Bridgewater Bancshares, Inc. Announces Record Third Quarter 2022 Net Income of $14.5 Million, $0.47 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 record net income of $14.5 million for the third quarter of 2022, a 12.7% increase over net income of $12.9 million for the second quarter of 2022, and a 26.1% increase over net income of $11.5 million for the third quarter of 2021. Earnings per diluted common share for the third quarter of 2022 were $0.47 , a 14.6% increase compared to $0.41 per diluted common share for the second quarter of 2022, and a 19.4% increase compared to $0.40 per diluted common share for the same period in 2021.\n \n“Bridgewater’s ability to produce consistent financial results remained evident in the third quarter with record pre-provision net revenue and continued growth of tangible book value per share,” said Chairman, Chief Executive Officer, and President, Jerry Baack . “Our impressive profitability was driven by robust loan growth, well controlled expenses and the hard work of our team members to expand and deepen our client relationships.\n \n“While the current economic environment creates an elevated level of uncertainty, we remain confident in our business model. As the rise in interest rates drives deposit costs higher and creates near-term net interest margin pressure, we believe our proven ability to grow the balance sheet can support our continued focus on overall revenue growth. Couple this with our superb credit quality and an efficiency ratio among the best in the industry and we have a story that is poised to continue driving sustained shareholder value.”\n \n Third Quarter 2022 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 Diluted \n \n \n \n \n \n \n \n \n \n \n \n Adjusted \n \n \n \n \n \n \n \n \n \n \n \n Nonperforming \n \n \n \n \n \n \n \n \n \n ROA \n \n \n \n \n \n \n \n \n \n \n \n PPNR ROA (1) \n \n \n \n \n \n \n \n \n \n \n \n ROE \n \n \n \n \n \n \n \n \n \n \n \n earnings per share \n \n \n \n \n \n \n \n \n \n \n \n efficiency ratio (1) \n \n \n \n \n \n \n \n \n \n \n \n assets to total assets \n \n \n \n \n \n \n \n \n \n 1.46 \n \n \n \n % \n \n \n \n \n \n \n \n 2.15 \n \n \n \n % \n \n \n \n \n \n \n \n 14.99 \n \n \n \n % \n \n \n \n \n \n \n \n $ \n \n \n \n 0.47 \n \n \n \n \n \n \n \n \n \n \n \n 39.4 \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 \n \n(1)\n \n \n \nRepresents a non-GAAP financial measure. See \"Non-GAAP Financial Measures\" for further details.\n \n \n \n \n Third Quarter 2022 Highlights \n \n \nDiluted earnings per common share were $0.47 , compared to $0.41 per common share for the second quarter of 2022.\n \n \nTangible book value per share, a non-GAAP financial measure, increased $0.30 , or 10.8% annualized, to $11.33 , compared to $11.03 at June 30, 2022 , despite the market value depreciation of the securities portfolio due to rapidly rising interest rates, which continues to negatively impact accumulated other comprehensive income.\n \n \nRecord pre-provision net revenue (PPNR), a non-GAAP financial measure, of $21.4 million , compared to $20.4 million for the second quarter of 2022, an increase of $1.0 million , or 4.9%. PPNR ROA, a non-GAAP financial measure, was 2.15%, compared to 2.19% for the second quarter of 2022.\n \n \nAnnualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the third quarter of 2022 were 1.46% and 14.99%, compared to ROA and ROE of 1.38% and 13.55%, respectively, for the second quarter of 2022. Annualized return on average tangible common equity, a non-GAAP financial measure, was 17.03% for the third quarter of 2022, compared to 15.26% for the second quarter of 2022.\n \n \nGross loans increased $154.2 million , or 19.0% annualized, from the end of the second quarter of 2022.\n \n \nDeposits increased $103.1 million , or 12.8% annualized, from the end of the second quarter of 2022.\n \n \nNet interest margin (on a fully tax-equivalent basis) was 3.53%, compared to 3.58% in the second quarter of 2022. 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, was 3.38%, compared to 3.34% in the second quarter of 2022.\n \n \nAdjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 39.4%, compared to 40.0% for the second quarter of 2022.\n \n \nA loan loss provision of $1.5 million was recorded to support strong organic loan growth. The allowance for loan losses to total loans was 1.38% at September 30, 2022 , compared to 1.39% at June 30, 2022 .\n \n \nAnnualized net loan charge-offs (recoveries) as a percentage of average loans were (0.03)% for the third quarter of 2022, compared to 0.00% for the second quarter of 2022.\n \n \n Year-Over-Year Highlights \n \n \nNet income was $14.5 million for the third quarter of 2022, compared to $11.5 million for the third quarter of 2021, an increase of $3.0 million , or 26.1%.\n \n \nDiluted earnings per common share for the third quarter of 2022 were $0.47 , compared to $0.40 for the third quarter of 2021, an increase of 19.4%.\n \n \nNet interest margin (on a fully tax-equivalent basis) was 3.53% for the third quarter of 2022 compared to 3.54% for the third quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, was 3.38% for the third quarter of 2022, compared to 3.22% for the third quarter of 2021.\n \n \nGross loans increased $668.1 million at September 30, 2022 , or 24.6%, compared to September 30, 2021 .\n \n \nDeposits increased $450.9 million at September 30, 2022 , or 15.8%, compared to September 30, 2021 .\n \n \n \n \n \n \n \n Key Financial Measures \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n Per Common Share Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nBasic Earnings Per Share\n \n \n \n \n \n \n \n$\n \n \n \n0.49\n \n \n \n \n \n \n \n$\n \n \n \n0.43\n \n \n \n \n \n \n \n$\n \n \n \n0.41\n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n1.32\n \n \n \n \n \n \n \n$\n \n \n \n1.18\n \n \n \n \n \n \n \n \n \nDiluted Earnings Per Share\n \n \n \n \n \n \n \n \n \n \n \n0.47\n \n \n \n \n \n \n \n \n \n \n \n0.41\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 \n \n \n \n1.27\n \n \n \n \n \n \n \n \n \n \n \n1.14\n \n \n \n \n \n \n \n \n \nBook Value Per Share\n \n \n \n \n \n \n \n \n \n \n \n11.44\n \n \n \n \n \n \n \n \n \n \n \n11.14\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 \n \n \n \n11.44\n \n \n \n \n \n \n \n \n \n \n \n10.73\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 \n11.33\n \n \n \n \n \n \n \n \n \n \n \n11.03\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 \n \n \n \n11.33\n \n \n \n \n \n \n \n \n \n \n \n10.62\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 \n27,520,117\n \n \n \n \n \n \n \n \n \n \n \n27,839,260\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 \n \n \n \n27,825,517\n \n \n \n \n \n \n \n \n \n \n \n28,035,246\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 \n28,592,854\n \n \n \n \n \n \n \n \n \n \n \n28,803,842\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 \n \n \n \n28,882,701\n \n \n \n \n \n \n \n \n \n \n \n29,077,850\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 \n27,587,978\n \n \n \n \n \n \n \n \n \n \n \n27,677,372\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 \n \n \n \n27,587,978\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n1.46\n \n \n \n%\n \n \n \n \n \n \n \n1.38\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 \n \n \n \n1.42\n \n \n \n%\n \n \n \n \n \n \n \n1.42\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 \n2.15\n \n \n \n \n \n \n \n \n \n \n \n2.19\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 \n \n \n \n2.15\n \n \n \n \n \n \n \n \n \n \n \n2.10\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 \n14.99\n \n \n \n \n \n \n \n \n \n \n \n13.55\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 \n \n \n \n13.85\n \n \n \n \n \n \n \n \n \n \n \n14.95\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 \n17.03\n \n \n \n \n \n \n \n \n \n \n \n15.26\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 \n \n \n \n15.63\n \n \n \n \n \n \n \n \n \n \n \n15.69\n \n \n \n \n \n \n \n \n \nYield on Interest Earning Assets(2)\n \n \n \n \n \n \n \n \n \n \n \n4.37\n \n \n \n \n \n \n \n \n \n \n \n4.16\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 \n \n \n \n4.23\n \n \n \n \n \n \n \n \n \n \n \n4.20\n \n \n \n \n \n \n \n \n \nYield on Total Loans, Gross(2)\n \n \n \n \n \n \n \n \n \n \n \n4.59\n \n \n \n \n \n \n \n \n \n \n \n4.45\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 \n \n \n \n4.50\n \n \n \n \n \n \n \n \n \n \n \n4.65\n \n \n \n \n \n \n \n \n \nCost of Total Deposits\n \n \n \n \n \n \n \n \n \n \n \n0.73\n \n \n \n \n \n \n \n \n \n \n \n0.46\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 \n \n \n \n0.55\n \n \n \n \n \n \n \n \n \n \n \n0.53\n \n \n \n \n \n \n \n \n \nCost of Funds\n \n \n \n \n \n \n \n \n \n \n \n0.93\n \n \n \n \n \n \n \n \n \n \n \n0.63\n \n \n \n \n \n \n \n \n \n \n \n0.65\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n0.73\n \n \n \n \n \n \n \n \n \n \n \n0.70\n \n \n \n \n \n \n \n \n \nNet Interest Margin (2)\n \n \n \n \n \n \n \n \n \n \n \n3.53\n \n \n \n \n \n \n \n \n \n \n \n3.58\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 \n3.57\n \n \n \n \n \n \n \n \n \n \n \n3.55\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 \n3.38\n \n \n \n \n \n \n \n \n \n \n \n3.34\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 \n \n \n \n3.36\n \n \n \n \n \n \n \n \n \n \n \n3.29\n \n \n \n \n \n \n \n \n \nEfficiency Ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n39.8\n \n \n \n \n \n \n \n \n \n \n \n40.2\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 \n \n \n \n40.7\n \n \n \n \n \n \n \n \n \n \n \n42.4\n \n \n \n \n \n \n \n \n \nAdjusted Efficiency Ratio (1)\n \n \n \n \n \n \n \n \n \n \n \n39.4\n \n \n \n \n \n \n \n \n \n \n \n40.0\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 \n \n \n \n40.4\n \n \n \n \n \n \n \n \n \n \n \n41.3\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 \n1.42\n \n \n \n \n \n \n \n \n \n \n \n1.47\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 \n \n \n \n1.48\n \n \n \n \n \n \n \n \n \n \n \n1.53\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 \n1.41\n \n \n \n \n \n \n \n \n \n \n \n1.47\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 \n \n \n \n1.47\n \n \n \n \n \n \n \n \n \n \n \n1.49\n \n \n \n \n \n \n \n \n \nLoan to Deposit Ratio\n \n \n \n \n \n \n \n \n \n \n \n102.3\n \n \n \n \n \n \n \n \n \n \n \n100.7\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 \n \n \n \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 \n83.0\n \n \n \n \n \n \n \n \n \n \n \n82.9\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 \n \n \n \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 \n7.57\n \n \n \n \n \n \n \n \n \n \n \n7.87\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n11.24\n \n \n \n%\n \n \n \n \n \n \n \n11.43\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 \n \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 Equity Tier 1 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n11.46\n \n \n \n \n \n \n \n \n \n \n \n11.53\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 \n \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 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n11.46\n \n \n \n \n \n \n \n \n \n \n \n11.53\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 \n \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 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n12.67\n \n \n \n \n \n \n \n \n \n \n \n12.74\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n9.98\n \n \n \n%\n \n \n \n \n \n \n \n10.33\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 \n \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 Equity Tier 1 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n8.47\n \n \n \n \n \n \n \n \n \n \n \n8.50\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 \n \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 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n10.19\n \n \n \n \n \n \n \n \n \n \n \n10.29\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 \n \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 Risk-based Capital Ratio\n \n \n \n \n \n \n \n \n \n \n \n13.78\n \n \n \n \n \n \n \n \n \n \n \n13.98\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 \n \n \n \n \n \n \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)\n \n \n \nRepresents a non-GAAP financial measure. See \"Non-GAAP Financial Measures\" for further details.\n \n \n \n \n \n(2)\n \n \n \nAmounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.\n \n \n \n \n \n(3)\n \n \n \nCore deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000 .\n \n \n \n \n \n(4)\n \n \n \nPreliminary data. Current period subject to change prior to filings with applicable regulatory agencies.\n \n \n \n \n \n \n \n \n \n Selected Financial Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n March 31 , \n \n \n \n \n \n \n \n December 31 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n Selected Balance Sheet Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nTotal Assets\n \n \n \n \n \n \n \n$\n \n \n \n4,128,987\n \n \n \n \n \n \n \n$\n \n \n \n3,883,264\n \n \n \n \n \n \n \n$\n \n \n \n3,607,920\n \n \n \n \n \n \n \n$\n \n \n \n3,477,659\n \n \n \n \n \n \n \n$\n \n \n \n3,389,125\n \n \n \n \n \nTotal Loans, Gross\n \n \n \n \n \n \n \n \n \n \n \n3,380,082\n \n \n \n \n \n \n \n \n \n \n \n3,225,885\n \n \n \n \n \n \n \n \n \n \n \n2,987,967\n \n \n \n \n \n \n \n \n \n \n \n2,819,472\n \n \n \n \n \n \n \n \n \n \n \n2,712,012\n \n \n \n \n \nAllowance for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n46,491\n \n \n \n \n \n \n \n \n \n \n \n44,711\n \n \n \n \n \n \n \n \n \n \n \n41,692\n \n \n \n \n \n \n \n \n \n \n \n40,020\n \n \n \n \n \n \n \n \n \n \n \n38,901\n \n \n \n \n \n Goodwill and Other Intangibles\n \n \n \n \n \n \n \n \n \n \n \n2,962\n \n \n \n \n \n \n \n \n \n \n \n3,009\n \n \n \n \n \n \n \n \n \n \n \n3,057\n \n \n \n \n \n \n \n \n \n \n \n3,105\n \n \n \n \n \n \n \n \n \n \n \n3,153\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n3,305,074\n \n \n \n \n \n \n \n \n \n \n \n3,201,953\n \n \n \n \n \n \n \n \n \n \n \n3,035,611\n \n \n \n \n \n \n \n \n \n \n \n2,946,237\n \n \n \n \n \n \n \n \n \n \n \n2,854,157\n \n \n \n \n \nTangible Common Equity (1)\n \n \n \n \n \n \n \n \n \n \n \n312,531\n \n \n \n \n \n \n \n \n \n \n \n305,360\n \n \n \n \n \n \n \n \n \n \n \n309,870\n \n \n \n \n \n \n \n \n \n \n \n309,653\n \n \n \n \n \n \n \n \n \n \n \n298,135\n \n \n \n \n \nTotal Shareholders' Equity\n \n \n \n \n \n \n \n \n \n \n \n382,007\n \n \n \n \n \n \n \n \n \n \n \n374,883\n \n \n \n \n \n \n \n \n \n \n \n379,441\n \n \n \n \n \n \n \n \n \n \n \n379,272\n \n \n \n \n \n \n \n \n \n \n \n367,803\n \n \n \n \n \nAverage Total Assets - Quarter-to-Date\n \n \n \n \n \n \n \n \n \n \n \n3,948,201\n \n \n \n \n \n \n \n \n \n \n \n3,743,575\n \n \n \n \n \n \n \n \n \n \n \n3,513,798\n \n \n \n \n \n \n \n \n \n \n \n3,403,270\n \n \n \n \n \n \n \n \n \n \n \n3,332,301\n \n \n \n \n \nAverage Shareholders' Equity - Quarter-to-Date\n \n \n \n \n \n \n \n \n \n \n \n384,020\n \n \n \n \n \n \n \n \n \n \n \n381,448\n \n \n \n \n \n \n \n \n \n \n \n383,024\n \n \n \n \n \n \n \n \n \n \n \n374,035\n \n \n \n \n \n \n \n \n \n \n \n330,604\n \n \n \n \n \n ________________________________ \n \n \n \n(1)\n \n \n \nRepresents 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 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \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$\n \n \n \n42,359\n \n \n \n \n \n \n \n$\n \n \n \n37,782\n \n \n \n \n \n \n \n$\n \n \n \n33,517\n \n \n \n \n \n \n \n$\n \n \n \n114,835\n \n \n \n \n \n \n \n$\n \n \n \n95,104\n \n \n \n \n \nInterest Expense\n \n \n \n \n \n \n \n \n \n \n \n8,264\n \n \n \n \n \n \n \n \n \n \n \n5,252\n \n \n \n \n \n \n \n \n \n \n \n4,844\n \n \n \n \n \n \n \n \n \n \n \n18,030\n \n \n \n \n \n \n \n \n \n \n \n14,748\n \n \n \n \n \nNet Interest Income\n \n \n \n \n \n \n \n \n \n \n \n34,095\n \n \n \n \n \n \n \n \n \n \n \n32,530\n \n \n \n \n \n \n \n \n \n \n \n28,673\n \n \n \n \n \n \n \n \n \n \n \n96,805\n \n \n \n \n \n \n \n \n \n \n \n80,356\n \n \n \n \n \nProvision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n1,500\n \n \n \n \n \n \n \n \n \n \n \n3,025\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n6,200\n \n \n \n \n \n \n \n \n \n \n \n4,000\n \n \n \n \n \nNet Interest Income after Provision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n32,595\n \n \n \n \n \n \n \n \n \n \n \n29,505\n \n \n \n \n \n \n \n \n \n \n \n27,373\n \n \n \n \n \n \n \n \n \n \n \n90,605\n \n \n \n \n \n \n \n \n \n \n \n76,356\n \n \n \n \n \nNoninterest Income\n \n \n \n \n \n \n \n \n \n \n \n1,387\n \n \n \n \n \n \n \n \n \n \n \n1,650\n \n \n \n \n \n \n \n \n \n \n \n1,410\n \n \n \n \n \n \n \n \n \n \n \n4,594\n \n \n \n \n \n \n \n \n \n \n \n4,021\n \n \n \n \n \nNoninterest Expense\n \n \n \n \n \n \n \n \n \n \n \n14,157\n \n \n \n \n \n \n \n \n \n \n \n13,752\n \n \n \n \n \n \n \n \n \n \n \n13,236\n \n \n \n \n \n \n \n \n \n \n \n41,417\n \n \n \n \n \n \n \n \n \n \n \n35,636\n \n \n \n \n \nIncome Before Income Taxes\n \n \n \n \n \n \n \n \n \n \n \n19,825\n \n \n \n \n \n \n \n \n \n \n \n17,403\n \n \n \n \n \n \n \n \n \n \n \n15,547\n \n \n \n \n \n \n \n \n \n \n \n53,782\n \n \n \n \n \n \n \n \n \n \n \n44,741\n \n \n \n \n \nProvision for Income Taxes\n \n \n \n \n \n \n \n \n \n \n \n5,312\n \n \n \n \n \n \n \n \n \n \n \n4,521\n \n \n \n \n \n \n \n \n \n \n \n4,038\n \n \n \n \n \n \n \n \n \n \n \n14,125\n \n \n \n \n \n \n \n \n \n \n \n11,568\n \n \n \n \n \nNet Income\n \n \n \n \n \n \n \n \n \n \n \n14,513\n \n \n \n \n \n \n \n \n \n \n \n12,882\n \n \n \n \n \n \n \n \n \n \n \n11,509\n \n \n \n \n \n \n \n \n \n \n \n39,657\n \n \n \n \n \n \n \n \n \n \n \n33,173\n \n \n \n \n \nPreferred Stock Dividends\n \n \n \n \n \n \n \n \n \n \n \n(1,013)\n \n \n \n \n \n \n \n \n \n \n \n(1,014)\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n(3,040)\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \nNet Income Available to Common Shareholders\n \n \n \n \n \n \n \n$\n \n \n \n13,500\n \n \n \n \n \n \n \n$\n \n \n \n11,868\n \n \n \n \n \n \n \n$\n \n \n \n11,509\n \n \n \n \n \n \n \n$\n \n \n \n36,617\n \n \n \n \n \n \n \n$\n \n \n \n33,173\n \n \n \n \n Income Statement \n \n Net Interest Income \n \nNet interest income was $34.1 million for the third quarter of 2022, an increase of $1.6 million , or 4.8%, from $32.5 million in the second quarter of 2022, and an increase of $5.4 million , or 18.9%, from $28.7 million in the third quarter of 2021. The linked-quarter increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and loans, offset partially by higher rates paid on deposits. The year-over-year increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and core loans, offset partially by higher rates paid on deposits and lower PPP fee recognition. Average interest earning assets were $3.87 billion for the third quarter of 2022, an increase of $200.1 million , or 5.5%, from $3.67 billion for the second quarter of 2022, and an increase of $637.6 million , or 19.7%, from $3.23 billion for the third quarter of 2021. The linked-quarter and year-over-year increases in average interest earning assets were primarily due to strong organic growth in the loan portfolio and continued purchases of investment securities, offset partially by the forgiveness of PPP loans and the reduction of cash balances.\n \nNet interest margin (on a fully tax-equivalent basis) for the third quarter of 2022 was 3.53%, a five basis point decrease from 3.58% in the second quarter of 2022, and a modest one basis point decline from 3.54% in the third quarter of 2021. 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 2022 was 3.38%, a four basis point increase from 3.34% in the second quarter of 2022, and a 16 basis point increase from 3.22% in the third quarter of 2021. The Company remains focused on managing the impact of continued interest rate hikes and the evolving shape of the yield curve during this unique interest rate environment.\n \nAs the PPP loan portfolio has almost fully paid off, the recognition of fees associated with the originations has decreased significantly, which impacts comparability between periods. The Company recognized $90,000 of PPP origination fees during the third quarter of 2022, compared to $244,000 during the second quarter of 2022, and $1.6 million during the third quarter of 2021. Remaining PPP origination fees to be recognized as of September 30, 2022 were $45,000 .\n \nInterest income was $42.4 million for the third quarter of 2022, an increase of $4.6 million , or 12.1%, from $37.8 million in the second quarter of 2022, and an increase of $8.8 million , or 26.4%, from $33.5 million in the third quarter of 2021. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.37% in the third quarter of 2022, compared to 4.16% in the second quarter of 2022, and 4.14% in the third quarter of 2021. The linked-quarter expansion in the yield on interest earning assets was primarily due to the rapid increase in market interest rates resulting in new loan originations and investment purchases at yields accretive to the existing portfolios. The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment, offset partially by the lower recognition of PPP origination fees.\n \nLoan interest income and loan fees remain the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield, excluding PPP loans, increased to 4.59% in the third quarter of 2022, which was 16 basis points higher than 4.43% in the second quarter of 2022, and eight basis points higher than 4.51% in the third quarter of 2021. While loan fees have maintained a relatively stable contribution to the aggregate loan yield, the current period was impacted by fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the decrease in fee recognition, the Company is encouraged that the core loan yield continues to rise as new loan originations and the existing portfolio reprice in the higher rate environment.\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 \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 \n \n \n \n September 30, 2022 \n \n \n \n \n \n \n \n \n \n \n \n June 30, 2022 \n \n \n \n \n \n \n \n \n \n \n \n March 31, 2022 \n \n \n \n \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n \n \nInterest\n \n \n \n \n \n \n \n4.42\n \n \n \n%\n \n \n \n \n \n \n \n4.17\n \n \n \n%\n \n \n \n \n \n \n \n4.15\n \n \n \n%\n \n \n \n \n \n \n \n4.20\n \n \n \n%\n \n \n \n \n \n \n \n4.28\n \n \n \n%\n \n \n \n \n \nFees\n \n \n \n \n \n \n \n0.17\n \n \n \n \n \n \n \n \n \n \n \n0.26\n \n \n \n \n \n \n \n \n \n \n \n0.25\n \n \n \n \n \n \n \n \n \n \n \n0.21\n \n \n \n \n \n \n \n \n \n \n \n0.23\n \n \n \n \n \n \n \n \n \nYield on Loans, Excluding PPP Loans\n \n \n \n \n \n \n \n4.59\n \n \n \n%\n \n \n \n \n \n \n \n4.43\n \n \n \n%\n \n \n \n \n \n \n \n4.40\n \n \n \n%\n \n \n \n \n \n \n \n4.41\n \n \n \n%\n \n \n \n \n \n \n \n4.51\n \n \n \n%\n \n \n \n \nInterest expense was $8.3 million for the third quarter of 2022, an increase of $3.0 million , or 57.3%, from $5.3 million in the second quarter of 2022, and an increase of $3.4 million , or 70.6%, from $4.8 million in the third quarter of 2021. The cost of interest bearing liabilities increased 44 basis points on a linked-quarter basis from 0.86% in the second quarter of 2022 to 1.30% in the third quarter of 2022, primarily due to the rapid increase in market interest rates that occurred during the quarter. On a year-over-year basis, the cost of interest bearing liabilities increased 42 basis points from 0.88% in the third quarter of 2021 to 1.30% in the third quarter of 2022, primarily due to higher rates paid on deposits and the increased utilization of federal funds purchased and FHLB advances in the rising interest rate environment.\n \nInterest expense on deposits was $6.0 million for the third quarter of 2022, an increase of $2.5 million , or 73.1%, from $3.5 million in the second quarter of 2022, and an increase of $2.6 million , or 75.1%, from $3.4 million in the third quarter of 2021. The cost of total deposits increased 27 basis points on a linked-quarter basis from 0.46% in the second quarter of 2022, to 0.73% in the third quarter of 2022, primarily due to the rapid increase in rates in 2022. On a year-over-year basis, the cost of total deposits increased 25 basis points from 0.48% in the third quarter of 2021, to 0.73% in the third quarter of 2022, primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.\n \nA summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended September 30, 2022 , June 30, 2022 , and September 30, 2021 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 \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n September 30, 2022 \n \n \n \n \n \n \n \n \n June 30, 2022 \n \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \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 \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 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 \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 \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 \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 \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 \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \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 \n57,613\n \n \n \n \n \n \n \n$\n \n \n \n165\n \n \n \n \n \n \n \n1.13\n \n \n \n%\n \n \n \n \n$\n \n \n \n61,046\n \n \n \n \n \n \n \n$\n \n \n \n40\n \n \n \n \n \n \n \n0.26\n \n \n \n%\n \n \n \n \n$\n \n \n \n187,405\n \n \n \n \n \n \n \n$\n \n \n \n67\n \n \n \n \n \n \n \n0.14\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 \n \n \n \n \n \n \n \n \n \n \n \n \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 \n461,255\n \n \n \n \n \n \n \n \n \n \n \n3,741\n \n \n \n \n \n \n \n3.22\n \n \n \n \n \n \n \n \n \n \n \n \n417,142\n \n \n \n \n \n \n \n \n \n \n \n2,696\n \n \n \n \n \n \n \n2.59\n \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 \n2.21\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 \n75,801\n \n \n \n \n \n \n \n \n \n \n \n799\n \n \n \n \n \n \n \n4.18\n \n \n \n \n \n \n \n \n \n \n \n \n74,261\n \n \n \n \n \n \n \n \n \n \n \n795\n \n \n \n \n \n \n \n4.30\n \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 \n4.07\n \n \n \n \n \n \n \n \n \n Total Investment Securities \n \n \n \n \n \n \n \n \n \n \n \n537,056\n \n \n \n \n \n \n \n \n \n \n \n4,540\n \n \n \n \n \n \n \n3.35\n \n \n \n \n \n \n \n \n \n \n \n \n491,403\n \n \n \n \n \n \n \n \n \n \n \n3,491\n \n \n \n \n \n \n \n2.85\n \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 \n2.56\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 \n2,424\n \n \n \n \n \n \n \n \n \n \n \n96\n \n \n \n \n \n \n \n15.75\n \n \n \n \n \n \n \n \n \n \n \n \n8,335\n \n \n \n \n \n \n \n \n \n \n \n263\n \n \n \n \n \n \n \n12.67\n \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 \n9.15\n \n \n \n \n \n \n \n \n \nLoans (1)(2)\n \n \n \n \n \n \n \n \n \n \n \n3,263,390\n \n \n \n \n \n \n \n \n \n \n \n37,724\n \n \n \n \n \n \n \n4.59\n \n \n \n \n \n \n \n \n \n \n \n \n3,099,344\n \n \n \n \n \n \n \n \n \n \n \n34,205\n \n \n \n \n \n \n \n4.43\n \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 \n4.51\n \n \n \n \n \n \n \n \n \nTotal Loans\n \n \n \n \n \n \n \n \n \n \n \n3,265,814\n \n \n \n \n \n \n \n \n \n \n \n37,820\n \n \n \n \n \n \n \n4.59\n \n \n \n \n \n \n \n \n \n \n \n \n3,107,679\n \n \n \n \n \n \n \n \n \n \n \n34,468\n \n \n \n \n \n \n \n4.45\n \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 \n4.65\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 \n11,413\n \n \n \n \n \n \n \n \n \n \n \n156\n \n \n \n \n \n \n \n5.42\n \n \n \n \n \n \n \n \n \n \n \n \n11,620\n \n \n \n \n \n \n \n \n \n \n \n59\n \n \n \n \n \n \n \n2.04\n \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 \n4.65\n \n \n \n \n \n \n \n \n \nTotal Interest Earning Assets\n \n \n \n \n \n \n \n \n \n \n \n3,871,896\n \n \n \n \n \n \n \n \n \n \n \n42,681\n \n \n \n \n \n \n \n4.37\n \n \n \n%\n \n \n \n \n \n \n \n \n3,671,748\n \n \n \n \n \n \n \n \n \n \n \n38,058\n \n \n \n \n \n \n \n4.16\n \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 \n4.14\n \n \n \n%\n \n \n \n \n \nNoninterest Earning Assets\n \n \n \n \n \n \n \n \n \n \n \n76,305\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n71,827\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \nTotal Assets\n \n \n \n \n \n \n \n$\n \n \n \n3,948,201\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,743,575\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,332,301\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \n \n \n \n \n \n \n \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$\n \n \n \n517,658\n \n \n \n \n \n \n \n$\n \n \n \n1,032\n \n \n \n \n \n \n \n0.79\n \n \n \n%\n \n \n \n \n$\n \n \n \n552,502\n \n \n \n \n \n \n \n$\n \n \n \n694\n \n \n \n \n \n \n \n0.50\n \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 \n0.47\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 \n999,932\n \n \n \n \n \n \n \n \n \n \n \n2,494\n \n \n \n \n \n \n \n0.99\n \n \n \n \n \n \n \n \n \n \n \n \n925,354\n \n \n \n \n \n \n \n \n \n \n \n1,185\n \n \n \n \n \n \n \n0.51\n \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 \n0.45\n \n \n \n \n \n \n \n \n \nTime Deposits\n \n \n \n \n \n \n \n \n \n \n \n288,621\n \n \n \n \n \n \n \n \n \n \n \n847\n \n \n \n \n \n \n \n1.16\n \n \n \n \n \n \n \n \n \n \n \n \n280,645\n \n \n \n \n \n \n \n \n \n \n \n665\n \n \n \n \n \n \n \n0.95\n \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 \n1.16\n \n \n \n \n \n \n \n \n \nBrokered Deposits\n \n \n \n \n \n \n \n \n \n \n \n447,034\n \n \n \n \n \n \n \n \n \n \n \n1,612\n \n \n \n \n \n \n \n1.43\n \n \n \n \n \n \n \n \n \n \n \n \n403,931\n \n \n \n \n \n \n \n \n \n \n \n912\n \n \n \n \n \n \n \n0.91\n \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 \n0.92\n \n \n \n \n \n \n \n \n \nTotal Interest Bearing Deposits\n \n \n \n \n \n \n \n \n \n \n \n2,253,245\n \n \n \n \n \n \n \n \n \n \n \n5,985\n \n \n \n \n \n \n \n1.05\n \n \n \n \n \n \n \n \n \n \n \n \n2,162,432\n \n \n \n \n \n \n \n \n \n \n \n3,456\n \n \n \n \n \n \n \n0.64\n \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 \n0.66\n \n \n \n \n \n \n \n \n \nFederal Funds Purchased\n \n \n \n \n \n \n \n \n \n \n \n106,826\n \n \n \n \n \n \n \n \n \n \n \n709\n \n \n \n \n \n \n \n2.63\n \n \n \n \n \n \n \n \n \n \n \n \n137,379\n \n \n \n \n \n \n \n \n \n \n \n410\n \n \n \n \n \n \n \n1.20\n \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \nFHLB Advances\n \n \n \n \n \n \n \n \n \n \n \n72,343\n \n \n \n \n \n \n \n \n \n \n \n328\n \n \n \n \n \n \n \n1.80\n \n \n \n \n \n \n \n \n \n \n \n \n47,511\n \n \n \n \n \n \n \n \n \n \n \n167\n \n \n \n \n \n \n \n1.41\n \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 \n1.56\n \n \n \n \n \n \n \n \n \nSubordinated Debentures\n \n \n \n \n \n \n \n \n \n \n \n92,503\n \n \n \n \n \n \n \n \n \n \n \n1,242\n \n \n \n \n \n \n \n5.33\n \n \n \n \n \n \n \n \n \n \n \n \n92,396\n \n \n \n \n \n \n \n \n \n \n \n1,219\n \n \n \n \n \n \n \n5.29\n \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 \n5.27\n \n \n \n \n \n \n \n \n \nTotal Interest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n2,524,917\n \n \n \n \n \n \n \n \n \n \n \n8,264\n \n \n \n \n \n \n \n1.30\n \n \n \n%\n \n \n \n \n \n \n \n \n2,439,718\n \n \n \n \n \n \n \n \n \n \n \n5,252\n \n \n \n \n \n \n \n0.86\n \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 \n0.88\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 \n \n \n \n \n \n \n \n \n \n \n \n \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 \n991,545\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n882,477\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \nOther Noninterest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n47,719\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n39,932\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \nTotal Noninterest Bearing Liabilities\n \n \n \n \n \n \n \n \n \n \n \n1,039,264\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n922,409\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \nShareholders' Equity\n \n \n \n \n \n \n \n \n \n \n \n384,020\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n381,448\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \n \n \n \nTotal Liabilities and Shareholders' Equity\n \n \n \n \n \n \n \n$\n \n \n \n3,948,201\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,743,575\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n3,332,301\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet Interest Income / Interest Rate Spread\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n34,417\n \n \n \n \n \n \n \n3.07\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n32,806\n \n \n \n \n \n \n \n3.30\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n28,880\n \n \n \n \n \n \n \n3.26\n \n \n \n%\n \n \n \n \n \nNet Interest Margin (3)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.53\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.58\n \n \n \n%\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n3.54\n \n \n \n%\n \n \n \n \n \nTaxable Equivalent Adjustment:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Tax-Exempt Investment Securities and Loans\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(322)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(276)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n(207)\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNet Interest Income\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n34,095\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\n \n \n \n32,530\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n$\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(1)\n \n \n \nInterest 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 \n \n \n(2)\n \n \n \nAverage loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.\n \n \n \n \n \n(3)\n \n \n \nNet 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 \n \n Provision for Loan Losses \n \nThe provision for loan losses was $1.5 million for the third quarter of 2022, a decrease of $1.5 million from $3.0 million for the second quarter of 2022, and an increase of $200,000 from $1.3 million for the third quarter of 2021. The provision recorded in the third quarter of 2022 was primarily attributable to the strong growth of the loan portfolio. The allowance for loan losses to total loans was 1.38% at September 30, 2022 , compared to 1.39% at June 30, 2022 , and 1.43% at September 30, 2021 .