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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Bridgewater Bancshares Inc | NASDAQ:BWB | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.08 | -0.57% | 14.02 | 13.60 | 14.40 | 14.26 | 13.94 | 13.94 | 30,547 | 22:47:32 |
Fourth Quarter 2023 Highlights
Annual 2023 Highlights
(1) Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $8.9 million for the fourth quarter of 2023, compared to $9.6 million for the third quarter of 2023, and $13.7 million for the fourth quarter of 2022. Earnings per diluted common share were $0.28 for the fourth quarter of 2023, compared to $0.30 for the third quarter of 2023, and $0.45 for the fourth quarter of 2022.
“Bridgewater finished 2023 strong with the continuation of several positive trends as net interest margin continued to stabilize, deposit growth outpaced loan growth, and asset quality remained superb,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “We also returned capital to shareholders by opportunistically repurchasing shares of common stock during the fourth quarter, while tangible book value per share increased for the 28th consecutive quarter.
“As we enter 2024, we are optimistic about our outlook as our balance sheet is well-positioned to benefit as the yield curve normalizes. In addition, our loan pipeline has begun to grow once again as loan demand has started to increase. By moderating our loan growth and reducing our loan-to-deposit ratio over the past few quarters, we believe we can continue to gain market share by deploying capital into more profitable loan growth as the interest rate environment improves.”
Key Financial Measures
As of and for the Three Months Ended
As of and for the Year Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2023
2023
2022
2023
2022
Per Common Share Data
Basic Earnings Per Share
$
0.28
$
0.31
$
0.46
$
1.29
$
1.78
Diluted Earnings Per Share
0.28
0.30
0.45
1.27
1.72
Book Value Per Share
12.94
12.47
11.80
12.94
11.80
Tangible Book Value Per Share (1)
12.84
12.37
11.69
12.84
11.69
Financial Ratios
Return on Average Assets (2)
0.77
%
0.85
%
1.28
%
0.89
%
1.38
%
Pre-Provision Net Revenue Return on Average Assets (1)(2)
0.96
1.01
1.82
1.15
2.06
Return on Average Shareholders' Equity (2)
8.43
9.23
14.06
9.73
13.90
Return on Average Tangible Common Equity (1)(2)
8.95
9.92
15.86
10.53
15.69
Net Interest Margin (3)
2.27
2.32
3.16
2.42
3.45
Core Net Interest Margin (1)(3)
2.21
2.24
3.05
2.34
3.27
Cost of Total Deposits
3.19
2.99
1.31
2.73
0.75
Cost of Funds
3.23
3.10
1.67
2.92
0.99
Efficiency Ratio (1)
58.8
56.1
43.8
53.0
41.5
Noninterest Expense to Average Assets (2)
1.37
1.34
1.42
1.32
1.46
Tangible Common Equity to Tangible Assets (1)
7.73
7.61
7.48
7.73
7.48
Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4)
9.16
9.07
8.40
9.16
8.40
Balance Sheet and Asset Quality (dollars in thousands)
Total Assets
$
4,611,990
$
4,557,070
$
4,345,662
$
4,611,990
$
4,345,662
Total Loans, Gross
3,724,282
3,722,271
3,569,446
3,724,282
3,569,446
Deposits
3,709,948
3,675,509
3,416,543
3,709,948
3,416,543
Loan to Deposit Ratio
100.4
%
101.3
%
104.5
%
100.4
%
104.5
%
Net Loan Charge-Offs (Recoveries) to Average Loans (2)
0.01
0.01
0.00
0.01
(0.01
)
Nonperforming Assets to Total Assets (5)
0.02
0.02
0.01
0.02
0.01
Allowance for Credit Losses to Total Loans
1.36
1.36
1.34
1.36
1.34
__________________________
(1)Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)Annualized.
(3)Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4)Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
(5)Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
Income Statement
Net Interest Margin and Net Interest Income
Net interest margin (on a fully tax-equivalent basis) for the fourth quarter of 2023 was 2.27%, a five basis point decline from 2.32% in the third quarter of 2023 and an 89 basis point decline from 3.16% in the fourth quarter of 2022. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, and prior to 2023, PPP balances, interest, and fees, was 2.21% for the fourth quarter of 2023, a three basis point decline from 2.24% in the third quarter of 2023, and an 84 basis point decline from 3.05% in the fourth quarter of 2022.
Net interest income was $25.3 million for the fourth quarter of 2023, a decrease of $107,000 from $25.4 million in the third quarter of 2023, and a decrease of $7.6 million from $32.9 million in the fourth quarter of 2022.
Interest income was $58.6 million for the fourth quarter of 2023, an increase of $1.7 million from $56.8 million in the third quarter of 2023, and an increase of $9.7 million from $48.9 million in the fourth quarter of 2022.
