8-K - BWB - Equibles

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

FORM 8-K CURRENT REPORT

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

January 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 January 25, 2023, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three and twelve months ended December 31, 2022. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

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

Item 7.01 R egulation FD Disclosure.

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

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

Item 8.01 Other Events .

On January 25, 2023, in its 2022 fourth quarter earnings release, the Company announced that its Board of Directors had declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depository share, each representing a 1/100^th^ interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on March 1, 2023, to shareholders of record of the Series A Preferred Stock at the close of business on February 15, 2023.

Item 9.01 Financial Statements and Exhibits.

(d)****Exhibits

Exhibit 99.1	Press Release of Bridgewater Bancshares, Inc., dated January 25, 2023, regarding fourth quarter 2022 financial results
Exhibit 99.2	Earnings Presentation dated January 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: January 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

January 25, 2023

Bridgewater Bancshares, Inc. Announces Fourth Quarter 2022 Net Income of $13.7 Million, $0.45 Diluted Earnings Per Common Share

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $13.7 million for the fourth quarter of 2022, a 5.4% decrease from net income of $14.5 million for the third quarter of 2022, and a 9.8% increase from net income of $12.5 million for the fourth quarter of 2021. Earnings per diluted common share for the fourth quarter of 2022 were $0.45, a 5.6% decrease compared to $0.47 per diluted common share for the third quarter of 2022, and a 14.2% increase compared to $0.39 per diluted common share for the same period in 2021.

“Bridgewater delivered another strong year of financial results in 2022 highlighted again by our robust balance sheet growth, highly efficient business model and superb asset quality, with all of these trends continuing in the fourth quarter” said Chairman, Chief Executive Officer and President, Jerry Baack. “As expected, we also saw net interest margin compression during the quarter as the persistent rising interest rate environment created additional funding pressure given our strong loan growth. While we expect the operating environment to remain challenging as we head into 2023, we are taking steps to actively manage our balance sheet in the near-term, with a focus on profitable growth, to drive sustained success over the long-term.”

Fourth Quarter 2022 Financial Results


			****			****	Diluted		Adjusted		Nonperforming
ROA		PPNR ROA ^(1)^	****	ROE		****	earnings per share		efficiency ratio ^(1)^		assets to total assets
1.28	%	1.82	%	14.06	%		$	0.45	43.5	%	0.01	%

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

Fourth Quarter 2022 Highlights

●	Diluted earnings per common share were $0.45, compared to $0.47 per common share for the third quarter of 2022

●	Pre-provision net revenue (PPNR), a non-GAAP financial measure, of $19.5 million, compared to $21.4 million for the third quarter of 2022, a decrease of $1.9 million, or 9.0%. PPNR ROA, a non-GAAP financial measure, was 1.82%, compared to 2.15% for the third quarter of 2022.

●

Annualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the fourth quarter of 2022 were 1.28% and 14.06%, compared to ROA and ROE of 1.46% and 14.99%, respectively, for the third quarter of 2022. Annualized return on average tangible common equity, a non-GAAP financial measure, was 15.86% for the fourth quarter of 2022, compared to 17.03% for the third quarter of 2022.

●	Gross loans increased $189.4 million, or 22.2% annualized, from the third quarter of 2022.

●	Deposits increased $111.5 million, or 13.4% annualized, from the third quarter of 2022.

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●	Net interest margin (on a fully tax-equivalent basis) was 3.16%, compared to 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 3.05%, compared to 3.38% in the third quarter of 2022.

●	Adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 43.5%, compared to 39.4% for the third quarter of 2022.

●	A loan loss provision of $1.5 million was recorded to support strong organic loan growth in the fourth quarter of 2022. The allowance for loan losses to total loans was 1.34% at December 31, 2022, compared to 1.38% at September 30, 2022.

●	Annualized net loan charge-offs (recoveries) as a percentage of average loans were 0.00% for the fourth quarter of 2022, compared to (0.03)% for the third quarter of 2022.

●	Tangible book value per share, a non-GAAP financial measure, increased $0.36, or 12.7% annualized, to $11.69 at December 31, 2022, compared to $11.33 at September 30, 2022.

Annual 2022 Highlights

●	Diluted earnings per common share for the year ended December 31, 2022 were $1.72, a 12.0% increase, compared to $1.54 for the year ended December 31, 2021.

●	PPNR, a non-GAAP financial measure, was $79.7 million for the year ended December 31, 2022, an increase of 18.8%, compared to $67.1 million for the year ended December 31, 2021. PPNR ROA, a non-GAAP financial measure, was 2.06% for the year ended December 31, 2022, compared to 2.10% for the year ended December 31, 2021.

●	Gross loans increased $750.0 million at December 31, 2022, or 26.6%, compared to December 31, 2021.

●	Deposits increased $470.3 million at December 31, 2022, or 16.0%, compared to December 31, 2021.

●	Net interest margin (on a fully tax-equivalent basis) was 3.45% for the year ended December 31, 2022, compared to 3.54% for the year ended December 31, 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, for the year ended December 31, 2022 was 3.27%, compared to 3.28% for the year ended December 31, 2021.

●	Adjusted efficiency ratio, a non-GAAP financial measure, was 41.2% for the year ended December 31, 2022, compared to 41.0% for the year ended December 31, 2021.

●	Net loan charge-offs (recoveries) as a percentage of average loans were (0.01)% for the year ended December 31, 2022, compared to 0.00% for the year ended December 31, 2021.

●	The ratio of nonperforming assets to total assets was 0.01% at December 31, 2022, compared to 0.02% at December 31, 2021.

●	Tangible book value per share, a non-GAAP financial measure, increased $0.71, or 6.5%, to $11.69 at December 31, 2022, compared to $10.98 at December 31, 2021, despite the market value depreciation of the securities portfolio due to rapidly rising interest rates, which continue to negatively impact accumulated other comprehensive income.

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Key Financial Measures


		As of and for the Three Months Ended										As of and for the Year Ended
		December 31,			September 30,			December 31,				December 31,			December 31,
	****	2022			2022			2021			****	2022		****	2021
Per Common Share Data
Basic Earnings Per Share		$	0.46		$	0.49		$	0.41			$	1.78		$	1.59
Diluted Earnings Per Share			0.45			0.47			0.39				1.72			1.54
Book Value Per Share			11.80			11.44			11.09
Tangible Book Value Per Share ^(1)^			11.69			11.33			10.98
Basic Weighted Average Shares Outstanding			27,558,983			27,520,117			28,004,334				27,758,336			28,027,454
Diluted Weighted Average Shares Outstanding			28,527,306			28,592,854			29,038,785				28,668,177			28,968,286
Shares Outstanding at Period End			27,751,950			27,587,978			28,206,566

Selected Performance Ratios
Return on Average Assets (Annualized)			1.28	%		1.46	%		1.46	%			1.38	%		1.43	%
Pre-Provision Net Revenue Return on Average Assets (Annualized) ^(1)^			1.82			2.15			2.11				2.06			2.10
Return on Average Shareholders' Equity (Annualized)			14.06			14.99			13.27				13.90			14.45
Return on Average Tangible Common Equity (Annualized)^(1)^			15.86			17.03			14.78				15.69			15.45
Yield on Interest Earning Assets^(2)^			4.67			4.37			4.06				4.35			4.16
Yield on Total Loans, Gross^(2)^			4.87			4.59			4.49				4.60			4.60
Cost of Total Deposits			1.31			0.73			0.45				0.75			0.51
Cost of Funds			1.67			0.93			0.61				0.99			0.68
Net Interest Margin ^(2)^			3.16			3.53			3.51				3.45			3.54
Core Net Interest Margin ^(1)(2)^			3.05			3.38			3.25				3.27			3.28
Efficiency Ratio^(1)^			43.8			39.8			40.8				41.5			42.0
Adjusted Efficiency Ratio ^(1)^			43.5			39.4			40.3				41.2			41.0
Noninterest Expense to Average Assets (Annualized)			1.42			1.42			1.45				1.46			1.51
Adjusted Noninterest Expense to Average Assets (Annualized) ^(1)^			1.41			1.41			1.43				1.45			1.47
Loan to Deposit Ratio			104.5			102.3			95.7
Core Deposits to Total Deposits ^(3)^			74.6			83.0			85.4
Tangible Common Equity to Tangible Assets ^(1)^			7.48			7.57			8.91

Capital Ratios (Bank Only) ^(4)^
Tier 1 Leverage Ratio			10.76	%		11.24	%		11.09	%
Common Equity Tier 1 Risk-based Capital Ratio			11.29			11.46			11.69
Tier 1 Risk-based Capital Ratio			11.29			11.46			11.69
Total Risk-based Capital Ratio			12.47			12.67			12.94

Capital Ratios (Consolidated)^(4)^
Tier 1 Leverage Ratio			9.55	%		9.98	%		10.82	%
Common Equity Tier 1 Risk-based Capital Ratio			8.40			8.47			9.36
Tier 1 Risk-based Capital Ratio			10.03			10.19			11.43
Total Risk-based Capital Ratio			13.15			13.78			15.55

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)	Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
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(3)	Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
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(4)	Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
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Page 3 of 17

Selected Financial Data


		December 31,			September 30,		June 30,		March 31,		December 31,
(dollars in thousands)	****	2022		****	2022		2022		2022		2021
Selected Balance Sheet Data
Total Assets		$	4,345,662		$	4,128,987	$	3,883,264	$	3,607,920	$	3,477,659
Total Loans, Gross			3,569,446			3,380,082		3,225,885		2,987,967		2,819,472
Allowance for Loan Losses			47,996			46,491		44,711		41,692		40,020
Goodwill and Other Intangibles			2,914			2,962		3,009		3,057		3,105

Deposits			3,416,543			3,305,074		3,201,953		3,035,611		2,946,237
Tangible Common Equity^(1)^			324,636			312,531		305,360		309,870		309,653
Total Shareholders' Equity			394,064			382,007		374,883		379,441		379,272
Average Total Assets - Quarter-to-Date			4,251,345			3,948,201		3,743,575		3,513,798		3,403,270
Average Shareholders' Equity - Quarter-to-Date			387,589			384,020		381,448		383,024		374,035

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


	For the Three Months Ended							For the Year Ended
	December 31,		September 30,			December 31,		December 31,			December 31,
(dollars in thousands)	2022		2022		****	2021		2022		****	2021
Selected Income Statement Data
Interest Income	$	48,860	$	42,359		$	33,775	$	163,695		$	128,879
Interest Expense		15,967		8,264			4,622		33,997			19,370
Net Interest Income		32,893		34,095			29,153		129,698			109,509
Provision for Loan Losses		1,500		1,500			1,150		7,700			5,150
Net Interest Income after Provision for Loan Losses		31,393		32,595			28,003		121,998			104,359
Noninterest Income		1,738		1,387			1,288		6,332			5,309
Noninterest Expense		15,203		14,157			12,459		56,620			48,095
Income Before Income Taxes		17,928		19,825			16,832		71,710			61,573
Provision for Income Taxes		4,193		5,312			4,318		18,318			15,886
Net Income		13,735		14,513			12,514		53,392			45,687
Preferred Stock Dividends		(1,014)		(1,013)			(1,171)		(4,054)			(1,171)
Net Income Available to Common Shareholders	$	12,721	$	13,500		$	11,343	$	49,338		$	44,516

Income Statement

Net Interest Income

Net interest income was $32.9 million for the fourth quarter of 2022, a decrease of $1.2 million, or 3.5%, from $34.1 million in the third quarter of 2022, and an increase of $3.7 million, or 12.8%, from $29.2 million in the fourth quarter of 2021. The linked-quarter decrease in net interest income was due to higher rates paid on deposits and increased borrowings in the rising interest rate environment. The year-over-year increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and core loans, offset partially by higher rates paid on deposits and borrowings. Average interest earning assets were $4.18 billion for the fourth quarter of 2022, an increase of $305.7 million, or 7.9%, from $3.87 billion for the third quarter of 2022, and an increase of $857.0 million, or 25.8%, from $3.32 billion for the fourth quarter of 2021. The linked-quarter increase in average interest earning assets was primarily due to strong organic growth in the loan portfolio and purchases of investment securities. The year-over-year increase in average interest earning assets was primarily due to strong organic growth in the loan portfolio and purchases of investment securities, offset partially by the forgiveness of PPP loans and the reduction of cash balances.