\n \nAs an emerging growth company, the Company is not subject to Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,“ or CECL, until January 1, 2023 .\n \nThe following table presents the activity in the Company’s allowance for loan losses for the periods indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \nBalance at Beginning of Period\n \n \n \n \n \n \n \n$\n \n \n \n44,711\n \n \n \n \n \n \n \n$\n \n \n \n41,692\n \n \n \n \n \n \n \n$\n \n \n \n37,591\n \n \n \n \n \n \n \n$\n \n \n \n40,020\n \n \n \n \n \n \n \n$\n \n \n \n34,841\n \n \n \n \n \nProvision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n1,500\n \n \n \n \n \n \n \n \n \n \n \n3,025\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n6,200\n \n \n \n \n \n \n \n \n \n \n \n4,000\n \n \n \n \n \nCharge-offs\n \n \n \n \n \n \n \n \n \n \n \n(5)\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(20)\n \n \n \n \n \n \n \n \n \n \n \n(34)\n \n \n \n \n \n \n \n \n \n \n \n(37)\n \n \n \n \n \nRecoveries\n \n \n \n \n \n \n \n \n \n \n \n285\n \n \n \n \n \n \n \n \n \n \n \n8\n \n \n \n \n \n \n \n \n \n \n \n30\n \n \n \n \n \n \n \n \n \n \n \n305\n \n \n \n \n \n \n \n \n \n \n \n97\n \n \n \n \n \nBalance at End of Period\n \n \n \n \n \n \n \n$\n \n \n \n46,491\n \n \n \n \n \n \n \n$\n \n \n \n44,711\n \n \n \n \n \n \n \n$\n \n \n \n38,901\n \n \n \n \n \n \n \n$\n \n \n \n46,491\n \n \n \n \n \n \n \n$\n \n \n \n38,901\n \n \n \n \n Noninterest Income \n \nNoninterest income was $1.4 million for the third quarter of 2022, a decrease of $263,000 from $1.7 million for the second quarter of 2022, and a decrease of $23,000 from $1.4 million for the third quarter of 2021. The linked-quarter decrease was primarily due to a decrease in letter of credit fees and other income, offset partially by an increase in bank-owned life insurance income. The year-over-year decrease was primarily due to decreased letter of credit fees and gains on sales of securities, offset partially by an increase in bank-owned life insurance income.\n \nThe following table presents the major components of noninterest income for the periods indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \nNoninterest Income:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCustomer Service Fees\n \n \n \n \n \n \n \n$\n \n \n \n313\n \n \n \n \n \n \n \n$\n \n \n \n298\n \n \n \n \n \n \n \n$\n \n \n \n268\n \n \n \n \n \n \n \n$\n \n \n \n892\n \n \n \n \n \n \n \n$\n \n \n \n733\n \n \n \n \n \n Net Gain on Sales of Securities\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n52\n \n \n \n \n \n \n \n \n \n \n \n48\n \n \n \n \n \n \n \n \n \n \n \n52\n \n \n \n \n \n \n \n \n \n \n \n750\n \n \n \n \n \nLetter of Credit Fees\n \n \n \n \n \n \n \n \n \n \n \n428\n \n \n \n \n \n \n \n \n \n \n \n564\n \n \n \n \n \n \n \n \n \n \n \n577\n \n \n \n \n \n \n \n \n \n \n \n1,234\n \n \n \n \n \n \n \n \n \n \n \n1,135\n \n \n \n \n \nDebit Card Interchange Fees\n \n \n \n \n \n \n \n \n \n \n \n153\n \n \n \n \n \n \n \n \n \n \n \n152\n \n \n \n \n \n \n \n \n \n \n \n143\n \n \n \n \n \n \n \n \n \n \n \n438\n \n \n \n \n \n \n \n \n \n \n \n414\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 \n557\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \nBank-Owned Life Insurance\n \n \n \n \n \n \n \n \n \n \n \n227\n \n \n \n \n \n \n \n \n \n \n \n149\n \n \n \n \n \n \n \n \n \n \n \n166\n \n \n \n \n \n \n \n \n \n \n \n524\n \n \n \n \n \n \n \n \n \n \n \n166\n \n \n \n \n \nOther Income\n \n \n \n \n \n \n \n \n \n \n \n266\n \n \n \n \n \n \n \n \n \n \n \n435\n \n \n \n \n \n \n \n \n \n \n \n208\n \n \n \n \n \n \n \n \n \n \n \n897\n \n \n \n \n \n \n \n \n \n \n \n823\n \n \n \n \n \nTotals\n \n \n \n \n \n \n \n$\n \n \n \n1,387\n \n \n \n \n \n \n \n$\n \n \n \n1,650\n \n \n \n \n \n \n \n$\n \n \n \n1,410\n \n \n \n \n \n \n \n$\n \n \n \n4,594\n \n \n \n \n \n \n \n$\n \n \n \n4,021\n \n \n \n \n Noninterest Expense \n \nNoninterest expense was $14.2 million for the third quarter of 2022, an increase of $405,000 from $13.8 million for the second quarter of 2022, and an increase of $921,000 from $13.2 million for the third quarter of 2021. The linked-quarter increase was primarily due to an increase in salaries and employee benefits and technology expenses, offset partially by a decrease in professional and consulting fees, marketing and advertising expenses, and other expenses. The year-over-year increase was primarily attributable to increases in salaries and employee benefits, occupancy and equipment, and other expenses, offset partially by a decrease in debt prepayment fees.\n \nThe following table presents the major components of noninterest expense for the periods indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Three Months Ended \n \n \n \n \n \n \n \n Nine Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \nNoninterest Expense:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nSalaries and Employee Benefits\n \n \n \n \n \n \n \n$\n \n \n \n9,449\n \n \n \n \n \n \n \n$\n \n \n \n8,977\n \n \n \n \n \n \n \n$\n \n \n \n8,309\n \n \n \n \n \n \n \n$\n \n \n \n27,120\n \n \n \n \n \n \n \n$\n \n \n \n22,923\n \n \n \n \n \nOccupancy and Equipment\n \n \n \n \n \n \n \n \n \n \n \n1,086\n \n \n \n \n \n \n \n \n \n \n \n1,042\n \n \n \n \n \n \n \n \n \n \n \n942\n \n \n \n \n \n \n \n \n \n \n \n3,213\n \n \n \n \n \n \n \n \n \n \n \n2,977\n \n \n \n \n \nFDIC Insurance Assessment\n \n \n \n \n \n \n \n \n \n \n \n315\n \n \n \n \n \n \n \n \n \n \n \n330\n \n \n \n \n \n \n \n \n \n \n \n355\n \n \n \n \n \n \n \n \n \n \n \n1,005\n \n \n \n \n \n \n \n \n \n \n \n960\n \n \n \n \n \nData Processing\n \n \n \n \n \n \n \n \n \n \n \n372\n \n \n \n \n \n \n \n \n \n \n \n356\n \n \n \n \n \n \n \n \n \n \n \n325\n \n \n \n \n \n \n \n \n \n \n \n1,025\n \n \n \n \n \n \n \n \n \n \n \n916\n \n \n \n \n \nProfessional and Consulting Fees\n \n \n \n \n \n \n \n \n \n \n \n716\n \n \n \n \n \n \n \n \n \n \n \n769\n \n \n \n \n \n \n \n \n \n \n \n708\n \n \n \n \n \n \n \n \n \n \n \n2,181\n \n \n \n \n \n \n \n \n \n \n \n1,804\n \n \n \n \n \nInformation Technology and Telecommunications\n \n \n \n \n \n \n \n \n \n \n \n650\n \n \n \n \n \n \n \n \n \n \n \n594\n \n \n \n \n \n \n \n \n \n \n \n598\n \n \n \n \n \n \n \n \n \n \n \n1,822\n \n \n \n \n \n \n \n \n \n \n \n1,609\n \n \n \n \n \nMarketing and Advertising\n \n \n \n \n \n \n \n \n \n \n \n479\n \n \n \n \n \n \n \n \n \n \n \n524\n \n \n \n \n \n \n \n \n \n \n \n418\n \n \n \n \n \n \n \n \n \n \n \n1,629\n \n \n \n \n \n \n \n \n \n \n \n1,018\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 \n114\n \n \n \n \n \n \n \n \n \n \n \n63\n \n \n \n \n \n \n \n \n \n \n \n152\n \n \n \n \n \n \n \n \n \n \n \n294\n \n \n \n \n \n \n \n \n \n \n \n410\n \n \n \n \n \nDebt Prepayment 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 \n582\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 \nOther Expense\n \n \n \n \n \n \n \n \n \n \n \n928\n \n \n \n \n \n \n \n \n \n \n \n1,050\n \n \n \n \n \n \n \n \n \n \n \n799\n \n \n \n \n \n \n \n \n \n \n \n2,985\n \n \n \n \n \n \n \n \n \n \n \n2,294\n \n \n \n \n \nTotals\n \n \n \n \n \n \n \n$\n \n \n \n14,157\n \n \n \n \n \n \n \n$\n \n \n \n13,752\n \n \n \n \n \n \n \n$\n \n \n \n13,236\n \n \n \n \n \n \n \n$\n \n \n \n41,417\n \n \n \n \n \n \n \n$\n \n \n \n35,636\n \n \n \n \nThe Company continues to add key talent across the organization, reaching 246 full-time equivalent employees at September 30, 2022 , compared to 236 employees at June 30, 2022 , and 219 employees at September 30, 2021 .\n \nThe efficiency ratio, a non-GAAP financial measure, was 39.8% for the third quarter of 2022, compared to 40.2% for the second quarter of 2022, and 43.9% for the third quarter of 2021. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 39.4% for the third quarter of 2022, 40.0% for the second quarter of 2022 and 41.5% for the third quarter of 2021.\n \n Income Taxes \n \nThe effective combined federal and state income tax rate for the third quarter of 2022 was 26.8%, a slight increase from 26.0% for the second quarter of 2022 and 26.0% for the third quarter of 2021.\n \n Balance Sheet \n \nTotal assets at September 30, 2022 were $4.13 billion , a 6.3% increase from $3.88 billion at June 30, 2022 , and a 21.8% increase from $3.39 billion at September 30, 2021 . The linked-quarter increase in total assets was primarily due to strong organic loan growth and continued purchases of investment securities. The year-over-year increase in total assets was primarily due to robust organic loan growth and purchases of investment securities, offset partially by a decrease in cash and cash equivalents.