8-K - BWB - Equibles

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K CURRENT REPORT

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

January 24, 2024

Date of Report

(Date of earliest event reported)

BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

<br><br><br><br>	<br><br>	<br><br><br><br>
Minnesota<br><br>(State or other jurisdiction of<br><br>incorporation)	001-38412<br><br>(Commission File Number)	26-0113412<br><br>(I.R.S. Employer<br><br>Identification No.)
	4450 Excelsior Boulevard, Suite 100<br><br>St. Louis Park , Minnesota<br><br>(Address of principal executive offices)	55416<br><br>(Zip Code)

Registrant’s telephone number, including area code: (952) 893-6868

Not Applicable (Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

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

Item 2.02 R esults of Operations and Financial Condition.

On January 24, 2024, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three and twelve months ended December 31, 2023. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information furnished in this item of this Form 8-K, and the related exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 7.01 R egulation FD Disclosure.

The Company hereby furnishes the Investor Presentation attached hereto as Exhibit 99.2.

The information furnished in this item of this Form 8-K, and the related exhibits, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Item 8.01 Other Events .

On January 24, 2024, in its 2023 fourth quarter earnings release, the Company announced that its Board of Directors had 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 depository share, each representing a 1/100^th^ interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on March 1, 2024, to shareholders of record of the Series A Preferred Stock at the close of business on February 15, 2024.

Item 9.01 Financial Statements and Exhibits.

(d)****Exhibits

Exhibit 99.1	Press Release of Bridgewater Bancshares, Inc., dated January 24, 2024, regarding fourth quarter 2023 financial results
Exhibit 99.2	Earnings Presentation dated January 24, 2024
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Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES

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


	Bridgewater Bancshares, Inc.


Date: January 24, 2024
	By: /s/ Jerry Baack
	Name: Jerry Baack
	Title: Chairman, Chief Executive Officer and President

Exhibit 99.1


Investor Contact: Justin Horstman	Vice President, Investor Relations<br>Justin.Horstman@bwbmn.com	952.542.5169

January 24, 2024

Bridgewater Bancshares, Inc. Announces Fourth Quarter 2023 Net Income of $8.9 Million, $0.28 Diluted Earnings Per Common Share

Fourth Quarter 2023 Highlights

●	Deposit growth of $34.4 million, or 3.7% annualized, from the third quarter of 2023, exceeded gross loan growth which remained relatively stable from the third quarter of 2023, lowering the loan-to-deposit ratio to 100.4%.

●	Net interest margin (on a fully tax-equivalent basis) of 2.27%, compared to 2.32% in the third quarter of 2023.

●	No provision for credit losses on loans was recorded in the fourth quarter of 2023. The allowance for credit losses on loans to total loans was 1.36% at December 31, 2023 and September 30, 2023, respectively.

●	Nonperforming assets to total assets of 0.02% at December 31, 2023 and September 30, 2023.

●	Tangible book value per share^(1)^ of $12.84 at December 31, 2023, an increase of $0.46, or 14.9% annualized, compared to $12.37 at September 30, 2023.

●	Repurchased 423,749 shares of common stock at a weighted average price of $10.72, for a total of $4.5 million.

●	Early adopted ASU 2023-02 applying the modified retrospective method which reclassified noninterest expense to income tax expense effective January 1, 2023, which may impact comparability to prior 2023 filings.

Annual 2023 Highlights

●	Diluted earnings per common share for the year ended December 31, 2023 were $1.27, compared to $1.72 for the year ended December 31, 2022.

●	Asset growth of 6.1% compared to December 31, 2022 exceeded 2023 full-year noninterest expense growth of 4.8% compared to the full year of 2022.

●	Deposit growth of $293.4 million, or 8.6%, in 2023 exceeded gross loan growth of $154.8 million, or 4.3%.

●	Net loan charge-offs (recoveries) as a percentage of average loans were 0.01% for the year ended December 31, 2023, compared to (0.01)% for the year ended December 31, 2022.

●	Tangible book value per share^(1)^ increased $1.15, or 9.8%, to $12.84 at December 31, 2023, compared to $11.69 at December 31, 2022.

●	Common Equity Tier 1 Risk-Based Capital Ratio was 9.16% at December 31, 2023, compared to 8.40% at December 31, 2022.

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

Page 1 of 17

St. Louis Park, MN – Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $8.9 million for the fourth quarter of 2023, compared to $9.6 million for the third quarter of 2023, and $13.7 million for the fourth quarter of 2022. Earnings per diluted common share were $0.28 for the fourth quarter of 2023, compared to $0.30 for the third quarter of 2023, and $0.45 for the fourth quarter of 2022.

“Bridgewater finished 2023 strong with the continuation of several positive trends as net interest margin continued to stabilize, deposit growth outpaced loan growth, and asset quality remained superb,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “We also returned capital to shareholders by opportunistically repurchasing shares of common stock during the fourth quarter, while tangible book value per share increased for the 28th consecutive quarter.

“As we enter 2024, we are optimistic about our outlook as our balance sheet is well-positioned to benefit as the yield curve normalizes. In addition, our loan pipeline has begun to grow once again as loan demand has started to increase. By moderating our loan growth and reducing our loan-to-deposit ratio over the past few quarters, we believe we can continue to gain market share by deploying capital into more profitable loan growth as the interest rate environment improves.”

Key Financial Measures


		As of and for the Three Months Ended										As of and for the Year Ended
		December 31,			September 30,			December 31,				December 31,			December 31,
	****	2023			2023			2022			****	2023		****	2022
Per Common Share Data
Basic Earnings Per Share		$	0.28		$	0.31		$	0.46			$	1.29		$	1.78
Diluted Earnings Per Share			0.28			0.30			0.45				1.27			1.72
Book Value Per Share			12.94			12.47			11.80				12.94			11.80
Tangible Book Value Per Share ^(1)^			12.84			12.37			11.69				12.84			11.69

Financial Ratios
Return on Average Assets ^(2)^			0.77	%		0.85	%		1.28	%			0.89	%		1.38	%
Pre-Provision Net Revenue Return on Average Assets ^(1)(2)^			0.96			1.01			1.82				1.15			2.06
Return on Average Shareholders' Equity ^(2)^			8.43			9.23			14.06				9.73			13.90
Return on Average Tangible Common Equity^(1)(2)^			8.95			9.92			15.86				10.53			15.69
Net Interest Margin^(3)^			2.27			2.32			3.16				2.42			3.45
Core Net Interest Margin ^(1)(3)^			2.21			2.24			3.05				2.34			3.27
Cost of Total Deposits			3.19			2.99			1.31				2.73			0.75
Cost of Funds			3.23			3.10			1.67				2.92			0.99
Efficiency Ratio^(1)^			58.8			56.1			43.8				53.0			41.5
Noninterest Expense to Average Assets ^(2)^			1.37			1.34			1.42				1.32			1.46
Tangible Common Equity to Tangible Assets ^(1)^			7.73			7.61			7.48				7.73			7.48
Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) ^(4)^			9.16			9.07			8.40				9.16			8.40

Balance Sheet and Asset Quality (dollars in thousands)
Total Assets		$	4,611,990		$	4,557,070		$	4,345,662			$	4,611,990		$	4,345,662
Total Loans, Gross			3,724,282			3,722,271			3,569,446				3,724,282			3,569,446
Deposits			3,709,948			3,675,509			3,416,543				3,709,948			3,416,543
Loan to Deposit Ratio			100.4	%		101.3	%		104.5	%			100.4	%		104.5	%
Net Loan Charge-Offs (Recoveries) to Average Loans ^(2)^			0.01			0.01			0.00				0.01			(0.01)
Nonperforming Assets to Total Assets^(5)^			0.02			0.02			0.01				0.02			0.01
Allowance for Credit Losses to Total Loans			1.36			1.36			1.34				1.36			1.34

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)	Annualized.
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(3)	Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
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(4)	Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
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(5)	Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
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Page 2 of 17

Income Statement

Net Interest Margin and Net Interest Income

Net interest margin (on a fully tax-equivalent basis) for the fourth quarter of 2023 was 2.27%, a five basis point decline from 2.32% in the third quarter of 2023 and an 89 basis point decline from 3.16% in the fourth 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 prior to 2023, PPP balances, interest, and fees, was 2.21% for the fourth quarter of 2023, a three basis point decline from 2.24% in the third quarter of 2023, and an 84 basis point decline from 3.05% in the fourth quarter of 2022.

●	The linked-quarter and year-over-year declines in the margin were primarily due to higher funding costs, offset partially by higher earning asset yields.

Net interest income was $25.3 million for the fourth quarter of 2023, a decrease of $107,000 from $25.4 million in the third quarter of 2023, and a decrease of $7.6 million from $32.9 million in the fourth quarter of 2022.

●	The linked-quarter and year-over year decreases in net interest income were primarily due to higher rates paid on deposits in the rising interest rate environment.
●	Average interest earning assets were $4.48 billion for the fourth quarter of 2023, an increase of $64.0 million, or 1.4%, from $4.42 billion for the third quarter of 2023, and an increase of $302.8 million, or 7.2%, from $4.18 billion for the fourth quarter of 2022. The linked-quarter increase in average interest earning assets was primarily due to an increase in cash and purchases of investment securities. The year-over-year increase in average interest earning assets was primarily due to growth in the loan portfolio, purchases of investment securities, and an increase in cash.
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●

The linked-quarter and year-over year decreases in net interest income were primarily due to higher rates paid on deposits in the rising interest rate environment.

●

Average interest earning assets were $4.48 billion for the fourth quarter of 2023, an increase of $64.0 million, or 1.4%, from $4.42 billion for the third quarter of 2023, and an increase of $302.8 million, or 7.2%, from $4.18 billion for the fourth quarter of 2022. The linked-quarter increase in average interest earning assets was primarily due to an increase in cash and purchases of investment securities. The year-over-year increase in average interest earning assets was primarily due to growth in the loan portfolio, purchases of investment securities, and an increase in cash.

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Interest income was $58.6 million for the fourth quarter of 2023, an increase of $1.7 million from $56.8 million in the third quarter of 2023, and an increase of $9.7 million from $48.9 million in the fourth quarter of 2022.

●	The yield on interest earning assets (on a fully tax-equivalent basis) was 5.22% in the fourth quarter of 2023, compared to 5.14% in the third quarter of 2023 and 4.67% in the fourth quarter of 2022.
●	The linked-quarter increase in the yield on interest earning assets was primarily due to the purchase of higher yielding securities and loans repricing at yields accretive to the existing portfolio.
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●	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.
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●	Loan interest income and loan fees remain the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield increased to 5.33% in the fourth quarter of 2023, which was seven basis points higher than 5.26% in the third quarter of 2023, and 46 basis points higher than 4.87% in the fourth quarter of 2022.
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●	While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods saw fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the overall 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.
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A summary of interest and fees recognized on loans for the periods indicated is as follows:


	Three Months Ended
	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Interest	5.25	%	5.16	%	5.09	%	4.95	%	4.75	%
Fees	0.08		0.10		0.10		0.11		0.12
Yield on Loans	5.33	%	5.26	%	5.19	%	5.06	%	4.87	%

Interest expense was $33.2 million for the fourth quarter of 2023, an increase of $1.9 million from $31.4 million in the third quarter of 2023, and an increase of $17.3 million from $16.0 million in the fourth quarter of 2022.

