8-K - BWB - Equibles

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

FORM 8-K CURRENT REPORT

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

October 27, 2022

Date of Report

(Date of earliest event reported)

BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

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

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

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

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

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

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

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

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

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

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

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

Emerging growth company ☒

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

Item 2.02 R esults of Operations and Financial Condition.

On October 27, 2022, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 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 October 27, 2022, in its 2022 third quarter earnings release, the Company announced that its Board of Directors had declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depository share, each representing a 1/100^th^ interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2022, to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2022.

Item 9.01 Financial Statements and Exhibits.

(d)****Exhibits

Exhibit 99.1	Press Release of Bridgewater Bancshares, Inc., dated October 27, 2022, regarding second quarter 2022 financial results
Exhibit 99.2	Earnings Presentation dated October 27, 2022
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Exhibit 104	Cover Page Interactive Data File (embedded within the Inline XBRL document)
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SIGNATURES

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


	Bridgewater Bancshares, Inc.


Date: October 27, 2022
	By: /s/ Jerry Baack
	Name: Jerry Baack
	Title: Chairman, Chief Executive Officer and President

Exhibit 99.1


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

October 27, 2022

Bridgewater Bancshares, Inc. Announces Record Third Quarter 2022 Net Income of $14.5 Million, $0.47 Diluted Earnings Per Common Share

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced record net income of $14.5 million for the third quarter of 2022, a 12.7% increase over net income of $12.9 million for the second quarter of 2022, and a 26.1% increase over net income of $11.5 million for the third quarter of 2021. Earnings per diluted common share for the third quarter of 2022 were $0.47, a 14.6% increase compared to $0.41 per diluted common share for the second quarter of 2022, and a 19.4% increase compared to $0.40 per diluted common share for the same period in 2021.

“Bridgewater’s ability to produce consistent financial results remained evident in the third quarter with record pre-provision net revenue and continued growth of tangible book value per share,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “Our impressive profitability was driven by robust loan growth, well controlled expenses and the hard work of our team members to expand and deepen our client relationships.

“While the current economic environment creates an elevated level of uncertainty, we remain confident in our business model. As the rise in interest rates drives deposit costs higher and creates near-term net interest margin pressure, we believe our proven ability to grow the balance sheet can support our continued focus on overall revenue growth. Couple this with our superb credit quality and an efficiency ratio among the best in the industry and we have a story that is poised to continue driving sustained shareholder value.”

Third Quarter 2022 Financial Results


			****			****	Diluted		Adjusted		Nonperforming
ROA		PPNR ROA ^(1)^	****	ROE		****	earnings per share		efficiency ratio ^(1)^		assets to total assets
1.46	%	2.15	%	14.99	%		$	0.47	39.4	%	0.02	%

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

Third Quarter 2022 Highlights

●	Diluted earnings per common share were $0.47, compared to $0.41 per common share for the second quarter of 2022.

●	Tangible book value per share, a non-GAAP financial measure, increased $0.30, or 10.8% annualized, to $11.33, compared to $11.03 at June 30, 2022, despite the market value depreciation of the securities portfolio due to rapidly rising interest rates, which continues to negatively impact accumulated other comprehensive income.

●	Record pre-provision net revenue (PPNR), a non-GAAP financial measure, of $21.4 million, compared to $20.4 million for the second quarter of 2022, an increase of $1.0 million, or 4.9%. PPNR ROA, a non-GAAP financial measure, was 2.15%, compared to 2.19% for the second quarter of 2022.

Page 1 of 17

●

Annualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the third quarter of 2022 were 1.46% and 14.99%, compared to ROA and ROE of 1.38% and 13.55%, respectively, for the second quarter of 2022. Annualized return on average tangible common equity, a non-GAAP financial measure, was 17.03% for the third quarter of 2022, compared to 15.26% for the second quarter of 2022.

●	Gross loans increased $154.2 million, or 19.0% annualized, from the end of the second quarter of 2022.

●	Deposits increased $103.1 million, or 12.8% annualized, from the end of the second quarter of 2022.

●	Net interest margin (on a fully tax-equivalent basis) was 3.53%, compared to 3.58% in the second 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 3.38%, compared to 3.34% in the second 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 39.4%, compared to 40.0% for the second quarter of 2022.

●	A loan loss provision of $1.5 million was recorded to support strong organic loan growth. The allowance for loan losses to total loans was 1.38% at September 30, 2022, compared to 1.39% at June 30, 2022.

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

Year-Over-Year Highlights

●	Net income was $14.5 million for the third quarter of 2022, compared to $11.5 million for the third quarter of 2021, an increase of $3.0 million, or 26.1%.

●	Diluted earnings per common share for the third quarter of 2022 were $0.47, compared to $0.40 for the third quarter of 2021, an increase of 19.4%.

●	Net interest margin (on a fully tax-equivalent basis) was 3.53% for the third quarter of 2022 compared to 3.54% for the third quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, was 3.38% for the third quarter of 2022, compared to 3.22% for the third quarter of 2021.

●	Gross loans increased $668.1 million at September 30, 2022, or 24.6%, compared to September 30, 2021.

●	Deposits increased $450.9 million at September 30, 2022, or 15.8%, compared to September 30, 2021.

Page 2 of 17

Key Financial Measures


		As of and for the Three Months Ended										As of and for the Nine Months Ended
		September 30,			June 30,			September 30,				September 30,			September 30,
	****	2022			2022			2021			****	2022		****	2021
Per Common Share Data
Basic Earnings Per Share		$	0.49		$	0.43		$	0.41			$	1.32		$	1.18
Diluted Earnings Per Share			0.47			0.41			0.40				1.27			1.14
Book Value Per Share			11.44			11.14			10.73				11.44			10.73
Tangible Book Value Per Share ^(1)^			11.33			11.03			10.62				11.33			10.62
Basic Weighted Average Shares Outstanding			27,520,117			27,839,260			28,047,280				27,825,517			28,035,246
Diluted Weighted Average Shares Outstanding			28,592,854			28,803,842			29,110,547				28,882,701			29,077,850
Shares Outstanding at Period End			27,587,978			27,677,372			28,066,822				27,587,978			28,066,822

Selected Performance Ratios
Return on Average Assets (Annualized)			1.46	%		1.38	%		1.37	%			1.42	%		1.42	%
Pre-Provision Net Revenue Return on Average Assets (Annualized) ^(1)^			2.15			2.19			2.09				2.15			2.10
Return on Average Shareholders' Equity (Annualized)			14.99			13.55			13.81				13.85			14.95
Return on Average Tangible Common Equity (Annualized)^(1)^			17.03			15.26			15.47				15.63			15.69
Yield on Interest Earning Assets^(2)^			4.37			4.16			4.14				4.23			4.20
Yield on Total Loans, Gross^(2)^			4.59			4.45			4.65				4.50			4.65
Cost of Total Deposits			0.73			0.46			0.48				0.55			0.53
Cost of Funds			0.93			0.63			0.65				0.73			0.70
Net Interest Margin ^(2)^			3.53			3.58			3.54				3.57			3.55
Core Net Interest Margin ^(1)(2)^			3.38			3.34			3.22				3.36			3.29
Efficiency Ratio^(1)^			39.8			40.2			43.9				40.7			42.4
Adjusted Efficiency Ratio ^(1)^			39.4			40.0			41.5				40.4			41.3
Noninterest Expense to Average Assets (Annualized)			1.42			1.47			1.58				1.48			1.53
Adjusted Noninterest Expense to Average Assets (Annualized) ^(1)^			1.41			1.47			1.49				1.47			1.49
Loan to Deposit Ratio			102.3			100.7			95.0
Core Deposits to Total Deposits ^(3)^			83.0			82.9			83.3
Tangible Common Equity to Tangible Assets ^(1)^			7.57			7.87			8.81

Capital Ratios (Bank Only) ^(4)^
Tier 1 Leverage Ratio			11.24	%		11.43	%		10.96	%
Common Equity Tier 1 Risk-based Capital Ratio			11.46			11.53			11.88
Tier 1 Risk-based Capital Ratio			11.46			11.53			11.88
Total Risk-based Capital Ratio			12.67			12.74			13.13

Capital Ratios (Consolidated)^(4)^
Tier 1 Leverage Ratio			9.98	%		10.33	%		10.70	%
Common Equity Tier 1 Risk-based Capital Ratio			8.47			8.50			9.47
Tier 1 Risk-based Capital Ratio			10.19			10.29			11.65
Total Risk-based Capital Ratio			13.78			13.98			15.93

(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


		September 30,			June 30,		March 31,		December 31,		September 30,
(dollars in thousands)	****	2022		****	2022		2022		2021		2021
Selected Balance Sheet Data
Total Assets		$	4,128,987		$	3,883,264	$	3,607,920	$	3,477,659	$	3,389,125
Total Loans, Gross			3,380,082			3,225,885		2,987,967		2,819,472		2,712,012
Allowance for Loan Losses			46,491			44,711		41,692		40,020		38,901
Goodwill and Other Intangibles			2,962			3,009		3,057		3,105		3,153

Deposits			3,305,074			3,201,953		3,035,611		2,946,237		2,854,157
Tangible Common Equity^(1)^			312,531			305,360		309,870		309,653		298,135
Total Shareholders' Equity			382,007			374,883		379,441		379,272		367,803
Average Total Assets - Quarter-to-Date			3,948,201			3,743,575		3,513,798		3,403,270		3,332,301
Average Shareholders' Equity - Quarter-to-Date			384,020			381,448		383,024		374,035		330,604

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


	For the Three Months Ended							For the Nine Months Ended
	September 30,		June 30,			September 30,		September 30,			September 30,
(dollars in thousands)	2022		2022		****	2021		2022		****	2021
Selected Income Statement Data
Interest Income	$	42,359	$	37,782		$	33,517	$	114,835		$	95,104
Interest Expense		8,264		5,252			4,844		18,030			14,748
Net Interest Income		34,095		32,530			28,673		96,805			80,356
Provision for Loan Losses		1,500		3,025			1,300		6,200			4,000
Net Interest Income after Provision for Loan Losses		32,595		29,505			27,373		90,605			76,356
Noninterest Income		1,387		1,650			1,410		4,594			4,021
Noninterest Expense		14,157		13,752			13,236		41,417			35,636
Income Before Income Taxes		19,825		17,403			15,547		53,782			44,741
Provision for Income Taxes		5,312		4,521			4,038		14,125			11,568
Net Income		14,513		12,882			11,509		39,657			33,173
Preferred Stock Dividends		(1,013)		(1,014)			—		(3,040)			—
Net Income Available to Common Shareholders	$	13,500	$	11,868		$	11,509	$	36,617		$	33,173

Income Statement

Net Interest Income

Net interest income was $34.1 million for the third quarter of 2022, an increase of $1.6 million, or 4.8%, from $32.5 million in the second quarter of 2022, and an increase of $5.4 million, or 18.9%, from $28.7 million in the third quarter of 2021. The linked-quarter increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and loans, offset partially by higher rates paid on deposits. 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 lower PPP fee recognition. Average interest earning assets were $3.87 billion for the third quarter of 2022, an increase of $200.1 million, or 5.5%, from $3.67 billion for the second quarter of 2022, and an increase of $637.6 million, or 19.7%, from $3.23 billion for the third quarter of 2021. The linked-quarter and year-over-year increases in average interest earning assets were primarily due to strong organic growth in the loan portfolio and continued 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 third quarter of 2022 was 3.53%, a five basis point decrease from 3.58% in the second quarter of 2022, and a modest one basis point decline from 3.54% in the third 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 third quarter of 2022 was 3.38%, a four basis point increase from 3.34% in the second quarter of 2022, and a 16 basis point increase from 3.22% in the third 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.