\n \nTotal gross loans at September 30, 2022 were $3.38 billion , an increase of $154.2 million , or 4.8%, over total gross loans of $3.23 billion at June 30, 2022 , and an increase of $668.1 million , or 24.6%, over total gross loans of $2.71 billion at September 30, 2021 . The increase in the loan portfolio during the third quarter of 2022 was primarily due to growth in the commercial and multifamily segments, offset partially by a decrease in the construction and land development segment which was the result of completed construction projects migrating to permanent financing. While the Company’s loan growth in the third quarter of 2022 remained strong, the pace began to moderate slightly, compared to the first half of 2022 due to active balance sheet management to align loan growth with the funding outlook, sales of participations on larger originations to manage growth, and the impact of the higher interest rate environment on the number of deals that made financial sense.\n \nThe following table presents the dollar composition of the Company’s loan portfolio, by category, at the dates indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2022 \n \n \n \n \n \n \n \n June 30, 2022 \n \n \n \n \n \n \n \n March 31, 2022 \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommercial\n \n \n \n \n \n \n \n$\n \n \n \n412,448\n \n \n \n \n \n \n \n$\n \n \n \n403,569\n \n \n \n \n \n \n \n$\n \n \n \n363,290\n \n \n \n \n \n \n \n$\n \n \n \n360,169\n \n \n \n \n \n \n \n$\n \n \n \n350,081\n \n \n \n \n \n \n \n \n \nPaycheck Protection Program\n \n \n \n \n \n \n \n \n \n \n \n1,192\n \n \n \n \n \n \n \n \n \n \n \n4,860\n \n \n \n \n \n \n \n \n \n \n \n12,309\n \n \n \n \n \n \n \n \n \n \n \n26,162\n \n \n \n \n \n \n \n \n \n \n \n54,190\n \n \n \n \n \n \n \n \n \nConstruction and Land Development \n \n \n \n \n \n \n \n \n \n \n \n335,557\n \n \n \n \n \n \n \n \n \n \n \n359,191\n \n \n \n \n \n \n \n \n \n \n \n321,131\n \n \n \n \n \n \n \n \n \n \n \n281,474\n \n \n \n \n \n \n \n \n \n \n \n257,167\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 \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 \n341,102\n \n \n \n \n \n \n \n \n \n \n \n334,815\n \n \n \n \n \n \n \n \n \n \n \n312,201\n \n \n \n \n \n \n \n \n \n \n \n305,317\n \n \n \n \n \n \n \n \n \n \n \n290,535\n \n \n \n \n \n \n \n \n \nMultifamily\n \n \n \n \n \n \n \n \n \n \n \n1,230,509\n \n \n \n \n \n \n \n \n \n \n \n1,087,865\n \n \n \n \n \n \n \n \n \n \n \n1,012,623\n \n \n \n \n \n \n \n \n \n \n \n910,243\n \n \n \n \n \n \n \n \n \n \n \n865,172\n \n \n \n \n \n \n \n \n \nCRE Owner Occupied\n \n \n \n \n \n \n \n \n \n \n \n151,088\n \n \n \n \n \n \n \n \n \n \n \n142,214\n \n \n \n \n \n \n \n \n \n \n \n117,969\n \n \n \n \n \n \n \n \n \n \n \n111,096\n \n \n \n \n \n \n \n \n \n \n \n101,834\n \n \n \n \n \n \n \n \n \nCRE Nonowner Occupied\n \n \n \n \n \n \n \n \n \n \n \n900,691\n \n \n \n \n \n \n \n \n \n \n \n886,432\n \n \n \n \n \n \n \n \n \n \n \n840,463\n \n \n \n \n \n \n \n \n \n \n \n818,569\n \n \n \n \n \n \n \n \n \n \n \n786,271\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 \n2,623,390\n \n \n \n \n \n \n \n \n \n \n \n2,451,326\n \n \n \n \n \n \n \n \n \n \n \n2,283,256\n \n \n \n \n \n \n \n \n \n \n \n2,145,225\n \n \n \n \n \n \n \n \n \n \n \n2,043,812\n \n \n \n \n \n \n \n \n \nConsumer and Other\n \n \n \n \n \n \n \n \n \n \n \n7,495\n \n \n \n \n \n \n \n \n \n \n \n6,939\n \n \n \n \n \n \n \n \n \n \n \n7,981\n \n \n \n \n \n \n \n \n \n \n \n6,442\n \n \n \n \n \n \n \n \n \n \n \n6,762\n \n \n \n \n \n \n \n \n \nTotal Loans, Gross\n \n \n \n \n \n \n \n \n \n \n \n3,380,082\n \n \n \n \n \n \n \n \n \n \n \n3,225,885\n \n \n \n \n \n \n \n \n \n \n \n2,987,967\n \n \n \n \n \n \n \n \n \n \n \n2,819,472\n \n \n \n \n \n \n \n \n \n \n \n2,712,012\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(46,491)\n \n \n \n \n \n \n \n \n \n \n \n(44,711)\n \n \n \n \n \n \n \n \n \n \n \n(41,692)\n \n \n \n \n \n \n \n \n \n \n \n(40,020)\n \n \n \n \n \n \n \n \n \n \n \n(38,901)\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(9,088)\n \n \n \n \n \n \n \n \n \n \n \n(9,536)\n \n \n \n \n \n \n \n \n \n \n \n(9,065)\n \n \n \n \n \n \n \n \n \n \n \n(9,535)\n \n \n \n \n \n \n \n \n \n \n \n(10,199)\n \n \n \n \n \n \n \n \n \nTotal Loans, Net\n \n \n \n \n \n \n \n$\n \n \n \n3,324,503\n \n \n \n \n \n \n \n$\n \n \n \n3,171,638\n \n \n \n \n \n \n \n$\n \n \n \n2,937,210\n \n \n \n \n \n \n \n$\n \n \n \n2,769,917\n \n \n \n \n \n \n \n$\n \n \n \n2,662,912\n \n \n \n \n \n \n \n \nTotal deposits at September 30, 2022 were $3.31 billion , an increase of $103.1 million , or 3.2%, over total deposits of $3.20 billion at June 30, 2022 , and an increase of $450.9 million , or 15.8%, over total deposits of $2.85 billion at September 30, 2021 . Deposit growth in the third quarter of 2022 was primarily due to an increase in savings and money market deposits and time deposits, offset partially by a decline in interest bearing transaction deposits and brokered deposits. In addition to the continued growth of core deposits, brokered deposits are also being used as a supplemental funding source, as needed, for the robust loan portfolio growth. Given the rapid rise in interest rates in 2022 and the prospect for more, management believes deposits could experience fluctuations in future periods.\n \nThe following table presents the dollar composition of the Company’s deposit portfolio, by category, at the dates indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30, 2022 \n \n \n \n \n \n \n \n June 30, 2022 \n \n \n \n \n \n \n \n March 31, 2022 \n \n \n \n \n \n \n \n December 31, 2021 \n \n \n \n \n \n \n \n September 30, 2021 \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nNoninterest Bearing Transaction Deposits\n \n \n \n \n \n \n \n$\n \n \n \n961,084\n \n \n \n \n \n \n \n$\n \n \n \n961,998\n \n \n \n \n \n \n \n$\n \n \n \n835,482\n \n \n \n \n \n \n \n$\n \n \n \n875,084\n \n \n \n \n \n \n \n$\n \n \n \n846,490\n \n \n \n \n \nInterest Bearing Transaction Deposits\n \n \n \n \n \n \n \n \n \n \n \n510,396\n \n \n \n \n \n \n \n \n \n \n \n522,151\n \n \n \n \n \n \n \n \n \n \n \n598,402\n \n \n \n \n \n \n \n \n \n \n \n544,789\n \n \n \n \n \n \n \n \n \n \n \n488,785\n \n \n \n \n \nSavings and Money Market Deposits\n \n \n \n \n \n \n \n \n \n \n \n1,077,333\n \n \n \n \n \n \n \n \n \n \n \n952,138\n \n \n \n \n \n \n \n \n \n \n \n890,926\n \n \n \n \n \n \n \n \n \n \n \n863,567\n \n \n \n \n \n \n \n \n \n \n \n791,861\n \n \n \n \n \nTime Deposits\n \n \n \n \n \n \n \n \n \n \n \n293,052\n \n \n \n \n \n \n \n \n \n \n \n272,424\n \n \n \n \n \n \n \n \n \n \n \n286,674\n \n \n \n \n \n \n \n \n \n \n \n293,474\n \n \n \n \n \n \n \n \n \n \n \n309,824\n \n \n \n \n \nBrokered Deposits\n \n \n \n \n \n \n \n \n \n \n \n463,209\n \n \n \n \n \n \n \n \n \n \n \n493,242\n \n \n \n \n \n \n \n \n \n \n \n424,127\n \n \n \n \n \n \n \n \n \n \n \n369,323\n \n \n \n \n \n \n \n \n \n \n \n417,197\n \n \n \n \n \nTotal Deposits\n \n \n \n \n \n \n \n$\n \n \n \n3,305,074\n \n \n \n \n \n \n \n$\n \n \n \n3,201,953\n \n \n \n \n \n \n \n$\n \n \n \n3,035,611\n \n \n \n \n \n \n \n$\n \n \n \n2,946,237\n \n \n \n \n \n \n \n$\n \n \n \n2,854,157\n \n \n \n \n Capital \n \nTotal shareholders’ equity at September 30, 2022 was $382.0 million , an increase of $7.1 million compared to total shareholders’ equity of $374.9 million at June 30, 2022 , and an increase of $14.2 million , or 3.9%, over total shareholders’ equity of $367.8 million at September 30, 2021 . The linked-quarter increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by unrealized losses in the securities portfolio. The year-over-year increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by an increase in stock repurchases made under the Company’s stock repurchase program and an increase in unrealized losses in the securities portfolio.\n \nDuring the third quarter of 2022, the Company repurchased 99,310 shares of its common stock. Shares were repurchased at a weighted average price of $16.27 per share, for a total of $1.6 million . On August 18, 2022 , the Company announced that its board of directors approved a new stock repurchase program which authorizes the Company to repurchase up to $25.0 million of its common stock, subject to certain limitations and conditions. The new stock repurchase program replaced and superseded the $40.0 million stock repurchase program, under which approximately $1.6 million remained. As of September 30, 2022 , no shares have been repurchased under the new plan. