Bloomington, MN–(Bridgewater Bank)–Bridgewater Bancshares, Inc. (the “Company”), parent company of Bridgewater Bank, announced today it has completed a $25 million private placement of subordinated notes due July 15, 2027. Bridgewater Bank, founded in 2005, has a solid history of proactively raising capital to support its successful, growth model. Bridgewater is among a handful of banks in the Midwest market to use this type of financial instrument to fund growth.
The subordinated debt is structured as a 10-year unsecured fixed-to-floating rate note, with a fixed rate of 5.875% for the initial five years, payable semi-annually. Unless redeemed earlier, the note will mature on July 15, 2027. From July 15, 2022 to maturity, the interest rate will reset quarterly to the then current three-month LIBOR rate plus 388 basis points, payable quarterly. Prior to marketing the note, the Company received an investment grade rating from Kroll Bond Rating Agency (KBRA), a Nationally Recognized Statistical Rating Organization registered with the SEC.
“We are very pleased with the overwhelming response to this offering,” said Bridgewater Bank President and CEO, Jerry Baack. “We believe it is truly a testament to the Bank’s unique platform. The new capital positions us well for continued strategic growth and the historic low interest rate environment makes the overall cost of capital quite attractive.”
The Company intends to use the net proceeds for general corporate purposes and to provide capital to support the growth of Bridgewater Bank. Proceeds from the issuance of the subordinated debt will qualify as Tier 2 capital for regulatory purposes and the portion that the Company contributes to Bridgewater Bank qualifies as Tier 1 capital for the Bank.