Bridgewater Bancshares Inc.

10/23/2024 | Press release | Distributed by Public on 10/23/2024 14:52

Bridgewater Bancshares, Inc. Announces Third Quarter 2024 Net Income of $8.7 Million, $0.27 Diluted Earnings Per Common Share Form 8 K

Bridgewater Bancshares, Inc. Announces Third Quarter 2024 Net Income
 of $8.7 Million, $0.27 Diluted Earnings Per Common Share

Third Quarter 2024 Highlights

● Tangible book value per share(1) of $13.96 for the third quarter of 2024, an increase of $0.43, or 12.8% annualized, compared to $13.53 for the second quarter of 2024.
● Pre-provision net revenue(1) increased $489,000, or 4.5%, from the second quarter of 2024.
● Net interest income increased $603,000, or 2.4%, from the second quarter of 2024.
● Net interest margin (on a fully tax-equivalent basis) of 2.24% for the third quarter of 2024, in line with the second quarter of 2024.
● Core deposits(2) increased by $93.6 million, or 14.4% annualized, from the second quarter of 2024. Total deposits decreased by $60.3 million from the second quarter of 2024, primarily driven by a decrease in brokered deposits of $131.3 million.
● Gross loans decreased $114.8 million from the second quarter of 2024, primarily driven by elevated levels of loan payoffs.
● Loan-to-deposit ratio of 98.3%, compared to 99.8% at June 30, 2024.
● Efficiency ratio(1) of 58.0%, down from 58.7% for the second quarter of 2024.
● No provision for credit losses on loans was recorded in the third quarter of 2024. The allowance for credit losses on loans to total loans was 1.38% at September 30, 2024, compared to 1.37% at June 30, 2024.
● Annualized net loan charge-offs as a percentage of average loans of 0.10% for the third quarter of 2024, compared to 0.00% for the second quarter of 2024, primarily driven by one central business district office loan.
● Nonperforming assets to total assets of 0.19% at September 30, 2024, compared to 0.01% at June 30, 2024.
● Announced the strategic acquisition of First Minnetonka City Bank. Received all required regulatory approvals in October 2024 and expect to close on the transaction during the fourth quarter of 2024.
(1) Represents a non-GAAP financial measure. See "Non-GAAP FinancialMeasures" for further details.
(2) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.

St. Louis Park, MN - Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $8.7 million for the third quarter of 2024, compared to $8.1 million for the second quarter of 2024, and $9.6 million for the third quarter of 2023. Earnings per diluted common share were $0.27 for the third quarter of 2024, compared to $0.26 for the second quarter of 2024, and $0.30 for the third quarter of 2023.

Page 1 of 17

"Bridgewater's third quarter results were highlighted by robust core deposit growth and a stable net interest margin amid an improving interest rate backdrop following the Fed's rate cut in September," said Chairman and Chief Executive Officer, Jerry Baack. "As a result, we generated improved net interest income and pre-provision net revenue growth. Asset quality also remained a strength as we continued to see improving multifamily trends in the Twin Cities, such as declining vacancy rates.

"In August, we were excited to announce the signing of a definitive agreement for the acquisition of First Minnetonka City Bank, which we expect to close during the fourth quarter of 2024. This deal brings several strategic benefits including a low-cost, core deposit base and balance sheet optionality. When combined with the strong core deposit growth we have generated year-to-date, we believe we will have an enhanced funding and liquidity profile that positions us well moving forward."

Key Financial Measures

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2024

2024

2023

2024

2023

Per Common Share Data

Basic Earnings Per Share

$

0.28

$

0.26

$

0.31

$

0.79

$

1.01

Diluted Earnings Per Share

0.27

0.26

0.30

0.77

0.99

Book Value Per Share

14.06

13.63

12.47

14.06

12.47

Tangible Book Value Per Share (1)

13.96

13.53

12.37

13.96

12.37

Financial Ratios

Return on Average Assets (2)

0.73

%

0.70

%

0.85

%

0.71

%

0.93

%

Pre-Provision Net Revenue Return on Average Assets (1)(2)

0.96

0.94

1.01

0.95

1.22

Return on Average Shareholders' Equity (2)

7.79

7.49

9.23

7.55

10.19

Return on Average Tangible Common Equity (1)(2)

8.16

7.80

9.92

7.87

11.07

Net Interest Margin (3)

2.24

2.24

2.32

2.24

2.47

Core Net Interest Margin (1)(3)

2.16

2.17

2.24

2.17

2.39

Cost of Total Deposits

3.58

3.46

2.99

3.45

2.57

Cost of Funds

3.54

3.49

3.10

3.46

2.81

Efficiency Ratio (1)

58.0

58.7

56.1

58.3

51.2

Noninterest Expense to Average Assets (2)

1.33

1.35

1.34

1.34

1.30

Tangible Common Equity to Tangible Assets (1)

8.17

7.90

7.61

8.17

7.61

Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4)

9.79

9.41

9.07

9.79

9.07

Balance Sheet and Asset Quality (dollars in thousands)

Total Assets

$

4,691,517

$

4,687,035

$

4,557,070

$

4,691,517

$

4,557,070

Total Loans, Gross

3,685,590

3,800,385

3,722,271

3,685,590

3,722,271

Deposits

3,747,442

3,807,712

3,675,509

3,747,442

3,675,509

Loan to Deposit Ratio

98.3

%

99.8

%

101.3

%

98.3

%

101.3

%

Net Loan Charge-Offs to Average Loans (2)

0.10

0.00

0.01

0.03

0.00

Nonperforming Assets to Total Assets (5)

0.19

0.01

0.02

0.19

0.02

Allowance for Credit Losses to Total Loans

1.38

1.37

1.36

1.38

1.36

(1) Represents a non-GAAP financial measure. See "Non-GAAP FinancialMeasures" for further details.
(2) Annualized.
(3) Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4) Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
(5) Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.

