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

April 30, 2020

Date of Report

(Date of earliest event reported)

BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

| Minnesota<br>				<br>\(State or other jurisdiction of<br>				<br>incorporation\) | 001-38412<br>				<br>\(Commission File Number\) | 26-0113412<br>				<br>\(I.R.S. Employer<br>				<br>Identification No.\) |

| --- | --- | --- | | | 3800 American Boulevard West, Suite 100 Bloomington, Minnesota (Address of principal executive offices) | 55431 (Zip Code) |

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

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

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

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

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

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

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

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

| Title of each class: | Trading Symbol | Name of each exchange on which registered: |

| --- | --- | --- | | Common Stock, $0.01 Par Value | BWB | The Nasdaq Stock Market LLC |

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

Emerging growth company ☒

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

Item 2.02 Results of Operations and Financial Condition.

On April 30, 2020, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three months ended March 31, 2020. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

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

Item 7.01 Regulation FD Disclosure.

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

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1Press release of Bridgewater Bancshares, Inc., dated April 30, 2020, regarding first quarter 2020 financial results

Exhibit 99.2Investor Presentation dated April 30, 2020

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: April 30, 2020
	By: /s/ Jerry Baack
	Name: Jerry Baack
	Title: Chairman, Chief Executive Officer and President

		bwb\_Ex99\_1

Exhibit 99.1

Bridgewater Bancshares, Inc. Announces First Quarter 2020 Earnings

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $7.4 million for the first quarter of 2020, a 6.1% increase over net income of $7.0 million for the first quarter of 2019. Net income per diluted common share for the first quarter of 2020 was $0.25, a 10.4% increase, compared to $0.23 per diluted common share for the same period in 2019.

“In this unprecedented time, it has become very clear that our people are passionate, flexible and committed to assisting our clients and communities in ways beyond measure. I have witnessed initiative, creativity, humor and resilience among our incredibly talented team,” commented Chairman, Chief Executive Officer, and President, Jerry Baack. “The COVID-19 pandemic has evolved rapidly and created a significant amount of disruption for our clients and their businesses. Our strong first quarter earnings and increased loan provisioning position us to be able to assist clients so that our communities will be able to better weather the severe business interruptions caused by the pandemic. The health and safety of our employees, their families and our clients and their businesses are our top priorities. We remain committed to safe and sound banking practices. As the situation continues to evolve, additional steps will be taken to further these efforts in the weeks ahead, subject to regulatory and governmental guidance.”

First Quarter 2020 Financial Results

		Diluted		Nonperforming	Adjusted	Tangible common equity
ROA	ROE	Earnings per share		assets to total assets	efficiency ratio (1)	to tangible assets (2)
1.29%	11.94%	$	0.25	0.03%	44.1%	10.13%

| \(1\) | Ratio excludes the amortization of tax credit investments and represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details. |

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

Linked-Quarter Highlights

| · | Annualized pre-provision net revenue return on average assets \(PPNR ROA\), a non-GAAP financial measure, was 2.11% for the first quarter of 2020, compared to 2.09% for the fourth quarter of 2019. |

| --- | --- |

| · | Gross loans increased $90.8 million, or 19.1% on an annualized basis, to $2.00 billion at March 31, 2020, compared to December 31, 2019. |

| --- | --- |

| · | Deposits increased $76.8 million, or 16.9% on an annualized basis, to $1.90 billion at March 31, 2020, compared to December 31, 2019. |

| --- | --- |

| · | The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of the amortization of tax credit investments from noninterest expense, was 44.1% for the first quarter of 2020, compared to 44.3% for the fourth quarter of 2019. |

| --- | --- |

| · | Net loan charge-offs as a percent of average loans was 0.01% for the first quarter of 2020, compared to 0.04% for the fourth quarter of 2019. |

| --- | --- |

| · | The ratio of nonperforming assets to total assets was 0.03% at March 31, 2020, compared to 0.02% at December 31, 2019. |

| --- | --- |

| · | A loan loss provision of $2.1 million was recorded for the first quarter of 2020, primarily due to increased allocations for economic factors associated with the COVID-19 pandemic. The allowance for loan losses to total loans was 1.23% at March 31, 2020, compared to 1.18% at December 31, 2019. |

| --- | --- |

| · | The Company was able to rapidly deploy its business continuity plans in response to the COVID-19 pandemic. In addition, assistance programs have been developed to support clients experiencing business and personal disruptions due to the COVID-19 pandemic, including loan modifications, as needed, and participation in the Small Business Administration’s Paycheck Protection Program. |

| --- | --- |

Year-Over-Year Highlights

| · | Net income was $7.4  million for the first quarter of 2020, compared to $7.0  million for the first quarter of 2019, an increase of $425,000, or 6.1%. |

| --- | --- |

| · | Diluted earnings per common share for the first quarter of 2020 was $0.25, compared to $0.23 for the first quarter of 2019, an increase of  10.4%. |

| --- | --- |

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·	Tangible book value per share, a non-GAAP financial measure, increased 12.1%, or $0.91, to $8.49 at March 31, 2020, compared to $7.58 at March 31, 2019.

| · | Gross loans increased $279.2 million, or 16.2%, at March 31, 2020, compared to March 31, 2019. |

| --- | --- |

| · | Deposits increased $256.5 million, or 15.6%, at March 31, 2020, compared to March 31, 2019. |

| --- | --- |

| · | The ratio of nonperforming assets to total assets was 0.03% at March 31,  2020, compared to 0.08% at March 31, 2019. |

| --- | --- |

Recent Developments

The recent outbreak of the novel coronavirus, or COVID-19, which was declared a pandemic by the World Health Organization on March 11, 2020, has negatively impacted the global economy in extreme ways and created uncertainty in world financial markets. In response to this pandemic, the Company rapidly deployed its business continuity plan and continues to take steps to protect the health and safety of its employees and clients. Given the fluidity of the situation, management cannot estimate the duration and full impact of the COVID-19 pandemic on the economy, financial markets and the Company’s financial condition and results of operations. At this point, management does not expect that the Company’s financial results in future quarters will track with the Company’s historical performance.

Operations are being conducted in compliance with current federal, state and local government guidelines regarding social distancing, sanitation, and personal hygiene. Bank branches have modified hours and have been limited to two locations with drive-up services for in-person banking transactions, and lobby access to certain branches by appointment in the case of critical needs. Additional details about the Company’s COVID-19 pandemic assistance programs, including relevant disclosures and up-to-date information, have been added and are maintained at bwbmn.com.

Prior to the declaration of the COVID-19 pandemic, the Company had initiated efforts to update technology and desktop hardware in anticipation of the Company’s move to a new corporate headquarters in the second half of 2020. The Company was able to leverage these efforts and expedite the process of providing 100% of the Company’s non-branch personnel with the ability to work remotely. To ensure the safety of our staff and clients, branch personnel is working on a rotating schedule limiting exposure through social distancing.

The Company’s investments in technology, digital platforms and electronic banking has allowed clients and employees to transact with minimal interruption during these times of uncertainty. Additional staff have been assigned to assist clients over the telephone and work with clients on new enrollments in online banking and other treasury management services. Internally, these investments in technology have enabled increased communication capabilities for departments by use of video conferencing, chat, and other collaborative features.

The Company has increased oversight and analysis of all credits, especially in vulnerable industries such as hospitality and restaurants, to proactively monitor evolving credit risk. With the change in economic conditions, and particularly, Minnesota’s Stay at Home order from the state governor, the Company’s portfolio is expected to be negatively impacted. Management expects delinquencies and charge-offs to rise in future periods due to the continued impact of the COVID-19 pandemic. The Company will continue to monitor credits closely, while working with clients to provide relief when appropriate.

The Company has developed programs for assisting existing clients through this uncertain time by providing loan payment deferrals and interest-only modifications. As of April 24, 2020 the Company had approved loan modifications for 137 loans totaling $266.8 million. Of that total, modifications to interest-only payments totaled $151.3 million and loans with payment deferrals of principal totaled $115.5 million. In accordance with recent regulatory and accounting guidance, loans modified in response to the COVID-19 pandemic will not be considered troubled debt restructurings.

In a further effort to assist both existing and new clients, the Company is participating in government loan programs through the Small Business Administration, or SBA, primarily the Paycheck Protection Program. This program stemmed from the Coronavirus, Aid, Relief and Economic Security, or CARES, Act that was signed into law on March 27, 2020. As of April 24, 2020, the Company had funded nearly 600 loans, totaling approximately $150.0 million, to borrowers, including both existing and new clients. The Company has continued to accept and process applications under the newly expanded program.

