2020 Annual Report

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Bridgewater Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements (dollars in thousands, except share data)

contributed under the plan, including accrued interest, is made in a lump sum cash payment within 75 days following the date such amounts become vested. As of December 31, 2020 and 2019, the Company had a liability of $3,571 and $3,546, respectively, recorded on the consolidated balance sheets. There were no new contributions made to the plan during the years ended December 31, 2020 and 2019. Note 20: Regulatory Capital The Company and the Bank are subject to various regulatory requirements administered by federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank must also meet certain specific capital guidelines under the regulatory framework for prompt corrective action. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets (referred to as the “leverage ratio”), as defined under the applicable regulatory capital rules.

The following tables present the capital amounts and ratios for the Company and the Bank as of December 31, 2020 and 2019:

Minimum Required For Capital Adequacy To be Well Capitalized For Capital Adequacy Purposes Plus Capital Under Prompt Corrective

Actual

Purposes

Conservation Buffer

Action Regulations

December 31, 2020

Amount Ratio Amount Ratio Amount Ratio Amount Ratio

(dollars in thousands) Company (Consolidated): Total Risk-based Capital. . . . . . . . . . $ 360,198 14.58 % $ 197,604 Tier 1 Risk-based Capital . . . . . . . . . 255,530 10.35 148,203 Common Equity Tier 1 Capital . . . . . 255,530 10.35 111,152 Tier 1 Leverage Ratio. . . . . . . . . . . . 255,530 9.28 110,168 Bank: Total Risk-based Capital. . . . . . . . . . $ 330,380 13.37 % $ 197,629 Tier 1 Risk-based Capital . . . . . . . . . 299,447 12.12 148,222 Common Equity Tier 1 Capital . . . . . 299,447 12.12 111,166 Tier 1 Leverage Ratio. . . . . . . . . . . . 299,447 10.89 109,972 (dollars in thousands) Company (Consolidated): Total Risk-based Capital. . . . . . . . . . $ 269,613 12.98 % $ 166,163 Tier 1 Risk-based Capital . . . . . . . . . 236,533 11.39 124,623 Common Equity Tier 1 Capital . . . . . 236,533 11.39 93,467 Tier 1 Leverage Ratio. . . . . . . . . . . . 236,533 10.69 88,498 Bank: Total Risk-based Capital. . . . . . . . . . $ 252,501 12.16 % $ 166,137 Tier 1 Risk-based Capital . . . . . . . . . 243,461 11.72 124,603 Common Equity Tier 1 Capital . . . . . 243,461 11.72 93,452 Tier 1 Leverage Ratio. . . . . . . . . . . . 243,461 11.01 88,455 Actual December 31, 2019

8.00 % $ 259,355 6.00 209,954 4.50 172,904 4.00 110,168 8.00 % $ 259,388 6.00 209,981 4.50 172,925 4.00 109,972

10.50 %

N/A N/A N/A N/A

8.50 7.00 4.00

10.50 % $ 247,036 8.50 197,629 7.00 160,574 4.00 137,465

10.00 %

8.00 6.50 5.00