●	The cost of interest bearing liabilities was 3.97% in the fourth quarter of 2023, compared to 3.81% in the third quarter of 2023 and 2.22% in the fourth quarter of 2022.
●	The linked-quarter increase in the cost of interest bearing liabilities was primarily due to higher rates paid on deposits in the rising interest rate environment.
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●	The year-over-year increase in the cost of interest bearing liabilities was primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.
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Interest expense on deposits was $29.4 million for the fourth quarter of 2023, an increase of $2.2 million from $27.2 million in the third quarter of 2023, and an increase of $18.7 million from $10.8 million in the fourth quarter of 2022.

Page 3 of 17

●	The cost of total deposits was 3.19% in the fourth quarter of 2023, compared to 2.99% in the third quarter of 2023 and 1.31% in the fourth quarter of 2022.
●	The linked-quarter increase in the cost of total deposits was primarily due to client demands for higher interest rates and increased competition for deposits.
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●	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.
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Provision for Credit Losses

The provision for credit losses on loans was $0 for both the fourth quarter of 2023 and the third quarter of 2023, compared to $1.5 million for the fourth quarter of 2022.

●	No provision for credit losses on loans was recorded in the fourth quarter of 2023 due to a more managed pace of loan growth.
●	The allowance for credit losses on loans to total loans was 1.36% at both December 31, 2023 and September 30, 2023, compared to 1.34% at December 31, 2022.
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The provision for credit losses for off-balance sheet credit exposures was a negative provision of $250,000 for the fourth quarter of 2023, compared to a negative provision of $600,000 for the third quarter of 2023 and zero for the fourth quarter of 2022.

●	The negative provision during the quarter was due to a reduction in outstanding unfunded commitments primarily attributable to the migration to funded loans, as well as a moderation in volume of newly originated projects with unfunded commitments.

Noninterest Income

Noninterest income was $1.4 million for the fourth quarter of 2023, a decrease of $317,000 from $1.7 million for the third quarter of 2023 and a decrease of $329,000 from $1.7 million for the fourth quarter of 2022.

●	The linked-quarter decrease was primarily due to $493,000 of FHLB prepayment income recognized in the previous quarter which did not reoccur, offset partially by higher letter of credit fees and other income.
●	The year-over-year decrease was primarily due to lower other income.
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Noninterest Expense

Noninterest expense was $15.7 million for the fourth quarter of 2023, an increase of $503,000 from $15.2 million for the third quarter of 2023 and an increase of $537,000 from $15.2 million for the fourth quarter of 2022.

●	The linked-quarter increase was primarily due to increases in salaries and employee benefits, information technology and telecommunications, and marketing and advertising.
●	The year-over-year increase was primarily attributable to industry-wide increases in the FDIC insurance assessment, higher professional and consulting fees and information technology and telecommunications, offset partially by decreases in salaries and employee benefits and occupancy and equipment.
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●	The efficiency ratio, a non-GAAP financial measure, was 58.8% for the fourth quarter of 2023, compared to 56.1% for the third quarter of 2023, and 43.8% for the fourth quarter of 2022.
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●	The Company had 255 full-time equivalent employees at both December 31, 2023 and September 30, 2023, compared to 246 employees at December 31, 2022.
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Income Taxes

The effective combined federal and state income tax rate for the fourth quarter of 2023 was 21.0%, a decrease from 23.0% for the third quarter of 2023 and 23.4% for the fourth quarter of 2022. The effective combined federal and state rate for the years ended December 31, 2023 and 2022 was 23.9% and 25.5%, respectively.

●	The linked-quarter decrease in the effective tax rate was primarily due to the delivery of two tax credits that occurred within the fourth quarter.
●	The Company early adopted ASU 2023-02 applying the modified retrospective method which reclassified noninterest expense to income tax expense effective January 1, 2023.
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Page 4 of 17

Balance Sheet

Loans


(dollars in thousands)	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Commercial	$	464,061	$	459,854	$	460,061	$	455,156	$	436,393
Construction and Land Development		232,804		294,818		351,069		312,277		295,554
1 - 4 Family Construction		65,087		64,463		69,648		85,797		70,242
Real Estate Mortgage:
1 - 4 Family Mortgage		402,396		404,716		400,708		380,210		355,474
Multifamily		1,388,541		1,378,669		1,314,524		1,320,081		1,306,738
CRE Owner Occupied		175,783		159,485		159,088		158,650		149,905
CRE Nonowner Occupied		987,306		951,263		971,532		962,671		947,008
Total Real Estate Mortgage Loans		2,954,026		2,894,133		2,845,852		2,821,612		2,759,125
Consumer and Other		8,304		9,003		9,581		9,518		8,132
Total Loans, Gross		3,724,282		3,722,271		3,736,211		3,684,360		3,569,446
Allowance for Credit Losses on Loans		(50,494)		(50,585)		(50,701)		(50,148)		(47,996)
Net Deferred Loan Fees		(6,573)		(7,222)		(7,718)		(8,735)		(9,293)
Total Loans, Net	$	3,667,215	$	3,664,464	$	3,677,792	$	3,625,477	$	3,512,157

Total gross loans at December 31, 2023 were $3.72 billion, a slight increase of $2.0 million, or 0.2% annualized, over total gross loans of $3.72 billion at September 30, 2023, and an increase of $154.8 million, or 4.3%, over total gross loans of $3.57 billion at December 31, 2022.

●	The slower loan growth in the loan portfolio during the fourth quarter of 2023 was primarily due to moderating loan originations and decreased demand in the higher interest rate environment.

Deposits


(dollars in thousands)	December 31, 2023		September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022
Noninterest Bearing Transaction Deposits	$	756,964	$	754,297	$	751,217	$	742,198	$	884,272
Interest Bearing Transaction Deposits		692,801		780,863		719,488		630,037		451,992
Savings and Money Market Deposits		935,091		872,534		860,613		913,013		1,031,873
Time Deposits		300,651		265,737		271,783		266,213		272,253
Brokered Deposits		1,024,441		1,002,078		974,831		859,662		776,153
Total Deposits	$	3,709,948	$	3,675,509	$	3,577,932	$	3,411,123	$	3,416,543

Total deposits at December 31, 2023 were $3.71 billion, an increase of $34.4 million, or 3.7% annualized, over total deposits of $3.68 billion at September 30, 2023, and an increase of $293.4 million, or 8.6%, over total deposits of $3.42 billion at December 31, 2022.

●	Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, remained stable year over year, despite industry and market turmoil.
●	Brokered deposits continue to be used as a supplemental funding source, as needed.
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●	Uninsured deposits were 24% of total deposits as of December 31, 2023 and 22% of total deposits as of September 30, 2023.
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Page 5 of 17

Liquidity

Total on- and off-balance sheet liquidity was $2.23 billion as of December 31, 2023, compared to $2.18 billion at September 30, 2023 and $1.38 billion at December 31, 2022. The Company did not utilize the Bank Term Funding Program (BTFP) or Federal Reserve Discount Window during the fourth quarter of 2023.


Primary Liquidity—On-Balance Sheet	****	December 31, 2023		****	September 30, 2023		****	June 30, 2023		****	March 31, 2023			December 31, 2022
(dollars in thousands)										****
Cash and Cash Equivalents		$	96,594		$	77,617		$	138,618		$	177,116		$	48,090
Securities Available for Sale			604,104			553,076			538,220			559,430			548,613
Less: Pledged Securities			(170,727)			(164,277)			(236,206)			(234,452)			—
Total Primary Liquidity		$	529,971		$	466,416		$	440,632		$	502,094		$	596,703
Ratio of Primary Liquidity to Total Deposits			14.3	%		12.7	%		12.3	%		14.7	%		17.5	%

Secondary Liquidity—Off-Balance Sheet Borrowing Capacity	****									****
Net Secured Borrowing Capacity with the FHLB		$	498,736		$	516,501		$	400,792		$	246,795		$	390,898
Net Secured Borrowing Capacity with the Federal Reserve Bank			979,448			1,022,128			986,644			990,685			157,827
Unsecured Borrowing Capacity with Correspondent Lenders			200,000			150,000			108,000			158,000			208,000
Secured Borrowing Capacity with Correspondent Lender			26,250			26,250			26,250			26,250			26,250
Total Secondary Liquidity		$	1,704,434		$	1,714,879		$	1,521,686		$	1,421,730		$	782,975
Total Primary and Secondary Liquidity		$	2,234,405		$	2,181,295		$	1,962,318		$	1,923,824		$	1,379,678
Ratio of Primary and Secondary Liquidity to Total Deposits			60.2	%		59.3	%		54.8	%		56.4	%		40.4	%

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 0.01% for both the fourth quarter of 2023 and the third quarter of 2023, and 0.00% for the fourth quarter of 2022.
●	At December 31, 2023, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $919,000, or 0.02% of total assets, as compared to $749,000, or 0.02%, of total assets at September 30, 2023, and $639,000, or 0.01% of total assets at December 31, 2022.
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●	Loans with potential weaknesses that warrant a watchlist risk rating at December 31, 2023 totaled $26.5 million, compared to $26.9 million at September 30, 2023, and $32.3 million at December 31, 2022.
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●	Loans that warranted a substandard risk rating at December 31, 2023 totaled $35.9 million, compared to $35.6 million at September 30, 2023, and $28.0 million at December 31, 2022.
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●	Loans past due 30-89 days increased quarter over quarter due to the timing of closing on one matured loan. The closing occurred subsequent to year-end and the loan continues to perform as a pass-rated credit.
---	---

Capital

Total shareholders’ equity at December 31, 2023 was $425.5 million, an increase of $9.6 million, or 2.3%, compared to total shareholders’ equity of $416.0 million at September 30, 2023, and an increase of $31.5 million, or 8.0%, over total shareholders’ equity of $394.1 million at December 31, 2022.

●	The linked-quarter 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 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, the adoption of the Current Expected Credit Losses (CECL) accounting methodology, preferred stock dividends, and stock repurchases.
---	---
●	The Common Equity Tier 1 Risk-Based Capital Ratio was 9.16% at December 31, 2023, compared to 9.07% at September 30, 2023 and 8.40% at December 31, 2022.
---	---
●	Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.73% at December 31, 2023, compared to 7.61% at September 30, 2023, and 7.48% at December 31, 2022.
---	---

Tangible book value per share, a non-GAAP financial measure, was $12.84 as of December 31, 2023, an increase of 3.7% from $12.37 as of September 30, 2023, and an increase of 9.8% from $11.69 as of December 31, 2022.

●	The Company has increased tangible book value per share each of the past 28 quarters.

During the fourth quarter of 2023, the company repurchased 423,749 shares of its common stock. Shares were repurchased at a weighted average price of $10.72 per share for a total of $4.5 million.