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Key Financial Measures

|  | As of and for the Three Months Ended |  |  |  |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, | | | December 31, | | | March 31, | | | | | 2020 | | | 2019 | | | 2019 | | | | Per Common Share Data | | | | | | | | | | | Basic Earnings Per Share | $ | 0.26 | | $ | 0.30 | | $ | 0.23 | | | Diluted Earnings Per Share | | 0.25 | | | 0.29 | | | 0.23 | | | Book Value Per Share | | 8.61 | | | 8.45 | | | 7.70 | | | Tangible Book Value Per Share (1) | | 8.49 | | | 8.33 | | | 7.58 | | | Basic Weighted Average Shares Outstanding | | 28,791,494 | | | 28,833,576 | | | 30,097,638 | | | Diluted Weighted Average Shares Outstanding | | 29,502,245 | | | 29,561,103 | | | 30,706,736 | | | Shares Outstanding at Period End | | 28,807,375 | | | 28,973,572 | | | 30,097,674 | | | Selected Performance Ratios | | | | | | | | | | | Return on Average Assets (Annualized) | | 1.29 | % | | 1.53 | % | | 1.42 | % | | Pre-Provision Net Revenue Return on Average Assets (Annualized)(1) | | 2.11 | | | 2.09 | | | 2.03 | | | Return on Average Common Equity (Annualized) | | 11.94 | | | 14.16 | | | 12.60 | | | Return on Average Tangible Common Equity (Annualized) (1) | | 12.10 | | | 14.37 | | | 12.81 | | | Yield on Interest Earning Assets | | 4.90 | | | 5.01 | | | 4.99 | | | Yield on Total Loans, Gross | | 5.17 | | | 5.33 | | | 5.27 | | | Cost of Interest Bearing Liabilities | | 1.84 | | | 1.96 | | | 2.06 | | | Cost of Total Deposits | | 1.27 | | | 1.34 | | | 1.46 | | | Net Interest Margin (2) | | 3.59 | | | 3.65 | | | 3.54 | | | Efficiency Ratio (1) | | 44.4 | | | 49.6 | | | 44.1 | | | Adjusted Efficiency Ratio (3) | | 44.1 | | | 44.3 | | | 43.1 | | | Noninterest Expense to Average Assets (Annualized) | | 1.69 | | | 1.87 | | | 1.59 | | | Adjusted Noninterest Expense to Average Assets (Annualized) (3) | | 1.68 | | | 1.67 | | | 1.55 | | | Loan to Deposit Ratio | | 105.4 | | | 104.9 | | | 104.9 | | | Core Deposits to Total Deposits | | 78.6 | | | 80.7 | | | 75.8 | | | Tangible Common Equity to Tangible Assets (1) | | 10.13 | | | 10.65 | | | 11.16 | | | Capital Ratios (Bank Only) (4) | | | | | | | | | | | Tier 1 Leverage Ratio | | 10.93 | % | | 11.01 | % | | 10.88 | % | | Tier 1 Risk-based Capital Ratio | | 11.53 | | | 11.72 | | | 11.70 | | | Total Risk-based Capital Ratio | | 12.67 | | | 12.16 | | | 12.83 | | | Capital Ratios (Consolidated) (4) | | | | | | | | | | | Tier 1 Leverage Ratio | | 10.51 | % | | 10.69 | % | | 11.26 | % | | Tier 1 Risk-based Capital Ratio | | 11.10 | | | 11.39 | | | 12.14 | | | Total Risk-based Capital Ratio | | 13.38 | | | 12.98 | | | 14.58 | |

| \(1\) | 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%. | | --- | --- | | (3) | Ratio excludes the amortization of tax credit investments and represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details. | | --- | --- | | (4) | Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies. | | --- | --- |

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Selected Financial Data

|  | March 31, |  | December 31, |  | September 30, |  | June 30, |  | March 31, |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (dollars in thousands) | 2020 | | 2019 | | 2019 | | 2019 | | 2019 | | | Selected Balance Sheet Data | | | | | | | | | | | | Total Assets | $ | 2,418,730 | $ | 2,268,830 | $ | 2,232,339 | $ | 2,123,631 | $ | 2,048,111 | | Total Loans, Gross | | 2,002,817 | | 1,912,038 | | 1,846,218 | | 1,784,903 | | 1,723,629 | | Allowance for Loan Losses | | 24,585 | | 22,526 | | 22,124 | | 21,362 | | 20,607 | | Goodwill and Other Intangibles | | 3,439 | | 3,487 | | 3,535 | | 3,582 | | 3,630 | | Deposits | | 1,900,127 | | 1,823,310 | | 1,802,236 | | 1,699,265 | | 1,643,666 | | Tangible Common Equity (1) | | 244,704 | | 241,307 | | 232,524 | | 225,555 | | 228,145 | | Total Shareholders' Equity | | 248,143 | | 244,794 | | 236,059 | | 229,137 | | 231,775 | | Average Total Assets - Quarter-to-Date | | 2,317,040 | | 2,221,370 | | 2,168,909 | | 2,069,707 | | 2,011,174 | | Average Common Equity - Quarter-to-Date | | 250,800 | | 240,188 | | 232,590 | | 231,374 | | 225,844 |

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

| --- | --- |

|  | For the Three Months Ended |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | | | March 31, | | December 31, | | March 31, | | | (dollars in thousands) | 2020 | | 2019 | | 2019 | | | Selected Income Statement Data | | | | | | | | Interest Income | $ | 27,468 | $ | 27,419 | $ | 24,267 | | Interest Expense | | 7,366 | | 7,491 | | 7,136 | | Net Interest Income | | 20,102 | | 19,928 | | 17,131 | | Provision for Loan Losses | | 2,100 | | 600 | | 600 | | Net Interest Income after Provision for Loan Losses | | 18,002 | | 19,328 | | 16,531 | | Noninterest Income | | 1,719 | | 1,112 | | 634 | | Noninterest Expense | | 9,746 | | 10,489 | | 7,885 | | Income Before Income Taxes | | 9,975 | | 9,951 | | 9,280 | | Provision for Income Taxes | | 2,532 | | 1,380 | | 2,262 | | Net Income | $ | 7,443 | $ | 8,571 | $ | 7,018 |

Income Statement

Net Interest Income

Net interest income was $20.1 million for the first quarter of 2020, an increase of $174,000, or 0.9%, from $19.9 million in the fourth quarter of 2019, and an increase of $3.0 million, or 17.3%, from $17.1 million in the first quarter of 2019. The linked-quarter increase in net interest income was due to growth in average interest earning assets, as well as a change in the mix of interest earning assets. The year-over-year increase in net interest income was largely attributable to growth in average interest earning assets, which increased by $285.0 million, or 14.3%, to $2.28 billion for the first quarter of 2020, from $1.99 billion for the first quarter of 2019. This increase in average interest earning assets was primarily due to continued organic growth in the loan portfolio.

Net interest margin (on a fully tax-equivalent basis) for the first quarter of 2020 was 3.59%, a 6 basis point decrease from 3.65% in the fourth quarter of 2019, and a 5 basis point increase from 3.54% in the first quarter of 2019. While the Company diligently worked to reduce the cost of interest bearing liabilities during the first quarter of 2020, the linked-quarter decrease in net interest margin was primarily attributable to the historically low and flat yield curve weighing on earning asset yields. The year-over-year increase in net interest margin was largely attributable to the reduction in deposit costs outpacing the lower rates earned in interest and fees on loans.

Interest income was $27.5 million for the first quarter of 2020, an increase of $49,000, or 0.2%, from $27.4 million in the fourth quarter of 2019, and an increase of $3.2 million, or 13.2%, from $24.3 million in the first quarter of 2019. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.90% in the first quarter of 2020, compared to 5.01% in the fourth quarter of 2019, and 4.99% in the first quarter of 2019. The decrease in the yield on interest earning assets in comparison to both prior periods was primarily due to the decline in market interest rates.

Loan interest income and loan fees remain the primary contributing factors to the changes in yield on interest earning assets. The aggregate loan yield decreased to 5.17% in the first quarter of 2020, which is 16 basis points lower than 5.33% in the fourth quarter of 2019, and 10 basis points lower than 5.27% in the first quarter of 2019. While deferred loan fees are regularly amortized into income, fluctuations in the level of loan fees recognized can vary based on prepayments and other factors. The decreased yield on loans was attributable to declining market interest rates and lower loan fees recognized in the first quarter of 2020, compared to the fourth quarter of 2019. On a year-over-year basis, loan fees increased 7 basis points in their contribution to the aggregate loan yield; however, this was

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outweighed by the historically low yield curve pressuring the core loan yield lower, and ultimately resulted in the aggregate portfolio yield contracting by 10 basis points.

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

|  | Three Months Ended |  |  |  |  |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, 2020 | | December 31, 2019 | | September 30, 2019 | | June 30, 2019 | | March 31, 2019 | | | Interest | 4.90 | % | 5.00 | % | 5.07 | % | 5.10 | % | 5.07 | % | | Fees | 0.27 | | 0.33 | | 0.25 | | 0.23 | | 0.20 | | | Yield on Loans | 5.17 | % | 5.33 | % | 5.32 | % | 5.33 | % | 5.27 | % |

Interest expense was $7.4 million for the first quarter of 2020, a decrease of $125,000, or 1.7%, from $7.5 million in the fourth quarter of 2019, and an increase of $230,000, or 3.2%, from $7.1 million in the first quarter of 2019. The cost of interest bearing liabilities decreased to 1.84% in the first quarter of 2020 from 1.96% in the fourth quarter of 2019, primarily due to lower rates paid on deposits. On a year-over-year basis, the cost of interest bearing liabilities decreased 22 basis points from 2.06% in the first quarter of 2019 to 1.84% in the first quarter of 2020. The Federal Open Market Committee (FOMC) reduced the Fed Funds target rate numerous times over the past 12 months, savings and money market deposit accounts indexed to Fed Funds were the most directly impacted as evidenced by the 29 basis point reduction in costs. With the most recent Fed Funds cuts occurring late in the first quarter of 2020, the Company expects a further reprieve in deposit funding costs in future quarters.

