Business Wire | Apr 29, 2021 07:05AM EDT

Bridgewater Bancshares, Inc. Announces Record First Quarter 2021 Net Income of $10.7 Million, $0.37 Diluted Earnings Per Share

Apr. 29, 2021

ST. LOUIS PARK, Minn.--(BUSINESS WIRE)--Apr. 29, 2021--Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $10.7 million for the first quarter of 2021, a 43.4% increase over net income of $7.4 million for the first quarter of 2020. Net income per diluted common share for the first quarter of 2021 was $0.37, a 46.1% increase, compared to $0.25 per diluted common share for the same period in 2020.

"This team has done a phenomenal job driving record quarterly earnings to start 2021," commented Chairman, Chief Executive Officer, and President, Jerry Baack. "Our results demonstrate our ability to drive strong organic loan growth and stabilize our net interest margin despite a challenging rate environment and unprecedented levels of liquidity in the system. In addition to our operating results, we have met some exciting new milestones in the first quarter of 2021, surpassing $3.0 billion in assets and 200 employees for the first time in Company history. We will work to continue our momentum into the rest of 2021 despite the ongoing uncertainty related to the impacts of the pandemic."

First Quarter 2021 Financial Results



Diluted Nonperforming Adjusted

ROA PPNR ROA ROE earnings per assets to total efficiency ^(1) share assets ratio ^(1)

1.47% 2.15% 15.87% $ 0.37 0.03% 40.7%

* Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details. Linked-Quarter Highlights

* Diluted earnings per common share were $0.37 for the first quarter of 2021, compared to $0.17 per common share for the fourth quarter of 2020, or $0.32 per common share for the fourth quarter of 2020 when excluding tax-adjusted FHLB prepayment fees.

* Annualized return on average assets (ROA) and annualized return on average common equity (ROE) for the first quarter of 2021 were 1.47% and 15.87% compared to ROA and ROE of 1.31% and 13.86%, respectively, for the fourth quarter of 2020, when excluding the tax-adjusted FHLB prepayment fees incurred in the fourth quarter of 2020.

* Net interest margin was stable at 3.60% for the first quarter of 2021, compared to 3.61% in the fourth quarter of 2020.

* A loan loss provision of $1.1 million was recorded in the first quarter of 2021 to support strong organic loan growth. The allowance for loan losses to total loans was 1.48% at March 31, 2021, compared to 1.50% at December 31, 2020. The allowance for loan losses to total loans, excluding Paycheck Protection Program (PPP) loans, was 1.59% at March 31, 2021, compared to 1.59% at December 31, 2020.

* Gross loans, excluding PPP loans, increased $74.9 million in the first quarter of 2021, or 13.9% annualized.

* Deposits increased $137.0 million in the first quarter of 2021, which was net of a $96.1 million managed run-off in brokered deposits.

* Tangible book value per share, a non-GAAP financial measure, increased 5.2%, or $0.49, to $9.80 at March 31, 2021, compared to $9.31 at December 31, 2020.

* Annualized net loan charge-offs (recoveries) as a percentage of average loans were (0.01)% for the first quarter of 2021, compared to 0.08% for the fourth quarter of 2020.

* Loan modification balances as a percent of totals loans, excluding PPP loans, decreased from 3.0% at December 31, 2020 to 1.6% at March 31, 2021.

* Round two PPP loan originations as of March 31, 2021, totaled $70.1 million, generating net deferred fees of $3.0 million.

Year-Over-Year Highlights

* Net income was $10.7 million for the first quarter of 2021, compared to $7.4 million for the first quarter of 2020, an increase of $3.2 million, or 43.4%.

* Diluted earnings per common share for the first quarter of 2021 were $0.37, compared to $0.25 for the first quarter of 2020, an increase of 46.1%.

* Pre-provision net revenue (PPNR), a non-GAAP financial measure, was $15.6 million for the first quarter of 2021, an increase of 28.3%, compared to $12.2 million for the first quarter of 2020. PPNR ROA, a non-GAAP financial measure, was 2.15% for the first quarter of 2021, compared to 2.11% for the first quarter of 2020.

* Net interest margin was stable at 3.60% for the first quarter of 2021, compared to 3.59% for the first quarter of 2020, despite extraordinary volatility in interest rates over the past year.

* The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 40.7% for the first quarter of 2021, compared to 44.1% for the first quarter of 2020.

* Gross loans increased $423.3 million at March 31, 2021, or 21.1%, compared to March 31, 2020. Excluding $163.3 million of PPP loans, gross loans increased 13.0%, at March 31, 2021, compared to March 31, 2020.

* Deposits increased $738.5 million at March 31, 2021, or 38.9%, compared to March 31, 2020. Excluding brokered deposits and remaining PPP loan funds, deposits increased 32.1% at March 31, 2021, compared to March 31, 2020.

* Tangible book value per share, a non-GAAP financial measure, increased 15.3%, or $1.31, to $9.80 at March 31, 2021, compared to $8.49 at March 31, 2020.

Recent Developments

The novel coronavirus (COVID-19) pandemic has continued to create uncertainty and extraordinary change for the Company, its clients, its communities and the country as a whole. Vaccines have been rolled out nationwide in the first quarter of 2021, however the situation remains fluid and management cannot estimate the duration and full impact of the COVID-19 pandemic on the economy, financial markets and the Company's financial condition and results of operations.

The Company participated in both the first and second rounds of the Small Business Administration's (SBA) PPP, which stemmed from the Coronavirus Aid, Relief and Economic Security, or CARES, Act that was signed into law on March 27, 2020, and reopened as authorized by the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, which was signed into law on December 27, 2020, or Economic Aid Act. As of March 31, 2021, $93.1 million of round one PPP loans and $70.1 million of round two PPP loans remained outstanding for total outstanding PPP principal balances of $163.3 million.

The Company has developed programs for clients who are experiencing business and personal disruptions due to the COVID-19 pandemic 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 will not be considered troubled debt restructurings. There was no new modification activity in the first quarter of 2021. The Company had 19 modified loans totaling $37.1 million outstanding as of March 31, 2021, representing 1.6% of the total loan portfolio, excluding PPP loans.

