On this page of StockholderLetter.com we present the latest annual shareholder letter from Bridgewater Bancshares Inc — ticker symbol BWB. Reading current and past BWB letters to shareholders can bring important insights into the investment thesis.

 •  3/10/2025 Letter Continued (Full PDF)
 •  3/13/2023 BWB Stockholder Letter
 •  3/11/2024 BWB Stockholder Letter
 •  More "Banking & Savings" Category Stockholder Letters
 •  BWB Benford's Law Stock Score = 92

BWB Shareholder/Stockholder Letter Transcript:

Bridgewater Bridgewater
Bridgewater
Inc.
Bancshares, Bancshares,
Inc.
Bancshares, Inc.
2024 ANNUAL REPORT
BRIDGEWATER BANCSHARES, INC.

WHO WE ARE
Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding
company founded in 2005. Its banking subsidiary, Bridgewater Bank, is a premier, full-service bank
dedicated to providing responsive support and simple solutions to businesses, entrepreneurs, and
successful individuals across the Twin Cities. Bridgewater offers a comprehensive suite of products
and services spanning deposits, lending, and treasury management solutions. Bridgewater has
also received numerous awards for its banking services and esteemed corporate culture. For more
information, please visit BWBMN.com.
2024 AT A GLANCE
Assets
$5.1 Billion
Branches
9
1
57.9%
Efficiency Ratio
1
Tangible Book Value Per Share Growth
5.1%
Deposit Growth
10.2%
2
Core Deposit Growth
Loan Growth
NPAs / Assets
1
Represents a non-GAAP financial measure. See    GAAP Reconciliation and Management Explanation of Non-GAAP Financial
Measures    in the accompanying Form 10-K for the year ended December 31, 2024 for further details.
2
Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
22.0%
3.9%
0.01%
BRANCH MAP
Twin Cities
CONTENTS
3
Letter to Shareholders
6
Board of Directors & Strategic Leadership Team
7
Networking Highlights
8
Financial Summary
2024 Form 10-K
Environmental, Social & Governance
Shareholder Information
2


FELLOW SHAREHOLDERS
At Bridgewater, 2024 was a journey that began
by working through various market-related challenges and ended with the emergence of several
catalysts that we believe will support renewed
growth and profitability heading into 2025.
While we felt the effects of higher interest rates,
increased competition, and market concerns regarding commercial real estate, our teams stayed
true to our culture, executed on our strategic priorities, and continued providing a responsive level of support for our clients. As the rate environment improved, these efforts translated into real
momentum including strong core deposit growth,
improved loan demand, renewed revenue growth,
and the closing of the complementary acquisition of First Minnetonka City Bank.
A Look Back at 2024
Bridgewater saw a return to quarter-over-quarter profitability growth in 2024 as our balance
sheet was well-positioned for the interest rate
cuts we saw late in the year. With a large portion
of our funding base tied to short-term rates, we
experienced an immediate decrease in our overall
cost of funds. This resulted in a return to net interest margin expansion in the fourth quarter of
2024 and a more favorable margin outlook heading into 2025.
We knew 2024 would be a year of more moderate loan growth due to reduced loan demand in
a higher interest rate environment. As a result,
our focus was on optimizing our balance sheet
to be better positioned for longer term profitable growth as the market improves. This is ex-
Jerry Baack
Chairman and Chief Executive Officer
actly what we did, primarily through strong core
deposit growth. In 2024, core deposit balances
increased by $342 million, or 13%, even when excluding the $217 million of core deposits added
through the First Minnetonka City Bank acquisition late in the year. Our teams were able to
attract core deposits due to our ongoing ability
to build strong relationships across the Twin Cities, as well as leveraging a new online high-yield
savings product, and focusing on targeted verticals where we have extensive expertise, such as
women-owned small businesses and affordable
housing. These efforts helped us to reduce our
loan-to-deposit ratio from 100% at the end of
2023 to below 95% at the end of 2024, positioning us well for future growth.
We were also able to create balance sheet optionality in 2024 through the acquisition of First
Minnetonka City Bank, a $245 million bank with
2024 Awards & Recognition
Finance & Commerce Reader Rankings:
Best Business Bank | Best Small Business
Bank | Best Commercial Mortgage Lender
Star Tribune:
Top Place to Work For 2024
Twin Cities Business:
Best Business Bank | Best Consumer
Bank | Best Community Bank
3

two branches in Minnetonka, Minnesota. While
we have almost exclusively been an organic
growth story since Bridgewater was founded,
we have continued to actively evaluate strategic
M&A opportunities as a potential way to supplement our growth and gain market share in the
Twin Cities. First Minnetonka City Bank checked
all of the boxes we were looking for in an M&A
partner. This low-risk acquisition enhances our
deposit and liquidity profile through the addition
of a low-cost core deposit base, reduces our CRE
concentration, and helps to diversify our revenue
stream and expand our product suite through an
investment advisory platform. We were able to
obtain regulatory approval quickly, in less than
two months, which allowed us to close prior to
year-end and create positive momentum going
forward.
Through this acquisition, we welcomed new team
members and a broader client base to Bridgewater. To date, the onboarding process has gone
very well with new team members embracing the
unique Bridgewater culture. Clients have also
started to see the benefits of the broader product set and responsive service model. We look
forward to the smooth integration continuing in
2025.
Total Assets
$2.9
$3.5
$4.3
15
$4.6
R
AG
C

