64\n \n \n \n \n \n \n \n \n \n \n \n \n4,495.61\n \n \n \n \n \n \n \n \n \n \n \n \n7,247.34\n \n \n \n \n \n \n \n \n \nNet Loan Charge-Offs (Recoveries) (Annualized) to Average Loans\n \n \n \n \n \n \n \n \n \n \n \n0.00\n \n \n \n \n \n \n \n \n \n \n \n \n0.00\n \n \n \n \n \n \n \n \n \n \n \n \n(0.01\n \n \n \n)\n \n \n \n \n \n \n \n \n0.08\n \n \n \n \n \n \n \n \n \n \n \n \n0.00\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (1) Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due plus foreclosed assets. \n \n \nThe Company developed programs for clients who experienced business and personal disruptions due to the COVID-19 pandemic by providing interest-only modifications, loan payment deferrals, and extended amortization modifications. In accordance with interagency regulatory guidance and the CARES Act, qualifying loans modified in response to the COVID-19 pandemic are not considered troubled debt restructurings. The Company had 13 modified loans totaling $35.4 million outstanding as of September 30, 2021 , representing 1.3% of the total loan portfolio, excluding PPP loans, which is down slightly from 1.4% at June 30, 2021 .\n \nThe following table presents a rollforward of loan modification activity, by modification type, from June 30, 2021 to September 30, 2021 :\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n Interest-Only \n \n \n \n \n \n \n \n Extended Amortization \n \n \n \n \n \n \n \n Total \n \n \n \n \n \nPrincipal Balance - June 30, 2021 \n \n \n \n \n \n \n \n$\n \n \n \n29,159\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4,778\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n33,937\n \n \n \n \n \n \n \n \n \nModification Expired\n \n \n \n \n \n \n \n \n \n \n \n(27,521\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(4,764\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n(32,285\n \n \n \n)\n \n \n \n \n \nAdditional Modification Granted\n \n \n \n \n \n \n \n \n \n \n \n18,313\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n4,764\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n23,077\n \n \n \n \n \n \n \n \n \nNew Modifications\n \n \n \n \n \n \n \n \n \n \n \n10,623\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n10,623\n \n \n \n \n \n \n \n \n \nNet Principal Advances (Payments)\n \n \n \n \n \n \n \n \n \n \n \n23\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(14\n \n \n \n)\n \n \n \n \n \n \n \n \n \n \n \n9\n \n \n \n \n \n \n \n \n \nPrincipal Balance - September 30, 2021 \n \n \n \n \n \n \n \n$\n \n \n \n30,597\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n4,764\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n35,361\n \n \n \n \n \n \n \n \n About the Company \n \n Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota -based financial holding company. Bridgewater's banking subsidiary, Bridgewater Bank , is a premier, full-service Twin Cities bank dedicated to serving the diverse needs of commercial real estate investors, entrepreneurs, business clients and high-net-worth individuals. By pairing a range of deposit, lending and business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $3.4 billion and seven branches as of September 30, 2021 , Bridgewater is considered one of the largest locally led banks in the State of Minnesota , and has received numerous awards for its growth, banking services and esteemed corporate culture.