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Income Statement

Net Interest Margin and Net Interest Income

Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2024 was 2.24%, stable with the second quarter of 2024, and an eight basis point decline from 2.32% in the third quarter of 2023. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, was 2.16% for the third quarter of 2024, a one basis point decline from 2.17% in the second quarter of 2024, and an eight basis point decline from 2.24% in the third quarter of 2023.

● Net interest margin has remained stable at 2.24% each quarter in 2024.
● The year-over-year decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.

Net interest income was $25.6 million for the third quarter of 2024, an increase of $603,000 from $25.0 million in the second quarter of 2024, and an increase of $178,000 from $25.4 million in the third quarter of 2023.

● The linked-quarter increase in net interest income was primarily due to increased cash balances, higher yields in the securities and loan portfolios and increased loan fees due to elevated loan payoffs, offset partially by decreased loan balances and higher rates paid on deposits.
● The year-over year increase in net interest income was primarily due to increased cash balances, growth and higher yields in the securities portfolio, and higher yields on loans, offset partially by growth and higher rates on deposits.

Interest income was $63.0 million for the third quarter of 2024, an increase of $2.1 million from $60.9 million in the second quarter of 2024, and an increase of $6.2 million from $56.8 million in the third quarter of 2023.

● The yield on interest earning assets (on a fully tax-equivalent basis) was 5.48% in the third quarter of 2024, compared to 5.41% in the second quarter of 2024 and 5.14% in the third quarter of 2023.
● The linked-quarter increase in the yield on interest earning assets was primarily due to continued repricing of assets at accretive yields.
● The year-over-year increase in the yield on interest earning assets was primarily due to the purchase of higher yielding securities and the repricing of the loan and securities portfolios in the higher interest rate environment.
● Loan interest income and loan fees remained one of the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield increased to 5.57% in the third quarter of 2024, seven basis points higher than 5.50% in the second quarter of 2024, and 31 basis points higher than 5.26% in the third quarter of 2023.
● The core loan yield continued to rise as new loan originations and the existing portfolio reprice in the higher rate environment.

A summary of interest and fees recognized on loans for the periods indicated is as follows:

Three Months Ended

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2023

September 30, 2023

Interest

5.47

%

5.42

%

5.31

%

5.25

%

5.16

%

Fees

0.10

0.08

0.07

0.08

0.10

Yield on Loans

5.57

%

5.50

%

5.38

%

5.33

%

5.26

%

Interest expense was $37.4 million for the third quarter of 2024, an increase of $1.5 million from $35.9 million in the second quarter of 2024, and an increase of $6.0 million from $31.4 million in the third quarter of 2023.

● The cost of interest bearing liabilities was 4.27% in the third quarter of 2024, compared to 4.19% in the second quarter of 2024 and 3.81% in the third quarter of 2023.
● The linked-quarter increase in the cost of interest bearing liabilities was primarily due to higher rates paid on deposits, offset partially by a decrease in the utilization of overnight borrowings.
● The year-over-year increase in the cost of interest bearing liabilities was primarily due to continued deposit repricing in the higher rate environment.

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Interest expense on deposits was $34.2 million for the third quarter of 2024, an increase of $2.6 million from $31.6 million in the second quarter of 2024, and an increase of $7.0 million from $27.2 million in the third quarter of 2023.

● The cost of total deposits was 3.58% in the third quarter of 2024, compared to 3.46% in the second quarter of 2024 and 2.99% in the third quarter of 2023.
● The linked-quarter increase in the cost of total deposits was primarily due to continued client demand for higher interest rates and increased competition.
● The year-over-year increase in the cost of total deposits was primarily due to upward repricing of the deposit portfolio in the higher interest rate environment.

Provision for Credit Losses

The provision for credit losses on loans was $-0- for the third quarter of 2024, compared to $600,000 for the second quarter of 2024 and $-0- for the third quarter of 2023.

● No provision for credit losses on loans was recorded in the third quarter of 2024. Although loans decreased during the quarter, increased loss rates and other qualitative factor adjustments resulted in no provision for the quarter.
● The allowance for credit losses on loans to total loans was 1.38% at September 30, 2024, compared to 1.37% at June 30, 2024 and 1.36% at September 30, 2023.

The provision for credit losses for off-balance sheet credit exposures was $-0- for the third quarter of 2024, compared to $-0- for the second quarter of 2024, and a negative provision of $600,000 for the third quarter of 2023.

● No provision was recorded during the third quarter of 2024 due to unfunded commitments remaining stable as the migration to funded loans was offset by the volume of newly originated loans with unfunded commitments.

Noninterest Income

Noninterest income was $1.5 million for the third quarter of 2024, a decrease of $241,000 from $1.8 million for the second quarter of 2024, and a decrease of $204,000 from $1.7 million for the third quarter of 2023.

● The linked-quarter decrease was primarily due to a net loss on sale of securities in the third quarter and a net gain on sale of securities in the second quarter.
● The year-over-year decrease was primarily due to $493,000 of FHLB prepayment income recognized in the previous year which did not reoccur, offset partially by higher letter of credit fees, an increase in the cash surrender value of bank-owned life insurance and an increase in other income.

Noninterest Expense

Noninterest expense was $15.8 million for the third quarter of 2024, an increase of $221,000 from $15.5 million for the second quarter of 2024 and an increase of $523,000 from $15.2 million for the third quarter of 2023.

● The linked-quarter increase was primarily due to increases in professional and consulting fees related to the acquisition of First Minnetonka City Bank and salaries and employee benefits, offset partially by a decrease in data processing and derivative collateral fees.
● The year-over-year increase was primarily attributable to increases in salaries and employee benefits, higher professional and consulting fees relating to the acquisition of First Minnetonka City Bank and increases in information technology and telecommunications and marketing and advertising expenses, offset partially by a decrease in the FDIC insurance assessment and lower derivative collateral fees.
● The efficiency ratio, a non-GAAP financial measure, was 58.0% for the third quarter of 2024, compared to 58.7% for the second quarter of 2024, and 56.1% for the third quarter of 2023.
● The Company had 265 full-time equivalent employees at September 30, 2024, compared to 258 at June 30, 2024, and 255 at September 30, 2023.