$5.1
($ in Billions)
2020
4
Strong asset quality has long been a differentiator for Bridgewater, and it was again in 2024 due
to our consistent underwriting standards, active
credit oversight, and experienced lending and
credit teams. During a year with slower loan demand, we did not expand our credit box to generate more growth. Instead, we stuck to our conservative credit philosophy and spent more time
working with our clients while assessing and taking steps to mitigate potential repricing risk. As a
result, net charge-offs to average loans were just
0.03% for the year while nonperforming assets to
total assets were just 0.01% at year-end, both of
which were well below the industry average. The
net charge-offs were isolated to one central business district office loan, an asset class that has
been a challenge for banks across the industry.
We continue to feel good about the overall performance of our loan portfolio.
Bridgewater   s multifamily portfolio continued
to perform well, with no charge-offs in 2024 and
only $62,000 of net charge-offs since the bank   s
inception in 2005. This is notable because of the
industry-wide concerns that arose in early 2024
over multifamily properties, fueled by challenges
in higher growth, coastal markets. While the Twin
Cities multifamily market has experienced some
stress in recent years, trends improved throughout 2024. This included declining vacancy rates
and strong absorption levels, both of which point
toward a more favorable outlook for future occupancy levels and rent growth. As part of our
multifamily strategy, we have also leveraged our
expertise in the affordable housing space to expand our focus on supporting communities and
clients both in the Twin Cities and nationally. Our
teams have built great relationships with developers across the market and have a deep understanding of the affordable housing landscape.
A Look Ahead to 2025
2021
2022
2023
2024
We enter 2025 with a heightened sense of optimism. After taking a more defensive posture over
the past two years due to challenging market
conditions, we believe our actions in 2024 have
positioned us to be more offensive-minded in
2025. As a result, our focus will be on returning
to a more normalized level of profitable growth,
while continuing to gain market share in the Twin

Cities and leveraging technology investments to
support growth and efficiency across the business.
Since the Federal Reserve began cutting interest
rates in late 2024, we have seen an increase in
overall loan demand as projects make more financial sense. This is evident through our loan
pipeline, which is near the highest levels we have
seen over the past two years. We also anticipate
a more favorable business environment given
the new administration in 2025, which we believe
could spur incremental commercial growth opportunities in the Twin Cities over the next few
years. While we do not know if there will be further interest rate cuts in 2025 or how the shape of
the yield curve will evolve, the rate environment
is more favorable today than it was a year ago.
The biggest driver of profitable growth at Bridgewater has always been our pace of core deposit
growth. Our ability to grow core deposits meaningfully in excess of loans in 2024, thereby reducing our loan-to-deposit ratio, enhanced our balance sheet liquidity position. With loan demand
increasing and market conditions improving, we
believe we can begin to deploy this liquidity to
generate growth and optimize profitability in
2025.
Over the years, our ability to consistently take
market share in the Twin Cities has been driven
by our strong brand and responsive service model. As we look ahead to 2025, we have additional catalysts to further aid these efforts. First, our
acquisition of First Minnetonka City Bank provides two new branch locations and an enhanced
product suite that we can offer to a broader client
base. Second, we plan to open a de novo branch
in Lake Elmo, Minnesota, a new market for us in
the east Twin Cities metro area. Third, we expect to see continued M&A-related market disruption in the Twin Cities. Over the past several
years, Bridgewater has been a beneficiary of local banks being acquired by out-of-state buyers.
With more disruption anticipated in 2025, we expect to see more opportunities to add top talent
and win new client relationships.
Technology will also play a key role in the growth
of the bank, as well as creating efficiencies and
enhancing the client experience. In 2025, we will
continue to expand our usage of recent technol-
Financed by Bridgewater Bank
In 2024, Bridgewater Bank helped finance the
new construction of a 126-unit building located
in Woodbury, MN, providing a much-needed affordable housing option for the community.
ogy investments, such as the nCino commercial
loan origination system and our new CRM platform launched in 2024, to save time and improve
processes. In addition, we plan to roll out an upgraded online banking experience for our retail
and small business clients in 2025. Finally, successfully executing the systems conversion of
our acquisition of First Minnetonka City Bank will
be a key priority this year. We have the teams and
processes in place to ensure a smooth conversion.
Driving shareholder value remains at the forefront of our strategic vision as a company. This
has been evident through 31 consecutive quarters
of tangible book value growth prior to our recent
acquisition, a rare feat in the banking industry.
With the momentum we have created heading
into 2025, combined with an active Board of Directors, engaged and talented team of employees, and unique culture that allows us to be an
employer of choice in the Twin Cities, we believe
we are poised to continue this trend in 2025 and
beyond.
Jerry Baack
Chairman and Chief Executive Officer
5



 3/10/2025 Letter Continued (Full PDF)