The following table presents a rollforward of loan modification activity, by modification type, from December 31, 2020 to March 31, 2021:



(dollars in thousands) Interest-Only Payment Extended Total Deferral Amortization

Principal Balance - $ 61,105 $ 613 $ 4,834 $ 66,552December 31, 2020

Modification Expired (29,396) - - (29,396)

Net Principal Advances (46) 5 (32) (73)(Payments)

Principal Balance - $ 31,663 $ 618 $ 4,802 $ 37,083March 31, 2021

Key Financial Measures



As of and for the Three Months Ended

March 31, December 31, March 31,

2021 2020 2020

Per Common Share Data

Basic Earnings Per Share $ 0.38 $ 0.18 $ 0.26

Diluted Earnings Per Share 0.37 0.17 0.25

Book Value Per Share 9.92 9.43 8.61

Tangible Book Value Per Share ^ 9.80 9.31 8.49 (1)

Basic Weighted Average Shares 28,017,366 28,179,768 28,791,494 Outstanding

Diluted Weighted Average Shares 28,945,212 28,823,384 29,502,245 Outstanding

Shares Outstanding at Period End 28,132,929 28,143,493 28,807,375



Selected Performance Ratios

Return on Average Assets 1.47 % 0.70 % 1.29 %(Annualized)

Pre-Provision Net Revenue Returnon Average Assets (Annualized) ^ 2.15 2.30 2.11 (1)

Return on Average Common Equity 15.87 7.45 11.94 (Annualized)

Return on Average Tangible 16.06 7.55 12.10 Common Equity (Annualized)^ (1)

Yield on Interest Earning Assets 4.31 4.46 4.90

Yield on Total Loans, Gross 4.74 4.89 5.17

Cost of Interest Bearing 1.04 1.24 1.84 Liabilities

Cost of Total Deposits 0.59 0.69 1.27

Net Interest Margin ^(2) 3.60 3.61 3.59

Efficiency Ratio^ (1) 41.2 59.0 44.4

Adjusted Efficiency Ratio ^(1) 40.7 36.6 44.1

Noninterest Expense to Average 1.51 2.16 1.69 Assets (Annualized)

Adjusted Noninterest Expense to 1.49 1.34 1.68 Average Assets (Annualized) ^(1)

Loan to Deposit Ratio 91.9 93.0 105.4

Core Deposits to Total Deposits 83.5 78.1 78.6

Tangible Common Equity to 8.99 8.96 10.13 Tangible Assets ^(1)



Capital Ratios (Bank Only) ^(3)

Tier 1 Leverage Ratio 10.65 % 10.89 % 10.93 %

Tier 1 Risk-based Capital Ratio 12.08 12.12 11.53

Total Risk-based Capital Ratio 13.33 13.37 12.67



Capital Ratios (Consolidated)^ (3)

Tier 1 Leverage Ratio 9.11 % 9.28 % 10.51 %

Tier 1 Risk-based Capital Ratio 10.34 10.35 11.10

Total Risk-based Capital Ratio 14.46 14.58 13.38

* Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details. * Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%. * Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies. Selected Financial Data



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

(dollars in 2021 2020 2020 2020 2020thousands)

SelectedBalance Sheet Data

Total Assets $ 3,072,359 $ 2,927,345 $ 2,774,564 $ 2,754,463 $ 2,418,730

Total Loans, 2,426,123 2,326,428 2,259,228 2,193,778 2,002,817Gross

Allowance for 35,987 34,841 31,381 27,633 24,585Loan Losses

Goodwill andOther 3,248 3,296 3,344 3,391 3,439Intangibles



Deposits 2,638,654 2,501,636 2,273,044 2,242,051 1,900,127

Tangible Common 275,923 262,109 262,088 253,799 244,704Equity^ (1)

TotalShareholders' 279,171 265,405 265,432 257,190 248,143Equity

Average TotalAssets - 2,940,262 2,816,032 2,711,755 2,622,272 2,317,040Quarter-to-Date

Average CommonEquity - 272,729 265,716 263,195 255,109 250,800Quarter-to-Date

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

For the Three Months Ended

March December March 31, 31, 31,

(dollars in thousands) 2021 2020 2020

Selected Income Statement Data

Interest Income $ 30,440 $ 30,699 $ 27,468

Interest Expense 5,045 5,858 7,366

Net Interest Income 25,395 24,841 20,102

Provision for Loan Losses 1,100 3,900 2,100

Net Interest Income after Provision for Loan 24,295 20,941 18,002Losses

Noninterest Income 1,008 986 1,719

Noninterest Expense 10,923 15,258 9,746

Income Before Income Taxes 14,380 6,669 9,975

Provision for Income Taxes 3,709 1,690 2,532

Net Income $ 10,671 $ 4,979 $ 7,443

Income Statement

Net Interest Income

Net interest income was $25.4 million for the first quarter of 2021, an increase of $554,000, or 2.2%, from $24.8 million in the fourth quarter of 2020, and an increase of $5.3 million, or 26.3%, from $20.1 million in the first quarter of 2020. The linked-quarter and year-over-year increases in net interest income were primarily due to growth in average interest earning assets, lower rates paid on deposits, and the recognition of PPP loan origination fees, offset partially by declining yields on loans. Average interest earning assets were $2.88 billion for the first quarter of 2021, an increase of $123.5 million, or 4.5%, from $2.76 billion for the fourth quarter of 2020, and an increase of $605.5 million, or 26.6%, from $2.28 billion for the first quarter of 2020. The linked-quarter increase in average interest earning assets was primarily due to strong organic growth in the loan portfolio. The year-over-year increase in average interest earning assets was primarily due to increased on-balance sheet liquidity, continued strong organic growth in the loan portfolio, as well as the funding of PPP loans.

Net interest margin (on a fully tax-equivalent basis) for the first quarter of 2021 was 3.60%, a 1 basis point decline from 3.61% in the fourth quarter of 2020, and a 1 basis point increase from 3.59% in the first quarter of 2020.

