8-K - BWB - Equibles

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K CURRENT REPORT

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

October 27, 2020

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)<br><br>	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	BWB	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 Results of Operations and Financial Condition .

On October 29, 2020, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2020. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

The information furnished in 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 Regulation FD Disclosure .

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

Item 8.01 Other Events.

On October 27, 2020, the Board of Directors of the Company approved a $15 million increase to the Company’s previously announced stock repurchase program (the “Program”), increasing the amount of common stock authorized to be repurchased from $25 million to up to $40 million for the duration of the Program. Additionally, the Board extended the Program to run through October 27, 2022. A copy of the Company’s press release announcing the changes to the Program is attached as Exhibit 99.3 to this Form 8-K and is incorporated herein by reference.

Under the Program, the Company may repurchase shares of common stock from time to time in open market or privately negotiated transactions. Any open market repurchases will be conducted in accordance with the limitations set forth in Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable legal requirements. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The extent to which the Company repurchases its shares, and the timing of such repurchases, will depend upon a variety of factors, including general market and economic conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by the Company. The Company may, in its discretion, begin, suspend or terminate repurchases at any time prior to the Program’s expiration, without any prior notice.

Item 9.01 Financial Statements and Exhibits.

(d)****Exhibits

Exhibit 99.1	Press release of Bridgewater Bancshares, Inc., dated October 29, 2020, regarding third quarter 2020 financial results
Exhibit 99.2	Investor Presentation dated October 29, 2020
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Exhibit 99.3	Press release of Bridgewater Bancshares, Inc., dated October 29, 2020, announcing increase to and extension of its stock repurchase program
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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: October 29, 2020
	By: /s/ Jerry Baack
	Name: Jerry Baack
	Title: Chairman, Chief Executive Officer and President

Exhibit 99.1

Bridgewater Bancshares, Inc. Announces Third Quarter 2020 Net Income of $7.2 Million, $0.25 Diluted Earnings Per Share

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $7.2 million, or $0.25 per diluted common share, for the third quarter of 2020, compared to net income of $7.6 million, or $0.26 per diluted common share, for the second quarter of 2020, and net income of $7.8 million, or $0.27 per diluted common share, for the third quarter of 2019.

“The third quarter marked the unveiling of our long awaited new corporate headquarters, and we could not be more excited to complete our relocation to this unconventional space in the heart of our market area,” commented Chairman, Chief Executive Officer, and President, Jerry Baack. “Not only does our new headquarters create an opportunity for us to safely return to the office, the campus-like atmosphere complements our unique culture. Our third quarter results remained strong, demonstrating our ability to adjust quickly to this historically low interest rate environment and other operating challenges introduced by the pandemic. We remain diligent in the monitoring of our loan portfolio and given the uncertainty of the credit outlook and the current economic environment, we continued to build reserves in the third quarter. The duration of this challenging operating environment is unknown, but we believe our incredibly deep and talented team is ready and capable of handling any challenges that come our way.”

Third Quarter 2020 Financial Results


		****	Diluted		Nonperforming	****	Adjusted	****	Tangible common equity
ROA	ROE	****	earnings per share		assets to total assets	****	efficiency ratio ^(1)^	****	to tangible assets ^(1)^
1.05%	10.84%		$	0.25	0.02%		41.7%		9.46%

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

Linked-Quarter Highlights

●	Annualized pre-provision net revenue return on average assets, a non-GAAP financial measure, was 1.94% for the third quarter of 2020, compared to 2.00% for the second quarter of 2020.

●	The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 41.7% for the third quarter of 2020, compared to 40.4% for the second quarter of 2020.<br>
●	Cost of total deposits declined 12 basis points to 0.87% in the third quarter of 2020, compared to 0.99% in the second quarter of 2020.<br>
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●	Loans increased $65.5 million, or 11.9% on an annualized basis, to $2.26 billion at September 30, 2020, compared to June 30, 2020.
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●	Deposits increased $31.0 million, or 5.5% on an annualized basis, to $2.27 billion at September 30, 2020, compared to June 30, 2020.<br>
●	Annualized net loan charge-offs (recoveries) as a percent of average loans were 0.00% for the third quarter of 2020, compared to (0.01)% for the second quarter of 2020.
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●

A loan loss provision of $3.8 million was recorded for the third quarter of 2020, primarily due to increased allocations for economic factors associated with the COVID-19 pandemic. The allowance for loan losses to total loans was 1.39% at September 30, 2020, compared to 1.26% at June 30, 2020. The allowance for loan losses to total loans, excluding $181.6 million of Paycheck Protection Program (PPP) loans, was 1.51% at September 30, 2020, compared to 1.37% at June 30, 2020.

●	75 loan modifications totaling $113.7 million, or 38.8% of total loan modifications, returned to regular payment status during the third quarter of 2020. Loan modification balances as a percent of totals loans, excluding PPP loans, decreased from 14.6% at the end of the second quarter of 2020 to 9.2% at the end of the third quarter of 2020.

Year-Over-Year Highlights

●	Diluted earnings per common share for the third quarter of 2020 were $0.25, compared to $0.27 for the third quarter of 2019.

●	Cost of total deposits declined 55 basis points to 0.87% in the third quarter of 2020, compared to 1.42% in the third quarter of 2019.

Page 1 of 17

●	Tangible book value per share, a non-GAAP financial measure, increased 13.0%, or $1.05, to $9.13 at September 30, 2020, compared to $8.08 at September 30, 2019.

●	Gross loans increased $413.0 million at September 30, 2020, or 22.4%, compared to September 30, 2019. Year-over-year loan growth was $231.4 million, or 12.5%, excluding $181.6 million of PPP loans.

●	Deposits increased $470.8 million at September 30, 2020, or 26.1%, compared to September 30, 2019. Year-over-year growth consisted of $284.1 million in organic deposits, excluding an estimated $30.0 million in growth attributable to remaining PPP loan funds.

●	The ratio of nonperforming assets to total assets was 0.02% at September 30, 2020, compared to 0.04% at September 30, 2019.

Year-To-Date Highlights

●	Diluted earnings per common share for the nine months ended September 30, 2020 were $0.76, compared to $0.76 for the nine months ended September 30, 2019.

●

Year-to-date pre-provision net revenue, a non-GAAP financial measure, was $38.4 million for the nine months ended September 30, 2020, an increase of 19.8%, compared to $32.1 million for the nine months ended September 30, 2019. Year-to-date annualized pre-provision net revenue return on average assets, a non-GAAP financial measure, was 2.01% for the nine months ended September 30, 2020, compared to 2.06% for the nine months ended September 30, 2019.

●	The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 42.0% for the nine months ended September 30, 2020, compared to 42.9% for the nine months ended September 30, 2019.

●	Year-to-date annualized loan growth for 2020, excluding PPP loans, was 11.6% as of September 30, 2020.

●	Year-to-date annualized organic deposit growth for 2020, excluding brokered deposits and remaining PPP loan funds, was 21.1% as of September 30, 2020.

Recent Developments

The outbreak of the novel coronavirus, or COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has continued to create uncertainty and extraordinary change for the Company, its clients, its communities and the country as a whole. In response to this pandemic, the Company rapidly deployed its business continuity plan and continues to take steps to protect the health and safety of its employees and clients. During the third quarter of 2020, the Company began returning employees to the office pursuant to new health and safety procedures, including increasing physical space between employees, using face coverings, alternating schedules for employees in the workspace and requiring employees with COVID-19 symptoms or exposure to quarantine away from the office. Given the fluidity of the situation, management cannot estimate the duration and full impact of the COVID-19 pandemic on the economy, financial markets and the Company’s financial condition and results of operations. At this point, management does not expect that the Company’s financial results in future quarters will track with the Company’s historical performance.

During the third quarter of 2020, the Company opened its newly constructed office complex in St. Louis Park, Minnesota. The Company relocated its headquarters from Bloomington, Minnesota and relocated its current branch location in St. Louis Park to the new office complex. Management expects that occupancy and equipment expense will increase in future periods related to the operations and depreciation of the building.

The Company participated in the Small Business Administration’s (SBA) PPP, which stemmed from the Coronavirus Aid, Relief and Economic Security, or CARES, Act that was signed into law on March 27, 2020. As of September 30, 2020, PPP principal loan balances totaled $181.6 million, compared to $180.2 million at June 30, 2020. In the third quarter of 2020, the Company began to shift its efforts to principal forgiveness processing; however, there was no forgiveness granted to any borrowers during the third quarter of 2020.

The Company continues to monitor the loan portfolio, working with clients to provide relief when appropriate. The Company has developed programs for clients who are experiencing business and personal disruptions due to the COVID-19 pandemic by providing loan payment deferrals and interest-only modifications. In accordance with interagency regulatory guidance and the CARES Act, qualifying loans modified in response to the COVID-19 pandemic will not be considered troubled debt restructurings. New modification activity has been limited in the third quarter of 2020. Page 2 of 17

The following table presents a rollforward of loan modification activity, by modification type, from June 30, 2020 to September 30, 2020:


	Interest-Only		Payment Deferral		Total
Principal Balance - June 30, 2020	$	175,307	$	117,703	$	293,010
Modification Expired		(45,392)		(90,108)		(135,500)
Second Modification Granted		18,909		2,909		21,818
New Modifications		10,502		—		10,502
Net Principal Advances (Payments)		1,559		(8)		1,551
Principal Balance - September 30, 2020	$	160,885	$	30,496	$	191,381

The following table presents a summary of active loan modifications, by loan segment and modification type, at September 30, 2020:


		Interest-Only					Payment Deferral					Total
	****	Amount		****	# of Loans	****	Amount		****	# of Loans	****	Amount		****	# of Loans
Commercial		$	11,705		21		$	414		2		$	12,119		23
Construction and Land Development			—		—			—		—			—		—
Real Estate Mortgage:
1 - 4 Family Mortgage			5,589		10			—		—			5,589		10
Multifamily			42,273		6			—		—			42,273		6
CRE Owner Occupied			1,646		4			1,502		3			3,148		7
CRE Nonowner Occupied			99,672		35			28,580		6			128,252		41
Consumer and Other			—		—			—		—			—		—
Totals		$	160,885		76		$	30,496		11		$	191,381		87

Modifications have been granted on a case-by-case basis based on the specific needs and circumstances affecting each borrower. Interest-only modifications have been primarily granted for three to six month periods, but range up to twelve months. Payment deferral modifications have been granted for three to six month periods. The Company has 52 modified loans totaling $99.8 million set to expire in October 2020. As of October 22, 2020, based on lender and client surveys, the Company estimates that $73.6 million will return to regular payment status, bringing loan modification balances as a percent of total loans, excluding PPP loans, to 5.6%. Page 3 of 17

Key Financial Measures


		As of and for the Three Months Ended										As of and for the Nine Months Ended
		September 30,			June 30,			September 30,				September 30,			September 30,
	****	2020			2020			2019			****	2020		****	2019
Per Common Share Data
Basic Earnings Per Share		$	0.25		$	0.26		$	0.27			$	0.77		$	0.77
Diluted Earnings Per Share			0.25			0.26			0.27				0.76			0.76
Book Value Per Share			9.25			8.92			8.20				9.25			8.20
Tangible Book Value Per Share ^(1)^			9.13			8.80			8.08				9.13			8.08
Basic Weighted Average Shares Outstanding			28,683,855			28,676,441			28,820,144				28,717,142			29,535,589
Diluted Weighted Average Shares Outstanding			29,174,601			29,165,157			29,497,961				29,300,763			30,181,556
Shares Outstanding at Period End			28,710,775			28,837,560			28,781,162				28,710,775			28,781,162

Selected Performance Ratios
Return on Average Assets (Annualized)			1.05	%		1.17	%		1.43	%			1.16	%		1.46	%
Pre-Provision Net Revenue Return on Average Assets (Annualized) ^(1)^			1.94			2.00			2.08				2.01			2.06
Return on Average Common Equity (Annualized)			10.84			11.98			13.31				11.57			13.27
Return on Average Tangible Common Equity (Annualized)^(1)^			10.98			12.14			13.52				11.73			13.49
Yield on Interest Earning Assets			4.30			4.45			4.98				4.53			5.01
Yield on Total Loans, Gross			4.73			4.85			5.32				4.91			5.31
Cost of Interest Bearing Liabilities			1.50			1.58			2.04				1.63			2.06
Cost of Total Deposits			0.87			0.99			1.42				1.03			1.44
Net Interest Margin ^(2)^			3.28			3.38			3.56				3.41			3.57
Efficiency Ratio^(1)^			42.3			48.6			45.6				45.1			46.6
Adjusted Efficiency Ratio ^(1)^			41.7			40.4			42.9				42.0			42.9
Noninterest Expense to Average Assets (Annualized)			1.42			1.64			1.66				1.58			1.70
Adjusted Noninterest Expense to Average Assets (Annualized) ^(1)^			1.40			1.37			1.56				1.47			1.56
Loan to Deposit Ratio			99.4			97.8			102.4
Core Deposits to Total Deposits			77.1			75.7			79.9
Tangible Common Equity to Tangible Assets ^(1)^			9.46			9.23			10.43