Net interest margin (on a fully tax-equivalent basis) for the fourth quarter of 2022 was 3.16%, a 37 basis point decrease from 3.53% in the third quarter of 2022, and a 35 basis point decrease from 3.51% in the fourth quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, for the fourth quarter of 2022 was 3.05%, a 33 basis point decrease from 3.38% in the third quarter of 2022, and a 20 basis point decrease from 3.25% in the fourth quarter of 2021. The Company remains focused on managing the impact of continued interest rate hikes and the evolving shape of the yield curve during this unique interest rate environment.

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As the PPP loan portfolio has almost fully paid off, the recognition of fees associated with the originations has decreased significantly, which impacts comparability between periods. The Company recognized $45,000 of PPP origination fees during the fourth quarter of 2022, compared to $90,000 during the third quarter of 2022, and $958,000 during the fourth quarter of 2021. There were no remaining PPP origination fees to be recognized as of December 31, 2022.

Interest income was $48.9 million for the fourth quarter of 2022, an increase of $6.5 million, or 15.3%, from $42.4 million in the third quarter of 2022, and an increase of $15.1 million, or 44.7%, from $33.8 million in the fourth quarter of 2021. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.67% in the fourth quarter of 2022, compared to 4.37% in the third quarter of 2022, and 4.06% in the fourth quarter of 2021. The linked-quarter increase in the yield on interest earning assets was primarily due to the rapid increase in market interest rates resulting in new loan originations, loans repricing, and investment purchases at yields accretive to the existing portfolios. The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment, offset partially by the lower recognition of PPP origination fees.

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 4.86% in the fourth quarter of 2022, which was 27 basis points higher than 4.59% in the third quarter of 2022, and 45 basis points higher than 4.41% in the fourth quarter of 2021. While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods were impacted by fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the decrease in fee recognition, the Company is encouraged that the core loan yield continues to rise as new loan originations and the existing portfolio loans reprice in the higher rate environment.

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


	Three Months Ended
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021	****
Interest	4.74	%	4.42	%	4.17	%	4.15	%	4.20	%
Fees	0.12		0.17		0.26		0.25		0.21
Yield on Loans, Excluding PPP Loans	4.86	%	4.59	%	4.43	%	4.40	%	4.41	%

Interest expense was $16.0 million for the fourth quarter of 2022, an increase of $7.7 million, or 93.2%, from $8.3 million in the third quarter of 2022, and an increase of $11.3 million, or 245.4%, from $4.6 million in the fourth quarter of 2021. The cost of interest bearing liabilities increased 92 basis points on a linked-quarter basis from 1.30% in the third quarter of 2022 to 2.22% in the fourth quarter of 2022, primarily due to higher rates paid on deposits, drawing on the Company’s revolving line of credit, and the increased utilization of federal funds purchased and FHLB advances in the rising interest rate environment. On a year-over-year basis, the cost of interest bearing liabilities increased 136 basis points from 0.86% in the fourth quarter of 2021 to 2.22% in the fourth quarter of 2022, primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.

Interest expense on deposits was $10.8 million for the fourth quarter of 2022, an increase of $4.8 million, or 80.2%, from $6.0 million in the third quarter of 2022, and an increase of $7.5 million, or 232.6%, from $3.2 million in the fourth quarter of 2021. The cost of total deposits increased 58 basis points on a linked-quarter basis from 0.73% in the third quarter of 2022, to 1.31% in the fourth quarter of 2022. On a year-over-year basis, the cost of total deposits increased 86 basis points from 0.45% in the fourth quarter of 2021, to 1.31% in the fourth quarter of 2022. The linked-quarter and year-over-year increases were primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.

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A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended December 31, 2022, September 30, 2022, and December 31, 2021 is as follows:


		For the Three Months Ended																							****
		December 31, 2022								September 30, 2022							****	December 31, 2021							****
		Average			Interest			Yield/		Average			Interest			Yield/	****	Average			Interest			Yield/	****
	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)
Interest Earning Assets:
Cash Investments		$	65,393		$	366		2.22	%	$	57,613		$	165		1.13	%	$	146,744		$	65		0.18	%
Investment Securities:
Taxable Investment Securities			540,601			5,268		3.87			461,255			3,741		3.22			341,325			1,893		2.20
Tax-Exempt Investment Securities^(1)^			67,867			728		4.26			75,801			799		4.18			71,602			782		4.33
Total Investment Securities			608,468			5,996		3.91			537,056			4,540		3.35			412,927			2,675		2.57
Paycheck Protection Program Loans ^(2)^			1,109			48		17.06			2,424			96		15.75			39,900			1,057		10.51
Loans ^(1)(2)^			3,481,041			42,654		4.86			3,263,390			37,724		4.59			2,715,722			30,154		4.41
Total Loans			3,482,150			42,702		4.87			3,265,814			37,820		4.59			2,755,622			31,211		4.49
Federal Home Loan Bank Stock			21,633			163		2.99			11,413			156		5.42			5,310			59		4.39
Total Interest Earning Assets			4,177,644			49,227		4.67	%		3,871,896			42,681		4.37	%		3,320,603			34,010		4.06	%
Noninterest Earning Assets			73,701								76,305								82,667
Total Assets		$	4,251,345							$	3,948,201							$	3,403,270
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	464,631		$	2,013		1.72	%	$	517,658		$	1,032		0.79	%	$	499,475		$	548		0.43	%
Savings and Money Market Deposits			1,048,227			4,533		1.72			999,932			2,494		0.99			803,848			876		0.43
Time Deposits			281,334			1,007		1.42			288,621			847		1.16			299,823			830		1.10
Brokered Deposits			537,351			3,228		2.38			447,034			1,612		1.43			404,438			987		0.97
Total Interest Bearing Deposits			2,331,543			10,781		1.83			2,253,245			5,985		1.05			2,007,584			3,241		0.64
Federal Funds Purchased			340,471			3,379		3.94			106,826			709		2.63			10			—		0.67
Notes Payable			11,359			202		7.04			—			—		—			—			—		—
FHLB Advances			94,103			575		2.42			72,343			328		1.80			44,185			162		1.46
Subordinated Debentures			81,242			1,030		5.03			92,503			1,242		5.33			92,189			1,219		5.25
Total Interest Bearing Liabilities			2,858,718			15,967		2.22	%		2,524,917			8,264		1.30	%		2,143,968			4,622		0.86	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			943,232								991,545								861,473
Other Noninterest Bearing Liabilities			61,806								47,719								23,794
Total Noninterest Bearing Liabilities			1,005,038								1,039,264								885,267
Shareholders' Equity			387,589								384,020								374,035
Total Liabilities and Shareholders' Equity		$	4,251,345							$	3,948,201							$	3,403,270
Net Interest Income / Interest Rate Spread						33,260		2.45	%					34,417		3.07	%					29,388		3.20	%
Net Interest Margin ^(3)^								3.16	%							3.53	%							3.51	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(367)								(322)								(235)
Net Interest Income					$	32,893							$	34,095							$	29,153

(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 6 of 17

Provision for Loan Losses

The provision for loan losses was $1.5 million for both the third and fourth quarter of 2022 and $350,000 higher than the $1.2 million provided in the fourth quarter of 2021. The provision recorded in the fourth quarter of 2022 was primarily attributable to the growth of the loan portfolio. The allowance for loan losses to total loans was 1.34% at December 31, 2022, compared to 1.38% at September 30, 2022, and 1.42% at December 31, 2021.

As an emerging growth company, the Company anticipates adopting Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,” as of January 1, 2023 and does not expect a material adjustment upon adoption. The current estimate and future calculations are highly dependent on loan composition, macroeconomic conditions and forecasts, and other management assumptions and judgements.

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


		Three Months Ended									Year Ended
		December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)	****	2022		****	2022		****	2021		****	2022		****	2021
Balance at Beginning of Period		$	46,491		$	44,711		$	38,901		$	40,020		$	34,841
Provision for Loan Losses			1,500			1,500			1,150			7,700			5,150
Charge-offs			(3)			(5)			(37)			(37)			(74)
Recoveries			8			285			6			313			103
Balance at End of Period		$	47,996		$	46,491		$	40,020		$	47,996		$	40,020

Noninterest Income

Noninterest income was $1.7 million for the fourth quarter of 2022, an increase of $351,000 from $1.4 million for the third quarter of 2022, and an increase of $450,000 from $1.3 million for the fourth quarter of 2021. The linked-quarter increase was primarily due to an increase in other income, which included $306,000 of rate lock fees, offset partially by a decrease in letter of credit fees. The year-over-year increase was primarily due to increased customer service fees, an increase in bank-owned life insurance income and an increase in other income, offset partially by decreased letter of credit fees.

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


	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)	2022		****	2022		****	2021		****	2022		****	2021
Noninterest Income:
Customer Service Fees	$	344		$	313		$	274		$	1,236		$	1,007
Net Gain on Sales of Securities		30			—			—			82			750
Letter of Credit Fees		358			428			541			1,592			1,676
Debit Card Interchange Fees		148			153			149			586			563
Swap Fees		—			—			—			557			—
Bank-Owned Life Insurance		238			227			150			762			316
Other Income		620			266			174			1,517			997
Totals	$	1,738		$	1,387		$	1,288		$	6,332		$	5,309

Noninterest Expense

Noninterest expense was $15.2 million for the fourth quarter of 2022, an increase of $1.0 million from $14.2 million for the third quarter of 2022, and an increase of $2.7 million from $12.5 million for the fourth quarter of 2021. The linked-quarter increase was primarily due to increases in salaries and employee benefits, derivative collateral fees, and other expense. The year-over-year increase was primarily attributable to increases in salaries and employee benefits, occupancy and equipment, and derivative collateral fees.

Page 7 of 17

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


	Three Months Ended									Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
(dollars in thousands)	2022		****	2022		****	2021		****	2022		****	2021
Noninterest Expense:
Salaries and Employee Benefits	$	9,821		$	9,449		$	7,966		$	36,941		$	30,889
Occupancy and Equipment		1,177			1,086			939			4,390			3,916
FDIC Insurance Assessment		360			315			345			1,365			1,305
Data Processing		371			372			306			1,396			1,222
Professional and Consulting Fees		635			594			718			2,664			2,520
Derivative Collateral Fees		535			122			1			687			3
Information Technology and Telecommunications		673			650			554			2,495			2,163
Marketing and Advertising		403			479			469			2,032			1,487
Intangible Asset Amortization		48			48			48			191			191
Amortization of Tax Credit Investments		114			114			152			408			562
Debt Prepayment Fees		—			—			—			—			582
Other Expense		1,066			928			961			4,051			3,255
Totals	$	15,203		$	14,157		$	12,459		$	56,620		$	48,095

The Company continues to invest in its people across the organization, with 246 full-time equivalent employees at December 31, 2022, and September 30, 2022, and 220 employees at December 31, 2021.

