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Stock Options | 3 Months Ended
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Mar. 31, 2026
Stock Options and Restricted Stock |
Stock Options and Restricted Stock | Note 9: Stock Options and Restricted Stock In 2012, the Company adopted the Bridgewater Bancshares, Inc. 2012 Combined Incentive and Non-Statutory Stock Option Plan (the “2012 Plan”) under which the Company was able to grant options to its directors, officers, and employees for up to 750,000 shares of common stock. Both incentive stock options and nonqualified stock options were granted under the 2012 Plan. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant, and the maximum term of each outstanding option is ten years. All outstanding options have been granted with vesting periods of four or five years. The 2012 Plan expired in March 2022, and awards are no longer able to be granted under the 2012 Plan. ​ In 2017, the Company adopted the Bridgewater Bancshares, Inc. 2017 Combined Incentive and Non-Statutory Stock Option Plan (the “2017 Plan”). Under the 2017 Plan, the Company may grant options to its directors, officers, employees and consultants for up to 1,500,000 shares of common stock. Both incentive stock options and nonqualified stock options may be granted under the 2017 Plan. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each outstanding option is ten years. All outstanding options have been granted with vesting periods of four or five years. As of both March 31, 2026 and December 31, 2025, there were 10,000 shares of the Company’s common stock reserved for future option grants under the 2017 Plan. In 2019, the Company adopted the Bridgewater Bancshares, Inc. 2019 Equity Incentive Plan (the “2019 EIP”). The types of awards which may be granted under the 2019 EIP include incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, restricted stock and cash incentive awards. The Company may grant these awards to its directors, officers, employees and certain other service providers for up to 1,000,000 shares of common stock. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each award is ten years. All outstanding awards have been granted with a vesting period of four years. As of March 31, 2026 and December 31, 2025, there were 2,225 and 2,192 shares, respectively, of the Company’s common stock reserved for future grants under the 2019 EIP. In 2023, the Company adopted the Bridgewater Bancshares, Inc. 2023 Equity Incentive Plan (the “2023 EIP”). Under the 2023 EIP, the Company may grant incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, restricted stock and cash incentive awards. The Company may grant these awards to its directors, officers, employees and certain other service providers for up to 1,500,000 shares of common stock. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each award is ten years. All outstanding awards have been granted with a vesting period of four years. As of March 31, 2026 and December 31, 2025, there were 368,418 and 464,751 shares, respectively, of the Company’s common stock reserved for future grants under the 2023 EIP. Stock Options The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on an industry index as described below. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account the fact that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Historically, the Company has not paid a dividend on its common stock and does not expect to do so in the near fut ure The Co mpany used the S&P 600 CM Bank Index as its historical volatility index. The S&P 600 CM Bank Index is an index of publicly traded small capitalization, regional, commercial banks located throughout the United States. There were 56 banks in the index ranging in market capitalization from $600.0 million up to $5.0 billion. The weighted average assumptions used in the model for valuing stock options grants for the three months ended March 31, 2026 are as follows: ​
​ | ​ | ​ | ​
​ | ​ | March 31, | ​
​ | ​ ​ ​ | 2026 | ​ ​ ​
Dividend Yield |  | — | %
Expected Life |  | 7 | Years
Expected Volatility |  | 30.92 | %
Risk-Free Interest Rate |  | 3.95 | %
​ ​ The following table presents a summary of the status of the Company’s outstanding stock options for the three months ended March 31, 2026: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2026
​ | ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Weighted
​ | ​ | ​ | ​ | Average
​ | ​ | Shares | ​ | Exercise Price