Income Taxes

The effective combined federal and state income tax rate was 23.6% for both the second and third quarter of 2024, compared to 23.0% for the third quarter of 2023.

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Balance Sheet

Loans

(dollars in thousands)

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2023

September 30, 2023

Commercial

$

493,403

$

518,762

$

483,069

$

464,061

$

459,854

Construction and Land Development

118,596

134,096

200,970

232,804

294,818

1 - 4 Family Construction

45,822

60,551

65,606

65,087

64,463

Real Estate Mortgage:

1 - 4 Family Mortgage

421,179

416,944

417,773

402,396

404,716

Multifamily

1,379,814

1,404,835

1,389,345

1,388,541

1,378,669

CRE Owner Occupied

182,239

185,988

182,589

175,783

159,485

CRE Nonowner Occupied

1,032,142

1,070,050

1,035,702

987,306

951,263

Total Real Estate Mortgage Loans

3,015,374

3,077,817

3,025,409

2,954,026

2,894,133

Consumer and Other

12,395

9,159

9,151

8,304

9,003

Total Loans, Gross

3,685,590

3,800,385

3,784,205

3,724,282

3,722,271

Allowance for Credit Losses on Loans

(51,018)

(51,949)

(51,347)

(50,494)

(50,585)

Net Deferred Loan Fees

(5,705)

(6,214)

(6,356)

(6,573)

(7,222)

Total Loans, Net

$

3,628,867

$

3,742,222

$

3,726,502

$

3,667,215

$

3,664,464

Total gross loans at September 30, 2024 were $3.69 billion, a decrease of $114.8 million, or 3.0%, over total gross loans of $3.80 billion at June 30, 2024, and a decrease of $36.7 million, or 1.0%, over total gross loans of $3.72 billion at September 30, 2023.

● The decrease in the loan portfolio during the third quarter of 2024 was due to elevated loan payoffs.

Deposits

(dollars in thousands)

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2023

September 30, 2023

Noninterest Bearing Transaction Deposits

$

713,309

$

705,175

$

698,432

$

756,964

$

754,297

Interest Bearing Transaction Deposits

805,756

752,568

783,736

692,801

780,863

Savings and Money Market Deposits

980,345

943,994

979,773

935,091

872,534

Time Deposits

347,080

373,713

352,510

300,651

265,737

Brokered Deposits

900,952

1,032,262

992,774

1,024,441

1,002,078

Total Deposits

$

3,747,442

$

3,807,712

$

3,807,225

$

3,709,948

$

3,675,509

Total deposits at September 30, 2024 were $3.75 billion, a decrease of $60.3 million, or 1.6%, over total deposits of $3.81 billion at June 30, 2024, and an increase of $71.9 million, or 2.0%, over total deposits of $3.68 billion at September 30, 2023.

● Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, increased $93.6 million, or 14.4% annualized, from the second quarter of 2024. Growth in core deposits was due to both increased balances of existing clients and new client acquisitions. On a year-to-date basis, core deposits increased by $131.2 million, or 6.9% annualized. Based on the nature of the Company's client base, core deposit balances can fluctuate from quarter to quarter, as deposit growth is not always linear.
● Brokered deposits, which declined by $131.3 million, or 12.7%, in the current quarter, continue to be used as a supplemental funding source, as needed.
● Uninsured deposits were 25.0% of total deposits as of September 30, 2024, compared to 22.5% of total deposits as of June 30, 2024.

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Liquidity

Total on- and off-balance sheet liquidity was $2.29 billion as of September 30, 2024, compared to $2.22 billion at June 30, 2024 and $2.18 billion at September 30, 2023.

Primary Liquidity-On-Balance Sheet

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2023

September 30, 2023

(dollars in thousands)

Cash and Cash Equivalents

$

167,869

$

97,237

$

105,784

$

96,594

$

77,617

Securities Available for Sale

664,715

601,057

633,282

604,104

553,076

Less: Pledged Securities

(146,144)

(169,095)

(169,479)

(170,727)

(164,277)

Total Primary Liquidity

$

686,440

$

529,199

$

569,587

$

529,971

$

466,416

Ratio of Primary Liquidity to Total Deposits

18.3

%

13.9

%

15.0

%

14.3

%

12.7

%

Secondary Liquidity-Off-Balance Sheet Borrowing Capacity

Net Secured Borrowing Capacity with the FHLB

$

509,223

$

451,171

$

446,801

$

498,736

$

516,501

Net Secured Borrowing Capacity with the Federal Reserve Bank

867,955

1,015,873

1,006,010

979,448

1,022,128

Unsecured Borrowing Capacity with Correspondent Lenders

200,000

200,000

200,000

200,000

150,000

Secured Borrowing Capacity with Correspondent Lender

26,250

26,250

26,250

26,250

26,250

Total Secondary Liquidity

$

1,603,428

$

1,693,294

$

1,679,061

$

1,704,434

$

1,714,879

Total Primary and Secondary Liquidity

$

2,289,868

$

2,222,493

$

2,248,648

$

2,234,405

$

2,181,295

Ratio of Primary and Secondary Liquidity to Total Deposits

61.1

%

58.4

%

59.1

%

60.2

%

59.3

%

Asset Quality

Overall asset quality remained superb due to the Company's measured risk selection, consistent underwriting standards, active credit oversight and experienced lending and credit teams.