A summary of interest and fees recognized on loans for the periods indicated is as follows:
Three Months Ended
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
Interest
5.25
%
5.16
%
5.09
%
4.95
%
4.75
%
Fees
0.08
0.10
0.10
0.11
0.12
Yield on Loans
5.33
%
5.26
%
5.19
%
5.06
%
4.87
%
Interest expense was $33.2 million for the fourth quarter of 2023, an increase of $1.9 million from $31.4 million in the third quarter of 2023, and an increase of $17.3 million from $16.0 million in the fourth quarter of 2022.
Interest expense on deposits was $29.4 million for the fourth quarter of 2023, an increase of $2.2 million from $27.2 million in the third quarter of 2023, and an increase of $18.7 million from $10.8 million in the fourth quarter of 2022.
Provision for Credit Losses
The provision for credit losses on loans was $0 for both the fourth quarter of 2023 and the third quarter of 2023, compared to $1.5 million for the fourth quarter of 2022.
The provision for credit losses for off-balance sheet credit exposures was a negative provision of $250,000 for the fourth quarter of 2023, compared to a negative provision of $600,000 for the third quarter of 2023 and zero for the fourth quarter of 2022.
Noninterest Income
Noninterest income was $1.4 million for the fourth quarter of 2023, a decrease of $317,000 from $1.7 million for the third quarter of 2023 and a decrease of $329,000 from $1.7 million for the fourth quarter of 2022.
Noninterest Expense
Noninterest expense was $15.7 million for the fourth quarter of 2023, an increase of $503,000 from $15.2 million for the third quarter of 2023 and an increase of $537,000 from $15.2 million for the fourth quarter of 2022.
Income Taxes
The effective combined federal and state income tax rate for the fourth quarter of 2023 was 21.0%, a decrease from 23.0% for the third quarter of 2023 and 23.4% for the fourth quarter of 2022. The effective combined federal and state rate for the years ended December 31, 2023 and 2022 was 23.9% and 25.5%, respectively.
Balance Sheet
Loans
(dollars in thousands)
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
Commercial
$
464,061
$
459,854
$
460,061
$
455,156
$
436,393
Construction and Land Development
232,804
294,818
351,069
312,277
295,554
1 - 4 Family Construction
65,087
64,463
69,648
85,797
70,242
Real Estate Mortgage:
1 - 4 Family Mortgage
402,396
404,716
400,708
380,210
355,474
Multifamily
1,388,541
1,378,669
1,314,524
1,320,081
1,306,738
CRE Owner Occupied
175,783
159,485
159,088
158,650
149,905
CRE Nonowner Occupied
987,306
951,263
971,532
962,671
947,008
Total Real Estate Mortgage Loans
2,954,026
2,894,133
2,845,852
2,821,612
2,759,125
Consumer and Other
8,304
9,003
9,581
9,518
8,132
Total Loans, Gross
3,724,282
3,722,271
3,736,211
3,684,360
3,569,446
Allowance for Credit Losses on Loans
(50,494
)
(50,585
)
(50,701
)
(50,148
)
(47,996
)
Net Deferred Loan Fees
(6,573
)
(7,222
)
(7,718
)
(8,735
)
(9,293
)
Total Loans, Net
$
3,667,215
$
3,664,464
$
3,677,792
$
3,625,477
$
3,512,157
Total gross loans at December 31, 2023 were $3.72 billion, a slight increase of $2.0 million, or 0.2% annualized, over total gross loans of $3.72 billion at September 30, 2023, and an increase of $154.8 million, or 4.3%, over total gross loans of $3.57 billion at December 31, 2022.
Deposits
(dollars in thousands)
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
Noninterest Bearing Transaction Deposits
$
756,964
$
754,297
$
751,217
$
742,198
$
884,272
Interest Bearing Transaction Deposits
692,801
780,863
719,488
630,037
451,992
Savings and Money Market Deposits
935,091
872,534
860,613
913,013
1,031,873
Time Deposits
300,651
265,737
271,783
266,213
272,253
Brokered Deposits
1,024,441
1,002,078
974,831
859,662
776,153
Total Deposits
$
3,709,948
$
3,675,509
$
3,577,932
$
3,411,123
$
3,416,543
Total deposits at December 31, 2023 were $3.71 billion, an increase of $34.4 million, or 3.7% annualized, over total deposits of $3.68 billion at September 30, 2023, and an increase of $293.4 million, or 8.6%, over total deposits of $3.42 billion at December 31, 2022.
Liquidity
Total on- and off-balance sheet liquidity was $2.23 billion as of December 31, 2023, compared to $2.18 billion at September 30, 2023 and $1.38 billion at December 31, 2022. The Company did not utilize the Bank Term Funding Program (BTFP) or Federal Reserve Discount Window during the fourth quarter of 2023.