Page 6 of 17

●	The Company has $20.5 million remaining under its current share repurchase authorization.

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 March 1, 2024 to shareholders of record of the Series A Preferred Stock at the close of business on February 15, 2024.

Conference Call and Webcast

The Company will host a conference call to discuss its fourth quarter 2023 financial results on Thursday, January 25, 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 4855149. The replay will be available through February 1, 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 business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $4.6 billion and seven branches as of December 31, 2023, 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 recent and potential additional rate increases by the Federal Reserve; 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 rising rates 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 at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; 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, 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

Page 7 of 17

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 high rates of employee turnover; the occurrence of fraudulent activity, breaches or 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 the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023; 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 Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company 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; 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
		December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	****	2023		****	2023		****	2023		****	2023		****	2022		****
Income Statement
Net Interest Income		$	25,314		$	25,421		$	25,872		$	28,567		$	32,893
Provision for (Recovery of) Credit Losses			(250)			(600)			50			625			1,500
Noninterest Income			1,409			1,726			1,415			1,943			1,738
Noninterest Expense			15,740			15,237			14,274			14,069			15,203
Net Income			8,873			9,629			9,816			11,642			13,735
Net Income Available to Common Shareholders			7,859			8,616			8,802			10,629			12,721

Per Common Share Data
Basic Earnings Per Share		$	0.28		$	0.31		$	0.32		$	0.38		$	0.46
Diluted Earnings Per Share			0.28			0.30			0.31			0.37			0.45
Book Value Per Share			12.94			12.47			12.25			12.05			11.80
Tangible Book Value Per Share ^(1)^			12.84			12.37			12.15			11.95			11.69
Basic Weighted Average Shares Outstanding			27,870,430			27,943,409			27,886,425			27,726,894			27,558,983
Diluted Weighted Average Shares Outstanding			28,238,056			28,311,778			28,198,739			28,490,046			28,527,306
Shares Outstanding at Period End			27,748,965			28,015,505			27,973,995			27,845,244			27,751,950

Financial Ratios
Return on Average Assets ^(2)^			0.77	%		0.85	%		0.88	%		1.07	%		1.28	%
Pre-Provision Net Revenue Return on Average Assets ^(1)(2)^			0.96			1.01			1.16			1.49			1.82
Return on Average Shareholders' Equity ^(2)^			8.43			9.23			9.69			11.70			14.06
Return on Average Tangible Common Equity ^(1)(2)^			8.95			9.92			10.48			12.90			15.86
Net Interest Margin^(3)^			2.27			2.32			2.40			2.72			3.16
Core Net Interest Margin ^(1)(3)^			2.21			2.24			2.31			2.62			3.05
Cost of Total Deposits			3.19			2.99			2.66			2.01			1.31
Cost of Funds			3.23			3.10			2.91			2.41			1.67
Efficiency Ratio^(1)^			58.8			56.1			52.3			45.9			43.8
Noninterest Expense to Average Assets ^(2)^			1.37			1.34			1.28			1.30			1.42

Balance Sheet
Total Assets		$	4,611,990		$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662
Total Loans, Gross			3,724,282			3,722,271			3,736,211			3,684,360			3,569,446
Deposits			3,709,948			3,675,509			3,577,932			3,411,123			3,416,543
Total Shareholders' Equity			425,515			415,960			409,126			402,006			394,064
Loan to Deposit Ratio			100.4	%		101.3	%		104.4	%		108.0	%		104.5	%
Core Deposits to Total Deposits ^(4)^			68.7			70.3			70.3			72.4			74.6
Uninsured Deposits to Total Deposits			24.3			22.2			22.1			24.0			38.5

Asset Quality
Net Loan Charge-Offs to Average Loans^(2)^			0.01	%		0.01	%		0.00	%		0.00	%		0.00	%
Nonperforming Assets to Total Assets ^(5)^			0.02			0.02			0.02			0.02			0.01
Allowance for Credit Losses to Total Loans			1.36			1.36			1.36			1.36			1.34

Capital Ratios (Consolidated) ^(6)^
Tier 1 Leverage Ratio			9.57	%		9.62	%		9.47	%		9.41	%		9.55	%
Common Equity Tier 1 Risk-based Capital Ratio			9.16			9.07			8.72			8.48			8.40
Tier 1 Risk-based Capital Ratio			10.79			10.69			10.33			10.08			10.03
Total Risk-based Capital Ratio			13.97			13.88			13.50			13.25			13.15
Tangible Common Equity to Tangible Assets ^(1)^			7.73			7.61			7.39			7.23			7.48

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)	Annualized.
---	---
(3)	Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
---	---

Page 9 of 17

(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)


	December 31,			September 30,			June 30,			March 31,			December 31,
	2023		****	2023		****	2023		****	2023		****	2022
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Assets
Cash and Cash Equivalents	$	128,562		$	124,358		$	177,101		$	209,192		$	87,043
Bank-Owned Certificates of Deposit		—			1,225			1,225			1,225			1,181
Securities Available for Sale, at Fair Value		604,104			553,076			538,220			559,430			548,613
Loans, Net of Allowance for Credit Losses		3,667,215			3,664,464			3,677,792			3,625,477			3,512,157
Federal Home Loan Bank (FHLB) Stock, at Cost		17,097			17,056			21,557			28,632			19,606
Premises and Equipment, Net		48,886			49,331			49,710			47,801			48,445
Foreclosed Assets		—			—			116			116			—
Accrued Interest		16,697			15,182			13,822			13,377			13,479
Goodwill		2,626			2,626			2,626			2,626			2,626
Other Intangible Assets, Net		188			197			206			240			288
Bank-Owned Life Insurance		34,477			34,209			33,958			33,719			33,485
Other Assets		92,138			95,346			86,852			81,064			78,739
Total Assets	$	4,611,990		$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662

Liabilities and Equity
Liabilities
Deposits:
Noninterest Bearing	$	756,964		$	754,297		$	751,217		$	742,198		$	884,272
Interest Bearing		2,952,984			2,921,212			2,826,715			2,668,925			2,532,271
Total Deposits		3,709,948			3,675,509			3,577,932			3,411,123			3,416,543
Federal Funds Purchased		—			—			195,000			437,000			287,000
Notes Payable		13,750			13,750			13,750			13,750			13,750
FHLB Advances		319,500			294,500			262,000			197,000			97,000
Subordinated Debentures, Net of Issuance Costs		79,288			79,192			79,096			79,001			78,905
Accrued Interest Payable		5,282			3,816			2,974			3,257			2,831
Other Liabilities		58,707			74,343			63,307			59,762			55,569
Total Liabilities		4,186,475			4,141,110			4,194,059			4,200,893			3,951,598

SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value; Authorized 10,000,000
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at December 31, 2023 (unaudited), September 30, 2023 (unaudited), June 30, 2023 (unaudited), March 31, 2023 (unaudited), and December 31, 2022		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 27,748,965 at December 31, 2023 (unaudited), 28,015,505 at September 30, 2023 (unaudited), 27,973,995 at June 30, 2023 (unaudited), 27,845,244 at March 31, 2023 (unaudited), and 27,751,950 at December 31, 2022		277			280			280			278			278
Additional Paid-In Capital		96,320			100,120			99,044			97,716			96,529
Retained Earnings		280,650			272,812			264,196			255,394			248,685
Accumulated Other Comprehensive Loss		(18,246)			(23,766)			(20,908)			(17,896)			(17,942)
Total Shareholders' Equity		425,515			415,960			409,126			402,006			394,064
Total Liabilities and Equity	$	4,611,990		$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662

Page 11 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended															Year Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(dollars in thousands)	2023		****	2023		****	2023		****	2023		****	2022		****	2023		****	2022
Interest Income
Loans, Including Fees	$	49,727		$	48,999		$	47,721		$	44,955		$	42,488		$	191,402		$	146,256
Investment Securities		7,283			6,507			6,237			6,218			5,843			26,245			16,410
Other		1,543			1,303			1,043			819			529			4,708			1,029
Total Interest Income		58,553			56,809			55,001			51,992			48,860			222,355			163,695


Interest Expense
Deposits		29,448			27,225			22,998			16,374			10,781			96,045			23,379
Federal Funds Purchased		268			548			2,761			4,944			3,379			8,521			4,507
Notes Payable		299			296			285			263			202			1,143			202
FHLB Advances		2,220			2,316			2,092			861			575			7,489			1,221
Subordinated Debentures		1,004			1,003			993			983			1,030			3,983			4,688
Total Interest Expense		33,239			31,388			29,129			23,425			15,967			117,181			33,997

Net Interest Income		25,314			25,421			25,872			28,567			32,893			105,174			129,698
Provision for (Recovery of) Credit Losses		(250)			(600)			50			625			1,500			(175)			7,700

Net Interest Income After Provision for Credit Losses		25,564			26,021			25,822			27,942			31,393			105,349			121,998

Noninterest Income
Customer Service Fees		359			379			368			349			344			1,455			1,236
Net Gain (Loss) on Sales of Securities		(27)			—			50			(56)			30			(33)			82
Letter of Credit Fees		418			315			379			634			358			1,746			1,592
Debit Card Interchange Fees		152			150			155			138			148			595			586
Swap Fees		—			—			—			—			—			—			557
Bank-Owned Life Insurance		268			252			238			234			238			992			762
FHLB Prepayment Income		—			493			—			299			—			792			—
Other Income		239			137			225			345			620			946			1,517
Total Noninterest Income		1,409			1,726			1,415			1,943			1,738			6,493			6,332

Noninterest Expense
Salaries and Employee Benefits		9,615			9,519			8,589			8,815			9,821			36,538			36,941
Occupancy and Equipment		1,062			1,101			1,075			1,209			1,177			4,447			4,390
FDIC Insurance Assessment		1,050			1,075			900			665			360			3,690			1,365
Data Processing		424			392			401			357			371			1,574			1,396
Professional and Consulting Fees		782			715			829			755			635			3,081			2,664
Derivative Collateral Fees		573			543			404			380			535			1,900			687
Information Technology and Telecommunications		812			683			711			683			673			2,889			2,495
Marketing and Advertising		324			222			321			262			403			1,129			2,032
Intangible Asset Amortization		9			9			34			48			48			100			191
Amortization of Tax Credit Investments		—			—			—			—			114			—			408
Other Expense		1,089			978			1,010			895			1,066			3,972			4,051
Total Noninterest Expense		15,740			15,237			14,274			14,069			15,203			59,320			56,620

Income Before Income Taxes		11,233			12,510			12,963			15,816			17,928			52,522			71,710
Provision for Income Taxes		2,360			2,881			3,147			4,174			4,193			12,562			18,318
Net Income		8,873			9,629			9,816			11,642			13,735			39,960			53,392
Preferred Stock Dividends		(1,014)			(1,013)			(1,014)			(1,013)			(1,014)			(4,054)			(4,054)
Net Income Available to Common Shareholders	$	7,859		$	8,616		$	8,802		$	10,629		$	12,721		$	35,906		$	49,338