Capital Ratios (Bank Only)^(3)^
Tier 1 Leverage Ratio			11.24	%		11.36	%		10.88	%
Tier 1 Risk-based Capital Ratio			12.60			12.96			11.61
Total Risk-based Capital Ratio			13.85			14.21			12.44

Capital Ratios (Consolidated)^(3)^
Tier 1 Leverage Ratio			9.83	%		9.94	%		10.53	%
Tier 1 Risk-based Capital Ratio			11.03			11.39			11.26
Total Risk-based Capital Ratio			15.45			15.99			13.31

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)	Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
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(3)	Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
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Selected Financial Data


		September 30,			June 30,		March 31,		December 31,		September 30,
(dollars in thousands)	****	2020		****	2020		2020		2019		2019
Selected Balance Sheet Data
Total Assets		$	2,774,564		$	2,754,463	$	2,418,730	$	2,268,830	$	2,232,339
Total Loans, Gross			2,259,228			2,193,778		2,002,817		1,912,038		1,846,218
Allowance for Loan Losses			31,381			27,633		24,585		22,526		22,124
Goodwill and Other Intangibles			3,344			3,391		3,439		3,487		3,535

Deposits			2,273,044			2,242,051		1,900,127		1,823,310		1,802,236
Tangible Common Equity^(1)^			262,088			253,799		244,704		241,307		232,524
Total Shareholders' Equity			265,432			257,190		248,143		244,794		236,059
Average Total Assets - Quarter-to-Date			2,711,755			2,622,272		2,317,040		2,221,370		2,168,909
Average Common Equity - Quarter-to-Date			263,195			255,109		250,800		240,188		232,590

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


	For the Three Months Ended							For the Nine Months Ended
	September 30,		June 30,			September 30,		September 30,			September 30,
(dollars in thousands)	2020		2020		****	2019		2020		****	2019
Selected Income Statement Data
Interest Income	$	28,493	$	28,166		$	26,572	$	84,127		$	76,359
Interest Expense		6,814		6,824			7,637		21,004			22,155
Net Interest Income		21,679		21,342			18,935		63,123			54,204
Provision for Loan Losses		3,750		3,000			900		8,850			2,100
Net Interest Income after Provision for Loan Losses		17,929		18,342			18,035		54,273			52,104
Noninterest Income		1,157		1,977			946		4,853			2,714
Noninterest Expense		9,672		10,711			9,084		30,129			26,443
Income Before Income Taxes		9,414		9,608			9,897		28,997			28,375
Provision for Income Taxes		2,240		2,010			2,092		6,782			5,543
Net Income	$	7,174	$	7,598		$	7,805	$	22,215		$	22,832

Income Statement

Net Interest Income

Net interest income was $21.7 million for the third quarter of 2020, an increase of $337,000, or 1.6%, from $21.3 million in the second quarter of 2020, and an increase of $2.7 million, or 14.5%, from $18.9 million in the third quarter of 2019. The linked-quarter increase in net interest income was primarily due to growth in average interest earning assets and lower rates paid on deposits, offset partially by lower rates on interest earning assets. The year-over-year increase in net interest income was largely attributed to growth in average interest earning assets, which increased by $521.0 million, or 24.4%, to $2.66 billion for the third quarter of 2020, from $2.13 billion for the third quarter of 2019. This increase in average interest earning assets was primarily due to continued organic growth in the loan portfolio and most recently, the funding of PPP loans.

Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2020 was 3.28%, a 10 basis point decrease from 3.38% in the second quarter of 2020, and a 28 basis point decrease from 3.56% in the third quarter of 2019.

While the Company is encouraged by the continued reduction in the cost of interest bearing liabilities during the third quarter of 2020, the linked-quarter decrease in net interest margin was primarily attributed to the historically low and flat yield curve weighing on earning asset yields. Furthermore, the Company’s participation in the PPP generated strong loan origination volume during the second quarter of 2020; however, the interest rate of 1.00% earned on these loans is significantly lower than the aggregate loan yield, thus impacting the net interest margin during the quarter. It is worth noting that the core net interest margin, excluding PPP loans and corresponding deposit balances, was 3.33% for the third quarter of 2020. The year-over-year decline in net interest margin largely followed the same themes as the quarter. Despite a significant reduction in interest bearing deposit costs over the year, the historically low interest rate environment coupled with a more liquid balance sheet mix pressured earning asset yields lower and ultimately continued to compress the net interest margin.

Interest income was $28.5 million for the third quarter of 2020, an increase of $327,000, or 1.2%, from $28.2 million in the second quarter of 2020, and an increase of $1.9 million, or 7.2%, from $26.6 million in the third quarter of 2019. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.30% in the third quarter of 2020, compared to 4.45% in the second quarter of 2020, and 4.98% in the third quarter of 2019. The linked-quarter decrease in the yield on interest earning assets was due primarily to lower market Page 5 of 17

rates resulting in lower loan and security yields. The year-over-year decrease in the yield on interest earning assets was due to the falling interest rate environment resulting in lower loan and security yields, the impact of PPP loans originated at a meaningfully lower rate than the aggregate loan portfolio yield, and an increase in cash balances held by the Company due to the uncertain impacts of the COVID-19 pandemic.

Loan interest income and loan fees remain the primary contributing factors to the changes in yield on interest earning assets. The aggregate loan yield, excluding PPP loans, decreased to 4.93% in the third quarter of 2020, which was 8 basis points lower than 5.01% in the second quarter of 2020, and 39 basis points lower than 5.32% in the third quarter of 2019. While loan fees have maintained a stable contribution to the aggregate loan yield, the historically low and flat yield curve has resulted in a declining core yield on loans in comparison to both prior periods.

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


	Three Months Ended
	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019	****
Interest	4.69	%	4.76	%	4.90	%	5.00	%	5.07	%
Fees	0.24		0.25		0.27		0.33		0.25
Yield on Loans, Excluding PPP Loans	4.93	%	5.01	%	5.17	%	5.33	%	5.32	%

Interest expense was $6.8 million for the third quarter of 2020, a decrease of $10,000, or 0.1%, from $6.8 million in the second quarter of 2020, and a decrease of $823,000, or 10.8%, from $7.6 million in the third quarter of 2019. The cost of interest bearing liabilities declined 8 basis points on a linked-quarter basis from 1.58% in the second quarter of 2020 to 1.50% in the third quarter of 2020, primarily due to lower rates paid on deposits. On a year-over-year basis, the cost of interest bearing liabilities decreased 54 basis points from 2.04% in the third quarter of 2019 to 1.50% in the third quarter of 2020.

Interest expense on deposits was $4.8 million for the third quarter of 2020, a decrease of $330,000, or 6.4%, from $5.2 million in the second quarter of 2020, and a decrease of $1.4 million, or 22.0%, from $6.2 million in the third quarter of 2019. The average cost of total deposits declined 12 basis points on a linked-quarter basis from 0.99% in the second quarter of 2020, and declined 55 basis points on a year-over-year basis from 1.42% in the third quarter of 2019, to 0.87% in the third quarter of 2020, primarily due to deposit rate cuts consistent with a lower rate environment and the repricing of time deposits.

Given strong deposit growth and ample time deposit maturities over the next 12 months, the Company anticipates meaningful deposit repricing opportunities in future quarters.

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A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended September 30, 2020, June 30, 2020, and September 30, 2019 is as follows:


		For the Three Months Ended																							****
		September 30, 2020								June 30, 2020							****	September 30, 2019							****
		Average			Interest			Yield/		Average			Interest			Yield/	****	Average			Interest			Yield/	****
	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)
Interest Earning Assets:
Cash Investments		$	101,787		$	42		0.16	%	$	109,073		$	37		0.14	%	$	73,970		$	346		1.86	%
Investment Securities:
Taxable Investment Securities			256,808			1,389		2.15			203,559			1,304		2.58			151,319			1,095		2.87
Tax-Exempt Investment Securities^(1)^			82,579			900		4.33			91,793			996		4.37			95,575			1,031		4.28
Total Investment Securities			339,387			2,289		2.68			295,352			2,300		3.13			246,894			2,126		3.42
Paycheck Protection Program Loans ^(2)^			181,397			1,173		2.57			139,235			873		2.52			—			—		—
Loans ^(1)(2)^			2,025,410			25,081		4.93			2,013,163			25,070		5.01			1,805,920			24,220		5.32
Total Loans			2,206,807			26,254		4.73			2,152,398			25,943		4.85			1,805,920			24,220		5.32
Federal Home Loan Bank Stock			7,901			127		6.38			10,469			125		4.81			8,111			96		4.72
Total Interest Earning Assets			2,655,882			28,712		4.30	%		2,567,292			28,405		4.45	%		2,134,895			26,788		4.98	%
Noninterest Earning Assets			55,873								54,980								34,014
Total Assets		$	2,711,755							$	2,622,272							$	2,168,909
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits			306,162			400		0.52	%		272,565			377		0.56	%		250,667			511		0.81	%
Savings and Money Market Deposits			501,246			1,106		0.88			521,313			1,327		1.02			453,340			2,080		1.82
Time Deposits			369,975			1,899		2.04			388,357			2,122		2.20			359,329			2,229		2.46
Brokered Deposits			419,744			1,435		1.36			319,711			1,344		1.69			242,600			1,389		2.27
Total Interest Bearing Deposits			1,597,127			4,840		1.21			1,501,946			5,170		1.38			1,305,936			6,209		1.89
Federal Funds Purchased			152			—		0.33			9			—		0.72			—			—		—
Notes Payable			11,500			108		3.74			12,000			111		3.72			13,500			127		3.73
FHLB Advances			129,457			748		2.30			193,819			1,064		2.21			143,690			908		2.51
Subordinated Debentures			73,649			1,118		6.04			31,228			479		6.17			24,699			393		6.31
Total Interest Bearing Liabilities			1,811,885			6,814		1.50	%		1,739,002			6,824		1.58	%		1,487,825			7,637		2.04	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			615,214								603,456								434,021
Other Noninterest Bearing Liabilities			21,461								24,705								14,473
Total Noninterest Bearing Liabilities			636,675								628,161								448,494
Shareholders' Equity			263,195								255,109								232,590
Total Liabilities and Shareholders' Equity		$	2,711,755							$	2,622,272							$	2,168,909
Net Interest Income / Interest Rate Spread						21,898		2.80	%					21,581		2.87	%					19,151		2.94	%
Net Interest Margin ^(3)^								3.28	%							3.38	%							3.56	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities						(219)								(239)								(216)
Net Interest Income					$	21,679							$	21,342							$	18,935

(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.
---	---

Page 7 of 17

(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.

Provision for Loan Losses

The provision for loan losses was $3.8 million for the third quarter of 2020, an increase of $750,000 from $3.0 million for the second quarter of 2020, and an increase of $2.9 million from $900,000 for the third quarter of 2019. The allowance for loan losses to total loans was 1.39% at September 30, 2020, compared to 1.26% at June 30, 2020, and 1.20% at September 30, 2019. The allowance for loan losses to total loans, excluding $181.6 million of PPP loans, was 1.51% at September 30, 2020. The continued reserve build in the third quarter of 2020 was primarily attributable to growth of the loan portfolio, economic uncertainties and evolving risks driven by the impact of the COVID-19 pandemic.

As an emerging growth company, the Company is not subject to Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,“ or CECL, until January 1, 2023.

The following table presents the activity in the Company’s allowance for loan losses for the periods indicated:


		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)	****	2020		****	2020		****	2019		****	2020		****	2019
Balance at Beginning of Period		$	27,633		$	24,585		$	21,362		$	22,526		$	20,031
Provision for Loan Losses			3,750			3,000			900			8,850			2,100
Charge-offs			(6)			(1)			(144)			(54)			(183)
Recoveries			4			49			6			59			176
Balance at End of Period		$	31,381		$	27,633		$	22,124		$	31,381		$	22,124

Noninterest Income

Noninterest income was $1.2 million for the third quarter of 2020, a decrease of $820,000 from $2.0 million for the second quarter of 2020, and an increase of $211,000 from $946,000 for the third quarter of 2019. The linked-quarter decrease was primarily due to decreased gains on sales of securities, offset partially by increased letter of credit fees and customer service fees. The year-over-year increase was primarily due to increased letter of credit fees.