Primary Liquidity—On-Balance Sheet
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
(dollars in thousands)
Cash and Cash Equivalents
$
96,594
$
77,617
$
138,618
$
177,116
$
48,090
Securities Available for Sale
604,104
553,076
538,220
559,430
548,613
Less: Pledged Securities
(170,727
)
(164,277
)
(236,206
)
(234,452
)
—
Total Primary Liquidity
$
529,971
$
466,416
$
440,632
$
502,094
$
596,703
Ratio of Primary Liquidity to Total Deposits
14.3
%
12.7
%
12.3
%
14.7
%
17.5
%
Secondary Liquidity—Off-Balance Sheet Borrowing Capacity
Net Secured Borrowing Capacity with the FHLB
$
498,736
$
516,501
$
400,792
$
246,795
$
390,898
Net Secured Borrowing Capacity with the Federal Reserve Bank
979,448
1,022,128
986,644
990,685
157,827
Unsecured Borrowing Capacity with Correspondent Lenders
200,000
150,000
108,000
158,000
208,000
Secured Borrowing Capacity with Correspondent Lender
26,250
26,250
26,250
26,250
26,250
Total Secondary Liquidity
$
1,704,434
$
1,714,879
$
1,521,686
$
1,421,730
$
782,975
Total Primary and Secondary Liquidity
$
2,234,405
$
2,181,295
$
1,962,318
$
1,923,824
$
1,379,678
Ratio of Primary and Secondary Liquidity to Total Deposits
60.2
%
59.3
%
54.8
%
56.4
%
40.4
%
Asset Quality
Overall asset quality remained superb due to the Company’s measured risk selection, consistent underwriting standards, active credit oversight, and experienced lending and credit teams.
Capital
Total shareholders’ equity at December 31, 2023 was $425.5 million, an increase of $9.6 million, or 2.3%, compared to total shareholders’ equity of $416.0 million at September 30, 2023, and an increase of $31.5 million, or 8.0%, over total shareholders’ equity of $394.1 million at December 31, 2022.
Tangible book value per share, a non-GAAP financial measure, was $12.84 as of December 31, 2023, an increase of 3.7% from $12.37 as of September 30, 2023, and an increase of 9.8% from $11.69 as of December 31, 2022.
During the fourth quarter of 2023, the company repurchased 423,749 shares of its common stock. Shares were repurchased at a weighted average price of $10.72 per share for a total of $4.5 million.
Today, the Company also announced that its Board of Directors has declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (Series A Preferred Stock). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on March 1, 2024 to shareholders of record of the Series A Preferred Stock at the close of business on February 15, 2024.
Conference Call and Webcast
The Company will host a conference call to discuss its fourth quarter 2023 financial results on Thursday, January 25, 2024 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 844-481-2913 and requesting to join the Bridgewater Bancshares earnings call. To listen to a replay of the conference call via phone, please dial 877-344-7529 and enter access code 4855149. The replay will be available through February 1, 2024. The conference call will also be available via a live webcast on the Investor Relations section of the Company’s website, investors.bridgewaterbankmn.com, and archived for replay.
About the Company
Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding company. Bridgewater's banking subsidiary, Bridgewater Bank, is a premier, full-service Twin Cities bank dedicated to serving the diverse needs of commercial real estate investors, entrepreneurs, business clients and successful individuals. By pairing a range of deposit, lending, and business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $4.6 billion and seven branches as of December 31, 2023, Bridgewater is considered one of the largest locally led banks in the State of Minnesota, and has received numerous awards for its growth, banking services, and esteemed corporate culture.
Use of Non-GAAP financial measures
In addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.
Forward-Looking Statements
This earnings release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by 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.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of recent and potential additional rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation and possible recession; the effects of developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for credit losses on loans; new or revised accounting standards; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including in response to the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics, acts of war or terrorism or other adverse external events, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Bridgewater Bancshares, Inc. and Subsidiaries