Page 4 of 17

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 $90,000 of PPP origination fees during the third quarter of 2022, compared to $244,000 during the second quarter of 2022, and $1.6 million during the third quarter of 2021. Remaining PPP origination fees to be recognized as of September 30, 2022 were $45,000.

Interest income was $42.4 million for the third quarter of 2022, an increase of $4.6 million, or 12.1%, from $37.8 million in the second quarter of 2022, and an increase of $8.8 million, or 26.4%, from $33.5 million in the third quarter of 2021. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.37% in the third quarter of 2022, compared to 4.16% in the second quarter of 2022, and 4.14% in the third quarter of 2021. The linked-quarter expansion in the yield on interest earning assets was primarily due to the rapid increase in market interest rates resulting in new loan originations 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 4.59% in the third quarter of 2022, which was 16 basis points higher than 4.43% in the second quarter of 2022, and eight basis points higher than 4.51% in the third quarter of 2021. While loan fees have maintained a relatively stable contribution to the aggregate loan yield, the current period was 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 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
	September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021	****
Interest	4.42	%	4.17	%	4.15	%	4.20	%	4.28	%
Fees	0.17		0.26		0.25		0.21		0.23
Yield on Loans, Excluding PPP Loans	4.59	%	4.43	%	4.40	%	4.41	%	4.51	%

Interest expense was $8.3 million for the third quarter of 2022, an increase of $3.0 million, or 57.3%, from $5.3 million in the second quarter of 2022, and an increase of $3.4 million, or 70.6%, from $4.8 million in the third quarter of 2021. The cost of interest bearing liabilities increased 44 basis points on a linked-quarter basis from 0.86% in the second quarter of 2022 to 1.30% in the third quarter of 2022, primarily due to the rapid increase in market interest rates that occurred during the quarter. On a year-over-year basis, the cost of interest bearing liabilities increased 42 basis points from 0.88% in the third quarter of 2021 to 1.30% in the third quarter of 2022, primarily due to higher rates paid on deposits and the increased utilization of federal funds purchased and FHLB advances in the rising interest rate environment.

Interest expense on deposits was $6.0 million for the third quarter of 2022, an increase of $2.5 million, or 73.1%, from $3.5 million in the second quarter of 2022, and an increase of $2.6 million, or 75.1%, from $3.4 million in the third quarter of 2021. The cost of total deposits increased 27 basis points on a linked-quarter basis from 0.46% in the second quarter of 2022, to 0.73% in the third quarter of 2022, primarily due to the rapid increase in rates in 2022. On a year-over-year basis, the cost of total deposits increased 25 basis points from 0.48% in the third quarter of 2021, to 0.73% in the third quarter of 2022, primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.

Page 5 of 17

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


		For the Three Months Ended																							****
		September 30, 2022								June 30, 2022							****	September 30, 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		$	57,613		$	165		1.13	%	$	61,046		$	40		0.26	%	$	187,405		$	67		0.14	%
Investment Securities:
Taxable Investment Securities			461,255			3,741		3.22			417,142			2,696		2.59			314,367			1,751		2.21
Tax-Exempt Investment Securities^(1)^			75,801			799		4.18			74,261			795		4.30			71,801			737		4.07
Total Investment Securities			537,056			4,540		3.35			491,403			3,491		2.85			386,168			2,488		2.56
Paycheck Protection Program Loans ^(2)^			2,424			96		15.75			8,335			263		12.67			76,006			1,753		9.15
Loans ^(1)(2)^			3,263,390			37,724		4.59			3,099,344			34,205		4.43			2,579,021			29,348		4.51
Total Loans			3,265,814			37,820		4.59			3,107,679			34,468		4.45			2,655,027			31,101		4.65
Federal Home Loan Bank Stock			11,413			156		5.42			11,620			59		2.04			5,701			68		4.65
Total Interest Earning Assets			3,871,896			42,681		4.37	%		3,671,748			38,058		4.16	%		3,234,301			33,724		4.14	%
Noninterest Earning Assets			76,305								71,827								98,000
Total Assets		$	3,948,201							$	3,743,575							$	3,332,301
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	517,658		$	1,032		0.79	%	$	552,502		$	694		0.50	%	$	479,580		$	562		0.47	%
Savings and Money Market Deposits			999,932			2,494		0.99			925,354			1,185		0.51			801,354			904		0.45
Time Deposits			288,621			847		1.16			280,645			665		0.95			318,222			928		1.16
Brokered Deposits			447,034			1,612		1.43			403,931			912		0.91			440,167			1,023		0.92
Total Interest Bearing Deposits			2,253,245			5,985		1.05			2,162,432			3,456		0.64			2,039,323			3,417		0.66
Federal Funds Purchased			106,826			709		2.63			137,379			410		1.20			—			—		—
FHLB Advances			72,343			328		1.80			47,511			167		1.41			54,130			213		1.56
Subordinated Debentures			92,503			1,242		5.33			92,396			1,219		5.29			91,337			1,214		5.27
Total Interest Bearing Liabilities			2,524,917			8,264		1.30	%		2,439,718			5,252		0.86	%		2,184,790			4,844		0.88	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			991,545								882,477								784,148
Other Noninterest Bearing Liabilities			47,719								39,932								32,759
Total Noninterest Bearing Liabilities			1,039,264								922,409								816,907
Shareholders' Equity			384,020								381,448								330,604
Total Liabilities and Shareholders' Equity		$	3,948,201							$	3,743,575							$	3,332,301
Net Interest Income / Interest Rate Spread						34,417		3.07	%					32,806		3.30	%					28,880		3.26	%
Net Interest Margin ^(3)^								3.53	%							3.58	%							3.54	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(322)								(276)								(207)
Net Interest Income					$	34,095							$	32,530							$	28,673

(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 the third quarter of 2022, a decrease of $1.5 million from $3.0 million for the second quarter of 2022, and an increase of $200,000 from $1.3 million for the third quarter of 2021. The provision recorded in the third quarter of 2022 was primarily attributable to the strong growth of the loan portfolio. The allowance for loan losses to total loans was 1.38% at September 30, 2022, compared to 1.39% at June 30, 2022, and 1.43% at September 30, 2021.

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

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


		Three Months Ended									Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)	****	2022		****	2022		****	2021		****	2022		****	2021
Balance at Beginning of Period		$	44,711		$	41,692		$	37,591		$	40,020		$	34,841
Provision for Loan Losses			1,500			3,025			1,300			6,200			4,000
Charge-offs			(5)			(14)			(20)			(34)			(37)
Recoveries			285			8			30			305			97
Balance at End of Period		$	46,491		$	44,711		$	38,901		$	46,491		$	38,901

Noninterest Income

Noninterest income was $1.4 million for the third quarter of 2022, a decrease of $263,000 from $1.7 million for the second quarter of 2022, and a decrease of $23,000 from $1.4 million for the third quarter of 2021. The linked-quarter decrease was primarily due to a decrease in letter of credit fees and other income, offset partially by an increase in bank-owned life insurance income. The year-over-year decrease was primarily due to decreased letter of credit fees and gains on sales of securities, offset partially by an increase in bank-owned life insurance income.

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


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)	2022		****	2022		****	2021		****	2022		****	2021
Noninterest Income:
Customer Service Fees	$	313		$	298		$	268		$	892		$	733
Net Gain on Sales of Securities		—			52			48			52			750
Letter of Credit Fees		428			564			577			1,234			1,135
Debit Card Interchange Fees		153			152			143			438			414
Swap Fees		—			—			—			557			—
Bank-Owned Life Insurance		227			149			166			524			166
Other Income		266			435			208			897			823
Totals	$	1,387		$	1,650		$	1,410		$	4,594		$	4,021

Noninterest Expense

Noninterest expense was $14.2 million for the third quarter of 2022, an increase of $405,000 from $13.8 million for the second quarter of 2022, and an increase of $921,000 from $13.2 million for the third quarter of 2021. The linked-quarter increase was primarily due to an increase in salaries and employee benefits and technology expenses, offset partially by a decrease in professional and consulting fees, marketing and advertising expenses, and other expenses. The year-over-year increase was primarily attributable to increases in salaries and employee benefits, occupancy and equipment, and other expenses, offset partially by a decrease in debt prepayment fees.

Page 7 of 17

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


	Three Months Ended									Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
(dollars in thousands)	2022		****	2022		****	2021		****	2022		****	2021
Noninterest Expense:
Salaries and Employee Benefits	$	9,449		$	8,977		$	8,309		$	27,120		$	22,923
Occupancy and Equipment		1,086			1,042			942			3,213			2,977
FDIC Insurance Assessment		315			330			355			1,005			960
Data Processing		372			356			325			1,025			916
Professional and Consulting Fees		716			769			708			2,181			1,804
Information Technology and Telecommunications		650			594			598			1,822			1,609
Marketing and Advertising		479			524			418			1,629			1,018
Intangible Asset Amortization		48			47			48			143			143
Amortization of Tax Credit Investments		114			63			152			294			410
Debt Prepayment Fees		—			—			582			—			582
Other Expense		928			1,050			799			2,985			2,294
Totals	$	14,157		$	13,752		$	13,236		$	41,417		$	35,636

The Company continues to add key talent across the organization, reaching 246 full-time equivalent employees at September 30, 2022, compared to 236 employees at June 30, 2022, and 219 employees at September 30, 2021.