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


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)	2020		****	2020		****	2019		****	2020		****	2019
Noninterest Income:
Customer Service Fees	$	200		$	135		$	184		$	575		$	564
Net Gain on Sales of Securities		109			1,361			58			1,473			516
Net Gain on Sales of Foreclosed Assets		—			—			69			—			69
Letter of Credit Fees		487			265			331			1,026			790
Debit Card Interchange Fees		119			99			116			310			313
Swap Fees		—			—			—			907			—
Other Income		242			117			188			562			462
Totals	$	1,157		$	1,977		$	946		$	4,853		$	2,714

Noninterest Expense

Noninterest expense was $9.7 million for the third quarter of 2020, a decrease of $1.0 million from $10.7 million for the second quarter of 2020, and an increase of $588,000 from $9.1 million for the third quarter of 2019. The linked-quarter decrease was primarily due to $1.4 million of FHLB advance prepayment fees incurred in the second quarter of 2020, as well as lower amortization of tax credit investments. The decrease was partially offset by increased salaries and employee benefits and occupancy and equipment expenses related to the new corporate headquarters. The year-over-year increase was attributed to increased salaries and employee benefits and FDIC insurance assessment, offset partially by decreased marketing and advertising and amortization of tax credit investments.

Page 8 of 17

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


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)	2020		****	2020		****	2019		****	2020		****	2019
Noninterest Expense:
Salaries and Employee Benefits	$	6,550		$	6,348		$	5,915		$	19,352		$	15,841
Occupancy and Equipment		894			672			761			2,279			2,202
FDIC Insurance Assessment		160			168			—			518			570
Data Processing		267			238			182			734			486
Professional and Consulting Fees		492			423			414			1,400			1,253
Information Technology and Telecommunications		385			326			233			977			677
Marketing and Advertising		94			85			339			645			1,208
Intangible Asset Amortization		48			47			48			143			143
Amortization of Tax Credit Investments		145			362			530			592			2,097
FHLB Advance Prepayment Fees		—			1,430			—			1,430			—
Other Expense		637			612			662			2,059			1,966
Totals	$	9,672		$	10,711		$	9,084		$	30,129		$	26,443

The Company had 180 full-time equivalent employees at September 30, 2020, compared to 173 employees at June 30, 2020, and 158 employees at September 30, 2019. Despite the uncertainty surrounding the COVID-19 pandemic, the Company continues to attract strategic hires in lending, deposit gathering, technology and risk management roles. The efficiency ratio, a non-GAAP financial measure, was 42.3% for the third quarter of 2020, compared to 48.6% for the second quarter of 2020, and 45.6% for the third quarter of 2019. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 41.7% for the third quarter of 2020, 40.4% for the second quarter of 2020 and 42.9% for the third quarter of 2019. The efficiencies of the Company’s “branch-light” model have been evident throughout the pandemic, and going forward, have positioned the Company well to continue making investments in technology as the industry adapts to evolving client behavior.

Income Taxes

The effective combined federal and state income tax rate for the third quarter of 2020 was 23.8%, an increase from 20.9% for the second quarter of 2020 and an increase from 21.1% for the third quarter of 2019. The effective combined federal and state income tax rate for the nine months ended September 30, 2020 was 23.4%.

Balance Sheet

Total assets at September 30, 2020 were $2.77 billion, a 0.7% increase from $2.75 billion at June 30, 2020, and a 24.3% increase from $2.23 billion at September 30, 2019. While the linked-quarter increase was nominal, restored organic loan growth and purchases of investment securities deployed excess liquidity build from the previous quarter. The year-over-year increase in total assets was primarily due to organic loan growth, PPP loan growth and purchases of investment securities.

Total gross loans at September 30, 2020 were $2.26 billion, an increase of $65.5 million, or 3.0%, over total gross loans of $2.19 billion at June 30, 2020, and an increase of $413.0 million, or 22.4%, over total gross loans of $1.85 billion at September 30, 2019. Year-to-date annualized loan growth, excluding $181.6 million of PPP loans, was 11.6% as of September 30, 2020.

The following table presents the dollar composition of the Company’s loan portfolio, by category, at the dates indicated:


	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
(dollars in thousands)
Commercial	$	287,254	$	302,536	$	299,425	$	276,035	$	291,723
Paycheck Protection Program		181,596		180,228		—		—		—
Construction and Land Development		175,882		191,768		183,350		196,776		216,054
Real Estate Mortgage:
1 - 4 Family Mortgage		286,089		289,456		272,590		260,611		254,782
Multifamily		585,814		522,491		536,380		515,014		456,257
CRE Owner Occupied		75,963		73,539		75,207		66,584		71,209
CRE Nonowner Occupied		660,058		627,651		631,541		592,545		551,992
Total Real Estate Mortgage Loans		1,607,924		1,513,137		1,515,718		1,434,754		1,334,240
Consumer and Other		6,572		6,109		4,324		4,473		4,201
Total Loans, Gross		2,259,228		2,193,778		2,002,817		1,912,038		1,846,218
Allowance for Loan Losses		(31,381)		(27,633)		(24,585)		(22,526)		(22,124)
Net Deferred Loan Fees		(10,367)		(10,287)		(5,336)		(5,512)		(5,788)
Total Loans, Net	$	2,217,480	$	2,155,858	$	1,972,896	$	1,884,000	$	1,818,306

Page 9 of 17

Total deposits at September 30, 2020 were $2.27 billion, an increase of $31.0 million, or 1.4%, over total deposits of $2.24 billion at June 30, 2020, and an increase of $470.8 million, or 26.1%, over total deposits of $1.80 billion at September 30, 2019. Deposit growth in the third quarter of 2020 was primarily due to an increase in noninterest bearing and interest bearing transaction deposits, offset partially by a decline in savings and money market and time deposits. The growth in noninterest bearing and interest bearing transaction deposits is a result of both successful new client acquisition initiatives and pandemic-related accumulation of liquidity by existing clients. Given the fluid environment, management believes deposits could experience fluctuations in future periods.

The following table presents the dollar composition of the Company’s deposit portfolio, by category, at the dates indicated:


		September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
(dollars in thousands)	****
Noninterest Bearing Transaction Deposits		$	685,773	$	648,869	$	476,217	$	447,509	$	478,493
Interest Bearing Transaction Deposits			322,253		285,386		255,483		264,627		243,889
Savings and Money Market Deposits			498,397		516,543		514,113		516,785		470,518
Time Deposits			363,897		382,187		393,340		360,027		363,308
Brokered Deposits			402,724		409,066		260,974		234,362		246,028
Total Deposits		$	2,273,044	$	2,242,051	$	1,900,127	$	1,823,310	$	1,802,236

Total shareholders’ equity at September 30, 2020 was $265.4 million, an increase of $8.2 million, or 3.2%, over total shareholders’ equity of $257.2 million at June 30, 2020, and an increase of $29.4 million, or 12.4%, over total shareholders’ equity of $236.1 million at September 30, 2019. The linked-quarter increase was due to net income retained and an increase in unrealized gains in the securities portfolio, partially offset by stock repurchases made under the Company’s stock repurchase program. The year-over-year increase was due to net income retained, partially offset by stock repurchases made in the first and third quarters of 2020 under the Company’s stock repurchase program.

Strong earnings and capital growth coupled with better asset quality visibility as loan modifications expired, supported management’s decision to resume repurchases under the Company’s stock buyback program late in the third quarter of 2020. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock buyback program in this fluid economic environment. During the third quarter of 2020, the Company repurchased 137,984 shares of its common stock. Shares were repurchased at a weighted average price of $9.39 for a total of $1.3 million.

Tangible book value per share, a non-GAAP financial measure, was $9.13 as of September 30, 2020, an increase of 3.7% from $8.80 as of June 30, 2020, and an increase of 13.0% from $8.08 as of September 30, 2019.

Asset Quality

The Company has not yet witnessed direct impacts of the COVID-19 pandemic in the Company’s asset quality metrics; however, management believes that the economic uncertainty that exists may begin to negatively impact the portfolio in future quarters. Annualized net charge-offs (recoveries) as a percent of average loans for the third quarter of 2020 were 0.00%, compared to (0.01)% for the second quarter of 2020, and 0.03% for the third quarter of 2019. At September 30, 2020, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $433,000, or 0.02% of total assets, as compared to $602,000, or 0.02% of total assets at June 30, 2020, and $828,000 or 0.04% of total assets at September 30, 2019.

The Company has increased oversight and analysis of all segments within the loan portfolio in response to the COVID-19 pandemic, especially in vulnerable industries such as hospitality and restaurants, to proactively monitor evolving credit risk. With the change in economic conditions and the uncertain duration of the COVID-19 pandemic, the Company’s portfolio is expected to be negatively impacted and management anticipates that delinquencies and charge-offs could rise in future periods. Loans that have potential weaknesses that warrant a watchlist risk rating at September 30, 2020, were $50.9 million, compared to $45.7 million at June 30, 2020. As the COVID-19 pandemic continues to evolve, the length and extent of the economic contraction may result in further watchlist or adverse classifications in the loan portfolio. Loans that warrant a substandard risk rating at September 30, 2020 were $16.1 million, compared to $3.7 million at June 30, 2020.

Page 10 of 17

The following table presents a summary of asset quality measurements at the dates indicated:


		As of and for the Three Months Ended
		September 30,			June 30			March 31			December 31,			September 30,
(dollars in thousands)	****	2020		****	2020		****	2020		****	2019		****	2019		****
Selected Asset Quality Data
Loans 30-89 Days Past Due		$	458		$	153		$	21		$	403		$	—
Loans 30-89 Days Past Due to Total Loans			0.02	%		0.01	%		0.00	%		0.02	%		0.00	%
Nonperforming Loans		$	433		$	602		$	606		$	461		$	828
Nonperforming Loans to Total Loans			0.02	%		0.03	%		0.03	%		0.02	%		0.04	%
Foreclosed Assets		$	—		$	—		$	—		$	—		$	—
Nonaccrual Loans to Total Loans			0.02	%		0.03	%		0.03	%		0.02	%		0.04	%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans			0.02			0.03			0.03			0.02			0.04
Nonperforming Assets ^(1)^		$	433		$	602		$	606		$	461		$	828
Nonperforming Assets to Total Assets ^(1)^			0.02	%		0.02	%		0.03	%		0.02	%		0.04	%
Allowance for Loan Losses to Total Loans			1.39			1.26			1.23			1.18			1.20
Allowance for Loan Losses to Total Loans, Excluding PPP Loans			1.51			1.37			N/A			N/A			N/A
Allowance for Loans Losses to Nonperforming Loans			7,247.34			4,590.20			4,056.93			4,886.33			2,671.98
Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans			0.00			(0.01)			0.01			0.04			0.03

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

About the Company

Bridgewater Bancshares, Inc. is a financial holding company headquartered in St. Louis Park, Minnesota. The Company has two wholly owned subsidiaries, Bridgewater Bank, a Minnesota-chartered commercial bank founded in November 2005, and Bridgewater Risk Management, Inc., a captive insurance company founded in December 2016. Bridgewater Bank has two wholly owned subsidiaries, Bridgewater Investment Management, Inc. and BWB Holdings, LLC. Bridgewater Bank currently operates through 7 branches in Bloomington, Greenwood, Minneapolis (2), St. Louis Park, Orono, and St. Paul, all located within the Minneapolis-St. Paul-Bloomington metropolitan statistical area.

Investor Relations Contact:

Jerry Baack

Chief Executive Officer

investorrelations@bwbmn.com

952-893-6866

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 Page 11 of 17

those indicated in the forward-looking statements include, among others, the following: the negative effects of the COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events; potential impairment to the goodwill we recorded in connection with our past acquisition; 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. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Page 12 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets

(dollars in thousands, except share data)


		September 30,			December 31,			September 30,
	****	2020		****	2019		****	2019
		(Unaudited)						(Unaudited)
ASSETS
Cash and Cash Equivalents		$	91,510		$	31,935		$	89,619
Bank-Owned Certificates of Deposit			2,862			2,654			2,654
Securities Available for Sale, at Fair Value			373,955			289,877			263,803
Loans, Net of Allowance for Loan Losses of $31,381 at September 30, 2020 (unaudited), $22,526 at December 31, 2019 and $22,124 at September 30, 2019 (unaudited)			2,217,480			1,884,000			1,818,306
Federal Home Loan Bank (FHLB) Stock, at Cost			7,817			7,824			8,024
Premises and Equipment, Net			48,885			27,628			25,764
Accrued Interest			9,647			6,775			6,519
Goodwill			2,626			2,626			2,626
Other Intangible Assets, Net			718			861			909
Other Assets			19,064			14,650			14,115
Total Assets		$	2,774,564		$	2,268,830		$	2,232,339

LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing		$	685,773		$	447,509		$	478,493
Interest Bearing			1,587,271			1,375,801			1,323,743
Total Deposits			2,273,044			1,823,310			1,802,236
Notes Payable			11,500			13,000			13,500
FHLB Advances			127,500			136,500			141,500
Subordinated Debentures, Net of Issuance Costs			73,665			24,733			24,707
Accrued Interest Payable			2,082			1,982			1,763
Other Liabilities			21,341			24,511			12,574
Total Liabilities			2,509,132			2,024,036			1,996,280

SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value
Authorized 10,000,000; None Issued and Outstanding at September 30, 2020 (unaudited), December 31, 2019 and September 30, 2019 (unaudited)			—			—			—
Common Stock- $0.01 par value
Common Stock - Authorized 75,000,000; Issued and Outstanding 28,710,775 at September 30, 2020 (unaudited), 28,973,572 at December 31, 2019 and 28,781,162 at September 30, 2019 (unaudited)			287			290			288
Additional Paid-In Capital			110,010			112,093			111,670
Retained Earnings			149,852			127,637			119,066
Accumulated Other Comprehensive Income			5,283			4,774			5,035
Total Shareholders' Equity			265,432			244,794			236,059
Total Liabilities and Equity		$	2,774,564		$	2,268,830		$	2,232,339

Page 13 of 17

Bridgewater Bancshares, Inc. and SubsidiariesConsolidated Statements of Income

(dollars in thousands, except per share data)


		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
	****	2020		****	2020		****	2019		****	2020		****	2019
		(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
INTEREST INCOME
Loans, Including Fees		$	26,224		$	25,913		$	24,220		$	77,250		$	69,720
Investment Securities			2,100			2,091			1,910			6,387			5,739
Other			169			162			442			490			900
Total Interest Income			28,493			28,166			26,572			84,127			76,359

INTEREST EXPENSE
Deposits			4,840			5,170			6,209			15,734			17,932
Notes Payable			108			111			127			334			378
FHLB Advances			748			1,064			908			2,839			2,510
Subordinated Debentures			1,118			479			393			1,990			1,163
Federal Funds Purchased			—			—			—			107			172
Total Interest Expense			6,814			6,824			7,637			21,004			22,155

NET INTEREST INCOME			21,679			21,342			18,935			63,123			54,204
Provision for Loan Losses			3,750			3,000			900			8,850			2,100

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			17,929			18,342			18,035			54,273			52,104

NONINTEREST INCOME
Customer Service Fees			200			135			184			575			564
Net Gain on Sales of Available for Sale Securities			109			1,361			58			1,473			516
Net Gain on Sales of Foreclosed Assets			—			—			69			—			69
Other Income			848			481			635			2,805			1,565
Total Noninterest Income			1,157			1,977			946			4,853			2,714

NONINTEREST EXPENSE
Salaries and Employee Benefits			6,550			6,348			5,915			19,352			15,841
Occupancy and Equipment			894			672			761			2,279			2,202
Other Expense			2,228			3,691			2,408			8,498			8,400
Total Noninterest Expense			9,672			10,711			9,084			30,129			26,443

INCOME BEFORE INCOME TAXES			9,414			9,608			9,897			28,997			28,375
Provision for Income Taxes			2,240			2,010			2,092			6,782			5,543
NET INCOME		$	7,174		$	7,598		$	7,805		$	22,215		$	22,832

EARNINGS PER SHARE
Basic		$	0.25		$	0.26		$	0.27		$	0.77		$	0.77
Diluted			0.25			0.26			0.27			0.76			0.76
Dividends Paid Per Share			—			—			—			—			—

Page 14 of 17

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


		For the Three Months Ended										For the Nine Months Ended
		September 30,			June 30,			September 30,				September 30,			September 30,
	****	2020		****	2020		****	2019		****	****	2020		****	2019		****

Efficiency Ratio
Noninterest Expense		$	9,672		$	10,711		$	9,084			$	30,129		$	26,443
Less: Amortization of Intangible Assets			(48)			(47)			(48)				(143)			(143)
Adjusted Noninterest Expense		$	9,624		$	10,664		$	9,036			$	29,986		$	26,300
Net Interest Income			21,679			21,342			18,935				63,123			54,204
Noninterest Income			1,157			1,977			946				4,853			2,714
Less: Gain on Sales of Securities			(109)			(1,361)			(58)				(1,473)			(516)
Adjusted Operating Revenue		$	22,727		$	21,958		$	19,823			$	66,503		$	56,402
Efficiency Ratio			42.3	%		48.6	%		45.6	%			45.1	%		46.6	%

Adjusted Efficiency Ratio
Noninterest Expense		$	9,672		$	10,711		$	9,084			$	30,129		$	26,443
Less: Amortization of Tax Credit Investments			(145)			(362)			(530)				(592)			(2,097)
Less: FHLB Advance Prepayment Fees			—			(1,430)			—				(1,430)			—
Less: Amortization of Intangible Assets			(48)			(47)			(48)				(143)			(143)
Adjusted Noninterest Expense		$	9,479		$	8,872		$	8,506			$	27,964		$	24,203
Net Interest Income			21,679			21,342			18,935				63,123			54,204
Noninterest Income			1,157			1,977			946				4,853			2,714
Less: Gain on Sales of Securities			(109)			(1,361)			(58)				(1,473)			(516)
Adjusted Operating Revenue		$	22,727		$	21,958		$	19,823			$	66,503		$	56,402
Adjusted Efficiency Ratio			41.7	%		40.4	%		42.9	%			42.0	%		42.9	%


		For the Three Months Ended									For the Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
	****	2020		****	2020			2019			2020		****	2019		****
Pre-Provision Net Revenue
Noninterest Income		$	1,157		$	1,977		$	946		$	4,853		$	2,714
Less: Gain on sales of Securities			(109)			(1,361)			(58)			(1,473)			(516)
Total Operating Noninterest Income			1,048			616			888			3,380			2,198
Plus: Net Interest income			21,679			21,342			18,935			63,123			54,204
Net Operating Revenue		$	22,727		$	21,958		$	19,823		$	66,503		$	56,402

Noninterest Expense		$	9,672		$	10,711		$	9,084		$	30,129		$	26,443
Less: Amortization of Tax Credit Investments			(145)			(362)			(530)			(592)			(2,097)
Less: FHLB Advance Prepayment Fees			—			(1,430)			—			(1,430)			—
Total Operating Noninterest Expense		$	9,527		$	8,919		$	8,554		$	28,107		$	24,346

Pre-Provision Net Revenue		$	13,200		$	13,039		$	11,269		$	38,396		$	32,056

Plus:
Non-Operating Revenue Adjustments			109			1,361			58			1,473			516
Less:
Provision for Loan Losses			3,750			3,000			900			8,850			2,100
Non-Operating Expense Adjustments			145			1,792			530			2,022			2,097
Provision for Income Taxes			2,240			2,010			2,092			6,782			5,543
Net Income		$	7,174		$	7,598		$	7,805		$	22,215		$	22,832

Average Assets		$	2,711,755		$	2,622,272		$	2,168,909		$	2,550,945		$	2,083,837
Pre-Provision Net Revenue Return on Average Assets			1.94	%		2.00	%		2.08	%		2.01	%		2.06	%

Page 15 of 17


	As of and for the Three Months Ended										As of and for the Nine Months Ended
	September 30,			June 30,			September 30,				September 30,			September 30,
	2020		****	2020		****	2019		****	****	2020		****	2019		****

Tangible Common Equity and Tangible Common Equity/Tangible Assets
Common Equity	$	265,432		$	257,190		$	236,059
Less: Intangible Assets		(3,344)			(3,391)			(3,535)
Tangible Common Equity	$	262,088		$	253,799		$	232,524

Total Assets	$	2,774,564		$	2,754,463		$	2,232,339
Less: Intangible Assets		(3,344)			(3,391)			(3,535)
Tangible Assets	$	2,771,220		$	2,751,072		$	2,228,804
Tangible Common Equity/Tangible Assets		9.46	%		9.23	%		10.43	%

Tangible Book Value Per Share
Book Value Per Common Share	$	9.25		$	8.92		$	8.20
Less: Effects of Intangible Assets		(0.12)			(0.12)			(0.12)
Tangible Book Value Per Common Share	$	9.13		$	8.80		$	8.08

Average Tangible Common Equity
Average Common Equity	$	263,195		$	255,109		$	232,590			$	256,393		$	229,961
Less: Effects of Average Intangible Assets		(3,371)			(3,419)			(3,558)				(3,418)			(3,605)
Average Tangible Common Equity	$	259,824		$	251,690		$	229,032			$	252,975		$	226,356

Page 16 of 17

Bridgewater Bancshares, Inc. and Subsidiaries

Analysis of Average Balances, Yields and Rates (year-to-date)

(dollars in thousands, except per share data) (Unaudited)


		For the Nine Months Ended															****
		September 30, 2020								September 30, 2019							****
		Average			Interest			Yield/		Average			Interest			Yield/
	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)
Interest Earning Assets:
Cash Investments		$	80,186		$	138		0.23	%	$	46,158		$	604		1.75	%
Investment Securities:
Taxable Investment Securities			216,332			4,080		2.52			143,583			3,126		2.91
Tax-Exempt Investment Securities^(1)^			89,674			2,920		4.35			103,032			3,307		4.29
Total Investment Securities			306,006			7,000		3.06			246,615			6,433		3.49
Paycheck Protection Program Loans ^(2)^			107,541			2,046		2.54			—			—		—
Loans ^(1)(2)^			1,997,553			75,301		5.04			1,756,855			69,720		5.31
Total Loans			2,105,094			77,347		4.91			1,756,855			69,720		5.31
Federal Home Loan Bank Stock			9,541			352		4.93			7,906			296		5.00
Total Interest Earning Assets			2,500,827			84,837		4.53	%		2,057,534			77,053		5.01	%
Noninterest Earning Assets			50,118								26,303
Total Assets		$	2,550,945							$	2,083,837
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits			275,303			1,207		0.58	%		211,784			1,130		0.71	%
Savings and Money Market Deposits			518,648			4,338		1.12			433,430			5,784		1.78
Time Deposits			378,133			6,199		2.19			347,731			6,230		2.40
Brokered Deposits			319,615			3,990		1.67			266,976			4,788		2.40
Total Interest Bearing Deposits			1,491,699			15,734		1.41			1,259,921			17,932		1.90
Federal Funds Purchased			8,302			107		1.73			8,923			172		2.58
Notes Payable			12,000			334		3.72			14,000			378		3.61
FHLB Advances			165,088			2,839		2.30			133,097			2,510		2.52
Subordinated Debentures			43,318			1,990		6.14			24,673			1,163		6.30
Total Interest Bearing Liabilities			1,720,407			21,004		1.63	%		1,440,614			22,155		2.06	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			554,513								401,973
Other Noninterest Bearing Liabilities			19,632								11,289
Total Noninterest Bearing Liabilities			574,145								413,262
Shareholders' Equity			256,393								229,961
Total Liabilities and Shareholders' Equity		$	2,550,945							$	2,083,837
Net Interest Income / Interest Rate Spread						63,833		2.90	%					54,898		2.95	%
Net Interest Margin ^(3)^								3.41	%							3.57	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities						(710)								(694)
Net Interest Income					$	63,123							$	54,204

(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.
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(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.
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Page 17 of 17