● Annualized net charge-offs as a percentage of average loans were 0.10% for the third quarter of 2024, compared to 0.00% for the second quarter of 2024, and 0.01% for the third quarter of 2023. The increase in net charge-offs was primarily due to one central business district office loan.
● At September 30, 2024, the Company's nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $8.8 million, or 0.19% of total assets, compared to $678,000, or 0.01%, of total assets at June 30, 2024, and $749,000, or 0.02%, of total assets at September 30, 2023. The increase in nonperforming assets was primarily due to one central business district office loan that previously had a substandard risk rating.
● Loans with potential weaknesses that warranted a watchlist risk rating at September 30, 2024 totaled $32.0 million, compared to $30.4 million at June 30, 2024, and $26.9 million at September 30, 2023.
● Loans that warranted a substandard risk rating at September 30, 2024 totaled $31.6 million, compared to $33.9 million at June 30, 2024, and $35.6 million at September 30, 2023.

Capital

Total shareholders' equity at September 30, 2024 was $452.2 million, an increase of $13.0 million, or 3.0%, compared to total shareholders' equity of $439.2 million at June 30, 2024, and an increase of $36.2 million, or 8.7%, over total shareholders' equity of $416.0 million at September 30, 2023.

● The linked-quarter increase was primarily due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio and preferred stock dividends.
● The year-over-year increase was due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio, preferred stock dividends, and stock repurchases.
● The Common Equity Tier 1 Risk-Based Capital Ratio was 9.79% at September 30, 2024, compared to 9.41% at June 30, 2024, and 9.07% at September 30, 2023.
● Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 8.17% at September 30, 2024, compared to 7.90% at June 30, 2024, and 7.61% at September 30, 2023.

Tangible book value per share, a non-GAAP financial measure, was $13.96 as of September 30, 2024, an increase of 12.8% annualized from $13.53 as of June 30, 2024, and an increase of 12.8% from $12.37 as of September 30, 2023.

● The Company has increased tangible book value per share each of the past 31 quarters.

The Company did not repurchase any shares of its common stock during the third quarter of 2024.

● The Company has $15.3 million remaining under its current share repurchase authorization.

Page 6 of 17

Today, the Company also announced that its Board of Directors has 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 2, 2024 to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2024.

Conference Call and Webcast

The Company will host a conference call to discuss its third quarter 2024 financial results on Thursday, October 24, 2024 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 844-481-2913 and requesting to join the Bridgewater Bancshares earnings call. To listen to a replay of the conference call via phone, please dial 877-344-7529 and enter access code 1933700. The replay will be available through October 31, 2024. The conference call will also be available via a live webcast on the Investor Relations section of the Company's website, investors.bridgewaterbankmn.com, and archived for replay.

About the Company

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 treasury management solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $4.7 billion and seven branches as of September 30, 2024, 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.

Use of Non-GAAP financial measures

In 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.

Forward-Looking Statements

This 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.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of changes in interest rates; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of inflation and possible recession; the effects of developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time that resulted in recent bank failures; loan concentrations in our 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 credit losses on loans; new or revised accounting standards; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, including those who have balances above current FDIC insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact 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; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and employee turnover; the occurrence of fraudulent activity, breaches or

Page 7 of 17

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

Any 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. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Page 8 of 17

Bridgewater Bancshares, Inc. and Subsidiaries
Financial Highlights

(dollars in thousands, except share data)

As of and for the Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Income Statement

Net Interest Income

$

25,599

$

24,996

$

24,631

$

25,314

$

25,421

Provision for (Recovery of) Credit Losses

-

600

750

(250)

(600)

Noninterest Income

1,522

1,763

1,550

1,409

1,726

Noninterest Expense

15,760

15,539

15,189

15,740

15,237

Net Income

8,675

8,115

7,831

8,873

9,629

Net Income Available to Common Shareholders

7,662

7,101

6,818

7,859

8,616

Per Common Share Data

Basic Earnings Per Share

$

0.28

$

0.26

$

0.25

$

0.28

$

0.31

Diluted Earnings Per Share

0.27

0.26

0.24

0.28

0.30

Book Value Per Share

14.06

13.63

13.30

12.94

12.47

Tangible Book Value Per Share (1)

13.96

13.53

13.20

12.84

12.37

Basic Weighted Average Shares Outstanding

27,382,798

27,386,713

27,691,401

27,870,430

27,943,409

Diluted Weighted Average Shares Outstanding

27,904,910

27,748,184

28,089,805

28,238,056

28,311,778

Shares Outstanding at Period End

27,425,690

27,348,049

27,589,827

27,748,965

28,015,505

Financial Ratios

Return on Average Assets (2)

0.73

%

0.70

%

0.69

%

0.77

%

0.85

%

Pre-Provision Net Revenue Return on Average Assets (1)(2)

0.96

0.94

0.95

0.96

1.01

Return on Average Shareholders' Equity (2)

7.79

7.49

7.35

8.43

9.23

Return on Average Tangible Common Equity (1)(2)

8.16

7.80

7.64

8.95

9.92

Net Interest Margin (3)

2.24

2.24

2.24

2.27

2.32

Core Net Interest Margin (1)(3)

2.16

2.17

2.18

2.21

2.24

Cost of Total Deposits

3.58

3.46

3.32

3.19

2.99

Cost of Funds

3.54

3.49

3.34

3.23

3.10

Efficiency Ratio (1)

58.0

58.7

58.2

58.8

56.1

Noninterest Expense to Average Assets (2)

1.33

1.35

1.33

1.37

1.34

Balance Sheet

Total Assets

$

4,691,517

$

4,687,035

$

4,723,109

$

4,611,990

$

4,557,070

Total Loans, Gross

3,685,590

3,800,385

3,784,205

3,724,282

3,722,271

Deposits

3,747,442

3,807,712

3,807,225

3,709,948

3,675,509

Total Shareholders' Equity

452,200

439,241

433,611

425,515

415,960

Loan to Deposit Ratio

98.3

%

99.8

%

99.4

%

100.4

%

101.3

%

Core Deposits to Total Deposits (4)

