Bridgewater Bancshares, Inc._2023 Annual Report

Optimizing our balance sheet was one of the ar eas that became a focus in 2023. Given indus try-wide funding challenges, we had to be more thoughtful around better aligning loan growth with core deposit growth. This meant a slower pace of loan growth than we had been used to in prior years and an increased focus on bringing in core deposits. Our teams responded well to this shift by increasing core deposit growth and driv ing our loan-to-deposit ratio lower over the past few quarters. Coupled with other balance sheet initiatives, such as reducing our reliance on high er cost borrowings, we were able to begin stabi lizing revenue and net interest margin toward the end of the year. We also took steps to continue our strong track record of superb asset quality in 2023 as we navi gated an uncertain economic outlook. Our consis tent underwriting standards, active credit over sight and experienced lending and credit teams led to another year of very low levels of nonper forming assets and virtually no net charge-offs. Looking ahead to potential repricing risks, we proactively engaged with clients with maturing loans or resetting rates to identify situations of potential cash flow strain and recommended

solutions early in the process. These efforts are continuing into 2024 as just another way we are truly partnering with our clients. Lastly, I can’t talk about Bridgewater without emphasizing our collaborative culture. Our team members were in the office and engaged through out the year, both through their work as well as participation in other activities such as health and wellness, mentorship, DE&I and volunteer ing. A more engaged team is a more committed team with less turnover and a greater focus on providing high quality service. The leadership and collaboration of our teams was on full dis play throughout this unique year in the banking industry. Culture has always been a differentiator for Bridgewater, and 2023 was no exception. As the economy transitions through unpredict able cycles, our focus for our shareholders re mains the same–to consistently grow tangible book value over time. We were able to do this throughout 2023 as our tangible book value per share grew 9.8% during the year. In fact, we have now grown tangible book value for 28 consecu tive quarters, a feat most banks have not been able to accomplish for even the last eight quar ters. As we look ahead to 2024, we are hopeful that we will see a more favorable banking environment with potential rate cuts on the horizon, and more importantly, a more normalized yield curve. The actions we have taken in 2023 have positioned us for enhanced profitability as the economic out look improves. As we focus on driving sustained shareholder value over the long-term, we will be focused on several strategic objectives in 2024: As we enter 2024, we are beginning to see de mand increase in the Twin Cities and a more robust loan pipeline, which began building to ward the end of 2023. We expect this will trans late into more profitable growth as the interest rate environment normalizes. We have over $1 billion of adjustable funding tied to short-term interest rates and a predominantly fixed-rate loan portfolio that is well-positioned to con tinue repricing higher, even if interest rates de Strategic Objectives for 2024 Optimize the Balance Sheet for Longer Term Profitable Growth

Tangible Book Value Per Share Growth 1

11% CAGR

$12.84

$11.69

$10.98

$9.31

$8.33

Represents a non-GAAP financial measure. See “GAAP Reconciliation and Management Explanation of Non-GAAP Financial Measures” in the accompanying 2023 From 10-K for further details 2019 2020 2021 2022 2023 1

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