[8-K] Bridgewater Bancshares, Inc. Reports Material Event

Rhea-AI Filing Summary

Bridgewater Bancshares, Inc. (Nasdaq: BWB) disclosed that on 24 June 2025 it completed a private placement of $80 million aggregate principal amount of 7.625% fixed-to-floating rate subordinated notes due 2035. The debt was issued at par to institutional accredited investors and QIBs under a Subordinated Note Purchase Agreement and will be treated as Tier 2 regulatory capital.

The notes carry a 7.625% fixed coupon through 30 June 2030, after which the rate resets quarterly to three-month term SOFR + 388 bps. The company can redeem the notes in whole—but not in part—only under limited circumstances before 30 June 2030; thereafter it may redeem all or a portion at 100% of principal on any interest-payment date. The notes are unsecured, subordinated obligations, rank junior to senior indebtedness, and are not guaranteed by subsidiaries.

Net proceeds will be used to redeem $50 million of outstanding 5.25% subordinated notes due 2030 and for general corporate purposes, effectively lengthening liability duration but at a higher coupon. A Registration Rights Agreement obliges Bridgewater to exchange the privately placed notes for registered notes with substantially identical terms; failure to do so would trigger additional interest payments. The financing documents—including the Indenture, Purchase Agreement, and Registration Rights Agreement—are filed as Exhibits 4.1, 10.1, and 10.2, respectively.

An accompanying press release (Ex. 99.1) and investor presentation (Ex. 99.2) were furnished under Item 7.01, but are expressly not incorporated by reference for Exchange Act liability purposes.

Positive

• Strengthens Tier 2 capital without diluting shareholders.
• Extends liability maturity to 2035, reducing near-term refinancing risk.
• Optional redemption after five years provides future flexibility if credit spreads tighten.

Negative

• Higher coupon (7.625% vs 5.25%) increases annual interest expense.
• Floating-rate reset after 2030 introduces earnings volatility tied to SOFR.
• Issuance adds $30 million net new debt beyond redeemed notes.

Insights

Debt Capital Markets Analyst

Costly Tier-2 raise boosts capital but elevates interest burden, hinting at higher perceived risk.

Bridgewater Bancshares issued $80 million of 7.625 % fixed-to-floating subordinated notes due 2035, priced at par in a private Rule 506(b) placement. The coupon is 240 bp above the 5.25 % notes the bank will redeem, implying an additional $3.5 million in annual pre-tax interest once the $50 million old issue is retired. Net debt rises by $30 million, and the new notes qualify as Tier 2 capital, immediately strengthening total-capital ratios without shareholder dilution.

The structure is conventional: non-call until 30 June 2030, then quarterly resets at three-month SOFR + 388 bp; redemption provisions are limited pre-call, and acceleration is available only for specified insolvency events. A registration-rights agreement obliges the bank to exchange the notes for registered securities or pay a 25 bp penalty, reducing procedural risk to investors.

Because the notes rank junior to all senior liabilities and lack subsidiary guarantees, investors demanded a sizeable risk premium. Paying 7.625 % highlights a higher perceived credit or liquidity risk environment versus 2020, and the step-up SOFR spread locks in that premium beyond the fixed period.

For shareholders, regulatory capital flexibility is a plus, but the markedly higher funding cost compresses net interest margin, with no immediate revenue offset. On balance, the transaction modestly weakens near-term earnings power while improving loss-absorbing capacity, leading to a net negative but not severe impact.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 8-K
CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

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June 24, 2025

Date of Report

(Date of earliest event reported)

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BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)

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Minnesota (State or other jurisdiction of incorporation) ​	001-38412 (Commission File Number)	26-0113412 (I.R.S. Employer Identification No.)
​	4450 Excelsior Boulevard, Suite 100 St. Louis Park, Minnesota (Address of principal executive offices)	55416 (Zip Code)

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Registrant’s telephone number, including area code: (952) 893-6868

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Not Applicable
(Former name or former address, if changed since last report.)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

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☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

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☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

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☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Securities registered pursuant to Section 12(b) of the Act:

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Title of each class:		Trading Symbol		Name of each exchange on which registered:
Common Stock, $0.01 Par Value		BWB		The Nasdaq Stock Market LLC

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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Emerging growth company ☐

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 1.01           Entry into a Material Definitive Agreement.

On June 24, 2025, Bridgewater Bancshares, Inc. (the “Company”) entered into a Subordinated Note Purchase Agreement (the “Purchase Agreement”) with certain institutional accredited investors and qualified institutional buyers (the “Purchasers”) pursuant to which the Company sold and issued $80.0 million in aggregate principal amount of its 7.625% Fixed-to-Floating Rate Subordinated Notes due 2035 (the “Notes”). The Notes were issued by the Company to the Purchasers at a price equal to 100% of their face amount. The Company intends to use the net proceeds it received from the sale of the Notes to redeem $50.0 million of outstanding 5.25% Fixed-to-Floating Subordinated Notes due 2030 and for general corporate purposes. The Purchase Agreement contains certain customary representations, warranties and covenants made by the Company, on the one hand, and the Purchasers, severally and not jointly, on the other hand.

The Notes have a stated maturity of June 30, 2035, are redeemable, in whole or in part, on or after June 30, 2030, and at any time upon the occurrences of certain events. The Notes will bear interest at a fixed rate of 7.625% per year, from and including June 24, 2025 to, but excluding June 30, 2030 or earlier redemption date. From and including June 30, 2030 to, but excluding the maturity date or early redemption date, the interest rate will reset quarterly at a variable rate equal to the then current three-month term secured overnight financing rate (“SOFR”), plus 388 basis points. As provided in the Notes, the interest rate on the Notes during the applicable floating rate period may be determined based on a rate other than three-month term SOFR.

