8-K - BWB - Equibles

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

FORM 8-K CURRENT REPORT

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

October 25, 2023

Date of Report

(Date of earliest event reported)

BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

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

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

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

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

Emerging growth company ☒

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

Item 2.02 R esults of Operations and Financial Condition.

On October 25, 2023, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2023. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

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

Item 7.01 R egulation FD Disclosure.

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

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

Item 8.01 Other Events .

On October 25, 2023, in its 2023 third quarter earnings release, the Company announced that its Board of Directors had declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depository share, each representing a 1/100^th^ interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2023, to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2023.

Item 9.01 Financial Statements and Exhibits.

(d)****Exhibits

Exhibit 99.1	Press Release of Bridgewater Bancshares, Inc., dated October 25, 2023, regarding third quarter 2023 financial results
Exhibit 99.2	Earnings Presentation dated October 25, 2023
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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 25, 2023
	By: /s/ Jerry Baack
	Name: Jerry Baack
	Title: Chairman, Chief Executive Officer and President

Exhibit 99.1


Media Contact: Jessica Stejskal	SVP Marketing<br>Jessica.stejskal@bwbmn.com	952.893.6860	Investor Contact: Justin Horstman	Director of Investor Relations<br>Justin.Horstman@bwbmn.com	952.542.5169

October 25, 2023

Bridgewater Bancshares, Inc. Announces Third Quarter 2023 Net Income of $9.6 Million, $0.30 Diluted Earnings Per Common Share

Third Quarter 2023 Highlights

●	Annualized return on average assets (ROA) of 0.85%, compared to 0.88% for the second quarter of 2023.

●	Annualized return on average shareholders’ equity (ROE) of 9.23%, compared to 9.69% for the second quarter of 2023, and annualized return on average tangible common equity (ROATCE)^(1)^ of 9.92%, compared to 10.48% for the second quarter of 2023.

●	Deposits increased by $97.6 million, or 10.8% annualized, from the second quarter of 2023, including an increase of core deposits^(2)^ of $69.9 million, or 11.0% annualized.

●	Core deposit growth exceeded loan growth for the second consecutive quarter as gross loans declined slightly by $13.9 million from the second quarter of 2023, lowering the loan-to-deposit ratio to 101.3%.

●	Net interest margin (on a fully tax-equivalent basis) of 2.32%, compared to 2.40% in the second quarter of 2023.

●	Efficiency ratio^(1)^ of 56.5%, compared to 52.7% for the second quarter of 2023.

●	No provision for credit losses on loans was recorded in the third quarter of 2023. The allowance for credit losses on loans to total loans was 1.36% at both September 30, 2023 and June 30, 2023.

●	Annualized net loan charge-offs as a percentage of average loans of 0.01% for the third quarter of 2023, compared to 0.00% for the second quarter of 2023.

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

●	Tangible book value per share^(1)^ of $12.37 at September 30, 2023, an increase of $0.23, or 7.4% annualized, compared to $12.15 at June 30, 2023.

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)	Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
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Page 1 of 17

St. Louis Park, MN – Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $9.6 million for the third quarter of 2023, compared to $9.8 million for the second quarter of 2023, and $14.5 million for the third quarter of 2022. Earnings per diluted common share were $0.30 for the third quarter of 2023, compared to $0.31 for the second quarter of 2023, and $0.47 per diluted common share for the same period in 2022.

“Throughout the third quarter, Bridgewater saw the continuation of several encouraging trends, including signs of net interest margin stabilization, enhanced balance sheet composition, and superb asset quality,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “A second consecutive quarter of strong core deposit growth and reduced borrowings aided our net interest margin. In addition, we are being very thoughtful in how we position the balance sheet for longer term success as this unique banking environment continues to evolve.

“The quality of our loan portfolio was evident again during the quarter due to our consistent underwriting standards, active credit oversight, and experienced lending and credit teams. We also remained focused on our ongoing client engagement efforts, investments in our people, and creating efficiencies across the organization, all with an eye toward continuing our track record of consistent tangible book value growth, which has increased each of the past 27 quarters.”

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,
	****	2023			2023			2022			****	2023		****	2022
Per Common Share Data
Basic Earnings Per Share		$	0.31		$	0.32		$	0.49			$	1.01		$	1.32
Diluted Earnings Per Share			0.30			0.31			0.47				0.99			1.27
Book Value Per Share			12.47			12.25			11.44				12.47			11.44
Tangible Book Value Per Share ^(1)^			12.37			12.15			11.33				12.37			11.33

Financial Ratios
Return on Average Assets ^(2)^			0.85	%		0.88	%		1.46	%			0.93	%		1.42	%
Pre-Provision Net Revenue Return on Average Assets ^(1)(2)^			1.01			1.16			2.15				1.22			2.15
Return on Average Shareholders' Equity ^(2)^			9.23			9.69			14.99				10.19			13.85
Return on Average Tangible Common Equity^(1)(2)^			9.92			10.48			17.03				11.07			15.63
Net Interest Margin^(3)^			2.32			2.40			3.53				2.47			3.57
Core Net Interest Margin ^(1)(3)^			2.24			2.31			3.38				2.39			3.35
Cost of Total Deposits			2.99			2.66			0.73				2.57			0.55
Cost of Funds			3.10			2.91			0.93				2.81			0.73
Efficiency Ratio^(1)^			56.5			52.7			39.8				51.6			40.7
Noninterest Expense to Average Assets ^(2)^			1.35			1.29			1.42				1.32			1.48
Tangible Common Equity to Tangible Assets ^(1)^			7.61			7.39			7.57				7.61			7.57
Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) ^(4)^			9.07			8.72			8.47				9.07			8.47

Balance Sheet and Asset Quality (dollars in thousands)
Total Assets		$	4,557,070		$	4,603,185		$	4,128,987			$	4,557,070		$	4,128,987
Total Loans, Gross			3,722,271			3,736,211			3,380,082				3,722,271			3,380,082
Deposits			3,675,509			3,577,932			3,305,074				3,675,509			3,305,074
Loan to Deposit Ratio			101.3	%		104.4	%		102.3	%			101.3	%		102.3	%
Net Loan Charge-Offs (Recoveries) to Average Loans ^(2)^			0.01			0.00			(0.03)				0.00			(0.01)
Nonperforming Assets to Total Assets^(5)^			0.02			0.02			0.02				0.02			0.02
Allowance for Credit Losses to Total Loans			1.36			1.36			1.38				1.36			1.38

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

Income Statement

Net Interest Income and Net Interest Margin

Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2023 was 2.32%, an eight basis point decline from 2.40% in the second quarter of 2023 and a 121 basis point decline from 3.53% in the third quarter of 2022. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees was 2.24% for the third quarter of 2023, a seven basis point decline from 2.31% in the second quarter of 2023, and a 114 basis point decline from 3.38% in the third quarter of 2022.

●	The linked-quarter decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.
●	The year-over-year decline in the margin was primarily due to higher funding costs and increased borrowings in the rising interest rate environment, offset partially by higher earning asset yields.
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Net interest income was $25.4 million for the third quarter of 2023, a decrease of $451,000 from $25.9 million in the second quarter of 2023, and a decrease of $8.7 million from $34.1 million in the third quarter of 2022.

●	The linked-quarter decrease in net interest income was primarily due to higher rates paid on deposits in the rising interest rate environment.
●	The year-over-year decrease in net interest income was primarily due to higher rates paid on deposits and increased borrowings in the rising interest rate environment.
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●	Average interest earning assets were $4.42 billion for the third quarter of 2023, an increase of $21.4 million, or 0.5%, from $4.40 billion for the second quarter of 2023, and an increase of $544.5 million, or 14.1%, from $3.87 billion for the third quarter of 2022. The linked-quarter increase in average interest earning assets was primarily due to an increase in cash. The year-over-year increase in average interest earning assets was primarily due to strong growth in the loan portfolio and purchases of investment securities.
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Interest income was $56.8 million for the third quarter of 2023, an increase of $1.8 million from $55.0 million in the second quarter of 2023, and an increase of $14.5 million from $42.4 million in the third quarter of 2022.

●	The yield on interest earning assets (on a fully tax-equivalent basis) was 5.14% in the third quarter of 2023, compared to 5.06% in the second quarter of 2023 and 4.37% in the third quarter of 2022.
●	The linked-quarter increase in the yield on interest earning assets was primarily due to the increase in market interest rates resulting in new loan originations and loans repricing at yields accretive to the existing portfolio.
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●	The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment.
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●	Loan interest income and loan fees remain the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield, excluding PPP loans, increased to 5.26% in the third quarter of 2023, which was seven basis points higher than 5.19% in the second quarter of 2023, and 67 basis points higher than 4.59% in the third quarter of 2022.
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●	While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods saw fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the overall decrease in fee recognition, the Company is encouraged that the core loan yield continues to rise as new loan originations and the existing portfolio reprice in the higher rate environment.
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A summary of interest and fees recognized on loans, excluding PPP loans, for the periods indicated is as follows:


	Three Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Interest	5.16	%	5.09	%	4.95	%	4.74	%	4.42	%
Fees	0.10		0.10		0.11		0.12		0.17
Yield on Loans, Excluding PPP Loans	5.26	%	5.19	%	5.06	%	4.86	%	4.59	%

Interest expense was $31.4 million for the third quarter of 2023, an increase of $2.3 million from $29.1 million in the second quarter of 2023, and an increase of $23.1 million from $8.3 million in the third quarter of 2022.

●	The cost of interest bearing liabilities increased 22 basis points on a linked-quarter basis from 3.59% in the second quarter of 2023 to 3.81% in the third quarter of 2023, primarily due to higher rates paid on deposits in the rising interest rate environment.
●	On a year-over-year basis, the cost of interest bearing liabilities increased 251 basis points from 1.30% in the third quarter of 2022 to 3.81% in the third quarter of 2023, primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.
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Page 3 of 17

Interest expense on deposits was $27.2 million for the third quarter of 2023, an increase of $4.2 million from $23.0 million in the second quarter of 2023, and an increase of $21.2 million from $6.0 million in the third quarter of 2022.