Financial Highlights
(dollars in thousands, except share data)
As of and for the Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
Income Statement
Net Interest Income
$
25,314
$
25,421
$
25,872
$
28,567
$
32,893
Provision for (Recovery of) Credit Losses
(250
)
(600
)
50
625
1,500
Noninterest Income
1,409
1,726
1,415
1,943
1,738
Noninterest Expense
15,740
15,237
14,274
14,069
15,203
Net Income
8,873
9,629
9,816
11,642
13,735
Net Income Available to Common Shareholders
7,859
8,616
8,802
10,629
12,721
Per Common Share Data
Basic Earnings Per Share
$
0.28
$
0.31
$
0.32
$
0.38
$
0.46
Diluted Earnings Per Share
0.28
0.30
0.31
0.37
0.45
Book Value Per Share
12.94
12.47
12.25
12.05
11.80
Tangible Book Value Per Share (1)
12.84
12.37
12.15
11.95
11.69
Basic Weighted Average Shares Outstanding
27,870,430
27,943,409
27,886,425
27,726,894
27,558,983
Diluted Weighted Average Shares Outstanding
28,238,056
28,311,778
28,198,739
28,490,046
28,527,306
Shares Outstanding at Period End
27,748,965
28,015,505
27,973,995
27,845,244
27,751,950
Financial Ratios
Return on Average Assets (2)
0.77
%
0.85
%
0.88
%
1.07
%
1.28
%
Pre-Provision Net Revenue Return on Average Assets (1)(2)
0.96
1.01
1.16
1.49
1.82
Return on Average Shareholders' Equity (2)
8.43
9.23
9.69
11.70
14.06
Return on Average Tangible Common Equity (1)(2)
8.95
9.92
10.48
12.90
15.86
Net Interest Margin (3)
2.27
2.32
2.40
2.72
3.16
Core Net Interest Margin (1)(3)
2.21
2.24
2.31
2.62
3.05
Cost of Total Deposits
3.19
2.99
2.66
2.01
1.31
Cost of Funds
3.23
3.10
2.91
2.41
1.67
Efficiency Ratio (1)
58.8
56.1
52.3
45.9
43.8
Noninterest Expense to Average Assets (2)
1.37
1.34
1.28
1.30
1.42
Balance Sheet
Total Assets
$
4,611,990
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
Total Loans, Gross
3,724,282
3,722,271
3,736,211
3,684,360
3,569,446
Deposits
3,709,948
3,675,509
3,577,932
3,411,123
3,416,543
Total Shareholders' Equity
425,515
415,960
409,126
402,006
394,064
Loan to Deposit Ratio
100.4
%
101.3
%
104.4
%
108.0
%
104.5
%
Core Deposits to Total Deposits (4)
68.7
70.3
70.3
72.4
74.6
Uninsured Deposits to Total Deposits
24.3
22.2
22.1
24.0
38.5
Asset Quality
Net Loan Charge-Offs to Average Loans (2)
0.01
%
0.01
%
0.00
%
0.00
%
0.00
%
Nonperforming Assets to Total Assets (5)
0.02
0.02
0.02
0.02
0.01
Allowance for Credit Losses to Total Loans
1.36
1.36
1.36
1.36
1.34
Capital Ratios (Consolidated) (6)
Tier 1 Leverage Ratio
9.57
%
9.62
%
9.47
%
9.41
%
9.55
%
Common Equity Tier 1 Risk-based Capital Ratio
9.16
9.07
8.72
8.48
8.40
Tier 1 Risk-based Capital Ratio
10.79
10.69
10.33
10.08
10.03
Total Risk-based Capital Ratio
13.97
13.88
13.50
13.25
13.15
Tangible Common Equity to Tangible Assets (1)
7.73
7.61
7.39
7.23
7.48
__________________________
(1) Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details. (2)Annualized.
(3)Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4)Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
(5)Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
(6)Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share data)
December 31,
September 30,
June 30,
March 31,
December 31,
2023
2023
2023
2023
2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Assets
Cash and Cash Equivalents
$
128,562
$
124,358
$
177,101
$
209,192
$
87,043
Bank-Owned Certificates of Deposit
—
1,225
1,225
1,225
1,181
Securities Available for Sale, at Fair Value
604,104
553,076
538,220
559,430
548,613
Loans, Net of Allowance for Credit Losses
3,667,215
3,664,464
3,677,792
3,625,477
3,512,157
Federal Home Loan Bank (FHLB) Stock, at Cost
17,097
17,056
21,557
28,632
19,606
Premises and Equipment, Net
48,886
49,331
49,710
47,801
48,445
Foreclosed Assets
—
—
116
116
—
Accrued Interest
16,697
15,182
13,822
13,377
13,479
Goodwill
2,626
2,626
2,626
2,626
2,626
Other Intangible Assets, Net
188
197
206
240
288
Bank-Owned Life Insurance
34,477
34,209
33,958
33,719
33,485
Other Assets
92,138
95,346
86,852
81,064
78,739
Total Assets
$
4,611,990
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
Liabilities and Equity
Liabilities
Deposits:
Noninterest Bearing
$
756,964
$
754,297
$
751,217
$
742,198
$
884,272
Interest Bearing
2,952,984
2,921,212
2,826,715
2,668,925
2,532,271
Total Deposits
3,709,948
3,675,509
3,577,932
3,411,123
3,416,543
Federal Funds Purchased
—
—
195,000
437,000
287,000
Notes Payable
13,750
13,750
13,750
13,750
13,750
FHLB Advances
319,500
294,500
262,000
197,000
