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Bridgewater Bancshares, Inc. Announces First Quarter 2024 Net Income of $7.8 Million, $0.24 Diluted Earnings Per Common Share

First Quarter 2024 Highlights

  • Tangible book value per share(1) of $13.20 for the first quarter of 2024, an increase of $0.37, or 11.5% annualized, compared to $12.84 for the fourth quarter of 2023.
  • Repurchased 193,802 shares of common stock at a weighted average price of $11.75 per share, for a total of $2.3 million.
  • Gross loans increased $59.9 million, or 6.5% annualized, from the fourth quarter of 2023.
  • Loan-to-deposit ratio of 99.4%, compared to 100.4% at December 31, 2023.
  • Deposits increased by $97.3 million, or 10.5% annualized, from the fourth quarter of 2023, including an increase in core deposits(2) of $90.3 million, or 14.3% annualized.
  • Net interest margin (on a fully tax-equivalent basis) of 2.24%, compared to 2.27% in the fourth quarter of 2023.
  • Efficiency ratio(1) of 58.2%, compared to 58.8% for the fourth quarter of 2023.
  • Noninterest expense declined $551,000, or 3.5%, from the fourth quarter of 2023. Annualized noninterest expense to average assets was 1.33%, compared to 1.37% for the fourth quarter of 2023.
  • A provision for credit losses on loans of $850,000 was recorded to support loan growth in the first quarter of 2024. The allowance for credit losses on loans to total loans was 1.36% at both March 31, 2024 and December 31, 2023.
  • Annualized net loan charge-offs as a percentage of average loans of 0.00% for the first quarter of 2024, compared to 0.01% for the fourth quarter of 2023.
  • Nonperforming assets to total assets of 0.01% at March 31, 2024, compared to 0.02% at December 31, 2023.

(1) Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

(2) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $7.8 million for the first quarter of 2024, compared to $8.9 million for the fourth quarter of 2023, and $11.6 million for the first quarter of 2023. Earnings per diluted common share were $0.24 for the first quarter of 2024, compared to $0.28 for the fourth quarter of 2023, and $0.37 for the first quarter of 2023.

“Bridgewater’s 2024 first quarter results were highlighted by improved balance sheet growth, including the loan portfolio and core deposits,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “We were encouraged by an uptick in loan balances due to the increased loan demand and pipelines we began seeing in late 2023. Deposit balances, including core deposits, also rebounded nicely during the quarter, resulting in our loan-to-deposit ratio dropping below 100% for the first time since the first quarter of 2022.

“During the first quarter, we also saw net interest margin compression continue to slow, well-controlled expenses, superb asset quality, and the 29th consecutive quarter of tangible book value per share growth. While the economic environment continues to evolve, we remain optimistic about our outlook as we execute on our proven business model and continue to provide a differentiated level of service to our clients.”

Key Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

 

March 31,

 

December 31,

 

March 31,

 

 

 

2024

 

2023

 

2023

 

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.25

 

$

0.28

 

$

0.38

 

Diluted Earnings Per Share

 

 

0.24

 

 

0.28

 

 

0.37

 

Book Value Per Share

 

 

13.30

 

 

12.94

 

 

12.05

 

Tangible Book Value Per Share (1)

 

 

13.20

 

 

12.84

 

 

11.95

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (2)

 

 

0.69

%

 

0.77

%

 

1.07

%

Pre-Provision Net Revenue Return on Average Assets (1)(2)

 

 

0.95

 

 

0.96

 

 

1.49

 

Return on Average Shareholders' Equity (2)

 

 

7.35

 

 

8.43

 

 

11.70

 

Return on Average Tangible Common Equity (1)(2)

 

 

7.64

 

 

8.95

 

 

12.90

 

Net Interest Margin (3)

 

 

2.24

 

 

2.27

 

 

2.72

 

Core Net Interest Margin (1)(3)

 

 

2.18

 

 

2.21

 

 

2.62

 

Cost of Total Deposits

 

 

3.32

 

 

3.19

 

 