Earnings Per Share
Basic	$	0.28		$	0.31		$	0.32		$	0.38		$	0.46		$	1.29		$	1.78
Diluted		0.28			0.30			0.31			0.37			0.45			1.27			1.72

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																							****
		December 31, 2023								September 30, 2023							****	December 31, 2022							****
		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		$	106,275		$	1,233		4.60	%	$	81,038		$	903		4.42	%	$	65,393		$	366		2.22	%
Investment Securities:
Taxable Investment Securities			600,856			7,007		4.63			565,008			6,234		4.38			540,601			5,268		3.87
Tax-Exempt Investment Securities^(1)^			29,172			350		4.75			29,955			346		4.58			67,867			728		4.26
Total Investment Securities			630,028			7,357		4.63			594,963			6,580		4.39			608,468			5,996		3.91
Loans ^(1)(2)^			3,726,126			50,022		5.33			3,722,594			49,326		5.26			3,482,150			42,702		4.87
Federal Home Loan Bank Stock			17,999			310		6.85			17,829			400		8.89			21,633			163		2.99
Total Interest Earning Assets			4,480,428			58,922		5.22	%		4,416,424			57,209		5.14	%		4,177,644			49,227		4.67	%
Noninterest Earning Assets			87,018								88,513								73,701
Total Assets		$	4,567,446							$	4,504,937							$	4,251,345
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	719,630		$	7,546		4.16	%	$	730,244		$	7,136		3.88	%	$	464,631		$	2,013		1.72	%
Savings and Money Market Deposits			911,835			9,003		3.92			874,612			8,089		3.67			1,048,227			4,533		1.72
Time Deposits			268,140			2,330		3.45			266,635			1,962		2.92			281,334			1,007		1.42
Brokered Deposits			1,009,166			10,569		4.16			985,276			10,038		4.04			537,351			3,228		2.38
Total Interest Bearing Deposits			2,908,771			29,448		4.02			2,856,767			27,225		3.78			2,331,543			10,781		1.83
Federal Funds Purchased			18,932			268		5.62			39,641			548		5.48			340,471			3,379		3.94
Notes Payable			13,750			299		8.62			13,750			296		8.58			11,359			202		7.04
FHLB Advances			303,467			2,220		2.90			275,261			2,316		3.34			94,103			575		2.42
Subordinated Debentures			79,233			1,004		5.02			79,137			1,003		5.03			81,242			1,030		5.03
Total Interest Bearing Liabilities			3,324,153			33,239		3.97	%		3,264,556			31,388		3.81	%		2,858,718			15,967		2.22	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			753,430								754,567								943,232
Other Noninterest Bearing Liabilities			72,074								71,767								61,806
Total Noninterest Bearing Liabilities			825,504								826,334								1,005,038
Shareholders' Equity			417,789								414,047								387,589
Total Liabilities and Shareholders' Equity		$	4,567,446							$	4,504,937							$	4,251,345
Net Interest Income / Interest Rate Spread						25,683		1.25	%					25,821		1.33	%					33,260		2.45	%
Net Interest Margin ^(3)^								2.27	%							2.32	%							3.16	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(369)								(400)								(367)
Net Interest Income					$	25,314							$	25,421							$	32,893

(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 Year Ended															****
		December 31, 2023								December 31, 2022							****
		Average			Interest			Yield/		Average			Interest			Yield/
(dollars in thousands)	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
Interest Earning Assets:
Cash Investments		$	77,759		$	3,170		4.08	%	$	66,072		$	597		0.90	%
Investment Securities:
Taxable Investment Securities			577,102			25,199		4.37			448,500			13,960		3.11
Tax-Exempt Investment Securities^(1)^			29,004			1,325		4.57			72,379			3,101		4.29
Total Investment Securities			606,106			26,524		4.38			520,879			17,061		3.28
Loans ^(1)(2)^			3,699,252			192,679		5.21			3,190,712			146,827		4.60
Federal Home Loan Bank Stock			21,249			1,538		7.24			12,628			432		3.42
Total Interest Earning Assets			4,404,366			223,911		5.08	%		3,790,291			164,917		4.35	%
Noninterest Earning Assets			86,438								76,189
Total Assets		$	4,490,804							$	3,866,480
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	650,028		$	23,379		3.60	%	$	524,968		$	4,336		0.83	%
Savings and Money Market Deposits			922,799			30,639		3.32			963,096			9,129		0.95
Time Deposits			263,161			7,064		2.68			284,868			3,264		1.15
Brokered Deposits			909,662			34,963		3.84			449,095			6,650		1.48
Total Interest Bearing Deposits			2,745,650			96,045		3.50			2,222,027			23,379		1.05
Federal Funds Purchased			169,645			8,521		5.02			149,608			4,507		3.01
Notes Payable			13,750			1,143		8.31			2,863			202		7.04
FHLB Advances			238,000			7,489		3.15			64,278			1,221		1.90
Subordinated Debentures			79,090			3,983		5.04			89,584			4,688		5.23
Total Interest Bearing Liabilities			3,246,135			117,181		3.61	%		2,528,360			33,997		1.34	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			768,428								910,490
Other Noninterest Bearing Liabilities			65,763								43,597
Total Noninterest Bearing Liabilities			834,191								954,087
Shareholders' Equity			410,478								384,033
Total Liabilities and Shareholders' Equity		$	4,490,804							$	3,866,480
Net Interest Income / Interest Rate Spread						106,730		1.47	%					130,920		3.01	%
Net Interest Margin ^(3)^								2.42	%							3.45	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(1,556)								(1,222)
Net Interest Income					$	105,174							$	129,698

(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 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 Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(dollars in thousands)	****	2023		****	2023		****	2023		****	2023		****	2022		****	2023		****	2022
Allowance for Credit Losses
Balance at Beginning of Period		$	50,585		$	50,701		$	50,148		$	47,996		$	46,491		$	47,996		$	40,020
Impact of Adopting CECL			—			—			—			650			—			650			—
Provision for Credit Losses			—			—			550			1,500			1,500			2,050			7,700
Charge-offs			(95)			(122)			(3)			(4)			(3)			(224)			(37)
Recoveries			4			6			6			6			8			22			313
Net Charge-offs		$	(91)		$	(116)		$	3		$	2		$	5		$	(202)		$	276
Balance at End of Period			50,494			50,585			50,701			50,148			47,996			50,494			47,996
Allowance for Credit Losses to Total Loans			1.36	%		1.36	%		1.36	%		1.36	%		1.34	%		1.36	%		1.34	%

		As of and for the Three Months Ended															As of and for the Year Ended
		December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(dollars in thousands)	****	2023		****	2023		****	2023		****	2023		****	2022		****	2023		****	2022
Provision for Credit Losses on Loans		$	—		$	—		$	550		$	1,500		$	1,500		$	2,050		$	7,700
Recovery of Credit Losses for Off-Balance Sheet Credit Exposures			(250)			(600)			(500)			(875)			—			(2,225)			—
Provision for (Recovery of) Credit Losses		$	(250)		$	(600)		$	50		$	625		$	1,500		$	(175)		$	7,700


	As of and for the Three Months Ended
	December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	2023		****	2023		****	2023		****	2023		****	2022
Selected Asset Quality Data
Loans 30-89 Days Past Due	$	15,110		$	11		$	—		$	21		$	186
Loans 30-89 Days Past Due to Total Loans		0.41	%		0.00	%		0.00	%		0.00	%		0.01	%
Nonperforming Loans	$	919		$	749		$	662		$	693		$	639
Nonperforming Loans to Total Loans		0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Foreclosed Assets	$	—		$	—		$	116		$	116		$	—
Nonaccrual Loans to Total Loans		0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans		0.02			0.02			0.02			0.02			0.02
Nonperforming Assets ^(1)^	$	919		$	749		$	778		$	809		$	639
Nonperforming Assets to Total Assets ^(1)^		0.02	%		0.02	%		0.02	%		0.02	%		0.01	%
Net Loan Charge-Offs (Annualized) to Average Loans		0.01			0.01			0.00			0.00			0.00
Watchlist Risk Rating Loans	$	26,485		$	26,877		$	27,215		$	27,574		$	32,252
Substandard Risk Rating Loans		35,858			35,621			33,821			36,258			28,049

(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 Year Ended
	December 31,			September 30,			June 30,			March 31,			December 31,			December 31,			December 31,
(dollars in thousands)	2023		****	2023		****	2023		****	2023			2022			2023		****	2022		****

Pre-Provision Net Revenue
Noninterest Income	$	1,409		$	1,726		$	1,415		$	1,943		$	1,738		$	6,493		$	6,332
Less: (Gain) Loss on Sales of Securities		27			—			(50)			56			(30)			33			(82)
Less: FHLB Advance Prepayment Income		—			(493)			—			(299)			—			(792)			—
Total Operating Noninterest Income		1,436			1,233			1,365			1,700			1,708			5,734			6,250
Plus: Net Interest Income		25,314			25,421			25,872			28,567			32,893			105,174			129,698
Net Operating Revenue	$	26,750		$	26,654		$	27,237		$	30,267		$	34,601		$	110,908		$	135,948

Noninterest Expense	$	15,740		$	15,237		$	14,274		$	14,069		$	15,203		$	59,320		$	56,620
Less: Amortization of Tax Credit Investments		—			—			—			—			(114)			—			(408)
Total Operating Noninterest Expense	$	15,740		$	15,237		$	14,274		$	14,069		$	15,089		$	59,320		$	56,212

Pre-Provision Net Revenue	$	11,010		$	11,417		$	12,963		$	16,198		$	19,512		$	51,588		$	79,736

Plus:
Non-Operating Revenue Adjustments		(27)			493			50			243			30			759			82
Less:
Provision (Recovery of) for Credit Losses		(250)			(600)			50			625			1,500			(175)			7,700
Non-Operating Expense Adjustments		—			—			—			—			114			—			408
Provision for Income Taxes		2,360			2,881			3,147			4,174			4,193			12,562			18,318
Net Income	$	8,873		$	9,629		$	9,816		$	11,642		$	13,735		$	39,960		$	53,392

Average Assets	$	4,567,446		$	4,504,937		$	4,483,662		$	4,405,234		$	4,251,345		$	4,490,804		$	3,866,480
Pre-Provision Net Revenue Return on Average Assets		0.96	%		1.01	%		1.16	%		1.49	%		1.82	%		1.15	%		2.06	%

Core Net Interest Margin
Net Interest Income (Tax-equivalent Basis)	$	25,683		$	25,822		$	26,280		$	28,947		$	33,260		$	106,730		$	130,920
Less: Loan Fees		(751)			(914)			(941)			(998)			(1,100)			(3,604)			(6,273)
Less: PPP Interest and Fees		NM			NM			NM			NM			NM			NM			(970)
Core Net Interest Income	$	24,932		$	24,908		$	25,339		$	27,949		$	32,160		$	103,126		$	123,677