●	The cost of total deposits increased 33 basis points on a linked-quarter basis from 2.66% in the second quarter of 2023, to 2.99% in the third quarter of 2023, primarily due to the rising interest rate environment and increased competition from other market alternatives.
●	On a year-over-year basis, the cost of total deposits increased 226 basis points from 0.73% in the third quarter of 2022, to 2.99% in the third quarter of 2023, primarily due to upward repricing of the deposit portfolio in the higher interest rate environment.
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Provision for Credit Losses

The provision for credit losses on loans was zero for the third quarter of 2023, compared to $550,000 for the second quarter of 2023 and $1.5 million for the third quarter of 2022.

●	No provision for credit losses on loans was recorded in the third quarter of 2023 due to a more managed pace of loan growth.
●	The allowance for credit losses on loans to total loans was 1.36% at September 30, 2023, compared to 1.36% at June 30, 2023, and 1.38% at September 30, 2022.
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The provision for credit losses for off-balance sheet credit exposures was a negative provision of $600,000 for the third quarter of 2023, compared to a negative $500,000 for the second quarter of 2023 and zero for the third quarter of 2022.

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

Noninterest Income

Noninterest income was $1.7 million for the third quarter of 2023, an increase of $311,000 from $1.4 million for the second quarter of 2023 and an increase of $339,000 from $1.4 million for the third quarter of 2022.

●	The linked-quarter increase was primarily due to $0.5 million of FHLB prepayment income, offset partially by lower other income.
●	The year-over-year increase was primarily due to $0.5 million of FHLB prepayment income, offset partially by decreased letter of credit fees and other income.
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Noninterest Expense

Noninterest expense was $15.4 million for the third quarter of 2023, an increase of $962,000 from $14.4 million for the second quarter of 2023 and an increase of $1.2 million from $14.2 million for the third quarter of 2022. It is worth noting, on a year-to-date basis through the third quarter, noninterest expense increased $2.5 million, or 6.0%, compared to year-to-date in 2022.

●	The linked-quarter increase was primarily due to increases in salaries and employee benefits and industry-wide increases in the FDIC insurance assessment, offset partially by a decrease in professional and consulting fees.
●	The year-over-year increase was primarily attributable to increases in the FDIC insurance assessment and derivative collateral fees, offset partially by decreases in marketing and advertising.
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●	The efficiency ratio, a non-GAAP financial measure, was 56.5% for the third quarter of 2023, compared to 52.7% for the second quarter of 2023, and 39.8% for the third quarter of 2022.
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●	The Company had 255 full-time equivalent employees at September 30, 2023, compared to 253 employees at June 30, 2023, and
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246 employees at September 30, 2022.

Income Taxes

The effective combined federal and state income tax rate for the third quarter of 2023 was 22.3%, a decrease from 23.6% for the second quarter of 2023 and 26.8% for the third quarter of 2022. The effective combined federal and state rate for the nine months ended September 30, 2023 and 2022 was 24.1% and 26.3%, respectively.

Page 4 of 17

Balance Sheet

Loans


(dollars in thousands)	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Commercial	$	459,063	$	459,184	$	454,193	$	435,344	$	412,448
Paycheck Protection Program		791		877		963		1,049		1,192
Construction and Land Development		294,818		351,069		312,277		295,554		280,380
1 - 4 Family Construction		64,463		69,648		85,797		70,242		55,177
Real Estate Mortgage:
1 - 4 Family Mortgage		404,716		400,708		380,210		355,474		341,102
Multifamily		1,378,669		1,314,524		1,320,081		1,306,738		1,230,509
CRE Owner Occupied		159,485		159,088		158,650		149,905		151,088
CRE Nonowner Occupied		951,263		971,532		962,671		947,008		900,691
Total Real Estate Mortgage Loans		2,894,133		2,845,852		2,821,612		2,759,125		2,623,390
Consumer and Other		9,003		9,581		9,518		8,132		7,495
Total Loans, Gross		3,722,271		3,736,211		3,684,360		3,569,446		3,380,082
Allowance for Loan Losses		(50,585)		(50,701)		(50,148)		(47,996)		(46,491)
Net Deferred Loan Fees		(7,222)		(7,718)		(8,735)		(9,293)		(9,088)
Total Loans, Net	$	3,664,464	$	3,677,792	$	3,625,477	$	3,512,157	$	3,324,503

Total gross loans at September 30, 2023 were $3.72 billion, a slight decrease of $13.9 million, or 1.5% annualized, over total gross loans of $3.74 billion at June 30, 2023, and an increase of $342.2 million, or 10.1%, over total gross loans of $3.38 billion at September 30, 2022.

●	The decrease in the loan portfolio during the third quarter of 2023 was primarily due to moderating loan originations and elevated payoffs and paydowns.

Deposits


(dollars in thousands)	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Noninterest Bearing Transaction Deposits	$	754,297	$	751,217	$	742,198	$	884,272	$	961,084
Interest Bearing Transaction Deposits		780,863		719,488		630,037		451,992		510,396
Savings and Money Market Deposits		872,534		860,613		913,013		1,031,873		1,077,333
Time Deposits		265,737		271,783		266,213		272,253		293,052
Brokered Deposits		1,002,078		974,831		859,662		776,153		463,209
Total Deposits	$	3,675,509	$	3,577,932	$	3,411,123	$	3,416,543	$	3,305,074

Total deposits at September 30, 2023 were $3.68 billion, an increase of $97.6 million, or 10.8% annualized, over total deposits of $3.58 billion at June 30, 2023, and an increase of $370.4 million, or 11.2%, over total deposits of $3.31 billion at September 30, 2022.

●	Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, increased $69.9 million, or 11.0% annualized, from the second quarter 2023.
●	Brokered deposits continue to be used as a supplemental funding source, as needed.
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●	Uninsured deposits were 22% of total deposits as of September 30, 2023 and June 30, 2023.
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Page 5 of 17

Liquidity

Total on- and off-balance sheet liquidity was $2.18 billion as of September 30, 2023, compared to $1.96 billion at June 30, 2023 and $1.41 billion at September 30, 2022. The Company did not utilize the Bank Term Funding Program (BTFP) or Federal Reserve Discount Window during the third quarter of 2023.


Primary Liquidity—On-Balance Sheet	****	September 30, 2023		****	June 30. 2023		****	March 31, 2023		****	December 31, 2022			September 30, 2022
(dollars in thousands)										****
Cash and Cash Equivalents		$	77,617		$	138,618		$	177,116		$	48,090		$	36,332
Securities Available for Sale			553,076			538,220			559,430			548,613			542,007
Less: Pledged Securities			(164,277)			(236,206)			(234,452)			—			—
Total Primary Liquidity		$	466,416		$	440,632		$	502,094		$	596,703		$	578,339
Ratio of Primary Liquidity to Total Deposits			12.7	%		12.3	%		14.7	%		17.5	%		17.5	%

Secondary Liquidity—Off-Balance Sheet Borrowing Capacity	****									****
Net Secured Borrowing Capacity with the FHLB		$	516,501		$	400,792		$	246,795		$	390,898		$	426,604
Net Secured Borrowing Capacity with the Federal Reserve Bank			1,022,128			986,644			990,685			157,827			156,534
Unsecured Borrowing Capacity with Correspondent Lenders			150,000			108,000			158,000			208,000			208,000
Secured Borrowing Capacity with Correspondent Lender			26,250			26,250			26,250			26,250			40,000
Total Secondary Liquidity		$	1,714,879		$	1,521,686		$	1,421,730		$	782,975		$	831,138
Total Primary and Secondary Liquidity		$	2,181,295		$	1,962,318		$	1,923,824		$	1,379,678		$	1,409,477
Ratio of Primary and Secondary Liquidity to Total Deposits			59.3	%		54.8	%		56.4	%		40.4	%		42.6	%

Asset Quality

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

●	Annualized net charge-offs (recoveries) as a percentage of average loans were 0.01% for the third quarter of 2023, compared to 0.00% for the second quarter of 2023, and (0.03)% for the third quarter of 2022.
●	At September 30, 2023, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $749,000, or 0.02% of total assets, as compared to $778,000, or 0.02% of total assets at June 30, 2023, and $663,000, or 0.02% of total assets at September 30, 2022.
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●	Loans with potential weaknesses that warrant a watchlist risk rating at September 30, 2023 totaled $26.9 million, compared to $27.2 million at June 30, 2023, and $22.8 million at September 30, 2022.
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●	Loans that warranted a substandard risk rating at September 30, 2023 totaled $35.6 million, compared to $33.8 million at June 30, 2023, and $30.8 million at September 30, 2022. Increased uncertainty in the economic environment may result in future watchlist or adverse classifications in the loan portfolio.
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Capital

Total shareholders’ equity at September 30, 2023 was $416.0 million, an increase of $6.8 million, or 1.7%, compared to total shareholders’ equity of $409.1 million at June 30, 2023, and an increase of $34.0 million, or 8.9%, over total shareholders’ equity of $382.0 million at September 30, 2022.

●	The linked-quarter increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by an increase in unrealized losses in the securities portfolio and preferred stock dividends.
●	The year-over-year increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by an increase in unrealized losses in the securities portfolio, the adoption of the Current Expected Credit Losses (CECL) accounting methodology and preferred stock dividends.
---	---
●	The common equity Tier 1 risk-based capital ratio was 9.07% at September 30, 2023, compared to 8.72% at June 30, 2023 and 8.47% at September 30, 2022.
---	---
●	Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.61% at September 30, 2023, compared to 7.39% at June 30, 2023, and 7.57% at September 30, 2022.
---	---

Tangible book value per share, a non-GAAP financial measure, was $12.37 as of September 30, 2023, an increase of 1.9% from $12.15 as of June 30, 2023, and an increase of 9.2% from $11.33 as of September 30, 2022.

●	The linked-quarter and year-over-year increases occurred despite the market value depreciation of the securities portfolio driven by the rising interest rate environment.

The Company did not purchase any shares of its common stock during the third quarter of 2023.

●	The Company has $25.0 million remaining under its current share repurchase authorization.

Page 6 of 17

Today, the Company also announced that its Board of Directors has declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2023 to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2023.

Conference Call and Webcast

The Company will host a conference call to discuss its third quarter 2023 financial results on Thursday, October 26, 2023 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 844-481-2913 and requesting to join the Bridgewater Bancshares earnings call. To listen to a replay of the conference call via phone, please dial 877-344-7529 and enter access code 1859973. The replay will be available through November 2, 2023. The conference call will also be available via a live webcast on the Investor Relations section of the Company’s website, investors.bridgewaterbankmn.com, and archived for replay.

