Financial Performance - The Company reported financial results for the three and nine months ended September 30, 2023, with annualized results not indicative of future performance [160]. - Net income for Q3 2023 was $9.6 million, down from $14.5 million in Q3 2022, with diluted earnings per share of $0.30 compared to $0.47 in the prior year [183]. - Net interest income for Q3 2023 was $25,421, a decrease from $34,095 in Q3 2022 [182]. - The efficiency ratio for Q3 2023 was 56.5%, compared to 39.8% in Q3 2022, indicating increased operational costs relative to income [181]. - Net interest income for the nine months ended September 30, 2023, was $79.9 million, a decrease of $16.9 million, or 17.5%, compared to $96.8 million for the same period in 2022 [208]. - The company's net income for the nine months ended September 30, 2023, was $31.09 million, compared to $39.66 million for the same period in 2022, indicating a decrease of approximately 21.5% [287]. Assets and Loans - Total assets as of September 30, 2023, were $4,557,070, an increase from $4,128,987 as of September 30, 2022 [181]. - Total loans, gross, were $3,722,271 as of September 30, 2023, compared to $3,380,082 as of September 30, 2022 [181]. - Total gross loans increased by $152.8 million, or 4.3%, to $3.72 billion at September 30, 2023, compared to $3.57 billion at December 31, 2022 [233]. - The total loans, net, amounted to $3.66 billion as of September 30, 2023 [244]. - The annualized loan growth for the nine months ended September 30, 2023, was 5.7% [243]. Interest Income and Expenses - The net interest margin for Q3 2023 was 2.32%, down from 3.53% in Q3 2022 [181]. - Interest income on loans for the nine months ended September 30, 2023, was $142.7 million, compared to $104.1 million for the same period in 2022, reflecting a $38.5 million increase [214]. - Interest expense on interest bearing liabilities increased by $65.9 million to $83.9 million for the nine months ended September 30, 2023, compared to $18.0 million for the same period in 2022 [215]. - The average rate paid on interest bearing liabilities was 3.49% for the nine months ended September 30, 2023, compared to 1.00% for the same period in 2022 [211]. Credit Losses and Allowances - The allowance for credit losses was $50,585 as of September 30, 2023, compared to $46,491 as of September 30, 2022 [181]. - The provision for credit losses on loans was $2.1 million for the nine months ended September 30, 2023, compared to $6.2 million for the same period in 2022 [218]. - The allowance for credit losses on loans to total loans was 1.36% at September 30, 2023, compared to 1.38% at September 30, 2022 [220]. - Nonperforming loans totaled $749,000 at September 30, 2023, an increase of $110,000 from $639,000 at December 31, 2022 [251]. Deposits and Liquidity - Deposits increased to $3,675,509 as of September 30, 2023, from $3,305,074 as of September 30, 2022 [181]. - Total deposits reached $3.68 billion, an increase of $259 million, or 7.6%, compared to $3.42 billion at December 31, 2022 [259]. - Brokered deposits amounted to $1.0 billion, reflecting an increase of $225.9 million from $776.2 million at December 31, 2022 [261]. - Total on- and off-balance sheet liquidity was $2.18 billion as of September 30, 2023, compared to $1.38 billion at December 31, 2022 [282]. Operational Efficiency - The average return on assets for the nine months ended September 30, 2023, was 1.22%, down from 2.15% for the same period in 2022 [287]. - Noninterest expense increased by $1.2 million to $15.4 million for the third quarter of 2023, and increased by $2.5 million, or 6.0%, to $43.9 million for the nine months ended September 30, 2023, mainly due to higher FDIC insurance assessments [224][225]. - The efficiency ratio increased to 56.5% for the three months ended September 30, 2023, up from 52.7% in the previous quarter [289]. Capital and Shareholders' Equity - Total shareholders' equity increased to $416.0 million as of September 30, 2023, up by $21.9 million from $394.1 million at December 31, 2022 [270]. - Tangible book value per share rose to $12.37, reflecting a 5.8% increase from $11.69 as of December 31, 2022 [271]. - The Company's total risk-based capital was $567.2 million with a ratio of 13.88% as of September 30, 2023, exceeding the minimum required for capital adequacy [274]. Risk Factors - The Company faces risks including interest rate fluctuations, economic conditions, and competition from nonbank entities [162]. - Future performance is subject to uncertainties, including potential economic downturns and regulatory changes impacting the financial services industry [161].