While the origination volume of PPP loans earning 1.00% negatively impacted net interest margin, the recognition of fees associated with the originations has benefited net interest margin for each of the past two quarters. The SBA began forgiving PPP loans, which has accelerated the recognition of PPP fees starting in the fourth quarter of 2020 and continuing into the first quarter of 2021. The Company recognized $1.5 million of PPP origination fees during the first quarter of 2021, compared to $1.7 million during the fourth quarter of 2020. The elevated fee recognition is illustrated in the 5.08% PPP loan yield for the first quarter of 2021.

The following table summarizes PPP loan originations and net origination fees as of March 31, 2021:





Originated Outstanding Program Lifetime

Number Principal Number Principal Net Net Origination Origination

(dollars of of Feesin Loans Balance Loans Balance Generated Fees Earnedthousands)

Round One 1,200 $ 181,600 412 $ 93,114 $ 5,706 $ 4,359PPP Loans

Round Two 517 70,144 517 70,144 3,041 68PPP Loans

Totals 1,717 $ 251,744 929 $ 163,258 $ 8,747 $ 4,427

Nevertheless, earning asset yields continue to be negatively impacted by the low interest rate environment, however given the volatility of the past year and competing dynamics on both sides of the balance sheet, the Company was encouraged by another quarter of meaningful deposit repricing that supported continued net interest margin stabilization.

Interest income was $30.4 million for the first quarter of 2021, a decrease of $259,000, or 0.8%, from $30.7 million in the fourth quarter of 2020, and an increase of $3.0 million, or 10.8%, from $27.5 million in the first quarter of 2020. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.31% in the first quarter of 2021, compared to 4.46% in the fourth quarter of 2020, and 4.90% in the first quarter of 2020. The linked-quarter decrease in the yield on interest earning assets was due primarily to the historically low interest rate environment resulting in a lower loan yield, lower loan fees recognized, and an increase in cash balances due to extraordinary deposit inflows, offset partially by $1.5 million of PPP loan origination fees. The year-over-year decline in the yield on interest earning assets was primarily due to the historically low interest rate environment coupled with unprecedented liquidity resulting in lower loan and security yields and excess cash balances.

Loan interest income and loan fees remain the primary contributing factors to the changes in yield on interest earning assets. The aggregate loan yield, excluding PPP loans, decreased to 4.72% in the first quarter of 2021, which was 15 basis points lower than 4.87% in the fourth quarter of 2020, and 45 basis points lower than 5.17% in the first quarter of 2020. While loan fees have maintained a relatively stable contribution to the aggregate loan yield, the historically low yield curve has resulted in a declining core yield on loans in comparison to both prior periods.

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



Three Months Ended

March December September June March 31, 31, 2020 30, 2020 30, 31, 2021 2020 2020

Interest 4.50 % 4.59 % 4.69 % 4.76 % 4.90 %

Fees 0.22 0.28 0.24 0.25 0.27

Yield on Loans,Excluding PPP 4.72 % 4.87 % 4.93 % 5.01 % 5.17 %Loans

Interest expense was $5.0 million for the first quarter of 2021, a decrease of $813,000, or 13.9%, from $5.9 million in the fourth quarter of 2020, and a decrease of $2.3 million, or 31.5%, from $7.4 million in the first quarter of 2020. The cost of interest bearing liabilities declined 20 basis points on a linked-quarter basis from 1.24% in the fourth quarter of 2020 to 1.04% in the first quarter of 2021, primarily due to lower rates paid on deposits. On a year-over-year basis, the cost of interest bearing liabilities decreased 80 basis points from 1.84% in the first quarter of 2020 to 1.04% in the first quarter of 2021, primarily due to lower rates paid on deposits, offset partially by strong growth of interest bearing deposits and additional subordinated debentures.

Interest expense on deposits was $3.7 million for the first quarter of 2021, a decrease of $408,000, or 10.0%, from $4.1 million in the fourth quarter of 2020, and a decrease of $2.1 million, or 35.9%, from $5.7 million in the first quarter of 2020. The cost of total deposits declined 10 basis points on a linked-quarter basis from 0.69% in the fourth quarter of 2020, and declined 68 basis points on a year-over-year basis from 1.27% in the first quarter of 2020, to 0.59% in the first quarter of 2021, primarily due to deposit rate cuts consistent with a lower rate environment and the downward repricing of time deposits. Given strong deposit inflows and ample time deposit maturities over the next 12 months, the Company anticipates continued deposit repricing opportunities in the future. Additionally, the significant FHLB de-leveraging strategy executed in the fourth quarter of 2020 has begun to manifest lower interest bearing liability costs in the current quarter.

A summary of the Company's average balances, interest yields and rates, and net interest margin for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020 is as follows:



For the Three Months Ended

March 31, 2021 December 31, 2020 March 31, 2020

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 $ 105,477 $ 34 0.13 % $ 79,896 $ 32 0.16 % $ 29,462 $ 59 0.81 %Investments

Investment Securities:

TaxableInvestment 301,680 1,723 2.32 290,093 1,632 2.24 188,186 1,387 2.96 Securities

Tax-ExemptInvestment 80,963 881 4.41 81,370 888 4.34 94,728 1,024 4.35 Securities^ (1)

TotalInvestment 382,643 2,604 2.76 371,463 2,520 2.70 282,914 2,411 3.43 Securities

PaycheckProtection 148,881 1,864 5.08 165,099 2,097 5.05 - - - Program Loans ^(2)

Loans ^(1)(2) 2,241,038 26,074 4.72 2,136,229 26,168 4.87 1,954,959 25,150 5.17

Total Loans 2,389,919 27,938 4.74 2,301,328 28,265 4.89 1,954,959 25,150 5.17

Federal Home 5,045 78 6.28 6,856 92 5.35 10,270 100 3.93 Loan Bank Stock

Total Interest 2,883,084 30,654 4.31 % 2,759,543 30,909 4.46 % 2,277,605 27,720 4.90 %Earning Assets

Noninterest 57,178 56,489 39,435 Earning Assets

Total Assets $ 2,940,262 $ 2,816,032 $ 2,317,040

InterestBearing Liabilities:

Deposits:

InterestBearing 364,017 422 0.47 % 353,806 420 0.47 % 246,843 431 0.70 %TransactionDeposits

