Bridgewater Bancshares, Inc._2023 Annual Report

The Company believes these non-GAAP financial measures provide useful information to management and investors that is supplementary to the financial condition, results of operations and cash flows computed in accordance with GAAP; however, the Company acknowledges that these non-GAAP financial measures have a number of limitations. As such, you should not view these disclosures as a substitute for results determined in accordance with GAAP, and they are not necessarily comparable to non-GAAP financial measures that other companies use. The following reconciliation table provides a more detailed analysis of these non-GAAP financial measures:

As of and for the year ended December 31,

(dollars in thousands)

2023

2022

2021

2020

2019

Pre-Provision Net Revenue NoninterestIncome...................................... $ Less: (Gain) Loss on Sales of Securities . . . . . . . . . . . . . . . . . . . . . . . Less: FHLB Advance Prepayment Income . . . . . . . . . . . . . . . . . . . . . TotalOperatingNoninterestIncome......................... Plus:NetInterestIncome.................................. NetOperatingRevenue.................................. $ 110,908 6,493 33 (792) 5,734 105,174 NoninterestExpense ..................................... $ Less: Amortization of Tax Credit Investments . . . . . . . . . . . . . . . . . . . Less:DebtPrepaymentFees................................ Total Operating Noninterest Expense . . . . . . . . . . . . . . . . . . . . . . . . $ 59,320 — — 59,320 Plus: Non-Operating Revenue Adjustments. . . . . . . . . . . . . . . . . . . . . . . . Less: Provision (Recovery of) for Credit Losses . . . . . . . . . . . . . . . . . . . . Non-Operating Expense Adjustments . . . . . . . . . . . . . . . . . . . . . . . . ProvisionforIncomeTaxes............................... NetIncome............................................ $ 759 (175) — 12,562 39,960 Pre-ProvisionNetRevenue ................................ $ 51,588

$

6,332

$

5,309

$

5,839 (1,503) 4,336 87,964 92,300 —

$

3,826

(82)

(750)

(516)

—

—

—

6,250

4,559

3,310 74,132 77,442 36,932 (3,225)

129,698

109,509

$ 135,948

$ 114,068

$

$

$

56,620

$

48,095

$

45,387

$

(408)

(562) (582)

(738)

—

(7,043) 37,606

—

$

56,212

$

46,951

$

$

33,707

$

79,736

$

67,117

$

54,694

$

43,735

82

750

1,503

516

7,700

5,150 1,144 15,886 45,687

12,750 7,781 8,472 27,194

2,700 3,225 6,923

408

18,318 53,392

$

$

$

$

31,403

AverageAssets......................................... $ 4,490,804

$ 3,866,480

$ 3,189,800

$ 2,617,579

$ 2,114,211

Pre-Provision Net Revenue Return on Average Assets .............

1.15 %

2.06 %

2.10 %

2.09 %

2.07 %

As of and for the year ended December 31,

(dollars in thousands)

2023

2022

2021

2020

2019

Core Net Interest Margin Net Interest Income (Tax-Equivalent Basis). . . . . . . . . . . . . . . . . . . . . $ 106,730 Less:LoanFees ........................................ (3,604) Less:PPPInterestandFees................................ NM CoreNetInterestIncome ................................ $ 103,126 Average Interest Earning Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,404,366 Less:AveragePPPLoans ................................. NM Core Average Interest Earning Assets . . . . . . . . . . . . . . . . . . . . . . . $ 4,404,366

$ 130,920

$ 110,373

$

88,883 (5,283) (4,143) 79,457

$

75,040 (4,562)

(6,273) (970)

(5,173) (6,441) 98,759

—

$ 123,677

$

$

$

70,478

$ 3,790,291

$ 3,115,883

$ 2,565,859

$ 2,091,198

(7,441)

(103,151)

(122,240)

—

$ 3,782,850

$ 3,012,732

$ 2,443,619

$ 2,091,198

Core Net Interest Margin ................................

2.34 %

3.27 %

3.28 %

3.25 %

3.37 %

As of and for the year ended December 31,

(dollars in thousands)

2023

2022

2021

2020

2019

Efficiency Ratio NoninterestExpense..................................... $ Less: Amortization of Intangible Assets . . . . . . . . . . . . . . . . . . . . . . . AdjustedNoninterestExpense............................. $ NetInterestIncome...................................... NoninterestIncome...................................... Less: (Gain) Loss on Sales of Securities . . . . . . . . . . . . . . . . . . . . . . . AdjustedOperatingRevenue.............................. $ 111,700 59,320 (100) 59,220 105,174 6,493 33

$

56,620

$

48,095

$

45,387

$

36,932

(191)

(191)

(191)

(191)

$

56,429 129,698

$

47,904

$ $

45,196 87,964 5,839 (1,503) 92,300

$ $

36,741 74,132 3,826

$ 109,509

6,332

5,309

(82)

(750)

(516)

$ 135,948

$ 114,068

$

$

77,442

Efficiency Ratio .......................................

53.0 %

41.5 %

42.0 %

49.0 %

47.4 %

76