2020 Annual Report

Fellow shareholders, It is a pleasure to provide Bridgewater Bancshares, Inc.’s annual report for 2020, highlighting the exceptional results of a year laden with uncertainty but ripe with opportunity. While the pandemic challenged the way we operate, forcing us to be even more creative and nimble, it provided an occasion for us to display resilience and a competitive spirit. Banks were challenged to pivot seemingly overnight, and many did it well. However, we presume that few banks emulated the growth, profitability and efficiency exhibited by Bridgewater. Despite unforeseen challenges, we closed 2020 with a firm foundation for the next leg of growth. Bridgewater maintains a strong capital position with a healthy level of liquidity. We took advantage of the low-rate environment and extraordinary deposit growth during this tumultuous year to remove inefficient long-term Federal Home Loan Bank (FHLB) advances from the balance sheet. While this non-recurring charge has negatively affected current earnings and overshadows strong operating results, this strategic action will better orient the balance sheet, improve the net interest margin outlook and position us for increased long- term earnings. Looking back on a unique but defining year, Bridgewater posted solid financial returns as we completed our fifteenth straight year of profitability. Loans and deposits saw double-digit growth, propelling us to $2.93 billion in assets at year end. We held our position as one of the largest banks headquartered in Minnesota by asset size and continued to operate as the premier real estate lender in the Twin Cities MSA. Despite meaningfully increasing our loan loss reserve, our credit quality remains strong with few modifications and low single-digit classifications. Outstanding growth in the loan portfolio was in part due to our participation in the SBA’s Paycheck Protection Program, which provided opportunities to diversify our client base, heighten brand awareness and increase our market share. A year-end adjusted efficiency ratio of 40.5% is not happenstance. Our focused business model anchored in responsive support, simple solutions and nimble teamwork allowed us tomaintain efficiencywhile accelerating our adoption of new and innovative technology solutions amidst a pandemic. All within the first quarter, we introduced our team members to a remote work environment and implemented a new and robust online banking platform for business clients. While our strategic network of branches remained open for in-person client service for most of 2020, many clients took advantage of our digital banking platforms. The Twin Cities market is active and strong. Since 2005, Bridgewater has built a local presence, a compelling brand and a strong, enduring network of loyal clients rooted in the Twin Cities. We have reaped the benefits of operating in a market defined by a mix of both entrepreneurial and established companies that also headquarters over 15 Fortune 500 companies. The appeal of Minneapolis/St. Paul has attracted several out- of-state acquirers, disrupting clients and employees alike. As one of the largest, locally-led and locally- founded banks in Minnesota, we plan to capitalize on these disturbances and attract disenfranchised clients, producers and skilled talent. We will work to further increase our market niche among seasoned real estate entrepreneurs and expand our reach throughout the Twin Cities with new verticals designed to meet the demands of our predominately commercial client base. We look forward with optimism. While 2020 showed us that the future is not always certain, having the right people, tools and a positive attitude makes all the difference. We have proven the team can quickly pivot and be successful working remotely, but we eagerly anticipate reuniting where networking and collaboration will occur in our newly designed Corporate Center. As we look ahead to 2021 and beyond, we know we have what it takes to make our mission a reality. Thank you for your continued investment in the Finest Entrepreneurial Bank in the Twin Cities.

Jerry Baack Chairman of the Board