71.5

67.9

69.3

68.7

70.3

Uninsured Deposits to Total Deposits

25.0

22.5

26.0

24.3

22.2

Asset Quality

Net Loan Charge-Offs to Average Loans (2)

0.10

%

0.00

%

0.00

%

0.01

%

0.01

%

Nonperforming Assets to Total Assets (5)

0.19

0.01

0.01

0.02

0.02

Allowance for Credit Losses to Total Loans

1.38

1.37

1.36

1.36

1.36

Capital Ratios (Consolidated) (6)

Tier 1 Leverage Ratio

9.75

%

9.66

%

9.66

%

9.57

%

9.62

%

Common Equity Tier 1 Risk-based Capital Ratio

9.79

9.41

9.21

9.16

9.07

Tier 1 Risk-based Capital Ratio

11.44

11.03

10.83

10.79

10.69

Total Risk-based Capital Ratio

14.62

14.16

14.00

13.97

13.88

Tangible Common Equity to Tangible Assets (1)

8.17

7.90

7.72

7.73

7.61

(1) Represents a non-GAAP financial measure. See "Non-GAAP FinancialMeasures" for further details.
(2) Annualized.

Page 9 of 17

(3) Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
(5) Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
(6) Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.

Page 10 of 17

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except share data)

September 30,

June 30,

March 31,

December 31,

September 30,

2024

2024

2024

2023

2023

(Unaudited)

(Unaudited)

(Unaudited)

(Unaudited)

Assets

Cash and Cash Equivalents

$

191,859

$

134,093

$

143,355

$

128,562

$

124,358

Bank-Owned Certificates of Deposit

-

-

-

-

1,225

Securities Available for Sale, at Fair Value

664,715

601,057

633,282

604,104

553,076

Loans, Net of Allowance for Credit Losses

3,628,867

3,742,222

3,726,502

3,667,215

3,664,464

Federal Home Loan Bank (FHLB) Stock, at Cost

18,626

15,844

17,195

17,097

17,056

Premises and Equipment, Net

47,777

47,902

48,299

48,886

49,331

Foreclosed Assets

434

-

20

-

-

Accrued Interest

16,750

16,944

16,696

16,697

15,182

Goodwill

2,626

2,626

2,626

2,626

2,626

Other Intangible Assets, Net

163

171

180

188

197

Bank-Owned Life Insurance

38,219

35,090

34,778

34,477

34,209

Other Assets

81,481

91,086

100,176

92,138

95,346

Total Assets

$

4,691,517

$

4,687,035

$

4,723,109

$

4,611,990

$

4,557,070

Liabilities and Equity

Liabilities

Deposits:

Noninterest Bearing

$

713,309

$

705,175

$

698,432

$

756,964

$

754,297

Interest Bearing

3,034,133

3,102,537

3,108,793

2,952,984

2,921,212

Total Deposits

3,747,442

3,807,712

3,807,225

3,709,948

3,675,509

Notes Payable

13,750

13,750

13,750

13,750

13,750

FHLB Advances

349,500

287,000

317,000

319,500

294,500

Subordinated Debentures, Net of Issuance Costs

79,574

79,479

79,383

79,288

79,192

Accrued Interest Payable

3,458

3,999

4,405

5,282

3,816

Other Liabilities

45,593

55,854

67,735

58,707

74,343

Total Liabilities

4,239,317

4,247,794

4,289,498

4,186,475

4,141,110

Shareholders' Equity

Preferred Stock- $0.01 par value; Authorized 10,000,000

Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at September 30, 2024 (unaudited), June 30, 2024 (unaudited), March 31, 2024 (unaudited), December 31, 2023, and September 30, 2023 (unaudited)

66,514

66,514

66,514

66,514

66,514

Common Stock- $0.01 par value; Authorized 75,000,000

Common Stock - Issued and Outstanding 27,425,690 at September 30, 2024 (unaudited), 27,348,049 at June 30, 2024 (unaudited), 27,589,827 at March 31, 2024 (unaudited), 27,748,965 at December 31, 2023 and 28,015,505 at September 30, 2023 (unaudited)

274

273

276

277

280

Additional Paid-In Capital

94,597

93,205

95,069

96,320

100,120

Retained Earnings

302,231

294,569

287,468

280,650

272,812

Accumulated Other Comprehensive Loss

(11,416)

(15,320)

(15,716)

(18,246)

(23,766)

Total Shareholders' Equity

452,200

439,241

433,611

425,515

415,960

Total Liabilities and Equity

$

4,691,517

$

4,687,035

$

4,723,109

$

4,611,990

$

4,557,070

Page 11 of 17

Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Interest Income

Loans, Including Fees

$

51,895

$

51,385

$

49,581

$

49,727

$

48,999

$

152,861

$

141,675

Investment Securities

8,725

8,177

7,916

7,283

6,507

24,818

18,962

Other

2,407

1,316

1,172

1,543

1,303

4,895

3,165

Total Interest Income

63,027

60,878

58,669

58,553

56,809

182,574

163,802

Interest Expense

Deposits

34,187

31,618

30,190

29,448

27,225

95,995

66,597

Federal Funds Purchased

2

853

304

268

548

1,159

8,253

Notes Payable

296

296

295

299

296

887

844

FHLB Advances

1,942

2,125

2,258

2,220

2,316

6,325

5,269

Subordinated Debentures

1,001

990

991

1,004

1,003

2,982

2,979

Total Interest Expense

37,428

35,882

34,038

33,239

31,388

107,348

83,942

Net Interest Income

25,599

24,996

24,631

25,314

25,421

75,226

79,860

Provision for (Recovery of) Credit Losses

-

600

750

(250)

(600)

1,350

75

Net Interest Income After Provision for Credit Losses

25,599

24,396

23,881

25,564

26,021

73,876

79,785

Noninterest Income

Customer Service Fees

373

366

342

359

379

1,081

1,096

Net Gain (Loss) on Sales of Securities

(28)

320

93

(27)

-

385

(6)