The efficiency ratio, a non-GAAP financial measure, was 43.8% for the fourth quarter of 2022, compared to 39.8% for the third quarter of 2022, and 40.8% for the fourth quarter of 2021. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 43.5% for the fourth quarter of 2022, 39.4% for the third quarter of 2022, and 40.3% for the fourth quarter of 2021.

Income Taxes

The effective combined federal and state income tax rate for the fourth quarter of 2022 was 23.4%, a decrease from 26.8% for the third quarter of 2022 and 25.7% for the fourth quarter of 2021.

Balance Sheet

Total assets at December 31, 2022 were $4.35 billion, a 5.2% increase from $4.13 billion at September 30, 2022, and a 25.0% increase from $3.48 billion at December 31, 2021. The linked-quarter increase in total assets was primarily due to strong organic loan growth and continued purchases of investment securities. The year-over-year increase in total assets was primarily due to strong organic loan growth, purchases of investment securities and an increase of other assets, offset partially by a decrease in cash and cash equivalents.

Total gross loans at December 31, 2022 were $3.57 billion, an increase of $189.4 million, or 5.6%, over total gross loans of $3.38 billion at September 30, 2022, and an increase of $750.0 million, or 26.6%, over total gross loans of $2.82 billion at December 31, 2021. The increase in the loan portfolio during the fourth quarter of 2022 was primarily due to growth in the construction and land development, multifamily, and CRE nonowner occupied segments.

Page 8 of 17

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


	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
(dollars in thousands)
Commercial	$	435,344	$	412,448	$	403,569	$	363,290	$	360,169
Paycheck Protection Program		1,049		1,192		4,860		12,309		26,162
Construction and Land Development		365,796		335,557		359,191		321,131		281,474
Real Estate Mortgage:
1 - 4 Family Mortgage		355,474		341,102		334,815		312,201		305,317
Multifamily		1,306,738		1,230,509		1,087,865		1,012,623		910,243
CRE Owner Occupied		149,905		151,088		142,214		117,969		111,096
CRE Nonowner Occupied		947,008		900,691		886,432		840,463		818,569
Total Real Estate Mortgage Loans		2,759,125		2,623,390		2,451,326		2,283,256		2,145,225
Consumer and Other		8,132		7,495		6,939		7,981		6,442
Total Loans, Gross		3,569,446		3,380,082		3,225,885		2,987,967		2,819,472
Allowance for Loan Losses		(47,996)		(46,491)		(44,711)		(41,692)		(40,020)
Net Deferred Loan Fees		(9,293)		(9,088)		(9,536)		(9,065)		(9,535)
Total Loans, Net	$	3,512,157	$	3,324,503	$	3,171,638	$	2,937,210	$	2,769,917

Total deposits at December 31, 2022 were $3.42 billion, an increase of $111.5 million, or 3.4%, over total deposits of $3.31 billion at September 30, 2022, and an increase of $470.3 million, or 16.0%, over total deposits of $2.95 billion at December 31, 2021. Deposit growth in the fourth quarter of 2022 was primarily due to an increase in brokered deposits, offset partially by a decline in all other deposit portfolios. Brokered deposits were being used as a supplemental funding source, as needed, to support the loan portfolio growth.

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


		December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
(dollars in thousands)	****
Noninterest Bearing Transaction Deposits		$	884,272	$	961,084	$	961,998	$	835,482	$	875,084
Interest Bearing Transaction Deposits			451,992		510,396		522,151		598,402		544,789
Savings and Money Market Deposits			1,031,873		1,077,333		952,138		890,926		863,567
Time Deposits			272,253		293,052		272,424		286,674		293,474
Brokered Deposits			776,153		463,209		493,242		424,127		369,323
Total Deposits		$	3,416,543	$	3,305,074	$	3,201,953	$	3,035,611	$	2,946,237

Capital

Total shareholders’ equity at December 31, 2022 was $394.1 million, an increase of $12.1 million compared to total shareholders’ equity of $382.0 million at September 30, 2022, and an increase of $14.8 million, or 3.9%, over total shareholders’ equity of $379.3 million at December 31, 2021. The linked-quarter increase was due to net income retained, offset partially by unrealized losses in the securities portfolio. The year-over-year increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by stock repurchases made under the Company’s stock repurchase program and an increase in unrealized losses in the securities portfolio. The Company did not purchase any shares of its common stock during the fourth quarter of 2022.

Tangible book value per share, a non-GAAP financial measure, was $11.69 as of December 31, 2022, an increase of 3.2% from $11.33 as of September 30, 2022, and an increase of 6.5% from $10.98 as of December 31, 2021. The linked-quarter and year-over-year increase occurred despite the market value depreciation of the securities portfolio driven by the rapidly rising interest rate environment, which continues to negatively impact accumulated other comprehensive income. Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.48% at December 31, 2022, compared to 7.57% at September 30, 2022, and 8.91% at December 31, 2021.

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

Page 9 of 17

Asset Quality

Annualized net charge-offs (recoveries) as a percent of average loans were 0.00% for the fourth quarter of 2022, compared to (0.03)% for the third quarter of 2022 and 0.00% for each of the previous three quarters. At December 31, 2022, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $639,000, or 0.01% of total assets, as compared to $663,000, or 0.02% of total assets at September 30, 2022, and $722,000, or 0.02% of total assets at December 31, 2021.

Loans that have potential weaknesses that warrant a watchlist risk rating at December 31, 2022 totaled $32.3 million, compared to $22.8 million at September 30, 2022, and $49.3 million at December 31, 2021. The linked-quarter increase was primarily due to the migration of two loan relationships. The increased uncertainty in the economic environment may result in further watchlist or adverse classifications in the loan portfolio. Loans that warranted a substandard risk rating at December 31, 2022 totaled $28.0 million, compared to $30.8 million at September 30, 2022, and $22.6 million at December 31, 2021.

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


		As of and for the Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)	****	2022		****	2022		****	2022		****	2022		****	2021		****
Selected Asset Quality Data
Loans 30-89 Days Past Due		$	186		$	38		$	225		$	13		$	49
Loans 30-89 Days Past Due to Total Loans			0.01	%		0.00	%		0.01	%		0.00	%		0.00	%
Nonperforming Loans		$	639		$	663		$	688		$	706		$	722
Nonperforming Loans to Total Loans			0.02	%		0.02	%		0.02	%		0.02	%		0.03	%
Foreclosed Assets		$	—		$	—		$	—		$	—		$	—
Nonaccrual Loans to Total Loans			0.02	%		0.02	%		0.02	%		0.02	%		0.03	%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans			0.02			0.02			0.02			0.02			0.03
Nonperforming Assets ^(1)^		$	639		$	663		$	688		$	706		$	722
Nonperforming Assets to Total Assets ^(1)^			0.01	%		0.02	%		0.02	%		0.02	%		0.02	%
Allowance for Loan Losses to Total Loans			1.34			1.38			1.39			1.40			1.42
Allowance for Loan Losses to Total Loans, Excluding PPP Loans			1.35			1.38			1.39			1.40			1.43
Allowance for Loans Losses to Nonaccrual Loans			7,511.11			7,012.22			6,498.69			5,905.38			5,542.94
Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans			0.00			(0.03)			0.00			0.00			0.00

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

The Company will host a conference call to discuss its fourth quarter 2022 financial results on Thursday, January 26, 2023 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 877-270-2148 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 1810249. The replay will be available through February 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 $4.3 billion and seven branches as of December 31, 2022, Bridgewater is considered one of the largest locally led banks in the State of Minnesota, and has received numerous awards for its growth, banking services, and esteemed corporate culture.

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

Page 10 of 17

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 anticipated rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of rising interest rates, which has resulted in unrealized losses in our portfolio; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation; 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; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the expected discontinuation of the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including changes to federal and state corporate tax rates; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events including the Russian invasion of Ukraine; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

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

Page 11 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets

(dollars in thousands, except share data)


		December 31,			September 30,			December 31,
	****	2022		****	2022		****	2021
ASSETS
Cash and Cash Equivalents		$	87,043		$	75,496		$	143,473
Bank-Owned Certificates of Deposit			1,181			1,182			1,876
Securities Available for Sale, at Fair Value			548,613			542,007			439,362
Loans, Net of Allowance for Loan Losses of $47,996 at December 31, 2022 (unaudited), $46,491 at September 30, 2022 (unaudited) and $40,020 at December 31, 2021			3,512,157			3,324,503			2,769,917
Federal Home Loan Bank (FHLB) Stock, at Cost			19,606			15,603			5,242
Premises and Equipment, Net			48,445			48,941			49,395
Accrued Interest			13,479			11,198			9,186
Goodwill			2,626			2,626			2,626
Other Intangible Assets, Net			288			336			479
Other Assets			112,224			107,095			56,103
Total Assets		$	4,345,662		$	4,128,987		$	3,477,659

LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing		$	884,272		$	961,084		$	875,084
Interest Bearing			2,532,271			2,343,990			2,071,153
Total Deposits			3,416,543			3,305,074			2,946,237
Federal Funds Purchased			287,000			212,000			—
Notes Payable			13,750			—			—
FHLB Advances			97,000			71,500			42,500
Subordinated Debentures, Net of Issuance Costs			78,905			92,559			92,239
Accrued Interest Payable			2,831			2,214			1,409
Other Liabilities			55,569			63,633			16,002
Total Liabilities			3,951,598			3,746,980			3,098,387

SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value; Authorized 10,000,000
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at December 31, 2022 (unaudited), September 30, 2022 (unaudited) and December 31, 2021			66,514			66,514			66,514
Common Stock- $0.01 par value; Authorized 75,000,000
Common Stock - Issued and Outstanding 27,751,950 at December 31, 2022 (unaudited), 27,587,978 at September 30, 2022 (unaudited) and 28,206,566 at December 31, 2021			278			276			282
Additional Paid-In Capital			96,529			95,973			104,123
Retained Earnings			248,685			235,964			199,347
Accumulated Other Comprehensive Income (Loss)			(17,942)			(16,720)			9,006
Total Shareholders' Equity			394,064			382,007			379,272
Total Liabilities and Equity		$	4,345,662		$	4,128,987		$	3,477,659

Page 12 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)


		Three Months Ended									Year Ended
		December 31,			September 30,			December 31,			December 31,			December 31,
	****	2022		****	2022		****	2021		****	2022		****	2021
INTEREST INCOME
Loans, Including Fees		$	42,488		$	37,666		$	31,140		$	146,256		$	118,845
Investment Securities			5,843			4,372			2,511			16,410			9,576
Other			529			321			124			1,029			458
Total Interest Income			48,860			42,359			33,775			163,695			128,879

INTEREST EXPENSE
Deposits			10,781			5,984			3,241			23,379			13,842
Notes Payable			202			—			—			202			61
FHLB Advances			575			329			162			1,221			831
Subordinated Debentures			1,030			1,242			1,219			4,688			4,630
Federal Funds Purchased			3,379			709			—			4,507			6
Total Interest Expense			15,967			8,264			4,622			33,997			19,370

NET INTEREST INCOME			32,893			34,095			29,153			129,698			109,509
Provision for Loan Losses			1,500			1,500			1,150			7,700			5,150

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			31,393			32,595			28,003			121,998			104,359

NONINTEREST INCOME
Customer Service Fees			344			313			274			1,236			1,007
Net Gain on Sales of Available for Sale Securities			30			—			—			82			750
Other Income			1,364			1,074			1,014			5,014			3,552
Total Noninterest Income			1,738			1,387			1,288			6,332			5,309