A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended March 31, 2020, December 31, 2019 and March 31, 2019 is as follows:

|  | For the Three Months Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, 2020 | | | | | | December 31, 2019 | | | | | | March 31, 2019 | | | | | | | | Average | | Interest | | Yield/ | | Average | | Interest | | Yield/ | | Average | | Interest | | Yield/ | | | | Balance | | & Fees | | Rate | | Balance | | & Fees | | Rate | | Balance | | & Fees | | Rate | | | (dollars in thousands) | | | | | | | | | | | | | | | | | | | | Interest Earning Assets: | | | | | | | | | | | | | | | | | | | | Cash Investments | $ | 29,462 | $ | 59 | 0.81 | % | $ | 45,818 | $ | 150 | 1.30 | % | $ | 27,945 | $ | 87 | 1.27 | % | | Investment Securities: | | | | | | | | | | | | | | | | | | | | Taxable Investment Securities | | 188,186 | | 1,387 | 2.96 | | | 168,911 | | 1,228 | 2.88 | | | 138,397 | | 973 | 2.85 | | | Tax-Exempt Investment Securities (1) | | 94,728 | | 1,024 | 4.35 | | | 95,015 | | 1,019 | 4.26 | | | 110,463 | | 1,173 | 4.31 | | | Total Investment Securities | | 282,914 | | 2,411 | 3.43 | | | 263,926 | | 2,247 | 3.38 | | | 248,860 | | 2,146 | 3.50 | | | Loans (1)(2) | | 1,954,959 | | 25,150 | 5.17 | | | 1,872,234 | | 25,132 | 5.33 | | | 1,707,908 | | 22,179 | 5.27 | | | Federal Home Loan Bank Stock | | 10,270 | | 100 | 3.93 | | | 7,947 | | 103 | 5.13 | | | 7,911 | | 100 | 5.12 | | | Total Interest Earning Assets | | 2,277,605 | | 27,720 | 4.90 | % | | 2,189,925 | | 27,632 | 5.01 | % | | 1,992,624 | | 24,512 | 4.99 | % | | Noninterest Earning Assets | | 39,435 | | | | | | 31,445 | | | | | | 18,550 | | | | | | Total Assets | $ | 2,317,040 | | | | | $ | 2,221,370 | | | | | $ | 2,011,174 | | | | | | Interest Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | Deposits: | | | | | | | | | | | | | | | | | | | | Interest Bearing Transaction Deposits | | 246,843 | | 431 | 0.70 | % | | 257,777 | | 503 | 0.77 | % | | 181,033 | | 232 | 0.52 | % | | Savings and Money Market Deposits | | 533,578 | | 1,905 | 1.44 | | | 487,424 | | 1,963 | 1.60 | | | 414,811 | | 1,766 | 1.73 | | | Time Deposits | | 376,154 | | 2,177 | 2.33 | | | 353,351 | | 2,151 | 2.41 | | | 329,511 | | 1,880 | 2.31 | | | Brokered Deposits | | 218,289 | | 1,211 | 2.23 | | | 243,358 | | 1,447 | 2.36 | | | 292,067 | | 1,825 | 2.53 | | | Total Interest Bearing Deposits | | 1,374,864 | | 5,724 | 1.67 | | | 1,341,910 | | 6,064 | 1.79 | | | 1,217,422 | | 5,703 | 1.90 | | | Federal Funds Purchased | | 24,835 | | 107 | 1.74 | | | 3,011 | | 14 | 1.82 | | | 24,956 | | 160 | 2.59 | | | Notes Payable | | 12,505 | | 115 | 3.70 | | | 13,000 | | 123 | 3.75 | | | 14,500 | | 121 | 3.38 | | | FHLB Advances | | 172,379 | | 1,027 | 2.40 | | | 136,554 | | 897 | 2.61 | | | 124,000 | | 775 | 2.54 | | | Subordinated Debentures | | 24,744 | | 393 | 6.39 | | | 24,725 | | 393 | 6.31 | | | 24,647 | | 377 | 6.20 | | | Total Interest Bearing Liabilities | | 1,609,327 | | 7,366 | 1.84 | % | | 1,519,200 | | 7,491 | 1.96 | % | | 1,405,525 | | 7,136 | 2.06 | % | | Noninterest Bearing Liabilities: | | | | | | | | | | | | | | | | | | | | Noninterest Bearing Transaction Deposits | | 444,201 | | | | | | 451,265 | | | | | | 369,912 | | | | | | Other Noninterest Bearing Liabilities | | 12,712 | | | | | | 10,717 | | | | | | 9,893 | | | | | | Total Noninterest Bearing Liabilities | | 456,913 | | | | | | 461,982 | | | | | | 379,805 | | | | | | Shareholders' Equity | | 250,800 | | | | | | 240,188 | | | | | | 225,844 | | | | | | Total Liabilities and Shareholders' Equity | $ | 2,317,040 | | | | | $ | 2,221,370 | | | | | $ | 2,011,174 | | | | | | Net Interest Income / Interest Rate Spread | | | | 20,354 | 3.06 | % | | | | 20,141 | 3.05 | % | | | | 17,376 | 2.93 | % | | Net Interest Margin (3) | | | | | 3.59 | % | | | | | 3.65 | % | | | | | 3.54 | % | | Taxable Equivalent Adjustment: | | | | | | | | | | | | | | | | | | | | Tax-Exempt Investment Securities | | | | (252) | | | | | | (213) | | | | | | (245) | | | | Net Interest Income | | | $ | 20,102 | | | | | $ | 19,928 | | | | | $ | 17,131 | | |

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| \(1\) | 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. | | --- | --- |

Provision for Loan Losses

The provision for loan losses was $2.1 million for the first quarter of 2020, an increase of $1.5 million from $600,000 for the fourth quarter of 2019 and the first quarter of 2019. The increase in the provision in the first quarter of 2020 was attributable to increased allocations for economic factors associated with the COVID-19 pandemic.

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

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

|  | Three Months Ended |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | | | March 31, | | December 31, | | March 31, | | | (dollars in thousands) | 2020 | | 2019 | | 2019 | | | Balance at Beginning of Period | $ | 22,526 | $ | 22,124 | $ | 20,031 | | Provision for Loan Losses | | 2,100 | | 600 | | 600 | | Charge-offs | | (47) | | (205) | | (36) | | Recoveries | | 6 | | 7 | | 12 | | Balance at End of Period | $ | 24,585 | $ | 22,526 | $ | 20,607 |

Noninterest Income

Noninterest income was $1.7 million for the first quarter of 2020, an increase of $607,000 from $1.1 million for the fourth quarter of 2019, and an increase of $1.1 million from $634,000 for the first quarter of 2019. The linked-quarter increase was primarily due to increased swap fees, offset partially by decreased letter of credit fees. The year-over-year increase was primarily due to increased swap fees and customer service fees.

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

|  | Three Months Ended |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | | | March 31, | | December 31, | | March 31, | | | (dollars in thousands) | 2020 | | 2019 | | 2019 | | | Noninterest Income: | | | | | | | | Customer Service Fees | $ | 240 | $ | 196 | $ | 191 | | Net Gain (Loss) on Sales of Securities | | 3 | | — | | (5) | | Letter of Credit Fees | | 274 | | 394 | | 246 | | Debit Card Interchange Fees | | 92 | | 105 | | 88 | | Swap Fees | | 907 | | 255 | | — | | Other Income | | 203 | | 162 | | 114 | | Totals | $ | 1,719 | $ | 1,112 | $ | 634 |

Noninterest Expense

Noninterest expense was $9.7 million for the first quarter of 2020, a decrease of $743,000 from $10.5 million for the fourth quarter of 2019, and an increase of $1.9 million from $7.9 million for the first quarter of 2019. The linked-quarter decrease was primarily due to decreased amortization of tax credit investments and occupancy and equipment, offset partially by increased salaries and employee benefits. The year-over-year increase was attributed to increased salaries and employee benefits and professional and consulting fees, offset partially by decreased FDIC insurance assessment and amortization of tax credit investments.

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

|  | Three Months Ended |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | | | March 31, | | December 31, | | March 31, | | | (dollars in thousands) | 2020 | | 2019 | | 2019 | | | Noninterest Expense: | | | | | | | | Salaries and Employee Benefits | $ | 6,454 | $ | 6,235 | $ | 4,802 | | Occupancy and Equipment | | 713 | | 883 | | 656 | | FDIC Insurance Assessment | | 190 | | 165 | | 285 | | Data Processing | | 229 | | 161 | | 153 | | Professional and Consulting Fees | | 485 | | 437 | | 388 | | Information Technology and Telecommunications | | 266 | | 319 | | 236 | | Marketing and Advertising | | 466 | | 299 | | 465 | | Intangible Asset Amortization | | 48 | | 48 | | 48 | | Amortization of Tax Credit Investments | | 85 | | 1,128 | | 177 | | Other Expense | | 810 | | 814 | | 675 | | Totals | $ | 9,746 | $ | 10,489 | $ | 7,885 |

The Company had 170 full-time equivalent employees at March 31, 2020, compared to 160 employees at December 31, 2019, and 143 employees at March 31, 2019. The increased head count included strategic hires in deposit gathering, lending, technology, and other supportive roles to meet the needs of the Company’s growing infrastructure.