About the Company

Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding company. Bridgewater's banking subsidiary, Bridgewater Bank, is a premier, full-service Twin Cities bank dedicated to serving the diverse needs of commercial real estate investors, entrepreneurs, business clients and successful individuals. By pairing a range of deposit, lending, and business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $4.6 billion and seven branches as of September 30, 2023, Bridgewater is considered one of the largest locally led banks in the State of Minnesota, and has received numerous awards for its growth, banking services, and esteemed corporate culture.

Use of Non-GAAP financial measures

In addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

Forward-Looking Statements

This earnings release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of recent and potential additional rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital to

Page 7 of 17

implement our business plan; our ability to implement our growth strategy and manage costs effectively; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including in response to the recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Page 8 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Financial Highlights

(dollars in thousands, except share data)


		As of and for the Three Months Ended
		September 30,			June 30,			March 31,			December 31			September 30,
(dollars in thousands)	****	2023		****	2023		****	2023		****	2022		****	2022		****
Income Statement
Net Interest Income		$	25,421		$	25,872		$	28,567		$	32,893		$	34,095
Provision for (Recovery of) Credit Losses			(600)			50			625			1,500			1,500
Noninterest Income			1,726			1,415			1,943			1,738			1,387
Noninterest Expense			15,350			14,388			14,183			15,203			14,157
Net Income			9,629			9,816			11,642			13,735			14,513
Net Income Available to Common Shareholders			8,616			8,802			10,629			12,721			13,500

Per Common Share Data
Basic Earnings Per Share		$	0.31		$	0.32		$	0.38		$	0.46		$	0.49
Diluted Earnings Per Share			0.30			0.31			0.37			0.45			0.47
Book Value Per Share			12.47			12.25			12.05			11.80			11.44
Tangible Book Value Per Share ^(1)^			12.37			12.15			11.95			11.69			11.33
Basic Weighted Average Shares Outstanding			27,943,409			27,886,425			27,726,894			27,558,983			27,520,117
Diluted Weighted Average Shares Outstanding			28,311,778			28,198,739			28,490,046			28,527,306			28,592,854
Shares Outstanding at Period End			28,015,505			27,973,995			27,845,244			27,751,950			27,587,978

Financial Ratios
Return on Average Assets ^(2)^			0.85	%		0.88	%		1.07	%		1.28	%		1.46	%
Pre-Provision Net Revenue Return on Average Assets ^(1)(2)^			1.01			1.16			1.49			1.82			2.15
Return on Average Shareholders' Equity ^(2)^			9.23			9.69			11.70			14.06			14.99
Return on Average Tangible Common Equity ^(1)(2)^			9.92			10.48			12.90			15.86			17.03
Net Interest Margin^(3)^			2.32			2.40			2.72			3.16			3.53
Core Net Interest Margin ^(1)(3)^			2.24			2.31			2.62			3.05			3.38
Cost of Total Deposits			2.99			2.66			2.01			1.31			0.73
Cost of Funds			3.10			2.91			2.41			1.67			0.93
Efficiency Ratio^(1)^			56.5			52.7			46.2			43.8			39.8
Noninterest Expense to Average Assets ^(2)^			1.35			1.29			1.31			1.42			1.42

Balance Sheet
Total Assets		$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662		$	4,128,987
Total Loans, Gross			3,722,271			3,736,211			3,684,360			3,569,446			3,380,082
Deposits			3,675,509			3,577,932			3,411,123			3,416,543			3,305,074
Total Shareholders' Equity			415,960			409,126			402,006			394,064			382,007
Loan to Deposit Ratio			101.3	%		104.4	%		108.0	%		104.5	%		102.3	%
Core Deposits to Total Deposits ^(4)^			70.3			70.3			72.4			74.6			83.0
Uninsured Deposits to Total Deposits			22.2			22.1			24.0			38.5			42.5

Asset Quality
Net Loan Charge-Offs (Recoveries) to Average Loans^(2)^			0.01	%		0.00	%		0.00	%		0.00	%		(0.03)	%
Nonperforming Assets to Total Assets ^(5)^			0.02			0.02			0.02			0.01			0.02
Allowance for Credit Losses to Total Loans			1.36			1.36			1.36			1.34			1.38

Capital Ratios (Consolidated) ^(6)^
Tier 1 Leverage Ratio			9.62	%		9.47	%		9.41	%		9.55	%		9.98	%
Common Equity Tier 1 Risk-based Capital Ratio			9.07			8.72			8.48			8.40			8.47
Tier 1 Risk-based Capital Ratio			10.69			10.33			10.08			10.03			10.19
Total Risk-based Capital Ratio			13.88			13.50			13.25			13.15			13.78
Tangible Common Equity to Tangible Assets ^(1)^			7.61			7.39			7.23			7.48			7.57

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

Page 9 of 17

(4)	Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
(5)	Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
---	---
(6)	Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
---	---

Page 10 of 17

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except share data)


	September 30,			June 30,			March 31,			December 31,			September 30,
	2023		****	2023		****	2023		****	2022		****	2022
	(Unaudited)			(Unaudited)			(Unaudited)						(Unaudited)
Assets
Cash and Cash Equivalents	$	124,358		$	177,101		$	209,192		$	87,043		$	75,496
Bank-Owned Certificates of Deposit		1,225			1,225			1,225			1,181			1,182
Securities Available for Sale, at Fair Value		553,076			538,220			559,430			548,613			542,007
Loans, Net of Allowance for Credit Losses		3,664,464			3,677,792			3,625,477			3,512,157			3,324,503
Federal Home Loan Bank (FHLB) Stock, at Cost		17,056			21,557			28,632			19,606			15,603
Premises and Equipment, Net		49,331			49,710			47,801			48,445			48,941
Foreclosed Assets		—			116			116			—			—
Accrued Interest		15,182			13,822			13,377			13,479			11,198
Goodwill		2,626			2,626			2,626			2,626			2,626
Other Intangible Assets, Net		197			206			240			288			336
Bank-Owned Life Insurance		34,209			33,958			33,719			33,485			33,248
Other Assets		95,346			86,852			81,064			78,739			73,847
Total Assets	$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662		$	4,128,987

Liabilities and Equity
Liabilities
Deposits:
Noninterest Bearing	$	754,297		$	751,217		$	742,198		$	884,272		$	961,084
Interest Bearing		2,921,212			2,826,715			2,668,925			2,532,271			2,343,990
Total Deposits		3,675,509			3,577,932			3,411,123			3,416,543			3,305,074
Federal Funds Purchased		—			195,000			437,000			287,000			212,000
Notes Payable		13,750			13,750			13,750			13,750			—
FHLB Advances		294,500			262,000			197,000			97,000			71,500
Subordinated Debentures, Net of Issuance Costs		79,192			79,096			79,001			78,905			92,559
Accrued Interest Payable		3,816			2,974			3,257			2,831			2,214
Other Liabilities		74,343			63,307			59,762			55,569			63,633
Total Liabilities		4,141,110			4,194,059			4,200,893			3,951,598			3,746,980

SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value; Authorized 10,000,000
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at September 30, 2023 (unaudited), June 30, 2023 (unaudited), March 31, 2023 (unaudited), December 31, 2022, and September 30, 2022 (unaudited)		66,514			66,514			66,514			66,514			66,514
Common Stock- $0.01 par value; Authorized 75,000,000
Common Stock - Issued and Outstanding 28,015,505 at September 30, 2023 (unaudited), 27,973,995 at June 30, 2023 (unaudited), 27,845,244 at March 31, 2023 (unaudited), 27,751,950 at December 31, 2022 and 27,587,978 at September 30, 2022 (unaudited)		280			280			278			278			276
Additional Paid-In Capital		100,120			99,044			97,716			96,529			95,973
Retained Earnings		272,812			264,196			255,394			248,685			235,964
Accumulated Other Comprehensive Loss		(23,766)			(20,908)			(17,896)			(17,942)			(16,720)
Total Shareholders' Equity		415,960			409,126			402,006			394,064			382,007
Total Liabilities and Equity	$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662		$	4,128,987

Page 11 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)


	Three Months Ended															Nine Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,			September 30,			September 30,
(dollars in thousands)	2023		****	2023		****	2023		****	2022		****	2022		****	2023		****	2022
Interest Income
Loans, Including Fees	$	48,999		$	47,721		$	44,955		$	42,488		$	37,666		$	141,675		$	103,768
Investment Securities		6,507			6,237			6,218			5,843			4,372			18,962			10,567
Other		1,303			1,043			819			529			321			3,165			500
Total Interest Income		56,809			55,001			51,992			48,860			42,359			163,802			114,835


Interest Expense
Deposits		27,225			22,998			16,374			10,781			5,984			66,597			12,598
Notes Payable		296			285			263			202			—			844			—
FHLB Advances		2,316			2,092			861			575			329			5,269			646
Subordinated Debentures		1,003			993			983			1,030			1,242			2,979			3,658
Federal Funds Purchased		548			2,761			4,944			3,379			709			8,253			1,128
Total Interest Expense		31,388			29,129			23,425			15,967			8,264			83,942			18,030

Net Interest Income		25,421			25,872			28,567			32,893			34,095			79,860			96,805
Provision for (Recovery of) Credit Losses		(600)			50			625			1,500			1,500			75			6,200

Net Interest Income After Provision for Credit Losses		26,021			25,822			27,942			31,393			32,595			79,785			90,605

Noninterest Income
Customer Service Fees		379			368			349			344			313			1,096			892
Net Gain (Loss) on Sales of Securities		—			50			(56)			30			—			(6)			52
Letter of Credit Fees		315			379			634			358			428			1,328			1,234
Debit Card Interchange Fees		150			155			138			148			153			443			438
Swap Fees		—			—			—			—			—			—			557
Bank-Owned Life Insurance		252			238			234			238			227			724			524
FHLB Prepayment Income		493			—			299			—			—			792			—
Other Income		137			225			345			620			266			707			897
Total Noninterest Income		1,726			1,415			1,943			1,738			1,387			5,084			4,594