NONINTEREST EXPENSE
Salaries and Employee Benefits			9,821			9,449			7,966			36,941			30,889
Occupancy and Equipment			1,177			1,086			939			4,390			3,916
Other Expense			4,205			3,622			3,554			15,289			13,290
Total Noninterest Expense			15,203			14,157			12,459			56,620			48,095

INCOME BEFORE INCOME TAXES			17,928			19,825			16,832			71,710			61,573
Provision for Income Taxes			4,193			5,312			4,318			18,318			15,886
NET INCOME			13,735			14,513			12,514			53,392			45,687
Preferred Stock Dividends			(1,014)			(1,013)			(1,171)			(4,054)			(1,171)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		$	12,721		$	13,500		$	11,343		$	49,338		$	44,516

EARNINGS PER SHARE
Basic		$	0.46		$	0.49		$	0.41		$	1.78		$	1.59
Diluted			0.45			0.47			0.39			1.72			1.54
Dividends Paid Per Common Share			—			—			—			—			—

Page 13 of 17

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

(dollars in thousands, except per share data)

(Unaudited)


		For the Year Ended															****
		December 31, 2022								December 31, 2021							****
		Average			Interest			Yield/		Average			Interest			Yield/
	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)
Interest Earning Assets:
Cash Investments		$	66,072		$	597		0.90	%	$	132,188		$	199		0.15	%
Investment Securities:
Taxable Investment Securities			448,500			13,960		3.11			317,954			7,015		2.21
Tax-Exempt Investment Securities^(1)^			72,379			3,101		4.29			75,313			3,242		4.30
Total Investment Securities			520,879			17,061		3.28			393,267			10,257		2.61
Paycheck Protection Program Loans ^(2)^			7,441			970		13.03			103,151			6,441		6.24
Loans ^(1)(2)^			3,183,271			145,857		4.58			2,481,706			112,587		4.54
Total Loans			3,190,712			146,827		4.60			2,584,857			119,028		4.60
Federal Home Loan Bank Stock			12,628			432		3.42			5,571			259		4.65
Total Interest Earning Assets			3,790,291			164,917		4.35	%		3,115,883			129,743		4.16	%
Noninterest Earning Assets			76,189								73,917
Total Assets		$	3,866,480							$	3,189,800
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	524,968		$	4,336		0.83	%	$	441,528		$	2,052		0.46	%
Savings and Money Market Deposits			963,096			9,129		0.95			773,779			3,729		0.48
Time Deposits			284,868			3,264		1.15			323,638			4,099		1.27
Brokered Deposits			449,095			6,650		1.48			406,863			3,962		0.97
Total Interest Bearing Deposits			2,222,027			23,379		1.05			1,945,808			13,842		0.71
Federal Funds Purchased			149,608			4,507		3.01			2,479			6		0.24
Notes Payable			2,863			202		7.04			1,658			61		3.66
FHLB Advances			64,278			1,221		1.90			53,294			831		1.56
Subordinated Debentures			89,584			4,688		5.23			82,865			4,630		5.59
Total Interest Bearing Liabilities			2,528,360			33,997		1.34	%		2,086,104			19,370		0.93	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			910,490								764,087
Other Noninterest Bearing Liabilities			43,597								23,372
Total Noninterest Bearing Liabilities			954,087								787,459
Shareholders' Equity			384,033								316,237
Total Liabilities and Shareholders' Equity		$	3,866,480							$	3,189,800
Net Interest Income / Interest Rate Spread						130,920		3.01	%					110,373		3.23	%
Net Interest Margin ^(3)^								3.45	%							3.54	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(1,222)								(864)
Net Interest Income					$	129,698							$	109,509

(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 Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


		For the Three Months Ended									For the Year Ended
		December 31,			September 30,			December 31,			December 31,			December 31,
	****	2022		****	2022			2021			2022		****	2021		****
Pre-Provision Net Revenue
Noninterest Income		$	1,738		$	1,387		$	1,288		$	6,332		$	5,309
Less: Gain on Sales of Securities			(30)			—			—			(82)			(750)
Total Operating Noninterest Income			1,708			1,387			1,288			6,250			4,559
Plus: Net Interest Income			32,893			34,095			29,153			129,698			109,509
Net Operating Revenue		$	34,601		$	35,482		$	30,441		$	135,948		$	114,068

Noninterest Expense		$	15,203		$	14,157		$	12,459		$	56,620		$	48,095
Less: Amortization of Tax Credit Investments			(114)			(114)			(152)			(408)			(562)
Less: Debt Prepayment Fees			—			—			—			—			(582)
Total Operating Noninterest Expense		$	15,089		$	14,043		$	12,307		$	56,212		$	46,951

Pre-Provision Net Revenue		$	19,512		$	21,439		$	18,134		$	79,736		$	67,117

Plus:
Non-Operating Revenue Adjustments			30			—			—			82			750
Less:
Provision for Loan Losses			1,500			1,500			1,150			7,700			5,150
Non-Operating Expense Adjustments			114			114			152			408			1,144
Provision for Income Taxes			4,193			5,312			4,318			18,318			15,886
Net Income		$	13,735		$	14,513		$	12,514		$	53,392		$	45,687

Average Assets		$	4,251,345		$	3,948,201		$	3,403,270		$	3,866,480		$	3,189,800
Pre-Provision Net Revenue Return on Average Assets			1.82	%		2.15	%		2.11	%		2.06	%		2.10	%


		As of and for the Three Months Ended										As of and for the Year Ended
		December 31,			September 30,			December 31,				December 31,			December 31,
	****	2022		****	2022		****	2021		****	****	2022		****	2021		****
Core Net Interest Margin
Net Interest Income (Tax-Equivalent Basis)		$	33,260		$	34,417		$	29,388			$	130,920		$	110,373
Less: Loan Fees			(1,100)			(1,400)			(1,462)				(6,273)			(5,173)
Less: PPP Interest and Fees			(48)			(96)			(1,057)				(970)			(6,441)
Core Net Interest Income		$	32,112		$	32,921		$	26,869			$	123,677		$	98,759

Average Interest Earning Assets		$	4,177,644		$	3,871,896		$	3,320,603			$	3,790,291		$	3,115,883
Less: Average PPP Loans			(1,109)			(2,424)			(39,900)				(7,441)			(103,151)
Core Average Interest Earning Assets		$	4,176,535		$	3,869,472		$	3,280,703			$	3,782,850		$	3,012,732
Core Net Interest Margin			3.05	%		3.38	%		3.25	%			3.27	%		3.28	%

Page 15 of 17

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


		For the Three Months Ended										For the Year Ended
		December 31,			September 30,			December 31,				December 31,			December 31,
	****	2022		****	2022		****	2021		****	****	2022		****	2021		****
Efficiency Ratio
Noninterest Expense		$	15,203		$	14,157		$	12,459			$	56,620		$	48,095
Less: Amortization of Intangible Assets			(48)			(48)			(48)				(191)			(191)
Adjusted Noninterest Expense		$	15,155		$	14,109		$	12,411			$	56,429		$	47,904
Net Interest Income			32,893			34,095			29,153				129,698			109,509
Noninterest Income			1,738			1,387			1,288				6,332			5,309
Less: Gain on Sales of Securities			(30)			—			—				(82)			(750)
Adjusted Operating Revenue		$	34,601		$	35,482		$	30,441			$	135,948		$	114,068
Efficiency Ratio			43.8	%		39.8	%		40.8	%			41.5	%		42.0	%

Adjusted Efficiency Ratio
Noninterest Expense		$	15,203		$	14,157		$	12,459			$	56,620		$	48,095
Less: Amortization of Tax Credit Investments			(114)			(114)			(152)				(408)			(562)
Less: Debt Prepayment Fees			—			—			—				—			(582)
Less: Amortization of Intangible Assets			(48)			(48)			(48)				(191)			(191)
Adjusted Noninterest Expense		$	15,041		$	13,995		$	12,259			$	56,021		$	46,760
Net Interest Income			32,893			34,095			29,153				129,698			109,509
Noninterest Income			1,738			1,387			1,288				6,332			5,309
Less: Gain on Sales of Securities			(30)			—			—				(82)			(750)
Adjusted Operating Revenue		$	34,601		$	35,482		$	30,441			$	135,948		$	114,068
Adjusted Efficiency Ratio			43.5	%		39.4	%		40.3	%			41.2	%		41.0	%


		For the Three Months Ended										For the Year Ended
		December 31,			September 30,			December 31,				December 31,			December 31,
	****	2022		****	2022		****	2021		****	****	2022		****	2021		****
Adjusted Noninterest Expense to Average Assets (Annualized)
Noninterest Expense		$	15,203		$	14,157		$	12,459			$	56,620		$	48,095
Less: Amortization of Tax Credit Investments			(114)			(114)			(152)				(408)			(562)
Less: Debt Prepayment Fees			—			—			—				—			(582)
Adjusted Noninterest Expense		$	15,089		$	14,043		$	12,307			$	56,212		$	46,951

Average Assets		$	4,251,345		$	3,948,201		$	3,403,270			$	3,866,480		$	3,189,800
Adjusted Noninterest Expense to Average Assets (Annualized)			1.41	%		1.41	%		1.43	%			1.45	%		1.47	%

Page 16 of 17

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


	As of and for the Three Months Ended									As of and for the Year Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
	2022			2022			2021			2022			2021
Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity	$	394,064		$	382,007		$	379,272
Less: Preferred Stock		(66,514)			(66,514)			(66,514)
Total Common Shareholders' Equity		327,550			315,493			312,758
Less: Intangible Assets		(2,914)			(2,962)			(3,105)
Tangible Common Equity	$	324,636		$	312,531		$	309,653

Total Assets	$	4,345,662		$	4,128,987		$	3,477,659
Less: Intangible Assets		(2,914)			(2,962)			(3,105)
Tangible Assets	$	4,342,748		$	4,126,025		$	3,474,554
Tangible Common Equity/Tangible Assets		7.48	%		7.57	%		8.91	%

Tangible Book Value Per Share
Book Value Per Common Share	$	11.80		$	11.44		$	11.09
Less: Effects of Intangible Assets		(0.11)			(0.11)			(0.11)
Tangible Book Value Per Common Share	$	11.69		$	11.33		$	10.98

Return on Average Tangible Common Equity
Net Income Available to Common Shareholders	$	12,721		$	13,500		$	11,343		$	49,338		$	44,516

Average Shareholders' Equity	$	387,589		$	384,020		$	374,035		$	384,033		$	316,237
Less: Average Preferred Stock		(66,514)			(66,514)			(66,515)			(66,514)			(24,915)
Average Common Equity		321,075			317,506			307,520			317,519			291,322
Less: Effects of Average Intangible Assets		(2,941)			(2,989)			(3,132)			(3,012)			(3,204)
Average Tangible Common Equity	$	318,134		$	314,517		$	304,388		$	314,507		$	288,118
Return on Average Tangible Common Equity		15.86	%		17.03	%		14.78	%		15.69	%		15.45	%


	Three Months Ended
	December 31,		September 30,		June 30,		March 31,		December 31,
	2022		2022		2022		2022		2021
Tangible Common Equity
Total Shareholders' Equity	$	394,064	$	382,007	$	374,883	$	379,441	$	379,272
Less: Preferred Stock		(66,514)		(66,514)		(66,514)		(66,514)		(66,514)
Common Shareholders' Equity		327,550		315,493		308,369		312,927		312,758
Less: Intangible Assets		(2,914)		(2,962)		(3,009)		(3,057)		(3,105)
Tangible Common Equity	$	324,636	$	312,531	$	305,360	$	309,870	$	309,653