The efficiency ratio, a non-GAAP financial measure, was 39.8% for the third quarter of 2022, compared to 40.2% for the second quarter of 2022, and 43.9% for the third quarter of 2021. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 39.4% for the third quarter of 2022, 40.0% for the second quarter of 2022 and 41.5% for the third quarter of 2021.

Income Taxes

The effective combined federal and state income tax rate for the third quarter of 2022 was 26.8%, a slight increase from 26.0% for the second quarter of 2022 and 26.0% for the third quarter of 2021.

Balance Sheet

Total assets at September 30, 2022 were $4.13 billion, a 6.3% increase from $3.88 billion at June 30, 2022, and a 21.8% increase from $3.39 billion at September 30, 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 robust organic loan growth and purchases of investment securities, offset partially by a decrease in cash and cash equivalents.

Total gross loans at September 30, 2022 were $3.38 billion, an increase of $154.2 million, or 4.8%, over total gross loans of $3.23 billion at June 30, 2022, and an increase of $668.1 million, or 24.6%, over total gross loans of $2.71 billion at September 30, 2021. The increase in the loan portfolio during the third quarter of 2022 was primarily due to growth in the commercial and multifamily segments, offset partially by a decrease in the construction and land development segment which was the result of completed construction projects migrating to permanent financing. While the Company’s loan growth in the third quarter of 2022 remained strong, the pace began to moderate slightly, compared to the first half of 2022 due to active balance sheet management to align loan growth with the funding outlook, sales of participations on larger originations to manage growth, and the impact of the higher interest rate environment on the number of deals that made financial sense.

Page 8 of 17

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


	September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
(dollars in thousands)
Commercial	$	412,448	$	403,569	$	363,290	$	360,169	$	350,081
Paycheck Protection Program		1,192		4,860		12,309		26,162		54,190
Construction and Land Development		335,557		359,191		321,131		281,474		257,167
Real Estate Mortgage:
1 - 4 Family Mortgage		341,102		334,815		312,201		305,317		290,535
Multifamily		1,230,509		1,087,865		1,012,623		910,243		865,172
CRE Owner Occupied		151,088		142,214		117,969		111,096		101,834
CRE Nonowner Occupied		900,691		886,432		840,463		818,569		786,271
Total Real Estate Mortgage Loans		2,623,390		2,451,326		2,283,256		2,145,225		2,043,812
Consumer and Other		7,495		6,939		7,981		6,442		6,762
Total Loans, Gross		3,380,082		3,225,885		2,987,967		2,819,472		2,712,012
Allowance for Loan Losses		(46,491)		(44,711)		(41,692)		(40,020)		(38,901)
Net Deferred Loan Fees		(9,088)		(9,536)		(9,065)		(9,535)		(10,199)
Total Loans, Net	$	3,324,503	$	3,171,638	$	2,937,210	$	2,769,917	$	2,662,912

Total deposits at September 30, 2022 were $3.31 billion, an increase of $103.1 million, or 3.2%, over total deposits of $3.20 billion at June 30, 2022, and an increase of $450.9 million, or 15.8%, over total deposits of $2.85 billion at September 30, 2021. Deposit growth in the third quarter of 2022 was primarily due to an increase in savings and money market deposits and time deposits, offset partially by a decline in interest bearing transaction deposits and brokered deposits. In addition to the continued growth of core deposits, brokered deposits are also being used as a supplemental funding source, as needed, for the robust loan portfolio growth. Given the rapid rise in interest rates in 2022 and the prospect for more, management believes deposits could experience fluctuations in future periods.

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


		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		September 30, 2021
(dollars in thousands)	****
Noninterest Bearing Transaction Deposits		$	961,084	$	961,998	$	835,482	$	875,084	$	846,490
Interest Bearing Transaction Deposits			510,396		522,151		598,402		544,789		488,785
Savings and Money Market Deposits			1,077,333		952,138		890,926		863,567		791,861
Time Deposits			293,052		272,424		286,674		293,474		309,824
Brokered Deposits			463,209		493,242		424,127		369,323		417,197
Total Deposits		$	3,305,074	$	3,201,953	$	3,035,611	$	2,946,237	$	2,854,157

Capital

Total shareholders’ equity at September 30, 2022 was $382.0 million, an increase of $7.1 million compared to total shareholders’ equity of $374.9 million at June 30, 2022, and an increase of $14.2 million, or 3.9%, over total shareholders’ equity of $367.8 million at September 30, 2021. The linked-quarter increase was due to net income retained and unrealized gains in the derivatives portfolio, 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 an increase in stock repurchases made under the Company’s stock repurchase program and an increase in unrealized losses in the securities portfolio.

During the third quarter of 2022, the Company repurchased 99,310 shares of its common stock. Shares were repurchased at a weighted average price of $16.27 per share, for a total of $1.6 million. On August 18, 2022, the Company announced that its board of directors approved a new stock repurchase program which authorizes the Company to repurchase up to $25.0 million of its common stock, subject to certain limitations and conditions. The new stock repurchase program replaced and superseded the $40.0 million stock repurchase program, under which approximately $1.6 million remained. As of September 30, 2022, no shares have been repurchased under the new plan. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program based on various factors including valuation, capital levels and other uses of capital.

Tangible book value per share, a non-GAAP financial measure, was $11.33 as of September 30, 2022, an increase of 2.7% from $11.03 as of June 30, 2022, and an increase of 6.6% from $10.62 as of September 30, 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 7.57% at September 30, 2022, compared to 7.87% at June 30, 2022, and 8.81% at September 30, 2021.

Page 9 of 17

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 December 1, 2022 to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2022.

Asset Quality

Annualized net charge-offs (recoveries) as a percent of average loans were (0.03)% for the third quarter of 2022, compared to 0.00% for each of the previous four quarters. At September 30, 2022, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $663,000, or 0.02% of total assets, as compared to $688,000, or 0.02% of total assets at June 30, 2022, and $734,000, or 0.02% of total assets at September 30, 2021.

Loans that have potential weaknesses that warrant a watchlist risk rating at September 30, 2022 totaled $22.8 million, compared to $34.7 million at June 30, 2022, and $67.4 million at September 30, 2021. The linked-quarter decrease was primarily due to the migration of one relationship to substandard and the payoff of one other relationship. Loans that warranted a substandard risk rating at September 30, 2022 totaled $30.8 million, compared to $27.0 million at June 30, 2022, and $7.7 million at September 30, 2021.

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


		As of and for the Three Months Ended
		September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands)	****	2022		****	2022		****	2022		****	2021		****	2021		****
Selected Asset Quality Data
Loans 30-89 Days Past Due		$	38		$	225		$	13		$	49		$	18
Loans 30-89 Days Past Due to Total Loans			0.00	%		0.01	%		0.00	%		0.00	%		0.00	%
Nonperforming Loans		$	663		$	688		$	706		$	722		$	734
Nonperforming Loans to Total Loans			0.02	%		0.02	%		0.02	%		0.03	%		0.03	%
Foreclosed Assets		$	—		$	—		$	—		$	—		$	—
Nonaccrual Loans to Total Loans			0.02	%		0.02	%		0.02	%		0.03	%		0.03	%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans			0.02			0.02			0.02			0.03			0.03
Nonperforming Assets ^(1)^		$	663		$	688		$	706		$	722		$	734
Nonperforming Assets to Total Assets ^(1)^			0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Allowance for Loan Losses to Total Loans			1.38			1.39			1.40			1.42			1.43
Allowance for Loan Losses to Total Loans, Excluding PPP Loans			1.38			1.39			1.40			1.43			1.46
Allowance for Loans Losses to Nonaccrual Loans			7,012.22			6,498.69			5,905.38			5,542.94			5,299.86
Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans			(0.03)			0.00			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.

During the COVID-19 pandemic, the Company developed programs for clients who experienced business and personal disruptions by providing interest-only modifications, loan payment deferrals, and extended amortization modifications. In accordance with interagency regulatory guidance and the CARES Act, qualifying loans modified in response to the COVID-19 pandemic are not considered troubled debt restructurings. The Company had one modified loan totaling $10.6 million outstanding as of September 30, 2022, representing 0.3% of the total loan portfolio, excluding PPP loans, which is down from $29.8 million at June 30, 2022.

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 $4.1 billion and seven branches as of September 30, 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

Page 10 of 17

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

Forward-Looking Statements

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

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of recent and 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; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation; the negative effects of the ongoing COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, including due to supply chain disruptions, 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; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk, especially in light of recent excess liquidity at the Bank; 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; 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; 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)


		September 30,			December 31,			September 30,
	****	2022		****	2021		****	2021
		(Unaudited)						(Unaudited)
ASSETS
Cash and Cash Equivalents		$	75,496		$	143,473		$	189,502
Bank-Owned Certificates of Deposit			1,182			1,876			1,877
Securities Available for Sale, at Fair Value			542,007			439,362			413,149
Loans, Net of Allowance for Loan Losses of $46,491 at September 30, 2022 (unaudited), $40,020 at December 31, 2021 and $38,901 at September 30, 2021 (unaudited)			3,324,503			2,769,917			2,662,912
Federal Home Loan Bank (FHLB) Stock, at Cost			15,603			5,242			5,442
Premises and Equipment, Net			48,941			49,395			49,803
Accrued Interest			11,198			9,186			8,550
Goodwill			2,626			2,626			2,626
Other Intangible Assets, Net			336			479			527
Other Assets			107,095			56,103			54,737
Total Assets		$	4,128,987		$	3,477,659		$	3,389,125

LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing		$	961,084		$	875,084		$	846,490
Interest Bearing			2,343,990			2,071,153			2,007,667
Total Deposits			3,305,074			2,946,237			2,854,157
Federal Funds Purchased			212,000			—			—
FHLB Advances			71,500			42,500			47,500
Subordinated Debentures, Net of Issuance Costs			92,559			92,239			92,153
Accrued Interest Payable			2,214			1,409			1,656
Other Liabilities			63,633			16,002			25,856
Total Liabilities			3,746,980			3,098,387			3,021,322

SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value; Authorized 10,000,000
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at September 30, 2022 (unaudited), December 31, 2021, and September 30, 2021 (unaudited)			66,514			66,514			66,515
Common Stock- $0.01 par value; Authorized 75,000,000
Common Stock - Issued and Outstanding 27,587,978 at September 30, 2022 (unaudited), 28,206,566 at December 31, 2021 and 28,066,822 at September 30, 2021 (unaudited)			276			282			281
Additional Paid-In Capital			95,973			104,123			103,471
Retained Earnings			235,964			199,347			188,004
Accumulated Other Comprehensive Income (Loss)			(16,720)			9,006			9,532
Total Shareholders' Equity			382,007			379,272			367,803
Total Liabilities and Equity		$	4,128,987		$	3,477,659		$	3,389,125