Financial Performance - The Company reported financial results for the three and six months ended June 30, 2023, with annualized results not indicative of future performance[155]. - Net income for Q2 2023 was $9.8 million, down from $12.9 million in Q2 2022, with diluted earnings per share decreasing from $0.41 to $0.31[179]. - The company reported a diluted earnings per share of $0.69 for the six months ended June 30, 2023, down from $0.80 for the same period in 2022[179]. - Net income for the six months ended June 30, 2023, was $21.5 million, down from $25.1 million for the same period in 2022, a decrease of 14.3%[281]. - Adjusted operating revenue for the three months ended June 30, 2023, was $27,237,000, down from $30,566,000 in the previous quarter[1]. Income and Expenses - Net interest income for Q2 2023 was $25.9 million, compared to $32.9 million in Q2 2022, reflecting a decrease in net interest margin from 3.16% to 2.40%[178]. - Noninterest income for Q2 2023 was $1.4 million, a decrease of $235,000 from $1.7 million in Q2 2022, primarily due to lower letter of credit fees[216]. - Noninterest expense for Q2 2023 was $14.4 million, an increase of $636,000 from $13.8 million in Q2 2022, driven by higher FDIC insurance assessments[219]. - The efficiency ratio for Q2 2023 was 52.7%, compared to 43.8% in Q2 2022, indicating increased operational costs relative to income[177]. Assets and Liabilities - Total assets as of June 30, 2023, were $4.6 billion, an increase from $3.9 billion a year earlier[177]. - Total deposits reached $3.6 billion as of June 30, 2023, up from $3.2 billion a year earlier[177]. - Total interest earning assets increased to $4,395,051 thousand for the three months ended June 30, 2023, compared to $3,671,748 thousand for the same period in 2022, reflecting a growth of 19.7%[183]. - Total gross loans reached $3.74 billion at June 30, 2023, an increase of $166.8 million or 4.7% from $3.57 billion at December 31, 2022[228]. - The total allowance for credit losses was $50.7 million as of June 30, 2023[237]. Credit Quality - The allowance for credit losses on loans is a valuation account that reflects the net amount expected to be collected, with management making estimates based on current conditions and forecasts[163][166]. - Provision for credit losses was $50,000 in Q2 2023, compared to $3.0 million in Q2 2022, indicating improved credit quality[178]. - The provision for credit losses on loans was $2.1 million for the six months ended June 30, 2023, compared to $4.7 million for the same period in 2022[212]. - Loans classified as "watch" totaled $27.2 million at June 30, 2023, down from $32.3 million at December 31, 2022[245]. - Total nonperforming assets increased to $778,000 as of June 30, 2023, from $639,000 at December 31, 2022, representing a growth of 21.8%[247]. Risk Management - The Company faces various risks including interest rate fluctuations, economic conditions, and competition from nonbank entities[157][158]. - Management emphasizes the importance of effective risk management frameworks and the ability to attract and retain key personnel[157]. - The Company has entered into cash flow hedges with a total notional amount of $308.0 million as of June 30, 2023, to manage interest rate exposure[1]. - In a hypothetical scenario of a 400 basis point increase in interest rates, the company would experience a 7.68% decrease in net interest income[1]. - The simulation analysis indicates that actual net interest income may vary significantly due to timing and magnitude of interest rate changes[293]. Capital and Liquidity - Total shareholders' equity increased to $409.1 million as of June 30, 2023, from $394.1 million at December 31, 2022, reflecting a $15.1 million increase[264]. - The Company’s total risk-based capital was $558.0 million with a ratio of 13.50% as of June 30, 2023, exceeding the minimum required capital[268]. - Total on- and off-balance sheet liquidity was $1.96 billion as of June 30, 2023, compared to $1.38 billion at December 31, 2022[276]. - Core deposits amounted to approximately $2.51 billion, accounting for 70.3% of total deposits as of June 30, 2023[278]. - The ratio of primary and secondary liquidity to total deposits improved to 54.8% as of June 30, 2023, up from 40.4% at December 31, 2022[277].