Page 17 of 17

Exhibit 99.2

EARNINGS PRESENTATION<br>FOURTH QUARTER 2022
2<br>Forward<br>-<br>Looking Statements<br>This presentation contains “forward<br>-<br>looking statements” within the meaning of the safe harbor provisions of the U.S. Private Sec<br>urities Litigation Reform Act of 1995. Forward<br>-<br>looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projectio<br>ns<br>with respect to the anticipated future<br>performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”,<br>“c<br>ould”, “predict”, “potential”, “believe”, “expect”,<br>“continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “ou<br>tlo<br>ok”, or the negative version of those words or other<br>comparable words of a future or forward<br>-<br>looking nature.<br>Forward<br>-<br>looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on ou<br>r current beliefs, expectations and<br>assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and<br>oth<br>er future conditions. Because forward<br>-<br>looking<br>statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are diff<br>icu<br>lt to predict and many of which are outside of our<br>control. Our actual results and financial condition may differ materially from those indicated in the forward<br>-<br>looking statements<br>.. Therefore, you should not rely on any of these<br>forward<br>-<br>looking statements. Important factors that could cause our actual results and financial condition to differ materially f<br>rom those indicated in the forward<br>-<br>looking<br>statements include, among others, the following: interest rate risk, including the effects of recent and anticipated rate inc<br>rea<br>ses by the Federal Reserve; fluctuations in the<br>values of the securities held in our securities portfolio, including as a result of rising interest rates, which has resulted<br>in<br>unrealized losses in our portfolio; business and<br>economic conditions generally and in the financial services industry, nationally and within our market area, including rising<br>ra<br>tes of inflation; loan concentrations in our<br>portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; o<br>ur<br>ability to maintain an adequate level of allowance for<br>loan losses; new or revised accounting standards, including as a result of the implementation of the Current Expected Credit<br>Los<br>s standard; the concentration of large loans to<br>certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity ris<br>k,<br>which may increase our dependence on non<br>-<br>core<br>funding sources such as brokered deposits, and negative impact of our cost of funds; our ability to raise additional capital<br>to<br>implement our business plan; our ability to<br>implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availa<br>bil<br>ity of some reference rates, such as the<br>expected discontinuation of the London Interbank Offered Rate, as well as other alternative reference rates; the composition<br>of<br>our senior leadership team and our ability to<br>attract and retain key personnel; talent and labor shortages an high rates of employment turnover; the occurrence of fraudule<br>nt<br>activity, breaches or failures of our information<br>security controls or cybersecurity<br>-<br>related incidents; interruptions involving our information technology and telecommunications<br>systems or third<br>-<br>party servicers; competition in<br>the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effect<br>ive<br>ness of our risk management framework; the<br>commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent an<br>d f<br>uture legislative and regulatory changes,<br>including changes to federal and state corporate tax rates; risks related to climate change and the negatively impact it may<br>hav<br>e on our customers and their businesses; the<br>imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; se<br>ver<br>e weather, natural disasters, wide spread<br>disease or pandemics (including the COVID<br>-<br>19 pandemic), acts of war or terrorism or other adverse external events, including the<br>Russian invasion of Ukraine; potential<br>impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulation<br>s a<br>nd guidance, including the new 1% excise tax on<br>stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by<br>th<br>e Company with the Securities and Exchange<br>Commission.<br>Any forward<br>-<br>looking statement made by us in this press release is based only on information currently available to us and speaks<br>only as of the date on which it is made. We<br>undertake no obligation to publicly update any forward<br>-<br>looking statement, whether written or oral, that may be made from time to<br>time, whether as a result of new<br>information, future developments or otherwise. Certain of the information contained in this presentation is derived from info<br>rma<br>tion provided by industry sources. Although we<br>believe that such information is accurate and that the sources from which it has been obtained are reliable, we cannot guaran<br>tee<br>the accuracy of, and have not independently<br>verified, such information.<br>Use of Non<br>-<br>GAAP Financial Measures<br>In addition to the results presented in accordance with U.S. General Accepted Accounting Principles (“GAAP”), the Company rou<br>tin<br>ely supplements its evaluation with an<br>analysis of certain non<br>-<br>GAAP financial measures. The Company believes these non<br>-<br>GAAP financial measures, in addition to the rel<br>ated GAAP measures, provide meaningful<br>information to investors to help them understand the Company’s operating performance and trends, and to facilitate comparison<br>s w<br>ith the performance of peers. These<br>disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they neces<br>sar<br>ily comparable to non<br>-<br>GAAP performance<br>measures that may be presented by other companies. Reconciliations of non<br>-<br>GAAP disclosures to the comparable GAAP measures are p<br>rovided in this presentation.<br>Disclaimer
---
1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>3<br>•<br>Gross loan balances up $750.0 million, or 26.6%, from 2021<br>•<br>Investment securities balances up $109.3 million, or 24.9%, from 2021<br>•<br>Deposit balances up $470.3 million, or 16.0%, from 2021<br>Diluted<br>EPS<br>Efficiency<br>Ratio<br>1<br>Return on Avg. Tangible<br>Common Equity<br>1<br>Return on<br>Average Assets<br>•<br>Record pre<br>-<br>provision net revenue (PPNR) of $79.7 million, up 18.8% from 2021<br>•<br>Well<br>-<br>controlled noninterest expense growth of 17.7% vs. 2021, lower than asset growth of 25.0%<br>•<br>Efficiency ratio<br>1<br>of 41.5%, down from 42.0% in 2021<br>•<br>Net charge<br>-<br>offs (recoveries) to average loans of (0.01)%<br>•<br>Nonperforming assets to total assets of 0.01%, vs. 0.02% in 2021<br>•<br>Allowance to total loans of 1.34%, down 8 bps from 2021<br>•<br>Tangible book value per share<br>1<br>of $11.69, up 6.5% from 2021, despite market value depreciation of<br>the securities portfolio due to rising interest rates, which negatively impacted AOCI<br>•<br>Tangible common equity ratio<br>1<br>of 7.48%, down 143 bps from 2021<br>•<br>Repurchased 662,765 shares of common stock ($10.8 million) at a weighted average price of $16.26<br>Robust Balance<br>Sheet Growth<br>Highly Efficient<br>Operating<br>Performance<br>Superb<br>Asset Quality<br>Tangible Book<br>Value Growth<br>2022 Full Year Earnings Highlights<br>PPNR Return on<br>Average Assets<br>1<br>$1.72<br>1.38%<br>2.06%<br>15.69%<br>41.5%
---
1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>4<br>•<br>Gross loan balances up $189.4 million, or 22.2% annualized, from 3Q22<br>•<br>Investment securities balances up $6.6 million, or 4.8% annualized, from 3Q22<br>•<br>Deposit balances up $111.5 million, or 13.4% annualized, from 3Q22<br>•<br>Efficiency ratio<br>1<br>of 43.8%, up from 39.8% in 3Q22<br>•<br>Total revenue of $34.6 million, down 2.4% from 3Q22<br>•<br>Noninterest expense of $15.2 million, up 7.4% from 3Q22<br>•<br>Annualized net charge<br>-<br>offs (recoveries) to average loans of 0.00%<br>•<br>Nonperforming assets to total assets of 0.01% vs. 0.02% in 3Q22<br>•<br>Growth<br>-<br>driven provision of $1.5 million; allowance to total loans at 1.34%<br>•<br>CECL adoption on January 1, 2023; not expecting a material Day 1 impact<br>Robust Balance<br>Sheet Growth<br>Highly Efficient<br>Operating<br>Performance<br>Superb<br>Asset Quality<br>4Q22 Earnings Highlights<br>•<br>Net interest margin of 3.16%, down 37 bps from 3Q22<br>•<br>Yield on interest<br>-<br>earning assets of 4.67%, up 30 bps from 3Q22<br>•<br>Cost of deposits of 1.31%, up 58 bps from 3Q22<br>Net Interest<br>Margin Pressure<br>Diluted<br>EPS<br>Efficiency<br>Ratio<br>1<br>Return on Avg. Tangible<br>Common Equity<br>1<br>Return on<br>Average Assets<br>PPNR Return on<br>Average Assets<br>1<br>$0.45<br>1.28%<br>1.82%<br>15.86%<br>43.8%
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$26,634<br>$27,874<br>$30,237<br>$32,599<br>$31,745<br>$1,057<br>$563<br>$263<br>$96<br>$48<br>$1,462<br>$1,743<br>$2,030<br>$1,400<br>$1,100<br>$29,153<br>$30,180<br>$32,530<br>$34,095<br>$32,893<br>3.51%<br>3.60%<br>3.58%<br>3.53%<br>3.16%<br>3.25%<br>3.34%<br>3.34%<br>3.38%<br>3.05%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Core Net Interest Margin<br>1,2<br>Net Interest Margin<br>1<br>5<br>1<br>Amounts calculated on a tax<br>-<br>equivalent basis using statutory federal tax rate of 21%<br>2<br>Excludes loan fees and PPP loan balances, interest and fees; represents a Non<br>-<br>GAAP financial<br>measure, see Appendix for Non<br>-<br>GAAP reconciliation<br>Dollars in thousands<br>Net Interest Income<br>Impacted by Margin Pressure<br>Net Interest Income (ex. interest income<br>on loan fees and PPP loans)<br>Net Interest Margin Drivers<br>Interest Income and fees on PPP loans<br>Loan fees<br>12.8% YoY Net Interest Income Growth<br>Core NIM<br>2<br>down 33 bps<br>Net Interest Margin:<br>•<br>Began passing on higher interest rates to deposit<br>clients in 3Q22<br>•<br>Sophisticated, higher balance client base is more<br>sensitive to rising interest rates<br>•<br>Leveraged higher cost wholesale deposits and<br>borrowings to support robust loan growth<br>•<br>Fixed<br>-<br>rate nature of the loan portfolio (66%)<br>results in slower repricing compared to deposits<br>•<br>December 2022 NIM:<br>3.00%<br>1<br>Net Interest Income:<br>•<br>Robust loan growth in 4Q22 more than offset by<br>margin pressure<br>•<br>Focus remains on growing NII over time<br>Net Interest Income / NIM Drivers