2.01

 

Cost of Funds

 

 

3.34

 

 

3.23

 

 

2.41

 

Efficiency Ratio (1)

 

 

58.2

 

 

58.8

 

 

45.9

 

Noninterest Expense to Average Assets (2)

 

 

1.33

 

 

1.37

 

 

1.30

 

Tangible Common Equity to Tangible Assets (1)

 

 

7.72

 

 

7.73

 

 

7.23

 

Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4)

 

 

9.21

 

 

9.16

 

 

8.48

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet and Asset Quality (dollars in thousands)

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,723,109

 

$

4,611,990

 

$

4,602,899

 

Total Loans, Gross

 

 

3,784,205

 

 

3,724,282

 

 

3,684,360

 

Deposits

 

 

3,807,225

 

 

3,709,948

 

 

3,411,123

 

Loan to Deposit Ratio

 

 

99.4

%

 

100.4

%

 

108.0

%

Net Loan Charge-Offs (Recoveries) to Average Loans (2)

 

 

0.00

 

 

0.01

 

 

0.00

 

Nonperforming Assets to Total Assets (5)

 

 

0.01

 

 

0.02

 

 

0.02

 

Allowance for Credit Losses to Total Loans

 

 

1.36

 

 

1.36

 

 

1.36

 

_________________________________

(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 first quarter of 2024 was 2.24%, a three basis point decline from 2.27% in the fourth quarter of 2023 and a 48 basis point decline from 2.72% in the first quarter of 2023. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees, was 2.18% for the first quarter of 2024, a three basis point decline from 2.21% in the fourth quarter of 2023, and a 44 basis point decline from 2.62% in the first quarter of 2023.

  • The linked-quarter and year-over-year declines in the margin were primarily due to higher funding costs, offset partially by higher earning asset yields.

Net interest income was $24.6 million for the first quarter of 2024, a decrease of $683,000 from $25.3 million in the fourth quarter of 2023, and a decrease of $3.9 million from $28.6 million in the first quarter of 2023.

  • The linked-quarter and year-over year decreases in net interest income were primarily due to higher rates paid on deposits and growth in the rising interest rate environment, which outpaced the repricing of the loan and securities portfolios.

Interest income was $58.7 million for the first quarter of 2024, an increase of $116,000 from $58.6 million in the fourth quarter of 2023, and an increase of $6.7 million from $52.0 million in the first quarter of 2023.

  • The yield on interest earning assets (on a fully tax-equivalent basis) was 5.28% in the first quarter of 2024, compared to 5.22% in the fourth quarter of 2023 and 4.91% in the first quarter of 2023.
  • The linked-quarter increase in the yield on interest earning assets was primarily due to the purchase of higher yielding securities and loans repricing at yields accretive to the existing portfolio.
  • The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment.
  • Loan interest income and loan fees remain the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield increased to 5.38% in the first quarter of 2024, five basis points higher than 5.33% in the fourth quarter of 2023, and 32 basis points higher than 5.06% in the first quarter of 2023.
  • Despite the overall decrease in fee recognition, the core loan yield continues to rise as new loan originations and the existing portfolio reprice in the higher rate environment.

A summary of interest and fees recognized on loans for the periods indicated is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

March 31, 2024

 

 

December 31, 2023

 

 

September 30, 2023

 

 

June 30, 2023

 

 

March 31, 2023

 

Interest

 

5.31

%

 

5.25

%

 

5.16

%

 

5.09

%

 

4.95

%

Fees

 

0.07

 

 

0.08

 

 

0.10

 

 

0.10

 

 

0.11

 

Yield on Loans

 

5.38

%

 

5.33

%

 

5.26

%

 

5.19

%

 

5.06

%

Interest expense was $34.0 million for the first quarter of 2024, an increase of $799,000 from $33.2 million in the fourth quarter of 2023, and an increase of $10.6 million from $23.4 million in the first quarter of 2023.

