Bridgewater Bancshares, Inc. (BWB)

●

rapid technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequences to us and our customers, including the development and implementation of tools incorporating artificial intelligence;

●	the commencement, cost and outcome of litigation and other legal proceedings and regulatory actions against us;

●	the impact of recent and future legislative and regulatory changes, domestic or foreign;

●	risks related to climate change and the negative impact it may have on our customers and their businesses;

●	the imposition of tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers;

●

severe weather, natural disasters, wide spread disease or pandemics, acts of war, military conflicts, or terrorism, changes in foreign relations, or other adverse external events, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine and recent military activities in Venezuela and Mexico;

●	potential impairment to the goodwill the Company recorded in connection with acquisitions;

●	changes to U.S. or state tax laws, regulations and governmental policies concerning the Company’s general business, including changes in interpretation or prioritization of such rules and regulations;

●	the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks; and

●	any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this report. In addition, past results of operations are not necessarily indicative of future results. Any forward-looking statement made by us in this report is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

PART I

ITEM 1. BUSINESS

Company Overview and History

Bridgewater Bancshares, Inc. (the “Company”) is a Minnesota corporation and financial holding company with one wholly-owned subsidiary: Bridgewater Bank (the “Bank”). The Bank has two wholly-owned subsidiaries: BWB Holdings, LLC, which was formed for the purpose of holding repossessed property; and Bridgewater Investment Management, Inc., which was formed for the purposes of holding certain municipal securities and engaging in municipal lending activities. The Bank has nine full-service offices located in Bloomington, Greenwood, Minneapolis (2), Minnetonka, Orono, Lake Elmo, St. Louis Park, and St. Paul, Minnesota. The Lake Elmo branch opened in February 2026.

The Company is headquartered in St. Louis Park, Minnesota, a suburb located approximately 5 miles southwest of downtown Minneapolis. The Company and Bank were established in 2005 as a de novo bank by a group of industry veterans and local business leaders dedicated to providing responsive support and simple solutions to businesses, entrepreneurs, and successful individuals.

Since inception, the Company has grown significantly and profitably, with a focus on organic growth, driven primarily by commercial real estate (“CRE”) lending. Assets have grown at a compounded annual growth rate of 28.6% since 2005, surpassing total asset milestones of $1.0 billion in 2016, $3.0 billion in 2021, and $5.0 billion in 2024. While

Table of Contents

this growth has primarily been organic, the Company has completed two bank acquisitions. Most recently, the Bank acquired First Minnetonka City Bank (“FMCB”) in December 2024, which added approximately $245.0 million of assets, $225.7 million of deposits, $117.1 million of loans and leases, and two branch locations in Minnetonka, Minnesota. One of these branches was subsequently closed in December 2025 given the close proximity of other Bridgewater Bank branches. The acquisition also added an investment advisory function that offers nondeposit investment products through a third party arrangement.

As of December 31, 2025, total assets were $5.41 billion, total gross loans were $4.31 billion, total deposits were $4.32 billion, and total shareholders’ equity was $517.1 million.

The principal sources of funds for loans and investments are transaction, savings, time, and brokered deposits, and short-term and long-term borrowings. The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and noninterest income, including service charges, letter of credit fees, and swap fees. The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses. The Company’s simple, highly efficient business model of providing responsive support and simple solutions to clients continues to be the underlying principle that drives the Company’s profitable growth.

Market Area and Competition

The Company operates in the Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area (“Twin Cities MSA”) which had total deposits of $232.6 billion as of June 30, 2025, and ranks as the 15th largest MSA in the United States in total deposits, and the third largest MSA in the Midwest in total deposits, based on FDIC data. This area is commonly known as the “Twin Cities” after its two largest cities, Minneapolis, the city with the largest population in the state, and St. Paul, the state capital.

The Twin Cities MSA is defined by attractive market demographics, including strong household incomes, dense populations, a resilient employee base and the presence of a diverse group of large and small businesses. As of December 31, 2025, the Twin Cities ranked first in median household income in the Midwest and seventh in the nation, when compared to the top 20 MSAs by population size in each area, based on data available on S&P Global Market Intelligence. According to the U.S. Bureau of Labor Statistics, the population in the Twin Cities MSA was approximately 3.7 million as of December 31, 2025, making it the third largest MSA in the Midwest and 16th largest MSA in the United States. The Twin Cities MSA had an unemployment rate of 4.3%, which was lower than the national average of 4.4%, as of December 31, 2025. These strong labor market fundamentals can be attributed to the significant presence of national and international businesses across diverse industries operating within the Twin Cities MSA.