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program based on various factors including valuation, capital levels and other uses of capital.\n \nTangible book value per share, a non-GAAP financial measure, was $11.33 as of September 30, 2022 , an increase of 2.7% from $11.03 as of June 30, 2022 , and an increase of 6.6% from $10.62 as of September 30, 2021 . The linked-quarter and year-over-year increase occurred despite the market value depreciation of the securities portfolio driven by the rapidly rising interest rate environment, which continues to negatively impact accumulated other comprehensive income. Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.57% at September 30, 2022 , compared to 7.87% at June 30, 2022 , and 8.81% at September 30, 2021 .\n \nToday the Company also announced that its Board of Directors declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (\"Series A Preferred Stock\"). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2022 to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2022 .\n \n Asset Quality \n \nAnnualized net charge-offs (recoveries) as a percent of average loans were (0.03)% for the third quarter of 2022, compared to 0.00% for each of the previous four quarters. At September 30, 2022 , the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $663,000 , or 0.02% of total assets, as compared to $688,000 , or 0.02% of total assets at June 30, 2022 , and $734,000 , or 0.02% of total assets at September 30, 2021 .\n \nLoans that have potential weaknesses that warrant a watchlist risk rating at September 30, 2022 totaled $22.8 million , compared to $34.7 million at June 30, 2022 , and $67.4 million at September 30, 2021 . The linked-quarter decrease was primarily due to the migration of one relationship to substandard and the payoff of one other relationship. Loans that warranted a substandard risk rating at September 30, 2022 totaled $30.8 million , compared to $27.0 million at June 30, 2022 , and $7.7 million at September 30, 2021 .\n \nThe following table presents a summary of asset quality measurements at the dates indicated:\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n As of and for the Three Months Ended \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n \n \n June 30 , \n \n \n \n \n \n \n \n \n \n \n \n March 31 , \n \n \n \n \n \n \n \n \n \n \n \n December 31 , \n \n \n \n \n \n \n \n \n \n \n \n September 30 , \n \n \n \n \n \n \n \n \n \n (dollars in thousands) \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n \n \n Selected Asset Quality Data \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nLoans 30-89 Days Past Due\n \n \n \n \n \n \n \n$\n \n \n \n38\n \n \n \n \n \n \n \n \n$\n \n \n \n225\n \n \n \n \n \n \n \n \n$\n \n \n \n13\n \n \n \n \n \n \n \n \n$\n \n \n \n49\n \n \n \n \n \n \n \n \n$\n \n \n \n18\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 \n0.01\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 \nNonperforming Loans\n \n \n \n \n \n \n \n$\n \n \n \n663\n \n \n \n \n \n \n \n \n$\n \n \n \n688\n \n \n \n \n \n \n \n \n$\n \n \n \n706\n \n \n \n \n \n \n \n \n$\n \n \n \n722\n \n \n \n \n \n \n \n \n$\n \n \n \n734\n \n \n \n \n \n \n \n \n \nNonperforming Loans to Total Loans\n \n \n \n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \n \n \n \n0.02\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \n \n \n \n0.03\n \n \n \n%\n \n \n \n \n \nForeclosed Assets\n \n \n \n \n \n \n \n$\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 \n0.02\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 \n0.02\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 \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 \n0.02\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 \n0.02\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 \nNonperforming Assets (1)\n \n \n \n \n \n \n \n$\n \n \n \n663\n \n \n \n \n \n \n \n \n$\n \n \n \n688\n \n \n \n \n \n \n \n \n$\n \n \n \n706\n \n \n \n \n \n \n \n \n$\n \n \n \n722\n \n \n \n \n \n \n \n \n$\n \n \n \n734\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 \n0.02\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 \n0.02\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 \n1.38\n \n \n \n \n \n \n \n \n \n \n \n \n1.39\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 \n1.42\n \n \n \n \n \n \n \n \n \n \n \n \n1.43\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 \n1.38\n \n \n \n \n \n \n \n \n \n \n \n \n1.39\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 \n1.43\n \n \n \n \n \n \n \n \n \n \n \n \n1.46\n \n \n \n \n \n \n \n \n \nAllowance for Loans Losses to Nonaccrual Loans\n \n \n \n \n \n \n \n \n \n \n \n7,012.22\n \n \n \n \n \n \n \n \n \n \n \n \n6,498.69\n \n \n \n \n \n \n \n \n \n \n \n \n5,905.38\n \n \n \n \n \n \n \n \n \n \n \n \n5,542.94\n \n \n \n \n \n \n \n \n \n \n \n \n5,299.86\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 \n(0.03)\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 \n0.00\n \n \n \n \n \n \n \n \n \n ________________________________ \n \n \n \n(1)\n \n \n \nNonperforming assets are defined as nonaccrual loans plus loans 90 days past due and still accruing plus foreclosed assets.\n \n \n \n \nDuring the COVID-19 pandemic, the Company developed programs for clients who experienced business and personal disruptions 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 one modified loan totaling $10.6 million outstanding as of September 30, 2022 , representing 0.3% of the total loan portfolio, excluding PPP loans, which is down from $29.8 million at June 30, 2022 .\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 successful 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 $4.1 billion and seven branches as of September 30, 2022 , 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: interest rate risk, including the effects of recent and anticipated rate increases by the Federal Reserve ; fluctuations in the values of the securities held in our securities portfolio, including as the result of rising interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation; the negative effects of the ongoing 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; 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, especially in light of recent excess liquidity at the Bank; 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; talent and labor shortages and high rates of employee turnover; 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, including from nonbank competitors such as credit unions and “fintech” companies; 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; 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 including the Russian invasion of Ukraine ; 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 the new 1% excise tax on stock buybacks by publicly traded companies; 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 \n \n \n Bridgewater Bancshares, Inc. and Subsidiaries \n \n \n Consolidated Balance Sheets \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 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 2022 \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 \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 \n75,496\n \n \n \n \n \n \n \n$\n \n \n \n143,473\n \n \n \n \n \n \n \n$\n \n \n \n189,502\n \n \n \n \n \nBank-Owned Certificates of Deposit\n \n \n \n \n \n \n \n \n \n \n \n1,182\n \n \n \n \n \n \n \n \n \n \n \n1,876\n \n \n \n \n \n \n \n \n \n \n \n1,877\n \n \n \n \n \nSecurities Available for Sale, at Fair Value\n \n \n \n \n \n \n \n \n \n \n \n542,007\n \n \n \n \n \n \n \n \n \n \n \n439,362\n \n \n \n \n \n \n \n \n \n \n \n413,149\n \n \n \n \n \nLoans, Net of Allowance for Loan Losses of $46,491 at September 30, 2022 (unaudited), $40,020 at December 31, 2021 and $38,901 at September 30, 2021 (unaudited)\n \n \n \n \n \n \n \n \n \n \n \n3,324,503\n \n \n \n \n \n \n \n \n \n \n \n2,769,917\n \n \n \n \n \n \n \n \n \n \n \n2,662,912\n \n \n \n \n \n Federal Home Loan Bank (FHLB) Stock, at Cost\n \n \n \n \n \n \n \n \n \n \n \n15,603\n \n \n \n \n \n \n \n \n \n \n \n5,242\n \n \n \n \n \n \n \n \n \n \n \n5,442\n \n \n \n \n \nPremises and Equipment, Net\n \n \n \n \n \n \n \n \n \n \n \n48,941\n \n \n \n \n \n \n \n \n \n \n \n49,395\n \n \n \n \n \n \n \n \n \n \n \n49,803\n \n \n \n \n \nAccrued Interest\n \n \n \n \n \n \n \n \n \n \n \n11,198\n \n \n \n \n \n \n \n \n \n \n \n9,186\n \n \n \n \n \n \n \n \n \n \n \n8,550\n \n \n \n \n \n Goodwill \n \n \n \n \n \n \n \n \n \n \n \n2,626\n \n \n \n \n \n \n \n \n \n \n \n2,626\n \n \n \n \n \n \n \n \n \n \n \n2,626\n \n \n \n \n \nOther Intangible Assets, Net\n \n \n \n \n \n \n \n \n \n \n \n336\n \n \n \n \n \n \n \n \n \n \n \n479\n \n \n \n \n \n \n \n \n \n \n \n527\n \n \n \n \n \nOther Assets\n \n \n \n \n \n \n \n \n \n \n \n107,095\n \n \n \n \n \n \n \n \n \n \n \n56,103\n \n \n \n \n \n \n \n \n \n \n \n54,737\n \n \n \n \n \nTotal Assets\n \n \n \n \n \n \n \n$\n \n \n \n4,128,987\n \n \n \n \n \n \n \n$\n \n \n \n3,477,659\n \n \n \n \n \n \n \n$\n \n \n \n3,389,125\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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$\n \n \n \n961,084\n \n \n \n \n \n \n \n$\n \n \n \n875,084\n \n \n \n \n \n \n \n$\n \n \n \n846,490\n \n \n \n \n \nInterest Bearing\n \n \n \n \n \n \n \n \n \n \n \n2,343,990\n \n \n \n \n \n \n \n \n \n \n \n2,071,153\n \n \n \n \n \n \n \n \n \n \n \n2,007,667\n \n \n \n \n \nTotal Deposits\n \n \n \n \n \n \n \n \n \n \n \n3,305,074\n \n \n \n \n \n \n \n \n \n \n \n2,946,237\n \n \n \n \n \n \n \n \n \n \n \n2,854,157\n \n \n \n \n \nFederal Funds Purchased\n \n \n \n \n \n \n \n \n \n \n \n212,000\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 \nFHLB Advances\n \n \n \n \n \n \n \n \n \n \n \n71,500\n \n \n \n \n \n \n \n \n \n \n \n42,500\n \n \n \n \n \n \n \n \n \n \n \n47,500\n \n \n \n \n \nSubordinated Debentures, Net of Issuance Costs\n \n \n \n \n \n \n \n \n \n \n \n92,559\n \n \n \n \n \n \n \n \n \n \n \n92,239\n \n \n \n \n \n \n \n \n \n \n \n92,153\n \n \n \n \n \nAccrued Interest Payable\n \n \n \n \n \n \n \n \n \n \n \n2,214\n \n \n \n \n \n \n \n \n \n \n \n1,409\n \n \n \n \n \n \n \n \n \n \n \n1,656\n \n \n \n \n \nOther Liabilities\n \n \n \n \n \n \n \n \n \n \n \n63,633\n \n \n \n \n \n \n \n \n \n \n \n16,002\n \n \n \n \n \n \n \n \n \n \n \n25,856\n \n \n \n \n \nTotal Liabilities\n \n \n \n \n \n \n \n \n \n \n \n3,746,980\n \n \n \n \n \n \n \n \n \n \n \n3,098,387\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \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 27,600 Series A shares ( $2,500 liquidation preference) at September 30, 2022 (unaudited), December 31, 2021 , and September 30, 2021 (unaudited)\n \n \n \n \n \n \n \n \n \n \n \n66,514\n \n \n \n \n \n \n \n \n \n \n \n66,514\n \n \n \n \n \n \n \n \n \n \n \n66,515\n \n \n \n \n \nCommon Stock- $0.01 par value; Authorized 75,000,000\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \nCommon Stock - Issued and Outstanding 27,587,978 at September 30, 2022 (unaudited), 28,206,566 at December 31, 2021 and 28,066,822 at September 30, 2021 (unaudited)\n \n \n \n \n \n \n \n \n \n \n \n276\n \n \n \n \n \n \n \n \n \n \n \n282\n \n \n \n \n \n \n \n \n \n \n \n281\n \n \n \n \n \n Additional Paid-In Capital \n \n \n \n \n \n \n \n \n \n \n \n95,973\n \n \n \n \n \n \n \n \n \n \n \n104,123\n \n \n \n \n \n \n \n \n \n \n \n103,471\n \n \n \n \n \nRetained Earnings\n \n \n \n \n \n \n \n \n \n \n \n235,964\n \n \n \n \n \n \n \n \n \n \n \n199,347\n \n \n \n \n \n \n \n \n \n \n \n188,004\n \n \n \n \n \nAccumulated Other Comprehensive Income (Loss)\n \n \n \n \n \n \n \n \n \n \n \n(16,720)\n \n \n \n \n \n \n \n \n \n \n \n9,006\n \n \n \n \n \n \n \n \n \n \n \n9,532\n \n \n \n \n \nTotal Shareholders' Equity\n \n \n \n \n \n \n \n \n \n \n \n382,007\n \n \n \n \n \n \n \n \n \n \n \n379,272\n \n \n \n \n \n \n \n \n \n \n \n367,803\n \n \n \n \n \nTotal Liabilities and Equity\n \n \n \n \n \n \n \n$\n \n \n \n4,128,987\n \n \n \n \n \n \n \n$\n \n \n \n3,477,659\n \n \n \n \n \n \n \n$\n \n \n \n3,389,125\n \n \n \n \n \n \n \n \n \n Bridgewater Bancshares, Inc. and Subsidiaries \n \n \n Consolidated Statements of Income \n \n \n (dollars in thousands, except per share data) \n \n \n (Unaudited) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 2022 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \n \n \n \n \n \n \n \n 2022 \n \n \n \n \n \n \n \n 2021 \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$\n \n \n \n37,666\n \n \n \n \n \n \n \n$\n \n \n \n34,358\n \n \n \n \n \n \n \n$\n \n \n \n31,049\n \n \n \n \n \n \n \n$\n \n \n \n103,768\n \n \n \n \n \n \n \n$\n \n \n \n87,705\n \n \n \n \n \n Investment Securities \n \n \n \n \n \n \n \n \n \n \n \n4,372\n \n \n \n \n \n \n \n \n \n \n \n3,325\n \n \n \n \n \n \n \n \n \n \n \n2,333\n \n \n \n \n \n \n \n \n \n \n \n10,567\n \n \n \n \n \n \n \n \n \n \n \n7,065\n \n \n \n \n \nOther\n \n \n \n \n \n \n \n \n \n \n \n321\n \n \n \n \n \n \n \n \n \n \n \n99\n \n \n \n \n \n \n \n \n \n \n \n135\n \n \n \n \n \n \n \n \n \n \n \n500\n \n \n \n \n \n \n \n \n \n \n \n334\n \n \n \n \n \nTotal Interest Income\n \n \n \n \n \n \n \n \n \n \n \n42,359\n \n \n \n \n \n \n \n \n \n \n \n37,782\n \n \n \n \n \n \n \n \n \n \n \n33,517\n \n \n \n \n \n \n \n \n \n \n \n114,835\n \n \n \n \n \n \n \n \n \n \n \n95,104\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n5,984\n \n \n \n \n \n \n \n \n \n \n \n3,456\n \n \n \n \n \n \n \n \n \n \n \n3,417\n \n \n \n \n \n \n \n \n \n \n \n12,598\n \n \n \n \n \n \n \n \n \n \n \n10,601\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 \n61\n \n \n \n \n \nFHLB Advances\n \n \n \n \n \n \n \n \n \n \n \n329\n \n \n \n \n \n \n \n \n \n \n \n167\n \n \n \n \n \n \n \n \n \n \n \n213\n \n \n \n \n \n \n \n \n \n \n \n646\n \n \n \n \n \n \n \n \n \n \n \n669\n \n \n \n \n \nSubordinated Debentures\n \n \n \n \n \n \n \n \n \n \n \n1,242\n \n \n \n \n \n \n \n \n \n \n \n1,219\n \n \n \n \n \n \n \n \n \n \n \n1,214\n \n \n \n \n \n \n \n \n \n \n \n3,658\n \n \n \n \n \n \n \n \n \n \n \n3,411\n \n \n \n \n \nFederal Funds Purchased\n \n \n \n \n \n \n \n \n \n \n \n709\n \n \n \n \n \n \n \n \n \n \n \n410\n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n1,128\n \n \n \n \n \n \n \n \n \n \n \n6\n \n \n \n \n \nTotal Interest Expense\n \n \n \n \n \n \n \n \n \n \n \n8,264\n \n \n \n \n \n \n \n \n \n \n \n5,252\n \n \n \n \n \n \n \n \n \n \n \n4,844\n \n \n \n \n \n \n \n \n \n \n \n18,030\n \n \n \n \n \n \n \n \n \n \n \n14,748\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n34,095\n \n \n \n \n \n \n \n \n \n \n \n32,530\n \n \n \n \n \n \n \n \n \n \n \n28,673\n \n \n \n \n \n \n \n \n \n \n \n96,805\n \n \n \n \n \n \n \n \n \n \n \n80,356\n \n \n \n \n \nProvision for Loan Losses\n \n \n \n \n \n \n \n \n \n \n \n1,500\n \n \n \n \n \n \n \n \n \n \n \n3,025\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n6,200\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 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n32,595\n \n \n \n \n \n \n \n \n \n \n \n29,505\n \n \n \n \n \n \n \n \n \n \n \n27,373\n \n \n \n \n \n \n \n \n \n \n \n90,605\n \n \n \n \n \n \n \n \n \n \n \n76,356\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n313\n \n \n \n \n \n \n \n \n \n \n \n298\n \n \n \n \n \n \n \n \n \n \n \n268\n \n \n \n \n \n \n \n \n \n \n \n892\n \n \n \n \n \n \n \n \n \n \n \n733\n \n \n \n \n \n Net Gain on Sales of Available for Sale Securities \n \n \n \n \n \n \n \n \n \n \n \n—\n \n \n \n \n \n \n \n \n \n \n \n52\n \n \n \n \n \n \n \n \n \n \n \n48\n \n \n \n \n \n \n \n \n \n \n \n52\n \n \n \n \n \n \n \n \n \n \n \n750\n \n \n \n \n \nOther Income\n \n \n \n \n \n \n \n \n \n \n \n1,074\n \n \n \n \n \n \n \n \n \n \n \n1,300\n \n \n \n \n \n \n \n \n \n \n \n1,094\n \n \n \n \n \n \n \n \n \n \n \n3,650\n \n \n \n \n \n \n \n \n \n \n \n2,538\n \n \n \n \n \nTotal Noninterest Income\n \n \n \n \n \n \n \n \n \n \n \n1,387\n \n \n \n \n \n \n \n \n \n \n \n1,650\n \n \n \n \n \n \n \n \n \n \n \n1,410\n \n \n \n \n \n \n \n \n \n \n \n4,594\n \n \n \n \n \n \n \n \n \n \n \n4,021\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 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 \n9,449\n \n \n \n \n \n \n \n \n \n \n \n8,977\n \n \n \n \n \n \n \n \n \n \n \n8,309\n \n \n \n \n \n \n \n \n \n \n \n27,120\n \n \n \n \n \n \n \n \n \n \n \n22,923\n \n \n \n \n \nOccupancy and Equipment\n \n \n \n \n \n \n \n \n \n \n \n1,086\n \n \n \n \n \n \n \n \n \n \n \n1,042\n \n \n \n \n \n \n \n \n \n \n \n942\n \n \n \n \n \n \n \n \n \n \n \n3,213\n \n \n \n \n \n \n \n \n \n \n \n2,977\n \n \n \n \n \nOther Expense\n \n \n \n \n \n \n \n \n \n \n \n3,622\n \n \n \n \n \n \n \n \n \n \n \n3,733\n \n \n \n \n \n \n \n \n \n \n \n3,985\n \n \n \n \n \n \n \n \n \n \n \n11,084\n \n \n \n \n \n \n \n \n \n \n \n9,736\n \n \n \n \n \nTotal Noninterest Expense\n \n \n \n \n \n \n \n \n \n \n \n14,157\n \n \n \n \n \n \n \n \n \n \n \n13,752\n \n \n \n \n \n \n \n \n \n \n \n13,236\n \n \n \n \n \n \...

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