Financial Performance - The Company reported financial results for the three months ended March 31, 2023, with annualized results not indicative of future performance [153]. - Net income for Q1 2023 was $11.6 million, a decrease from $12.3 million in Q1 2022, with diluted earnings per share at $0.37 compared to $0.39 in the prior year [177]. - The efficiency ratio for Q1 2023 was 46.2%, compared to 42.4% in Q1 2022, showing an increase of 8.95% [175]. - Noninterest income for Q1 2023 was $1.9 million, an increase of $386,000 from $1.6 million in Q1 2022, primarily due to increased letter of credit fees and FHLB prepayment income [202]. - Noninterest expense was $14.2 million for Q1 2023, an increase of $675,000 from $13.5 million in Q1 2022, mainly due to higher FDIC insurance assessments and derivative collateral fees [203]. - The provision for income taxes was $4.1 million for Q1 2023, a decrease from $4.3 million in Q1 2022, with an effective tax rate of 25.9% for both periods [210]. - Pre-provision net revenue for the three months ended March 31, 2023, was $16.2 million, down from $19.5 million in the previous quarter [267]. Asset and Loan Growth - Total assets increased to $4.6 billion as of March 31, 2023, up from $3.6 billion a year earlier, representing a growth of approximately 27.5% [175]. - Total loans, gross, rose to $3.68 billion, an increase of 23.3% from $2.99 billion in Q1 2022 [175]. - Average interest earning assets increased by $892.9 million, or 26.0%, to $4.32 billion in Q1 2023 from $3.43 billion in Q1 2022 [188]. - Total gross loans reached $3.68 billion at March 31, 2023, an increase of $114.9 million, or 3.2%, from $3.57 billion at December 31, 2022, and an increase of $696.4 million, or 23.3%, from $2.99 billion at March 31, 2022 [212]. - The total real estate mortgage loans amounted to $2.82 billion, with multifamily loans making up $1.32 billion [223]. Interest Income and Expenses - Net interest income for Q1 2023 was $28.57 million, down from $30.18 million in Q1 2022, reflecting a decrease of 5.3% [176]. - Total interest income for Q1 2023 was $52.4 million, a $17.4 million, or 49.8%, increase from $35.0 million in Q1 2022 [190]. - Interest expense on interest bearing liabilities rose by $18.9 million, or 418.9%, to $23.4 million in Q1 2023 compared to $4.5 million in Q1 2022 [194]. - The average rate paid on interest bearing liabilities increased to 3.03% in Q1 2023 from 0.80% in Q1 2022, a rise of 223 basis points [189]. - Interest income on loans for Q1 2023 was $45.3 million, a $13.4 million, or 42.2%, increase from $31.8 million in Q1 2022 [191]. Credit Losses and Allowances - The allowance for credit losses increased to $50.15 million, up from $41.69 million a year ago, reflecting a growth of 20.2% [175]. - The provision for credit losses on loans was $1.5 million for Q1 2023, a decrease of 12.4% from $1.7 million in Q1 2022, with the allowance for credit losses on loans to total loans at 1.36% as of March 31, 2023, down from 1.40% a year earlier [199]. - The allowance for credit losses on loans was $50.1 million as of March 31, 2023, an increase of $2.2 million from $48.0 million at December 31, 2022, reflecting a 4.6% rise [235]. - Nonperforming loans increased to $693,000 as of March 31, 2023, up from $639,000 at December 31, 2022 [229]. - The allowance for credit losses on off-balance sheet credit exposures was $4.3 million at March 31, 2023, compared to $360,000 at December 31, 2022, reflecting a negative provision of ($875,000) for Q1 2023 [200]. Liquidity and Deposits - The Company maintained total on- and off-balance sheet liquidity of $1.92 billion as of March 31, 2023, an increase of $540 million from $1.38 billion at December 31, 2022 [261]. - Total deposits decreased slightly by $5.4 million, or 0.2%, to $3.41 billion as of March 31, 2023, compared to $3.42 billion at December 31, 2022, but increased by $375.5 million, or 12.4%, from $3.04 billion at March 31, 2022 [239]. - Brokered deposits increased by $83.5 million, or 10.8%, to $859.7 million as of March 31, 2023, compared to $776.2 million at December 31, 2022 [241]. - The Company has total contractual obligations of $4.15 billion as of March 31, 2023, with $3.36 billion due within one year [249]. - The Company’s total risk-based capital was $547.8 million with a ratio of 13.25% as of March 31, 2023, exceeding the minimum required ratio of 8.00% [253]. Risk Management - The Company faces risks from interest rate fluctuations, which could impact the value of securities held in its portfolio [154]. - The ALM Committee oversees the management of interest rate risk, ensuring compliance with the risk management infrastructure approved by the board of directors [270]. - In a hypothetical scenario of a 400 basis point increase in interest rates, net interest income would decrease by 18.88% [276]. - Conversely, a 300 basis point decrease in interest rates would result in a 17.87% increase in net interest income [276]. - The Company has various borrowing mechanisms in place for both short-term and long-term liquidity needs [249].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022. OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-38412 BRIDGEWATER BANCSHARES, INC. (Exact name of registrant as specified in its charter) Minnesota 26-0113412 (St ...