97,000
Subordinated Debentures, Net of Issuance Costs
79,288
79,192
79,096
79,001
78,905
Accrued Interest Payable
5,282
3,816
2,974
3,257
2,831
Other Liabilities
58,707
74,343
63,307
59,762
55,569
Total Liabilities
4,186,475
4,141,110
4,194,059
4,200,893
3,951,598
SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value; Authorized 10,000,000
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at December 31, 2023 (unaudited), September 30, 2023 (unaudited), June 30, 2023 (unaudited), March 31, 2023 (unaudited), and December 31, 2022
66,514
66,514
66,514
66,514
66,514
Common Stock- $0.01 par value; Authorized 75,000,000
Common Stock - Issued and Outstanding 27,748,965 at December 31, 2023 (unaudited), 28,015,505 at September 30, 2023 (unaudited), 27,973,995 at June 30, 2023 (unaudited), 27,845,244 at March 31, 2023 (unaudited), and 27,751,950 at December 31, 2022
277
280
280
278
278
Additional Paid-In Capital
96,320
100,120
99,044
97,716
96,529
Retained Earnings
280,650
272,812
264,196
255,394
248,685
Accumulated Other Comprehensive Loss
(18,246
)
(23,766
)
(20,908
)
(17,896
)
(17,942
)
Total Shareholders' Equity
425,515
415,960
409,126
402,006
394,064
Total Liabilities and Equity
$
4,611,990
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
2023
2022
Interest Income
Loans, Including Fees
$
49,727
$
48,999
$
47,721
$
44,955
$
42,488
$
191,402
$
146,256
Investment Securities
7,283
6,507
6,237
6,218
5,843
26,245
16,410
Other
1,543
1,303
1,043
819
529
4,708
1,029
Total Interest Income
58,553
56,809
55,001
51,992
48,860
222,355
163,695
Interest Expense
Deposits
29,448
27,225
22,998
16,374
10,781
96,045
23,379
Federal Funds Purchased
268
548
2,761
4,944
3,379
8,521
4,507
Notes Payable
299
296
285
263
202
1,143
202
FHLB Advances
2,220
2,316
2,092
861
575
7,489
1,221
Subordinated Debentures
1,004
1,003
993
983
1,030
3,983
4,688
Total Interest Expense
33,239
31,388
29,129
23,425
15,967
117,181
33,997
Net Interest Income
25,314
25,421
25,872
28,567
32,893
105,174
129,698
Provision for (Recovery of) Credit Losses
(250
)
(600
)
50
625
1,500
(175
)
7,700
Net Interest Income After Provision for Credit Losses
25,564
26,021
25,822
27,942
31,393
105,349
121,998
Noninterest Income
Customer Service Fees
359
379
368
349
344
1,455
1,236
Net Gain (Loss) on Sales of Securities
(27
)
—
50
(56
)
30
(33
)
82
Letter of Credit Fees
418
315
379
634
358
1,746
1,592
Debit Card Interchange Fees
152
150
155
138
148
595
586
Swap Fees
—
—
—
—
—
—
557
Bank-Owned Life Insurance
268
252
238
234
238
992
762
FHLB Prepayment Income
—
493
—
299
—
792
—
Other Income
239
137
225
345
620
946
1,517
Total Noninterest Income
1,409
1,726
1,415
1,943
1,738
6,493
6,332
Noninterest Expense
Salaries and Employee Benefits
9,615
9,519
8,589
8,815
9,821
36,538
36,941
Occupancy and Equipment
1,062
1,101
1,075
1,209
1,177
4,447
4,390
FDIC Insurance Assessment
1,050
1,075
900
665
360
3,690
1,365
Data Processing
424
392
401
357
371
1,574
1,396
Professional and Consulting Fees
782
715
829
755
635
3,081
2,664
Derivative Collateral Fees
573
543
404
380
535
1,900
687
Information Technology and Telecommunications
812
683
711
683
673
2,889
2,495
Marketing and Advertising
324
222
321
262
403
1,129
2,032
Intangible Asset Amortization
9
9
34
48
48
100
191
Amortization of Tax Credit Investments
—
—
—
—
114
—
408
Other Expense
1,089
978
1,010
895
1,066
3,972
4,051
Total Noninterest Expense
15,740
15,237
14,274
14,069
15,203
59,320
56,620
Income Before Income Taxes
11,233
12,510
12,963
15,816
17,928
52,522
71,710
Provision for Income Taxes
2,360
2,881
3,147
4,174
4,193
12,562
18,318
Net Income
8,873
9,629
9,816
11,642
13,735
39,960
53,392
Preferred Stock Dividends
(1,014
)
(1,013
)
(1,014
)
(1,013
)
(1,014
)
(4,054
)
(4,054
)
Net Income Available to Common Shareholders
$
7,859
$
8,616
$
8,802
$
10,629
$
12,721
$
35,906
$
49,338
Earnings Per Share
Basic
$
0.28
$
0.31
$
0.32
$
0.38
$
0.46
$
1.29
$
1.78
Diluted
0.28
0.30
0.31
0.37
0.45
1.27
1.72
Bridgewater Bancshares, Inc. and Subsidiaries
Analysis of Average Balances, Yields and Rates
(dollars in thousands, except per share data)
(Unaudited)
For the Three Months Ended
December 31, 2023
September 30, 2023
December 31, 2022
Average
Interest
Yield/
Average
Interest
Yield/
Average
Interest
Yield/
(dollars in thousands)
Balance
& Fees
Rate
Balance
& Fees
Rate
Balance
& Fees
Rate
Interest Earning Assets:
Cash Investments
$
106,275
$
1,233
4.60
%
$
81,038
$
903
4.42
%
$
65,393
$
366
2.22
%
Investment Securities:
Taxable Investment Securities