Savings andMoney Market 724,104 1,008 0.56 538,030 1,003 0.74 533,578 1,905 1.44 Deposits

Time Deposits 344,715 1,267 1.49 362,469 1,607 1.76 376,154 2,177 2.33

Brokered 402,694 974 0.98 433,037 1,049 0.96 218,289 1,211 2.23 Deposits

Total InterestBearing 1,835,530 3,671 0.81 1,687,342 4,079 0.96 1,374,864 5,724 1.67 Deposits

Federal Funds - - - 4,072 4 0.33 24,835 107 1.74 Purchased

Notes Payable 6,722 61 3.66 11,000 105 3.77 12,505 115 3.70

FHLB Advances 57,500 228 1.61 99,196 551 2.21 172,379 1,027 2.40

Subordinated 73,776 1,085 5.96 73,696 1,119 6.04 24,744 393 6.39 Debentures

Total InterestBearing 1,973,528 5,045 1.04 % 1,875,306 5,858 1.24 % 1,609,327 7,366 1.84 %Liabilities

NoninterestBearing Liabilities:

NoninterestBearing 676,173 654,299 444,201 TransactionDeposits

OtherNoninterest 17,832 20,711 12,712 BearingLiabilities

TotalNoninterest 694,005 675,010 456,913 BearingLiabilities

Shareholders' 272,729 265,716 250,800 Equity

TotalLiabilities and $ 2,940,262 $ 2,816,032 $ 2,317,040 Shareholders'Equity

Net InterestIncome / 25,609 3.27 % 25,051 3.22 % 20,354 3.06 %Interest RateSpread

Net Interest 3.60 % 3.61 % 3.59 %Margin ^(3)

TaxableEquivalent Adjustment:

Tax-ExemptInvestment (214) (210) (252) Securities andLoans

Net Interest $ 25,395 $ 24,841 $ 20,102 Income

* 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%. * Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs. * Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period. Provision for Loan Losses

The provision for loan losses was $1.1 million for the first quarter of 2021, a decrease of $2.8 million from $3.9 million for the fourth quarter of 2020, and a decrease of $1.0 million from $2.1 million for the first quarter of 2020. The provision recorded in the first quarter of 2021 was primarily attributable to growth of the loan portfolio. The allowance for loan losses to total loans was 1.48% at March 31, 2021, compared to 1.50% at December 31, 2020, and 1.23% at March 31, 2020. The allowance for loan losses to total loans, excluding $163.3 million of PPP loans, was 1.59% at March 31, 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

March 31, December 31, March 31,

(dollars in thousands) 2021 2020 2020

Balance at Beginning of Period $ 34,841 $ 31,381 $ 22,526

Provision for Loan Losses 1,100 3,900 2,100

Charge-offs (14) (463) (47)

Recoveries 60 23 6

Balance at End of Period $ 35,987 $ 34,841 $ 24,585

Noninterest Income

Noninterest income was $1.0 million for the first quarter of 2021, an increase of $22,000 from $986,000 for the fourth quarter of 2020, and a decrease of $711,000 from $1.7 million for the first quarter of 2020. The linked-quarter increase was primarily due to increased other miscellaneous items, offset partially by lower gains on sales of securities and letter of credit fees. The year-over-year decrease was primarily due to lower swap fees, partially offset by increased letter of credit fees and other miscellaneous items.

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



Three Months Ended

March 31, December 31, March 31,

(dollars in thousands) 2021 2020 2020

Noninterest Income:

Customer Service Fees $ 234 $ 251 $ 240

Net Gain on Sales of Securities - 30 3

Letter of Credit Fees 327 477 274

Debit Card Interchange Fees 130 118 92

Swap Fees - - 907

Other Income 317 110 203

Totals $ 1,008 $ 986 $ 1,719

Noninterest Expense

Noninterest expense was $10.9 million for the first quarter of 2021, a decrease of $4.3 million from $15.3 million for the fourth quarter of 2020, and an increase of $1.2 million from $9.7 million for the first quarter of 2020. The linked-quarter decrease was primarily due to $5.6 million of prepayment fees associated with the extinguishment of $69.0 million of FHLB term advances incurred in the fourth quarter of 2020, partially offset by an increase in salaries and employee benefits. The year-over-year increase was primarily attributable to increased salaries and employee benefits, occupancy and equipment, and technology expenses, offset partially by decreased marketing and advertising expenses.

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



Three Months Ended

March December March 31, 31, 31,

(dollars in thousands) 2021 2020 2020

Noninterest Expense:

Salaries and Employee Benefits $ 7,102 $ 6,216 $ 6,454

Occupancy and Equipment 1,055 979 713

FDIC Insurance Assessment 315 270 190

Data Processing 291 293 229

Professional and Consulting Fees 544 566 485

Information Technology and 462 397 266Telecommunications

Marketing and Advertising 286 143 466

Intangible Asset Amortization 48 48 48

Amortization of Tax Credit Investments 118 146 85

FHLB Advance Prepayment Fees - 5,613 -

Other Expense 702 587 810

Totals $ 10,923 $ 15,258 $ 9,746

In the first quarter of 2021, the Company attracted 21 new hires in lending, deposit gathering, technology, risk management, and other supportive roles, which continued to demonstrate the Company's status as a preferred employer amidst ongoing market disruption. The Company reached 200 full-time equivalent employees at March 31, 2021, compared to 183 employees at December 31, 2020, and 170 employees at March 31, 2020. The efficiency ratio, a non-GAAP financial measure, was 41.2% for the first quarter of 2021, compared to 59.0% for the fourth quarter of 2020, and 44.4% for the first quarter of 2020. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 40.7% for the first quarter of 2021, 36.6% for the fourth quarter of 2020 and 44.1% for the first quarter of 2020. The efficiencies of the Company's "branch-light" model have been evident throughout the pandemic, and going forward, have positioned the Company well to continue making investments in technology as the industry adapts to evolving client behavior.

Income Taxes

The effective combined federal and state income tax rate for the first quarter of 2021 was 25.8%, an increase from 25.3% for the fourth quarter of 2020, and an increase from 25.4% for the first quarter of 2020.