  • The cost of interest bearing liabilities was 4.03% in the first quarter of 2024, compared to 3.97% in the fourth quarter of 2023 and 3.03% in the first quarter of 2023.
  • The linked-quarter increase in the cost of interest bearing liabilities was primarily due to higher rates paid on deposits and changes in the deposit mix.
  • The year-over-year increase in the cost of interest bearing liabilities was primarily due to deposit repricing, which resulted from a rapid increase in market interest rates.

Interest expense on deposits was $30.2 million for the first quarter of 2024, an increase of $742,000 from $29.4 million in the fourth quarter of 2023, and an increase of $13.8 million from $16.4 million in the first quarter of 2023.

  • The cost of total deposits was 3.32% in the first quarter of 2024, compared to 3.19% in the fourth quarter of 2023 and 2.01% in the first quarter of 2023.
  • The linked-quarter increase in the cost of total deposits was primarily due to client demands for higher interest rates, increased competition, and changes in the mix of deposits.
  • The year-over-year increase in the cost of total deposits was primarily due to upward repricing of the deposit portfolio in the higher interest rate environment.

Provision for Credit Losses

The provision for credit losses on loans was $850,000 for the first quarter of 2024, compared to $0 for the fourth quarter of 2023 and $1.5 million for the first quarter of 2023.

  • The provision for credit losses on loans recorded in the first quarter of 2024 was primarily attributable to the increased growth of the loan portfolio.
  • The allowance for credit losses on loans to total loans was 1.36% at each of March 31, 2024, December 31, 2023 and March 31, 2023.

The provision for credit losses for off-balance sheet credit exposures was a negative provision of $100,000 for the first quarter of 2024, compared to a negative provision of $250,000 for the fourth quarter of 2023 and a negative provision of $875,000 for the first quarter of 2023.

  • The negative provision during the first quarter of 2024 was due to a reduction in outstanding unfunded commitments primarily attributable to the migration to funded loans, as well as a moderation in volume of newly originated projects with unfunded commitments.

Noninterest Income

Noninterest income was $1.6 million for the first quarter of 2024, an increase of $141,000 from $1.4 million for the fourth quarter of 2023 and a decrease of $393,000 from $1.9 million for the first quarter of 2023.

  • The linked-quarter increase was primarily due to a net gain on sale of securities and an increase in other income, offset partially by lower letter of credit fees.
  • The year-over-year decrease was primarily due to lower letter of credit fees and $299,000 of FHLB prepayment income recognized in the previous year which did not reoccur, offset partially by a net gain on sale of securities.

Noninterest Expense

Noninterest expense was $15.2 million for the first quarter of 2024, a decrease of $551,000 from $15.7 million for the fourth quarter of 2023 and an increase of $1.1 million from $14.1 million for the first quarter of 2023.

  • The linked-quarter decrease was primarily due to decreases in salaries and employee benefits, FDIC insurance assessment and other expense, offset partially by an increase in professional and consulting expense.
  • The year-over-year increase was primarily attributable to increases in salaries and employee benefits, industry-wide increases in the FDIC insurance assessment, higher professional and consulting fees, derivative collateral fees and information technology and telecommunications, offset partially by decreases in occupancy and equipment.
  • The efficiency ratio, a non-GAAP financial measure, was 58.2% for the first quarter of 2024, compared to 58.8% for the fourth quarter of 2023, and 45.9% for the first quarter of 2023.
  • The Company had 255 full-time equivalent employees at both March 31, 2024 and December 31, 2023, compared to 246 employees at March 31, 2023.

Income Taxes

The effective combined federal and state income tax rate for the first quarter of 2024 was 23.5%, an increase from 21.0% for the fourth quarter of 2023 and a decrease from 26.4% for the first quarter of 2023.

  • The linked-quarter increase in the effective tax rate was primarily due to the timing and delivery of tax credits in the fourth quarter of 2023.