While the recognition of tax credit investments creates volatility in the level of total noninterest expense and concurrently the efficiency ratio, it directly reduces income tax expense and the effective tax rate. The efficiency ratio, a non-GAAP financial measure, was 44.4% for the first quarter of 2020, compared to 49.6% for the fourth quarter of 2019, and 44.1% for the first quarter of 2019. Excluding the impact of the amortization of tax credit investments, the adjusted efficiency ratio, a non-GAAP financial measure, was 44.1% for the first quarter of 2020, 44.3% for the fourth quarter of 2019 and 43.1% for the first quarter of 2019.

Income Taxes

The effective combined federal and state income tax rate for the first quarter of 2020 was 25.4%, an increase from 13.9% for the fourth quarter of 2019 and an increase from 24.4% for the first quarter of 2019. The higher effective combined rate compared to both periods was due to fewer tax credits being recognized.

Balance Sheet

Total assets at March 31, 2020 were $2.42 billion, a 6.6% increase from $2.27 billion at December 31, 2019, and a 18.1% increase from $2.05 billion at March 31, 2019. The increase in total assets was primarily due to organic loan growth.

Total gross loans at March 31, 2020 were $2.00 billion, an increase of $90.8 million, or 4.7%, over total gross loans of $1.91 billion at December 31, 2019, and an increase of $279.2 million, or 16.2%, over total gross loans of $1.72 billion at March 31, 2019.

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

|  | March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019 |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (dollars in thousands) | | | | | | | | | | | | Commercial and Industrial | $ | 299,425 | $ | 276,035 | $ | 291,723 | $ | 287,804 | $ | 284,807 | | Construction and Land Development | | 183,350 | | 196,776 | | 216,054 | | 195,568 | | 178,782 | | Real Estate Mortgage: | | | | | | | | | | | | 1 - 4 Family Mortgage | | 272,590 | | 260,611 | | 254,782 | | 247,029 | | 233,131 | | Multifamily | | 536,380 | | 515,014 | | 456,257 | | 437,198 | | 417,975 | | CRE Owner Occupied | | 75,207 | | 66,584 | | 71,209 | | 68,681 | | 66,130 | | CRE Nonowner Occupied | | 631,541 | | 592,545 | | 551,992 | | 544,579 | | 538,998 | | Total Real Estate Mortgage Loans | | 1,515,718 | | 1,434,754 | | 1,334,240 | | 1,297,487 | | 1,256,234 | | Consumer and Other | | 4,324 | | 4,473 | | 4,201 | | 4,044 | | 3,806 | | Total Loans, Gross | | 2,002,817 | | 1,912,038 | | 1,846,218 | | 1,784,903 | | 1,723,629 | | Allowance for Loan Losses | | (24,585) | | (22,526) | | (22,124) | | (21,362) | | (20,607) | | Net Deferred Loan Fees | | (5,336) | | (5,512) | | (5,788) | | (5,157) | | (4,791) | | Total Loans, Net | $ | 1,972,896 | $ | 1,884,000 | $ | 1,818,306 | $ | 1,758,384 | $ | 1,698,231 |

Total deposits at March 31, 2020 were $1.90 billion, an increase of $76.8 million, or 4.2%, over total deposits of $1.82 billion at December 31, 2019, and an increase of $256.5 million, or 15.6%, over total deposits of $1.64 billion at March 31, 2019.

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

|  | March 31, 2020 |  | December 31, 2019 |  | September 30, 2019 |  | June 30, 2019 |  | March 31, 2019 |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | (dollars in thousands) | | | | | | | | | | | | Noninterest Bearing Transaction Deposits | $ | 476,217 | $ | 447,509 | $ | 478,493 | $ | 409,198 | $ | 404,937 | | Interest Bearing Transaction Deposits | | 255,483 | | 264,627 | | 243,889 | | 231,318 | | 180,459 | | Savings and Money Market Deposits | | 514,113 | | 516,785 | | 470,518 | | 456,447 | | 434,186 | | Time Deposits | | 393,340 | | 360,027 | | 363,308 | | 359,338 | | 346,163 | | Brokered Deposits | | 260,974 | | 234,362 | | 246,028 | | 242,964 | | 277,921 | | Total Deposits | $ | 1,900,127 | $ | 1,823,310 | $ | 1,802,236 | $ | 1,699,265 | $ | 1,643,666 |

Total shareholders’ equity at March 31, 2020 was $248.1 million, an increase of $3.3 million, or 1.4%, over total shareholders’ equity of $244.8 million at December 31, 2019, and an increase of $16.4 million, or 7.1%, over total shareholders’ equity of $231.8 million at March 31, 2019. The linked-quarter increase was due to net income retained, partially offset by stock repurchases made under the Company’s stock repurchase program, a decrease in unrealized gains in the securities portfolio, and an increase in unrealized losses in the interest rate swap portfolio. The year-over-year increase was due to net income retained, partially offset by stock repurchases made under the Company’s stock repurchase program.

Tangible book value per share, a non-GAAP financial measure, was $8.49 as of March 31, 2020, an increase of 2.0% from $8.33 as of December 31, 2019, and an increase of 12.1% from $7.58 as of March 31, 2019.

During the first quarter of 2020, the Company repurchased 177,864 shares of its common stock, representing less than 1% of the Company’s outstanding shares. Shares were repurchased at a weighted average price of $11.52 for a total of $2.0 million. Although the stock repurchase program remains in place, the Company has not repurchased any shares since March 16, 2020. The Company remains committed to maintaining strong capital levels and will consider the current economic environment and the uncertainty of the long-term impact of the COVID-19 pandemic when evaluating its future utilization of the stock repurchase program. Management currently does not expect to begin repurchasing shares again until the COVID-19 pandemic has subsided.

Asset Quality

Asset quality metrics for the Company remained strong at March 31, 2020. Annualized net charge-offs as a percent of average loans for the first quarter of 2020, were 0.01%, compared to 0.04% for the fourth quarter of 2019, and 0.01% for the first quarter of 2019. At March 31, 2020, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $606,000, or 0.03% of total assets, as compared to $461,000, or 0.02% of total assets at December 31, 2019, and $1.6 million, or 0.08% of total assets at March 31, 2019.

The Company is closely analyzing all segments within the loan portfolio in response to the COVID-19 pandemic. As a result, at the end of the first quarter of 2020 the Company identified loans that have potential weaknesses that warrant a watchlist risk rating. At March 31, 2020, watchlist loans increased to $45.8 million, compared to $5.3 million at December 31, 2019. Loans added to the watchlist during the first quarter of 2020 were in vulnerable industries, primarily hospitality and restaurants. As the COVID-19 pandemic continues to evolve, the length and extent of the economic contraction will dictate further watchlist or adverse classifications in the loan portfolio.

About the Company

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

Investor Relations Contact:

Jerry Baack

Chief Executive Officer

investorrelations@bwbmn.com

952-893-6866

Use of Non-GAAP financial measures

In addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s

Page 8 of 13

operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

Forward-Looking Statements

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

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the negative effects of the COVID-19 pandemic, including its potential effects on the economic environment, our clients and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area; our ability to maintain an adequate level of allowance for loan losses; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the recent coronavirus outbreak), acts of war or terrorism or other adverse external events; and any other risks described in the “Risk Factors” sections of other 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.

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Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets

(dollars in thousands, except share data)

		December 31,		March 31,
		2019		2019
				(Unaudited)
ASSETS
Cash and Cash Equivalents	61,526	$	31,935	$	48,750
Bank-Owned Certificates of Deposit	2,895		2,654		2,948
Securities Available for Sale, at Fair Value	307,317		289,877		250,285
Loans, Net of Allowance for Loan Losses of 24,585 at March 31, 2020 (unaudited), 22,526 at December 31, 2019 and 20,607 at March 31, 2019 (unaudited)	1,972,896		1,884,000		1,698,231
Federal Home Loan Bank (FHLB) Stock, at Cost	11,017		7,824		7,324
Premises and Equipment, Net	35,271		27,628		15,697
Accrued Interest	7,102		6,775		7,058
Goodwill	2,626		2,626		2,626
Other Intangible Assets, Net	813		861		1,004
Other Assets	17,267		14,650		14,188
Total Assets	2,418,730	$	2,268,830	$	2,048,111
LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing	476,217	$	447,509	$	404,937
Interest Bearing	1,423,910		1,375,801		1,238,729
Total Deposits	1,900,127		1,823,310		1,643,666
Notes Payable	12,500		13,000		14,500
FHLB Advances	207,500		136,500		124,000
Subordinated Debentures, Net of Issuance Costs	24,759		24,733		24,656
Accrued Interest Payable	1,688		1,982		1,679
Other Liabilities	24,013		24,511		7,835
Total Liabilities	2,170,587		2,024,036		1,816,336
SHAREHOLDERS' EQUITY
Preferred Stock- 0.01 par value
Authorized 10,000,000; None Issued and Outstanding at March 31, 2020 (unaudited), December 31, 2019 and March 31, 2019 (unaudited)	—		—		—
Common Stock- 0.01 par value
Common Stock - Authorized 75,000,000; Issued and Outstanding 28,807,375 at March 31, 2020 (unaudited), 28,973,572 at December 31, 2019 and 30,097,674 at March 31, 2019 (unaudited)	288		290		301
Additional Paid-In Capital	110,446		112,093		126,209
Retained Earnings	135,080		127,637		103,252
Accumulated Other Comprehensive Income	2,329		4,774		2,013
Total Shareholders' Equity	248,143		244,794		231,775
Total Liabilities and Equity	2,418,730	$	2,268,830	$	2,048,111

All values are in US Dollars.