Exhibit 99.2

Investor Presentation<br>Fourth Quarter 2019
2<br>Why Bridgewater Bank?<br>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<br>statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of Bridgewater<br>Bancshares, Inc. (the “Company”). These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”,<br>“continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other<br>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<br>our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.<br>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<br>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<br>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<br>include, among others, the following: the negative effects of the COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, as well as any<br>changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national<br>real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area;<br>our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected<br>Credit Loss Standard; our high concentration of large loans to certain borrowers; our concentration of large deposits from certain clients; our ability to successfully manage liquidity risk;<br>our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and<br>manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other<br>alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of<br>our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers;<br>competition in the financial services industry; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and<br>regulatory actions against us; the impact of recent and future legislative and regulatory changes; interest rate risk; fluctuations in the values of the securities held in our securities portfolio;<br>the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or<br>pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events; potential impairment to the goodwill we recorded in connection with our past<br>acquisition; and any other risks described in the “Risk Factors” sections of reports and other documents 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. We undertake no<br>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<br>or otherwise. Certain of the information contained in this presentation is derived from information provided by industry sources. Although we believe that such information is accurate<br>and that the sources from which it has been obtained are reliable, we cannot guarantee the accuracy of, and 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<br>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<br>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<br>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.<br>Reconciliations of non-GAAP disclosures to the comparable GAAP measures are provided in this presentation.
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3<br>Our History
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4<br>Why Bridgewater Bank?<br>Why Bridgewater?
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5<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. * Change in basis points for profitability metrics<br>Second Quarter 2020 Financial Results<br>Q3 2020 Financial Results<br>Q3 2020 Q2 2020 % Change Q3 2019 % Change<br>Income Statement Summary<br>Interest Income 28,493 $ 28,166 $ 1.2% 26,572 $ 7.2%<br>Interest Expense 6,814 6,824 (0.1) 7,637 (10.8)<br>Net Interest Income 21,679 21,342 1.6 18,935 14.5<br>Provision for Loan Losses 3,750 3,000 25.0 900 316.7<br>Net Interest Income after Provision 17,929 18,342 (2.3) 18,035 (0.6)<br>Noninterest Income 1,157 1,977 (41.5) 946 22.3<br>Noninterest Expense 9,672 10,711 (9.7) 9,084 6.5<br>Pretax Income 9,414 9,608 (2.0) 9,897 (4.9)<br>Provision for Income Taxes 2,240 2,010 11.4 2,092 7.1<br>Net Income 7,174 $ 7,598 $ (5.6) 7,805 $ (8.1)<br>Diluted EPS 0.25 $ 0.26 $ (3.8) 0.27 $ (7.4)<br>Balance Sheet Summary<br>Total Assets 2,774,564 $ 2,754,463 $ 0.7% 2,232,339 $ 24.3%<br>Loans, Gross 2,259,228 2,193,778 3.0 1,846,218 22.4<br>Deposits 2,273,044 2,242,051 1.4 1,802,236 26.1<br>Tangible Common Equity1 262,088 253,799 3.3 235,524 11.3<br>Profitability Metrics* Q3 2020 Q2 2020 Net Change Q3 2019 Net Change<br>Return on Average Assets 1.05% 1.17% (0.12) 1.43% (0.38)<br>Return on Average Equity 10.84 11.98 (1.14) 13.31 (2.47)<br>Net Interest Margin 3.28 3.38 (0.10) 3.56 (0.28)<br>Adjusted Efficiency Ratio1 41.7 40.4 1.30 42.9 (1.20)<br>QoQ Comparison YoY Comparison
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6<br>Strong Capital and Liquidity<br>Dollars in thousands<br>Strong Capital and Liquidity<br>Consolidated Capital Ratios On & Off-Balance Sheet Liquidity as % of Total Assets<br>15.8% 14.2%<br>15.2%<br>18.3% 16.8%<br>18.6%<br>18.9% 14.0%<br>16.1%<br>15.5%<br>$768,539 $749,816<br>$706,323<br>$948,234<br>$894,373<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>On-Balance Sheet Liquidity as a % of Assets Off-Balance Sheet Liquidity as a % of Assets<br>10.53% 10.69% 10.51% 9.94% 9.83%<br>11.26% 11.39% 11.10% 11.39% 11.03%<br>13.31% 12.98% 13.38%<br>15.99%<br>15.45%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Tier 1 Leverage Ratio Common Equity Tier 1 Capital Ratio<br>Total Risk-Based Capital Ratio
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$232,524 $241,307 $244,704<br>$253,799 $262,088<br>10.43% 10.65%<br>10.13%<br>9.23% 9.46%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Tangible Common Equity ($000)¹<br>Tangible Common Equity to Tangible Assets¹<br>$4.05<br>$4.53<br>$5.40<br>$7.22<br>$8.33<br>$9.13<br>2015 2016 2017 2018 2019 Q3 2020<br>Tangible Book Value Per Share¹<br>7<br>Compound Tangible Book Value<br>Strong Capital and Liquidity Compound Tangible Book Value<br>Tangible Book Value Tangible Common Equity<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in thousands
---
8 Dollars in thousands<br>Core Earnings Capital Generation Core Earnings Capital Generation<br>Pre-Provision Net Revenue¹, Net Income, and ROA<br>$11,269 $11,679 $12,157 $13,039 $13,200<br>$7,805 $8,571<br>$7,443 $7,598 $7,174<br>2.08% 2.09% 2.11%<br>2.00% 1.94%<br>1.43%<br>1.53%<br>1.29%<br>1.17%<br>1.05%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>PPNR¹ Net Income PPNR ROA¹ ROA<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation
---
Twin Cities<br>Minnesota<br>9 Source: S&P Global Market Intelligence<br>Efficient Branch Footprint<br>Efficient Branch Footprint
---
10 Source: S&P Global Market Intelligence; deposit market share data as of 6/30/2020.<br>Twin Cities Deposit Landscape<br>Growing Market Share<br>2006 Total Market 2020 Total Market<br>Top 10 Institutions Deposits ($000) Share Top 10 Institutions Deposits ($000) Share<br>Wells Fargo & Co. 16,308,234 $ 27.59% U.S. Bancorp 83,341,943 $ 38.23%<br>U.S. Bancorp 15,535,660 $ 26.28% Wells Fargo & Co. 65,154,088 $ 29.88%<br>TCF Financial Corp. 3,686,508 $ 6.24% TCF Financial Corp. 8,226,068 $ 3.77%<br>Marshall & Iisley Corp. 1,729,917 $ 2.93% Bank of Montreal 5,928,722 $ 2.72%<br>Bremer Financial Corp. 1,720,239 $ 2.91% Bremer Financial Corp. 5,801,429 $ 2.66%<br>Associated Banc-Corp 1,162,530 $ 1.97% Ameriprise Bank, fsb 5,300,381 $ 2.43%<br>Klein Financial Inc. 880,289 $ 1.49% Bank of America Corp. 4,634,383 $ 2.13%<br>Inter Savings Bank, fsb 558,660 $ 0.94% Old National Bancorp 3,585,042 $ 1.64%<br>Excel Bank Corp. 505,614 $ 0.86% Bridgewater Bancshares 2,289,454 $ 1.05%<br>American Bancorp 457,414 $ 0.77% Associated Banc-Corp 2,277,702 $ 1.04%<br>Total Deposits 42,545,065 $ 71.98% Total Deposits 186,539,212 $ 85.55%<br>Total Bank Deposits 59,119,026 $ 197 Total Bank Deposits 218,026,091 $ 144<br>% of Twin Cities MSA Deposits 71.98% % of Twin Cities MSA Deposits 85.55%<br>Total Bank Deposits - Minneapolis-St.Paul-Bloomington, MN-WI MSA
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11<br>Stable Operating Efficiency<br>Efficiency Ratio Operating Expense Composition<br>1.56 1.67 1.68<br>1.37 1.40<br>0.10<br>0.20 0.01<br>0.27 0.02<br>42.9 44.3 44.1<br>40.4 41.7<br>45.6<br>49.6<br>44.4<br>48.6<br>42.3<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>NIE / Avg. Assets Historic Tax Credit Amortization<br>Adjusted Efficiency Ratio¹ Efficiency Ratio¹<br>$5,915 $6,235 $6,454 $6,348 $6,550<br>$761<br>$883 $713 $672<br>$894 $415<br>$480 $495 $564<br>$652 $1,463<br>$1,763 $1,999<br>$1,335<br>$1,431 $530<br>$1,128<br>$85<br>$362<br>$145<br>$1,430<br>$9,084<br>$10,489<br>$9,746<br>$10,711<br>$9,672<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Personnel Occupancy<br>Technology Other<br>Historic Tax Credit Amortization FHLB Advance Prepayment Fees<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in thousands
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12<br>¹Excludes PPP Loan Yield impact<br>Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21%<br>Dollars in thousands<br>Net Interest Margin<br>• 14.5% YoY growth in net interest<br>income<br>• Q3 2020 NIM was 3.33% when<br>excluding PPP loans and<br>corresponding deposits<br>• Q3 2020 marked the first full quarter<br>of the $50 million of additional<br>subordinated debt and<br>corresponding interest expense,<br>which impacted NIM by 11 bps<br>• Loan yields¹ only declined 8 bps<br>while total interest bearing deposit<br>costs decreased 17 bps when<br>compared to the linked-quarter<br>Net Interest Margin<br>$18,935<br>$19,928 $20,102<br>$21,342 $21,679<br>3.56%<br>3.65% 3.59%<br>3.38%<br>3.28%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Net Interest Income Net Interest Margin
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$1,805,920 $1,872,234 $1,954,959<br>$2,152,398 $2,206,807<br>5.32% 5.33%<br>5.17%<br>5.01% 4.93%<br>5.07% 5.00%<br>4.90%<br>4.76% 4.69%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Average Loans Loan Yield Loan Yield Excluding Fees<br>13 Yield is adjusted to exclude Paycheck Protection Program loans<br>Dollars in thousands<br>Spot<br>Rate<br>2.51%<br>Spot<br>Rate<br>4.57%<br>Spot<br>Rate<br>0.94%<br>Spot<br>Rate<br>0.90%<br>Net Interest Drivers<br>*<br>$246,894<br>$263,926<br>$282,914 $295,352<br>$339,387<br>3.42% 3.38% 3.43%<br>3.13%<br>2.68%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Average Investments Investment Yield<br>$1,305,936 $1,341,910 $1,374,864<br>$1,501,946<br>$1,597,127<br>1.89% 1.79%<br>1.67%<br>1.38%<br>1.21%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Average Interest Bearing Deposits Cost of Int. Bearing Deposits<br>$1,305,936 $1,341,910 $1,374,864 $1,501,946 $1,597,127<br>$434,021 $451,265 $444,201<br>$603,456 $615,214 $181,889 $177,290 $234,463<br>$237,056 $214,758<br>1.58% 1.51% 1.44%<br>1.17% 1.12%<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Avg. Interest Bearing Deposits Avg. Noninterest Bearing Deposits<br>Avg. Borrowings Cost of Liability Funding<br>Average Investments and Yield Average Loans and Yield<br>Cost of Interest Bearing Deposits Cost of Liability Funding
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14<br>Dollars in thousands<br>Loan Portfolio Repricing<br>Loan Portfolio – Repricing Composition<br>17.0%,<br>Adjustable<br>24.3%, Variable 58.7%, Fixed<br>Variable/Adjustable Loans Vs. Rate Floors<br>Fixed/Adjustable Years to Maturity/Repricing<br>88%<br>82%<br>67%<br>58%<br>79%<br>86%<br>12%<br>18%<br>33%<br>42%<br>21%<br>14%<br>$223,780<br>$388,757<br>$267,496<br>$220,681<br>$278,357<br>$332,535<br>Less Than 1<br>Year<br>1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years > 5 Years<br>Fixed Adjustable<br>Index Rate At Floor 0 to -25 bps -26 to -50 bps -51 to -75 bps -76 to -100 bps > -100 bps Total<br>PRIME 298,234 $ 20,330 $ 2,806 $ 35 $ 115 $ 586 $ 322,107 $<br>Libor 128,820 10,236 2,782 - 13,737 - 155,575<br>2 Yr FHLB 2,526 - - - - - 2,526<br>3 Yr FHLB 15,276 - - - - - 15,276<br>5 Yr FHLB 6,843 - - - - - 6,843<br>1 Yr CMT 9,544 - - - - - 9,544<br>2 Yr CMT 15,130 - 8,582 - - 1,743 25,454<br>3 Yr CMT 53,937 3,731 2,358 7,438 12,648 1,481 81,592<br>5 Yr CMT 170,279 18,569 2,248 6,484 1,944 9,205 208,728<br>10 Yr CMT 538 - - - - - 538<br>Total 701,127 $ 52,866 $ 18,775 $ 13,957 $ 28,444 $ 13,014 $ 828,183 $
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$46,690 $46,690<br>$37,108<br>$30,736<br>$1,955<br>$39,360<br>$24,971<br>$34,478<br>$10,197<br>$29,212<br>$86,051<br>$71,661 $71,586<br>$40,933<br>$31,167<br>Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021<br>Retail Time Deposit Maturities Brokered Time Deposit Maturities<br>15<br>Excludes rolling short term brokered funding balances related to interest rate hedges<br>1 Rate indicated assumes renewal into like term at market rates as of 10/19/2020<br>Dollars in thousands<br>• $301.4 million in time deposits<br>maturing in the next 5 quarters at<br>a blended cost of 1.89%<br>Deposit Repricing Opportunities<br>Time Deposit Maturities<br>Maturity Dates Balance*<br>Weighted<br>Avg. Yield<br>Implied<br>Repricing<br>Rate1<br>% of Total<br>Portfolio<br>Oct-20 28,390 $ 2.21% 0.53% 4.66%<br>Nov-20 13,417 2.07% 0.57% 2.20%<br>Dec-20 44,244 1.88% 0.40% 7.27%<br>Jan-21 26,628 1.98% 0.56% 4.37%<br>Feb-21 22,796 2.00% 0.52% 3.74%<br>Mar-21 22,238 2.06% 0.46% 3.65%<br>Apr-21 23,833 1.34% 0.45% 3.91%<br>May-21 25,574 1.91% 0.57% 4.20%<br>Jun-21 22,180 1.80% 0.50% 3.64%<br>Jul-21 12,136 1.61% 0.58% 1.99%<br>Aug-21 16,057 1.74% 0.54% 2.64%<br>Sep-21 12,740 1.27% 0.57% 2.09%<br>Oct-21 17,726 1.97% 0.49% 2.91%<br>Nov-21 5,296 2.16% 0.45% 0.87%<br>Dec-21 8,146 2.47% 0.44% 1.34%<br>Total 301,397 $ 1.89% 0.50% 49.50%<br>Time Deposit Repricing
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$60,000<br>$30,000<br>$1,802,236 $1,823,310<br>$1,900,127<br>$2,242,051 $2,273,044<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Total Deposits ($000's) PPP Loan Deposits ($000's)<br>16<br>• 37% YoY growth¹ in noninterest<br>bearing deposits<br>• Internal deposit growth plan<br>momentum<br>• The Bridge, a robust treasury<br>management platform, continues to<br>get traction, especially in this current<br>environment where sophisticated<br>digital banking tools and client self-<br>service capabilities are paramount<br>• Capitalizing on unique opportunity to<br>migrate numerous new client<br>relationships neglected or<br>underserved by their primary bank<br>during PPP<br>Deposit Growth<br>¹ Excludes $30 million of noninterest bearing deposit growth associated with remaining PPP loan funds<br>Dollars in thousands