600,856
7,007
4.63
565,008
6,234
4.38
540,601
5,268
3.87
Tax-Exempt Investment Securities (1)
29,172
350
4.75
29,955
346
4.58
67,867
728
4.26
Total Investment Securities
630,028
7,357
4.63
594,963
6,580
4.39
608,468
5,996
3.91
Loans (1)(2)
3,726,126
50,022
5.33
3,722,594
49,326
5.26
3,482,150
42,702
4.87
Federal Home Loan Bank Stock
17,999
310
6.85
17,829
400
8.89
21,633
163
2.99
Total Interest Earning Assets
4,480,428
58,922
5.22
%
4,416,424
57,209
5.14
%
4,177,644
49,227
4.67
%
Noninterest Earning Assets
87,018
88,513
73,701
Total Assets
$
4,567,446
$
4,504,937
$
4,251,345
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
719,630
$
7,546
4.16
%
$
730,244
$
7,136
3.88
%
$
464,631
$
2,013
1.72
%
Savings and Money Market Deposits
911,835
9,003
3.92
874,612
8,089
3.67
1,048,227
4,533
1.72
Time Deposits
268,140
2,330
3.45
266,635
1,962
2.92
281,334
1,007
1.42
Brokered Deposits
1,009,166
10,569
4.16
985,276
10,038
4.04
537,351
3,228
2.38
Total Interest Bearing Deposits
2,908,771
29,448
4.02
2,856,767
27,225
3.78
2,331,543
10,781
1.83
Federal Funds Purchased
18,932
268
5.62
39,641
548
5.48
340,471
3,379
3.94
Notes Payable
13,750
299
8.62
13,750
296
8.58
11,359
202
7.04
FHLB Advances
303,467
2,220
2.90
275,261
2,316
3.34
94,103
575
2.42
Subordinated Debentures
79,233
1,004
5.02
79,137
1,003
5.03
81,242
1,030
5.03
Total Interest Bearing Liabilities
3,324,153
33,239
3.97
%
3,264,556
31,388
3.81
%
2,858,718
15,967
2.22
%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits
753,430
754,567
943,232
Other Noninterest Bearing Liabilities
72,074
71,767
61,806
Total Noninterest Bearing Liabilities
825,504
826,334
1,005,038
Shareholders' Equity
417,789
414,047
387,589
Total Liabilities and Shareholders' Equity
$
4,567,446
$
4,504,937
$
4,251,345
Net Interest Income / Interest Rate Spread
25,683
1.25
%
25,821
1.33
%
33,260
2.45
%
Net Interest Margin (3)
2.27
%
2.32
%
3.16
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans
(369)
(400)
(367)
Net Interest Income
$
25,314
$
25,421
$
32,893
__________________________
(1)Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%.
(2)Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
(3)Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
Bridgewater Bancshares, Inc. and Subsidiaries
Analysis of Average Balances, Yields and Rates
(dollars in thousands, except per share data)
(Unaudited)
For the Year Ended
December 31, 2023
December 31, 2022
Average
Interest
Yield/
Average
Interest
Yield/
(dollars in thousands)
Balance
& Fees
Rate
Balance
& Fees
Rate
Interest Earning Assets:
Cash Investments
$
77,759
$
3,170
4.08
%
$
66,072
$
597
0.90
%
Investment Securities:
Taxable Investment Securities
577,102
25,199
4.37
448,500
13,960
3.11
Tax-Exempt Investment Securities (1)
29,004
1,325
4.57
72,379
3,101
4.29
Total Investment Securities
606,106
26,524
4.38
520,879
17,061
3.28
Loans (1)(2)
3,699,252
192,679
5.21
3,190,712
146,827
4.60
Federal Home Loan Bank Stock
21,249
1,538
7.24
12,628
432
3.42
Total Interest Earning Assets
4,404,366
223,911
5.08
%
3,790,291
164,917
4.35
%
Noninterest Earning Assets
86,438
76,189
Total Assets
$
4,490,804
$
3,866,480
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
650,028
$
23,379
3.60
%
$
524,968
$
4,336
0.83
%
Savings and Money Market Deposits
922,799
30,639
3.32
963,096
9,129
0.95
Time Deposits
263,161
7,064
2.68
284,868
3,264
1.15
Brokered Deposits
909,662
34,963
3.84
449,095
6,650
1.48
Total Interest Bearing Deposits
2,745,650
96,045
3.50
2,222,027
23,379
1.05
Federal Funds Purchased
169,645
8,521
5.02
149,608
4,507
3.01
Notes Payable
13,750
1,143
8.31
2,863
202
7.04
FHLB Advances
238,000
7,489
3.15
64,278
1,221
1.90
Subordinated Debentures
79,090
3,983
5.04
89,584
4,688
5.23
Total Interest Bearing Liabilities
3,246,135
117,181
3.61
%
2,528,360
33,997
1.34
%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits
768,428
910,490
Other Noninterest Bearing Liabilities
65,763
43,597
Total Noninterest Bearing Liabilities
834,191
954,087
Shareholders' Equity
410,478
384,033
Total Liabilities and Shareholders' Equity
$
4,490,804
$
3,866,480
Net Interest Income / Interest Rate Spread
106,730
1.47
%
130,920
3.01
%
Net Interest Margin (3)
2.42
%
3.45
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans
(1,556)
(1,222)
Net Interest Income
$
105,174
$
129,698
__________________________
(1) Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%. (2)Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
(3)Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.