The Notes were offered and sold by the Company in a private placement transaction in reliance on exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D thereunder. On June 24, 2025, in connection with the sale and issuance of the Notes, the Company entered into a Registration Rights Agreement (the “Registration Rights Agreement”) with the Purchasers. Under the terms of the Registration Rights Agreement, the Company has agreed to take certain actions to provide for the exchange of the Notes for subordinated notes that are registered under the Securities Act and have substantially the same terms as the Notes (the “Exchange Offer”). Under certain circumstances, if the Company fails to meet its obligations under the Registration Rights Agreement, it would be required to pay additional interest to the holders of the Notes.

The Notes were issued under an Indenture, dated June 24, 2025 (the “Indenture”), by and between the Company and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Notes are not subject to any sinking fund and are not convertible into or exchangeable, other than pursuant to the Exchange Offer, for any other securities or assets of the Company or any of its subsidiaries. The Notes are not subject to redemption at the option of the holder. Prior to June 30, 2030, the Company may redeem the Notes, in whole but not in part, only under certain limited circumstances set forth in the Indenture. On or after June 30, 2030, the Company may redeem the Notes, in whole or in part, at its option, on any interest payment date. Any redemption by the Company would be at a redemption price equal to 100% of the principal amount of the Notes being redeemed, together with any accrued and unpaid interest on the Notes being redeemed to but excluding the date of redemption.

Principal and interest on the Notes are subject to acceleration only in limited circumstances in the case of certain bankruptcy and insolvency-related events with respect to the Company. The Notes are unsecured, subordinated obligations of the Company, are not obligations of, and are not guaranteed by, any subsidiary of the Company, and rank junior in right of payment to the Company’s current and future senior indebtedness. The Notes are intended to qualify as Tier 2 capital of the Company for regulatory capital purposes.

The forms of the Purchase Agreement, the Registration Rights Agreement, the Indenture and the Notes are attached as Exhibits 10.1, 10.2, 4.1 and 4.2, respectively, to this Current Report on Form 8-K (the “Report”) and are incorporated herein

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by reference. The foregoing descriptions of the Purchase Agreement, the Registration Rights Agreement, the Indenture and the Notes are summaries and are qualified in their entirety by reference to the full text of such documents.

Item 2.03           Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 above is incorporated by reference into this Item 2.03.

Item 7.01          Regulation FD Disclosure.

On June 24, 2025, the Company issued a press release announcing the completion of the offering of the Notes, a copy of which is furnished as Exhibit 99.1 to this Report.

In connection with the offering of the Notes, the Company delivered an investor presentation to potential investors on a confidential basis, a copy of which is furnished as Exhibit 99.2 to this Report.

The information contained in this Item 7.01 and Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as may be expressly set forth by specific reference in such filing.

Cautionary Note Regarding Forward-Looking Statements

This Report includes “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act, including but not limited to statements about the anticipated use of net proceeds from the offering, the Exchange Offer and other matters. Forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond the Company’s control. The Company cautions you that the forward-looking statements presented in this Report are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking information contained in this Report. Forward-looking statements generally can be identified by the use of forward-looking 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. Factors that may cause actual results to differ materially from those made or suggested by the forward-looking statements contained in this Report include those identified in the Company’s most recent annual report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Any forward-looking statements presented herein are made only as of the date of this Report, and the Company does not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.

Item 9.01          Financial Statements and Exhibits.

(d)          Exhibits

Exhibit No.	Description
4.1	Indenture, dated June 24, 2025, by and between Bridgewater Bancshares, Inc. and U.S. Bank Trust Company, National Association, as trustee.
4.2	Forms of 7.625% Fixed-to-Floating Rate Subordinated Note due 2035 (included as Exhibit A-1 and Exhibit A-2 to the Indenture filed as Exhibit 4.1 hereto).

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10.1	Form of Subordinated Note Purchase Agreement, dated June 24, 2025, by and among Bridgewater Bancshares, Inc. and the Purchasers.
10.2	Form of Registration Rights Agreement, dated June 24, 2025, by and among Bridgewater Bancshares, Inc. and the Purchasers.
99.1	Press Release of Bridgewater Bancshares, Inc., dated June 24, 2025.
99.2	Investor Presentation of Bridgewater Bancshares, Inc.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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​	Bridgewater Bancshares, Inc.
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Date: June 24, 2025	​
​	By: /s/ Jerry Baack
​	Name: Jerry Baack
​	Title: Chairman and Chief Executive Officer

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FAQ

Why did Bridgewater Bancshares (BWB) issue $80 million of subordinated notes?

The company intends to redeem $50 million of existing 5.25% notes due 2030 and use the remaining proceeds for general corporate purposes, thereby boosting Tier 2 capital.

What is the interest rate and maturity of the new Bridgewater notes?

The notes carry a 7.625% fixed rate until 30 June 2030, then reset quarterly to three-month SOFR + 388 bps, and mature on 30 June 2035.

Can the notes be redeemed early by Bridgewater Bancshares?

Yes. Prior to 30 June 2030 they may be redeemed only under limited circumstances; on or after that date they are callable in whole or part at par on any interest-payment date.

Will the subordinated notes be registered with the SEC?

Bridgewater entered a Registration Rights Agreement obligating it to exchange the privately placed notes for registered notes with identical terms; failure triggers additional interest.

Do the notes rank senior to existing debt or deposits?

No. They are unsecured, subordinated obligations ranking junior to senior indebtedness and not guaranteed by subsidiaries.