The Company operates in a competitive market area and competes with other, often much larger, retail and commercial banks and financial institutions. Two large, national banking chains, Wells Fargo and U.S. Bank, together controlled 58.96% of the deposit market share in the Twin Cities MSA as of June 30, 2025, based on FDIC data and as displayed in the table below. By comparison, the Company had a deposit market share of 1.84%, which ranked the Company ninth in the Twin Cities MSA overall and third in the Twin Cities MSA among banks headquartered in Minnesota.

Table of Contents

 

Total

 

Market

State

Branch

Deposits

Share

Loading financial statements...

Financial statements

data from SEC XBRL filings. Values are as-reported; restatements supersede originals. Values reported in .

From 10-Q filed 2026-10-29 (period ending 2026-09-30).

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

General

The following discussion explains the Company’s financial condition and results of operations as of and for the three and nine months ended September 30, 2026. Annualized results for these interim periods may not be indicative of results for the full year or future periods. The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes presented elsewhere in this report and the Company’s Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission, or the SEC, on February 26, 2026.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent known and unknown uncertainties, risks, changes in circumstances and other factors that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

●	interest rate risk, including the effects of the recent increase in the benchmark federal funds rate by the Federal Reserve;

●	effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement, executive orders, and changes in foreign policy;

●	fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates;

●	business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of inflation, and future monetary policies of the Federal Reserve and executive orders in response thereto, and possible recession;

●	credit risk and risks from concentrations (including by type of borrower, geographic area, collateral and industry) within the Company’s loan portfolio or large loans to certain borrowers (including CRE loans);

●	the overall health of the local and national real estate market;

●	our ability to successfully manage credit risk;

●	our ability to maintain an adequate level of allowance for credit losses on loans;

Table of Contents

●	new or revised accounting standards as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, Securities and Exchange Commission or Public Company Accounting Oversight Board;

●	the concentration of large deposits from certain clients, including those who have balances above current Federal Deposit Insurance Corporation insurance limits;

●	our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds;

●	our ability to raise additional capital to implement our business plan;

●	our ability to implement our growth strategy and manage costs effectively;

●	the composition of our senior leadership team and our ability to attract and retain key personnel;

●	talent and labor shortages and employee turnover;

●	the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud;

●	interruptions involving our information technology and telecommunications systems or third-party servicers;

●	competition in the financial services industry, including from nonbank competitors such as credit unions, “fintech” companies and digital asset service providers;

●	the effectiveness of our risk management framework;

●

●	emerging issues related to the development and use of artificial intelligence that could give rise to legal or regulatory action, damage our reputation, or otherwise materially harm our business or customers;

●	the commencement, cost and outcome of litigation and other legal proceedings and regulatory actions against us;

●	the impact of recent and future legislative and regulatory changes, domestic or foreign;

●	risks related to climate change and the negative impact it may have on our customers and their businesses;

●	the imposition of tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers;

●

severe weather, natural disasters, widespread disease or pandemics, acts of war, military conflicts, or terrorism, changes in foreign relations, or other adverse external events, including the wars in Iran and Ukraine, ongoing conflicts in the Middle East, and other international military conflicts that can increase levels of political and economic unpredictability, contribute to rising energy and commodity prices, affect global supply chains, increase the volatility of financial markets, and other matters beyond our control;

●	potential impairment to the goodwill the Company recorded in connection with acquisitions;

●	the availability of future equity and debt issuances and other capital raising opportunities on favorable terms;

●	changes to U.S. or state tax laws, regulations and governmental policies concerning the Company’s general business, including changes in interpretation or prioritization of such rules and regulations;

Table of Contents

●	the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks;

●	and any other risks described in the “Risk Factors” sections of reports filed by the Company with the SEC.