Page 12 of 17

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)


		Three Months Ended									Nine Months Ended
		September 30,			June 30			September 30,			September 30,			September 30,
	****	2022		****	2022		****	2021		****	2022		****	2021
INTEREST INCOME
Loans, Including Fees		$	37,666		$	34,358		$	31,049		$	103,768		$	87,705
Investment Securities			4,372			3,325			2,333			10,567			7,065
Other			321			99			135			500			334
Total Interest Income			42,359			37,782			33,517			114,835			95,104

INTEREST EXPENSE
Deposits			5,984			3,456			3,417			12,598			10,601
Notes Payable			—			—			—			—			61
FHLB Advances			329			167			213			646			669
Subordinated Debentures			1,242			1,219			1,214			3,658			3,411
Federal Funds Purchased			709			410			—			1,128			6
Total Interest Expense			8,264			5,252			4,844			18,030			14,748

NET INTEREST INCOME			34,095			32,530			28,673			96,805			80,356
Provision for Loan Losses			1,500			3,025			1,300			6,200			4,000

NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES			32,595			29,505			27,373			90,605			76,356

NONINTEREST INCOME
Customer Service Fees			313			298			268			892			733
Net Gain on Sales of Available for Sale Securities			—			52			48			52			750
Other Income			1,074			1,300			1,094			3,650			2,538
Total Noninterest Income			1,387			1,650			1,410			4,594			4,021

NONINTEREST EXPENSE
Salaries and Employee Benefits			9,449			8,977			8,309			27,120			22,923
Occupancy and Equipment			1,086			1,042			942			3,213			2,977
Other Expense			3,622			3,733			3,985			11,084			9,736
Total Noninterest Expense			14,157			13,752			13,236			41,417			35,636

INCOME BEFORE INCOME TAXES			19,825			17,403			15,547			53,782			44,741
Provision for Income Taxes			5,312			4,521			4,038			14,125			11,568
NET INCOME			14,513			12,882			11,509			39,657			33,173
Preferred Stock Dividends			(1,013)			(1,014)			—			(3,040)			—
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS		$	13,500		$	11,868		$	11,509		$	36,617		$	33,173

EARNINGS PER SHARE
Basic		$	0.49		$	0.43		$	0.41		$	1.32		$	1.18
Diluted			0.47			0.41			0.40			1.27			1.14

Page 13 of 17

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

(dollars in thousands, except per share data)

(Unaudited)


		For the Nine Months Ended															****
		September 30, 2022								September 30, 2021							****
		Average			Interest			Yield/		Average			Interest			Yield/
	****	Balance		****	& Fees		****	Rate	****	Balance		****	& Fees		****	Rate	****
(dollars in thousands)
Interest Earning Assets:
Cash Investments		$	66,301		$	231		0.47	%	$	127,283		$	134		0.14	%
Investment Securities:
Taxable Investment Securities			417,462			8,692		2.78			310,078			5,122		2.21
Tax-Exempt Investment Securities^(1)^			73,900			2,373		4.29			76,564			2,460		4.30
Total Investment Securities			491,362			11,065		3.01			386,642			7,582		2.62
Paycheck Protection Program Loans ^(2)^			9,575			922		12.88			124,466			5,384		5.78
Loans ^(1)(2)^			3,082,924			103,204		4.48			2,402,844			82,433		4.59
Total Loans			3,092,499			104,126		4.50			2,527,310			87,817		4.65
Federal Home Loan Bank Stock			9,593			269		3.75			5,658			200		4.71
Total Interest Earning Assets			3,659,755			115,691		4.23	%		3,046,893			95,733		4.20	%
Noninterest Earning Assets			77,028								70,968
Total Assets		$	3,736,783							$	3,117,861
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	545,301		$	2,322		0.57	%	$	422,000		$	1,504		0.48	%
Savings and Money Market Deposits			934,408			4,597		0.66			763,646			2,853		0.50
Time Deposits			286,059			2,257		1.05			331,664			3,269		1.32
Brokered Deposits			419,352			3,422		1.09			407,680			2,975		0.98
Total Interest Bearing Deposits			2,185,120			12,598		0.77			1,924,990			10,601		0.74
Federal Funds Purchased			85,287			1,128		1.77			3,311			6		0.24
Notes Payable			—			—		—			2,216			61		3.66
FHLB Advances			54,227			646		1.59			56,364			669		1.59
Subordinated Debentures			92,396			3,658		5.29			79,723			3,411		5.72
Total Interest Bearing Liabilities			2,417,030			18,030		1.00	%		2,066,604			14,748		0.95	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			899,456								731,269
Other Noninterest Bearing Liabilities			37,463								23,228
Total Noninterest Bearing Liabilities			936,919								754,497
Shareholders' Equity			382,834								296,760
Total Liabilities and Shareholders' Equity		$	3,736,783							$	3,117,861
Net Interest Income / Interest Rate Spread						97,661		3.23	%					80,985		3.25	%
Net Interest Margin ^(3)^								3.57	%							3.55	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(856)								(629)
Net Interest Income					$	96,805							$	80,356

(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 Nine Months Ended
		September 30,			June 30,			September 30,			September 30,			September 30,
	****	2022		****	2022			2021			2022		****	2021		****
Pre-Provision Net Revenue
Noninterest Income		$	1,387		$	1,650		$	1,410		$	4,594		$	4,021
Less: Gain on Sales of Securities			—			(52)			(48)			(52)			(750)
Total Operating Noninterest Income			1,387			1,598			1,362			4,542			3,271
Plus: Net Interest Income			34,095			32,530			28,673			96,805			80,356
Net Operating Revenue		$	35,482		$	34,128		$	30,035		$	101,347		$	83,627

Noninterest Expense		$	14,157		$	13,752		$	13,236		$	41,417		$	35,636
Less: Amortization of Tax Credit Investments			(114)			(63)			(152)			(294)			(410)
Total Operating Noninterest Expense		$	14,043		$	13,689		$	12,502		$	41,123		$	34,644

Pre-Provision Net Revenue		$	21,439		$	20,439		$	17,533		$	60,224		$	48,983

Plus:
Non-Operating Revenue Adjustments			—			52			48			52			750
Less:
Provision for Loan Losses			1,500			3,025			1,300			6,200			4,000
Non-Operating Expense Adjustments			114			63			734			294			992
Provision for Income Taxes			5,312			4,521			4,038			14,125			11,568
Net Income		$	14,513		$	12,882		$	11,509		$	39,657		$	33,173

Average Assets		$	3,948,201		$	3,743,575		$	3,332,301		$	3,736,783		$	3,117,861
Pre-Provision Net Revenue Return on Average Assets			2.15	%		2.19	%		2.09	%		2.15	%		2.10	%


		As of and for the Three Months Ended										As of and for the Nine Months Ended
		September 30,			June 30,			September 30,				September 30,			September 30,
	****	2022		****	2022		****	2021		****	****	2022		****	2021		****
Core Net Interest Margin
Net Interest Income (Tax-Equivalent Basis)		$	34,417		$	32,806		$	28,880			$	97,662		$	80,985
Less: Loan Fees			(1,400)			(2,030)			(1,487)				(5,173)			(3,712)
Less: PPP Interest and Fees			(96)			(263)			(1,753)				(922)			(5,384)
Core Net Interest Income		$	32,921		$	30,513		$	25,640			$	91,567		$	71,889

Average Interest Earning Assets		$	3,871,896		$	3,671,748		$	3,234,301			$	3,659,755		$	3,046,893
Less: Average PPP Loans			(2,424)			(8,335)			(76,006)				(9,575)			(124,466)
Core Average Interest Earning Assets		$	3,869,472		$	3,663,413		$	3,158,295			$	3,650,180		$	2,922,427
Core Net Interest Margin			3.38	%		3.34	%		3.22	%			3.35	%		3.29	%

Page 15 of 17

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)


		For the Three Months Ended										For the Nine Months Ended
		September 30,			June 30,			September 30,				September 30,			September 30,
	****	2022		****	2022		****	2021		****	****	2022		****	2021		****
Efficiency Ratio
Noninterest Expense		$	14,157		$	13,752		$	13,236			$	41,417		$	35,636
Less: Amortization of Intangible Assets			(48)			(47)			(48)				(143)			(143)
Adjusted Noninterest Expense		$	14,109		$	13,705		$	13,188			$	41,274		$	35,493
Net Interest Income			34,095			32,530			28,673				96,805			80,356
Noninterest Income			1,387			1,650			1,410				4,594			4,021
Less: Gain on Sales of Securities			—			(52)			(48)				(52)			(750)
Adjusted Operating Revenue		$	35,482		$	34,128		$	30,035			$	101,347		$	83,627
Efficiency Ratio			39.8	%		40.2	%		43.9	%			40.7	%		42.4	%

Adjusted Efficiency Ratio
Noninterest Expense		$	14,157		$	13,752		$	13,236			$	41,417		$	35,636
Less: Amortization of Tax Credit Investments			(114)			(63)			(152)				(294)			(410)
Less: Debt Prepayment Fees			—			—			(582)				—			(582)
Less: Amortization of Intangible Assets			(48)			(47)			(48)				(143)			(143)
Adjusted Noninterest Expense		$	13,995		$	13,642		$	12,454			$	40,980		$	34,501
Net Interest Income			34,095			32,530			28,673				96,805			80,356
Noninterest Income			1,387			1,650			1,410				4,594			4,021
Less: Gain on Sales of Securities			—			(52)			(48)				(52)			(750)
Adjusted Operating Revenue		$	35,482		$	34,128		$	30,035			$	101,347		$	83,627
Adjusted Efficiency Ratio			39.4	%		40.0	%		41.5	%			40.4	%		41.3	%


		For the Three Months Ended										For the Nine Months Ended
		September 30,			June 30,			September 30,				September 30,			September 30,
	****	2022		****	2022		****	2021		****	****	2022		****	2021		****
Adjusted Noninterest Expense to Average Assets (Annualized)
Noninterest Expense		$	14,157		$	13,752		$	13,236			$	41,417		$	35,636
Less: Amortization of Tax Credit Investments			(114)			(63)			(152)				(294)			(410)
Less: Debt Prepayment Fees			—			—			(582)				—			(582)
Adjusted Noninterest Expense		$	14,043		$	13,689		$	12,502			$	41,123		$	34,644

Average Assets		$	3,948,201		$	3,743,575		$	3,332,301			$	3,736,783		$	3,117,861
Adjusted Noninterest Expense to Average Assets (Annualized)			1.41	%		1.47	%		1.49	%			1.47	%		1.49	%