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22.2% 23.3% 21.9% 23.6% 24.5%<br>30.2%<br>17.1%<br>13.0%<br>13.2%<br>11.5%<br>14.5%<br>14.2%<br>20.1%<br>23.4%<br>27.6%<br>25.8%<br>28.3%<br>21.9%<br>25.3%<br>26.6%<br>21.8%<br>20.4%<br>19.8%<br>16.0%<br>15.3%<br>13.7%<br>15.5%<br>18.7%<br>12.9%<br>17.7%<br>$761,882<br>$1,023,508<br>$1,339,350<br>$1,560,934<br>$1,823,310<br>$2,273,044<br>2015 2016 2017 2018 2019 Q3 2020<br>Noninterest Bearing Transaction Deposits Interest Bearing Transaction Deposits Savings & Money Market Deposits Time Deposits Brokered Deposits<br>17<br>Dollars in thousands<br>Historical Deposit Composition<br>Historical Deposit Composition<br>• Continue to attract in-market lenders and deposit gatherers with<br>loyal client bases from institutions disrupted by M&A<br>• Average core deposits per branch surpassed $250 million<br>• Growth in brokered deposits linked to balance sheet swaps and<br>utilized given their flexible structures, optionality and efficiency<br>not afforded in traditional, retail deposit channels
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$180,228<br>$181,596<br>$1,846,218<br>$1,912,038<br>$2,002,817<br>$2,193,778<br>$2,259,228<br>Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020<br>Total Gross Loans ($000's) PPP Loans ($000's)<br>18<br>Loan Growth<br>• Continued focus on profitable loan<br>growth and disciplined pricing<br>• Meaningful new and diverse client<br>acquisition opportunities generated<br>through PPP<br>• Addition of C&I lending expertise as a<br>result of M&A disruption<br>Loan Growth<br>Dollars in thousands
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14.6% 10.6% 9.7% 12.6% 10.3% 7.8%<br>17.9% 17.9% 14.5%<br>13.6% 13.6% 12.7% 0.3% 0.4% 0.3%<br>0.2% 0.2% 0.3%<br>21.1% 20.5%<br>23.6%<br>24.5%<br>26.9% 25.9%<br>6.1%<br>6.2%<br>4.9%<br>3.9%<br>3.5%<br>3.4%<br>27.0%<br>31.2%<br>30.8%<br>29.5%<br>31.0%<br>29.2%<br>13.0%<br>13.2%<br>16.2%<br>15.7%<br>14.5%<br>12.7%<br><br><br><br><br><br>8.0%<br>$799,497<br>$1,000,739<br>$1,347,113<br>$1,664,931<br>$1,912,038<br>$2,259,228<br>2015 2016 2017 2018 2019 Q3 2020<br>Construction & Development 1-4 Family Consumer & Other Multifamily<br>Owner-Occupied CRE Non Owner-Occupied CRE Commercial & Industrial Paycheck Protection Program<br>19 Dollars in thousands<br>Historical Loan Composition<br>Historical Loan Composition<br>• Strong organic growth<br>• Well diversified portfolio among asset classes<br>• Multifamily niche mitigates concentrations and portfolio risk<br>• Geographic focus on Twin Cities MSA
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20<br>Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”)<br>Full<br>Payment Interest<br>Only 16%<br>7-12<br>Month<br>1-3<br>Month<br>4-6<br>Month<br>4-6<br>Month<br>1Excludes PPP Loans<br>Based on lender and client survey<br>Modifications as of September 30, 2020<br>Dollars in thousands<br>Loan Type CRE Nonowner<br>Occupied Multifamily<br>Construction<br>and<br>Development<br>1-4 Family<br>Mortgage<br>CRE Owner<br>Occupied<br>Commercial<br>and Industrial<br>Consumer and<br>Other Total<br>Balance June 30, 2020 $ 186,979 $ 57,571 $ 133 $ 8,458 $ 8,899 $ 30,970 $ - $ 293,010<br> Modification Expired (82,820) (16,252) (133) (2,869) (5,751) (27,674) - (135,500)<br> 2nd Modification Granted 15,684 ---- 6,134 - 21,818<br> New Modifications 8,046 ---- 2,456 - 10,502<br> Net Principal Change 364 954 --- 233 - 1,551<br>Balance September 30, 2020 $ 128,252 $ 42,273 $ - $ 5,589 $ 3,148 $ 12,119 $ - $ 191,381<br>Total Portfolio Principal Balance1 $ 660,058 $ 585,814 $ 175,882 $ 286,089 $ 75,963 $ 287,254 $ 6,572 $ 2,077,632<br>% of Total Gross Loans 19.4% 7.2% 0.0% 2.0% 4.1% 4.2% 0.0% 9.2%<br>% on Watchlist 16.7% 0.0% 0.0% 0.0% 0.0% 65.6% 0.0% 15.3%<br>% Classified as Substandard 2.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1.5%<br>Linked Quarter % Decline -31.4% -26.6% -100.0% -33.9% -64.6% -60.9% 0.0% -34.7%<br>$36,541<br>$3,301 $2,455<br>$27,441<br>$3,542<br>$2,909<br>$10,830<br>$11,668<br>$636<br>$18,468<br>Nov-20 Dec-20 Q1 2021 Q2 2021 Q3 2021 Q4 2021<br> First Modification Rolloff Second Modification Rolloff<br>Expiration of Modifications as of October 22, 2020
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21 Based on lender and client survey<br>Dollars in thousands<br>Loan Portfolio Composition<br>Loans by<br>Type<br>Loan Portfolio Composition<br>CRE NOO<br>29.2%<br>Multifamily<br>25.9%<br>C&D<br>7.8%<br>1-4 Family<br>12.7%<br>CRE OO<br>3.4%<br>C&I<br>12.7%<br>PPP<br>8.0%<br>Consumer<br>& Other<br>0.3%<br>$2.26<br>Billion<br>% of<br>Balance Total<br>(dollars in thousands)<br>Investor Real Estate Secured<br>CRE Nonowner Occupied (CRE NOO) 660,058 $ 29.2%<br>Multifamily 585,814 25.9%<br>Construction and Development (C&D) 175,882 7.8%<br>Total Investor Real Estate Secured 1,421,754 62.9%<br>1-4 Family Residential 286,089 12.7%<br>CRE Owner Occupied (CRE OO) 75,963 3.4%<br>Commercial and Industrial (C&I) 287,254 12.7%<br>SBA Paycheck Protection Program (PPP) 181,596 8.0%<br>Consumer and Other 6,572 0.3%<br>Total Loans, Gross 2,259,228 100.0%<br>$293,010<br>$169,563<br>$69,738<br>$21,818<br>$48,053<br>$0<br>$50,000<br>$100,000<br>$150,000<br>$200,000<br>$250,000<br>$300,000<br>$350,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>Modification Summary
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22<br>Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”)<br>By<br>Property<br>Type<br>Portfolio Characteristics – CRE NOO<br>Loan Balance Outstanding $660,058<br>% of Total Loans, Gross 29.2%<br>Number of Loans 346<br>Average Loan Size $1,908<br>Loan-to-Value (Weighted Average) 59.6%<br>5 Year Net Charge-Offs (%) 0.05%<br>Modification Summary<br>Office<br>28.3%<br>Retail 25.5%<br>Industrial<br>22.2%<br>Nursing/<br>Assisted<br>Living<br>8.2%<br>Hotels<br>4.8%<br>Restaurant<br>3.0%<br>Other 8.0%<br>Investor Real Estate Secured:<br>CRE Nonowner Occupied (“NOO”)<br>$660<br>Million<br>Full<br>Payment<br>Interest<br>Only<br>23%<br>77%<br>7-12<br>Month<br>1-3<br>Month<br>4-6<br>Month<br>4-6<br>Month<br>$186,979<br>$112,567<br>$21,141<br>$15,683<br>$41,782<br>$0<br>$25,000<br>$50,000<br>$75,000<br>$100,000<br>$125,000<br>$150,000<br>$175,000<br>$200,000<br>$225,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 334 $ 618,891<br>Watch 8 29,056<br>Substandard 4 12,111<br>Total 346 $ 660,058<br>Based on lender and client survey<br>Dollars in thousands
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Modification Summary<br>$51,195<br>$18,489 $3,839<br>$0<br>$10,000<br>$20,000<br>$30,000<br>$40,000<br>$50,000<br>$60,000<br>$70,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>23<br>By Property<br>Square<br>Footage<br>Portfolio Characteristics – CRE NOO Office<br>Loan Balance Outstanding $186,914<br>% of Total Loans, Gross 8.3%<br>Number of Loans 93<br>Average Loan Size $2,010<br>Loan-to-Value (Weighted Average) 61.2%<br>Investor Real Estate Secured: CRE NOO Retail Investor Real Estate Secured:<br>CRE NOO Office<br>4-6<br>Month<br>0-30k<br>Sq Ft,<br>38.9%<br>30k - 100k<br>Sq Ft,<br>35.4%<br>100k+ Sq Ft,<br>25.7%<br>$187<br>Million<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 93 $ 186,914<br>Watch --<br>Substandard --<br>Total 93 $ 186,914<br>Based on lender and client survey<br>Dollars in thousands
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Modification Summary<br>$74,300<br>$53,307<br>$10,658<br>$8,551<br>$9,104<br>$0<br>$10,000<br>$20,000<br>$30,000<br>$40,000<br>$50,000<br>$60,000<br>$70,000<br>$80,000<br>$90,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>24<br>By Property<br>Square<br>Footage<br>Portfolio Characteristics – CRE NOO Retail<br>Loan Balance Outstanding $168,279<br>% of Total Loans, Gross 7.5%<br>Number of Loans 105<br>Average Loan Size $1,603<br>Loan-to-Value (Weighted Average) 62.0%<br>Investor Real Estate Secured: CRE NOO Retail Investor Real Estate Secured:<br>CRE NOO Retail<br>4-6<br>Month<br>0-30k<br>Sq Ft,<br>44.5%<br>30k - 100k<br>Sq Ft,<br>34.9%<br>100k+ Sq Ft,<br>20.6%<br>$168<br>Million<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 100 $ 156,478<br>Watch 3 8,690<br>Substandard 2 3,111<br>Total 105 $ 168,279<br>Based on lender and client survey<br>Dollars in thousands
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Modification Summary<br>$14,801<br>$6,684<br>$3,878<br>$0<br>$4,000<br>$8,000<br>$12,000<br>$16,000<br>$20,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>25<br>By Property<br>Square<br>Footage<br>Portfolio Characteristics – CRE NOO Industrial<br>Loan Balance Outstanding $146,363<br>% of Total Loans, Gross 6.5%<br>Number of Loans 61<br>Average Loan Size $2,399<br>Loan-to-Value (Weighted Average) 54.9%<br>Investor Real Estate Secured: CRE NOO Retail Investor Real Estate Secured:<br>CRE NOO Industrial<br>4-6<br>Month<br>0-30k<br>Sq Ft,<br>7.3%<br>30k - 100k<br>Sq Ft,<br>23.1%<br>100k+ Sq Ft,<br>69.6%<br>$146<br>Million<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 61 $ 146,363<br>Watch --<br>Substandard --<br>Total 61 $ 146,363<br>Based on lender and client survey<br>Dollars in thousands
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26 Based on state of primary real property collateral if available, otherwise borrower address is used.<br>Investor Real Estate Secured: CRE NOO Hotels<br>By<br>Geography <br>Portfolio Characteristics – CRE NOO Hotels<br>Loan Balance Outstanding $31,630<br>% of Total Loans, Gross 1.4%<br>Number of Loans 6<br>Average Loan Size $5,272<br>Loan-to-Value (Weighted Average) 63.5% Twin Cities MSA<br>88.6%<br>MN<br>11.4%<br>$32<br>Million<br>Investor Real Estate Secured:<br>CRE NOO Hotels<br>4-6<br>Month<br>Full<br>Payment<br>100%<br>Modification Summary<br>$19,477<br>$12,136<br>$7,133<br>$19,262<br>$0<br>$5,000<br>$10,000<br>$15,000<br>$20,000<br>$25,000<br>$30,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 3 $ 15,904<br>Watch 3 15,726<br>Substandard --<br>Total 6 $ 31,630<br>Based on lender and client survey<br>Dollars in thousands
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27<br>By<br>Restaurant<br>Type<br>Portfolio Characteristics – CRE NOO Restaurant<br>Loan Balance Outstanding $19,763<br>% of Total Loans, Gross 0.9%<br>Number of Loans 17<br>Average Loan Size $1,163<br>Loan-to-Value (Weighted Average) 56.1%<br>Investor Real Estate Secured: CRE NOO Restaurant Investor Real Estate Secured:<br>CRE NOO Restaurant<br>Full-Service<br>41.6%<br>Quick-Service<br>31.0%<br>Tap Rooms<br>11.9%<br>Coffee<br>Shops &<br>Bakeries<br>15.4%<br>$20<br>Million<br>Interest<br>Only<br>96%<br>4%<br>4-6<br>Month<br>7-12<br>Month<br>Modification Summary Risk Rating Number of Loans 9/30/20 Total<br>Pass 17 $ 19,763<br>Watch --<br>Substandard --<br>Total 17 $ 19,763<br>$13,117 $12,501<br>$6,605<br>$2,358<br>$0<br>$2,500<br>$5,000<br>$7,500<br>$10,000<br>$12,500<br>$15,000<br>$17,500<br>$20,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>Based on lender and client survey<br>Dollars in thousands
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5-19<br>Units<br>15.2%<br>20-49<br>Units<br>25.0%<br>50-99<br>Units<br>31.8%<br>100+<br>Units<br>27.9%<br>$586<br>Million<br>28<br>By<br>Unit Type<br>Portfolio Characteristics – Multifamily<br>Loan Balance Outstanding $585,814<br>% of Total Loans, Gross 25.9%<br>Number of Loans 309<br>Average Loan Size $1,896<br>Loan-to-Value (Weighted Average) 61.7%<br>5 Year Net Charge-Offs (%) 0.00%<br>Investor Real Estate Secured: CRE NOO Restaurant Investor Real Estate Secured:<br>Multifamily<br>Interest<br>Only<br>44%<br>56%<br>7-12<br>Month<br>100%<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 309 $ 585,814<br>Watch --<br>Substandard --<br>Total 309 $ 585,814<br>Modification Summary<br>$57,571<br>$42,273 $41,089<br>$0<br>$10,000<br>$20,000<br>$30,000<br>$40,000<br>$50,000<br>$60,000<br>$70,000<br>$80,000<br>6/30/2020 9/30/2020 10/22/2020<br>First Modification Second Modification<br>Based on lender and client survey<br>Dollars in thousands
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Residential<br>34.0%<br>Multifamily<br>34.2%<br>CRE Other<br>10.9%<br>Land<br>21.0%<br>$176<br>Million<br>29<br>By<br>Property<br>Type<br>By<br>Geography<br>Land Portfolio Composition<br>Investor Real Estate Secured: CRE NOO Restaurant Investor Real Estate Secured:<br>Construction and Development<br>Portfolio Characteristics – C&D<br>Loan Balance Outstanding $175,882<br>% of Total Loans, Gross 7.8%<br>% Utilization of Commitments 39.1%<br>Number of Loans 301<br>Average Loan Size $584<br>Loan-to-Value (Weighted Average) 63.3%<br>5 Year Net Charge-Offs (%) 0.11%<br>Twin Cities MSA<br>89.4%<br>MN<br>1.0%<br>Other<br>States<br>9.6%<br>Finished<br>Lots,<br>40.6%<br>Developed<br>Land, 42.4%<br>Undeveloped<br>Land, 17.1%<br>$37<br>Million<br>Dollars in thousands<br>Based on state of primary real property collateral if available, otherwise borrower address is used.
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30<br>Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”)<br>By<br>Property<br>Type<br>Portfolio Characteristics – CRE OO<br>Loan Balance Outstanding $75,963<br>% of Total Loans, Gross 3.4%<br>Number of Loans 124<br>Average Loan Size $613<br>Loan-to-Value (Weighted Average) 57.0%<br>5 Year Net Charge-Offs (%) 0.03%<br>Office<br>28.2%<br>Retail<br>14.4%<br>Industrial<br>46.3%<br>Restaurant<br>3.8% Other<br>7.3%<br>$76<br>Million<br>Real Estate Secured:<br>CRE Owner Occupied<br>4-6<br>Month<br>4-6<br>Month<br>Modification Summary<br>$8,899<br>$3,149<br>$0<br>$0<br>$2,000<br>$4,000<br>$6,000<br>$8,000<br>$10,000<br>$12,000<br>6/30/20 9/30/20 10/22/20<br>First Modification Second Modification<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 121 $ 74,374<br>Watch --<br>Substandard 3 1,589<br>Total 124 $ 75,963<br>Dollars in thousands