Balance Sheet

Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

Commercial

 

$

483,069

 

 

$

464,061

 

 

$

459,854

 

 

$

460,061

 

 

$

455,156

 

Construction and Land Development

 

 

200,970

 

 

 

232,804

 

 

 

294,818

 

 

 

351,069

 

 

 

312,277

 

1 - 4 Family Construction

 

 

65,606

 

 

 

65,087

 

 

 

64,463

 

 

 

69,648

 

 

 

85,797

 

Real Estate Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 - 4 Family Mortgage

 

 

417,773

 

 

 

402,396

 

 

 

404,716

 

 

 

400,708

 

 

 

380,210

 

Multifamily

 

 

1,389,345

 

 

 

1,388,541

 

 

 

1,378,669

 

 

 

1,314,524

 

 

 

1,320,081

 

CRE Owner Occupied

 

 

182,589

 

 

 

175,783

 

 

 

159,485

 

 

 

159,088

 

 

 

158,650

 

CRE Nonowner Occupied

 

 

1,035,702

 

 

 

987,306

 

 

 

951,263

 

 

 

971,532

 

 

 

962,671

 

Total Real Estate Mortgage Loans

 

 

3,025,409

 

 

 

2,954,026

 

 

 

2,894,133

 

 

 

2,845,852

 

 

 

2,821,612

 

Consumer and Other

 

 

9,151

 

 

 

8,304

 

 

 

9,003

 

 

 

9,581

 

 

 

9,518

 

Total Loans, Gross

 

 

3,784,205

 

 

 

3,724,282

 

 

 

3,722,271

 

 

 

3,736,211

 

 

 

3,684,360

 

Allowance for Credit Losses on Loans

 

 

(51,347

)

 

 

(50,494

)

 

 

(50,585

)

 

 

(50,701

)

 

 

(50,148

)

Net Deferred Loan Fees

 

 

(6,356

)

 

 

(6,573

)

 

 

(7,222

)

 

 

(7,718

)

 

 

(8,735

)

Total Loans, Net

 

$

3,726,502

 

 

$

3,667,215

 

 

$

3,664,464

 

 

$

3,677,792

 

 

$

3,625,477

 

Total gross loans at March 31, 2024 were $3.78 billion, an increase of $59.9 million, or 6.5% annualized, over total gross loans of $3.72 billion at December 31, 2023, and an increase of $99.8 million, or 2.7%, over total gross loans of $3.68 billion at March 31, 2023.

  • The increase in the loan portfolio during the first quarter of 2024 was due to increased loan demand and originations, partially offset by a decrease in construction and land development due to migration out of this category as deals complete the construction phase.

Deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

June 30, 2023

 

March 31, 2023

Noninterest Bearing Transaction Deposits

 

$

698,432

 

$

756,964

 

$

754,297

 

$

751,217

 

$

742,198

 

Interest Bearing Transaction Deposits

 

 

783,736

 

 

692,801

 

 

780,863

 

 

719,488

 

 

630,037

 

Savings and Money Market Deposits

 

 

979,773

 

 

935,091

 

 

872,534

 

 

860,613

 

 

913,013

 

Time Deposits

 

 

352,510

 

 

300,651

 

 

265,737

 

 

271,783

 

 

266,213

 

Brokered Deposits

 

 

992,774

 

 

1,024,441

 

 

1,002,078

 

 

974,831

 

 

859,662

 

Total Deposits

 

$

3,807,225

 

$

3,709,948

 

$

3,675,509

 

$

3,577,932

 

$

3,411,123

 

Total deposits at March 31, 2024 were $3.81 billion, an increase of $97.3 million, or 10.5% annualized, over total deposits of $3.71 billion at December 31, 2023, and an increase of $396.1 million, or 11.6%, over total deposits of $3.41 billion at March 31, 2023.

  • Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, increased $90.3 million, or 14.3% annualized, from the fourth quarter of 2023. Growth in core deposits was primarily due to increased balances of existing clients and new client acquisitions. Based on the nature of these inflows, management believes core deposits could fluctuate in future periods as deposit growth is not always linear.
  • Brokered deposits, which declined for the first time since the fourth quarter of 2021, continue to be used as a supplemental funding source, as needed.
  • Uninsured deposits were 26% of total deposits as of March 31, 2024 and 24% of total deposits as of December 31, 2023.

