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

Provided By Business Wire

Last update: Oct 25, 2023

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

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

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

Key Financial Measures


	As of and for the Three Months Ended									As of and for the Nine Months Ended
	September 30,			June 30,			September 30,			September 30,			September 30,
	2023			2023			2022			2023			2022
Per Common Share Data
Basic Earnings Per Share	$	0.31		$	0.32		$	0.49		$	1.01		$	1.32
Diluted Earnings Per Share		0.30			0.31			0.47			0.99			1.27
Book Value Per Share		12.47			12.25			11.44			12.47			11.44
Tangible Book Value Per Share ⁽¹⁾		12.37			12.15			11.33			12.37			11.33

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

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

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

Income Statement

Net Interest Income and Net Interest Margin

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

The linked-quarter decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.
The year-over-year decline in the margin was primarily due to higher funding costs and increased borrowings in the rising interest rate environment, offset partially by higher earning asset yields.

Net interest income was $25.4 million for the third quarter of 2023, a decrease of $451,000 from $25.9 million in the second quarter of 2023, and a decrease of $8.7 million from $34.1 million in the third quarter of 2022.

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

Interest income was $56.8 million for the third quarter of 2023, an increase of $1.8 million from $55.0 million in the second quarter of 2023, and an increase of $14.5 million from $42.4 million in the third quarter of 2022.

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

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


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

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

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

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

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

Provision for Credit Losses

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

No provision for credit losses on loans was recorded in the third quarter of 2023 due to a more managed pace of loan growth.
The allowance for credit losses on loans to total loans was 1.36% at September 30, 2023, compared to 1.36% at June 30, 2023, and 1.38% at September 30, 2022.

The provision for credit losses for off-balance sheet credit exposures was a negative provision of $600,000 for the third quarter of 2023, compared to a negative $500,000 for the second quarter of 2023 and zero for the third quarter of 2022.

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

Noninterest Income

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

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

Noninterest Expense

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

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

Income Taxes

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

Balance Sheet

Loans


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

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

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

Deposits


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

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

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

Liquidity

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


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

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

Asset Quality

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

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

Capital

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

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

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

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

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

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

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

Conference Call and Webcast

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

About the Company

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

Use of Non-GAAP financial measures

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

Forward-Looking Statements

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

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of recent and potential additional rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation and possible recession; the effects of recent developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including in response to the recent failures of Silicon Valley Bank, Signature Bank and First Republic Bank; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

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


Bridgewater Bancshares, Inc. and Subsidiaries Financial Highlights *(dollars in thousands, except share data)*

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

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

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

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

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

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

(1)	Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)	Annualized.
(3)	Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4)	Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
(5)	Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
(6)	Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.


Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets *(dollars in thousands, except share data)*

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

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

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


Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income *(dollars in thousands, except per share data)* *(Unaudited)*

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


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

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

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

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

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

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

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


Bridgewater Bancshares, Inc. and Subsidiaries Analysis of Average Balances, Yields and Rates *(dollars in thousands, except per share data)* *(Unaudited)*


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

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


Bridgewater Bancshares, Inc. and Subsidiaries Analysis of Average Balances, Yields and Rates *(dollars in thousands, except per share data)* *(Unaudited)*

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

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


Bridgewater Bancshares, Inc. and Subsidiaries Asset Quality Summary *(dollars in thousands) (unaudited)*

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

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


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


Bridgewater Bancshares, Inc. and Subsidiaries Non-GAAP Financial Measures *(dollars in thousands) (unaudited)*

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

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

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

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

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

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

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

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

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


Bridgewater Bancshares, Inc. and Subsidiaries Non-GAAP Financial Measures *(dollars in thousands) (unaudited)*

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

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

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

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

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

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

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