Page 10 of 13

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income

(dollars in thousands, except per share data)

|  | Three Months Ended |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | | | March 31, | | December 31, | | March 31, | | | | 2020 | | 2019 | | 2019 | | | | (Unaudited) | | (Unaudited) | | (Unaudited) | | | INTEREST INCOME | | | | | | | | Loans, Including Fees | $ | 25,113 | $ | 25,132 | $ | 22,179 | | Investment Securities | | 2,196 | | 2,034 | | 1,901 | | Other | | 159 | | 253 | | 187 | | Total Interest Income | | 27,468 | | 27,419 | | 24,267 | | INTEREST EXPENSE | | | | | | | | Deposits | | 5,724 | | 6,064 | | 5,703 | | Notes Payable | | 115 | | 123 | | 121 | | FHLB Advances | | 1,027 | | 897 | | 775 | | Subordinated Debentures | | 393 | | 393 | | 377 | | Federal Funds Purchased | | 107 | | 14 | | 160 | | Total Interest Expense | | 7,366 | | 7,491 | | 7,136 | | NET INTEREST INCOME | | 20,102 | | 19,928 | | 17,131 | | Provision for Loan Losses | | 2,100 | | 600 | | 600 | | NET INTEREST INCOME AFTER | | | | | | | | PROVISION FOR LOAN LOSSES | | 18,002 | | 19,328 | | 16,531 | | NONINTEREST INCOME | | | | | | | | Customer Service Fees | | 240 | | 196 | | 191 | | Net Gain (Loss) on Sales of Available for Sale Securities | | 3 | | — | | (5) | | Other Income | | 1,476 | | 916 | | 448 | | Total Noninterest Income | | 1,719 | | 1,112 | | 634 | | NONINTEREST EXPENSE | | | | | | | | Salaries and Employee Benefits | | 6,454 | | 6,235 | | 4,802 | | Occupancy and Equipment | | 713 | | 883 | | 656 | | Other Expense | | 2,579 | | 3,371 | | 2,427 | | Total Noninterest Expense | | 9,746 | | 10,489 | | 7,885 | | INCOME BEFORE INCOME TAXES | | 9,975 | | 9,951 | | 9,280 | | Provision for Income Taxes | | 2,532 | | 1,380 | | 2,262 | | NET INCOME | $ | 7,443 | $ | 8,571 | $ | 7,018 | | EARNINGS PER SHARE | | | | | | | | Basic | $ | 0.26 | $ | 0.30 | $ | 0.23 | | Diluted | | 0.25 | | 0.29 | | 0.23 | | Dividends Paid Per Share | | — | | — | | — |

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Bridgewater Bancshares, Inc. and Subsidiaries Summary Quarterly Consolidated Financial Data

(dollars in thousands) (unaudited)

|  | As of and for the Three Months Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, | | | December 31, | | | September 30, | | | June 30, | | | March 31, | | | | | 2020 | | | 2019 | | | 2019 | | | 2019 | | | 2019 | | | | Selected Asset Quality Data | | | | | | | | | | | | | | | | | Loans 30-89 Days Past Due | $ | 21 | | $ | 403 | | $ | — | | $ | 470 | | $ | 387 | | | Loans 30-89 Days Past Due to Total Loans | | 0.00 | % | | 0.02 | % | | 0.00 | % | | 0.03 | % | | 0.02 | % | | Nonperforming Loans | $ | 606 | | $ | 461 | | $ | 828 | | $ | 555 | | $ | 1,557 | | | Nonperforming Loans to Total Loans | | 0.03 | % | | 0.02 | % | | 0.04 | % | | 0.03 | % | | 0.09 | % | | Foreclosed Assets | $ | — | | $ | — | | $ | — | | $ | 1,033 | | $ | — | | | Nonaccrual Loans to Total Loans | | 0.03 | % | | 0.02 | % | | 0.04 | % | | 0.03 | % | | 0.09 | % | | Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans | | 0.03 | | | 0.02 | | | 0.04 | | | 0.03 | | | 0.09 | | | Nonperforming Assets (1) | $ | 606 | | $ | 461 | | $ | 828 | | $ | 1,588 | | $ | 1,557 | | | Nonperforming Assets to Total Assets (1) | | 0.03 | % | | 0.02 | % | | 0.04 | % | | 0.07 | % | | 0.08 | % | | Allowance for Loan Losses to Total Loans | | 1.23 | | | 1.18 | | | 1.20 | | | 1.20 | | | 1.20 | | | Allowance for Loans Losses to Nonperforming Loans | | 4,056.93 | | | 4,886.33 | | | 2,671.98 | | | 3,849.01 | | | 1,323.51 | | | Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans | | 0.01 | | | 0.04 | | | 0.03 | | | (0.04) | | | 0.01 | |

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

| --- | --- |

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

|  | For the Three Months Ended |  |  |  |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, | | | December 31, | | | March 31, | | | | | 2020 | | | 2019 | | | 2019 | | | | Efficiency Ratio | | | | | | | | | | | Noninterest Expense | $ | 9,746 | | $ | 10,489 | | $ | 7,885 | | | Less: Amortization of Intangible Assets | | (48) | | | (48) | | | (48) | | | Adjusted Noninterest Expense | $ | 9,698 | | $ | 10,441 | | $ | 7,837 | | | Net Interest Income | | 20,102 | | | 19,928 | | | 17,131 | | | Noninterest Income | | 1,719 | | | 1,112 | | | 634 | | | Less: (Gain) Loss on Sales of Securities | | (3) | | | — | | | 5 | | | Adjusted Operating Revenue | $ | 21,818 | | $ | 21,040 | | $ | 17,770 | | | Efficiency Ratio | | 44.4 | % | | 49.6 | % | | 44.1 | % | | Adjusted Efficiency Ratio | | | | | | | | | | | Noninterest Expense | $ | 9,746 | | $ | 10,489 | | $ | 7,885 | | | Less: Amortization of Tax Credit Investments | | (85) | | | (1,128) | | | (177) | | | Less: Amortization of Intangible Assets | | (48) | | | (48) | | | (48) | | | Adjusted Noninterest Expense | $ | 9,613 | | $ | 9,313 | | $ | 7,660 | | | Net Interest Income | | 20,102 | | | 19,928 | | | 17,131 | | | Noninterest Income | | 1,719 | | | 1,112 | | | 634 | | | Less: (Gain) Loss on Sales of Securities | | (3) | | | — | | | 5 | | | Adjusted Operating Revenue | $ | 21,818 | | $ | 21,040 | | $ | 17,770 | | | Adjusted Efficiency Ratio | | 44.1 | % | | 44.3 | % | | 43.1 | % |

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	For the Three Months Ended
	March 31,		December 31,		March 31,
	2020		2019		2019
Pre-Provision Net Revenue
Noninterest Income	$	1,719	$	1,112	$	634
Less: (Gain) Loss on sales of Securities		(3)		—		5
Total Operating Noninterest Income		1,716		1,112		639
Plus: Net Interest income		20,102		19,928		17,131
Net Operating Revenue	$	21,818	$	21,040	$	17,770
Noninterest Expense	$	9,746	$	10,489	$	7,885
Less: Amortization of Tax Credit Investments		(85)		(1,128)		(177)
Total Operating Noninterest Expense	$	9,661	$	9,361	$	7,708
Pre-Provision Net Revenue	$	12,157	$	11,679	$	10,062
Plus:
Non-Operating Revenue Adjustments		3		—		(5)
Less:
Provision for Loan Losses		2,100		600		600
Non-Operating Expense Adjustments		85		1,128		177
Provision for Income Taxes		2,532		1,380		2,262
Net Income	$	7,443	$	8,571	$	7,018

|  | As of and for the Three Months Ended |  |  |  |  |  |  |  |  |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | March 31, | | | December 31, | | | March 31, | | | | | 2020 | | | 2019 | | | 2019 | | | | Tangible Common Equity and Tangible Common Equity/Tangible Assets | | | | | | | | | | | Common Equity | $ | 248,143 | | $ | 244,794 | | $ | 231,775 | | | Less: Intangible Assets | | (3,439) | | | (3,487) | | | (3,630) | | | Tangible Common Equity | | 244,704 | | | 241,307 | | | 228,145 | | | Total Assets | | 2,418,730 | | | 2,268,830 | | | 2,048,111 | | | Less: Intangible Assets | | (3,439) | | | (3,487) | | | (3,630) | | | Tangible Assets | $ | 2,415,291 | | $ | 2,265,343 | | $ | 2,044,481 | | | Tangible Common Equity/Tangible Assets | | 10.13 | % | | 10.65 | % | | 11.16 | % | | Tangible Book Value Per Share | | | | | | | | | | | Book Value Per Common Share | $ | 8.61 | | $ | 8.45 | | $ | 7.70 | | | Less: Effects of Intangible Assets | | (0.12) | | | (0.12) | | | (0.12) | | | Tangible Book Value Per Common Share | $ | 8.49 | | $ | 8.33 | | $ | 7.58 | | | Average Tangible Common Equity | | | | | | | | | | | Average Common Equity | $ | 250,800 | | $ | 240,188 | | $ | 225,844 | | | Less: Effects of Average Intangible Assets | | (3,466) | | | (3,510) | | | (3,653) | | | Average Tangible Common Equity | $ | 247,334 | | $ | 236,678 | | $ | 222,191 | |