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$287<br>Million<br>Real Estate<br>and Rental<br>and Leasing,<br>35.8%<br>Construction,<br>22.4%<br>Finance &<br>Insurance,<br>13.3%<br>Manufacturing,<br>13.2%<br>Professional<br>Services, 5.5%<br>Other Services,<br>3.0%<br>Accomodation &<br>Food Services,<br>3.7%<br>Other, 3.0%<br>31 Distribution by North American Industry Classification System (NAICS). Any industries included in Other category are individually < 3% of total portfolio.<br>By<br>Industry <br>Portfolio Characteristics – C&I<br>Loan Balance Outstanding $287,254<br>% of Total Loans, Gross 12.7%<br>Number of Loans 705<br>Average Loan Size $407<br>Number of Relationships 441<br>5 Year Net Charge-Offs (%) 0.02%<br>Commercial and Industrial<br>Full<br>Payment<br>Interest<br>Only<br>43% 57% 4-6<br>Month<br>1-3<br>Month<br>Modification Summary<br>$30,970<br>$5,985 $4,188<br>$6,134 $6,271<br>$0<br>$5,000<br>$10,000<br>$15,000<br>$20,000<br>$25,000<br>$30,000<br>$35,000<br>$40,000<br>6/30/20 9/30/20 10/22/20<br>First Modification Second Modification<br>Risk Rating Number of Loans 9/30/20 Total<br>Pass 682 $ 266,554<br>Watch 15 20,267<br>Substandard 8 432<br>Total 705 $ 287,254<br>Dollars in thousands
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$182<br>Million<br>Real Estate and<br>Rental and<br>Leasing 22.5%<br>Professional<br>Services<br>15.8%<br>Health Care<br>and Social<br>Assistance<br>12.1%<br>Manufacturing<br>10.4%<br>Construction<br>8.8%<br>Accomodation<br>& Food<br>6.4%<br>Finance and<br>Insurance 4.7%<br>Other Services<br>4.5%<br>Other<br>14.7%<br>32 Distribution by North American Industry Classification System (NAICS). Any industries included in Other category are individually < 4% of total portfolio.<br>By<br>Industry <br>New vs.<br>Existing<br>Client<br>PPP Origination Summary<br>Balance<br>Segment<br>Number of<br>Loans<br>Principal<br>Balance<br>Origination<br>Fees<br>< $350 1,072 $ 65,797 $ 3,290<br>$350 to $2,000 107 80,618 2,419<br>> $2,000 11 35,181 352<br>Total 1,190 $ 181,596 $ 6,060<br>PPP Loans<br>Existing Client<br>59.0%<br>New Client<br>41.0%<br>Dollars in thousands<br>PPP Forgiveness Summary as of 10/22/2020<br>Balance<br>Segment<br>Submitted to SBA Payment Received from SBA<br># of<br>Loans<br>Principal<br>Balance<br>Unrecognized<br>Fees<br># of<br>Loans<br>Principal<br>Balance<br>Unrecognized<br>Fees<br>< $350 119 $ 9,168 $ 336 42 $ 1,190 $ 37<br>$350 to<br>$2,000 20 12,716 297 ---<br>> $2,000 ------<br>Total 139 $ 21,884 $ 634 42 $ 1,190 $ 37
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33<br>Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”)<br>Watch List<br>By<br>Loan Type<br>Substandard<br>List By<br>Loan Type<br>C&I<br>39.8%<br>CRE NOO<br>Retail<br>17.1%<br>CRE NOO<br>Hotels<br>30.9%<br>1-4<br>Family<br>2.9%<br>CRE Other<br>9.1%<br>C&D<br>0.3%<br>$51<br>Million<br>Asset Quality<br>Dollars in thousands<br>Watch List Characteristics<br>Loan Balance Outstanding $50,917<br>% of Total Loans, Gross 2.3%<br>Number of Loans 28<br>Average Loan Size $1,818<br>Substandard List Characteristics<br>Loan Balance Outstanding $16,074<br>% of Total Loans, Gross 0.7%<br>Number of Loans 25<br>Average Loan Size $643<br>% of Bank Tier 1 Capital + ALLL 5.0%<br>CRE Other<br>56.0% CRE NOO<br>Retail 19.4%<br>1-4 Family<br>11.0%<br>Owner<br>Occupied,<br>9.9%<br>C&I 2.7%<br>C&D 1.1% Consumer &<br>Other 0.1%<br>$16<br>Million
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34<br>Asset Quality<br>Asset Quality<br>$12,194<br>$5,888<br>$4,184<br>$2,695<br>$16,074<br>9.73%<br>3.43%<br>1.82%<br>1.01%<br>5.00%<br>0.00%<br>5.00%<br>10.00%<br>15.00%<br>20.00%<br>25.00%<br> $-<br> $2,000<br> $4,000<br> $6,000<br> $8,000<br> $10,000<br> $12,000<br> $14,000<br> $16,000<br> $18,000<br> $20,000<br>2016 2017 2018 2019 Q3 2020<br>Classified Assets ($000s)<br>% of Bank Tier 1 Capital + ALLL<br>$6,506<br>$1,720<br>$581 $461 $433<br>0.52%<br>0.11%<br>0.03% 0.02% 0.02%<br>0.00%<br>0.20%<br>0.40%<br>0.60%<br>0.80%<br>1.00%<br> $-<br> $1,000<br> $2,000<br> $3,000<br> $4,000<br> $5,000<br> $6,000<br> $7,000<br> $8,000<br>2016 2017 2018 2019 Q3 2020<br>NPAs ($000s)<br>% of Assets<br>$12,333<br>$16,502<br>$20,031<br>$22,526<br>$31,381<br>1.23% 1.22% 1.20% 1.18%<br>1.39%<br>0.00%<br>0.50%<br>1.00%<br>1.50%<br>2.00%<br>2.50%<br>3.00%<br>3.50%<br>4.00%<br> $-<br> $5,000<br> $10,000<br> $15,000<br> $20,000<br> $25,000<br> $30,000<br> $35,000<br>2016 2017 2018 2019 Q3 2020<br>ALLL ($000s)<br>% of Gross Loans $969<br>$6 $46<br>$205<br>$2<br>0.11%<br>0.00% 0.00%<br>0.01%<br>0.00%<br>-0.05%<br>-0.03%<br>0.00%<br>0.03%<br>0.05%<br>0.08%<br>0.10%<br>0.13%<br> $(150)<br> $100<br> $350<br> $600<br> $850<br> $1,100<br> $1,350<br> $1,600<br>2016 2017 2018 2019 Q3 2020<br>NCOs ($000s)<br>% of Avg. Loans<br>Classified Assets Nonperforming Assets<br>Allowance for Loan Losses Net Charge-Offs<br>Dollars in thousands
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35<br>Investor Highlights<br>Investor Highlights
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37 Note: data set includes selected Minnesota bank and thrift M&A transactions in recent years<br>Source: S&P Global Market Intelligence; public filings<br>Core<br>Target Deal Deposit<br>Announcement Total Assets Value Premium In Market /<br>Buyer State Seller State Date ($mm) ($mm) (%) Market Entry<br>MN MN 6/28/2019 $129 NA NA In Market<br>SD MN 5/29/2019 $347 NA NA Market Entry<br>MN MN 4/22/2019 $206 NA NA In Market<br>IN MN 6/21/2018 $1,972 $433.8 14.9 In Market<br>ND MN 2/19/2018 $729 NA NA Market Entry<br>IA MN 11/13/2017 $390 $53.4 10.9 In Market<br>IN MN 8/8/2017 $2,056 $303.3 8.6 Market Entry<br>SD MN 8/3/2017 $409 NA NA Market Entry<br>NE MN 6/28/2016 $209 NA NA In Market<br>MN MN 1/7/2016 $76 $12.0 8.2 In Market<br>ND MN 9/22/2015 $352 $46.0 8.2 In Market<br>MN MN 7/24/2014 $670 $80.0 NA Market Entry<br>IA MN 11/21/2014 $1,172 $133.6 6.0 Market Entry<br>NE MN 7/25/2012 $401 NA NA Market Entry<br>Recent Minnesota M&A Transactions
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38<br>Source: S&P Global Market Intelligence<br>Dollars in thousands<br>265 •Commercial Banks located in Minnesota<br>233<br>•Commercial Banks located in Minnesota, and<br>with less than $500 million in assets<br>49<br>•Commercial Banks located in the Twin Cities<br>MSA, and with less than $500 million in assets<br>30<br>•Commercial Banks located in the Twin Cities<br>MSA, with less than $500 million in assets,<br>and a loan to deposits ratio of less than 80%<br>➢Total Assets (Median) = $177,703<br>➢Cost of Funds (Median) = 0.62%<br>Potential Acquisition Targets
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39 1 Non-GAAP financial measures; for further information, see page 40<br>Consolidated Summary<br>Financial Information - Historical<br>Dollar Values in Millions<br>2015Y 2016Y 2017Y 2018Y 2019Y<br>Balance Sheet<br>Total Assets 929 $ 1,260 $ 1,617 $ 1,974 $ 2,269 $<br>Gross Loans 799 1,001 1,347 1,665 1,912<br>Deposits 762 1,024 1,339 1,561 1,823<br>Gross Loan/Deposits 104.9% 97.8% 100.6% 106.7% 104.9% <br>Capital<br>Total Equity 80 $ 115 $ 137 $ 221 $ 245 $<br>Tangible Common Equity1 80 111 133 217 241<br>Tangible Common Equity/Tangible Assets1 8.63% 8.86% 8.26% 11.03% 10.65%<br>Tier 1 Leverage Ratio 8.89% 9.44% 8.38% 11.23% 10.69%<br>Tier 1 Risk-based Capital Ratio 10.34% 11.49% 9.49% 12.07% 11.39%<br>Total Risk-based Capital Ratio 11.59% 12.74% 12.46% 14.55% 12.98%<br>Earnings & Profitability<br>Net Income 11.2 $ 13.2 $ 16.9 $ 26.9 $ 31.4 $<br>ROAA 1.39% 1.20% 1.16% 1.51% 1.49%<br>ROAE 17.50% 12.88% 13.18% 13.87% 13.50%<br>Net Interest Margin 4.18% 4.00% 3.92% 3.72% 3.59%<br>Non-Int Inc./Avg. Assets 0.23% 0.23% 0.17% 0.14% 0.18%<br>Adjusted Non-Int Exp./Avg. Assets N/A N/A 1.62% 1.59% 1.59%<br>Adjusted Efficiency Ratio1 N/A N/A 41.1% 41.7% 43.3%<br>Asset Quality<br>NPAs/Assets 0.33% 0.52% 0.11% 0.03% 0.02%<br>Reserves/NPLs 429.94% 530.91% 1,448.81% 3,447.68% 4,886.33%<br>Reserves/Loans 1.26% 1.23% 1.22% 1.20% 1.18%<br>NCOs/Average Loans 0.14% 0.11% 0.00% 0.00% 0.01%<br>For the Fiscal Year Ended,
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40<br>This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these<br>non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both management and investors<br>to analyze and evaluate BWB’s financial performance. Because not all companies use the same calculations for these measures, the information in this<br>presentation may not be comparable to other similarly titled measures as calculated by other companies.<br>Efficiency Ratio is adjusted to exclude the historic tax credit amortization.<br>Dollars in thousands<br>Reconciliation of Annual<br>Non-GAAP Measures<br>Efficiency Ratio 2015 2016 2017 2017 2018 2018* 2019 2019*<br>Noninterest Expense 14,817 $ 20,168 $ 25,496 $ 25,496 $ 31,562 $ 31,562 $ 36,932 $ 36,932 $<br>Less: Amortization of Tax Credit Investments - - - (1,916) - (3,293) - (3,225)<br>Less: Amortization Intangible Assets - (104) (191) (191) (191) (191) (191) (191)<br>Adjusted Noninterest Expense 14,817 $ 20,064 $ 25,305 $ 23,389 $ 31,371 $ 28,078 $ 36,741 $ 33,516 $<br>Net Interest Income 32,695 $ 42,118 $ 54,173 $ 54,173 $ 64,738 $ 64,738 $ 74,132 $ 74,132 $<br>Noninterest Income 1,872 2,567 2,536 2,536 2,543 2,543 3,826 3,826<br>Less: (Gain) Loss on Sales of Securities (574) (830) 250 250 125 125 (516) (516)<br>Adjusted Operating Revenue 33,993 $ 43,855 $ 56,959 $ 56,959 $ 67,406 $ 67,406 $ 77,442 $ 77,442 $<br>Efficiency Ratio 43.6% 45.8% 44.4% 41.1% 46.5% 41.7% 47.4% 43.3%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible<br>Assets 2015 2016 2017 2018 2019<br>Common Equity 80,178 $ 115,366 $ 137,162 $ 220,998 $ 244,794 $<br>Less: Intangible Assets - (4,060) (3,869) (3,678) (3,487)<br>Tangible Common Equity 80,178 $ 111,306 $ 133,293 $ 217,320 $ 241,307 $<br>Total Assets 928,686 $ 1,260,394 $ 1,616,612 $ 1,973,741 $ 2,268,830 $<br>Less: Intangible Assets - (4,060) (3,869) (3,678) (3,487)<br>Tangible Assets 928,686 $ 1,256,334 $ 1,612,743 $ 1,970,063 $ 2,265,343 $<br>Tangible Common Equity/Tangible Assets 8.63% 8.86% 8.26% 11.03% 10.65%<br>Tangible Book Value Per Share 2015 2016 2017 2018 2019<br>Book Value Per Common Share 4.05 $ 4.69 $ 5.56 $ 7.34 $ 8.45 $<br>Less: Effects of Intangible Assets - (0.17) (0.16) (0.12) (0.12)<br>Tangible Book Value Per Common Share 4.05 $ 4.52 $ 5.40 $ 7.22 $ 8.33 $<br>Total Common Shares 19,819,349 24,589,861 24,679,861 30,097,274 28,973,572<br>As of and for the year ended December 31 for year end data,<br>As of and for the year ended December 31 for year end data,
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41<br>This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these<br>non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both management and investors<br>to analyze and evaluate BWB’s financial performance. Because not all companies use the same calculations for these measures, the information in this<br>presentation may not be comparable to other similarly titled measures as calculated by other companies.<br>Efficiency Ratio is adjusted to exclude the historic tax credit amortization.<br>Dollars in thousands<br>Reconciliation of Quarterly<br>Non-GAAP Measures<br>Efficiency Ratio<br>September 30,<br>2019<br>September 30,<br>2019 <br>December 31,<br>2019<br>December 31,<br>2019 <br>March 31,<br>2020<br>March 31,<br>2020<br>June 30,<br>2020<br>June 30,<br>2020<br>September 30,<br>2020<br>September 30,<br>2020<br>Noninterest Expense 9,084 $ 9,084 $ 10,489 $ 10,489 $ 9,746 $ 9,746 $ 10,711 $ 10,711 $ 9,672 $ 9,672 $<br>Less: Amortization of Tax Credit Investments - (530) - (1,128) - (85) - (362) - (145)<br>Less: FHLB Advances Prepayment Fee - - - - - - - (1,430) - -<br>Less: Amortization Intangible Assets (48) (48) (48) (48) (48) (48) (47) (47) (48) (48)<br>Adjusted Noninterest Expense 9,036 $ 8,506 $ 10,441 $ 9,313 $ 9,698 $ 9,613 $ 10,664 $ 8,872 $ 9,624 $ 9,479 $<br>Net Interest Income 18,935 $ 18,935 $ 19,928 $ 19,928 $ 20,102 $ 20,102 $ 21,342 $ 21,342 $ 21,679 $ 21,679 $<br>Noninterest Income 946 946 1,112 1,112 1,719 1,719 1,977 1,977 1,157 1,157<br>Less: Gain on Sales of Securities (58) (58) - - (3) (3) (1,361) (1,361) (109) (109)<br>Adjusted Operating Revenue 19,823 $ 19,823 $ 21,040 $ 21,040 $ 21,818 $ 21,818 $ 21,958 $ 21,958 $ 22,727 $ 22,727 $<br>Efficiency Ratio 45.6% 42.9% 49.6% 44.3% 44.4% 44.1% 48.6% 40.4% 42.3% 41.7%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible<br>Assets<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>Common Equity 236,059 $ 244,794 $ 248,143 $ 257,190 $ 265,432 $<br>Less: Intangible Assets (3,535) (3,487) (3,439) (3,391) (3,344)<br>Tangible Common Equity 232,524 $ 241,307 $ 244,704 $ 253,799 $ 262,088 $<br>Total Assets 2,232,339 $ 2,268,830 $ 2,418,730 $ 2,754,463 $ 2,774,564 $<br>Less: Intangible Assets (3,535) (3,487) (3,439) (3,391) (3,344)<br>Tangible Assets 2,228,804 $ 2,265,343 $ 2,415,291 $ 2,751,072 $ 2,771,220 $<br>Tangible Common Equity/Tangible Assets 10.43% 10.65% 10.13% 9.23% 9.46%<br>Tangible Book Value Per Share<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>Book Value Per Common Share 8.20 $ 8.45 $ 8.61 $ 8.92 $ 9.25 $<br>Less: Effects of Intangible Assets (0.12) (0.12) (0.12) (0.12) (0.12)<br>Tangible Book Value Per Common Share 8.08 $ 8.33 $ 8.49 $ 8.80 $ 9.13 $<br>Total Common Shares 28,781,162 28,973,572 28,807,375 28,837,560 28,710,775<br>As of and for the quarter ended,
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42<br>This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these<br>non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both management and investors<br>to analyze and evaluate BWB’s financial performance. Because not all companies use the same calculations for these measures, the information in this<br>presentation may not be comparable to other similarly titled measures as calculated by other companies.<br>Dollars in thousands<br>Reconciliation of Quarterly<br>Non-GAAP Measures – Pre-Provision<br>Pre-Provision Net Revenue<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>Noninterest Income 946 $ 1,112 $ 1,719 $ 1,977 $ 1,157 $<br>Less: Gain on sales on Securities (58) - (3) (1,361) (109)<br>Total Operating Noninterest Income 888 1,112 1,716 616 1,048<br>Plus: Net Interest Income 18,935 19,928 20,102 21,342 21,679<br>Net Operating Revenue 19,823 21,040 21,818 21,958 22,727<br>Noninterest Expense 9,084 10,489 9,746 10,711 9,672<br>Less: Amortization of Tax Credit Investments (530) (1,128) (85) (362) (145)<br>Less: FHLB Advances Prepayment Fees - - - (1,430) -<br>Total Operating Noninterest Expense 8,554 9,361 9,661 8,919 9,527<br>PPNR 11,269 $ 11,679 $ 12,157 $ 13,039 $ 13,200 $<br>As of and for the quarter end,
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For Immediate Release