Balance Sheet

Total assets at March 31, 2021 were $3.07 billion, a 5.0% increase from $2.93 billion at December 31, 2020, and a 27.0% increase from $2.42 billion at March 31, 2020. The linked-quarter increase in total assets was primarily due to strong organic loan growth and excess cash balances linked to continued strong deposit inflows. The year-over-year increase in total assets was primarily due to organic loan growth, PPP loan growth, purchases of investment securities, and excess cash balances.

Total gross loans at March 31, 2021 were $2.43 billion, an increase of $99.7 million, or 4.3%, over total gross loans of $2.33 billion at December 31, 2020, and an increase of $423.3 million, or 21.1%, over total gross loans of $2.00 billion at March 31, 2020. When excluding the PPP loans altogether, gross loans grew $74.9 million during the first quarter of 2021, or 13.9% on an annualized basis.

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



March 31, December September June 30, March 31, 2021 31, 2020 30, 2020 2020 2020

(dollars in thousands)

Commercial $ 301,023 $ 304,220 $ 287,254 $ 302,536 $ 299,425

PaycheckProtection 163,258 138,454 181,596 180,228 - Program

Constructionand Land 193,372 170,217 175,882 191,768 183,350 Development

Real Estate Mortgage:

1 - 4 Family 294,964 294,479 286,089 289,456 272,590 Mortgage

Multifamily 665,415 626,465 585,814 522,491 536,380

CRE Owner 79,665 75,604 75,963 73,539 75,207 Occupied

CRE Nonowner 720,396 709,300 660,058 627,651 631,541 Occupied

Total RealEstate 1,760,440 1,705,848 1,607,924 1,513,137 1,515,718 MortgageLoans

Consumer and 8,030 7,689 6,572 6,109 4,324 Other

Total Loans, 2,426,123 2,326,428 2,259,228 2,193,778 2,002,817 Gross

Allowancefor Loan (35,987) (34,841) (31,381) (27,633) (24,585) Losses

Net Deferred (11,273) (9,151) (10,367) (10,287) (5,336) Loan Fees

Total Loans, $ 2,378,863 $ 2,282,436 $ 2,217,480 $ 2,155,858 $ 1,972,896 Net

Total deposits at March 31, 2021 were $2.64 billion, an increase of $137.0 million, or 5.5%, over total deposits of $2.50 billion at December 31, 2020, and an increase of $738.5 million, or 38.9%, over total deposits of $1.90 billion at March 31, 2020. Deposit growth in the first quarter of 2021 was primarily due to an increase in noninterest bearing and interest bearing transaction deposits and savings and money market deposits, offset partially by a decline in time deposits and brokered deposits. The growth in core, non-maturity deposits was a result of both successful new client acquisition initiatives and pandemic-related accumulation of liquidity by existing clients. Given the fluid environment, management believes deposits could experience fluctuations in future periods; however, in the interim, the strong deposit inflows have provided the flexibility to let higher cost deposits roll off and reduce reliance on brokered deposits.

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



March 31, December September June 30, March 31, 2021 31, 2020 30, 2020 2020 2020

(dollars in thousands)

NoninterestBearing $ 712,999 $ 671,903 $ 685,773 $ 648,869 $ 476,217 TransactionDeposits

InterestBearing 433,344 366,290 322,253 285,386 255,483 TransactionDeposits

Savings andMoney 791,583 657,617 498,397 516,543 514,113 MarketDeposits

Time 344,581 353,543 363,897 382,187 393,340 Deposits

Brokered 356,147 452,283 402,724 409,066 260,974 Deposits

Total $ 2,638,654 $ 2,501,636 $ 2,273,044 $ 2,242,051 $ 1,900,127 Deposits

Total shareholders' equity at March 31, 2021 was $279.2 million, an increase of $13.8 million, or 5.2%, over total shareholders' equity of $265.4 million at December 31, 2020, and an increase of $31.0 million, or 12.5%, over total shareholders' equity of $248.1 million at March 31, 2020. The linked-quarter and year-over-year increases were due to net income retained and an increase in unrealized gains in the securities and derivatives portfolios, partially offset by stock repurchases made under the Company's stock repurchase program.

Strong earnings and capital growth coupled with better asset quality visibility as loan modifications expired supported management's decision to resume repurchases under the Company's stock repurchase program. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program in this fluid economic environment. During the first quarter of 2021, the Company repurchased 16,618 shares of its common stock at a weighted average price of $12.50 for a total of $208,000.

Tangible book value per share, a non-GAAP financial measure, was $9.80 as of March 31, 2021, an increase of 5.2% from $9.31 as of December 31, 2020, and an increase of 15.3% from $8.49 as of March 31, 2020.

Asset Quality

Annualized net charge-offs (recoveries) as a percent of average loans for the first quarter of 2021 were (0.01)%, compared to 0.08% for the fourth quarter of 2020, and 0.01% for the first quarter of 2020. At March 31, 2021, the Company's nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $770,000, or 0.03% of total assets, as compared to $775,000, or 0.03% of total assets at December 31, 2020, and $606,000 or 0.03% of total assets at March 31, 2020.

The Company has increased oversight and analysis of all segments of the loan portfolio in response to the COVID-19 pandemic, especially in vulnerable industries such as hospitality and restaurants, to proactively monitor evolving credit risk. Loans that have potential weaknesses that warrant a watchlist risk rating at March 31, 2021, totaled $58.3 million, compared to $44.8 million at December 31, 2020. As the COVID-19 pandemic continues to evolve, the length and extent of the economic uncertainty may result in further watchlist or adverse classifications in the loan portfolio. Loans that warranted a substandard risk rating at March 31, 2021 totaled $6.7 million, compared to $15.2 million at December 31, 2020.

