Bridgewater Bancshares, Inc. Annual Report

Bridgewater Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements (dollars in thousands, except share data)

December 15, 2019. The adoption of this guidance is not expected to have a significant impact on the Company’s consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, I ncome Taxes (Topic 740): Simplifying the Accounting for Income Taxes . This ASU aims to simplify the accounting for income taxes by removing certain exceptions to the general principles and also simplification of areas such as franchise taxes, step-up in tax basis goodwill, separate entity financial statements and interim recognition of enactment of tax laws or rate changes. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the potential impact this guidance will have on the consolidated financial statements. In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions between Topic 321, Topic 323 and Topic 815 . This ASU clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the fair value measurement alternative. The ASU will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company does not expect adoption to have a material impact on the consolidated financial statements. Subsequent Events Subsequent events have been evaluated through March 11, 2020, which is the date the consolidated financial statements were available to be issued. Note 2: Earnings Per Share Basic earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding for the period. Diluted earnings per common share are calculated by dividing net income by the weighted average number of shares adjusted for the dilutive effect of stock compensation. For the years ended December 31, 2019 and 2018, 303,000 and 130,000, respectively, of stock options were excluded from the calculation because they were deemed to be antidilutive. For the year ended December 31, 2017, no stock options were excluded from the calculation because none were considered antidilutive. The following table presents the numerators and denominators for basic and diluted earnings per share computations for the years ended December 31, 2019, 2018 and 2017: 2017 Net Income Available to Common Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,403 $ 26,920 $ 16,889 Weighted Average Common Stock Outstanding: Weighted Average Common Stock Outstanding (Basic) . . . . . . . . . . . . . . . . . . . . . . 29,358,644 29,001,393 24,604,464 Dilutive Effect of Stock Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 638,132 434,821 413,226 Weighted Average Common Stock Outstanding (Dilutive) . . . . . . . . . . . . . . . . . . . . 29,996,776 29,436,214 25,017,690 Year Ended December 31, 2019 2018

Basic Earnings per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Diluted Earnings per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1.07 $

0.93 $

0.69 0.68

1.05

0.91

94