Liquidity

Total on- and off-balance sheet liquidity was $2.25 billion as of March 31, 2024, compared to $2.23 billion at December 31, 2023 and $1.92 billion at March 31, 2023.

 

 

 

 

 

 

 

 

 

 

 

 

Primary Liquidity—On-Balance Sheet

 

March 31, 2024

December 31, 2023

September 30, 2023

June 30, 2023

March 31, 2023

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

105,784

 

$

96,594

 

$

77,617

 

$

138,618

 

$

177,116

 

Securities Available for Sale

 

 

633,282

 

 

604,104

 

 

553,076

 

 

538,220

 

 

559,430

 

Less: Pledged Securities

 

 

(169,479

)

 

(170,727

)

 

(164,277

)

 

(236,206

)

 

(234,452

)

Total Primary Liquidity

 

$

569,587

 

$

529,971

 

$

466,416

 

$

440,632

 

$

502,094

 

Ratio of Primary Liquidity to Total Deposits

 

 

15.0

%

 

14.3

%

 

12.7

%

 

12.3

%

 

14.7

%

 

 

 

 

 

 

 

 

 

 

 

 

Secondary Liquidity—Off-Balance Sheet Borrowing Capacity

 

 

 

 

 

 

 

 

 

 

 

Net Secured Borrowing Capacity with the FHLB

 

$

446,801

 

$

498,736

 

$

516,501

 

$

400,792

 

$

246,795

 

Net Secured Borrowing Capacity with the Federal Reserve Bank

 

 

1,006,010

 

 

979,448

 

 

1,022,128

 

 

986,644

 

 

990,685

 

Unsecured Borrowing Capacity with Correspondent Lenders

 

 

200,000

 

 

200,000

 

 

150,000

 

 

108,000

 

 

158,000

 

Secured Borrowing Capacity with Correspondent Lender

 

 

26,250

 

 

26,250

 

 

26,250

 

 

26,250

 

 

26,250

 

Total Secondary Liquidity

 

$

1,679,061

 

$

1,704,434

 

$

1,714,879

 

$

1,521,686

 

$

1,421,730

 

Total Primary and Secondary Liquidity

 

$

2,248,648

 

$

2,234,405

 

$

2,181,295

 

$

1,962,318

 

$

1,923,824

 

Ratio of Primary and Secondary Liquidity to Total Deposits

 

 

59.1

%

 

60.2

%

 

59.3

%

 

54.8

%

 

56.4

%

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.

  • Annualized net charge-offs as a percentage of average loans were 0.00% for the first quarter of 2024, 0.01% for the fourth quarter of 2023, and 0.00% for the first quarter of 2023.
  • At March 31, 2024, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $269,000, or 0.01% of total assets, compared to $919,000, or 0.02%, of total assets at December 31, 2023, and $809,000, or 0.02% of total assets at March 31, 2023.
  • Loans with potential weaknesses that warrant a watchlist risk rating at March 31, 2024 totaled $21.6 million, compared to $26.5 million at December 31, 2023, and $27.6 million at March 31, 2023.
  • Loans that warranted a substandard risk rating at March 31, 2024 totaled $33.8 million, compared to $35.9 million at December 31, 2023, and $36.3 million at March 31, 2023.

Capital

Total shareholders’ equity at March 31, 2024 was $433.6 million, an increase of $8.1 million, or 1.9%, compared to total shareholders’ equity of $425.5 million at December 31, 2023, and an increase of $31.6 million, or 7.9%, over total shareholders’ equity of $402.0 million at March 31, 2023.

  • The linked-quarter increase was primarily due to net income retained and an increase in unrealized gains in the derivatives portfolio, offset partially by preferred stock dividends and stock repurchases.
  • The year-over-year increase was due to net income retained and an increase in unrealized gains in the derivatives portfolio, offset partially by an increase in unrealized losses in the securities portfolio, preferred stock dividends, and stock repurchases.
  • The Common Equity Tier 1 Risk-Based Capital Ratio was 9.21% at March 31, 2024, compared to 9.16% at December 31, 2023 and 8.48% at March 31, 2023.
  • Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.72% at March 31, 2024, compared to 7.73% at December 31, 2023, and 7.23% at March 31, 2023.