Overview

The Company is a financial holding company headquartered in St. Louis Park, Minnesota. The principal sources of funds for loans and investments are transaction, savings, time, and brokered deposits, and short-term and long-term borrowings. The Company’s principal sources of income are interest and fees collected on loans, interest and dividends earned on investment securities and noninterest income, including service charges, letter of credit fees, and swap fees. The Company’s principal expenses are interest paid on deposit accounts and borrowings, employee compensation and other overhead expenses. The Company’s simple, highly efficient business model of providing responsive support and simple solutions to clients continues to be the underlying principle that drives the Company’s profitable growth.

Critical Accounting Policies and Estimates

The consolidated financial statements of the Company are prepared based on the application of certain accounting policies, the most significant of which are described in “Note 1 – Description of the Business and Summary of Significant Accounting Policies” of the notes to the consolidated financial statements included as a part of the Company’s most recent Annual Report on Form 10-K, filed with the SEC on February 26, 2026. There have been no significant changes in the critical accounting policies or the assumptions and judgments utilized in applying these policies since December 31, 2025. Certain policies require numerous estimates and strategic or economic assumptions that may prove inaccurate or subject to variation and may significantly affect the reported results and financial position for the current period or in future periods. Changes in underlying factors, assumptions or estimates in any of these areas could have a material impact on the future financial condition and results of operations. Management has discussed each critical accounting policy and the methodology for the identification and determination of critical accounting policies with the Company’s Audit Committee.

Recent Developments

In February 2026, the Company opened a new branch location in Lake Elmo, Minnesota to expand the Company’s presence in the eastern side of the Twin Cities market.

On February 27, 2026, the Company and the Bank entered into an equity distribution agreement with Piper Sandler & Co., as distribution agent, pursuant to which the Company may offer and sell, from time to time, shares of its common stock with an aggregate gross sales price of up to $50.0 million, including through “at-the-market” offerings and other permitted methods. The distribution agent is entitled to a commission of 2.5% of the gross sales price of the common stock sold in such offering. The Company is not obligated to sell any shares of its common stock pursuant to the equity distribution agreement, and may suspend or terminate sales thereunder at any time. Any shares sold will be issued pursuant to the Company’s effective shelf registration statement on Form S-3 and related prospectus supplement, and net proceeds, if any, are expected to be used for general corporate purposes, including investments in or advances to the Company’s subsidiaries, working capital, capital expenditures, stock repurchases, debt repayment, or potential acquisitions.

Table of Contents

On August 25, 2026, the Company's board of directors extended the expiration date of the Company’s previously announced stock repurchase program (the “2022 Stock Repurchase Program”) from August 26, 2026 to August 25, 2027. As of August 25, 2026, the 2022 Stock Repurchase Program had $12.4 million remaining under its stock repurchase authorization.

Table of Contents

Operating Results Overview

The following table summarizes certain key financial results as of and for the periods indicated:


	As of and for the Three Months Ended
	September 30,			June 30,			March 31,			December 31,			September 30,
(dollars in thousands, except per share data)	2026			2026			2026			2025			2025
Income Statement
Net Interest Income	$	40,658		$	38,566		$	36,647		$	35,687		$	34,091
Provision for Credit Losses		2,750			550			1,200			1,450			1,100
Noninterest Income		2,573			2,324			9,564			3,148			2,061
Noninterest Expense		21,341			21,894			22,170			20,238			19,956
Net Income		15,028			14,007			17,406			13,334			11,601
Net Income Available to Common Shareholders		14,015			12,993			16,393			12,320			10,588

Per Common Share Data
Basic Earnings Per Share	$	0.50		$	0.47		$	0.59		$	0.45		$	0.38
Diluted Earnings Per Share		0.49			0.45			0.58			0.43			0.38
Adjusted Diluted Earnings Per Share ⁽¹⁾		0.49			0.45			0.41			0.44			0.39
Book Value Per Share		16.98			17.27			16.60			16.23			15.62
Tangible Book Value Per Share ⁽¹⁾		16.33			16.61			15.93			15.55			14.93
Basic Weighted Average Shares Outstanding		27,923,824			27,861,522			27,800,091			27,641,138			27,504,840
Diluted Weighted Average Shares Outstanding		28,796,376			28,589,332			28,490,176			28,354,756			28,190,406
Shares Outstanding at Period End		27,960,252			27,880,830			27,832,867			27,759,970			27,584,732