Average Interest Earning Assets	$	4,480,428		$	4,416,424		$	4,395,050		$	4,323,706		$	4,177,644		$	4,404,366		$	3,790,291
Less: Average PPP Loans		NM			NM			NM			NM			NM			NM			(7,441)
Core Average Interest Earning Assets	$	4,480,428		$	4,416,424		$	4,395,050		$	4,323,706		$	4,177,644		$	4,404,366		$	3,782,850
Core Net Interest Margin		2.21	%		2.24	%		2.31	%		2.62	%		3.05	%		2.34	%		3.27	%

Efficiency Ratio
Noninterest Expense	$	15,740		$	15,237		$	14,274		$	14,069		$	15,203		$	59,320		$	56,620
Less: Amortization of Intangible Assets		(9)			(9)			(34)			(48)			(48)			(100)			(191)
Adjusted Noninterest Expense	$	15,731		$	15,228		$	14,240		$	14,021		$	15,155		$	59,220		$	56,429

Net Interest Income	$	25,314		$	25,421		$	25,872		$	28,567		$	32,893		$	105,174		$	129,698
Noninterest Income		1,409			1,726			1,415			1,943			1,738			6,493			6,332
Less: Gain (Loss) on Sales of Securities		27			—			(50)			56			(30)			33			(82)
Adjusted Operating Revenue	$	26,750		$	27,147		$	27,237		$	30,566		$	34,601		$	111,700		$	135,948
Efficiency Ratio		58.8	%		56.1	%		52.3	%		45.9	%		43.8	%		53.0	%		41.5	%

Page 16 of 17

Bridgewater Bancshares, Inc. and Subsidiaries

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


	For the Three Months Ended																For the Year Ended
	December 31,			September 30,			June 30,			March 31,			December 31,				December 31,			December 31,
(dollars in thousands)	2023		****	2023		****	2023		****	2023			2022				2023		****	2022

Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity	$	425,515		$	415,960		$	409,126		$	402,006		$	394,064
Less: Preferred Stock		(66,514)			(66,514)			(66,514)			(66,514)			(66,514)
Total Common Shareholders' Equity		359,001			349,446			342,612			335,492			327,550
Less: Intangible Assets		(2,814)			(2,823)			(2,832)			(2,866)			(2,914)
Tangible Common Equity	$	356,187		$	346,623		$	339,780		$	332,626		$	324,636

Total Assets	$	4,611,990		$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662
Less: Intangible Assets		(2,814)			(2,823)			(2,832)			(2,866)			(2,914)
Tangible Assets	$	4,609,176		$	4,554,247		$	4,600,353		$	4,600,033		$	4,342,748
Tangible Common Equity/Tangible Assets		7.73	%		7.61	%		7.39	%		7.23	%		7.48	%

Tangible Book Value Per Share
Book Value Per Common Share	$	12.94		$	12.47		$	12.25		$	12.05		$	11.80
Less: Effects of Intangible Assets		(0.10)			(0.10)			(0.10)			(0.10)			(0.11)
Tangible Book Value Per Common Share	$	12.84		$	12.37		$	12.15		$	11.95		$	11.69

Return on Average Tangible Common Equity
Net Income Available to Common Shareholders	$	7,859		$	8,616		$	8,802		$	10,629		$	12,721		$	35,906		$	49,338

Average Shareholders' Equity	$	417,789		$	414,047		$	406,347		$	403,533		$	387,589		$	410,478		$	384,033
Less: Average Preferred Stock		(66,514)			(66,514)			(66,514)			(66,514)			(66,514)			(66,514)			(66,514)
Average Common Equity		351,275			347,533			339,833			337,019			321,075			343,964			317,519
Less: Effects of Average Intangible Assets		(2,819)			(2,828)			(2,846)			(2,894)			(2,941)			(2,847)			(3,012)
Average Tangible Common Equity	$	348,456		$	344,705		$	336,987		$	334,125		$	318,134		$	341,117		$	314,507
Return on Average Tangible Common Equity		8.95	%		9.92	%		10.48	%		12.90	%		15.86	%		10.53	%		15.69	%