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$2,008<br>$2,138<br>$2,162<br>$2,253<br>$2,332<br>$861<br>$822<br>$882<br>$992<br>$943<br>$136<br>$145<br>$277<br>$272<br>$527<br>$3,005<br>$3,105<br>$3,321<br>$3,517<br>$3,802<br>0.61%<br>0.59%<br>0.63%<br>0.93%<br>1.67%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>$2,756<br>$2,900<br>$3,108<br>$3,266<br>$3,482<br>4.49%<br>4.45%<br>4.45%<br>4.59%<br>4.87%<br>4.20%<br>4.15%<br>4.17%<br>4.42%<br>4.74%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>$2,869<br>$2,961<br>$3,045<br>$3,245<br>$3,275<br>0.45%<br>0.43%<br>0.46%<br>0.73%<br>1.31%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Loan Yield (ex. Loan Fees and PPP)<br>2<br>6<br>1<br>Amounts calculated on a tax<br>-<br>equivalent basis using statutory federal tax rate of 21%<br>2<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>Dollars in millions<br>Steady Deployment into Higher Yielding Securities<br>Loan Portfolio Repricing Lags Deposits<br>Deposit Costs Rise<br>Overall Funding Costs Rise<br>Funding Costs Rising<br>Faster<br>Than Loan<br>Yields<br>$413<br>$445<br>$491<br>$537<br>$608<br>2.57%<br>2.77%<br>2.85%<br>3.35%<br>3.91%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Average Interest<br>-<br>Bearing Deposits<br>Average Noninterest<br>-<br>Bearing Deposits<br>Average Borrowings<br>Cost of Liability Funding<br>Average Investments<br>Investment Yield<br>1<br>Average Loans<br>Loan Yield<br>1<br>Average Total Deposits<br>Cost of Total Deposits
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PPNR ROA<br>1<br>7<br>Strong Profitability and<br>Revenue Generation<br>Highly<br>Profitable Franchise<br>1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>Dollars in thousands<br>Strong Revenue Growth<br>$29,153<br>$30,180<br>$32,530<br>$34,095<br>$32,893<br>$1,288<br>$1,557<br>$1,650<br>$1,387<br>$1,738<br>$30,441<br>$31,737<br>$34,180<br>$35,482<br>$34,631<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>$18,134<br>$18,346<br>$20,439<br>$21,439<br>$19,512<br>$12,514<br>$12,262<br>$12,882<br>$14,513<br>$13,735<br>2.11%<br>2.12%<br>2.19%<br>2.15%<br>1.82%<br>1.46%<br>1.42%<br>1.38%<br>1.46%<br>1.28%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Net Income<br>PPNR<br>1<br>ROA<br>Noninterest Income<br>Net Interest Income
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$7,966<br>$8,694<br>$8,977<br>$9,449<br>$9,821<br>$939<br>$1,085<br>$1,042<br>$1,086<br>$1,177<br>$860<br>$875<br>$950<br>$1,022<br>$1,044<br>$2,694<br>$2,854<br>$2,783<br>$2,600<br>$3,161<br>$12,459<br>$13,508<br>$13,752<br>$14,157<br>$15,203<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>1.45%<br>1.56%<br>1.47%<br>1.42%<br>1.42%<br>40.8%<br>42.4%<br>40.2%<br>39.8%<br>43.8%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>NIE / Avg. Assets<br>2<br>Efficiency Ratio<br>2<br>8<br>Efficiency Ratio Consistently<br>in the Low 40% Range<br>Continued Investments to Support<br>Balance Sheet Growth<br>1<br>3Q22 median efficiency ratio for publicly<br>-<br>traded banks with total assets between $3 billion and $10 billion (Source: S&P Capital<br>IQ)<br>2<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>Dollars in thousands<br>Efficiency Ratio Among the Lowest<br>in the Industry<br>Industry median efficiency ratio of 54%<br>1<br>4Q22 increase in Other NIE due to<br>higher derivative collateral fees<br>Occupancy<br>Personnel<br>Other<br>Technology
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$2,819<br>$2,988<br>$3,226<br>$3,380<br>$3,569<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Dollars in millions<br>9<br>•<br>4Q22 loan growth of $189.4 million, or 22.2%<br>annualized<br>•<br>Overall loan demand has declined as fewer deals<br>are making financial sense due to the higher<br>interest rate environment<br>•<br>Strong brand presence and relationships in the<br>market allow us to get in front of high quality<br>clients and deals<br>•<br>Actively managing the balance sheet to better<br>align with funding outlook<br>•<br>Leveraging sales of participations on new<br>originations<br>•<br>Being more disciplined on loan pricing to<br>manage growth and the net interest margin<br>•<br>Being more selective on credit by focusing on<br>high quality transactions with seasoned clients<br>Continued Robust Loan Growth<br>Managing Loan Growth<br>Gross Loans
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10<br>Dollars in millions<br>•<br>Continued strong loan growth impacted<br>by reduced levels of payoffs and<br>paydowns, which were down 37% from<br>4Q21<br>•<br>Year<br>-<br>over<br>-<br>year decline in payoffs and<br>paydowns more than offset the decline in<br>loan originations<br>Down 13%<br>compared to 4Q21<br>Down 37%<br>compared to 4Q21<br>Decrease<br>Increase<br>Total<br>4Q22 Loan Growth Breakdown<br>$234<br>$273<br>$311<br>$373<br>$427<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Selling Participations on Larger Loans to Manage Growth<br>Loan Participation Portfolio Balance<br>Sold $54M of participations in 4Q22 (17% of originations and advances)<br>Loan Originations and Payoffs<br>Are Slowing
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CRE NOO<br>26.5%<br>Multifamily<br>36.6%<br>C&D<br>10.3%<br>1<br>-<br>4 Family<br>10.0%<br>CRE OO<br>4.2%<br>C&I<br>12.2%<br>Consumer<br>& Other<br>0.2%<br>11<br>Dollars in millions<br>Loan Portfolio Composition<br>Loan Mix<br>by Type<br>$3.6<br>Billion<br>4Q22 Loan Growth by Type (vs. 3Q22)<br>Well<br>-<br>Diversified Loan Portfolio<br>•<br>Strong 4Q22 loan growth across the portfolio<br>•<br>4Q22 loan growth led by multifamily, which continues to be a key growth portfolio<br>due to segment expertise and lower risk characteristics<br>$(1)<br>$1<br>$14<br>$23<br>$30<br>$46<br>$76<br>Multifamily<br>1<br>-<br>4 Family<br>Construction & Development<br>C&I<br>CRE Owner Occupied<br>CRE Nonowner Occupied<br>Consumer & Other
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30%<br>28%<br>30%<br>29%<br>26%<br>18%<br>20%<br>16%<br>15%<br>13%<br>29%<br>29%<br>30%<br>33%<br>30%<br>10%<br>9%<br>9%<br>9%<br>8%<br>13%<br>14%<br>15%<br>14%<br>23%<br>$2,946<br>$3,036<br>$3,202<br>$3,305<br>$3,417<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>12<br>•<br>4Q22 deposit growth of $111.5 million, or 13.4%<br>annualized<br>•<br>Loan<br>-<br>to<br>-<br>deposit ratio of 104.5%<br>1<br>Calculated as the change in ending deposit rate over the change in ending Fed Funds rate from February 2022 to December 2022<br>Dollars in millions<br>Interest<br>-<br>Bearing Transaction<br>Noninterest<br>-<br>Bearing Transaction<br>Time<br>Savings & Money Market<br>Brokered<br>Deposit Pressures Increase as<br>Interest Rates Continue to Rise<br>•<br>Continued to supplement core deposits with<br>wholesale funding to support robust loan<br>growth in 4Q22<br>•<br>Core deposit growth becoming more challenging<br>as the rising interest rate environment continues<br>•<br>Treasuries have become a primary competitor for<br>core deposits<br>•<br>Deposit growth may not always be linear given<br>larger deposit relationships and more<br>sophisticated onboarding<br>•<br>Increased focus on aligning loan growth with<br>core deposit growth over the course of 2023<br>Deposit Growth Factors<br>Core Interest Bearing Deposit Beta of 31%<br>Deposit Beta<br>(cycle-to-date)<br>1<br>Core Interest Bearing Deposits<br>31%<br>Brokered Deposits<br>62%<br>Total Interest Bearing Deposits<br>46%<br>Total Deposits<br>34%
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$22,641<br>$18,611<br>$26,991<br>$30,767<br>$28,049<br>5.45%<br>4.32%<br>5.70%<br>6.26%<br>5.52%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>$31<br>$3<br>$6<br>$(280)<br>$(5)<br>0.00%<br>0.00%<br>0.00%<br>(0.03)%<br>0.00%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>$722<br>$706<br>$688<br>$663<br>$639<br>0.02%<br>0.02%<br>0.02%<br>0.02%<br>0.01%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>13<br>Asset Quality<br>Classified Assets<br>Nonperforming Assets<br>1<br>Allowance for Loan Losses<br>Net Charge<br>-<br>Offs<br>Superb Asset Quality Continues<br>Continue to closely monitor credits<br>Consistently low NPA levels<br>CECL adoption on January 1, 2023;<br>not expecting a material Day 1 impact<br>Cumulative NCOs of $381K since 2017<br>¹<br>Nonaccrual loans plus loans 90 days past due and still accruing and foreclosed assets<br>Dollars in thousands<br>Classified Assets<br>% of Bank Tier 1 Capital + ALLL<br>NPAs<br>% of Assets<br>Net Charge<br>-<br>offs (recoveries)<br>% of Average Loans (annualized)<br>$40,020<br>$41,692<br>$44,711<br>$46,491<br>$47,996<br>1.42%<br>1.40%<br>1.39%<br>1.38%<br>1.34%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>ALLL<br>% of Gross Loans
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C&I<br>29.4%<br>C&D<br>2.2%<br>Multifamily<br>10.1%<br>CRE NOO<br>Senior Housing<br>32.9%<br>CRE NOO<br>Retail<br>18.5%<br>CRE NOO<br>Office<br>4.8%<br>1<br>-<br>4 Family<br>2.1%<br>C&I<br>70.1%<br>CRE NOO<br>Hotels<br>12.0%<br>CRE NOO<br>Retail<br>10.3%<br>CRE OO<br>5.8%<br>C&D<br>0.4%<br>1<br>-<br>4<br>Family<br>1.4%<br>$<br>28<br>Million<br>14<br>Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”)<br>Watch List<br>By Loan<br>Type<br>Classified<br>List By<br>Loan Type<br>$32<br>Million<br>Dollars in thousands<br>Watch List Characteristics<br>Loan Balances Outstanding<br>$32,252<br>% of Total Loans, Gross<br>0.9%<br>Number of Loans<br>22<br>Average Loan Size<br>$1,466<br>Classified List Characteristics<br>Loan Balances Outstanding<br>$28,049<br>% of Total Loans, Gross<br>0.8%<br>Number of Loans<br>23<br>Average Loan Size<br>$1,220<br>% of Bank Tier 1 Capital + ALLL<br>5.52%<br>Watch and Classified Assets