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



As of and for the Three Months Ended

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

(dollars in 2021 2020 2020 2020 2020 thousands)

SelectedAsset Quality Data

Loans 30-89 $ - $ 13 $ 458 $ 153 $ 21 Days Past Due

Loans 30-89Days Past Due 0.00 % 0.00 % 0.02 % 0.01 % 0.00 %to TotalLoans

Nonperforming $ 770 $ 775 $ 433 $ 602 $ 606 Loans

NonperformingLoans to 0.03 % 0.03 % 0.02 % 0.03 % 0.03 %Total Loans

Foreclosed $ - $ - $ - $ - $ - Assets

NonaccrualLoans to 0.03 % 0.03 % 0.02 % 0.03 % 0.03 %Total Loans

NonaccrualLoans andLoans PastDue 90 Days 0.03 0.03 0.02 0.03 0.03 and StillAccruing toTotal Loans

Nonperforming $ 770 $ 775 $ 433 $ 602 $ 606 Assets ^(1)

NonperformingAssets to 0.03 % 0.03 % 0.02 % 0.02 % 0.03 %Total Assets^(1)

Allowance forLoan Losses 1.48 1.50 1.39 1.26 1.23 to TotalLoans

Allowance forLoan Lossesto Total 1.59 1.59 1.51 1.37 N/A Loans,Excluding PPPLoans

Allowance forLoans Lossesto 4,673.64 4,495.61 7,247.34 4,590.20 4,056.93 NonperformingLoans

Net LoanCharge-Offs(Recoveries) (0.01) 0.08 0.00 (0.01) 0.01 (Annualized)to AverageLoans

* Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due plus foreclosed assets. About the Company

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

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: the negative effects of the COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area; our ability to maintain an adequate level of allowance for loan losses; 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; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. tax laws, regulations and guidance; 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.

Bridgewater Bancshares, Inc. andSubsidiaries

Consolidated Balance Sheets (dollars in thousands, except sharedata)



March 31, December March 31, 31,

2021 2020 2020

(Unaudited) (Unaudited)

ASSETS

Cash and Cash Equivalents $ 200,896 $ 160,675 $ 61,526

Bank-Owned Certificates of Deposit 2,369 2,860 2,895

Securities Available for Sale, at 397,326 390,629 307,317Fair Value

Loans, Net of Allowance for LoanLosses of $35,987 at March 31, 2021(unaudited), $34,841 at December 31, 2,378,863 2,282,436 1,972,8962020 and $24,585 at March 31, 2020(unaudited)

Federal Home Loan Bank (FHLB) Stock, 5,820 5,027 11,017at Cost

Premises and Equipment, Net 51,297 50,987 35,271

Accrued Interest 8,718 9,172 7,102

Goodwill 2,626 2,626 2,626

Other Intangible Assets, Net 622 670 813

Other Assets 23,822 22,263 17,267

Total Assets $ 3,072,359 $ 2,927,345 $ 2,418,730



LIABILITIES AND EQUITY

LIABILITIES

Deposits:

Noninterest Bearing $ 712,999 $ 671,903 $ 476,217

Interest Bearing 1,925,655 1,829,733 1,423,910

Total Deposits 2,638,654 2,501,636 1,900,127

Notes Payable - 11,000 12,500

FHLB Advances 57,500 57,500 207,500

Subordinated Debentures, Net of 73,826 73,739 24,759Issuance Costs

Accrued Interest Payable 1,736 1,615 1,688

Other Liabilities 21,472 16,450 24,013

Total Liabilities 2,793,188 2,661,940 2,170,587



SHAREHOLDERS' EQUITY

Preferred Stock- $0.01 par value

Authorized 10,000,000; None Issuedand Outstanding at March 31, 2021 - - -(unaudited), December 31, 2020 andMarch 31, 2020 (unaudited)

Common Stock- $0.01 par value

Common Stock - Authorized 75,000,000;Issued and Outstanding 28,132,929 atMarch 31, 2021 (unaudited), 281 281 28828,143,493 at December 31, 2020 and28,807,375 at March 31, 2020(unaudited)

Additional Paid-In Capital 104,087 103,714 110,446

Retained Earnings 165,502 154,831 135,080

Accumulated Other Comprehensive 9,301 6,579 2,329Income

Total Shareholders' Equity 279,171 265,405 248,143

Total Liabilities and Equity $ 3,072,359 $ 2,927,345 $ 2,418,730

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

(Unaudited)

(Unaudited)

(Unaudited)

INTEREST INCOME

Loans, Including Fees

$

27,908

$

28,242

$

25,113

Investment Securities

2,420

2,333

2,196

Other

112

124

159

Total Interest Income

30,440

30,699

27,468

INTEREST EXPENSE

Deposits

3,671

4,079

5,724

Notes Payable

61

105

115

FHLB Advances

228

551

1,027

Subordinated Debentures

1,085

1,119

393

Federal Funds Purchased

-

4

107

Total Interest Expense

5,045

5,858

7,366

NET INTEREST INCOME

25,395

24,841

20,102

Provision for Loan Losses

1,100

3,900

2,100

NET INTEREST INCOME AFTER

PROVISION FOR LOAN LOSSES

24,295

20,941

18,002

NONINTEREST INCOME

Customer Service Fees

234

251

240

Net Gain on Sales of Available for Sale Securities

-

30

3

Other Income

774

705

1,476

Total Noninterest Income

1,008

986

1,719

NONINTEREST EXPENSE

Salaries and Employee Benefits

7,102

6,216

6,454

Occupancy and Equipment

1,055

979

713

Other Expense

2,766

8,063

2,579

Total Noninterest Expense

10,923

15,258

9,746

INCOME BEFORE INCOME TAXES

14,380

6,669

9,975

Provision for Income Taxes

3,709

1,690

2,532

NET INCOME

$

10,671

$

4,979

$

7,443

EARNINGS PER SHARE

Basic

$

0.38

$

0.18

$

0.26

Diluted

0.37

0.17

0.25

Dividends Paid Per Share

-

-

-

Bridgewater Bancshares, Inc. andSubsidiaries

Consolidated Statements of Income (dollars in thousands, except pershare data)



Three Months Ended

March 31, December March 31, 31,

2021 2020 2020

(Unaudited) (Unaudited) (Unaudited)