Letter of Credit Fees

424

387

316

418

315

1,127

1,328

Debit Card Interchange Fees

152

155

141

152

150

448

443

Bank-Owned Life Insurance

352

312

301

268

252

965

724

FHLB Prepayment Income

-

-

-

-

493

-

792

Other Income

249

223

357

239

137

829

707

Total Noninterest Income

1,522

1,763

1,550

1,409

1,726

4,835

5,084

Noninterest Expense

Salaries and Employee Benefits

9,851

9,675

9,433

9,615

9,519

28,959

26,923

Occupancy and Equipment

1,069

1,092

1,057

1,062

1,101

3,218

3,385

FDIC Insurance Assessment

750

725

875

1,050

1,075

2,350

2,640

Data Processing

368

472

412

424

392

1,252

1,150

Professional and Consulting Fees

1,149

852

889

782

715

2,890

2,299

Derivative Collateral Fees

381

528

486

573

543

1,395

1,327

Information Technology and Telecommunications

840

812

796

812

683

2,448

2,077

Marketing and Advertising

367

317

322

324

222

1,006

805

Intangible Asset Amortization

9

8

9

9

9

26

91

Other Expense

976

1,058

910

1,089

978

2,944

2,883

Total Noninterest Expense

15,760

15,539

15,189

15,740

15,237

46,488

43,580

Income Before Income Taxes

11,361

10,620

10,242

11,233

12,510

32,223

41,289

Provision for Income Taxes

2,686

2,505

2,411

2,360

2,881

7,602

10,202

Net Income

8,675

8,115

7,831

8,873

9,629

24,621

31,087

Preferred Stock Dividends

(1,013)

(1,014)

(1,013)

(1,014)

(1,013)

(3,040)

(3,040)

Net Income Available to Common Shareholders

$

7,662

$

7,101

$

6,818

$

7,859

$

8,616

$

21,581

$

28,047

Earnings Per Share

Basic

$

0.28

$

0.26

$

0.25

$

0.28

$

0.31

$

0.79

$

1.01

Diluted

0.27

0.26

0.24

0.28

0.30

0.77

0.99

Page 12 of 17

Bridgewater Bancshares, Inc. and Subsidiaries
Analysis of Average Balances, Yields and Rates

(dollars in thousands, except per share data)

(Unaudited)

For the Three Months Ended

September 30, 2024

June 30, 2024

September 30, 2023

Average

Interest

Yield/

Average

Interest

Yield/

Average

Interest

Yield/

(dollars in thousands)

Balance

& Fees

Rate

Balance

& Fees

Rate

Balance

& Fees

Rate

Interest Earning Assets:

Cash Investments

$

157,114

$

1,971

4.99

%

$

81,672

$

922

4.54

%

$

81,038

$

903

4.42

%

Investment Securities:

Taxable Investment Securities

668,429

8,406

5.00

641,469

7,861

4.93

565,008

6,234

4.38

Tax-Exempt Investment Securities (1)

31,496

402

5.08

31,550

401

5.11

29,955

346

4.58

Total Investment Securities

699,925

8,808

5.01

673,019

8,262

4.94

594,963

6,580

4.39

Loans (1)(2)

3,721,654

52,118

5.57

3,771,768

51,592

5.50

3,722,594

49,326

5.26

Federal Home Loan Bank Stock

16,828

436

10.31

19,461

394

8.15

17,829

400

8.89

Total Interest Earning Assets

4,595,521

63,333

5.48

%

4,545,920

61,170

5.41

%

4,416,424

57,209

5.14

%

Noninterest Earning Assets

108,283

100,597

88,513

Total Assets

$

4,703,804

$

4,646,517

$

4,504,937

Interest Bearing Liabilities:

Deposits:

Interest Bearing Transaction Deposits

$

804,161

$

9,369

4.63

%

$

732,923

$

8,270

4.54

%

$

730,244

$

7,136

3.88

%

Savings and Money Market Deposits

939,665

10,262

4.34

914,397

9,459

4.16

874,612

8,089

3.67

Time Deposits

355,050

3,918

4.39

360,691

3,850

4.30

266,635

1,962

2.92

Brokered Deposits

989,712

10,638

4.28

976,467

10,039

4.13

985,276

10,038

4.04

Total Interest Bearing Deposits

3,088,588

34,187

4.40

2,984,478

31,618

4.26

2,856,767

27,225

3.78

Federal Funds Purchased

141

2

5.72

61,151

853

5.61

39,641

548

5.48

Notes Payable

13,750

296

8.58

13,750

296

8.64

13,750

296

8.58

FHLB Advances

309,120

1,942

2.50

306,396

2,125

2.79

275,261

2,316

3.34

Subordinated Debentures

79,519

1,001

5.01

79,424

990

5.02

79,137

1,003

5.03

Total Interest Bearing Liabilities

3,491,118

37,428

4.27

%

3,445,199

35,882

4.19

%

3,264,556

31,388

3.81

%

Noninterest Bearing Liabilities:

Noninterest Bearing Transaction Deposits

710,192

691,891

754,567

Other Noninterest Bearing Liabilities

59,417

73,842

71,767

Total Noninterest Bearing Liabilities

769,609

765,733

826,334

Shareholders' Equity

443,077

435,585

414,047

Total Liabilities and Shareholders' Equity

$

4,703,804

$

4,646,517

$

4,504,937

Net Interest Income / Interest Rate Spread

25,905

1.21

%

25,288

1.22

%

25,821

1.33

%

Net Interest Margin (3)

2.24

%

2.24

%

2.32

%

Taxable Equivalent Adjustment:

Tax-Exempt Investment Securities and Loans

(306)

(292)

(400)

Net Interest Income

$

25,599

$

24,996

$

25,421

(1) Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%.
(2) Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
(3) Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

Page 13 of 17

Bridgewater Bancshares, Inc. and Subsidiaries
Analysis of Average Balances, Yields and Rates