Page 13 of 13

Exhibit 99.2

Investor Presentation<br>Fourth Quarter 2019
2<br>Disclaimer<br>Forward-Looking Statements<br>This presentation contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking<br>statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of Bridgewater<br>Bancshares, Inc. (the “Company”). These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”,<br>“continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other<br>comparable words of a future or forward-looking nature. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on<br>our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions.<br>Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are<br>outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of<br>these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements<br>include, among others, the following: the negative effects of the COVID-19 pandemic, including its potential effects on the economic environment, our clients and our operations, as well<br>as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and<br>national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our<br>market area; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current<br>Expected Credit Loss Standard; our high concentration of large loans to certain borrowers; our ability to successfully manage liquidity risk; our dependence on non-core funding sources<br>and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and<br>uncertainty related to the future use and availability of some reference rates; such as the London Interbank Offered Rate; as well as other alternative reference rates; the composition of<br>our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of our information security controls or<br>cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry;<br>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<br>and future legislative and regulatory changes; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental<br>policies impacting the value of products produced by our commercial borrowers; and any other risks described in the “Risk Factors” sections of reports and other documents filed by the<br>Company with the Securities and Exchange Commission.<br>Any forward-looking statement made by us in this presentation is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no<br>obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments<br>or otherwise. Certain of the information contained in this presentation is derived from information provided by industry sources. Although we believe that such information is accurate<br>and that the sources from which it has been obtained are reliable, we cannot guarantee the accuracy of, and have not independently verified, such information.<br>Use of Non-GAAP financial measures<br>In addition to the results presented in accordance with U.S. General Accepted Accounting Principles (“GAAP”), the Company routinely supplements its evaluation with an analysis of certain<br>non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help<br>them understand the Company’s operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute<br>for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.<br>Reconciliations of non-GAAP disclosures to the comparable GAAP measures are provided in this presentation.
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3<br>Response to COVID-19<br>• Pandemic team meeting regularly<br>to ensure Business Continuity Plan<br>in place<br>• 85% of team working from home<br>with enhanced technology and<br>security<br>• Hygiene and distancing actions<br>taken in branches to ensure team’s<br>safety<br>• All COVID-19 related medical<br>treatment covered under medical<br>plan<br>• Introduced new sick policies for<br>COVID-19 related absences<br>• Communicating Employee<br>Assistance Program and Health<br>and Wellness strategies<br>• Increased internal communication<br>with video conferencing, email and<br>videos<br>• Drive-thrus open and providing in-<br>person banking consultations if<br>requested<br>• Helping commercial clients<br>manage operations through digital<br>channels<br>• Communicating digital banking<br>capabilities on website and through<br>email<br>• Established additional client<br>outreach practices<br>• Paycheck Protection Program (PPP)<br>loan inquiry outreach ongoing.<br>Approximately 65% of SBA-<br>approved PPP loans are current<br>BWB clients<br>• Prudently working with clients to<br>provide access to capital, modify<br>loan terms when appropriate, and<br>provide support during this difficult<br>time<br>• Created a Dogs of BWB Campaign<br>for distraction from COVID-19<br>• Providing support to Twin Cities’<br>small businesses through PPP<br>loans helping companies hire back<br>over 2,600 employees<br>• Supporting local organizations as<br>they mobilize to help provide<br>assistance to those impacted<br>economically by the pandemic<br>• Assisted 314 new clients with<br>securing $48.8 million in PPP<br>funds<br>3
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4<br>Response to COVID-19<br>• Secured SBA approval for over 900<br>loans<br>• Average Loan size of $189k and<br>average fee of 3.25%<br>• Originated 314 new client loans<br>totaling approximately $49MM<br>• $267MM (137 loans) including:<br>• Interest-Only Modifications<br>• $125MM (95 loans) with I/O<br>period from 1 to 6 months<br>• $26MM (3 loans) with I/O<br>period from 7 to 12 months<br>• Payment Deferral Modifications<br>• $71MM (15 loans) with<br>payments deferred for 3<br>months<br>• $45MM (24 loans) with<br>payments deferred for 6<br>months<br>Balance<br>Segment Loans $ Amount<br><= $350k 794 $57.7MM<br>$350k to $2MM 104 $77.5MM<br>> $2MM 11 $36.2MM<br>Total 909 $171.4MM<br>Data as of April 29, 2020 Data as of April 24, 2020
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5 Dollars in thousands<br>COVID-19 Impacted Industries<br>Industry Type Total Principal Balance Unfunded Commitments<br># of<br>Loans % of Gross Loans<br>Investor CRE - Retail $135,998 $1,349 83 6.8%<br>Hospitality $41,350 $759 13 2.1%<br>Restaurant $28,851 $621 52 1.5%<br>• Primarily secured by real estate or all<br>business assets<br>• Retail portfolio contains a diversified tenant<br>base<br>• Hospitality loans with seasoned operators,<br>generally with significant resources and<br>experience weathering past downturns<br>• Restaurant exposure contains full-service<br>and limited-service restaurants with local<br>operators<br>• No energy exposure<br>Gross Loans $2.00 Billion
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6<br>Our History<br>6
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7<br>Why Bridgewater Bank?
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Commercial business expertise<br>Multifamily niche<br>Efficient branch footprint<br>Strong brand with extensive<br>referral network<br>Responsive support and<br>simple solutions<br>Experienced and non-hierarchical leadership<br>Culture based on accountability<br>Entrepreneurial<br>Highly efficient team<br>Very low nonperforming assets<br>Strong credit culture<br>Proactive risk management<br>Robust loan and deposit growth<br>Capital levels reliably maintained<br>Consistent earnings growth<br>8<br>Differentiators
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9<br>1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. * Change in basis points for profitability metrics<br>First Quarter 2020 Financial Results<br>Q1 2020 Q4 2019 % Change Q1 2019 % Change<br>Income Statement Summary<br>Interest Income 27,468 $ 27,419 $ 0.2% 24,267 $ 13.2%<br>Interest Expense 7,366 7,491 (1.7) 7,136 3.2<br>Net Interest Income 20,102 19,928 0.9 17,131 17.3<br>Provision for Loan Losses 2,100 600 250.0 600 250.0<br>Net Interest Income after Provision 18,002 19,328 (6.9) 16,531 8.9<br>Noninterest Income 1,719 1,112 54.6 634 171.1<br>Noninterest Expense 9,746 10,489 (7.1) 7,885 23.6<br>Pretax Income 9,975 9,951 0.2 9,280 7.5<br>Provision (Benefit) for Income Taxes 2,532 1,380 83.5 2,262 11.9<br>Net Income 7,443 $ 8,571 $ (13.2) 7,018 $ 6.1<br>Diluted EPS 0.25 $ 0.29 $ (13.0) 0.23 $ 10.4<br>Balance Sheet Summary<br>Total Assets 2,418,730 $ 2,268,830 $ 6.6% 2,048,111 $ 18.1%<br>Loans, Gross 2,002,817 1,912,038 4.7 1,723,629 16.2<br>Deposits 1,900,127 1,823,310 4.2 1,643,666 15.6<br>Tangible Common Equity1 244,704 241,307 1.4 228,145 7.3<br>Profitability Metrics* Q1 2020 Q4 2019 Net Change Q1 2019 Net Change<br>Return on Average Assets (ROA) 1.29% 1.53% (0.24) 1.42% (0.13)<br>Pre-Provision Net Revenue (PPNR ROA)1 2.11 2.09 0.02 2.03 0.08<br>Return on Average Equity (ROE) 11.94 14.16 (2.22) 12.60 (0.66)<br>Net Interest Margin 3.59 3.65 (0.06) 3.54 0.05<br>Adjusted Efficiency Ratio1 44.1 44.3 (0.20) 43.1 1.00<br>QoQ Comparison YoY Comparison