Noninterest Expense
Salaries and Employee Benefits		9,519			8,589			8,815			9,821			9,449			26,923			27,120
Occupancy and Equipment		1,101			1,075			1,209			1,177			1,086			3,385			3,213
FDIC Insurance Assessment		1,075			900			665			360			315			2,640			1,005
Data Processing		392			401			357			371			372			1,150			1,025
Professional and Consulting Fees		715			829			755			635			594			2,299			2,030
Derivative Collateral Fees		543			404			380			535			122			1,327			151
Information Technology and Telecommunications		683			711			683			673			650			2,077			1,822
Marketing and Advertising		222			321			262			403			479			805			1,629
Intangible Asset Amortization		9			34			48			48			48			91			143
Amortization of Tax Credit Investments		113			114			114			114			114			341			294
Other Expense		978			1,010			895			1,066			928			2,883			2,985
Total Noninterest Expense		15,350			14,388			14,183			15,203			14,157			43,921			41,417

Income Before Income Taxes		12,397			12,849			15,702			17,928			19,825			40,948			53,782
Provision for Income Taxes		2,768			3,033			4,060			4,193			5,312			9,861			14,125
Net Income		9,629			9,816			11,642			13,735			14,513			31,087			39,657
Preferred Stock Dividends		(1,013)			(1,014)			(1,013)			(1,014)			(1,013)			(3,040)			(3,040)
Net Income Available to Common Shareholders	$	8,616		$	8,802		$	10,629		$	12,721		$	13,500		$	28,047		$	36,617

Earnings Per Share
Basic	$	0.31		$	0.32		$	0.38		$	0.46		$	0.49		$	1.01		$	1.32
Diluted		0.30			0.31			0.37			0.45			0.47			0.99			1.27

Page 12 of 17

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

(dollars in thousands, except per share data)

(Unaudited)


		For the Three Months Ended																							****
		September 30, 2023								June 30, 2023							****	September 30, 2022							****
		Average			Interest			Yield/		Average			Interest			Yield/	****	Average			Interest			Yield/	****
(dollars in thousands)	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
Interest Earning Assets:
Cash Investments		$	81,038		$	903		4.42	%	$	59,963		$	587		3.93	%	$	57,613		$	165		1.13	%
Investment Securities:
Taxable Investment Securities			565,008			6,234		4.38			568,143			6,000		4.24			461,255			3,741		3.22
Tax-Exempt Investment Securities^(1)^			29,955			346		4.58			27,081			300		4.44			75,801			799		4.18
Total Investment Securities			594,963			6,580		4.39			595,224			6,300		4.24			537,056			4,540		3.35
Paycheck Protection Program Loans ^(2)^			828			2		1.00			913			2		1.00			2,424			96		15.75
Loans ^(1)(2)^			3,721,766			49,324		5.26			3,715,621			48,064		5.19			3,263,390			37,724		4.59
Total Loans			3,722,594			49,326		5.26			3,716,534			48,066		5.19			3,265,814			37,820		4.59
Federal Home Loan Bank Stock			17,829			400		8.89			23,330			456		7.84			11,413			156		5.42
Total Interest Earning Assets			4,416,424			57,209		5.14	%		4,395,051			55,409		5.06	%		3,871,896			42,681		4.37	%
Noninterest Earning Assets			88,513								88,611								76,305
Total Assets		$	4,504,937							$	4,483,662							$	3,948,201
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	730,244		$	7,136		3.88	%	$	683,034		$	5,918		3.48	%	$	517,658		$	1,032		0.79	%
Savings and Money Market Deposits			874,612			8,089		3.67			861,947			7,048		3.28			999,932			2,494		0.99
Time Deposits			266,635			1,962		2.92			269,439			1,702		2.53			288,621			847		1.16
Brokered Deposits			985,276			10,038		4.04			896,989			8,330		3.72			447,034			1,612		1.43
Total Interest Bearing Deposits			2,856,767			27,225		3.78			2,711,409			22,998		3.40			2,253,245			5,985		1.05
Federal Funds Purchased			39,641			548		5.48			210,677			2,761		5.26			106,826			709		2.63
Notes Payable			13,750			296		8.58			13,750			285		8.33			—			—		—
FHLB Advances			275,261			2,316		3.34			242,714			2,092		3.46			72,343			328		1.80
Subordinated Debentures			79,137			1,003		5.03			79,041			993		5.04			92,503			1,242		5.33
Total Interest Bearing Liabilities			3,264,556			31,388		3.81	%		3,257,591			29,129		3.59	%		2,524,917			8,264		1.30	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			754,567								755,040								991,545
Other Noninterest Bearing Liabilities			71,767								64,684								47,719
Total Noninterest Bearing Liabilities			826,334								819,724								1,039,264
Shareholders' Equity			414,047								406,347								384,020
Total Liabilities and Shareholders' Equity		$	4,504,937							$	4,483,662							$	3,948,201
Net Interest Income / Interest Rate Spread						25,821		1.33	%					26,280		1.47	%					34,417		3.07	%
Net Interest Margin ^(3)^								2.32	%							2.40	%							3.53	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(400)								(408)								(322)
Net Interest Income					$	25,421							$	25,872							$	34,095

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

Page 13 of 17

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

(dollars in thousands, except per share data)

(Unaudited)


		For the Nine Months Ended															****
		September 30, 2023								September 30, 2022							****
		Average			Interest			Yield/		Average			Interest			Yield/
(dollars in thousands)	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
Interest Earning Assets:
Cash Investments		$	68,150		$	1,937		3.80	%	$	66,301		$	231		0.47	%
Investment Securities:
Taxable Investment Securities			569,097			18,192		4.27			417,462			8,692		2.78
Tax-Exempt Investment Securities^(1)^			28,947			975		4.50			73,900			2,373		4.29
Total Investment Securities			598,044			19,167		4.29			491,362			11,065		3.01
Paycheck Protection Program Loans ^(2)^			913			7		1.00			9,575			922		12.88
Loans ^(1)(2)^			3,689,283			142,652		5.17			3,082,924			103,204		4.48
Total Loans			3,690,196			142,659		5.17			3,092,499			104,126		4.50
Federal Home Loan Bank Stock			22,343			1,228		7.34			9,593			269		3.75
Total Interest Earning Assets			4,378,733			164,991		5.04	%		3,659,755			115,691		4.23	%
Noninterest Earning Assets			86,243								77,028
Total Assets		$	4,464,976							$	3,736,783
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	625,531		$	15,833		3.38	%	$	545,301		$	2,322		0.57	%
Savings and Money Market Deposits			926,494			21,636		3.12			934,408			4,597		0.66
Time Deposits			261,474			4,734		2.42			286,059			2,257		1.05
Brokered Deposits			876,130			24,394		3.72			419,352			3,422		1.09
Total Interest Bearing Deposits			2,689,629			66,597		3.31			2,185,120			12,598		0.77
Federal Funds Purchased			220,434			8,253		5.01			85,287			1,128		1.77
Notes Payable			13,750			844		8.21			—			—		—
FHLB Advances			215,938			5,269		3.26			54,227			646		1.59
Subordinated Debentures			79,042			2,979		5.04			92,396			3,658		5.29
Total Interest Bearing Liabilities			3,218,793			83,942		3.49	%		2,417,030			18,030		1.00	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			774,523								899,456
Other Noninterest Bearing Liabilities			63,646								37,463
Total Noninterest Bearing Liabilities			838,169								936,919
Shareholders' Equity			408,014								382,834
Total Liabilities and Shareholders' Equity		$	4,464,976							$	3,736,783
Net Interest Income / Interest Rate Spread						81,049		1.55	%					97,661		3.23	%
Net Interest Margin ^(3)^								2.47	%							3.57	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(1,189)								(856)
Net Interest Income					$	79,860							$	96,805

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

Page 14 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Asset Quality Summary

(dollars in thousands) (unaudited)


		As of and for the Three Months Ended															As of and for the Nine Months Ended
		September 30,			June 30,			March 31,			December 31			September 30,			September 30,			September 30,
(dollars in thousands)	****	2023		****	2023		****	2023		****	2022		****	2022		****	2023		****	2022
Allowance for Credit Losses
Balance at Beginning of Period		$	50,701		$	50,148		$	47,996		$	46,491		$	44,711		$	47,996		$	40,020
Impact of Adopting CECL			—			—			650			—			—			650			—
Provision for Credit Losses			—			550			1,500			1,500			1,500			2,050			6,200
Charge-offs			(122)			(3)			(4)			(3)			(5)			(129)			(34)
Recoveries			6			6			6			8			285			18			305
Net Charge-offs		$	(116)		$	3		$	2		$	5		$	280		$	(111)		$	271
Balance at End of Period			50,585			50,701			50,148			47,996			46,491			50,585			46,491
Allowance for Credit Losses to Total Loans			1.36	%		1.36	%		1.36	%		1.34	%		1.38	%		1.36	%		1.38	%

		As of and for the Three Months Ended															As of and for the Nine Months Ended
		September 30,			June 30,			March 31,			December 31			September 30,			September 30,			September 30,
(dollars in thousands)	****	2023		****	2023		****	2023		****	2022		****	2022		****	2023		****	2022
Provision for Credit Losses on Loans		$	—		$	550		$	1,500		$	1,500		$	1,500		$	2,050		$	6,200
Provision for (Recovery of) Credit Losses for Off-Balance Sheet Credit Exposures			(600)			(500)			(875)			—			—			(1,975)			—
Provision for (Recovery of) Credit Losses		$	(600)		$	50		$	625		$	1,500		$	1,500		$	75		$	6,200


	As of and for the Three Months Ended
	September 30,			June 30,			March 31,			December 31			September 30,
(dollars in thousands)	2023		****	2023		****	2023		****	2022		****	2022
Selected Asset Quality Data
Loans 30-89 Days Past Due	$	11		$	—		$	21		$	186		$	38
Loans 30-89 Days Past Due to Total Loans		0.00	%		0.00	%		0.00	%		0.01	%		0.00	%
Nonperforming Loans	$	749		$	662		$	693		$	639		$	663
Nonperforming Loans to Total Loans		0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Foreclosed Assets	$	—		$	116		$	116		$	—		$	—
Nonaccrual Loans to Total Loans		0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans		0.02			0.02			0.02			0.02			0.02
Nonperforming Assets ^(1)^	$	749		$	778		$	809		$	639		$	663
Nonperforming Assets to Total Assets ^(1)^		0.02	%		0.02	%		0.02	%		0.01	%		0.02	%
Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans		0.01			0.00			0.00			0.00			(0.03)
Watchlist Risk Rating Loans	$	26,877		$	27,215		$	27,574		$	32,252		$	22,759
Substandard Risk Rating Loans		35,621			33,821			36,258			28,049			30,767