Page 17 of 17

Exhibit 99.2

Disclaimer<br>Forward-Looking Statements<br>This presentation 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<br>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”,<br>“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<br>words of a future or forward-looking nature.<br>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,<br>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<br>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<br>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<br>risk, including the effects of recent and potential additional rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business<br>and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation and possible recession; the effects of recent developments and events in the financial<br>services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; loan concentrations in our<br>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; the<br>concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; our ability to successfully manage liquidity risk, which may increase our<br>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<br>manage costs effectively; 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<br>or 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<br>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<br>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 the<br>recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of other governmental<br>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 Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new<br>1% excise tax on stock buybacks by publicly traded companies; potential changes in federal policy and at regular agencies as a result of the upcoming 2024 presidential election; and any other risks described in the “Risk Factors”<br>sections of reports filed by the Company with the Securities and Exchange Commission.<br>Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertake no obligation to publicly update any<br>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. Certain of the information contained in this presentation is derived<br>from information provided by industry sources. Although the Company believe that such information is accurate and that the sources from which it has been obtained are reliable, the Company cannot guarantee the accuracy of, and<br>have not independently verified, such information.<br>Use of Non-GAAP financial measures<br>In addition to the results presented in accordance with U.S. General Accepted Accounting Principles (“GAAP”), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company<br>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<br>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<br>that may be presented by other companies. Reconciliations of non-GAAP disclosures to the comparable GAAP measures are provided in this presentation.<br>2
0.02%<br>4Q23 Earnings Highlights<br>3<br>• Deposit balances up $34.4 million, or 3.7% annualized, from 3Q23<br>• Continued to moderate loan growth with balances up $2.0 million, or 0.2% annualized, from 3Q23<br>• Loan-to-deposit ratio of 100.4%, down from 108.0% at March 31, 2023<br>• Net interest margin (NIM) of 2.27%, down 5 bps from 3Q23<br>• December 2023 NIM of 2.30%, flat from September 2023 NIM<br>• Balance sheet well-positioned for rate cuts and a normalizing yield curve<br>• FY23 noninterest expense up $2.7 million, or 4.8%, from FY22, below 2023 asset growth of 6.1%<br>• 4Q23 noninterest expense up $0.5 million, or 3.3%, from 3Q23<br>• FY23 noninterest expense to average assets of 1.32%, down 14 bps from FY22<br>• Annualized net charge-offs to average loans of 0.01%, in-line with 3Q23<br>• Nonperforming assets to total assets of 0.02%, in-line with 3Q23<br>• No provision for credit losses; well-reserved with allowance to total loans of 1.36%<br>Net Interest Margin<br>Continued to Stabilize<br>Well-Controlled<br>Expenses in 2023<br>Superb<br>Asset Quality<br>$0.28<br>Diluted<br>EPS<br>Nonperforming Assets<br>to Total Assets<br>Efficiency<br>Ratio1<br>Return on<br>Average Assets<br>Return on Avg. Tangible<br>Common Equity1<br>0.77% 8.95% 58.8%<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>2 Includes publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion as of September 30, 2023 with growth rate through 3Q23 (Source: S&P Capital IQ)<br>• Tangible book value per share1 of $12.84, up 9.8% YoY; 28 consecutive quarters of growth<br>• Tangible book value per share1 growth of 183% since 4Q16 vs. peer bank average of 53%2<br>• Repurchased 423,749 shares of common stock, or $4.5 million (average price of $10.72 per share)<br>Consistent<br>Tangible Book Value<br>Per Share Growth<br>Deposit Growth<br>Outpaced Loan Growth
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Consistent Tangible Book Value Per Share<br>Outperformance<br>4<br>183%<br>53%<br>0%<br>50%<br>100%<br>150%<br>200%<br>4Q16<br>1Q17<br>2Q17<br>3Q17<br>4Q17<br>1Q18<br>2Q18<br>3Q18<br>4Q18<br>1Q19<br>2Q19<br>3Q19<br>4Q19<br>1Q20<br>2Q20<br>3Q20<br>4Q20<br>1Q21<br>2Q21<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>1Q23<br>2Q23<br>3Q23<br>4Q23<br>BWB Peer Bank Average2<br>Tangible Book Value Per Share1 Growth for 28 Consecutive Quarters<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>2<br>Includes publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion as of September 30, 2023 with growth rate through 3Q23 (Source: S&P Capital IQ)
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Net Interest Income and Margin<br>Continue to Stabilize<br>5<br>$31,793<br>$27,569<br>$24,931 $24,507 $24,563<br>$1,100<br>$998<br>$941 $914 $751<br>$32,893<br>$28,567<br>$25,872 $25,421 $25,314<br>3.16%<br>2.72%<br>3.05%<br>2.40% 2.32% 2.27%<br>2.62%<br>2.31% 2.24% 2.21%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Core Net Interest Margin1,2<br>Net Interest Margin1<br>Net Interest Income (ex. Loan Fees)<br>Loan Fees<br>Net Interest Income and Margin Trends Net Interest Margin Drivers<br>Core NIM2 down 3 bps<br>Net Interest Income / Net Interest Margin Commentary<br>1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21%<br>2 Excludes loan fees; represents a Non-GAAP financial measure, see Appendix for Non-GAAP reconciliation<br>Dollars in thousands<br>Net Interest Income<br>• Stable NII driven by NIM stabilization and moderated loan growth<br>• Net interest income (ex. loan fees) increased from 3Q23<br>Net Interest Margin<br>• NIM stabilization continues as the pace of rising funding costs slows<br>and asset yields move steadily higher<br>• December 2023 NIM of 2.30%, flat from September 2023 NIM<br>• Well-positioned for rate cuts and a more normalized yield curve<br>• Over $1 billion of adjustable funding tied to short-term rates<br>• Loan portfolio positioned to continue repricing higher
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Rising Funding Costs Slow as<br>Asset Yields Move Higher<br>6<br>$2,332 $2,498 $2,711 $2,857 $2,909<br>$943 $814 $755 $527 $755 $753 $636 $546 $408 $415<br>$3,802 $3,948 $4,012 $4,020 $4,077<br>1.67%<br>2.41%<br>2.91% 3.10% 3.23%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>$3,482 $3,630 $3,717 $3,723 $3,726<br>4.87% 5.06% 5.19% 5.26% 5.33%<br>4.75% 4.95% 5.09% 5.16% 5.25%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>$3,275 $3,311 $3,466 $3,611 $3,662<br>1.31%<br>2.01%<br>2.66% 2.99% 3.19%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Loan Yield (ex. Loan Fees)2<br>Loan Portfolio Repricing Higher as Growth Moderates High-Yielding Securities Portfolio<br>Slowing Pace of Rising Deposit Costs Overall Funding Costs Slow With Lower Levels of Borrowings<br>$608 $604 $595 $595 $630<br>3.91%<br>4.22% 4.24% 4.39% 4.63%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Average Interest-Bearing Deposits Average Noninterest-Bearing Deposits<br>Average Borrowings Cost of Liability Funding<br>Average Loans Loan Yield1 Average Investments Investment Yield1<br>Average Total Deposits Cost of Total Deposits<br>1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21%<br>2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in millions
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Revenue Trends Impacted by<br>Current Interest Rate Environment<br>7<br>PPNR ROA1<br>Continued Profitability in the Current Environment Spread-Based Revenue Model<br>$32,893<br>$28,567<br>$25,872 $25,421 $25,314<br>$1,738<br>$1,943<br>$1,415 $1,726 $1,409<br>$34,631<br>$30,510<br>$27,287 $27,147 $26,723<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>$19,512<br>$16,198<br>$12,963<br>$11,417 $11,010<br>$13,735<br>$11,642<br>$9,816 $9,629 $8,873<br>1.82%<br>1.49%<br>1.16%<br>1.01% 0.96%<br>1.28%<br>1.07%<br>0.88% 0.85% 0.77%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>PPNR Net Income 1 ROA Net Interest Income Noninterest Income<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in thousands
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$9,821 $8,815 $8,589 $9,519 $9,615<br>$1,177<br>$1,209 $1,075<br>$1,101 $1,062<br>$1,044<br>$1,040 $1,112<br>$1,075 $1,236<br>$360<br>$665 $900<br>$1,075 $1,050<br>$2,801<br>$2,340 $2,598<br>$2,467 $2,777<br>$15,203<br>$14,069 $14,274<br>$15,237 $15,740<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Well-Controlled Expenses in 2023<br>8<br>1.42%<br>1.30% 1.28% 1.34% 1.37%<br>43.8%<br>45.9%<br>52.3%<br>56.1%<br>58.8%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>NIE / Avg. Assets2 Efficiency Ratio3<br>Highly Efficient Business Model Despite Recent Revenue Pressures 2023 NIE Growth Below Asset Growth<br>Industry median efficiency ratio of 62%1 in 3Q23 2023 NIE up 4.8% vs. 2022, below asset growth of 6.1% YoY<br>Personnel Occupancy<br>Technology FDIC Insurance Assessment<br>1 Includes publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion as of September 30, 2023 (Source: S&P Capital IQ)<br>2 Annualized<br>3 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in thousands<br>Other
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Continued Deposit Growth Momentum<br>9<br>26% 22% 21% 21% 20%<br>13% 18% 20% 21% 19%<br>30% 27% 24% 24% 25%<br>8%<br>8% 8% 7% 8%<br>23% 25%<br>27%<br>27% 28%<br>$3,417 $3,411<br>$3,578 $3,676 $3,710<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Noninterest-Bearing Transaction Interest-Bearing Transaction<br>Savings & Money Market Time<br>Brokered<br>• Total deposit balances up 3.7% annualized<br>• Core deposit1 balances down 5.8% annualized<br>• Noninterest-bearing deposits increased for the 3rd consecutive quarter<br>• Continued to supplement core deposits with wholesale funding to<br>support future loan growth<br>• Expansion of the Treasury Management team in 2023 driving new<br>deposit client acquisition<br>Deposit Growth to Support Loan Growth Outlook<br>1 Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000<br>Dollars in millions<br>Funding Repricing Summary<br>Immediately Adjustable Deposits $ 752<br>Derivatives Hedging 258<br> Total $ 1,010<br>Time Deposit Maturities (next 12 months) $ 294<br>Callable Brokered Deposits 185<br> Total $ 479<br>Funding Tied to Short-Term Rates<br>Other Repricing Opportunities
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Moderated Loan Growth Continued,<br>But Loan Demand Improved<br>10<br>$3,569<br>$3,684<br>$3,736 $3,722 $3,724<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Gross Loans<br>Dollars in millions<br>• 4Q23 loan balances up $2.0M, or 0.2% annualized<br>• FY23 loan balances up $154.8M, or 4.3%<br>• Reduced loan demand due to the higher interest rate environment<br>• Payoffs and paydowns muted loan growth in 3Q23 and 4Q23<br>• Focused on better aligning loan growth with core deposit growth<br>• Loan-to-deposit ratio of 100.4%, down from 108.0% in 1Q23<br>Loan Growth Moderated in 2023<br>• Loan demand – loan pipeline increased in 4Q23 as demand picked up<br>• Market and economic conditions – rate cuts could drive higher demand<br>• Pace of loan payoffs and paydowns – potential for increased payoffs<br>as rates move lower<br>• Pace of core deposit growth – aligning loan growth with core deposit<br>growth over time<br>Loan Growth Outlook Drivers