\n \n Use of Non-GAAP financial measures \n \nIn addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (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 earnings release to the comparable GAAP measures are provided in the accompanying tables.\n \n Forward-Looking Statements \n \nThis earnings release 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.\n \nForward-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: the negative effects of the COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, including due to supply chain disruptions, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry; the effectiveness of our 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 changes to federal and state corporate tax rates; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including recent proposals to increase the federal corporate tax rate; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission .\n \nAny forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake 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.\n \n \n \n Bridgewater Bancshares, Inc. and Subsidiaries \n \n \n \n \n \n Consolidated Balance Sheets \n \n \n \n \n \n (dollars in thousands, except share data) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n December 31 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n ASSETS \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCash and Cash Equivalents\n \n \n \n \n \n \n \n$\n \n \n \n189,502\n \n \n \n \n \n \n \n$\n \n \n \n160,675\n \n \n \n \n \n \n \n$\n \n \n \n91,510\n \n \n \n \n \nBank-Owned Certificates of Deposit\n \n \n \n \n \n \n \n \n \n \n \n1,877\n \n \n \n \n \n \n \n \n \n \n \n2,860\n \n \n \n \n \n \n \n \n \n \n \n2,862\n \n \n \n \n \nSecurities Available for Sale, at Fair Value\n \n \n \n \n \n \n \n \n \n \n \n413,149\n \n \n \n \n \n \n \n \n \n \n \n390,629\n \n \n \n \n \n \n \n \n \n \n \n373,955\n \n \n \n \n \nLoans, Net of Allowance for Loan Losses of $38,901 at September 30, 2021 (unaudited), $34,841 at December 31, 2020 and $31,381 at September 30, 2020 (unaudited)\n \n \n \n \n \n \n \n \n \n \n \n2,662,912\n \n \n \n \n \n \n \n \n \n \n \n2,282,436\n \n \n \n \n \n \n \n \n \n \n \n2,217,480\n \n \n \n \n \n Federal Home Loan Bank (FHLB) Stock, at Cost\n \n \n \n \n \n \n \n \n \n \n \n5,442\n \n \n \n \n \n \n \n \n \n \n \n5,027\n \n \n \n \n \n \n \n \n \n \n \n7,817\n \n \n \n \n \nPremises and Equipment, Net\n \n \n \n \n \n \n \n \n \n \n \n49,803\n \n \n \n \n \n \n \n \n \n \n \n50,987\n \n \n \n \n \n \n \n \n \n \n \n48,885\n \n \n \n \n \nAccrued Interest\n \n \n \n \n \n \n \n \n \n \n \n8,550\n \n \n \n \n \n \n \n \n \n \n \n9,172\n \n \n \n \n \n \n \n \n \n \n \n9,647\n \n \n \n \n \n Goodwill \n \n \n \n \n \n \n \n \n \n \n \n2,626\n \n \n \n \n \n \n \n \n \n \n \n2,626\n \n \n \n \n \n \n \n \n \n \n \n2,626\n \n \n \n \n \nOther Intangible Assets, Net\n \n \n \n \n \n \n \n \n \n \n \n527\n \n \n \n \n \n \n \n \n \n \n \n670\n \n \n \n \n \n \n \n \n \n \n \n718\n \n \n \n \n \nOther Assets\n \n \n \n \n \n \n \n \n \n \n \n54,737\n \n \n \n \n \n \n \n \n \n \n \n22,263\n \n \n \n \n \n \n \n \n \n \n \n19,064\n \n \n \n \n \nTotal Assets\n \n \n \n \n \n \n \n$\n \n \n \n3,389,125\n \n \n \n \n \n \n \n$\n \n \n \n2,927,345\n \n \n \n \n \n \n \n$\n \n \n \n2,774,564\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n LIABILITIES AND EQUITY \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n LIABILITIES \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nDeposits:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNoninterest Bearing\n \n \n \n \n \n \n \n$\n \n \n \n846,490\n \n \n \n \n \n \n \n$\n \n \n \n671,903\n \n \n \n \n \n \n \n$\n \n \n \n685,773\n \n \n \n \n \nInterest Bearing\n \n \n \n \n \n \n \n \n \n \n \n2,007,667\n \n \n \n \n \n \n \n \n \n \n \n1,829,733\n \n \n \n \n \n \n \n \n \n \n \n1,587,271\n \n \n \n \n \nTotal Deposits\n \n \n \n \n \n \n \n \n \n \n \n2,854,157\n \n \n \n \n \n \n \n \n \n \n \n2,501,636\n \n \n \n \n \n \n \n \n \n \n \n2,273,044\n \n \n \n \n \nNotes Payable\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n11,000\n \n \n \n \n \n \n \n \n \n \n \n11,500\n \n \n \n \n \nFHLB Advances\n \n \n \n \n \n \n \n \n \n \n \n47,500\n \n \n \n \n \n \n \n \n \n \n \n57,500\n \n \n \n \n \n \n \n \n \n \n \n127,500\n \n \n \n \n \nSubordinated Debentures, Net of Issuance Costs\n \n \n \n \n \n \n \n \n \n \n \n92,153\n \n \n \n \n \n \n \n \n \n \n \n73,739\n \n \n \n \n \n \n \n \n \n \n \n73,665\n \n \n \n \n \nAccrued Interest Payable\n \n \n \n \n \n \n \n \n \n \n \n1,656\n \n \n \n \n \n \n \n \n \n \n \n1,615\n \n \n \n \n \n \n \n \n \n \n \n2,082\n \n \n \n \n \nOther Liabilities\n \n \n \n \n \n \n \n \n \n \n \n25,856\n \n \n \n \n \n \n \n \n \n \n \n16,450\n \n \n \n \n \n \n \n \n \n \n \n21,341\n \n \n \n \n \nTotal Liabilities\n \n \n \n \n \n \n \n \n \n \n \n3,021,322\n \n \n \n \n \n \n \n \n \n \n \n2,661,940\n \n \n \n \n \n \n \n \n \n \n \n2,509,132\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n SHAREHOLDERS' EQUITY \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPreferred Stock- $0.01 par value; Authorized 10,000,000\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nPreferred Stock - Issued and Outstanding 2,760,000 Series A shares ( $25 liquidation preference) at September 30, 2021 (unaudited), -0- at December 31, 2020 and -0- at September 30, 2020 (unaudited)\n \n \n \n \n \n \n \n \n \n \n \n66,515\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \nCommon Stock- $0.01 par value; Authorized 75,000,000\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommon Stock - Issued and Outstanding 28,066,822 at September 30, 2021 (unaudited), 28,143,493 at December 31, 2020 and 28,710,775 at September 30, 2020 (unaudited)\n \n \n \n \n \n \n \n \n \n \n \n281\n \n \n \n \n \n \n \n \n \n \n \n281\n \n \n \n \n \n \n \n \n \n \n \n287\n \n \n \n \n \n Additional Paid-In Capital \n \n \n \n \n \n \n \n \n \n \n \n103,471\n \n \n \n \n \n \n \n \n \n \n \n103,714\n \n \n \n \n \n \n \n \n \n \n \n110,010\n \n \n \n \n \nRetained Earnings\n \n \n \n \n \n \n \n \n \n \n \n188,004\n \n \n \n \n \n \n \n \n \n \n \n154,831\n \n \n \n \n \n \n \n \n \n \n \n149,852\n \n \n \n \n \nAccumulated Other Comprehensive Income\n \n \n \n \n \n \n \n \n \n \n \n9,532\n \n \n \n \n \n \n \n \n \n \n \n6,579\n \n \n \n \n \n \n \n \n \n \n \n5,283\n \n \n \n \n \nTotal Shareholders' Equity\n \n \n \n \n \n \n \n \n \n \n \n367,803\n \n \n \n \n \n \n \n \n \n \n \n265,405\n \n \n \n \n \n \n \n \n \n \n \n265,432\n \n \n \n \n \nTotal Liabilities and Equity\n \n \n \n \n \n \n \n$\n \n \n \n3,389,125\n \n \n \n \n \n \n \n$\n \n \n \n2,927,345\n \n \n \n \n \n \n \n$\n \n \n \n2,774,564\n \n \n \n \n \n \n \n \n Bridgewater Bancshares, Inc. and Subsidiaries \n \n \n \n \n \n Consolidated Statements of Income \n \n \n \n \n \n (dollars in thousands, except per share data) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2020 \n \n \n \n \n \n \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n \n \n (Unaudited) \n \n \n \n \n \n INTEREST INCOME \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nLoans, Including Fees\n \n \n \n \n \n \n \n$\n \n \n \n31,049\n \n \n \n \n \n \n \n$\n \n \n \n28,748\n \n \n \n \n \n \n \n$\n \n \n \n26,224\n \n \n \n \n \n \n \n$\n \n \n \n87,705\n \n \n \n \n \n \n \n$\n \n \n \n77,250\n \n \n \n \n \n Investment Securities \n \n \n \n \n \n \n \n \n \n \n \n2,333\n \n \n \n \n \n \n \n \n \n \n \n2,312\n \n \n \n \n \n \n \n \n \n \n \n2,100\n \n \n \n \n \n \n \n \n \n \n \n7,065\n \n \n \n \n \n \n \n \n \n \n \n6,387\n \n \n \n \n \nOther\n \n \n \n \n \n \n \n \n \n \n \n135\n \n \n \n \n \n \n \n \n \n \n \n87\n \n \n \n \n \n \n \n \n \n \n \n169\n \n \n \n \n \n \n \n \n \n \n \n334\n \n \n \n \n \n \n \n \n \n \n \n490\n \n \n \n \n \nTotal Interest Income\n \n \n \n \n \n \n \n \n \n \n \n33,517\n \n \n \n \n \n \n \n \n \n \n \n31,147\n \n \n \n \n \n \n \n \n \n \n \n28,493\n \n \n \n \n \n \n \n \n \n \n \n95,104\n \n \n \n \n \n \n \n \n \n \n \n84,127\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n INTEREST EXPENSE \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nDeposits\n \n \n \n \n \n \n \n \n \n \n \n3,417\n \n \n \n \n \n \n \n \n \n \n \n3,513\n \n \n \n \n \n \n \n \n \n \n \n4,840\n \n \n \n \n \n \n \n \n \n \n \n10,601\n \n \n \n \n \n \n \n \n \n \n \n15,734\n \n \n \n \n \nNotes Payable\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n108\n \n \n \n \n \n \n \n \n \n \n \n61\n \n \n \n \n \n \n \n \n \n \n \n334\n \n \n \n \n \nFHLB Advances\n \n \n \n \n \n \n \n \n \n \n \n213\n \n \n \n \n \n \n \n \n \n \n \n228\n \n \n \n \n \n \n \n \n \n \n \n748\n \n \n \n \n \n \n \n \n \n \n \n669\n \n \n \n \n \n \n \n \n \n \n \n2,839\n \n \n \n \n \nSubordinated Debentures\n \n \n \n \n \n \n \n \n \n \n \n1,214\n \n \n \n \n \n \n \n \n \n \n \n1,112\n \n \n \n \n \n \n \n \n \n \n \n1,118\n \n \n \n \n \n \n \n \n \n \n \n3,411\n \n \n \n \n \n \n \n \n \n \n \n1,990\n \n \n \n \n \nFederal Funds Purchased\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \n \n \n \n \n \n \n107\n \n \n \n \n \nTotal Interest Expense\n \n \n \n \n \n \n \n \n \n \n \n4,844\n \n \n \n \n \n \n \n \n \n \n \n4,859\n \n \n \n \n \n \n \n \n \n \n \n6,814\n \n \n \n \n \n \n \n \n \n \n \n14,748\n \n \n \n \n \n \n \n \n \n \n \n21,004\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n NET INTEREST INCOME \n \n \n \n \n \n \n \n \n \n \n \n28,673\n \n \n \n \n \n \n \n \n \n \n \n26,288\n \n \n \n \n \n \n \n \n \n \n \n21,679\n \n \n \n \n \n \n \n \n \n \n \n80,356\n \n \n \n \n \n \n \n \n \n \n \n63,123\n \n \n \n \n \nProvision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n1,600\n \n \n \n \n \n \n \n \n \n \n \n3,750\n \n \n \n \n \n \n \n \n \n \n \n4,000\n \n \n \n \n \n \n \n \n \n \n \n8,850\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n NET INTEREST INCOME AFTER \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n PROVISION FOR LOAN LOSSES \n \n \n \n \n \n \n \n \n \n \n \n27,373\n \n \n \n \n \n \n \n \n \n \n \n24,688\n \n \n \n \n \n \n \n \n \n \n \n17,929\n \n \n \n \n \n \n \n \n \n \n \n76,356\n \n \n \n \n \n \n \n \n \n \n \n54,273\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n NONINTEREST INCOME \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCustomer Service Fees\n \n \n \n \n \n \n \n \n \n \n \n268\n \n \n \n \n \n \n \n \n...

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