INTEREST INCOME

Loans, Including Fees $ 27,908 $ 28,242 $ 25,113

Investment Securities 2,420 2,333 2,196

Other 112 124 159

Total Interest Income 30,440 30,699 27,468



INTEREST EXPENSE

Deposits 3,671 4,079 5,724

Notes Payable 61 105 115

FHLB Advances 228 551 1,027

Subordinated Debentures 1,085 1,119 393

Federal Funds Purchased - 4 107

Total Interest Expense 5,045 5,858 7,366



NET INTEREST INCOME 25,395 24,841 20,102

Provision for Loan Losses 1,100 3,900 2,100



NET INTEREST INCOME AFTER

PROVISION FOR LOAN LOSSES 24,295 20,941 18,002



NONINTEREST INCOME

Customer Service Fees 234 251 240

Net Gain on Sales of Available for - 30 3Sale Securities

Other Income 774 705 1,476

Total Noninterest Income 1,008 986 1,719



NONINTEREST EXPENSE

Salaries and Employee Benefits 7,102 6,216 6,454

Occupancy and Equipment 1,055 979 713

Other Expense 2,766 8,063 2,579

Total Noninterest Expense 10,923 15,258 9,746



INCOME BEFORE INCOME TAXES 14,380 6,669 9,975

Provision for Income Taxes 3,709 1,690 2,532

NET INCOME $ 10,671 $ 4,979 $ 7,443



EARNINGS PER SHARE

Basic $ 0.38 $ 0.18 $ 0.26

Diluted 0.37 0.17 0.25

Dividends Paid Per Share - - -

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Pre-Provision Net Revenue

Noninterest Income

$

1,008

$

986

$

1,719

Less: Gain on sales of Securities

-

(30)

(3)

Total Operating Noninterest Income

1,008

956

1,716

Plus: Net Interest income

25,395

24,841

20,102

Net Operating Revenue

$

26,403

$

25,797

$

21,818

Noninterest Expense

$

10,923

$

15,258

$

9,746

Less: Amortization of Tax Credit Investments

(118)

(146)

(85)

Less: FHLB Advance Prepayment Fees

-

(5,613)

-

Total Operating Noninterest Expense

$

10,805

$

9,499

$

9,661

Pre-Provision Net Revenue

$

15,598

$

16,298

$

12,157

Plus:

Non-Operating Revenue Adjustments

-

30

3

Less:

Provision for Loan Losses

1,100

3,900

2,100

Non-Operating Expense Adjustments

118

5,759

85

Provision for Income Taxes

3,709

1,690

2,532

Net Income

$

10,671

$

4,979

$

7,443

Average Assets

$

2,940,262

$

2,816,032

$

2,317,040

Pre-Provision Net Revenue Return on Average Assets

2.15

%

2.30

%

2.11

%

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)



For the Three Months Ended

March 31, December March 31, 31,

2021 2020 2020

Pre-Provision Net Revenue

Noninterest Income $ 1,008 $ 986 $ 1,719

Less: Gain on sales of Securities - (30) (3)

Total Operating Noninterest Income 1,008 956 1,716

Plus: Net Interest income 25,395 24,841 20,102

Net Operating Revenue $ 26,403 $ 25,797 $ 21,818



Noninterest Expense $ 10,923 $ 15,258 $ 9,746

Less: Amortization of Tax Credit (118) (146) (85) Investments

Less: FHLB Advance Prepayment Fees - (5,613) -

Total Operating Noninterest Expense $ 10,805 $ 9,499 $ 9,661



Pre-Provision Net Revenue $ 15,598 $ 16,298 $ 12,157



Plus:

Non-Operating Revenue Adjustments - 30 3

Less:

Provision for Loan Losses 1,100 3,900 2,100

Non-Operating Expense Adjustments 118 5,759 85

Provision for Income Taxes 3,709 1,690 2,532

Net Income $ 10,671 $ 4,979 $ 7,443



Average Assets $ 2,940,262 $ 2,816,032 $ 2,317,040

Pre-Provision Net Revenue Return on 2.15 % 2.30 % 2.11 %Average Assets

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Efficiency Ratio

Noninterest Expense

$

10,923

$

15,258

$

9,746

Less: Amortization of Intangible Assets

(48)

(48)

(48)

Adjusted Noninterest Expense

$

10,875

$

15,210

$

9,698

Net Interest Income

25,395

24,841

20,102

Noninterest Income

1,008

986

1,719

Less: Gain on Sales of Securities

-

(30)

(3)

Adjusted Operating Revenue

$

26,403

$

25,797

$

21,818

Efficiency Ratio

41.2

%

59.0

%

44.4

%

Adjusted Efficiency Ratio

Noninterest Expense

$

10,923

$

15,258

$

9,746

Less: Amortization of Tax Credit Investments

(118)

(146)

(85)

Less: FHLB Advance Prepayment Fees

-

(5,613)

-

Less: Amortization of Intangible Assets

(48)

(48)

(48)

Adjusted Noninterest Expense

$

10,757

$

9,451

$

9,613

Net Interest Income

25,395

24,841

20,102

Noninterest Income

1,008

986

1,719

Less: Gain on Sales of Securities

-

(30)

(3)

Adjusted Operating Revenue

$

26,403

$

25,797

$

21,818

Adjusted Efficiency Ratio

40.7

%

36.6

%

44.1

%



For the Three Months Ended

March December March 31, 31, 31,

2021 2020 2020



Efficiency Ratio

Noninterest Expense $ 10,923 $ 15,258 $ 9,746

Less: Amortization of Intangible Assets (48) (48) (48)

Adjusted Noninterest Expense $ 10,875 $ 15,210 $ 9,698

Net Interest Income 25,395 24,841 20,102

Noninterest Income 1,008 986 1,719

Less: Gain on Sales of Securities - (30) (3)

Adjusted Operating Revenue $ 26,403 $ 25,797 $ 21,818

Efficiency Ratio 41.2 % 59.0 % 44.4 %



Adjusted Efficiency Ratio

Noninterest Expense $ 10,923 $ 15,258 $ 9,746

Less: Amortization of Tax Credit (118) (146) (85) Investments

Less: FHLB Advance Prepayment Fees - (5,613) -

Less: Amortization of Intangible Assets (48) (48) (48)

Adjusted Noninterest Expense $ 10,757 $ 9,451 $ 9,613

Net Interest Income 25,395 24,841 20,102

Noninterest Income 1,008 986 1,719

Less: Gain on Sales of Securities - (30) (3)