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13% 10%<br>24% 26%<br>12% 15%<br>$73 $59<br>$136 $147<br>$71 $86<br>Less<br>Than<br>1 Year<br>1 to 2<br>Years<br>2 to 3<br>Years<br>3 to 4<br>Years<br>4 to 5<br>Years<br>5+<br>Years<br>19% 15% 12% 15% 12%<br>27%<br>$502<br>$391 $309 $387 $327<br>$700<br>Less<br>Than<br>1 Year<br>1 to 2<br>Years<br>2 to 3<br>Years<br>3 to 4<br>Years<br>4 to 5<br>Years<br>5+<br>Years<br>Loan Portfolio to Reprice Higher<br>Even If Interest Rates Decline<br>11<br>Fixed,<br>70%<br>Variable,<br>15%<br>Adjustable,<br>15%<br>Loan Portfolio Mix<br>Fixed-Rate Portfolio<br>($2.6B)<br>Variable-Rate Portfolio<br>($541M)<br>Adjustable-Rate Portfolio<br>($572M)<br>Years to Maturity<br>• Large fixed-rate portfolio<br>provides support to total loan<br>yields in a rates-down<br>environment<br>• $502M of fixed-rate loans<br>maturing over the next year with<br>a weighted average yield of 5.11%<br>Variable-Rate Loan Floors<br>$-<br>$24 $25 $25<br>$452<br>At<br>Floor<br>(4Q23)<br>Down<br>25 bps<br>Down<br>50 bps<br>Down<br>75 bps<br>Down<br>100+<br>bps<br>Cumulative balances<br>at the floor as rates decline<br>• Small variable-rate portfolio<br>limits immediate repricing<br>pressure in a rates-down<br>environment<br>• 84% of variable-rate portfolio<br>have floors<br>• 96% of variable-rate loans are<br>currently tied to SOFR or Prime<br>Adjustable-Rate<br>Repricing/Maturity Schedule<br>• Adjustable-rate loans likely to<br>reprice higher in a rates-down<br>environment<br>• $73M of adjustable-rate loans<br>repricing or maturing over the<br>next year with a weighted<br>average yield of 4.15%<br>Dollars in millions<br>WA<br>Yield 5.11% 4.81% 4.31% 4.53% 5.05% 4.18%<br>WA<br>Yield 4.15% 4.98% 3.77% 4.40% 4.17% 4.22%
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Well-Diversified Loan Portfolio<br>with a Multifamily Focus<br>12 Dollars in millions<br>CRE NOO<br>27.0%<br>Multifamily<br>37.3%<br>C&D<br>8.0%<br>1-4 Family<br>Mortgage<br>10.8%<br>CRE OO<br>4.7% C&I<br>13.0%<br>Consumer<br>& Other<br>0.2%<br>Loan Mix<br>by Type<br>$3.7<br>Billion<br>4Q23 Loan Growth by Type (vs. 3Q23)<br>$(61)<br>$(2)<br>$(1)<br>$4<br>$10<br>$16<br>$36<br>Multifamily<br>1-4 Family Mortgage<br>Construction & Development<br>C&I<br>CRE Owner Occupied<br>CRE Nonowner Occupied<br>Consumer & Other<br>• Continued migration out of Construction &<br>Development as deals completed the<br>‘construction’ phase<br>• Remain comfortable with the diversity of the<br>loan portfolio, including CRE and Multifamily<br>concentrations, given portfolio performance<br>and expertise<br>2023 Loan Growth by Type (vs. 2022)<br>$(68)<br>$0<br>$26<br>$28<br>$40<br>$47<br>Multifamily $82<br>1-4 Family Mortgage<br>Construction & Development<br>C&I<br>CRE Owner Occupied<br>CRE Nonowner Occupied<br>Consumer & Other
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CRE Concentration Driven by a Proven,<br>Lower Risk Multifamily Portfolio<br>13<br>$1,285<br>$1,389<br>$2,674<br>4Q23<br>250%<br>of Bank RBC<br>Multifamily<br>Traditional CRE2<br>232%<br>of Bank RBC<br>482%<br>of Bank RBC<br>Multifamily Makes Up Over<br>Half of CRE Concentration<br>Multifamily: A Consistently Lower Risk Profile Than Traditional CRE<br>Differentiated Lending Approach<br>Portfolio Characteristics Drive Track Record of Strong Asset Quality<br>Favorable Twin Cities Multifamily Market<br>• Bank of choice in the Twin Cities due to expertise<br>and service model<br>• Local market focus with diverse product types<br>• Greater tenant diversification compared to other<br>asset classes<br>• Affordable housing focus<br>• Only $62K of net charge-offs since inception<br>WA LTV<br>Avg. Loan Size<br>Avg. Debt/Unit<br>NCOs (since 2005)<br>63%<br>$3.2M<br>$87K<br>$62K<br>Local Market Focus<br>Twin Cities<br>Metro<br>92%<br>Greater<br>MN<br>4%<br>Other<br>4%<br>Location<br>• Historically stable market with less volatility than coastal markets<br>• Market catalysts include relative affordability, low unemployment,<br>strong wages, and shortage of single-family housing<br>• Ranks 2nd in multifamily market demand YTD 3Q231<br>• Ranks 2nd in affordability as rent-to-income reached an all-time<br>low of 18.3% in 3Q23, 100 bps below pre-pandemic levels1<br>• Wage increases of 3.6% YoY as of 3Q23 have outpaced rent<br>growth of 1.3%1<br>Product Type<br>Diversification<br>Class A<br>36%<br>Class B<br>15%<br>Class C<br>40%<br>Construction<br>9%<br>Class<br>Well-Diversified<br>by Size<br>5-19<br>Units<br>11%<br>20-49<br>Units<br>25%<br>50-99<br>Units<br>29%<br>100+<br>Units<br>35%<br>Size<br>¹ Source: “Minneapolis Apartment Demand Among Strongest Nationally, CoStar (November 29, 2023)<br>2<br>Includes nonowner-occupied CRE, construction and land development, and 1-4 family construction<br>Dollars in millions
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Managing CRE and Office-Related Risk<br>14 1 Excludes medical office of $52M at December 31, 2023<br>Dollars in millions<br>Addressing CRE NOO Repricing Risk<br>• CRE NOO loans primarily located in the Twin Cities market<br>• Ongoing active client engagement<br>• Clients with maturing loans or resetting rates over<br>the next 12 months<br>• Identify situations of possible cash flow strain<br>• Recommend solutions early in the process<br>Well-Managed CRE NOO Office Exposure1<br>Small CRE NOO<br>Office Portfolio<br>Low Average Loan<br>Size<br>LTVs In-Line with the<br>Total Loan Portfolio<br>5.2%<br>of Total Loans<br>$2.3M<br>Average Loan Size<br>62%<br>Weighted Average LTV<br>CRE NOO Office by Geography<br>Twin Cities<br>Suburban<br>53%<br>Minneapolis-St. Paul CBD<br>13%<br>Minneapolis-St. Paul Non-CBD<br>18%<br>Out-of-State<br>16%<br>$194M<br>• Majority of CRE NOO office<br>exposure in the Twin Cities<br>suburbs<br>• Only 4 loans totaling $35M<br>located in central business<br>districts (CBD)<br>• Only 3 loans totaling $31M<br>outside of Minnesota – out-of-state projects for existing<br>local clients<br>Lower<br>Repricing Risk<br>Fixed-Rate<br>Maturity Schedule Low LTVs<br>82%<br>are Fixed-Rate<br>$189M<br>Maturing Over the<br>Next 12 Months<br>59%<br>Weighted Average LTV
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¹ Nonaccrual loans plus loans 90 days past due and still accruing and foreclosed assets<br>Dollars in thousands<br>Superb Asset Quality Continues<br>15<br>$(5) $(2) $(3)<br>$116 $91<br>0.00% 0.00% 0.00% 0.01% 0.01%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Net Charge-Offs<br>Cumulative NCOs of $537K since 2019<br>Net Charge-offs (recoveries) % of Average Loans (annualized)<br>$47,996<br>$50,148 $50,701 $50,585 $50,494<br>1.34% 1.36% 1.36% 1.36% 1.36%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Allowance for Credit Losses<br>Modest CECL Day 1 impact of $650K<br>on January 1, 2023<br>Allowance for Credit Losses % of Gross Loans<br>$639<br>$809 $778 $749<br>$919<br>0.01% 0.02% 0.02% 0.02% 0.02%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Nonperforming Assets1<br>Consistently low NPA levels<br>NPAs % of Assets
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Watch and Substandard Loans<br>Remain Stable<br>16<br>C&I<br>15.4%<br>Multifamily<br>11.0%<br>CRE NOO<br>Senior Housing<br>38.3%<br>CRE NOO<br>Retail<br>26.2%<br>CRE Other<br>9.1%<br>$26<br>Million<br>Watch List Loans Substandard Loans<br>C&I<br>45.0%<br>CRE NOO<br>Office<br>26.7%<br>CRE NOO<br>Hotels<br>8.6%<br>CRE NOO<br>Retail<br>12.6%<br>CRE OO<br>4.3%<br>C&D<br>0.9%<br>1-4<br>Family<br>1.9%<br>$36<br>Million<br>Watch List Characteristics<br>Loan Balances Outstanding $26,485<br>% of Total Loans, Gross 0.7%<br>Number of Loans 14<br>Average Loan Size $1,892<br>Substandard Characteristics<br>Loan Balances Outstanding $35,858<br>% of Total Loans, Gross 1.0%<br>Number of Loans 21<br>Average Loan Size $1,708<br>% of Bank Risk-Based Capital 6.46%<br>$32,252<br>$27,574 $27,215 $26,877 $26,485<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Watch List Loans<br>$28,049<br>$36,258 $33,821 $35,621 $35,858<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Substandard Loans<br>Dollars in thousands
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Building Capital Ratios<br>17<br>9.55% 9.41% 9.47% 9.62% 9.57%<br>8.40% 8.48% 8.72% 9.07% 9.16%<br>13.15% 13.25% 13.50%<br>13.88% 13.97%<br>7.48% 7.23% 7.39% 7.61% 7.73%<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Total Risk-Based Capital Ratio Common Equity Tier 1 Capital Ratio<br>Tier 1 Leverage Ratio<br>Building Capital in the Current Environment<br>Tangible Common Equity Ratio1<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>4Q23 Capital Actions<br>• Repurchased 423,749 shares of common stock ($4.5M) at a weighted<br>average price of $10.72<br>Capital Priorities<br>1<br>3<br>2<br>Organic Growth<br>Share Repurchases<br>M&A<br>4 Dividends<br>Drive profitability by supporting a proven organic loan growth<br>engine<br>Opportunistically return capital to shareholders by buying back<br>stock based on valuation, capital levels, and other uses of capital<br>Review and evaluate corporate development opportunities that<br>complement BWB’s business model<br>Have not historically paid a common stock dividend given loan<br>growth opportunities
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2024 Expectations<br>18<br>• Low-to-mid-single digit loan growth, likely weighted more toward 2H24<br>• Focus on aligning loan growth with core deposit growth<br>• Target loan-to-deposit ratio between 95% and 105%<br>Balance Sheet<br>Growth<br>• Continued near-term stabilization in the current interest rate environment<br>• Positioned to benefit from potential rate cuts and a normalizing yield curve<br>• Dependent on the path of interest rates, shape of the yield curve, and pace of core deposit growth and loan payoffs<br>Net Interest<br>Margin<br>• Ongoing noninterest expense growth, with continued investments in people and technology initiatives<br>• Noninterest expense growth aligned with asset growth, likely weighted more toward 2H24<br>• Provision expense to align with loan growth and overall asset quality<br>Expenses<br>• Build tangible common equity and CET1 ratios, aided by retained earnings and moderated pace of loan growth<br>• Ongoing evaluation of potential share repurchases based on valuation, capital levels, and other uses of capital<br>Capital<br>Levels
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2024 Strategic Priorities<br>19<br>Optimize Balance Sheet for<br>Longer Term Profitable Growth<br>Continue to Gain Loan and<br>Deposit Market Share<br>Generate Incremental<br>Operational Efficiencies While<br>Investing in the Business<br>Scale ERM Function and<br>Monitor Asset Quality Risks<br>• Opportunistically gather core<br>deposits and build high quality<br>lending relationships<br>• Grow loan balances inline with<br>core deposits over time<br>• Generate more profitable growth<br>in a normalized interest rate<br>environment<br>• Expand lending focus on high<br>quality affordable housing sector<br>• Execute on new C&I initiatives<br>through targeted verticals,<br>including a network of women<br>business leaders and<br>entrepreneurial operating system<br>implementers<br>• Identify M&A opportunities and<br>potential markets that enhance<br>BWB’s overall business model<br>• Identify opportunities across all<br>functions to improve operational<br>efficiency<br>• Make proactive investments to<br>scale the business and position for<br>longer term growth<br>• Implement key IT investments,<br>including new CRM platform and<br>upgraded retail and small business<br>online banking solution<br>• Continue to focus on scaling the<br>enterprise risk management<br>function<br>• Monitor the loan portfolio for signs<br>of credit weakness, especially in<br>CRE and multifamily portfolios<br>• Ongoing covenant testing and<br>assess repricing risk on maturing<br>loans
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APPENDIX<br>20