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 Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2022			2022			2021			2022			2021
Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity	$	382,007		$	374,883		$	367,803
Less: Preferred Stock		(66,514)			(66,514)			(66,515)
Total Common Shareholders' Equity		315,493			308,369			301,288
Less: Intangible Assets		(2,962)			(3,009)			(3,153)
Tangible Common Equity	$	312,531		$	305,360		$	298,135

Total Assets	$	4,128,987		$	3,883,264		$	3,389,125
Less: Intangible Assets		(2,962)			(3,009)			(3,153)
Tangible Assets	$	4,126,025		$	3,880,255		$	3,385,972
Tangible Common Equity/Tangible Assets		7.57	%		7.87	%		8.81	%

Tangible Book Value Per Share
Book Value Per Common Share	$	11.44		$	11.14		$	10.73
Less: Effects of Intangible Assets		(0.11)			(0.11)			(0.11)
Tangible Book Value Per Common Share	$	11.33		$	11.03		$	10.62

Return on Average Tangible Common Equity
Net Income Available to Common Shareholders	$	13,500		$	11,868		$	11,509		$	36,617		$	33,173

Average Shareholders' Equity	$	384,020		$	381,448		$	330,604		$	382,834		$	296,760
Less: Average Preferred Stock		(66,514)			(66,514)			(32,332)			(66,514)			(10,896)
Average Common Equity		317,506			314,934			298,272			316,320			285,864
Less: Effects of Average Intangible Assets		(2,989)			(3,037)			(3,180)			(3,036)			(3,227)
Average Tangible Common Equity	$	314,517		$	311,897		$	295,092		$	313,284		$	282,637
Return on Average Tangible Common Equity		17.03	%		15.26	%		15.47	%		15.63	%		15.69	%


	Three Months Ended
	September 30,		June 30,		March 31,		December 31,		September 30,
	2022		2022		2022		2021		2021
Tangible Common Equity
Total Shareholders' Equity	$	382,007	$	374,883	$	379,441	$	379,272	$	367,803
Less: Preferred Stock		(66,514)		(66,514)		(66,514)		(66,514)		(66,515)
Common Shareholders' Equity		315,493		308,369		312,927		312,758		301,288
Less: Intangible Assets		(2,962)		(3,009)		(3,057)		(3,105)		(3,153)
Tangible Common Equity	$	312,531	$	305,360	$	309,870	$	309,653	$	298,135