(dollars in thousands, except per share data)

(Unaudited)

For the Nine Months Ended

September 30, 2024

September 30, 2023

Average

Interest

Yield/

Average

Interest

Yield/

(dollars in thousands)

Balance

& Fees

Rate

Balance

& Fees

Rate

Interest Earning Assets:

Cash Investments

$

104,831

$

3,722

4.74

%

$

68,150

$

1,937

3.80

%

Investment Securities:

Taxable Investment Securities

649,538

23,867

4.91

569,097

18,192

4.27

Tax-Exempt Investment Securities (1)

31,597

1,203

5.09

28,947

975

4.50

Total Investment Securities

681,135

25,070

4.92

598,044

19,167

4.29

Loans (1)(2)

3,740,855

153,568

5.48

3,690,196

142,659

5.17

Federal Home Loan Bank Stock

18,111

1,173

8.65

22,343

1,228

7.34

Total Interest Earning Assets

4,544,932

183,533

5.39

%

4,378,733

164,991

5.04

%

Noninterest Earning Assets

102,993

86,243

Total Assets

$

4,647,925

$

4,464,976

Interest Bearing Liabilities:

Deposits:

Interest Bearing Transaction Deposits

$

757,409

$

25,332

4.47

%

$

625,531

$

15,833

3.38

%

Savings and Money Market Deposits

917,051

28,502

4.15

926,494

21,636

3.12

Time Deposits

344,484

10,935

4.24

261,474

4,734

2.42

Brokered Deposits

993,445

31,226

4.20

876,130

24,394

3.72

Total Interest Bearing Deposits

3,012,389

95,995

4.26

2,689,629

66,597

3.31

Federal Funds Purchased

27,605

1,159

5.61

220,434

8,253

5.01

Notes Payable

13,750

887

8.62

13,750

844

8.21

FHLB Advances

311,380

6,325

2.71

215,938

5,269

3.26

Subordinated Debentures

79,424

2,982

5.02

79,042

2,979

5.04

Total Interest Bearing Liabilities

3,444,548

107,348

4.16

%

3,218,793

83,942

3.49

%

Noninterest Bearing Liabilities:

Noninterest Bearing Transaction Deposits

700,308

774,523

Other Noninterest Bearing Liabilities

67,405

63,646

Total Noninterest Bearing Liabilities

767,713

838,169

Shareholders' Equity

435,664

408,014

Total Liabilities and Shareholders' Equity

$

4,647,925

$

4,464,976

Net Interest Income / Interest Rate Spread

76,185

1.23

%

81,049

1.55

%

Net Interest Margin (3)

2.24

%

2.47

%

Taxable Equivalent Adjustment:

Tax-Exempt Investment Securities and Loans

(959)

(1,189)

Net Interest Income

$

75,226

$

79,860

Page 14 of 17

Bridgewater Bancshares, Inc. and Subsidiaries
Asset Quality Summary

(dollars in thousands)

(unaudited)

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Allowance for Credit Losses

Balance at Beginning of Period

$

51,949

$

51,347

$

50,494

$

50,585

$

50,701

$

50,494

$

47,996

Impact of Adopting CECL

-

-

-

-

-

-

650

Provision for Credit Losses

-

600

850

-

-

1,450

2,050

Charge-offs

(937)

(10)

(2)

(95)

(122)

(949)

(129)

Recoveries

6

12

5

4

6

23

18

Net Charge-offs

$

(931)

$

2

$

3

$

(91)

$

(116)

$

(926)

$

(111)

Balance at End of Period

51,018

51,949

51,347

50,494

50,585

51,018

50,585

Allowance for Credit Losses to Total Loans

1.38

%

1.37

%

1.36

%

1.36

%

1.36

%

1.38

%

1.36

%

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Provision for Credit Losses on Loans

$

-

$

600

$

850

$

-

$

-

$

1,450

$

2,050

Recovery of Credit Losses for Off-Balance Sheet Credit Exposures

-

-

(100)

(250)

(600)

(100)

(1,975)

Provision for (Recovery of) Credit Losses

$

-

$

600

$

750

$

(250)

$

(600)

$

1,350

$

75

As of and for the Three Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

Selected Asset Quality Data

Loans 30-89 Days Past Due

$

65

$

502

$

-

$

15,110

$

11

Loans 30-89 Days Past Due to Total Loans

0.00

%

0.01

%

0.00

%

0.41

%

0.00

%

Nonperforming Loans

$

8,378

$

678

$

249

$

919

$

749

Nonperforming Loans to Total Loans

0.23

%

0.02

%

0.01

%

0.02

%

0.02

%

Nonaccrual Loans to Total Loans

0.23

0.02

0.01

0.02

0.02

Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans

0.23

0.02

0.01

0.02

0.02

Foreclosed Assets

$

434

$

-

$

20

$

-

$

-

Nonperforming Assets (1)

8,812

678

269

919

749

Nonperforming Assets to Total Assets (1)

0.19

%

0.01

%

0.01

%

0.02

%

0.02

%

Net Loan Charge-Offs (Annualized) to Average Loans

0.10

0.00

0.00

0.01

0.01

Watchlist Risk Rating Loans

$

31,991

$

30,436

$

21,624

$

26,485

$

26,877

Substandard Risk Rating Loans

31,637

33,908

33,829

35,858

35,621

(1) Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.