Page 15 of 17

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

(dollars in thousands) (unaudited)


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

Pre-Provision Net Revenue
Noninterest Income	$	1,726		$	1,415		$	1,943		$	1,738		$	1,387		$	5,084		$	4,594
Less: (Gain) Loss on Sales of Securities		—			(50)			56			(30)			—			6			(52)
Less: FHLB Advance Prepayment Income		(493)			—			(299)			—			—			(792)			—
Total Operating Noninterest Income		1,233			1,365			1,700			1,708			1,387			4,298			4,542
Plus: Net Interest Income		25,421			25,872			28,567			32,893			34,095			79,860			96,805
Net Operating Revenue	$	26,654		$	27,237		$	30,267		$	34,601		$	35,482		$	84,158		$	101,347

Noninterest Expense	$	15,350		$	14,388		$	14,183		$	15,203		$	14,157		$	43,921		$	41,417
Less: Amortization of Tax Credit Investments		(113)			(114)			(114)			(114)			(114)			(341)			(294)
Total Operating Noninterest Expense	$	15,237		$	14,274		$	14,069		$	15,089		$	14,043		$	43,580		$	41,123

Pre-Provision Net Revenue	$	11,417		$	12,963		$	16,198		$	19,512		$	21,439		$	40,578		$	60,224

Plus:
Non-Operating Revenue Adjustments		493			50			243			30			—			786			52
Less:
Provision (Recovery of) for Credit Losses		(600)			50			625			1,500			1,500			75			6,200
Non-Operating Expense Adjustments		113			114			114			114			114			341			294
Provision for Income Taxes		2,768			3,033			4,060			4,193			5,312			9,861			14,125
Net Income	$	9,629		$	9,816		$	11,642		$	13,735		$	14,513		$	31,087		$	39,657

Average Assets	$	4,504,937		$	4,483,662		$	4,405,234		$	4,251,345		$	3,948,201		$	4,464,974		$	3,736,783
Pre-Provision Net Revenue Return on Average Assets		1.01	%		1.16	%		1.49	%		1.82	%		2.15	%		1.22	%		2.15	%

Core Net Interest Margin
Net Interest Income (Tax-equivalent Basis)	$	25,822		$	26,280		$	28,947		$	33,260		$	34,417		$	81,049		$	97,661
Less: Loan Fees		(914)			(941)			(998)			(1,100)			(1,400)			(2,853)			(5,173)
Less: PPP Interest and Fees		(2)			(3)			(2)			(48)			(96)			(7)			(922)
Core Net Interest Income	$	24,906		$	25,336		$	27,947		$	32,112		$	32,921		$	78,189		$	91,566

Average Interest Earning Assets	$	4,416,424		$	4,395,050		$	4,323,706		$	4,177,644		$	3,871,896		$	4,378,733		$	3,659,755
Less: Average PPP Loans		(828)			(913)			(999)			(1,109)			(2,424)			(913)			(9,575)
Core Average Interest Earning Assets	$	4,415,596		$	4,394,137		$	4,322,707		$	4,176,535		$	3,869,472		$	4,377,820		$	3,650,180
Core Net Interest Margin		2.24	%		2.31	%		2.62	%		3.05	%		3.38	%		2.39	%		3.35	%

Efficiency Ratio
Noninterest Expense	$	15,350		$	14,388		$	14,183		$	15,203		$	14,157		$	43,921		$	41,417
Less: Amortization of Intangible Assets		(9)			(34)			(48)			(48)			(48)			(91)			(143)
Adjusted Noninterest Expense	$	15,341		$	14,354		$	14,135		$	15,155		$	14,109		$	43,830		$	41,274
Net Interest Income		25,421			25,872			28,567			32,893			34,095			79,860			96,805
Noninterest Income		1,726			1,415			1,943			1,738			1,387			5,084			4,594
Less: Gain (Loss) on Sales of Securities		—			(50)			56			(30)			—			6			(52)
Adjusted Operating Revenue	$	27,147		$	27,237		$	30,566		$	34,601		$	35,482		$	84,950		$	101,347
Efficiency Ratio		56.5	%		52.7	%		46.2	%		43.8	%		39.8	%		51.6	%		40.7	%

Page 16 of 17

Bridgewater Bancshares, Inc. and Subsidiaries

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


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

Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity	$	415,960		$	409,126		$	402,006		$	394,064		$	382,007
Less: Preferred Stock		(66,514)			(66,514)			(66,514)			(66,514)			(66,514)
Total Common Shareholders' Equity		349,446			342,612			335,492			327,550			315,493
Less: Intangible Assets		(2,823)			(2,832)			(2,866)			(2,914)			(2,962)
Tangible Common Equity	$	346,623		$	339,780		$	332,626		$	324,636		$	312,531

Total Assets	$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662		$	4,128,987
Less: Intangible Assets		(2,823)			(2,832)			(2,866)			(2,914)			(2,962)
Tangible Assets	$	4,554,247		$	4,600,353		$	4,600,033		$	4,342,748		$	4,126,025
Tangible Common Equity/Tangible Assets		7.61	%		7.39	%		7.23	%		7.48	%		7.57	%

Tangible Book Value Per Share
Book Value Per Common Share	$	12.47		$	12.25		$	12.05		$	11.80		$	11.44
Less: Effects of Intangible Assets		(0.10)			(0.10)			(0.10)			(0.11)			(0.11)
Tangible Book Value Per Common Share	$	12.37		$	12.15		$	11.95		$	11.69		$	11.33

Return on Average Tangible Common Equity
Net Income Available to Common Shareholders	$	8,616		$	8,802		$	10,629		$	12,721		$	13,500		$	28,047		$	36,617

Average Shareholders' Equity	$	414,047		$	406,347		$	403,533		$	387,589		$	384,020		$	408,014		$	382,834
Less: Average Preferred Stock		(66,514)			(66,514)			(66,514)			(66,514)			(66,514)			(66,514)			(66,514)
Average Common Equity		347,533			339,833			337,019			321,075			317,506			341,500			316,320
Less: Effects of Average Intangible Assets		(2,828)			(2,846)			(2,894)			(2,941)			(2,989)			(2,856)			(3,036)
Average Tangible Common Equity	$	344,705		$	336,987		$	334,125		$	318,134		$	314,517		$	338,644		$	313,284
Return on Average Tangible Common Equity		9.92	%		10.48	%		12.90	%		15.86	%		17.03	%		11.07	%		15.63	%