Adjusted Operating Revenue $ 26,403 $ 25,797 $ 21,818

Adjusted Efficiency Ratio 40.7 % 36.6 % 44.1 %

For the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Adjusted Noninterest Expense to Average Assets

Noninterest Expense

$

10,923

$

15,258

$

9,746

Less: Amortization of Tax Credit Investments

(118)

(146)

(85)

Less: FHLB Advance Prepayment Fees

-

(5,613)

-

Adjusted Noninterest Expense

$

10,805

$

9,499

$

9,661

Average Assets

$

2,940,262

$

2,816,032

$

2,317,040

Adjusted Noninterest Expense to Average Assets

1.49

%

1.34

%

1.68

%

As of and for the Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2020

Tangible Common Equity and Tangible Common Equity/Tangible Assets

Common Equity

$

279,171

$

265,405

$

248,143

Less: Intangible Assets

(3,248)

(3,296)

(3,439)

Tangible Common Equity

275,923

262,109

244,704

Total Assets

3,072,359

2,927,345

2,418,730

Less: Intangible Assets

(3,248)

(3,296)

(3,439)

Tangible Assets

$

3,069,111

$

2,924,049

$

2,415,291

Tangible Common Equity/Tangible Assets

8.99

%

8.96

%

10.13

%

Tangible Book Value Per Share

Book Value Per Common Share

$

9.92

$

9.43

$

8.61

Less: Effects of Intangible Assets

(0.12)

(0.12)

(0.12)

Tangible Book Value Per Common Share

$

9.80

$

9.31

$

8.49

Return on Average Tangible Common Equity

Net Income

$

10,671

$

4,979

$

7,443

Average Common Equity

$

272,729

$

265,716

$

250,800

Less: Effects of Average Intangible Assets

(3,276)

(3,323)

(3,466)

Average Tangible Common Equity

$

269,453

$

262,393

$

247,334

Return on Average Tangible Common Equity

16.06

%

7.55

%

12.10

%



For the Three Months Ended

March 31, December March 31, 31,

2021 2020 2020



Adjusted Noninterest Expense to Average Assets

Noninterest Expense $ 10,923 $ 15,258 $ 9,746

Less: Amortization of Tax (118) (146) (85) Credit Investments

Less: FHLB Advance Prepayment - (5,613) - Fees

Adjusted Noninterest Expense $ 10,805 $ 9,499 $ 9,661



Average Assets $ 2,940,262 $ 2,816,032 $ 2,317,040

Adjusted Noninterest Expense to 1.49 % 1.34 % 1.68 % Average Assets





As of and for the Three Months Ended

March 31, December March 31, 31,

2021 2020 2020



Tangible Common Equity andTangible Common Equity/Tangible Assets

Common Equity $ 279,171 $ 265,405 $ 248,143

Less: Intangible Assets (3,248) (3,296) (3,439)

Tangible Common Equity 275,923 262,109 244,704



Total Assets 3,072,359 2,927,345 2,418,730

Less: Intangible Assets (3,248) (3,296) (3,439)

Tangible Assets $ 3,069,111 $ 2,924,049 $ 2,415,291

Tangible Common Equity/Tangible 8.99 % 8.96 % 10.13 %Assets



Tangible Book Value Per Share

Book Value Per Common Share $ 9.92 $ 9.43 $ 8.61

Less: Effects of Intangible (0.12) (0.12) (0.12) Assets

Tangible Book Value Per Common $ 9.80 $ 9.31 $ 8.49 Share



Return on Average Tangible Common Equity

Net Income $ 10,671 $ 4,979 $ 7,443



Average Common Equity $ 272,729 $ 265,716 $ 250,800

Less: Effects of Average (3,276) (3,323) (3,466) Intangible Assets

Average Tangible Common Equity $ 269,453 $ 262,393 $ 247,334

Return on Average Tangible 16.06 % 7.55 % 12.10 %Common Equity

Three Months Ended

March 31,

December 31,

September 30,

June 30,

March 31,

2021

2020

2020

2020

2020

Tangible Common Equity

Common Equity

$

279,171

$

265,405

$

265,432

$

257,190

$

248,143

Less: Intangible Assets

(3,248)

(3,296)

(3,344)

(3,391)

(3,439)

Tangible Common Equity

$

275,923

$

262,109

$

262,088

$

253,799

$

244,704



Three Months Ended

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

2021 2020 2020 2020 2020

Tangible Common Equity

Common Equity $ 279,171 $ 265,405 $ 265,432 $ 257,190 $ 248,143

Less: Intangible (3,248) (3,296) (3,344) (3,391) (3,439)Assets

Tangible Common $ 275,923 $ 262,109 $ 262,088 $ 253,799 $ 244,704Equity

As of and for the Three Months Ended

December 31, 2020

Annualized ROA, Excluding Impact of FHLB Prepayment Fees

Net Income

$

4,979

Add: FHLB Prepayment Fees

5,613

Less: Tax Impact

(1,336)

Net Income, Excluding Impact of FHLB Prepayment Fees

$

9,256

Average Assets

$

2,816,032

Annualized ROA, Excluding Impact of FHLB Prepayment Fees

1.31

%

Annualized ROE, Excluding Impact of FHLB Prepayment Fees

Net Income

$

4,979

Add: FHLB Prepayment Fees

5,613

Less: Tax Impact

(1,336)

Net Income, Excluding Impact of FHLB Prepayment Fees

$

9,256

Average Equity

$

265,716

Annualized ROE, Excluding Impact of FHLB Prepayment Fees

13.86

%

Diluted Earnings Per Common Share, Excluding Impact of FHLB Prepayment Fees

Net Income

$

4,979

Add: FHLB Prepayment Fees

5,613

Less: Tax Impact

(1,336)

Net Income, Excluding Impact of FHLB Prepayment Fees

$

9,256

Diluted Weighted Average Shares Outstanding

$

28,823,384

Diluted Earnings Per Common Share, Excluding Impact of FHLB Prepayment Fees

$

0.32

View source version on businesswire.com: https://www.businesswire.com/news/home/20210429005360/en/

CONTACT: Investor Relations Contact: Jerry Baack Chief Executive Officer investorrelations@bwbmn.com 952-893-6866