Page 15 of 17

Bridgewater Bancshares, Inc. and Subsidiaries
Non-GAAP Financial Measures

(dollars in thousands)

(unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Pre-Provision Net Revenue

Noninterest Income

$

1,522

$

1,763

$

1,550

$

1,409

$

1,726

$

4,835

$

5,084

Less: (Gain) Loss on Sales of Securities

28

(320)

(93)

27

-

(385)

6

Less: FHLB Advance Prepayment Income

-

-

-

-

(493)

-

(792)

Total Operating Noninterest Income

1,550

1,443

1,457

1,436

1,233

4,450

4,298

Plus: Net Interest Income

25,599

24,996

24,631

25,314

25,421

75,226

79,860

Net Operating Revenue

$

27,149

$

26,439

$

26,088

$

26,750

$

26,654

$

79,676

$

84,158

Noninterest Expense

$

15,760

$

15,539

$

15,189

$

15,740

$

15,237

$

46,488

$

43,580

Total Operating Noninterest Expense

$

15,760

$

15,539

$

15,189

$

15,740

$

15,237

$

46,488

$

43,580

Pre-Provision Net Revenue

$

11,389

$

10,900

$

10,899

$

11,010

$

11,417

$

33,188

$

40,578

Plus:

Non-Operating Revenue Adjustments

(28)

320

93

(27)

493

385

786

Less:

Provision (Recovery of) for Credit Losses

-

600

750

(250)

(600)

1,350

75

Provision for Income Taxes

2,686

2,505

2,411

2,360

2,881

7,602

10,202

Net Income

$

8,675

$

8,115

$

7,831

$

8,873

$

9,629

$

24,621

$

31,087

Average Assets

$

4,703,804

$

4,646,517

$

4,592,838

$

4,567,446

$

4,504,937

$

4,647,925

$

4,464,976

Pre-Provision Net Revenue Return on Average Assets

0.96

%

0.94

%

0.95

%

0.96

%

1.01

%

0.95

%

1.22

%

Core Net Interest Margin

Net Interest Income (Tax-equivalent Basis)

$

25,905

$

25,288

$

24,992

$

25,683

$

25,822

$

76,185

$

81,049

Less: Loan Fees

(968)

(767)

(608)

(751)

(914)

(2,342)

(2,853)

Core Net Interest Income

$

24,937

$

24,521

$

24,384

$

24,932

$

24,908

$

73,843

$

78,196

Average Interest Earning Assets

$

4,595,521

$

4,545,920

$

4,492,756

$

4,480,428

$

4,416,424

$

4,544,932

$

4,378,733

Core Net Interest Margin

2.16

%

2.17

%

2.18

%

2.21

%

2.24

%

2.17

%

2.39

%

Efficiency Ratio

Noninterest Expense

$

15,760

$

15,539

$

15,189

$

15,740

$

15,237

$

46,488

$

43,580

Less: Amortization of Intangible Assets

(9)

(8)

(9)

(9)

(9)

(26)

(91)

Adjusted Noninterest Expense

$

15,751

$

15,531

$

15,180

$

15,731

$

15,228

$

46,462

$

43,489

Net Interest Income

$

25,599

$

24,996

$

24,631

$

25,314

$

25,421

$

75,226

$

79,860

Noninterest Income

1,522

1,763

1,550

1,409

1,726

4,835

5,084

Less: Gain (Loss) on Sales of Securities

28

(320)

(93)

27

-

(385)

6

Adjusted Operating Revenue

$

27,149

$

26,439

$

26,088

$

26,750

$

27,147

$

79,676

$

84,950

Efficiency Ratio

58.0

%

58.7

%

58.2

%

58.8

%

56.1

%

58.3

%

51.2

%

Page 16 of 17

Bridgewater Bancshares, Inc. and Subsidiaries

Non-GAAP Financial Measures

(dollars in thousands)

(unaudited)

For the Three Months Ended

For the Nine Months Ended

September 30,

June 30,

March 31,

December 31,

September 30,

September 30,

September 30,

(dollars in thousands)

2024

2024

2024

2023

2023

2024

2023

Tangible Common Equity and Tangible Common Equity/Tangible Assets

Total Shareholders' Equity

$

452,200

$

439,241

$

433,611

$

425,515

$

415,960

Less: Preferred Stock

(66,514)

(66,514)

(66,514)

(66,514)

(66,514)

Total Common Shareholders' Equity

385,686

372,727

367,097

359,001

349,446

Less: Intangible Assets

(2,789)

(2,797)

(2,806)

(2,814)

(2,823)

Tangible Common Equity

$

382,897

$

369,930

$

364,291

$

356,187

$

346,623

Total Assets

$

4,691,517

$

4,687,035

$

4,723,109

$

4,611,990

$

4,557,070

Less: Intangible Assets

(2,789)

(2,797)

(2,806)

(2,814)

(2,823)

Tangible Assets

$

4,688,728

$

4,684,238

$

4,720,303

$

4,609,176

$

4,554,247

Tangible Common Equity/Tangible Assets

8.17

%

7.90

%

7.72

%

7.73

%

7.61

%

Tangible Book Value Per Share

Book Value Per Common Share

$

14.06

$

13.63

$

13.30

$

12.94

$

12.47

Less: Effects of Intangible Assets

(0.10)

(0.10)

(0.10)

(0.10)

(0.10)

Tangible Book Value Per Common Share

$

13.96

$

13.53

$

13.20

$

12.84

$

12.37

Return on Average Tangible Common Equity

Net Income Available to Common Shareholders

$

7,662

$

7,101

$

6,818

$

7,859

$

8,616

$

21,581

$

28,047

Average Shareholders' Equity

$

443,077

$

435,585

$

428,248

$

417,789

$

414,047

$

435,664

$

408,014

Less: Average Preferred Stock

(66,514)

(66,514)

(66,514)

(66,514)

(66,514)

(66,514)

(66,514)

Average Common Equity

376,563

369,071

361,734

351,275

347,533

369,150

341,500

Less: Effects of Average Intangible Assets

(2,794)

(2,802)

(2,811)

(2,819)

(2,828)

(2,802)

(2,856)

Average Tangible Common Equity

$

373,769

$

366,269

$

358,923

$

348,456

$

344,705

$

366,348

$

338,644

Return on Average Tangible Common Equity

8.16

%

7.80

%

7.64

%

8.95

%

9.92

%

7.87

%

11.07

%

Page 17 of 17