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10<br>1<br>Strong Capital and Liquidity<br>Borrowing Capacity<br>Total Principal<br>Balance<br>FHLB Remaining Capacity $121,302<br>FRB Discount Window 111,178<br>Unsecured Lines with Other Banks 105,000<br>Total Borrowing Capacity $337,480<br>• $368.8 million in on-balance sheet<br>liquidity (includes unpledged<br>marketable securities)<br>• On-Balance Sheet liquidity equals<br>15.2% of Total Assets<br>• PPP loan funding offset by use of<br>PPPLF<br>• Strong capital levels in excess of<br>regulatory minimums<br>Dollars in thousands
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11 * Tangible common equity to tangible assets is a Non-GAAP financial measure. See appendix for Non-GAAP reconciliation.<br>Compound Tangible Book Value
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12 *Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation.<br>Dollars in thousands<br>Core Earnings Capital Generation
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13 *Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation.<br>Dollars in thousands<br>Stable Operating Efficiency
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14 *Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21%<br>Dollars in thousands<br>Net Interest Margin<br>• 17.3% YoY growth in Net<br>Interest Income<br>• Earning Asset Yields declined<br>11 bps over the linked-quarter<br>driven by historically low and<br>flat yield curve<br>• Cost of interest bearing<br>deposits decreased 12 basis<br>points over the linked-quarter
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15 Dollars in thousands<br>Net Interest Drivers<br>Spot<br>Rate<br>3.26%<br>Spot<br>Rate<br>4.71%<br>Spot<br>Rate<br>1.37%<br>Spot<br>Rate<br>1.21%
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16 *Data as of 3/31/2020<br>Dollars in thousands<br>Loan Portfolio – Interest Rate Impact<br>Index Rate At Floor 0 to -25 bps -26 to 50 bps -51 to -75 bps -76 to -100 bps > -100 bps Total<br>PRIME 315,934 15,631 1,825 644 - 614 334,650<br>Libor 122,957 193 - 12,957 18,273 - 154,380<br>1 Yr CMT 9,611 ---- 0 9,611<br>2 Yr CMT ----- 1,763 1,763<br>3 Yr CMT 63,376 3,736 2,358 7,459 12,485 3,526 92,939<br>5 Yr CMT 192,543 21,712 5,097 6,798 1,987 14,924 243,061<br>Total 704,421 41,272 9,280 27,858 32,745 20,827 836,403<br>Variable/Adjustable Loans Vs. Rate Floors
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17<br>Dollars in thousands<br>Deposit Repricing Opportunities<br>$406 million in time deposits<br>maturing in the next 5 quarters at a<br>blended cost of 1.94%<br>$300 million, or 23%, of non-maturity<br>deposit portfolio still earning a rate<br>>1.00% as of 3/31/20
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18<br>Deposit Growth<br>• 17.6% YoY growth in noninterest<br>bearing deposits<br>• Internal Deposit Growth Plan<br>traction<br>• Rolled out The Bridge, a robust<br>treasury management platform<br>aimed at enhancing our current<br>user experience and servicing<br>more sophisticated clientele<br>• Capitalizing on unique<br>opportunity to migrate numerous<br>new client relationships neglected<br>or underserved by their primary<br>bank during PPP rush
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19<br>Dollars in thousands<br>Historical Deposit Composition<br>• Decrease in composition of wholesale funding<br>• Actively onboarding new clients displaced from<br>continued M&A disruption<br>• Average Core Deposits per branch surpassed<br>$200 million
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20<br>Loan Growth<br>• Continued focus on profitable<br>loan growth and disciplined<br>pricing<br>• Meaningful new and diverse<br>client acquisition opportunities<br>generated through PPP<br>• Average Commercial line<br>utilization at 57% in Q1 2020 is<br>consistent with Q4 2019
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21 Dollars in thousands<br>Historical Loan Composition<br>• Strong organic growth<br>• Prominent multifamily lender in Twin Cities<br>• Addition of C&I lending expertise as a result<br>of M&A disruption
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22 Dollars in thousands<br>CRE Portfolio Diversification<br>• Robust CRE risk management system<br>• Well diversified CRE portfolio<br>• 88% of CRE portfolio loans located within<br>Twin Cities MSA<br>Total Construction &<br>Development<br>13.6%<br>Total Multifamily39.7%<br>Office 12.3%<br>Retail 10.1%<br>Industrial 11.6%<br>Assisted Living<br>4.1%<br>Hospitality 2.4%<br>Other 6.2%
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23 Dollars in thousands<br>Multifamily Portfolio Diversification<br>Unit Type Total Principal Balance Unfunded Commitments # of Loans<br>% of Gross<br>Loans WAVG LTV<br>5-19 Units $88,799 $6,078 148 4.4% 64.3%<br>20-49 Units $132,334 $3,775 67 6.6% 64.1%<br>50-99 Units $159,571 $5,477 40 8.0% 68.1%<br>100+ Units $155,676 $3,469 15 7.8% 65.8%<br>Total $536,380 $18,799 270 26.8% 65.8%<br>• Only $60,000 in cumulative losses since the<br>bank’s inception in 2005<br>• Loans to seasoned owners of multifamily<br>properties with significant operating experience<br>• Average loan size is $1.99 million
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24<br>Asset Quality
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25<br>Investor Highlights
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Minnesota<br>Twin Cities<br>27 Source: S&P Global Market Intelligence<br>Branch Footprint
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28 Source: S&P Global Market Intelligence; deposit market share data as of 6/30/2019.<br>Top 10 Institutions<br>2006 Total<br>Deposits ($000)<br>Market<br>Share Top 10 Institutions<br>2019 Total<br>Deposits ($000)<br>Market<br>Share<br>Wells Fargo & Co. 16,308,234 $ 27.59% U.S. Bancorp 73,464,421 $ 38.80%<br>U.S. Bancorp 15,535,660 $ 26.28% Wells Fargo & Co. 64,630,788 $ 34.14%<br>TCF Financial Corp. 3,689,254 $ 6.24% TCF Financial Corp. 6,678,784 $ 3.53%<br>Marshall & Ilsley Corp. 1,729,917 $ 2.93% Bremer Financial Corp. 4,717,182 $ 2.49%<br>Bremer Financial Corp. 1,720,239 $ 2.91% Bank of Montreal 4,098,778 $ 2.16%<br>Associated Banc-Corp 1,162,530 $ 1.97% Bank of America Corp. 3,133,900 $ 1.66%<br>Klein Financial Inc. 880,289 $ 1.49% Old National Bancorp 2,994,173 $ 1.58%<br>Inter Savings Bank, fsb 558,660 $ 0.94% Ameriprise Financial, Inc. 2,205,519 $ 1.16%<br>Excel Bank Corp. 505,614 $ 0.86% Associated Banc-Corp 1,971,146 $ 1.04%<br>American Bancorp. 457,414 $ 0.77% Bridgewater Bancshares Inc. 1,728,890 $ 0.91%<br>Total Deposits 42,547,811 $ 71.97% Total Deposits 165,623,581 $ 87.47%<br>Total Bank Deposits 59,119,026 $ 197 Total Bank Deposits 189,322,031 $ 144<br>% of Twin Cities MSA Deposits 71.97% % of Twin Cities MSA Deposits 87.48%<br>Total Bank Deposits - Minneapolis-St.Paul-Bloomington, MN-WI MSA<br>Twin Cities Deposit Landscape
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29 Note: data set includes selected Minnesota bank and thrift M&A transactions in recent years<br>Source: S&P Global Market Intelligence; public filings<br>Core<br>Target Deal Deposit<br>Announcement Total Assets Value Premium In Market /<br>Buyer State Seller State Date ($mm) ($mm) (%) Market Entry<br>MN MN 6/28/2019 $129 NA NA In Market<br>SD MN 5/29/2019 $347 NA NA Market Entry<br>MN MN 4/22/2019 $206 NA NA In Market<br>IN MN 6/21/2018 $1,972 $433.8 14.9 In Market<br>ND MN 2/19/2018 $729 NA NA Market Entry<br>IA MN 11/13/2017 $390 $53.4 10.9 In Market<br>IN MN 8/8/2017 $2,056 $303.3 8.6 Market Entry<br>SD MN 8/3/2017 $409 NA NA Market Entry<br>NE MN 6/28/2016 $209 NA NA In Market<br>MN MN 1/7/2016 $76 $12.0 8.2 In Market<br>ND MN 9/22/2015 $352 $46.0 8.2 In Market<br>MN MN 7/24/2014 $670 $80.0 NA Market Entry<br>IA MN 11/21/2014 $1,172 $133.6 6.0 Market Entry<br>NE MN 7/25/2012 $401 NA NA Market Entry<br>Recent Minnesota M&A Transactions
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30<br>Source: S&P Global Market Intelligence<br>Dollars in thousands<br>Potential Acquisition Targets<br>268 •Commercial Banks located in Minnesota<br>238<br>•Commercial Banks located in Minnesota, and<br>with less than $500 million in assets<br>52<br>•Commercial Banks located in the Twin Cities<br>MSA, and with less than $500 million in assets<br>31<br>•Commercial Banks located in the Twin Cities<br>MSA, with less than $500 million in assets,<br>and a loan to deposits ratio of less than 80%<br>➢Total Assets (Median) = $131,371<br>➢Cost of Funds (Median) = 0.56%