Selected Performance Ratios
Return on Average Assets ⁽²⁾		1.08	%		1.06	%		1.35	%		0.97	%		0.86	%
Pre-Provision Net Revenue Return on Average Assets ⁽¹⁾⁽²⁾		1.57			1.43			1.30			1.35			1.19
Return on Average Shareholders' Equity ⁽²⁾		10.81			10.17			13.45			10.38			9.47
Return on Average Tangible Common Equity⁽¹⁾⁽²⁾		11.91			11.15			15.13			11.53			10.50
Average Shareholders' Equity to Average Assets		9.99			10.39			10.01			9.37			9.04
Net Interest Margin ⁽³⁾		3.09			3.07			2.99			2.75			2.63
Core Net Interest Margin ⁽¹⁾⁽³⁾		2.98			2.94			2.86			2.62			2.52
Yield on Interest Earning Assets⁽³⁾		5.76			5.73			5.65			5.58			5.63
Yield on Total Loans, Gross⁽³⁾		5.96			5.91			5.81

Loading holders...

Held by

holders ( registered funds via N-PORT, institutional investors via 13F). Showing top by dollar value.

Holder	Type	ETF	MF	Position ($)	% of holder	Δ % of holder	Holder AUM

Recent insider activity

Last 90 days. Open-market trades (purchases & sales) by directors, officers, and 10%+ owners. 13 transactions across 6 insiders. Net: -292,481 shares, -$6,232,952.

Date	Insider	Role	Action	Shares	Price	Value
2026-09-15	Stejskal Jessica Anne	Chief Experience Officer	Sell	-400	$21.25	-$8,501
2026-09-09	Parish Douglas J. indirect	Director	Sell	-4,000	$21.38	-$85,536
2026-09-02	Juran David B. indirect	Director	Sell	-623	$21.50	-$13,394
2026-08-28	Juran David B. indirect	Director	Sell	-518	$21.50	-$11,139
2026-08-25	Juran David B. indirect	Director	Sell	-940	$21.54	-$20,246
2026-08-24	Juran David B. indirect	Director	Sell	-25,000	$21.74	-$543,430
2026-08-21	Juran David B. indirect	Director	Sell	-15,000	$21.59	-$323,886
2026-08-17	Baack Jerry J.	CEO	Sell	-10,000	$22.48	-$224,813
2026-08-14	Baack Jerry J.	CEO	Sell	-15,000	$22.21	-$333,219
2026-08-13	Baack Jerry J.	CEO	Sell	-10,000	$22.03	-$220,282
2026-08-06	Shellberg Jeffrey D.	Director	Sell	-40,000	$21.26	-$850,284
2026-08-05	Shellberg Jeffrey D.	Director	Sell	-160,000	$21.04	-$3,366,736
2026-08-04	Crocker Mary Jayne	Director	Sell	-11,000	$21.04	-$231,486

Source: SEC Form 4 filings.

Next expected filings

~2027-02-25 10-K expected by 2027-03-05 (in 119 days)
~2027-04-29 10-Q expected by 2027-05-08 (in 182 days)
~2027-07-29 10-Q expected by 2027-08-07 (in 273 days)
~2027-10-28 10-Q expected by 2027-11-06 (in 364 days)

Predicted from historical filing cadence; not an SEC commitment.

Recent SEC filings

2026-10-29 10-Q Quarterly Report
2026-10-20 8-K Earnings Release; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2026-08-26 8-K Other Events; Financial Statements and Exhibits
2026-07-30 10-Q Quarterly Report
2026-07-21 8-K Earnings Release; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2026-05-01 S-8 Employee Benefit Plan Registration
2026-04-30 10-Q Quarterly Report
2026-04-21 8-K Earnings Release; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2026-02-27 8-K Material Agreement Entered; Financial Statements and Exhibits
2026-02-26 10-K Annual Report
2026-01-27 8-K Earnings Release; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2025-10-30 10-Q Quarterly Report
2025-10-21 8-K Earnings Release; Regulation FD Disclosure; Other Events; Financial Statements and Exhibits
2025-08-19 8-K Officer/Director Change; Regulation FD Disclosure; Financial Statements and Exhibits
2025-08-07 S-4 Registration (Merger)

Line item
Period ending