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2023 Strategic Priorities<br>21<br>Manage High Quality<br>Balance Sheet Growth 1<br>2<br>3<br>4<br>Maintain High Efficiency<br>While Investing in the<br>Business<br>Continue Scalability of<br>ERM Function, Including<br>Proactive Assessment of<br>Asset Quality Risks<br>Implement Longer Term<br>Strategic Readiness<br>Initiatives<br>• Slower pace of balance sheet growth in the current environment<br>• Manage the balance sheet to optimize net interest income<br>• Increase emphasis on generating core deposit growth to support loan<br>growth over the course of 2023<br>• Identify opportunities to better manage the discretionary spend to align<br>expense growth with a slower pace of asset growth<br>• Continue to invest in people and technology<br>• Make proactive investments to scale the business and position for<br>longer-term growth<br>• Continued build-out of the enterprise risk management function, including<br>enhanced stress testing capabilities<br>• Ongoing monitoring of the loan portfolio for signs of credit weakness given<br>the economic uncertainty heading into 2023<br>• Expand covenant testing and assess repricing risk on maturing loans<br>• Complete CECL adoption in early 2023<br>• Expand C&I function to support further diversification of the loan portfolio<br>and new deposit growth channels over time<br>• Continue evaluating potential M&A opportunities and be ready to act as<br>the right opportunity becomes available<br>2023 Outcome<br>Moderated 2023 loan growth of 4.3%<br>with annualized core deposit growth of<br>4.2% since March 2023<br>2023 NIE growth of 4.8% (vs. 2022),<br>below YoY asset growth of 6.1%<br>Ongoing 12-month forward assessment<br>of loan covenants and repricing risks<br>Expanded C&I outreach to targeted<br>verticals including women business<br>leaders and entrepreneurs
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Payoffs and Paydowns Impacting<br>Loan Growth<br>22<br>New Loan Originations and Advances<br>$186<br>$75 $47 $71 $71<br>$127<br>$145<br>$84 $87 $87<br>$313<br>$220<br>$131 $158 $158<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>New Originations Advances<br>Loan Payoffs and Amortization/Paydowns<br>$99<br>$69 $54<br>$106 $102<br>$42<br>$42<br>$45<br>$60 $45<br>$141<br>$111 $99<br>$166<br>$147<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Dollars in millions Payoffs Amortization/Paydowns<br>4Q23 Loan Growth Waterfall
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Interest Rate Sensitivity<br>23<br>Estimated Change in NII From<br>Immediate Interest Rate Shocks<br>+100 bps<br>-100 bps<br>Liability-sensitive balance sheet well positioned for rate cuts and a<br>normalizing yield curve<br>Loan Portfolio Considerations<br>• Loan portfolio most sensitive to changes in the 3- to 5-year portion of the<br>yield curve<br>• Loan portfolio to reprice higher even in a rates-down environment given<br>larger fixed-rate portfolio and smaller variable-rate portfolio<br>• $575 million of fixed- and adjustable-rate loans scheduled to reprice over<br>the next year<br>• Leveraging prepayment penalties on new loan originations to help<br>maintain benefit of higher rates over time<br>Funding Considerations<br>• Deposit base is more sensitive to changing interest rates<br>• Momentum in core deposit growth since March 2023<br>• Continue to supplement core deposits with wholesale funding to support<br>loan growth over time<br>• Brokered deposits generally include call options to protect net interest<br>margin as interest rates decline<br>• Over $1 billion of adjustable funding tied to short-term rates<br>-200 bps<br>(1.2)%<br>+1.0%<br>4Q22<br>+1.3%<br>(4.6)%<br>+6.2%<br>1Q23<br>+12.2%<br>(1.9)%<br>+4.0%<br>2Q23<br>+7.5%<br>(0.6)%<br>+2.5%<br>3Q23<br>+4.9%<br>-300 bps +1.7% +17.9% +11.2% +7.2%<br>(1.3)%<br>+3.0%<br>4Q23<br>+5.9%<br>+8.9%
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High Quality Securities Portfolio<br>24<br>43% 41% 41% 38% 38%<br>24% 23% 24% 22% 22%<br>20% 21% 21% 22%<br>22%<br>13% 15% 14% 18%<br>18%<br>$549 $559 $538 $553<br>$604<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Mortgage-Backed Securities Municipal Bonds<br>Corporate Securities Other<br>Securities Available for Sale Portfolio<br>AAA,<br>26%<br>AA,<br>43%<br>A,<br>3%<br>BBB,<br>13%<br>NR,<br>15%<br>Rating Mix<br>Derivatives Portfolio Offsetting AOCI Impact<br>$(47,884) $(44,512)<br>$28,581 $27,227<br>$(17,942) $(18,246)<br>4Q22 4Q23<br>MTM Securities MTM Derivatives Net Impact on AOCI1<br>• No held-to-maturity securities<br>• Securities portfolio average duration of 4.9 years<br>• Average securities portfolio yield of 4.63%<br>• Unrealized losses on AFS securities were 10.0% of<br>stockholders’ equity<br>• AOCI / Total RBC of 3.1% vs. peer bank median of 11.3%2<br>1 Includes the tax-effected impact of $7,232 in 4Q22 and $7,359 in 4Q23<br>2 3Q23 median for publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion (Source: S&P Capital IQ)<br>Dollars in thousands
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Ample Liquidity and Borrowing Capacity<br>25 1 Excludes $171M of pledged securities at December 31, 2023<br>Dollars in millions<br>13.7% 10.9% 9.6% 10.2% 11.5%<br>17.0%<br>30.9% 33.1%<br>37.6%<br>37.0%<br>$1,380<br>$1,924 $1,962<br>$2,181 $2,234<br>4Q22 1Q23 2Q23 3Q23 4Q23<br>Off-Balance Sheet Liquidity as a % of Assets<br>On-Balance Sheet Liquidity as a % of Assets<br>Liquidity Position with 2.5x Coverage of Uninsured Deposits Diverse Liquidity Mix<br>2023 Liquidity Actions<br>• Added $854M of on- and off-balance sheet liquidity<br>• $821M increase in borrowing capacity with the FRB following<br>additional loan and securities pledging<br>• $108M increase in FHLB borrowing capacity<br>• $49M increase in cash and cash equivalents<br>• Did not utilize any borrowings from the Discount Window or the Bank<br>Term Funding Program (BTFP) in 2023<br>Funding Source 12/31/2023 12/31/2022 Change<br>Cash $ 9 7 $ 4 8 $ 4 9<br>Unpledged Securities1<br> 433 549 (116)<br>FHLB Capacity 499 391 108<br>FRB Discount Window 979 158 821<br>Unsecured Lines of Credit 200 208 (8)<br>Secured Line of Credit 26 26 (0)<br> Total $ 2,234 $ 1,380 $ 854<br>Available Balance
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Reconciliation of Non-GAAP Financial<br>Measures – Profitability and TCE<br>26 Dollars in thousands<br>Efficiency Ratio<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>December 31,<br>2023<br>Noninterest Expense $ 15,203 $ 14,069 $ 14,274 $ 15,237 $ 15,740 Net Income Available to Common Shareholders<br>Less: Amortization Intangible Assets (48) (48) (34) (9) (9)<br>Adjusted Noninterest Expense $ 15,155 $ 14,021 $ 14,240 $ 15,228 $ 15,731 Average Total Shareholders' Equity<br>Less: Average Preferred Stock<br>Net Interest Income $ 32,893 $ 28,567 $ 25,872 $ 25,421 $ 25,314 Average Total Common Shareholders' Equity<br>Noninterest Income 1,738 1,943 1,415 1,726 1,409 Less: Effects of Average Intangible Assets<br>Less: (Gain) Loss on Sales of Securities (30) 56 (50) - 2 7 Average Tangible Common Equity<br>Adjusted Operating Revenue $ 34,601 $ 30,566 $ 27,237 $ 27,147 $ 26,750 Annualized Return on Average Tangible Common Equity<br>Efficiency Ratio 43.8% 45.9% 52.3% 56.1% 58.8%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible Assets<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>December 31,<br>2023<br>Total Shareholders' Equity $ 394,064 $ 402,006 $ 409,126 $ 415,960 $ 425,515<br>Less: Preferred Stock (66,514) (66,514) (66,514) (66,514) (66,514)<br>Total Common Shareholders' Equity 327,550 335,492 342,612 349,446 359,001<br>Less: Intangible Assets (2,914) (2,866) (2,832) (2,823) (2,814)<br>Tangible Common Equity $ 324,636 $ 332,626 $ 339,780 $ 346,623 $ 356,187<br>Total Assets $ 4,345,662 $ 4,602,899 $ 4,603,185 $ 4,557,070 $ 4,611,990<br>Less: Intangible Assets (2,914) (2,866) (2,832) (2,823) (2,814)<br>Tangible Assets $ 4,342,748 $ 4,600,033 $ 4,600,353 $ 4,554,247 $ 4,609,176<br>Tangible Common Equity/Tangible Assets 7.48% 7.23% 7.39% 7.61% 7.73%<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>ROATCE<br>As of and for the quarter ended,<br>December 31,<br>2023<br>$ 7,859<br>$ 417,789<br> (66,514)<br>$ 351,275<br> (2,819)<br>$ 348,456<br>8.95%
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Reconciliation of Non-GAAP Financial<br>Measures – PPNR<br>27 Dollars in thousands<br>Pre-Provision Net Revenue<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>December 31,<br>2023<br>Noninterest Income $ 1,738 $ 1,943 $ 1,415 $ 1,726 $ 1,409<br>Less: (Gain) Loss on Sales on Securities (30) 5 6 (50) - 27<br>Less: FHLB Advance Prepayment Income - (299) - (493) -<br>Total Operating Noninterest Income 1,708 1,700 1,365 1,233 1,436<br>Plus: Net Interest Income 32,893 28,567 25,872 25,421 25,314<br> Net Operating Revenue 34,601 30,267 27,237 26,654 26,750<br>Noninterest Expense $ 15,203 $ 14,069 $ 14,274 $ 15,237 $ 15,740<br>Less: Amortization of Tax Credit Investments (114) - - - -<br> Total Operating Noninterest Expense 15,089 14,069 14,274 15,237 15,740<br>Pre-Provision Net Revenue $ 19,512 $ 16,198 $ 12,963 $ 11,417 $ 11,010<br> Plus:<br>Non-Operating Revenue Adjustments 30 243 5 0 493 (27)<br> Less:<br>Provision for (Recovery of) Credit Losses 1,500 625 5 0 (600) (250)<br>Non-Operating Expense Adjustments 114 - - - -<br>Provision for Income Taxes 4,193 4,174 3,147 2,881 2,360<br>Net Income $ 13,735 $ 11,642 $ 9,816 $ 9,629 $ 8,873<br>Average Assets $ 4,251,345 $ 4,405,234 $ 4,483,662 $ 4,504,937 $ 4,567,446<br>Pre-Provision Net Revenue Return on Average Assets 1.82% 1.49% 1.16% 1.01% 0.96%<br>As of and for the quarter ended,
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Reconciliation of Non-GAAP Financial<br>Measures – Core NIM<br>28 Dollars in thousands<br>Core Net Interest Margin<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>December 31,<br>2023<br>Net Interest Income (Tax-Equivalent Basis) $ 33,260 $ 28,947 $ 26,280 $ 25,822 $ 25,683<br>Less: Loan Fees (1,100) (998) (941) (914) (751)<br> Core Net Interest Margin $ 32,160 $ 27,949 $ 25,339 $ 24,908 $ 24,932<br>Average Interest Earning Assets $ 4,177,644 $ 4,323,706 $ 4,395,050 $ 4,416,424 $ 4,480,428<br>Core Net Interest Margin 3.05% 2.62% 2.31% 2.24% 2.21%<br>Loan Interest Income (Tax-Equivalent Basis) $ 42,702 $ 45,265 $ 48,066 $ 49,326 $ 50,022<br>Less: Loan Fees (1,100) (998) (941) (914) (751)<br> Core Loan Interest Income $ 41,602 $ 44,267 $ 47,125 $ 48,412 $ 49,271<br>Average Loans $ 3,482,150 $ 3,630,446 $ 3,716,534 $ 3,722,594 $ 3,726,126<br>Core Loan Yield 4.75% 4.95% 5.09% 5.16% 5.25%<br>As of and for the quarter ended,
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Reconciliation of Non-GAAP Financial<br>Measures – Tangible Book Value<br>29 Dollars in thousands<br>Tangible Book Value Per Share<br>December 31,<br>2016<br>March 31,<br>2017<br>June 30,<br>2017<br>September 30,<br>2017<br>December 31,<br>2017<br>March 31,<br>2018<br>June 30,<br>2018<br>September 30,<br>2018<br>December 31,<br>2018<br>March 31,<br>2019<br>Book Value Per Common Share $ 4.69 $ 4.91 $ 5.23 $ 5.43 $ 5.56 $ 6.62 $ 6.85 $ 7.01 $ 7.34 $ 7.70<br>Less: Effects of Intangible Assets (0.16) (0.16) (0.16) (0.16) (0.16) (0.13) (0.12) (0.12) (0.12) (0.12)<br>Tangible Book Value Per Common Share $ 4.53 $ 4.75 $ 5.07 $ 5.27 $ 5.40 $ 6.49 $ 6.73 $ 6.89 $ 7.22 $ 7.58<br>Total Common Shares 24,589,861 24,589,861 24,589,861 24,629,861 24,679,861 30,059,374 30,059,374 30,059,374 30,097,274 30,097,674<br>Tangible Book Value Per Share<br>June 30,<br>2019<br>September 30,<br>2019<br>December 31,<br>2019<br>March 31,<br>2020<br>June 30,<br>2020<br>September 30,<br>2020<br>December 31,<br>2020<br>March 31,<br>2021<br>June 30,<br>2021<br>September 30,<br>2021<br>Book Value Per Common Share $ 7.90 $ 8.20 $ 8.45 $ 8.61 $ 8.92 $ 9.25 $ 9.43 $ 9.92 $ 10.33 $ 10.73<br>Less: Effects of Intangible Assets (0.12) (0.12) (0.12) (0.12) (0.12) (0.12) (0.12) (0.12) (0.12) (0.11)<br>Tangible Book Value Per Common Share $ 7.78 $ 8.08 $ 8.33 $ 8.49 $ 8.80 $ 9.13 $ 9.31 $ 9.80 $ 10.21 $ 10.62<br>Total Common Shares 28,986,729 28,781,162 28,973,572 28,807,375 28,837,560 28,710,775 28,143,493 28,132,929 28,162,777 28,066,822<br>Tangible Book Value Per Share<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>December 31,<br>2023<br>Book Value Per Common Share $ 11.09 $ 11.12 $ 11.14 $ 11.44 $ 11.80 $ 12.05 $ 12.25 $ 12.47 $ 12.94<br>Less: Effects of Intangible Assets (0.11) (0.11) (0.11) (0.11) (0.11) (0.10) (0.10) (0.10) (0.10)<br>Tangible Book Value Per Common Share $ 10.98 $ 11.01 $ 11.03 $ 11.33 $ 11.69 $ 11.95 $ 12.15 $ 12.37 $ 12.84<br>Total Common Shares 28,206,566 28,150,389 27,677,372 27,587,978 27,751,950 27,845,244 27,973,995 28,015,505 27,748,965<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>As of and for the quarter ended,
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