Page 17 of 17

Exhibit 99.2

Disclaimer<br>Forward-Looking Statements<br>This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements<br>concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”,<br>“could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable<br>words of a future or forward-looking nature.<br>Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies,<br>projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are<br>difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these<br>forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate<br>risk, including the effects of recent and potential additional rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business<br>and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation and possible recession; the effects of recent developments and events in the financial<br>services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; loan concentrations in our<br>portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including<br>as a result of the implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, who have balances above current FDIC<br>insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital<br>to implement our business plan; our ability to implement our growth strategy and manage costs effectively; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages<br>and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial<br>intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit<br>unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future<br>legislative and regulatory changes, including in response to the recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank; risks related to climate change and the negative impact it may have on our customers and<br>their businesses; the imposition of other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19<br>pandemic), acts of war or terrorism or other adverse external events, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company recorded in connection with our past<br>acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the<br>Company with the Securities and Exchange Commission.<br>Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertake no obligation to publicly update any<br>forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise. Certain of the information contained in this presentation is derived<br>from information provided by industry sources. Although the Company believe that such information is accurate and that the sources from which it has been obtained are reliable, the Company cannot guarantee the accuracy of, and<br>have not independently verified, such information.<br>Use of Non-GAAP financial measures<br>In addition to the results presented in accordance with U.S. General Accepted Accounting Principles (“GAAP”), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company<br>believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s operating performance and trends, and to facilitate<br>comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures<br>that may be presented by other companies. Reconciliations of non-GAAP disclosures to the comparable GAAP measures are provided in this presentation.<br>2
0.02%<br>3Q23 Earnings Highlights<br>3<br>• Deposit balances up $97.6 million, or 10.8% annualized, from 2Q23, including core deposit2 growth of 11.0% annualized<br>• Borrowings declined $162.4 million, or 29.5%, from 2Q23, with no overnight borrowings as of September 30, 2023<br>• Loan balances declined $13.9 million, or 1.5% annualized, from 2Q23, impacted by increased payoffs and paydowns<br>• Loan-to-deposit ratio of 101.3%, down from 104.4% at June 30, 2023<br>• Net interest margin (NIM) of 2.32%, down 8 bps from 2Q23<br>• September 2023 NIM of 2.30%, down 3 bps from June 2023 NIM of 2.33%<br>• Yield on interest-earning assets of 5.14%, up 8 bps from 2Q23<br>• Total cost of funds of 3.10%, up 19 bps from 2Q23<br>• Noninterest expense up $1.0 million, or 6.7%, from 2Q23<br>• 2023 YTD noninterest expense up $2.5 million, or 6.0%, from 2022 YTD<br>• Noninterest expense to average assets of 1.35% annualized, up 6 bps from 2Q23<br>• Annualized net charge-offs to average loans of 0.01%, up 1 bp from 2Q23<br>• Nonperforming assets to total assets of 0.02%, in-line with 2Q23<br>• No provision for credit losses; well-reserved with allowance to total loans of 1.36%<br>Enhanced Balance<br>Sheet Composition<br>Net Interest Margin<br>Shows Signs of<br>Stabilization<br>Well-Controlled<br>Expenses YTD<br>Superb<br>Asset Quality<br>$0.30<br>Diluted<br>EPS<br>Nonperforming Assets<br>to Total Assets<br>Efficiency<br>Ratio1<br>Return on<br>Average Assets<br>Return on Avg. Tangible<br>Common Equity1<br>0.85% 9.92% 56.5%<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>2 Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000
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Net Interest Income Impacted by<br>Managed Loan Growth as NIM Stabilizes<br>4<br>$32,599 $31,745<br>$27,567<br>$24,928 $24,505<br>$96 $48<br>$2<br>$3 $2<br>$1,400 $1,100<br>$998<br>$941 $914<br>$34,095 $32,893<br>$28,567<br>$25,872 $25,421<br>3.53%<br>3.16%<br>2.72%<br>2.40% 2.32% 3.38%<br>3.05%<br>2.62%<br>2.31% 2.24%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Core Net Interest Margin1,2<br>Net Interest Margin1<br>Net Interest Income (ex. interest income<br>on loan fees and PPP loans)<br>Interest Income and fees on PPP loans<br>Loan fees<br>Net Interest Income and Margin Trends Net Interest Margin Drivers<br>Core NIM2 down 7 bps<br>Core NIM Stabilization in 3Q23<br>1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21%<br>2 Excludes loan fees and PPP loan balances, interest and fees; represents a Non-GAAP financial measure,<br>see Appendix for Non-GAAP reconciliation<br>Dollars in thousands<br>(1)<br>(6)<br>(13)<br>(16)<br>(14) (14) (15) (14)<br>(10)<br>(7) (6)<br>(2)<br>1 0<br>Aug.<br>22<br>Sep.<br>22<br>Oct.<br>22<br>Nov.<br>22<br>Dec.<br>22<br>Jan.<br>23<br>Feb.<br>23<br>Mar.<br>23<br>Apr.<br>23<br>May<br>23<br>Jun.<br>23<br>Jul.<br>23<br>Aug.<br>23<br>Sep.<br>23<br>Core NIM1,2 Expansion (Compression) by Month (bps)
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Rising Funding Costs Begin to Slow as<br>Asset Yields Move Higher<br>5<br>$2,253 $2,332 $2,498 $2,711 $2,857<br>$992 $943 $814 $272 $755 $755 $527 $636 $546 $408 $3,517 $3,802 $3,948 $4,012 $4,020<br>0.93%<br>1.67%<br>2.41%<br>2.91% 3.10%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>$3,266 $3,482 $3,630 $3,717 $3,723<br>4.59%<br>4.86%<br>5.06% 5.19% 5.26%<br>4.42% 4.74%<br>4.95% 5.09% 5.16%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>$3,245 $3,275 $3,311 $3,466 $3,611 0.73%<br>1.31%<br>2.01%<br>2.66% 2.99%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Loan Yield (ex. Loan Fees and PPP)2<br>Loan Portfolio Repricing Higher as Growth Slows High-Yielding Securities Portfolio<br>Rising Deposit Costs Begin to Slow Overall Funding Costs Slow as Borrowings Decline<br>$537<br>$608 $604 $595 $595<br>3.35%<br>3.91%<br>4.22% 4.24% 4.39%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Average Interest-Bearing Deposits Average Noninterest-Bearing Deposits<br>Average Borrowings Cost of Liability Funding<br>Average Loans Loan Yield1 Average Investments Investment Yield1<br>Average Total Deposits Cost of Total Deposits<br>1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21%<br>2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in millions
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Revenue Trends Impacted by<br>Current Interest Rate Environment<br>6<br>PPNR ROA1<br>Continued Profitability in the Current Environment Spread-Based Revenue Model<br>$34,095 $32,893<br>$28,567<br>$25,872 $25,421<br>$1,387 $1,738<br>$1,943<br>$1,415 $1,726<br>$35,482 $34,631<br>$30,510<br>$27,287 $27,147<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>$21,439<br>$19,512<br>$16,198<br>$12,963<br>$11,417<br>$14,513 $13,735<br>$11,642<br>$9,816 $9,629<br>2.15%<br>1.82%<br>1.49%<br>1.16%<br>1.01% 1.46%<br>1.28%<br>1.07%<br>0.88% 0.85%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>PPNR Net Income 1 ROA Net Interest Income Noninterest Income<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in thousands
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$9,449 $9,821 $8,815 $8,589 $9,519<br>$1,086 $1,177<br>$1,209 $1,075<br>$1,101<br>$1,022 $1,044<br>$1,040 $1,112<br>$1,075<br>$2,600<br>$3,161<br>$3,119 $3,612<br>$3,655<br>$14,157<br>$15,203<br>$14,183 $14,388<br>$15,350<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Well-Controlled Expenses YTD<br>7<br>1.42% 1.42%<br>1.31% 1.29% 1.35%<br>39.8%<br>43.8%<br>46.2%<br>52.7%<br>56.5%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>NIE / Avg. Assets2 Efficiency Ratio2<br>Highly Efficient Business Model Despite Recent Revenue Pressures Well-Controlled Expense Base in the Current Environment<br>Industry median efficiency ratio of 62%1 in 2Q23 2023 YTD NIE up 6.0% vs. YTD 2022, below YoY asset growth of 10.4%<br>Personnel Occupancy<br>Technology Other<br>1 2Q23 median efficiency ratio for publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion (Source: S&P Capital IQ)<br>2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation<br>Dollars in thousands
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Deposit Momentum Continues<br>8<br>29% 26% 22% 21% 21%<br>15%<br>13% 18% 20% 21%<br>33%<br>30% 27% 24% 24%<br>9%<br>8%<br>8% 8% 7%<br>14% 23% 25%<br>27%<br>27%<br>$3,305<br>$3,417 $3,411<br>$3,578 $3,676<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Noninterest-Bearing Transaction Interest-Bearing Transaction<br>Savings & Money Market Time<br>Brokered<br>• Total deposit balances up 10.8% annualized<br>• Core deposit1 balances up 11.0% annualized<br>• Overall mix shift continued from noninterest-bearing into<br>interest-bearing deposits<br>• Continued to supplement core deposits with wholesale<br>funding to support future loan growth<br>• Uninsured deposits made up 22% of total deposits, down from<br>38% in 4Q22<br>Strong Deposit Growth Again in 3Q23<br>1 Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000<br>2 Calculated as the change in ending deposit rate over the change in ending Fed Funds rate from February 2022<br>Dollars in millions<br>Cumulative Total Deposit Beta2 Stabilization<br>12%<br>20%<br>34%<br>40%<br>48% 49%<br>6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023