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16.4%<br>14.1%<br>13.5%<br>14.0%<br>13.7%<br>26.2%<br>25.9%<br>25.0%<br>20.1%<br>18.3%<br>$1,480<br>$1,444<br>$1,498<br>$1,409<br>$1,393<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>10.82%<br>10.78%<br>10.33%<br>9.98%<br>9.55%<br>9.36%<br>9.13%<br>8.50%<br>8.47%<br>8.40%<br>15.55%<br>15.02%<br>13.98%<br>13.78%<br>13.15%<br>8.91%<br>8.60%<br>7.87%<br>7.57%<br>7.48%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>15<br>Dollars in millions<br>On & Off<br>-<br>Balance Sheet Liquidity<br>as % of Total Assets<br>Capital and Liquidity Positions<br>Remain Strong<br>•<br>No shares repurchased during 4Q22<br>•<br>On October 15, 2022, Bridgewater redeemed the remaining $13.75M of $25.0M of Fixed<br>-<br>to<br>-<br>Floating Rate<br>Subordinated Notes issued in 2017 (funded by draw on outstanding revolving line of credit)<br>Focus on utilizing capital to support loan growth<br>Investment portfolio completely unencumbered<br>at December 31, 2022<br>Off<br>-<br>Balance Sheet Liquidity as a % of Assets<br>On<br>-<br>Balance Sheet Liquidity as a % of Assets<br>Total Risk<br>-<br>Based Capital Ratio<br>Common Equity Tier 1 Capital Ratio<br>Tier 1 Leverage Ratio<br>4Q22 Capital Actions<br>Consolidated Capital Ratios<br>Tangible Common Equity Ratio
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16<br>•<br>Balance sheet growth to slow from 2022 levels<br>•<br>High single<br>-<br>digit to low double<br>-<br>digit loan growth in 2023<br>–<br>focus on aligning loan growth<br>more closely with core deposit growth over the course of the year<br>•<br>Target loan<br>-<br>to<br>-<br>deposit ratio between 95% and 105%<br>Balance Sheet<br>Growth<br>Near<br>-<br>Term Expectations<br>•<br>Additional NIM compression in 1Q23 similar to 4Q22, with stabilization thereafter and<br>potential expansion in the second half of 2023<br>•<br>Loan growth to drive net interest income growth as margin stabilizes<br>•<br>Assumes Fed Funds rate holds steady near 5% throughout 2023<br>Net Interest<br>Margin<br>•<br>Efficiency ratio in the mid<br>-<br>40% range, impacted by lower net interest margin<br>•<br>Slower noninterest expense growth in<br>-<br>line with slower asset growth<br>Efficiency<br>Ratio<br>•<br>Build tangible common equity and CET1 ratios throughout 2023, aided by retained<br>earnings and slower pace of loan growth<br>•<br>Share repurchases unlikely in the near<br>-<br>term<br>Capital<br>Levels
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2022 Strategic Priorities<br>–<br>Building on Our Momentum<br>Continue Balance Sheet<br>Growth Trajectory<br>1<br>2<br>3<br>4<br>17<br>Invest in Business Scalability<br>to Support Growth<br>Maintain Highly Efficient<br>Operating Model<br>Recruit, Develop and Retain<br>Top Industry Talent<br>•<br>Generate mid<br>-<br>to high<br>-<br>teens loan growth in 2022<br>•<br>Twin Cities organic growth opportunities expected to support<br>growth to $5 billion in assets in the Twin Cities over the next few<br>years<br>•<br>Continue evaluating potential M&A opportunities<br>•<br>Make proactive investments<br>before<br>we need them<br>•<br>Includes areas such as technology and automation, risk<br>management and project management<br>•<br>Leverage strong spread<br>-<br>based revenue generation to drive<br>continued revenue growth<br>•<br>Evaluate potential opportunities to enhance revenue diversification<br>•<br>Manage expense growth in<br>-<br>line with asset growth<br>•<br>Attract top talent in key growth areas such as lending, credit,<br>treasury management, risk<br>and technology<br>•<br>Develop existing talent through management development programs<br>to enhance skills and promote growth within the company<br>•<br>Meet the evolving needs of our team members<br>–<br>modern amenities in<br>our new corporate center, collaboration, flexibility, ESG focus<br>2022<br>Progress<br>Full<br>-<br>year loan growth of 26.6%<br>2022<br>Progress<br>Launched new commercial loan<br>origination system in March<br>2022<br>2022<br>Progress<br>Efficiency ratio<br>1<br>of 41.5%<br>1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>2022<br>Progress<br>Increased FTE employees by 12%
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2023 Strategic Priorities<br>–<br>Positioning for Long<br>-<br>Term Success<br>Manage High Quality<br>Balance Sheet Growth<br>1<br>2<br>3<br>4<br>18<br>Maintain High Efficiency<br>While Investing in the<br>Business<br>Proactively Assess and<br>Monitor Asset Quality Risks<br>Implement<br>Longer Term<br>Strategic Readiness<br>Initiatives<br>•<br>Slower pace of balance sheet growth in the current environment<br>•<br>Manage the balance sheet to optimize net interest income<br>•<br>Increase emphasis on generating core deposit growth to support<br>loan growth over the course of 2023<br>•<br>Identify opportunities to better manage the discretionary spend to<br>align expense growth with a slower pace of asset growth<br>•<br>Continue to invest in people and technology<br>•<br>Make proactive investments to scale the business and position for<br>longer<br>-<br>term growth<br>•<br>Ongoing monitoring of the loan portfolio for signs of credit<br>weakness given the economic uncertainty heading into 2023<br>•<br>Expand covenant testing and assess repricing risk on maturing loans<br>•<br>Complete CECL adoption in early 2023<br>•<br>Continued build<br>-<br>out of the enterprise risk management function,<br>including enhanced stress testing capabilities<br>•<br>Expand C&I function to support further diversification of the loan<br>portfolio and new deposit growth channels over time<br>•<br>Continue evaluating potential M&A opportunities and be ready to act<br>if the right opportunity becomes available<br>1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation
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APPENDIX
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20<br>Estimated Change in NII From<br>Immediate Interest Rate Shocks<br>+200 bps<br>+100 bps<br>-<br>100 bps<br>(3.6)%<br>(1.7)%<br>+3.1%<br>•<br>Actively managing the balance sheet to drive sustained<br>profitability over time, regardless of the rate<br>environment<br>Loan Portfolio Considerations<br>•<br>Loan portfolio most sensitive to changes in the<br>3<br>-<br>to 5<br>-<br>year portion of the yield curve<br>•<br>Strong loan originations drive relatively quicker<br>repricing of the portfolio<br>•<br>Leveraging pre<br>-<br>payment penalties on new loan<br>originations to help maintain benefit of higher rates<br>over time<br>Deposit Considerations<br>•<br>Sophisticated, higher balance deposit base is more<br>sensitive to rising interest rates<br>•<br>Mix of deposit growth impacting deposit costs with<br>core interest bearing deposit beta of 31% vs.<br>brokered deposit beta of 62%<br>1<br>•<br>Increased focus on funding loan growth with core<br>deposits over the course of 2023<br>(0.7)%<br>(0.4)%<br>+0.5%<br>2Q22<br>3Q22<br>An Interest Rate Sensitivity Position<br>Focused on Optimizing Profitability<br>-<br>200 bps<br>+2.4%<br>(2.0)%<br>(2.3)%<br>(1.2)%<br>+1.0%<br>4Q22<br>+1.3%<br>1<br>Calculated as the change in ending deposit rate over the change in ending Fed Funds rate from February 2022 to December 2022
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13%<br>10%<br>11%<br>20%<br>25%<br>21%<br>$78<br>$61<br>$63<br>$121<br>$149<br>$125<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+ Years<br>100%<br>100%<br>100%<br>100%<br>100%<br>$526<br>$526<br>$526<br>$526<br>$526<br>At or<br>Above<br>Floor<br>(12/31/22)<br>Up<br>25 bps<br>Up<br>50 bps<br>Up<br>75 bps<br>Up<br>100+ bps<br>Fixed<br>,<br>65.7%<br>Variable<br>,<br>17.5%<br>Adjustable<br>,<br>16.8%<br>21<br>Fixed<br>-<br>Rate Portfolio ($2.3B)<br>Loan Portfolio Repricing<br>Robust total loan growth results in<br>relatively quick turn of the loan<br>portfolio and accelerated repricing:<br>•<br>27% year<br>-<br>over<br>-<br>year total loan<br>growth<br>•<br>$1.4B of total loan originations<br>and advances over prior 12<br>months<br>14%<br>13%<br>12%<br>12%<br>14%<br>35%<br>$334<br>$308<br>$274<br>$293<br>$322<br>$816<br>Less 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>Variable<br>-<br>Rate Portfolio ($625M)<br>•<br>84% of variable<br>-<br>rate portfolio<br>have floors, all of which are at or<br>above their floors<br>•<br>92% of variable<br>-<br>rate loans are<br>currently tied to SOFR or Prime<br>Variable<br>-<br>Rate Loan Floors<br>Cumulative Percent of balances<br>at or above floor as rates rise<br>Adjustable<br>-<br>Rate Portfolio ($597M)<br>•<br>Over 99% of the adjustable<br>-<br>rate<br>loans are at or above their floors<br>•<br>Implies immediate repricing as<br>rates rise, depending on the<br>repricing schedule<br>Adjustable<br>-<br>Rate Repricing Schedule<br>Loan Portfolio Mix<br>Dollars in millions<br>Fixed<br>-<br>Rate Portfolio Years to Maturity
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$310<br>$310<br>$305<br>$313<br>$325<br>8.91%<br>8.60%<br>7.87%<br>7.57%<br>7.48%<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>4Q22<br>Tangible Common Equity to Tangible Assets<br>1<br>$4.52<br>$5.40<br>$7.22<br>$8.33<br>$9.31<br>$10.98<br>$11.69<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>2022<br>22<br>Strong Capital and Liquidity<br>Tangible Book Value Per Share<br>1<br>Growth<br>Tangible Common Equity<br>1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>Dollars in millions, except per share data<br>Track Record of Tangible Book<br>Value Growth<br>Tangible Common Equity<br>1<br>•<br>2022 tangible book value per share growth despite the<br>market value depreciation of the securities portfolio due to<br>rising interest rates, which negatively impacted AOCI<br>•<br>TCE ratio impacted by robust loan growth, share<br>repurchases and declines in market value of the securities<br>portfolio, partially offset by in<br>-<br>the<br>-<br>money derivatives<br>portfolio