Bridgewater Bancshares, Inc. and Subsidiaries
Asset Quality Summary
(dollars in thousands) (unaudited)
As of and for the Three Months Ended
As of and for the Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
2023
2022
Allowance for Credit Losses
Balance at Beginning of Period
$
50,585
$
50,701
$
50,148
$
47,996
$
46,491
$
47,996
$
40,020
Impact of Adopting CECL
—
—
—
650
—
650
—
Provision for Credit Losses
—
—
550
1,500
1,500
2,050
7,700
Charge-offs
(95
)
(122
)
(3
)
(4
)
(3
)
(224
)
(37
)
Recoveries
4
6
6
6
8
22
313
Net Charge-offs
$
(91
)
$
(116
)
$
3
$
2
$
5
$
(202
)
$
276
Balance at End of Period
50,494
50,585
50,701
50,148
47,996
50,494
47,996
Allowance for Credit Losses to Total Loans
1.36
%
1.36
%
1.36
%
1.36
%
1.34
%
1.36
%
1.34
%
As of and for the Three Months Ended
As of and for the Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
2023
2022
Provision for Credit Losses on Loans
$
—
$
—
$
550
$
1,500
$
1,500
$
2,050
$
7,700
Recovery of Credit Losses for Off-Balance Sheet Credit Exposures
(250
)
(600
)
(500
)
(875
)
—
(2,225
)
—
Provision for (Recovery of) Credit Losses
$
(250
)
$
(600
)
$
50
$
625
$
1,500
$
(175
)
$
7,700
As of and for the Three Months Ended
December 31,
September 30,
June 30,
March 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
Selected Asset Quality Data
Loans 30-89 Days Past Due
$
15,110
$
11
$
—
$
21
$
186
Loans 30-89 Days Past Due to Total Loans
0.41
%
0.00
%
0.00
%
0.00
%
0.01
%
Nonperforming Loans
$
919
$
749
$
662
$
693
$
639
Nonperforming Loans to Total Loans
0.02
%
0.02
%
0.02
%
0.02
%
0.02
%
Foreclosed Assets
$
—
$
—
$
116
$
116
$
—
Nonaccrual Loans to Total Loans
0.02
%
0.02
%
0.02
%
0.02
%
0.02
%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans
0.02
0.02
0.02
0.02
0.02
Nonperforming Assets (1)
$
919
$
749
$
778
$
809
$
639
Nonperforming Assets to Total Assets (1)
0.02
%
0.02
%
0.02
%
0.02
%
0.01
%
Net Loan Charge-Offs (Annualized) to Average Loans
0.01
0.01
0.00
0.00
0.00
Watchlist Risk Rating Loans
$
26,485
$
26,877
$
27,215
$
27,574
$
32,252
Substandard Risk Rating Loans
35,858
35,621
33,821
36,258
28,049
__________________________
(1) Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.Bridgewater Bancshares, Inc. and Subsidiaries
Non-GAAP Financial Measures
(dollars in thousands) (unaudited)
For the Three Months Ended
For the Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
2023
2022
Pre-Provision Net Revenue
Noninterest Income
$
1,409
$
1,726
$
1,415
$
1,943
$
1,738
$
6,493
$
6,332
Less: (Gain) Loss on Sales of Securities
27
—
(50
)
56
(30
)
33
(82
)
Less: FHLB Advance Prepayment Income
—
(493
)
—
(299
)
—
(792
)
—
Total Operating Noninterest Income
1,436
1,233
1,365
1,700
1,708
5,734
6,250
Plus: Net Interest Income
25,314
25,421
25,872
28,567
32,893
105,174
129,698
Net Operating Revenue
$
26,750
$
26,654
$
27,237
$
30,267
$
34,601
$
110,908
$
135,948
Noninterest Expense
$
15,740
$
15,237
$
14,274
$
14,069
$
15,203
$
59,320
$
56,620
Less: Amortization of Tax Credit Investments
—
—
—
—
(114
)
—
(408
)
Total Operating Noninterest Expense
$
15,740
$
15,237
$
14,274
$
14,069
$
15,089
$
59,320
$
56,212
Pre-Provision Net Revenue
$
11,010
$
11,417
$
12,963
$
16,198
$
19,512
$
51,588
$
79,736
Plus:
Non-Operating Revenue Adjustments
(27
)
493
50
243
30
759
82
Less:
Provision (Recovery of) for Credit Losses
(250
)
(600
)
50
625
1,500
(175
)
7,700
Non-Operating Expense Adjustments
—
—
—
—
114
—
408
Provision for Income Taxes
2,360
2,881
3,147
4,174
4,193
12,562
18,318
Net Income
$
8,873
$
9,629
$
9,816
$
11,642
$
13,735
$
39,960
$
53,392
Average Assets
$
4,567,446
$
4,504,937
$
4,483,662
$
4,405,234
$
4,251,345