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Managing Loan Growth in the<br>Current Environment<br>9<br>$3,380<br>$3,569<br>$3,684 $3,736 $3,722<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Gross Loans<br>Dollars in millions<br>• Loan balances down $13.9M, or 1.5% annualized<br>• Focused on better aligning loan growth with core deposit<br>growth over time<br>• Core deposit growth outpaced loan growth over the<br>past two quarters<br>• Loan-to-deposit ratio of 101.3%, down from 108.0% in<br>1Q23<br>• Increased payoffs and paydowns muted loan growth in<br>3Q23<br>• Continued to leverage sales of participations on new<br>originations to manage overall growth<br>• Expect limited near-term loan growth in the current<br>environment to position the balance sheet for more<br>profitable longer term growth<br>Focus on Profitable Growth
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Increased Loan Payoffs and Paydowns<br>10<br>New Loan Originations and Advances<br>$169 $186<br>$75 $47 $71<br>$139 $127<br>$145<br>$84 $87<br>$308 $313<br>$220<br>$131 $158<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>New Originations Advances<br>Loan Payoffs and Amortization/Paydowns<br>$117 $99<br>$69 $54<br>$106<br>$36<br>$42<br>$42<br>$45<br>$60<br>$153 $141<br>$111 $99<br>$166<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Payoffs Amortization/Paydowns<br>$373 $427<br>$508 $537 $561<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Selling Participations on Larger Loans to Manage Growth<br>Loan Participation Portfolio Balance<br>Sold $134M of participations in 2023 YTD<br>Dollars in millions
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Well-Diversified Loan Portfolio<br>with a Multifamily Focus<br>11 Dollars in millions<br>CRE NOO<br>26%<br>Multifamily<br>37%<br>C&D<br>10%<br>1-4 Family<br>Mortgage<br>11%<br>CRE OO<br>4% C&I<br>12%<br>Consumer<br>& Other<br>0%<br>Loan Mix<br>by Type<br>$3.7<br>Billion<br>3Q23 Loan Growth by Type (vs. 2Q23)<br>$(61)<br>$(20)<br>$(1)<br>$0<br>$0<br>$4<br>Multifamily $64<br>1-4 Family Mortgage<br>Construction & Development<br>C&I<br>CRE Owner Occupied<br>CRE Nonowner Occupied<br>Consumer & Other<br>• Migration from Construction & Development to Multifamily as deals completed the ‘construction’ phase<br>• Remain comfortable with the diversity of the loan portfolio, including CRE and Multifamily concentrations given<br>portfolio performance and expertise
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¹ Nonaccrual loans plus loans 90 days past due and still accruing and foreclosed assets<br>Dollars in thousands<br>Superb Asset Quality Continues<br>12<br>$(280)<br>$(5) $(2) $(3)<br>$116<br>(0.03)%<br>0.00% 0.00% 0.00% 0.01%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Net Charge-Offs<br>Cumulative NCOs of $446K since 2019<br>Net Charge-offs (recoveries) % of Average Loans (annualized)<br>$46,491<br>$47,996<br>$50,148 $50,701 $50,585<br>1.38% 1.34% 1.36% 1.36% 1.36%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Allowance for Credit Losses<br>Modest CECL Day 1 impact of $650K<br>on January 1, 2023<br>Allowance for Credit Losses % of Gross Loans<br>$663 $639<br>$809 $778 $749<br>0.02%<br>0.01%<br>0.02% 0.02% 0.02%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Nonperforming Assets1<br>Consistently low NPA levels<br>NPAs % of Assets
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Watch and Substandard Loans<br>Remain Stable<br>13<br>C&I<br>16.2%<br>Multifamily<br>10.9%<br>CRE NOO<br>Senior Housing<br>37.9%<br>CRE NOO<br>Retail<br>26.0%<br>CRE Other<br>9.0%<br>$27<br>Million<br>Watch List Loans Substandard Loans<br>C&I<br>44.4%<br>CRE NOO<br>Office<br>27.0%<br>CRE NOO<br>Hotels<br>9.2%<br>CRE NOO<br>Retail<br>12.8%<br>CRE OO<br>4.4%<br>C&D<br>0.2%<br>1-4<br>Family<br>2.0%<br>$36<br>Million<br>Watch List Characteristics<br>Loan Balances Outstanding $26,877<br>% of Total Loans, Gross 0.7%<br>Number of Loans 18<br>Average Loan Size $1,493<br>Substandard Characteristics<br>Loan Balances Outstanding $35,621<br>% of Total Loans, Gross 1.0%<br>Number of Loans 21<br>Average Loan Size $1,696<br>% of Bank Risk-Based Capital 6.55%<br>$22,759<br>$32,252<br>$27,574 $27,215 $26,877<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Watch List Loans<br>$30,767 $28,049<br>$36,258 $33,821 $35,621<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Substandard Loans<br>Dollars in thousands
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Managing CRE and Office-Related Risk<br>14 1 Excludes medical office of $87M at September 30, 2023<br>Dollars in millions<br>Addressing CRE NOO Repricing Risk<br>• CRE NOO loans primarily located in the Twin Cities market<br>• Ongoing active client engagement<br>• Clients with maturing loans or resetting rates over<br>the next 12 months<br>• Identify situations of possible cash flow strain<br>• Recommend solutions early in the process<br>Well-Managed CRE NOO Office Exposure1<br>Small CRE NOO<br>Office Portfolio<br>Low Average Loan<br>Size<br>LTVs In-Line with the<br>Total Loan Portfolio<br>5.2%<br>of Total Loans<br>$2.3M<br>Average Loan Size<br>62%<br>Weighted Average LTV<br>CRE NOO Office by Geography<br>Twin Cities<br>Suburban<br>53%<br>Minneapolis-St. Paul CBD<br>13%<br>Minneapolis-St. Paul Non-CBD<br>20%<br>Out-of-State<br>14%<br>$195M<br>• Majority of CRE NOO office<br>exposure in the Twin Cities<br>suburbs<br>• Only 4 loans totaling $35M<br>located in central business<br>districts (CBD)<br>• Only 3 loans totaling $27M<br>outside of Minnesota – out-of-state projects for existing<br>local clients<br>Lower<br>Repricing Risk<br>Fixed-Rate<br>Maturity Schedule Low LTVs<br>81%<br>are Fixed-Rate<br>$146M<br>Maturing Over the<br>Next 12 Months<br>59%<br>Weighted Average LTV
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Ample Liquidity and Borrowing Capacity<br>15 1 Excludes $164M of pledged securities at September 30, 2023<br>Dollars in millions<br>14.0% 13.7% 10.9% 9.6% 10.2%<br>20.1% 17.0%<br>30.9% 33.1%<br>37.6%<br>$1,409 $1,380<br>$1,924 $1,962<br>$2,181<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Off-Balance Sheet Liquidity as a % of Assets<br>On-Balance Sheet Liquidity as a % of Assets<br>Liquidity Position with 2.7x Coverage of Uninsured Deposits Diverse Liquidity Mix<br>2023 YTD Liquidity Actions<br>• Added $801M of on- and off-balance sheet liquidity YTD<br>• $864M increase in borrowing capacity with the FRB following<br>additional loan and securities pledging<br>• $125M increase in FHLB borrowing capacity<br>• $30M increase to cash and cash equivalents<br>• Did not utilize any borrowings from the Discount Window or the Bank<br>Term Funding Program (BTFP) in 2023 YTD<br>Funding Source 9/30/2023 12/31/2022 Change<br>Cash $ 78 $ 4 8 $ 3 0<br>Unpledged Securities1<br> 389 549 (160)<br>FHLB Capacity 516 391 125<br>FRB Discount Window 1,022 158 864<br>Unsecured Lines of Credit 150 208 (58)<br>Secured Line of Credit 26 26 (0)<br> Total $ 2,181 $ 1,380 $ 801<br>Available Balance
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Well-Capitalized with Steady<br>Tangible Book Value Per Share Growth<br>16<br>9.98%<br>9.55% 9.41% 9.47% 9.62%<br>8.47% 8.40% 8.48% 8.72% 9.07%<br>13.78%<br>13.15% 13.25%<br>13.50%<br>13.88%<br>7.57% 7.48%<br>7.23% 7.39% 7.61%<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Total Risk-Based Capital Ratio Common Equity Tier 1 Capital Ratio<br>Tier 1 Leverage Ratio<br>Increased Consolidated Capital Ratios in 3Q23<br>Tangible Common Equity Ratio1<br>$4.52<br>$5.40<br>$7.22<br>$8.33<br>$9.31<br>$10.98<br>$11.69<br>$12.37<br>2016 2017 2018 2019 2020 2021 2022 3Q23<br>Steady Tangible Book Value Per Share1 Growth<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation
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Near-Term Expectations<br>17<br>• Limited near-term loan growth in the current environment; position the balance sheet for more profitable longer term growth<br>• Focus on aligning loan growth more closely with core deposit growth over time<br>• Continued core deposit growth over time, but may not be linear quarter-over-quarter<br>• Target loan-to-deposit ratio between 95% and 105%<br>Balance Sheet<br>Growth<br>• Near-term stabilization as net interest margin compression continues to slow<br>• Dependent on the path of interest rates, shape of the yield curve, and pace of core deposit growth and loan payoffs<br>Net Interest<br>Margin<br>• Ongoing noninterest expense growth, with continued investments in people and technology initiatives<br>• Noninterest expense growth aligned with asset growth over time<br>• Maintain lower provision expense given unfunded commitment decline and limited near-term loan growth outlook<br>Expenses<br>• Build tangible common equity and CET1 ratios, aided by retained earnings and limited pace of loan growth<br>• Ongoing evaluation of potential share repurchases<br>Capital<br>Levels
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2023 Strategic Priorities –<br>Positioning for Long-Term Success<br>18<br>Manage High Quality<br>Balance Sheet Growth 1<br>2<br>3<br>4<br>Maintain High Efficiency<br>While Investing in the<br>Business<br>Continue Scalability of<br>ERM Function, Including<br>Proactive Assessment of<br>Asset Quality Risks<br>Implement Longer Term<br>Strategic Readiness<br>Initiatives<br>• Slower pace of balance sheet growth in the current environment<br>• Manage the balance sheet to optimize net interest income<br>• Increase emphasis on generating core deposit growth to support loan<br>growth over the course of 2023<br>• Identify opportunities to better manage the discretionary spend to align<br>expense growth with a slower pace of asset growth<br>• Continue to invest in people and technology<br>• Make proactive investments to scale the business and position for<br>longer-term growth<br>• Continued build-out of the enterprise risk management function, including<br>enhanced stress testing capabilities<br>• Ongoing monitoring of the loan portfolio for signs of credit weakness given<br>the economic uncertainty heading into 2023<br>• Expand covenant testing and assess repricing risk on maturing loans<br>• Complete CECL adoption in early 2023<br>• Expand C&I function to support further diversification of the loan portfolio<br>and new deposit growth channels over time<br>• Continue evaluating potential M&A opportunities and be ready to act as<br>the right opportunity becomes available<br>Year-to-Date Progress<br>Core deposit growth outpaced<br>loan growth over the past two quarters<br>YTD NIE growth of 6.0% (vs. 2022),<br>compared to YoY asset growth of 10.4%<br>Ongoing 12-month forward assessment<br>of loan covenants and repricing risks<br>Expanding C&I outreach to targeted<br>verticals including women business<br>leaders and entrepreneurs
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APPENDIX<br>19