Tangible book value per share, a non-GAAP financial measure, was $13.20 as of March 31, 2024, an increase of 2.9% from $12.84 as of December 31, 2023, and an increase of 10.5% from $11.95 as of March 31, 2023.

  • The Company has increased tangible book value per share each of the past 29 quarters.

During the first quarter of 2024, the Company repurchased 193,802 shares of its common stock. Shares were repurchased at a weighted average price of $11.75 per share, for a total of $2.3 million.

  • The Company has $18.2 million remaining under its current share repurchase authorization.

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 June 3, 2024 to shareholders of record of the Series A Preferred Stock at the close of business on May 15, 2024.

Conference Call and Webcast

The Company will host a conference call to discuss its first quarter 2024 financial results on Thursday, April 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 8126492. The replay will be available through May 2, 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 $4.7 billion and seven branches as of March 31, 2024, 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 significant rate increases by the Federal Reserve since 2020; 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 high 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 that resulted in recent bank failures; 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 recent bank failures; 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 ongoing 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 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

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

 

Income Statement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

$

24,631

 

$

25,314

 

$

25,421

 

$

25,872

 

$

28,567

 

Provision for (Recovery of) Credit Losses

 

 

750

 

 

(250

)

 

(600

)

 

50

 

 

625

 

Noninterest Income

 

 

1,550

 

 

1,409

 

 

1,726

 

 

1,415

 

 

1,943

 

Noninterest Expense

 

 

15,189

 

 

15,740

 

 

15,237

 

 

14,274

 

 

14,069

 

Net Income

 

 

7,831

 

 

8,873

 

 

9,629

 

 

9,816

 

 

11,642

 

Net Income Available to Common Shareholders

 

 

6,818

 

 

7,859

 

 

8,616

 

 

8,802

 

 

10,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.25

 

$

0.28

 

$

0.31

 

$

0.32

 

$

0.38

 

Diluted Earnings Per Share

 

 

0.24

 

 

0.28

 

 

0.30

 

 

0.31

 

 

0.37

 

Book Value Per Share

 

 

13.30

 

 

12.94

 

 

12.47

 

 

12.25

 

 

12.05

 

Tangible Book Value Per Share (1)

 

 

13.20

 

 

12.84

 

 

12.37

 

 

12.15

 

 

11.95

 

Basic Weighted Average Shares Outstanding

 

 

27,691,401

 

 

27,870,430

 

 

27,943,409

 

 

27,886,425

 

 

27,726,894

 

Diluted Weighted Average Shares Outstanding

 

 

28,089,805

 

 

28,238,056

 

 

28,311,778

 

 

28,198,739

 

 

28,490,046

 

Shares Outstanding at Period End

 

 

27,589,827

 

 

27,748,965

 

 

28,015,505

 

 

27,973,995

 

 

27,845,244

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (2)

 

 

0.69

%

 

0.77

%

 

0.85

%

 

0.88

%

 

1.07

%

Pre-Provision Net Revenue Return on Average Assets (1)(2)

 

 

0.95

 

 

0.96

 

 

1.01

 

 

1.16

 

 

1.49

 

Return on Average Shareholders' Equity (2)

 

 

7.35

 

 

8.43

 

 

9.23

 

 

9.69

 

 

11.70

 

Return on Average Tangible Common Equity (1)(2)

 

 

7.64

 

 

8.95

 

 

9.92

 

 

10.48

 

 

12.90

 

Net Interest Margin (3)

 

 

2.24

 

 

2.27

 

 

2.32

 

 

2.40

 

 

2.72

 

Core Net Interest Margin (1)(3)

 

 

2.18

 

 

2.21

 

 

2.24

 

 