$
4,490,804
$
3,866,480
Pre-Provision Net Revenue Return on Average Assets
0.96
%
1.01
%
1.16
%
1.49
%
1.82
%
1.15
%
2.06
%
Core Net Interest Margin
Net Interest Income (Tax-equivalent Basis)
$
25,683
$
25,822
$
26,280
$
28,947
$
33,260
$
106,730
$
130,920
Less: Loan Fees
(751
)
(914
)
(941
)
(998
)
(1,100
)
(3,604
)
(6,273
)
Less: PPP Interest and Fees
NM
NM
NM
NM
NM
NM
(970
)
Core Net Interest Income
$
24,932
$
24,908
$
25,339
$
27,949
$
32,160
$
103,126
$
123,677
Average Interest Earning Assets
$
4,480,428
$
4,416,424
$
4,395,050
$
4,323,706
$
4,177,644
$
4,404,366
$
3,790,291
Less: Average PPP Loans
NM
NM
NM
NM
NM
NM
(7,441
)
Core Average Interest Earning Assets
$
4,480,428
$
4,416,424
$
4,395,050
$
4,323,706
$
4,177,644
$
4,404,366
$
3,782,850
Core Net Interest Margin
2.21
%
2.24
%
2.31
%
2.62
%
3.05
%
2.34
%
3.27
%
Efficiency Ratio
Noninterest Expense
$
15,740
$
15,237
$
14,274
$
14,069
$
15,203
$
59,320
$
56,620
Less: Amortization of Intangible Assets
(9
)
(9
)
(34
)
(48
)
(48
)
(100
)
(191
)
Adjusted Noninterest Expense
$
15,731
$
15,228
$
14,240
$
14,021
$
15,155
$
59,220
$
56,429
Net Interest Income
$
25,314
$
25,421
$
25,872
$
28,567
$
32,893
$
105,174
$
129,698
Noninterest Income
1,409
1,726
1,415
1,943
1,738
6,493
6,332
Less: Gain (Loss) on Sales of Securities
27
—
(50
)
56
(30
)
33
(82
)
Adjusted Operating Revenue
$
26,750
$
27,147
$
27,237
$
30,566
$
34,601
$
111,700
$
135,948
Efficiency Ratio
58.8
%
56.1
%
52.3
%
45.9
%
43.8
%
53.0
%
41.5
%
Bridgewater Bancshares, Inc. and Subsidiaries
Non-GAAP Financial Measures
(dollars in thousands) (unaudited)
For the Three Months Ended
For the Year Ended
December 31,
September 30,
June 30,
March 31,
December 31,
December 31,
December 31,
(dollars in thousands)
2023
2023
2023
2023
2022
2023
2022
Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity
$
425,515
$
415,960
$
409,126
$
402,006
$
394,064
Less: Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Total Common Shareholders' Equity
359,001
349,446
342,612
335,492
327,550
Less: Intangible Assets
(2,814
)
(2,823
)
(2,832
)
(2,866
)
(2,914
)
Tangible Common Equity
$
356,187
$
346,623
$
339,780
$
332,626
$
324,636
Total Assets
$
4,611,990
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
Less: Intangible Assets
(2,814
)
(2,823
)
(2,832
)
(2,866
)
(2,914
)
Tangible Assets
$
4,609,176
$
4,554,247
$
4,600,353
$
4,600,033
$
4,342,748
Tangible Common Equity/Tangible Assets
7.73
%
7.61
%
7.39
%
7.23
%
7.48
%
Tangible Book Value Per Share
Book Value Per Common Share
$
12.94
$
12.47
$
12.25
$
12.05
$
11.80
Less: Effects of Intangible Assets
(0.10
)
(0.10
)
(0.10
)
(0.10
)
(0.11
)
Tangible Book Value Per Common Share
$
12.84
$
12.37
$
12.15
$
11.95
$
11.69
Return on Average Tangible Common Equity
Net Income Available to Common Shareholders
$
7,859
$
8,616
$
8,802
$
10,629
$
12,721
$
35,906
$
49,338
Average Shareholders' Equity
$
417,789
$
414,047
$
406,347
$
403,533
$
387,589
$
410,478
$
384,033
Less: Average Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Average Common Equity
351,275
347,533
339,833
337,019
321,075
343,964
317,519
Less: Effects of Average Intangible Assets
(2,819
)
(2,828
)
(2,846
)
(2,894
)
(2,941
)
(2,847
)
(3,012
)
Average Tangible Common Equity
$
348,456
$
344,705
$
336,987
$
334,125
$
318,134
$
341,117
$
314,507
Return on Average Tangible Common Equity
8.95
%
9.92
%
10.48
%
12.90
%
15.86
%
10.53
%
15.69
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240123324643/en/
Investor Contact: Justin Horstman | Vice President, Investor Relations Justin.Horstman@bwbmn.com | 952.542.5169
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