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23<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial<br>Measures<br>–<br>Annual<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible<br>Assets<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>2022<br>Common Equity<br>115,366<br>$<br><br>137,162<br>$<br><br>220,998<br>$<br><br>244,794<br>$<br><br>265,405<br>$<br><br>379,272<br>$<br><br>394,064<br>$<br><br>Less: Preferred Stock<br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>(66,514)<br><br><br>(66,514)<br><br><br>Less: Intangible Assets<br>(4,060)<br><br><br>(3,869)<br><br><br>(3,678)<br><br><br>(3,487)<br><br><br>(3,296)<br><br><br>(3,105)<br><br><br>(2,914)<br><br><br>Tangible Common Equity<br>111,306<br>$<br><br>133,293<br>$<br><br>217,320<br>$<br><br>241,307<br>$<br><br>262,109<br>$<br><br>309,653<br>$<br><br>324,636<br>$<br><br>Total Assets<br>1,260,394<br>$<br><br>1,616,612<br>$<br><br>1,973,741<br>$<br><br>2,268,830<br>$<br><br>2,927,345<br>$<br><br>3,477,659<br>$<br><br>4,345,662<br>$<br><br>Less: Intangible Assets<br>(4,060)<br><br><br>(3,869)<br><br><br>(3,678)<br><br><br>(3,487)<br><br><br>(3,296)<br><br><br>(3,105)<br><br><br>(2,914)<br><br><br>Tangible Assets<br>1,256,334<br>$<br><br>1,612,743<br>$<br><br>1,970,063<br>$<br><br>2,265,343<br>$<br><br>2,924,049<br>$<br><br>3,474,554<br>$<br><br>4,342,748<br>$<br><br>Tangible Common Equity/Tangible Assets<br>8.86%<br>8.26%<br>11.03%<br>10.65%<br>8.96%<br>8.91%<br>7.48%<br>Tangible Book Value Per Share<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>2022<br>Book Value Per Common Share<br>4.69<br>$<br><br>5.56<br>$<br><br>7.34<br>$<br><br>8.45<br>$<br><br>9.43<br>$<br><br>11.09<br>$<br><br>11.80<br>$<br><br>Less: Effects of Intangible Assets<br>(0.17)<br><br><br>(0.16)<br><br><br>(0.12)<br><br><br>(0.12)<br><br><br>(0.12)<br><br><br>(0.11)<br><br><br>(0.11)<br><br><br>Tangible Book Value Per Common Share<br>4.52<br>$<br><br>5.40<br>$<br><br>7.22<br>$<br><br>8.33<br>$<br><br>9.31<br>$<br><br>10.98<br>$<br><br>11.69<br>$<br><br>Total Common Shares<br>24,589,861<br><br><br>24,679,861<br><br><br>30,097,274<br><br><br>28,973,572<br><br><br>28,143,493<br><br><br>28,206,566<br><br><br>27,751,950<br><br><br>As of and for the year ended December 31,
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24<br>* Efficiency Ratio is adjusted to exclude the historic tax credit amortization<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial<br>Measures<br>–<br>Profitability, TCE and TBV<br>Efficiency Ratio<br>December 31,<br>2021<br>December 31,<br>2021<br>March 31,<br>2022<br>March 31,<br>2022<br>June 30,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>September 30,<br>2022<br>December 31,<br>2022<br>December 31,<br>2022*<br>Noninterest Expense<br>12,459<br>$<br><br>12,459<br>$<br><br>13,508<br>$<br><br>13,508<br>$<br><br>13,752<br>$<br><br>13,752<br>$<br><br>14,157<br>$<br><br>14,157<br>$<br><br>15,203<br>$<br><br>15,203<br>$<br><br>Less: Amortization of Tax Credit Investments<br>-<br><br><br>(152)<br><br><br>-<br><br><br>(117)<br><br><br>-<br><br><br>(63)<br><br><br>-<br><br><br>(114)<br><br><br>-<br><br><br>(114)<br><br><br>Less: Amortization Intangible Assets<br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(47)<br><br><br>(47)<br><br><br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>Adjusted Noninterest Expense<br>12,411<br>$<br><br>12,259<br>$<br><br>13,460<br>$<br><br>13,343<br>$<br><br>13,705<br>$<br><br>13,642<br>$<br><br>14,109<br>$<br><br>13,995<br>$<br><br>15,155<br>$<br><br>15,041<br>$<br><br>Net Interest Income<br>29,153<br>$<br><br>29,153<br>$<br><br>30,180<br>$<br><br>30,180<br>$<br><br>32,530<br>$<br><br>32,530<br>$<br><br>34,095<br>$<br><br>34,095<br>$<br><br>32,893<br>$<br><br>32,893<br>$<br><br>Noninterest Income<br>1,288<br><br><br>1,288<br><br><br>1,557<br><br><br>1,557<br><br><br>1,650<br><br><br>1,650<br><br><br>1,387<br><br><br>1,387<br><br><br>1,738<br><br><br>1,738<br><br><br>Less: Gain on Sales of Securities<br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>(52)<br><br><br>(52)<br><br><br>-<br><br><br>-<br><br><br>(30)<br><br><br>(30)<br><br><br>Adjusted Operating Revenue<br>30,441<br>$<br><br>30,441<br>$<br><br>31,737<br>$<br><br>31,737<br>$<br><br>34,128<br>$<br><br>34,128<br>$<br><br>35,482<br>$<br><br>35,482<br>$<br><br>34,601<br>$<br><br>34,601<br>$<br><br>Efficiency Ratio<br>40.8%<br>40.3%<br>42.4%<br>42.0%<br>40.2%<br>40.0%<br>39.8%<br>39.4%<br>43.8%<br>43.5%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible Assets<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>December 31,<br>2022<br>Total Shareholders' Equity<br>379,272<br>$<br><br>379,441<br>$<br><br>374,883<br>$<br><br>382,007<br>$<br><br>394,064<br>$<br><br>Net Income Available to Common Shareholders<br>Less: Preferred Stock<br>(66,514)<br><br><br>(66,514)<br><br><br>(66,514)<br><br><br>(66,514)<br><br><br>(66,514)<br><br><br>Total Common Shareholders' Equity<br>312,758<br><br><br>312,927<br><br><br>308,369<br><br><br>315,493<br><br><br>327,550<br><br><br>Average Total Shareholders' Equity<br>Less: Intangible Assets<br>(3,105)<br><br><br>(3,057)<br><br><br>(3,009)<br><br><br>(2,962)<br><br><br>(2,914)<br><br><br>Less: Average Preferred Stock<br>Tangible Common Equity<br>309,653<br>$<br><br>309,870<br>$<br><br>305,360<br>$<br><br>312,531<br>$<br><br>324,636<br>$<br><br>Average Total Common Shareholders' Equity<br>Less: Effects of Average Intangible Assets<br>Total Assets<br>3,477,659<br>$<br><br>3,607,920<br>$<br><br>3,883,264<br>$<br><br>4,128,987<br>$<br><br>4,345,662<br>$<br><br>Average Tangible Common Equity<br>Less: Intangible Assets<br>(3,105)<br><br><br>(3,057)<br><br><br>(3,009)<br><br><br>(2,962)<br><br><br>(2,914)<br><br><br>Tangible Assets<br>3,474,554<br>$<br><br>3,604,863<br>$<br><br>3,880,255<br>$<br><br>4,126,025<br>$<br><br>4,342,748<br>$<br><br>Annualized Return on Average Tangible Common Equity<br>Tangible Common Equity/Tangible Assets<br>8.91%<br>8.60%<br>7.87%<br>7.57%<br>7.48%<br>Tangible Book Value Per Share<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>December 31,<br>2022<br>Book Value Per Common Share<br>11.09<br>$<br><br>11.12<br>$<br><br>11.14<br>$<br><br>11.44<br>$<br><br>11.80<br>$<br><br>Less: Effects of Intangible Assets<br>(0.11)<br><br><br>(0.11)<br><br><br>(0.11)<br><br><br>(0.11)<br><br><br>(0.11)<br><br><br>Tangible Book Value Per Common Share<br>10.98<br>$<br><br>11.01<br>$<br><br>11.03<br>$<br><br>11.33<br>$<br><br>11.69<br>$<br><br>Total Common Shares<br>28,206,566<br><br><br>28,150,389<br><br><br>27,677,372<br><br><br>27,587,978<br><br><br>27,751,950<br><br><br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>December 31, 2022<br>ROATCE<br>12,721<br>$<br><br>387,589<br>$<br><br>321,075<br>$<br><br>(66,514)<br><br><br>(2,941)<br><br><br>15.86%<br>318,134<br>$
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25<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial<br>Measures<br>–<br>PPNR<br>Pre-Provision Net Revenue<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>December 31,<br>2022<br>Noninterest Income<br>1,288<br>$<br><br>1,557<br>$<br><br>1,650<br>$<br><br>1,387<br>$<br><br>1,738<br>$<br><br>Less: Gain on Sales on Securities<br>-<br><br><br>-<br><br><br>(52)<br><br><br>-<br><br><br>(30)<br><br><br>Total Operating Noninterest Income<br>1,288<br><br><br>1,557<br><br><br>1,598<br><br><br>1,387<br><br><br>1,708<br><br><br>Plus: Net Interest Income<br>29,153<br><br><br>30,180<br><br><br>32,530<br><br><br>34,095<br><br><br>32,893<br><br><br> Net Operating Revenue<br>30,441<br><br><br>31,737<br><br><br>34,128<br><br><br>35,482<br><br><br>34,601<br><br><br>Noninterest Expense<br>12,459<br>$<br><br>13,508<br>$<br><br>13,752<br>$<br><br>14,157<br>$<br><br>15,203<br>$<br><br>Less: Amortization of Tax Credit Investments<br>(152)<br><br><br>(117)<br><br><br>(63)<br><br><br>(114)<br><br><br>(114)<br><br><br> Total Operating Noninterest Expense<br>12,307<br><br><br>13,391<br><br><br>13,689<br><br><br>14,043<br><br><br>15,089<br><br><br>Pre-Provision Net Revenue<br>18,134<br>$<br><br>18,346<br>$<br><br>20,439<br>$<br><br>21,439<br>$<br><br>19,512<br>$<br><br> Plus:<br>Non-Operating Revenue Adjustments<br>-<br><br><br>-<br><br><br>52<br><br><br>-<br><br><br>30<br><br><br> Less:<br>Provision for Loan Losses<br>1,150<br><br><br>1,675<br><br><br>3,025<br><br><br>1,500<br><br><br>1,500<br><br><br>Non-Operating Expense Adjustments<br>152<br><br><br>117<br><br><br>63<br><br><br>114<br><br><br>114<br><br><br>Provision for Income Taxes<br>4,318<br><br><br>4,292<br><br><br>4,521<br><br><br>5,312<br><br><br>4,193<br><br><br>Net Income<br>12,514<br>$<br><br>12,262<br>$<br><br>12,882<br>$<br><br>14,513<br>$<br><br>13,735<br>$<br><br>Average Assets<br>3,403,270<br>$<br><br>3,513,798<br>$<br><br>3,743,575<br>$<br><br>3,948,201<br>$<br><br>4,251,345<br>$<br><br>Pre-Provision Net Revenue Return on Average Assets<br>2.11%<br>2.12%<br>2.19%<br>2.15%<br>1.82%<br>As of and for the quarter ended,
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26<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial<br>Measures<br>–<br>Core NIM<br>Core Net Interest Margin<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>December 31,<br>2022<br>Net Interest Income (Tax-Equivalent Basis)<br>29,388<br>$<br><br>30,438<br>$<br><br>32,806<br>$<br><br>34,418<br>$<br><br>33,260<br>$<br><br>Less: Loan Fees<br>(1,462)<br><br><br>(1,743)<br><br><br>(2,030)<br><br><br>(1,400)<br><br><br>(1,100)<br><br><br>Less: PPP Interest and Fees<br>(1,057)<br><br><br>(563)<br><br><br>(263)<br><br><br>(96)<br><br><br>(48)<br><br><br> Core Net Interest Margin<br>26,869<br>$<br><br>28,132<br>$<br><br>30,513<br>$<br><br>32,922<br>$<br><br>32,112<br>$<br><br>Average Interest Earning Assets<br>3,320,603<br>$<br><br>3,430,774<br>$<br><br>3,671,748<br>$<br><br>3,871,896<br>$<br><br>4,177,644<br>$<br><br>Less: Average PPP Loans<br>(39,900)<br><br><br>(18,140)<br><br><br>(8,335)<br><br><br>(2,424)<br><br><br>(1,109)<br><br><br> Core Average Interest Earning Assets<br>3,280,703<br>$<br><br>3,412,634<br>$<br><br>3,663,413<br>$<br><br>3,869,472<br>$<br><br>4,176,535<br>$<br><br>Core Net Interest Margin<br>3.25%<br>3.34%<br>3.34%<br>3.38%<br>3.05%<br>Loan Interest Income (Tax-Equivalent Basis)<br>31,211<br>$<br><br>31,838<br>$<br><br>34,468<br>$<br><br>37,820<br>$<br><br>42,702<br>$<br><br>Less: Loan Fees<br>(1,462)<br><br><br>(1,743)<br><br><br>(2,030)<br><br><br>(1,400)<br><br><br>(1,100)<br><br><br>Less: PPP Interest and Fees<br>(1,057)<br><br><br>(563)<br><br><br>(263)<br><br><br>(96)<br><br><br>(48)<br><br><br> Core Loan Interest Income<br>28,692<br>$<br><br>29,532<br>$<br><br>32,175<br>$<br><br>36,324<br>$<br><br>41,554<br>$<br><br>Average Loans<br>2,755,622<br>$<br><br>2,899,985<br>$<br><br>3,107,679<br>$<br><br>3,265,814<br>$<br><br>3,482,150<br>$<br><br>Less: Average PPP Loans<br>(39,900)<br><br><br>(18,140)<br><br><br>(8,335)<br><br><br>(2,424)<br><br><br>(1,109)<br><br><br> Core Average Loans<br>2,715,722<br>$<br><br>2,881,845<br>$<br><br>3,099,344<br>$<br><br>3,263,390<br>$<br><br>3,481,041<br>$<br><br>Core Loan Yield<br>4.20%<br>4.15%<br>4.17%<br>4.42%<br>4.74%<br>As of and for the quarter ended,
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