Outstanding at Beginning of Year |  | 1,935,175 | ​ | $ | 11.59
Granted |  | 25,000 | ​ |  | 17.53
Exercised |  | (30,400) | ​ |  | 10.70
Forfeitures |  | — | ​ |  | —
Outstanding at Period End |  | 1,929,775 | ​ | $ | 11.68
​ | ​ | ​ | ​ | ​ | ​
Options Exercisable at Period End |  | 1,460,524 | ​ | $ | 11.17
​ For the three months ended March 31, 2026 and 2025, the Company recognized compensation expense for stock options of $283,000 and $265,000, respectively. The following table presents information pertaining to options outstanding at March 31, 2026: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | Options Outstanding | ​ | Options Exercisable
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Weighted Average | ​ | ​ | ​ | ​
​ | ​ | ​ | Number of | ​ | Weighted Average | ​ | Remaining Contractual | ​ | Number of | ​ | Weighted Average
Range of Exercise Prices | ​ ​ ​ | Options | ​ ​ ​ | Exercise Price | ​ | Life in Years | ​ | Options | ​ ​ ​ | Exercise Price
$ | 7.00 - 7.99 |  | 642,392 |  | $ | 7.47 |  | 1.5 |  | 642,392 |  | $ | 7.47
​ | 8.00 - 8.99 |  | 2,961 |  | ​ | 8.76 |  | 4.0 |  | 2,961 |  | ​ | 8.76
​ | 10.00 - 10.99 | ​ | 190,000 | ​ | ​ | 10.65 | ​ | 7.3 | ​ | 82,249 | ​ | ​ | 10.65
​ | 11.00 - 11.99 | ​ | 203,625 | ​ | ​ | 11.17 | ​ | 6.0 | ​ | 130,875 | ​ | ​ | 11.21
​ | 12.00 - 12.99 | ​ | 245,297 | ​ | ​ | 12.91 | ​ | 3.3 | ​ | 245,297 | ​ | ​ | 12.91
​ | 13.00 - 13.99 | ​ | 285,000 | ​ | ​ | 13.75 | ​ | 8.8 | ​ | 71,250 | ​ | ​ | 13.75
​ | 17.00 - 17.99 | ​ | 310,500 | ​ | ​ | 17.50 | ​ | 6.2 | ​ | 285,500 | ​ | ​ | 17.50
​ | 18.00 - 18.99 | ​ | 50,000 | ​ | ​ | 18.03 | ​ | 9.7 | ​ | — | ​ | ​ | —
​ | Totals |  | 1,929,775 | ​ | $ | 11.68 | ​ | 4.8 |  | 1,460,524 | ​ | $ | 11.17
​ As of March 31, 2026, there was $2.4 million of total unrecognized compensation cost related to nonvested stock options that is expected to be recognized over a weighted-average period of 2.4 years. The following table presents an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the three months ended March 31, 2026: ​
​ | ​ | ​ | ​ | ​ | ​
​ | ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Weighted
​ | ​ | Number of | ​ | Average Grant
​ | ​ | Shares | ​ | Date Fair Value
Nonvested Options at December 31, 2025 |  | 584,251 | ​ | $ | 5.69
Granted |  | 25,000 | ​ | ​ | 7.24
Vested |  | (140,000) | ​ | ​ | 5.55
Forfeited | ​ | — | ​ | ​ | —
Nonvested Options at March 31, 2026 |  | 469,251 | ​ | $ | 5.82
​ Restricted Stock Units The Company has granted restricted stock units out of the 2019 EIP and 2023 EIP. Restricted stock units represent the right to receive one share of Company stock upon vesting and vest in equal annual installments on the first four anniversaries of the date of the grant. Nonvested restricted stock units have no voting or dividend rights and are not considered outstanding until vested and settled. The following table presents an analysis of nonvested restricted stock units outstanding for the three months ended March 31, 2026:
​ | ​ | ​ | ​ | ​ | ​
​ | ​ ​ ​ | ​ ​ ​ | ​ ​ ​ | Weighted
​ | ​ | Number of | ​ | Average Grant
​ | ​ | Units | ​ | Date Fair Value
Nonvested at December 31, 2025 |  | 447,661 | ​ | $ | 15.24
Granted |  | 64,419 | ​ | ​ | 19.54
Vested |  | (50,373) | ​ | ​ | 13.93
Forfeited | ​ | (1,421) | ​ | ​ | 18.05
Nonvested at March 31, 2026 |  | 460,286 | ​ | $ | 15.97
​ Compensation expense associated with the restricted stock units is recognized on a straight-line basis over the period that the restrictions associated with the units lapse based on the total cost of the unit at the grant date. For the three months ended March 31, 2026 and 2025, the Company recognized compensation expense associated with restricted stock units of $841,000 and $603,000, respectively. ​ As of March 31, 2026, there was $6.4 million of total unrecognized compensation cost related to nonvested restricted stock units granted under the 2019 EIP and 2023 EIP that is expected to be recognized over a weighted-average period of 2.8 years. Restricted Stock Awards During the three months ended March 31, 2026, the Company issued 8,302 shares of unrestricted common stock to non-employee directors, as a part of their compensation for their annual services on the Company’s board of directors. The aggregate value of the shares issued to non-employee directors of $147,000 was included in stock based compensation expense in the accompanying consolidated statements of shareholders’ equity.

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