Page 17 of 17

Exhibit 99.2

EARNINGS PRESENTATION<br>THIRD 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<br>limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated f<br>utu<br>re performance of the Company. These statements are often, but not always,<br>identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will<br>”,<br>“anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”,<br>“annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward<br>-<br>lo<br>oking 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 assumptions regarding our business, future<br>plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward<br>-<br>looki<br>ng statements relate to the future, they are subject to inherent uncertainties,<br>risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual res<br>ult<br>s and financial condition may differ materially from those indicated in the forward<br>-<br>looking statements. Therefore, you should not rely on any of these forward<br>-<br>looking statements. Important factors that could caus<br>e our actual results and financial condition to differ materially from those<br>indicated in the forward<br>-<br>looking statements include, among others, the following: interest rate risk, including the effects of r<br>ecent and anticipated rate increases by the Federal Reserve; fluctuations in the values<br>of the securities held in our securities portfolio, including as a result of rising interest rates; business and economic con<br>dit<br>ions generally and in the financial services industry, nationally and within our market<br>area, including rising rates of inflation; the negative effects of the ongoing COVID<br>-<br>19 pandemic, including its effects on the e<br>conomic environment, our clients and our operations, including due to supply chain<br>disruptions, as well as any changes to federal, state or local government laws, regulations or orders in connection with the<br>pan<br>demic; loan concentrations in our portfolio; the overall health of the local and<br>national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of all<br>owa<br>nce for loan losses; new or revised accounting standards, including as a result of the<br>future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; th<br>e c<br>oncentration of large deposits from certain clients; our ability to successfully<br>manage liquidity risk, especially in light of recent excess liquidity at the Bank; our dependence on non<br>-<br>core funding sources an<br>d our cost of funds; our ability to raise additional capital to implement our business<br>plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the<br>fut<br>ure use and availability of some reference rates, such as the London Interbank<br>Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to<br>att<br>ract and retain key personnel; talent and labor shortages an high rates of<br>employment turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybe<br>rse<br>curity<br>-<br>related incidents; interruptions involving our information technology and<br>telecommunications systems or third<br>-<br>party servicers; competition in the financial services industry, including from nonbank comp<br>etitors such as credit unions and “fintech” companies; the effectiveness of our<br>risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions agai<br>nst<br>us; the impact of recent and future legislative and regulatory changes,<br>including changes to federal and state corporate tax rates; the imposition of tariffs or other governmental policies impactin<br>g t<br>he value of products produced by our commercial borrowers; severe weather,<br>natural disasters, wide spread disease or pandemics (including the COVID<br>-<br>19 pandemic), acts of war or terrorism or other adverse<br>external events, including the Russian invasion of Ukraine; potential impairment<br>to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guida<br>nce<br>, including the new 1% excise tax on stock buybacks by publicly traded companies;<br>and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange<br>Co<br>mmission.<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 undertake no obligation to publicly<br>update any forward<br>-<br>looking statement, whether written or oral, that may be made from time to time, whether as a result of new in<br>formation, future developments or otherwise. Certain of the information<br>contained in this presentation is derived from information provided by industry sources. Although we believe that such inform<br>ati<br>on is accurate and that the sources from which it has been obtained are reliable,<br>we cannot guarantee the accuracy of, and have not independently 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 analysis of certain non<br>-<br>GAAP financial<br>measures. The Company believes these non<br>-<br>GAAP financial measures, in addition to the related GAAP measures, provide meaningful<br>information to investors to help them understand the Company’s operating<br>performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed<br>as<br>a substitute for operating results determined in accordance with GAAP, nor are<br>they necessarily comparable to non<br>-<br>GAAP performance measures that may be presented by other companies. Reconciliations of non<br>-<br>GA<br>AP disclosures to the comparable GAAP measures are provided in this<br>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 $154.2 million, or 19.0% annualized, from 2Q22<br>•<br>Investment securities balances up $59.4 million, or 48.9% annualized, from 2Q22<br>•<br>Deposit balances up $103.1 million, or 12.8% annualized, from 2Q22<br>Diluted<br>EPS<br>Adjusted<br>Efficiency 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 $21.4 million, up 4.9% from 2Q22<br>•<br>Core net interest margin<br>1<br>of 3.38%, up 4 bps from 2Q22<br>•<br>Well<br>-<br>controlled noninterest expense of $14.2 million, up 2.9% from 2Q22<br>•<br>Adjusted efficiency ratio<br>1<br>of 39.4%, down from 40.0% in 2Q22<br>•<br>Annualized net charge<br>-<br>offs (recoveries) to average loans of (0.03)%<br>•<br>Nonperforming assets to total assets of 0.02%, in<br>-<br>line with 2Q22<br>•<br>Growth<br>-<br>driven provision of $1.5 million; allowance to total loans at 1.38%<br>•<br>CECL adoption coming on January 1, 2023; not expecting a material Day 1 impact<br>•<br>Tangible book value per share<br>1<br>of $11.33, up $0.30 from 2Q22, despite market value depreciation of the securities<br>portfolio due to rising interest rates, which negatively impacted AOCI<br>•<br>Tangible common equity ratio<br>1<br>of 7.57%, down 30 bps from 2Q22<br>•<br>Repurchased 99,310 shares of common stock ($1.6 million) at a weighted average price of $16.27<br>Robust Balance<br>Sheet Growth<br>Highly Efficient<br>Operating<br>Performance<br>Superb<br>Asset Quality<br>Tangible Book Value<br>Growth<br>3Q22 Earnings Highlights<br>PPNR Return on<br>Average Assets<br>1<br>$0.47<br>1.46%<br>2.15%<br>17.03%<br>39.4%
---
PPNR ROA<br>1<br>4<br>Strong Profitability and<br>Revenue Generation<br>Steady PPNR Trends<br>1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>Dollars in thousands<br>Consistent Revenue Growth<br>$28,673<br>$29,153<br>$30,180<br>$32,530<br>$34,095<br>$1,410<br>$1,288<br>$1,557<br>$1,650<br>$1,387<br>$30,083<br>$30,441<br>$31,737<br>$34,180<br>$35,482<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>$17,533<br>$18,134<br>$18,346<br>$20,439<br>$21,439<br>$11,509<br>$12,514<br>$12,262<br>$12,882<br>$14,513<br>2.09%<br>2.11%<br>2.12%<br>2.19%<br>2.15%<br>1.37%<br>1.46%<br>1.42%<br>1.38%<br>1.46%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Net Income<br>PPNR<br>1<br>ROA<br>Noninterest Income<br>Net Interest Income
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$25,433<br>$26,634<br>$27,874<br>$30,237<br>$32,599<br>$1,753<br>$1,057<br>$563<br>$263<br>$96<br>$1,487<br>$1,462<br>$1,743<br>$2,030<br>$1,400<br>$28,673<br>$29,153<br>$30,180<br>$32,530<br>$34,095<br>3.54%<br>3.51%<br>3.60%<br>3.58%<br>3.53%<br>3.22%<br>3.25%<br>3.34%<br>3.34%<br>3.38%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<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 measure, see Appendix for Non<br>-<br>GAAP<br>reconciliation<br>Dollars in thousands<br>Net Interest Income Momentum<br>Supported by Robust Loan Growth<br>Net Interest Income (ex. interest income on loan<br>fees and PPP loans)<br>Net Interest Margin Drivers<br>Interest Income and fees on PPP loans<br>Loan fees<br>18.9% YoY Net Interest Income Growth<br>Core NIM<br>2<br>up 4 bps<br>Managing the balance sheet to optimize net interest income in<br>the current environment:<br>•<br>Expect near<br>-<br>term net interest income growth to slow (flat to<br>modest near<br>-<br>term growth)<br>•<br>Expect NIM compression over the near<br>-<br>term as funding<br>costs rise:<br>•<br>Higher interest rates passed on to deposit clients in<br>3Q22 (full quarter impact in 4Q22)<br>•<br>Addition of wholesale deposits and borrowings to<br>supplement core funding<br>•<br>Expect mid<br>-<br>teens loan growth and higher asset yields to<br>continue to support net interest income despite funding<br>pressures<br>Net Interest Income / NIM Outlook
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$2,039<br>$2,008<br>$2,138<br>$2,162<br>$2,253<br>$784<br>$861<br>$822<br>$882<br>$992<br>$145<br>$136<br>$145<br>$277<br>$272<br>$2,968<br>$3,005<br>$3,105<br>$3,321<br>$3,517<br>0.65%<br>0.61%<br>0.59%<br>0.63%<br>0.93%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>$2,655<br>$2,756<br>$2,900<br>$3,108<br>$3,266<br>4.65%<br>4.49%<br>4.45%<br>4.45%<br>4.59%<br>4.28%<br>4.20%<br>4.15%<br>4.17%<br>4.42%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Spot<br>Rate<br>1<br>$2,823<br>$2,869<br>$2,961<br>$3,045<br>$3,245<br>0.48%<br>0.45%<br>0.43%<br>0.46%<br>0.73%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Loan Yield (ex. Loan Fees and PPP)<br>3<br>6<br>1<br>Excludes loan fees and PPP<br>2<br>Amounts calculated on a tax<br>-<br>equivalent basis using statutory federal tax rate of 21%<br>3<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 Higher<br>Deposit Costs Rise as Rate Hike Impact Begins<br>Overall Funding Costs Begin to Rise<br>Net Interest Income Drivers<br>Impacted by Rising Rate Environment<br>$386<br>$413<br>$445<br>$491<br>$537<br>2.56%<br>2.57%<br>2.77%<br>2.85%<br>3.35%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<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>2<br>Average Loans<br>Loan Yield<br>2<br>Average Total Deposits<br>Cost of Total Deposits<br>4.17%<br>4.10%<br>4.05%<br>4.19%<br>4.49%<br>Spot<br>Rate<br>2.54%<br>2.55%<br>2.70%<br>3.05%<br>3.55%<br>Spot<br>Rate<br>0.40%<br>0.37%<br>0.37%<br>0.58%<br>0.99%<br>Spot<br>Rate<br>0.56%<br>0.52%<br>0.51%<br>0.72%<br>1.25%
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7<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>3Q22 interest rate sensitivity position impacted by increased<br>balances of overnight borrowings and higher beta deposits to help<br>support continued robust loan growth<br>•<br>Actively managing the balance sheet to drive sustained profitability<br>over time, regardless of the rate environment<br>Loan Portfolio Considerations<br>•<br>Loan portfolio most sensitive to changes in the 3<br>-<br>to 5<br>-<br>year portion of the yield curve<br>•<br>Mid<br>-<br>teens loan growth outlook provides ability to generate<br>strong net interest income growth despite a larger fixed<br>-<br>rate<br>portfolio<br>•<br>Robust loan originations drive relatively quicker repricing of<br>the portfolio<br>Deposit Considerations<br>•<br>Overall deposit portfolio better positioned as mix of maturity<br>deposits has decreased since the last rising rate environment:<br>•<br>Supplementing core deposit growth with higher beta deposits<br>to help support continued robust loan growth<br>•<br>More active in passing on higher deposit rates to clients in<br>3Q22<br>•<br>Modeling a deposit beta of ~40% in non<br>-<br>maturity deposits<br>due to the more rapid velocity of rate hikes in the current<br>environment<br>68%<br>83%<br>32%<br>17%<br>4Q19<br>3Q22<br>Non<br>-<br>maturity deposits<br>Maturity deposits<br>11<br>(0.7)%<br>(0.4)%<br>+0.5%<br>2Q22<br>3Q22<br>An Interest Rate Sensitivity Position Focused on<br>Optimizing Profitability<br>-<br>200 bps<br>+2.4%<br>(2.0)%
