2021 Annual Report

In 2021, Bridgewater showed off the true growth power of the franchise, growing loans 28% excluding PPP loans, a level that few banks could match. As the industry was flush with unprecedented levels of liquidity, loan growth was difficult to come by for most banks, forcing many to hold excess cash or deploy liquidity into lower-yielding assets. Bridgewater was able to put this liquidity to work by funding substantial loan originations throughout the year. This level of growth is not unusual for us as we have grown loans at a 23% annual pace since 2017. So why was Bridgewater able to produce such strong loan growth? Market disruption in the Twin Cities related to several bank mergers resulted in significant growth opportunities. Not only have we been able to build new cli- ent relationships, we have added top talent across our lending, business services, and

back office teams, many of which have been able to bring over their client relationships. In addition, we expanded our strong brand presence and attracted new clients around the Twin Cities through our local and respon- sive service model. Despite the reduction in the number of local banks due to acquisi- tions over the past several years, it is becom- ing more apparent that “not all is lost in local banking” in the Twin Cities. Asset quality remained superb throughout the year due to our consistent underwriting standards, active credit oversight and mon- itoring, and experienced lending and credit teams. While many banks released reserves or took negative provisions in 2021, we mod- estly increased our allowance for loan losses in part due to our strong loan growth. With 85% of our loans in the Twin Cities market and the expertise of our lenders and credit ana- lysts across segments, geographies and rela- tionships, we had no net charge-offs in 2021, and nonperforming assets as a percent of to- tal assets were just 0.02%. Bridgewater remained one of the most ef- ficient banks in the industry in 2021 with an adjusted efficiency ratio of 41.0%. We have consistently maintained an adjusted efficien- cy ratio in the low 40% range over the past five years due to the way we operate—be it the way we network, our branch footprint, the banking tools we offer, or the expertise we bring in-house. This includes our “branch light” model in which we provide a responsive level of service to our clients with just sev- en branches across the Twin Cities. Looking ahead to 2022, we expect expense growth to remain in-line with asset growth as we con- tinue to invest in the business. Optimizing our capital position was a focus in 2021 as we took several capital actions during the year. We issued non-cumulative perpetu- al preferred stock and subordinated notes, a portion of which were used to redeem high- er yielding subordinated debentures issued in 2017. In addition, we continued to use our share repurchase program by buying back $2.3 million of common stock in 2021 at an average price of $15.71.

Robust Loan Growth is who we are

$2,819 $26

23% cagr (ex. ppp)

$2,326 $138

$1,912

$1,665

$1,347

$2,793

$2,188

$1,912

$1,665

$1,347

2017

2018 2019 2020 2021

loans (ex. ppp)

PPP

Dollars in Millions

4