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31 1 Non-GAAP financial measures; for further information, see page 32<br>Consolidated Summary<br>Financial Information - Historical<br>Dollar Values in Millions<br>2015Y 2016Y 2017Y 2018Y 2019Y<br>Balance Sheet<br>Total Assets 929 $ 1,260 $ 1,617 $ 1,974 $ 2,269 $<br>Gross Loans 799 1,001 1,347 1,665 1,912<br>Deposits 762 1,024 1,339 1,561 1,823<br>Gross Loan/Deposits 104.9% 97.8% 100.6% 106.7% 104.9% <br>Capital<br>Total Equity 80 $ 115 $ 137 $ 221 $ 245 $<br>Tangible Common Equity1 80 111 133 217 241<br>Tangible Common Equity/Tangible Assets1 8.63% 8.86% 8.26% 11.03% 10.65%<br>Tier 1 Leverage Ratio 8.89% 9.44% 8.38% 11.23% 10.69%<br>Tier 1 Risk-based Capital Ratio 10.34% 11.49% 9.49% 12.07% 11.39%<br>Total Risk-based Capital Ratio 11.59% 12.74% 12.46% 14.55% 12.98%<br>Earnings & Profitability<br>Net Income 11.2 $ 13.2 $ 16.9 $ 26.9 $ 31.4 $<br>ROAA 1.39% 1.20% 1.16% 1.51% 1.49%<br>ROAE 17.50% 12.88% 13.18% 13.87% 13.50%<br>Net Interest Margin 4.18% 4.00% 3.92% 3.72% 3.59%<br>Non-Int Inc./Avg. Assets 0.23% 0.23% 0.17% 0.14% 0.18%<br>Adjusted Non-Int Exp./Avg. Assets N/A N/A 1.62% 1.59% 1.59%<br>Adjusted Efficiency Ratio1 N/A N/A 41.1% 41.7% 43.3%<br>Asset Quality<br>NPAs/Assets 0.33% 0.52% 0.11% 0.03% 0.02%<br>Reserves/NPLs 429.94% 530.91% 1,448.81% 3,447.68% 4,886.33%<br>Reserves/Loans 1.26% 1.23% 1.22% 1.20% 1.18%<br>NCOs/Average Loans 0.14% 0.11% 0.00% 0.00% 0.01%<br>For the Fiscal Year Ended,
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32<br>This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these<br>non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both management and investors<br>to analyze and evaluate BWB’s financial performance. Because not all companies use the same calculations for these measures, the information in this<br>presentation may not be comparable to other similarly titled measures as calculated by other companies.<br>Efficiency Ratio is adjusted to exclude the historic tax credit amortization.<br>Dollars in thousands<br>Reconciliation of Annual<br>Non-GAAP Measures<br>Efficiency Ratio 2015 2016 2017 2017 2018 2018* 2019 2019*<br>Noninterest Expense 14,817 $ 20,168 $ 25,496 $ 25,496 $ 31,562 $ 31,562 $ 36,932 $ 36,932 $<br>Less: Amortization of Tax Credit Investments - - - (1,916) - (3,293) - (3,225)<br>Less: Amortization Intangible Assets - (104) (191) (191) (191) (191) (191) (191)<br>Adjusted Noninterest Expense 14,817 $ 20,064 $ 25,305 $ 23,389 $ 31,371 $ 28,078 $ 36,741 $ 33,516 $<br>Net Interest Income 32,695 $ 42,118 $ 54,173 $ 54,173 $ 64,738 $ 64,738 $ 74,132 $ 74,132 $<br>Noninterest Income 1,872 2,567 2,536 2,536 2,543 2,543 3,826 3,826<br>Less: (Gain) Loss on Sales of Securities (574) (830) 250 250 125 125 (516) (516)<br>Adjusted Operating Revenue 33,993 $ 43,855 $ 56,959 $ 56,959 $ 67,406 $ 67,406 $ 77,442 $ 77,442 $<br>Efficiency Ratio 43.6% 45.8% 44.4% 41.1% 46.5% 41.7% 47.4% 43.3%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible Assets 2015 2016 2017 2018 2019<br>Common Equity 80,178 $ 115,366 $ 137,162 $ 220,998 $ 244,794 $<br>Less: Intangible Assets - (4,060) (3,869) (3,678) (3,487)<br>Tangible Common Equity 80,178 $ 111,306 $ 133,293 $ 217,320 $ 241,307 $<br>Total Assets 928,686 $ 1,260,394 $ 1,616,612 $ 1,973,741 $ 2,268,830 $<br>Less: Intangible Assets - (4,060) (3,869) (3,678) (3,487)<br>Tangible Assets 928,686 $ 1,256,334 $ 1,612,743 $ 1,970,063 $ 2,265,343 $<br>Tangible Common Equity/Tangible Assets 8.63% 8.86% 8.26% 11.03% 10.65%<br>Tangible Book Value Per Share 2015 2016 2017 2018 2019<br>Book Value Per Common Share 4.05 $ 4.69 $ 5.56 $ 7.34 $ 8.45 $<br>Less: Effects of Intangible Assets - (0.17) (0.16) (0.12) (0.12)<br>Tangible Book Value Per Common Share 4.05 $ 4.53 $ 5.40 $ 7.22 $ 8.33 $<br>Total Common Shares 19,819,349 24,589,861 24,679,861 30,097,274 28,973,572<br>As of and for the year ended December 31 for year end data,<br>As of and for the year ended December 31 for year end data,
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33<br>This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these<br>non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both management and investors<br>to analyze and evaluate BWB’s financial performance. Because not all companies use the same calculations for these measures, the information in this<br>presentation may not be comparable to other similarly titled measures as calculated by other companies.<br>Efficiency Ratio is adjusted to exclude the historic tax credit amortization.<br>Dollars in thousands<br>Reconciliation of Quarterly<br>Non-GAAP Measures<br>Efficiency Ratio<br>March 31,<br>2019<br>March 31,<br>2019 <br>June 30,<br>2019<br>June 30,<br>2019 <br>September 30,<br>2019<br>September 30,<br>2019 <br>December 31,<br>2019<br>December 31,<br>2019 <br>March 31,<br>2020<br>March 31,<br>2020<br>Noninterest Expense 7,885 $ 7,885 $ 9,474 $ 9,474 $ 9,084 $ 9,084 $ 10,489 $ 10,489 $ 9,746 $ 9,746 $<br>Less: Amortization of Tax Credit Investments - (177) - (1,390) - (530) - (1,128) - (85)<br>Less: Amortization Intangible Assets (48) (48) (47) (47) (48) (48) (48) (48) (48) (48)<br>Adjusted Noninterest Expense 7,837 $ 7,660 $ 9,427 $ 8,037 $ 9,036 $ 8,506 $ 10,441 $ 9,313 $ 9,698 $ 9,613 $<br>Net Interest Income 17,131 $ 17,131 $ 18,138 $ 18,138 $ 18,935 $ 18,935 $ 19,928 $ 19,928 $ 20,102 $ 20,102 $<br>Noninterest Income 634 634 1,134 1,134 946 946 1,112 1,112 1,716 1,716<br>Less: (Gain) Loss on Sales of Securities 5 5 (463) (463) (58) (58) - - - -<br>Adjusted Operating Revenue 17,770 $ 17,770 $ 18,809 $ 18,809 $ 19,823 $ 19,823 $ 21,040 $ 21,040 $ 21,818 $ 21,818 $<br>Efficiency Ratio 44.1% 43.1% 50.1% 42.7% 45.6% 42.9% 49.6% 44.3% 44.4% 44.1%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible<br>Assets<br>March 31,<br>2019<br>June 30,<br>2019<br>September 30,<br>2019<br>December 31,<br>2019<br>March 31,<br>2020<br>Common Equity 231,775 $ 229,137 $ 236,059 $ 244,794 $ 248,143 $<br>Less: Intangible Assets (3,630) (3,582) (3,535) (3,487) (3,439)<br>Tangible Common Equity 228,145 $ 225,555 $ 232,524 $ 241,307 $ 244,704 $<br>Total Assets 2,048,111 $ 2,123,631 $ 2,232,339 $ 2,268,830 $ 2,418,730 $<br>Less: Intangible Assets (3,630) (3,582) (3,535) (3,487) (3,439)<br>Tangible Assets 2,044,481 $ 2,120,049 $ 2,228,804 $ 2,265,343 $ 2,415,291 $<br>Tangible Common Equity/Tangible Assets 11.16% 10.64% 10.43% 10.65% 10.13%<br>Tangible Book Value Per Share<br>March 31,<br>2019<br>June 30,<br>2019<br>September 30,<br>2019<br>December 31,<br>2019<br>March 31,<br>2020<br>Book Value Per Common Share 7.70 $ 7.90 $ 8.20 $ 8.45 $ 8.61 $<br>Less: Effects of Intangible Assets (0.12) (0.12) (0.12) (0.12) (0.12)<br>Tangible Book Value Per Common Share 7.58 $ 7.78 $ 8.08 $ 8.33 $ 8.49 $<br>Total Common Shares 30,097,274 28,986,729 28,781,162 28,973,572 28,807,375<br>As of and for the quarter ended,<br>As of and for the quarter end,
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34<br>Reconciliation of Quarterly<br>Non-GAAP Measures – Pre-Provision<br>This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these<br>non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both management and investors<br>to analyze and evaluate BWB’s financial performance. Because not all companies use the same calculations for these measures, the information in this<br>presentation may not be comparable to other similarly titled measures as calculated by other companies.<br>Dollars in thousands<br>Pre-Provision Net Revenue<br>March 31,<br>2019<br>June 30,<br>2019<br>September 30,<br>2019<br>December 31,<br>2019<br>March 31,<br>2020<br>Noninterest Income 634 $ 1,134 $ 946 $ 1,112 $ 1,719 $<br>Less: (Gain) Loss on sales on Securities 5 (463) (58) - (3)<br>Total Operating Noninterest Income 639 671 888 1,112 1,716<br>Plus: Net Interest Income 17,131 18,138 18,935 19,928 20,102<br>Net Operating Revenue 17,770 18,809 19,823 21,040 21,818<br>Noninterest Expense 7,885 9,474 9,084 10,489 9,746<br>Less: Amortization of Tax Credit Investments (177) (1,390) (530) (1,128) (85)<br>Total Operating Noninterest Expense 7,708 8,084 8,554 9,361 9,661<br>PPNR 10,062 $ 10,725 $ 11,269 $ 11,679 $ 12,157 $<br>As of and for the quarter end,
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