Bridgewater Bancshares, Inc._2023 Annual Report

approximately 1.5%, which ranked the Company tenth in the Twin Cities MSA overall and fourth in the Twin Cities MSA among banks headquartered in Minnesota.

Total

Market Share

State

Branch Count

Deposits ($000)

Rank

Institution

Headquarters

(%)

1 ............. U.S. Bancorp 2 ............. Wells Fargo & Co 3 ............. Ameriprise Financial, Inc. 4 ............. Huntington Bancshares, Inc. 5 ............. Bank of Montreal 6 ............. Otto Bremer Trust 7 ............. Bank of America Corp. 8 ............. State Bankshares, Inc. 9 ............. Old National Bancorp

MN CA MN OH N/A MN NC ND

83 88 69 30 19 17 2

95,115,907 50,360,064 20,933,401 6,565,049 6,479,589 5,301,745 4,520,617 3,957,691 3,631,394 3,608,662 200,474,119

40.02 21.19 8.81 2.76 2.73 2.23 1.90

7

1.67 1.53 1.52

IN

29

Bridgewater Bancshares, Inc.

MN

8

10 ............

Top 10 Institutions

352

84.36

Total Bank Deposits 237,642,506 The market has experienced disruption in recent years due to acquisitions of local institutions by larger regional banks headquartered outside of the market. The disruption has created significant opportunities for the Company to add both talent and clients. In addition, the Company has developed a local banking advantage in the market with only four of the ten largest banks by deposit market share being headquartered in Minnesota. Products and Services The Company offers a full array of simple, quality loan and deposit products primarily for commercial clients. While the Company provides products and services that compete with those offered by large national and regional competitors, the Company additionally offers responsive support and personalized solutions tailored for each client. The Company emphasizes client service and believes in providing distinguishing levels of service through the experience of employees, the responsiveness and certainty of the credit process and the efficiency with which business is conducted. The Company believes that clients notice a difference in service compared to the much larger institutions in the market. The Company has built a strong referral network that continually provides opportunities with new client relationships. At this time, the Company does not operate any non - depository business lines such as mortgage, wealth management or trust. Lending. The Bank focuses primarily on commercial lending, consisting of loans secured by nonfarm, nonresidential properties, loans secured by multifamily residential properties, nonowner occupied single family residential properties, construction loans, land development loans and commercial and industrial loans. The Bank has a particular expertise in multifamily financing which has historically represented a large portion of the loan portfolio. This asset class has performed extremely well and has lower historical loss rates when compared to other loan types. Commercial real estate loans (excluding multifamily and construction) consist of owner and nonowner occupied properties. This portfolio segment is well diversified with loans secured by office buildings, retail strip centers, industrial properties, senior housing and hospitality properties and mixed - use properties. In addition to loans secured by improved commercial real estate properties, the Bank engages in construction lending, which includes single family residential construction loans, land development, finished lots and raw land loans, and commercial and multifamily construction. In recent years, the Bank has increased its focus on commercial and industrial lending. This portfolio includes a mix of term equipment loans and revolving lines of credit to support the needs of local businesses. Additionally, the Bank has a niche within the tax credit investment market whereby it bridges equity capital receivables on various tax credit projects. 751

6