Contact: Jerry Baack

President & CEO

Bridgewater Bancshares, Inc.

(952) 893-6866

October 29, 2020

Bridgewater Bancshares Announces Changes toStock Repurchase Program

St. Louis Park, MN – Bridgewater Bancshares, Inc. (“Bridgewater”) (NASDAQ: BWB), the holding company for Bridgewater Bank, today announced that its Board of Directors has approved a $15 million increase to Bridgewater’s existing stock repurchase program. This approval increased the authorization to repurchase common stock under the program from a total of $25 million to up to a total of $40 million. The Board of Directors also approved an extension of the program until October 27, 2022.

Bridgewater also announced that it had repurchased a total of approximately $22.4 million of shares under the stock repurchase program which was originally announced in January 2019. As of October 28, 2020, approximately $17.6 million of Bridgewater common stock remained authorized for repurchase under the newly increased program.

“We are pleased that the Company’s strong historical financial performance and well-capitalized designation gives us the opportunity to increase our stock repurchase program and continue our commitment to enhancing shareholder value. As we manage through these unprecedented times, the Company remains committed to maintaining strong capital levels and will consider the economic impacts of the COVID-19 pandemic when evaluating the utilization of the stock repurchase program,” said Chairman, President and CEO Jerry Baack.

The stock repurchase program permits Bridgewater’s management to acquire shares of Bridgewater’s common stock from time to time in the open market in accordance with Rule 10b-18 of the Securities Exchange Act or in privately negotiated transactions at prices management considers to be attractive and in the best interests of Bridgewater and its shareholders. The stock repurchase program does not obligate Bridgewater to repurchase shares of its common stock, and there is no assurance that Bridgewater will do so.

Any repurchases are subject to compliance with applicable laws and regulations. Repurchases will be conducted in consideration of general market and economic conditions, regulatory requirements, availability of funds, and other relevant considerations, as determined by Bridgewater. The stock repurchase program may be modified, suspended or discontinued at any time at the discretion of Bridgewater’s Board of Directors.

About Bridgewater Bancshares, Inc. Bridgewater Bancshares, Inc. is a financial holding company headquartered in St. Louis Park, Minnesota. The Company has two wholly owned subsidiaries, Bridgewater Bank, a Minnesota-chartered commercial bank founded in November 2005, and Bridgewater Risk Management, Inc., a captive insurance company founded in December 2016. Bridgewater Bank has seven locations serving clients across the Minneapolis-St. Paul metropolitan statistical area in Minnesota and offers a full array of simple, quality loan and deposit products, primarily for commercial clients. As of September 30, 2020, the Company had total assets of approximately $2.77 billion, total loans of approximately $2.26 billion, total deposits of approximately $2.27 billion and total shareholders’ equity of approximately $265.4 million.

Forward-Looking Statements

This press 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 Bridgewater. 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 risks described in the “Risk Factors” sections of reports filed by Bridgewater 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. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Source: Bridgewater Bancshares, Inc.