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12%<br>13%<br>7%<br>25%<br>20%<br>23%<br>$66<br>$74<br>$43<br>$142<br>$113<br>$129<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+ Years<br>100%<br>100%<br>100%<br>100%<br>100%<br>$522<br>$522<br>$522<br>$522<br>$522<br>At or Above<br>Floor<br>(9/30/22)<br>Up<br>25 bps<br>Up<br>50 bps<br>Up<br>75 bps<br>Up<br>100+ bps<br>Fixed<br>,<br>64.9%<br>Variable<br>,<br>18.3%<br>Adjustable<br>,<br>16.8%<br>8<br>Fixed<br>-<br>Rate Portfolio ($2.2B)<br>Loan Portfolio Repricing<br>Robust total loan growth results in relatively<br>quick turn of the loan portfolio and<br>accelerated repricing:<br>•<br>25% year<br>-<br>over<br>-<br>year total loan growth<br>•<br>$1.4B of total loan originations and<br>advances over prior 12 months<br>12%<br>14%<br>11%<br>12%<br>15%<br>36%<br>$261<br>$302<br>$251<br>$266<br>$322<br>$792<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 ($618M)<br>•<br>85% of variable<br>-<br>rate portfolio have<br>floors, all of which are now at or above<br>their floors<br>•<br>89% 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 at or<br>above floor as rates rise<br>Adjustable<br>-<br>Rate Portfolio ($568M)<br>•<br>All of the adjustable<br>-<br>rate loans are at<br>or above their floors<br>•<br>Implies immediate repricing as rates<br>rise, depending on the repricing<br>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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$8,309<br>$7,966<br>$8,694<br>$8,977<br>$9,449<br>$942<br>$939<br>$1,085<br>$1,042<br>$1,086<br>$923<br>$860<br>$875<br>$950<br>$1,022<br>$2,480<br>$2,694<br>$2,854<br>$2,783<br>$2,600<br>$582<br>$13,236<br>$12,459<br>$13,508<br>$13,752<br>$14,157<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>1.49%<br>1.43%<br>1.55%<br>1.47%<br>1.41%<br>0.09%<br>0.02%<br>0.01%<br>0.00%<br>0.01%<br>1.58%<br>1.45%<br>1.56%<br>1.47%<br>1.42%<br>43.9%<br>40.8%<br>42.4%<br>40.2%<br>39.8%<br>41.5%<br>40.3%<br>42.0%<br>40.0%<br>39.4%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Adjusted NIE / Avg. Assets<br>2<br>Adjusted Efficiency Ratio<br>2<br>Adjustment Factors / Avg. Assets<br>2<br>Efficiency Ratio<br>2<br>9<br>Adjusted Efficiency Ratio Consistently<br>in the Low 40% Range<br>Continued Investments to Support<br>Balance Sheet Growth<br>1<br>2Q22 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>3<br>Includes debt extinguishment costs related to accelerated sub debt redemption in 3Q21<br>Dollars in thousands<br>Efficiency Ratio Among the Lowest<br>in the Industry<br>Industry median efficiency ratio of 56%<br>1<br>Noninterest expense growth expected to increase<br>with asset growth over time as investments in<br>talent and technology continue<br>Occupancy<br>Personnel<br>Other<br>Technology<br>Non<br>-<br>Core Items<br>3
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$2,712<br>$2,819<br>$2,988<br>$3,226<br>$3,380<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Dollars in millions<br>10<br>•<br>Moderated loan growth in 3Q22 of $154.2 million, or<br>19.0% annualized<br>•<br>26.6% annualized YTD loan growth<br>•<br>Expect continued loan growth moderation to the mid<br>-<br>teens range:<br>•<br>Loan pipelines and overall demand remain strong<br>•<br>Fewer deals making financial sense due to the<br>higher interest rate environment<br>•<br>Actively managing the balance sheet to align with<br>funding outlook<br>•<br>Leveraging sales of participations on larger<br>originations to manage growth<br>•<br>Being more selective on loan pricing to support the<br>net interest margin<br>•<br>Being more selective on credit by focusing on high<br>quality transactions with seasoned clients<br>Robust Loan Growth Continues<br>Loan Growth Outlook<br>Gross Loans
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11<br>Dollars in millions<br>•<br>As expected, levels of new originations and<br>payoffs/paydowns slowed<br>•<br>Gross loan portfolio grew $154 million from 2Q22<br>despite a 22% quarter<br>-<br>over<br>-<br>quarter decline in new<br>originations and advances<br>•<br>Loan pipeline remains strong and diversified<br>among various asset classes<br>A Proven Loan Growth Engine<br>Down 22%<br>compared to 2Q22<br>Down 21%<br>compared to 2Q22<br>Decrease<br>Increase<br>Total<br>3Q22 Loan Growth Breakdown<br>$179<br>$234<br>$273<br>$311<br>$373<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Selling Participations on Larger Loans to Manage Growth<br>Loan Participation Portfolio Balance<br>Sold $62M of participations in 3Q22 (20% of originations and advances)
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CRE NOO<br>26.7%<br>Multifamily<br>36.4%<br>C&D<br>9.9%<br>1<br>-<br>4 Family<br>10.1%<br>CRE OO<br>4.5%<br>C&I<br>12.2%<br>Consumer &<br>Other<br>0.2%<br>PPP<br>0.0%<br>12<br>Dollars in millions<br>Loan Portfolio Composition<br>Loan Mix<br>by Type<br>$3.4<br>Billion<br>3Q22 Loan Growth by Type (vs. 2Q22)<br>Well<br>-<br>Diversified Loan Portfolio<br>•<br>3Q22 loan growth driven by multifamily, which continues to be a key growth portfolio due to segment<br>expertise and lower risk characteristics<br>•<br>Construction and development balances declined in 3Q22 as several projects completed the<br>“construction” phase and balances were moved to other loan categories, primarily multifamily<br>$(24)<br>$(4)<br>$1<br>$6<br>$9<br>$9<br>$14<br>$143<br>Multifamily<br>1<br>-<br>4 Family<br>C&I<br>CRE Owner Occupied<br>Construction & Development<br>CRE Nonowner Occupied<br>Consumer & Other<br>PPP
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13<br>Dollars in millions<br>Loan Portfolio Composition<br>Multifamily Expertise Driving Consistent Growth<br>and Performance<br>Go<br>-<br>to<br>-<br>Market<br>Strategy<br>$865<br>$910<br>$1,013<br>$1,088<br>$1,231<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>Multifamily Loans<br>Competitors<br>Growth<br>Outlook<br>Key Stats<br>Risk<br>Profile<br>Portfolio<br>Diversification<br>JPMorgan Chase, agency lenders, local<br>banks and credit unions<br>Bank of choice in the Twin Cities market<br>due to proven expertise and service model<br>Continued appetite given expertise and<br>market opportunities<br>$2.9M<br>Avg. Loan Size<br>63<br>%<br>Weighted Avg.<br>LTV<br>100%<br>Loans with Pass<br>Rating<br>Lower risk profile than traditional CRE with<br>only $62K of net charge<br>-<br>offs since<br>inception<br>5<br>-<br>19 Units<br>14%<br>20<br>-<br>49<br>Units<br>27%<br>50<br>-<br>99<br>Units<br>28%<br>100+ Units<br>31%<br>Unit<br>Type
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30%<br>30%<br>28%<br>30%<br>29%<br>17%<br>18%<br>20%<br>16%<br>15%<br>28%<br>29%<br>29%<br>30%<br>33%<br>11%<br>10%<br>9%<br>9%<br>9%<br>14%<br>13%<br>14%<br>15%<br>14%<br>$2,854<br>$2,946<br>$3,036<br>$3,202<br>$3,305<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>14<br>•<br>Core deposit growth trend reflects successful new client<br>and banker acquisition initiatives<br>•<br>19.8% YoY growth in core, non<br>-<br>maturity deposits<br>•<br>Loan<br>-<br>to<br>-<br>deposit ratio increased to 102.3%<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 Growth and Stable Mix Continue to<br>Support Loan Portfolio<br>•<br>Continued optimism regarding core deposit pipeline<br>•<br>Core deposit growth may not always be linear due to<br>nature of larger deposit relationships<br>•<br>Will continue to supplement core deposits with time and<br>brokered deposits as needed to support robust loan<br>growth<br>•<br>Comfortable operating with a loan<br>-<br>to<br>-<br>deposit ratio<br>between 95% and 105%<br>Deposit Growth Outlook
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$7,742<br>$22,641<br>$18,611<br>$26,991<br>$30,767<br>1.93%<br>5.45%<br>4.32%<br>5.70%<br>6.26%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>$(10)<br>$31<br>$3<br>$6<br>$(280)<br>0.00%<br>0.00%<br>0.00%<br>0.00%<br>(0.03)%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>$734<br>$722<br>$706<br>$688<br>$663<br>0.02%<br>0.02%<br>0.02%<br>0.02%<br>0.02%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>$38,901<br>$40,020<br>$41,692<br>$44,711<br>$46,491<br>1.43%<br>1.42%<br>1.40%<br>1.39%<br>1.38%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>15<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 actively work with borrowers<br>and closely monitor credits<br>Consistently low NPA levels<br>CECL adoption on January 1, 2023; not expecting a material Day<br>1 impact based on current conditions<br>Cumulative NCOs of $386K since 2017<br>¹<br>Nonaccrual loans plus loans 90 days past due and still accruing and foreclosed assets<br>Dollars in thousands<br>Classified Assets<br>% of Bank Tier 1 Capital + ALLL<br>NPAs<br>% of Assets<br>ALLL<br>% of Gross Loans<br>Net Charge<br>-<br>offs (recoveries)<br>% of Average Loans (annualized)
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C&I<br>,<br>23.9%<br>CRE NOO<br>-<br>Senior<br>Housing<br>,<br>46.7%<br>CRE NOO<br>Retail<br>,<br>26.4%<br>1<br>-<br>4 Family<br>,<br>3.0%<br>C&I<br>33.4%<br>CRE NOO Hotels<br>50.4%<br>CRE NOO Retail<br>9.5%<br>CRE OO<br>5.4%<br>C&D<br>0.4%<br>1<br>-<br>4 Family<br>0.9%<br>$<br>31<br>Million<br>16<br>Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”)<br>Watch List By<br>Loan Type<br>Classified List<br>By<br>Loan Type<br>$23<br>Million<br>Dollars in thousands<br>Watch List Characteristics<br>Loan Balances Outstanding<br>$22,759<br>% of Total Loans, Gross<br>0.7%<br>Number of Loans<br>12<br>Average Loan Size<br>$1,897<br>Classified List Characteristics<br>Loan Balances Outstanding<br>$30,767<br>% of Total Loans, Gross<br>0.9%<br>Number of Loans<br>21<br>Average Loan Size<br>$1,465<br>% of Bank Tier 1 Capital + ALLL<br>6.26%<br>Watch and Classified Assets Remain<br>Primarily Pandemic<br>-<br>Related<br>Only four hotel relationships as of September 30, 2022;<br>two are classified
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17.5%<br>16.4%<br>14.1%<br>13.5%<br>14.0%<br>24.4%<br>26.2%<br>25.9%<br>25.0%<br>20.1%<br>$1,418<br>$1,480<br>$1,444<br>$1,498<br>$1,409<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>10.70%<br>10.82%<br>10.78%<br>10.33%<br>9.98%<br>9.47%<br>9.36%<br>9.13%<br>8.50%<br>8.47%<br>15.93%<br>15.55%<br>15.02%<br>13.98%<br>13.78%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<br>17<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>Repurchased 99,310 shares of common stock ($1.6M) at a weighted average price of $16.27<br>•<br>Board of Directors approved a new $25M stock repurchase program which will expire on August 16, 2024 (no shares were<br>repurchased under the new program in 3Q22)<br>•<br>On October 15, 2022, BWB redeemed the remaining $13.75M of $25.0M of Fixed<br>-<br>to<br>-<br>Floating Rate Subordinated Notes issued<br>in 2017 (funded by draw on outstanding revolving line of credit)<br>Focus on utilizing capital to support strong loan growth<br>Investment portfolio completely unencumbered<br>at September 30, 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>3Q22 Capital Actions<br>Consolidated Capital Ratios
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$298<br>$310<br>$310<br>$305<br>$313<br>8.81%<br>8.91%<br>8.60%<br>7.87%<br>7.57%<br>3Q21<br>4Q21<br>1Q22<br>2Q22<br>3Q22<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>$11.33<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>3Q22<br>18<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 market value<br>depreciation of the securities portfolio due to rising interest rates,<br>which negatively impacted AOCI<br>•<br>TCE ratio impacted by robust loan growth, recent share repurchases<br>and decline in market value of the securities portfolio<br>•<br>Expect to grow TCE ratio back toward 8.00% level over future quarters
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19<br>An Award<br>-<br>Winning Workplace Culture<br>New Corporate<br>Headquarters<br>Progressive Pay<br>and Benefits<br>Health and Wellness<br>Committee<br>Diversity, Equity and<br>Inclusion Committee<br>Volunteer<br>Paid Time Off<br>Modern, open design with an entrepreneurial spirit tailor<br>-<br>made for<br>team building and collaboration<br>Increased<br>minimum wage to $20 per hour<br>in August 2021,<br>as well as discretionary bonuses for all team members<br>regardless of level<br>Providing team member<br>opportunities to support physical<br>and mental health<br>, including fitness events and free access<br>to a mindfulness app<br>Inclusive culture that<br>encourages, supports and celebrates<br>diversity<br>of team members and communities in which we<br>serve<br>Team members receive up to<br>16 hours of PTO per year for<br>volunteer activities<br>supporting the Community<br>Reinvestment Act (CRA)<br>Top Workplaces<br>Star Tribune<br>2016. 2017. 2018. 2020. 2021. 2022.<br>Best Banks to Work For<br>American Banker<br>2017. 2018. 2020.<br>“In today’s environment, it is more important than<br>ever to be able to recruit, retain and develop top<br>talent. At Bridgewater, we have demonstrated an<br>ability to do this through our unconventional culture<br>and employee experience, extensive team member<br>referral network, and even the launch of a new<br>internship program to further enhance our talent<br>pipelines.”<br>Jerry Baack<br>Chairman, CEO and President