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Interest Rate Sensitivity<br>20<br>Estimated Change in NII From<br>Immediate Interest Rate Shocks<br>+100 bps<br>-100 bps<br>(1.7)%<br>+3.1%<br>Liability-sensitive balance sheet well positioned for potential future interest<br>rate cuts<br>Loan Portfolio Considerations<br>• Loan portfolio most sensitive to changes in the 3- to 5-year portion of the<br>yield curve<br>• Fixed-rate nature of the loan portfolio (68%) results in slower repricing<br>compared to deposits<br>• Leveraging prepayment penalties on new loan originations to help<br>maintain benefit of higher rates over time<br>Deposit Considerations<br>• Momentum in core deposit growth over the past two quarters<br>• Continue to supplement core deposits with wholesale funding to support<br>loan growth over time<br>• Deposit base is more sensitive to changing interest rates<br>• Stabilizing cumulative deposit beta of 49%1 at September 30, 2023, up<br>from 48%1 at June 30, 2023<br>3Q22<br>-200 bps +2.4%<br>(1.2)%<br>+1.0%<br>4Q22<br>+1.3%<br>(4.6)%<br>+6.2%<br>1Q23<br>+12.2%<br>1 Calculated as the change in ending deposit rate over the change in ending Fed Funds rate from February 2022<br>(1.9)%<br>+4.0%<br>2Q23<br>+7.5%<br>(0.6)%<br>+2.5%<br>3Q23<br>+4.9%<br>-300 bps +1.2% +1.7% +17.9% +11.2% +7.2%
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14% 8%<br>26% 20% 17% 15%<br>$84<br>$44<br>$151<br>$119 $99 $87<br>Less<br>Than<br>1 Year<br>1 to 2<br>Years<br>2 to 3<br>Years<br>3 to 4<br>Years<br>4 to 5<br>Years<br>5+<br>Years<br>18% 14% 11% 15% 14%<br>28%<br>$459<br>$353 $297 $377 $354<br>$708<br>Less<br>Than<br>1 Year<br>1 to 2<br>Years<br>2 to 3<br>Years<br>3 to 4<br>Years<br>4 to 5<br>Years<br>5+<br>Years<br>Loan Portfolio Repricing<br>21<br>Fixed,<br>68.4%<br>Variable,<br>15.9%<br>Adjustable,<br>15.7%<br>Loan Portfolio Mix<br>Fixed-Rate Portfolio<br>($2.5B)<br>Variable-Rate Portfolio<br>($591M)<br>Adjustable-Rate Portfolio<br>($584M)<br>Years to Maturity<br>Slowing pace of loan growth results<br>in a slower turn of the loan portfolio<br>and repricing:<br>• 10% year-over-year total loan<br>growth<br>• $822M of total loan<br>originations and advances over<br>prior 12 months<br>Variable-Rate Loan Floors<br>100% 100% 100% 100% 100%<br>$501 $501 $501 $501 $501<br>At or<br>Above<br>Floor<br>(9/30/23)<br>Up<br>25 bps<br>Up<br>50 bps<br>Up<br>75 bps<br>Up<br>100+ bps<br>Cumulative Percent of balances<br>at or above floor as rates rise<br>• 85% of variable-rate portfolio<br>have floors, all of which are at or<br>above their floors<br>• 98% of variable-rate loans are<br>currently tied to SOFR or Prime<br>Adjustable-Rate<br>Repricing Schedule<br>• 100% of the adjustable-rate<br>loans are at or above their floors<br>• Implies immediate repricing as<br>rates rise, depending on the<br>repricing schedule<br>Dollars in millions<br>Larger fixed-rate portfolio<br>helps to mitigate repricing risk
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High Quality Securities Portfolio<br>22<br>35% 43% 41% 41% 38%<br>31% 24% 23% 24% 22%<br>20% 20% 21% 21% 22%<br>13% 13% 15% 14% 18%<br>$542 $549 $559 $538 $553<br>3Q22 4Q22 1Q23 2Q23 3Q23<br>Mortgage-Backed Securities Municipal Bonds<br>Corporate Securities Other<br>Securities Available for Sale Portfolio<br>AAA,<br>23%<br>AA,<br>46%<br>A,<br>3%<br>BBB,<br>13%<br>NR,<br>15%<br>Rating Mix<br>Derivatives Portfolio Offsetting AOCI Impact<br>$(47,884)<br>$(62,216)<br>$28,581 $34,145<br>$(17,942) $(23,766)<br>4Q22 3Q23<br>MTM Securities MTM Derivatives Net Impact on AOCI1<br>• No held-to-maturity securities<br>• Securities portfolio average duration of 5.0 years<br>• Average securities portfolio yield of 4.39%<br>• Unrealized losses on AFS securities were 15.0% of<br>stockholders’ equity<br>• AOCI / Total RBC of 4.0% vs. peer bank median of 9.2%2<br>1 Includes the tax-effected impact of $7,232 in 4Q22 and $9,583 in 3Q23<br>2 2Q23 median for publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion (Source: S&P Capital IQ)<br>Dollars in thousands
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Reconciliation of Non-GAAP Financial<br>Measures – Annual<br>23 Dollars in thousands<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible<br>Assets 2016 2017 2018 2019 2020 2021 2022<br>Common Equity $ 115,366 $ 137,162 $ 220,998 $ 244,794 $ 265,405 $ 379,272 $ 394,064<br>Less: Preferred Stock - - - - - (66,514) (66,514)<br>Less: Intangible Assets (4,060) (3,869) (3,678) (3,487) (3,296) (3,105) (2,914)<br>Tangible Common Equity $ 111,306 $ 133,293 $ 217,320 $ 241,307 $ 262,109 $ 309,653 $ 324,636<br>Total Assets $ 1,260,394 $ 1,616,612 $ 1,973,741 $ 2,268,830 $ 2,927,345 $ 3,477,659 $ 4,345,662<br>Less: Intangible Assets (4,060) (3,869) (3,678) (3,487) (3,296) (3,105) (2,914)<br>Tangible Assets $ 1,256,334 $ 1,612,743 $ 1,970,063 $ 2,265,343 $ 2,924,049 $ 3,474,554 $ 4,342,748<br>Tangible Common Equity/Tangible Assets 8.86% 8.26% 11.03% 10.65% 8.96% 8.91% 7.48%<br>Tangible Book Value Per Share 2016 2017 2018 2019 2020 2021 2022<br>Book Value Per Common Share $ 4.69 $ 5.56 $ 7.34 $ 8.45 $ 9.43 $ 11.09 $ 11.80<br>Less: Effects of Intangible Assets (0.17) (0.16) (0.12) (0.12) (0.12) (0.11) (0.11)<br>Tangible Book Value Per Common Share $ 4.52 $ 5.40 $ 7.22 $ 8.33 $ 9.31 $ 10.98 $ 11.69<br>Total Common Shares 24,589,861 24,679,861 30,097,274 28,973,572 28,143,493 28,206,566 27,751,950<br>As of and for the year ended December 31,
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Reconciliation of Non-GAAP Financial<br>Measures – Profitability, TCE and TBV<br>24 Dollars in thousands<br>Efficiency Ratio<br>September 30,<br>2022<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>Noninterest Expense $ 14,157 $ 15,203 $ 14,183 $ 14,388 $ 15,350 Net Income Available to Common Shareholders<br>Less: Amortization Intangible Assets (48) (48) (48) (34) (9)<br>Adjusted Noninterest Expense $ 14,109 $ 15,155 $ 14,135 $ 14,354 $ 15,341 Average Total Shareholders' Equity<br>Less: Average Preferred Stock<br>Net Interest Income $ 34,095 $ 32,893 $ 28,567 $ 25,872 $ 25,421 Average Total Common Shareholders' Equity<br>Noninterest Income 1,387 1,738 1,943 1,415 1,726 Less: Effects of Average Intangible Assets<br>Less: (Gain) Loss on Sales of Securities - (30) 56 (50) - Average Tangible Common Equity<br>Adjusted Operating Revenue $ 35,482 $ 34,601 $ 30,566 $ 27,237 $ 27,147<br>Annualized Return on Average Tangible Common Equity<br>Efficiency Ratio 39.8% 43.8% 46.2% 52.7% 56.5%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible Assets<br>September 30,<br>2022<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>Total Shareholders' Equity $ 382,007 $ 394,064 $ 402,006 $ 409,126 $ 415,960<br>Less: Preferred Stock (66,514) (66,514) (66,514) (66,514) (66,514)<br>Total Common Shareholders' Equity 315,493 327,550 335,492 342,612 349,446<br>Less: Intangible Assets (2,962) (2,914) (2,866) (2,832) (2,823)<br>Tangible Common Equity $ 312,531 $ 324,636 $ 332,626 $ 339,780 $ 346,623<br>Total Assets $ 4,128,987 $ 4,345,662 $ 4,602,899 $ 4,603,185 $ 4,557,070<br>Less: Intangible Assets (2,962) (2,914) (2,866) (2,832) (2,823)<br>Tangible Assets $ 4,126,025 $ 4,342,748 $ 4,600,033 $ 4,600,353 $ 4,554,247<br>Tangible Common Equity/Tangible Assets 7.57% 7.48% 7.23% 7.39% 7.61%<br>Tangible Book Value Per Share<br>September 30,<br>2022<br>December 31,<br>2022<br>March 31,<br>2023<br>March 31,<br>2023<br>September 30,<br>2023<br>Book Value Per Common Share $ 11.44 $ 11.80 $ 12.05 $ 12.25 $ 12.47<br>Less: Effects of Intangible Assets (0.11) (0.11) (0.10) (0.10) (0.10)<br>Tangible Book Value Per Common Share $ 11.33 $ 11.69 $ 11.95 $ 12.15 $ 12.37<br>Total Common Shares 27,587,978 27,751,950 27,845,244 27,973,995 28,015,505<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>ROATCE<br>As of and for the quarter ended,<br>September 30,<br>2023<br>$ 8,616<br>$ 414,047<br> (66,514)<br>$ 347,533<br> (2,828)<br>$ 344,705<br>9.92%
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Reconciliation of Non-GAAP Financial<br>Measures – PPNR<br>25 Dollars in thousands<br>Pre-Provision Net Revenue<br>September 30,<br>2022<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>Noninterest Income $ 1,387 $ 1,738 $ 1,943 $ 1,415 $ 1,726<br>Less: (Gain) Loss on Sales on Securities - (30) 5 6 (50) -<br>Less: FHLB Advance Prepayment Income - - (299) - (493)<br>Total Operating Noninterest Income 1,387 1,708 1,700 1,365 1,233<br>Plus: Net Interest Income 34,095 32,893 28,567 25,872 25,421<br> Net Operating Revenue 35,482 34,601 30,267 27,237 26,654<br>Noninterest Expense $ 14,157 $ 15,203 $ 14,183 $ 14,388 $ 15,350<br>Less: Amortization of Tax Credit Investments (114) (114) (114) (114) (113)<br> Total Operating Noninterest Expense 14,043 15,089 14,069 14,274 15,237<br>Pre-Provision Net Revenue $ 21,439 $ 19,512 $ 16,198 $ 12,963 $ 11,417<br> Plus:<br>Non-Operating Revenue Adjustments - 30 243 5 0 493<br> Less:<br>Provision for Credit Losses 1,500 1,500 625 5 0 (600)<br>Non-Operating Expense Adjustments 114 114 114 114 113<br>Provision for Income Taxes 5,312 4,193 4,060 3,033 2,768<br>Net Income $ 14,513 $ 13,735 $ 11,642 $ 9,816 $ 9,629<br>Average Assets $ 3,948,201 $ 4,251,345 $ 4,405,234 $ 4,483,662 $ 4,504,937<br>Pre-Provision Net Revenue Return on Average Assets 2.15% 1.82% 1.49% 1.16% 1.01%<br>As of and for the quarter ended,
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Reconciliation of Non-GAAP Financial<br>Measures – Core NIM<br>26 Dollars in thousands<br>Core Net Interest Margin<br>September 30,<br>2022<br>December 31,<br>2022<br>March 31,<br>2023<br>June 30,<br>2023<br>September 30,<br>2023<br>Net Interest Income (Tax-Equivalent Basis) $ 34,418 $ 33,260 $ 28,947 $ 26,280 $ 25,822<br>Less: Loan Fees (1,400) (1,100) (998) (941) (914)<br>Less: PPP Interest and Fees (96) (48) (2) (3) (2)<br> Core Net Interest Margin $ 32,922 $ 32,112 $ 27,947 $ 25,336 $ 24,906<br>Average Interest Earning Assets $ 3,871,896 $ 4,177,644 $ 4,323,706 $ 4,395,050 $ 4,416,424<br>Less: Average PPP Loans (2,424) (1,109) (999) (913) (828)<br> Core Average Interest Earning Assets $ 3,869,472 $ 4,176,535 $ 4,322,707 $ 4,394,137 $ 4,415,596<br>Core Net Interest Margin 3.38% 3.05% 2.62% 2.31% 2.24%<br>Loan Interest Income (Tax-Equivalent Basis) $ 37,820 $ 42,702 $ 45,265 $ 48,066 $ 49,326<br>Less: Loan Fees (1,400) (1,100) (998) (941) (914)<br>Less: PPP Interest and Fees (96) (48) (2) (3) (2)<br> Core Loan Interest Income $ 36,324 $ 41,554 $ 44,265 $ 47,122 $ 48,410<br>Average Loans $ 3,265,814 $ 3,482,150 $ 3,630,446 $ 3,716,534 $ 3,722,594<br>Less: Average PPP Loans (2,424) (1,109) (999) (913) (828)<br> Core Average Loans $ 3,263,390 $ 3,481,041 $ 3,629,447 $ 3,715,621 $ 3,721,766<br>Core Loan Yield 4.42% 4.74% 4.95% 5.09% 5.16%<br>As of and for the quarter ended,
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