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2022 Strategic Priorities<br>–<br>Building on Our Momentum<br>Continue Balance Sheet Growth<br>Trajectory<br>1<br>2<br>3<br>4<br>20<br>Invest in Business Scalability to<br>Support Growth<br>Maintain Highly Efficient Operating<br>Model<br>Recruit, Develop and Retain Top<br>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 growth to $5<br>billion in assets in the Twin Cities over the next few years<br>•<br>Continue evaluating potential M&A opportunities<br>•<br>Make proactive investments<br>before<br>we need them<br>•<br>Includes areas such as technology and automation, risk management and project<br>management<br>•<br>Leverage strong spread<br>-<br>based revenue generation to drive continued revenue<br>growth<br>•<br>Evaluate potential opportunities to enhance revenue diversification<br>•<br>Manage expense growth in<br>-<br>line with asset growth<br>•<br>Attract top talent in key growth areas such as lending, credit, treasury<br>management, risk<br>and technology<br>•<br>Develop existing talent through management development programs to enhance<br>skills and promote growth within the company<br>•<br>Meet the evolving needs of our team members<br>–<br>modern amenities in our new<br>corporate center, collaboration, flexibility, ESG focus<br>YTD<br>Progress<br>Annualized loan growth of 26.6%<br>YTD<br>Progress<br>Launched new commercial loan<br>origination system in March 2022<br>YTD<br>Progress<br>Adjusted efficiency ratio<br>1<br>of 40.4%<br>1<br>Represents a Non<br>-<br>GAAP financial measure. See Appendix for Non<br>-<br>GAAP reconciliation<br>YTD<br>Progress<br>Increased FTE employees by 12%
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APPENDIX
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22<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial Measures<br>–<br>Annual<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible<br>Assets<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>Common Equity<br>115,366<br>$<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>$<br><br>Less: Preferred Stock<br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>(66,514)<br><br><br>Less: Intangible Assets<br>(4,060)<br><br><br>(3,869)<br><br><br>(3,678)<br><br><br>(3,487)<br><br><br>(3,296)<br><br><br>(3,105)<br><br><br>Tangible Common Equity<br>111,306<br>$<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>$<br><br>Total Assets<br>1,260,394<br>$<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>$<br><br>Less: Intangible Assets<br>(4,060)<br><br><br>(3,869)<br><br><br>(3,678)<br><br><br>(3,487)<br><br><br>(3,296)<br><br><br>(3,105)<br><br><br>Tangible Assets<br>1,256,334<br>$<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>$<br><br>Tangible Common Equity/Tangible Assets<br>8.86%<br>8.26%<br>11.03%<br>10.65%<br>8.96%<br>8.91%<br>Tangible Book Value Per Share<br>2016<br>2017<br>2018<br>2019<br>2020<br>2021<br>Book Value Per Common Share<br>4.69<br>$<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>$<br><br>Less: Effects of Intangible Assets<br>(0.17)<br><br><br>(0.16)<br><br><br>(0.12)<br><br><br>(0.12)<br><br><br>(0.12)<br><br><br>(0.11)<br><br><br>Tangible Book Value Per Common Share<br>4.52<br>$<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>$<br><br>Total Common Shares<br>24,589,861<br><br><br>24,679,861<br><br><br>30,097,274<br><br><br>28,973,572<br><br><br>28,143,493<br><br><br>28,206,566<br><br><br>As of and for the year ended December 31,
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23<br>* Efficiency Ratio is adjusted to exclude the historic tax credit amortization and debt prepayment fees<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial Measures<br>–<br>Profitability, TCE and TBV<br>Efficiency Ratio<br>September 30,<br>2021<br>September 30,<br>2021<br>December 31,<br>2021<br>December 31,<br>2021<br>March 31,<br>2022<br>March 31,<br>2022<br>June 30,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>September 30,<br>2022*<br>Noninterest Expense<br>13,236<br>$<br><br>13,236<br>$<br><br>12,459<br>$<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>$<br><br>Less: Amortization of Tax Credit Investments<br>-<br><br><br>(152)<br><br><br>-<br><br><br>(152)<br><br><br>-<br><br><br>(117)<br><br><br>-<br><br><br>(63)<br><br><br>-<br><br><br>(114)<br><br><br>Less: Debt Prepayment Fees<br>-<br><br><br>(582)<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>Less: Amortization Intangible Assets<br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(48)<br><br><br>(47)<br><br><br>(47)<br><br><br>(48)<br><br><br>(48)<br><br><br>Adjusted Noninterest Expense<br>13,188<br>$<br><br>12,454<br>$<br><br>12,411<br>$<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>$<br><br>Net Interest Income<br>28,673<br>$<br><br>28,673<br>$<br><br>29,153<br>$<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>$<br><br>Noninterest Income<br>1,410<br><br><br>1,410<br><br><br>1,288<br><br><br>1,288<br><br><br>1,557<br><br><br>1,557<br><br><br>1,650<br><br><br>1,650<br><br><br>1,387<br><br><br>1,387<br><br><br>Less: Gain on Sales of Securities<br>(48)<br><br><br>(48)<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>(52)<br><br><br>(52)<br><br><br>-<br><br><br>-<br><br><br>Adjusted Operating Revenue<br>30,035<br>$<br><br>30,035<br>$<br><br>30,441<br>$<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>$<br><br>Efficiency Ratio<br>43.9%<br>41.5%<br>40.8%<br>40.3%<br>42.4%<br>42.0%<br>40.2%<br>40.0%<br>39.8%<br>39.4%<br>Tangible Common Equity &<br>Tangible Common Equity/Tangible Assets<br>September 30,<br>2021<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>Total Shareholders' Equity<br>367,803<br>$<br><br>379,272<br>$<br><br>379,441<br>$<br><br>374,883<br>$<br><br>382,007<br>$<br><br>Net Income Available to Common Shareholders<br>Less: Preferred Stock<br>(66,515)<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>301,288<br><br><br>312,758<br><br><br>312,927<br><br><br>308,369<br><br><br>315,493<br><br><br>Average Total Shareholders' Equity<br>Less: Intangible Assets<br>(3,153)<br><br><br>(3,105)<br><br><br>(3,057)<br><br><br>(3,009)<br><br><br>(2,962)<br><br><br>Less: Average Preferred Stock<br>Tangible Common Equity<br>298,135<br>$<br><br>309,653<br>$<br><br>309,870<br>$<br><br>305,360<br>$<br><br>312,531<br>$<br><br>Average Total Common Shareholders' Equity<br>Less: Effects of Average Intangible Assets<br>Total Assets<br>3,389,125<br>$<br><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>Average Tangible Common Equity<br>Less: Intangible Assets<br>(3,153)<br><br><br>(3,105)<br><br><br>(3,057)<br><br><br>(3,009)<br><br><br>(2,962)<br><br><br>Tangible Assets<br>3,385,972<br>$<br><br>3,474,554<br>$<br><br>3,604,863<br>$<br><br>3,880,255<br>$<br><br>4,126,025<br>$<br><br>Annualized Return on Average Tangible Common Equity<br>Tangible Common Equity/Tangible Assets<br>8.81%<br>8.91%<br>8.60%<br>7.87%<br>7.57%<br>Tangible Book Value Per Share<br>June 30,<br>2021<br>September 30,<br>2021<br>December 31,<br>2021<br>March 31,<br>2022<br>September 30,<br>2022<br>Book Value Per Common Share<br>10.73<br>$<br><br>11.09<br>$<br><br>11.12<br>$<br><br>11.14<br>$<br><br>11.44<br>$<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>10.62<br>$<br><br>10.98<br>$<br><br>11.01<br>$<br><br>11.03<br>$<br><br>11.33<br>$<br><br>Total Common Shares<br>28,066,822<br><br><br>28,206,566<br><br><br>28,150,389<br><br><br>27,677,372<br><br><br>27,587,978<br><br><br>13,500<br>$<br><br>384,020<br>$<br><br>317,506<br>$<br><br>(66,514)<br><br><br>(2,989)<br><br><br>17.03%<br>314,517<br>$<br><br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>As of and for the quarter ended,<br>September 30, 2022<br>ROATCE<br>As of and for the quarter ended,
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24<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial Measures<br>–<br>PPNR<br>Pre-Provision Net Revenue<br>September 30,<br>2021<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>Noninterest Income<br>1,410<br>$<br><br>1,288<br>$<br><br>1,557<br>$<br><br>1,650<br>$<br><br>1,387<br>$<br><br>Less: Gain on sales on Securities<br>(48)<br><br><br>-<br><br><br>-<br><br><br>(52)<br><br><br>-<br><br><br>Total Operating Noninterest Income<br>1,362<br><br><br>1,288<br><br><br>1,557<br><br><br>1,598<br><br><br>1,387<br><br><br>Plus: Net Interest Income<br>28,673<br><br><br>29,153<br><br><br>30,180<br><br><br>32,530<br><br><br>34,095<br><br><br> Net Operating Revenue<br>30,035<br><br><br>30,441<br><br><br>31,737<br><br><br>34,128<br><br><br>35,482<br><br><br>Noninterest Expense<br>13,236<br>$<br><br>12,459<br>$<br><br>13,508<br>$<br><br>13,752<br>$<br><br>14,157<br>$<br><br>Less: Amortization of Tax Credit Investments<br>(152)<br><br><br>(152)<br><br><br>(117)<br><br><br>(63)<br><br><br>(114)<br><br><br>Less: Debt Prepayment Fee<br>(582)<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br>-<br><br><br> Total Operating Noninterest Expense<br>12,502<br><br><br>12,307<br><br><br>13,391<br><br><br>13,689<br><br><br>14,043<br><br><br>Pre-Provision Net Revenue<br>17,533<br>$<br><br>18,134<br>$<br><br>18,346<br>$<br><br>20,439<br>$<br><br>21,439<br>$<br><br> Plus:<br>Non-Operating Revenue Adjustments<br>48<br><br><br>-<br><br><br>-<br><br><br>52<br><br><br>-<br><br><br> Less:<br>Provision for Loan Losses<br>1,300<br><br><br>1,150<br><br><br>1,675<br><br><br>3,025<br><br><br>1,500<br><br><br>Non-Operating Expense Adjustments<br>734<br><br><br>152<br><br><br>117<br><br><br>63<br><br><br>114<br><br><br>Provision for Income Taxes<br>4,038<br><br><br>4,318<br><br><br>4,292<br><br><br>4,521<br><br><br>5,312<br><br><br>Net Income<br>11,509<br>$<br><br>12,514<br>$<br><br>12,262<br>$<br><br>12,882<br>$<br><br>14,513<br>$<br><br>Average Assets<br>3,332,301<br>$<br><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>Pre-Provision Net Revenue Return on Average Assets<br>2.09%<br>2.11%<br>2.12%<br>2.19%<br>2.15%<br>As of and for the quarter ended,
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25<br>Dollars in thousands<br>Reconciliation of Non<br>-<br>GAAP Financial Measures<br>–<br>Core NIM<br>Core Net Interest Margin<br>September 30,<br>2021<br>December 31,<br>2021<br>March 31,<br>2022<br>June 30,<br>2022<br>September 30,<br>2022<br>Net Interest Income (Tax-Equivalent Basis)<br>28,880<br>$<br><br>29,388<br>$<br><br>30,438<br>$<br><br>32,806<br>$<br><br>34,418<br>$<br><br>Less: Loan Fees<br>(1,487)<br><br><br>(1,462)<br><br><br>(1,743)<br><br><br>(2,030)<br><br><br>(1,400)<br><br><br>Less: PPP Interest and Fees<br>(1,753)<br><br><br>(1,057)<br><br><br>(563)<br><br><br>(263)<br><br><br>(96)<br><br><br> Core Net Interest Margin<br>25,640<br>$<br><br>26,869<br>$<br><br>28,132<br>$<br><br>30,513<br>$<br><br>32,922<br>$<br><br>Average Interest Earning Assets<br>3,234,301<br>$<br><br>3,320,603<br>$<br><br>3,430,774<br>$<br><br>3,671,748<br>$<br><br>3,871,896<br>$<br><br>Less: Average PPP Loans<br>(76,006)<br><br><br>(39,900)<br><br><br>(18,140)<br><br><br>(8,335)<br><br><br>(2,424)<br><br><br> Core Average Interest Earning Assets<br>3,158,295<br>$<br><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>Core Net Interest Margin<br>3.22%<br>3.25%<br>3.34%<br>3.34%<br>3.38%<br>Loan Interest Income (Tax-Equivalent Basis)<br>31,101<br>$<br><br>31,211<br>$<br><br>31,838<br>$<br><br>34,468<br>$<br><br>37,820<br>$<br><br>Less: Loan Fees<br>(1,487)<br><br><br>(1,462)<br><br><br>(1,743)<br><br><br>(2,030)<br><br><br>(1,400)<br><br><br>Less: PPP Interest and Fees<br>(1,753)<br><br><br>(1,057)<br><br><br>(563)<br><br><br>(263)<br><br><br>(96)<br><br><br> Core Loan Interest Income<br>27,861<br>$<br><br>28,692<br>$<br><br>29,532<br>$<br><br>32,175<br>$<br><br>36,324<br>$<br><br>Average Loans<br>2,655,027<br>$<br><br>2,755,622<br>$<br><br>2,899,985<br>$<br><br>3,107,679<br>$<br><br>3,265,814<br>$<br><br>Less: Average PPP Loans<br>(76,006)<br><br><br>(39,900)<br><br><br>(18,140)<br><br><br>(8,335)<br><br><br>2,424<br><br><br> Core Average Loans<br>2,579,021<br>$<br><br>2,715,722<br>$<br><br>2,881,845<br>$<br><br>3,099,344<br>$<br><br>3,268,238<br>$<br><br>Core Loan Yield<br>4.28%<br>4.20%<br>4.15%<br>4.17%<br>4.42%<br>As of and for the quarter ended,
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