2.31

 

 

2.62

 

Cost of Total Deposits

 

 

3.32

 

 

3.19

 

 

2.99

 

 

2.66

 

 

2.01

 

Cost of Funds

 

 

3.34

 

 

3.23

 

 

3.10

 

 

2.91

 

 

2.41

 

Efficiency Ratio (1)

 

 

58.2

 

 

58.8

 

 

56.1

 

 

52.3

 

 

45.9

 

Noninterest Expense to Average Assets (2)

 

 

1.33

 

 

1.37

 

 

1.34

 

 

1.28

 

 

1.30

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,723,109

 

$

4,611,990

 

$

4,557,070

 

$

4,603,185

 

$

4,602,899

 

Total Loans, Gross

 

 

3,784,205

 

 

3,724,282

 

 

3,722,271

 

 

3,736,211

 

 

3,684,360

 

Deposits

 

 

3,807,225

 

 

3,709,948

 

 

3,675,509

 

 

3,577,932

 

 

3,411,123

 

Total Shareholders' Equity

 

 

433,611

 

 

425,515

 

 

415,960

 

 

409,126

 

 

402,006

 

Loan to Deposit Ratio

 

 

99.4

%

 

100.4

%

 

101.3

%

 

104.4

%

 

108.0

%

Core Deposits to Total Deposits (4)

 

 

69.3

 

 

68.7

 

 

70.3

 

 

70.3

 

 

72.4

 

Uninsured Deposits to Total Deposits

 

 

26.0

 

 

24.3

 

 

22.2

 

 

22.1

 

 

24.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loan Charge-Offs to Average Loans (2)

 

 

0.00

%

 

0.01

%

 

0.01

%

 

0.00

%

 

0.00

%

Nonperforming Assets to Total Assets (5)

 

 

0.01

 

 

0.02

 

 

0.02

 

 

0.02

 

 

0.02

 

Allowance for Credit Losses to Total Loans

 

 

1.36

 

 

1.36

 

 

1.36

 

 

1.36

 

 

1.36

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Consolidated) (6)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

9.66

%

 

9.57

%

 

9.62

%

 

9.47

%

 

9.41

%

Common Equity Tier 1 Risk-based Capital Ratio

 

 

9.21

 

 

9.16

 

 

9.07

 

 

8.72

 

 

8.48

 

Tier 1 Risk-based Capital Ratio

 

 

10.83

 

 

10.79

 

 

10.69

 

 

10.33

 

 

10.08

 

Total Risk-based Capital Ratio

 

 

14.00

 

 

13.97

 

 

13.88

 

 

13.50

 

 

13.25

 

Tangible Common Equity to Tangible Assets (1)

 

 

7.72

 

 

7.73

 

 

7.61

 

 

7.39

 

 

7.23

 

___________________________________

(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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

 

2024

 

2023

 

2023

 

2023

 

2023

 

 

(Unaudited)

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

143,355

 

 

$

128,562

 

 

$

124,358

 

 

$

177,101

 

 

$

209,192

 

Bank-Owned Certificates of Deposit

 

 

 

 

 

 

 

 

1,225

 

 

 

1,225

 

 

 

1,225

 

Securities Available for Sale, at Fair Value

 

 

633,282

 

 

 

604,104

 

 

 

553,076

 

 

 

538,220

 

 

 

559,430

 

Loans, Net of Allowance for Credit Losses

 

 

3,726,502

 

 

 

3,667,215

 

 

 

3,664,464

 

 

 

3,677,792

 

 

 

3,625,477

 

Federal Home Loan Bank (FHLB) Stock, at Cost

 

 

17,195

 

 

 

17,097

 

 

 

17,056

 

 

 

21,557

 

 

 

28,632

 

Premises and Equipment, Net

 

 

48,299

 

 

 

48,886

 

 

 

49,331

 

 

 

49,710

 

 

 

47,801

 

Accrued Interest

 

 

16,696

 

 

 

16,697

 

 

 

15,182

 

 

 

13,822

 

 

 

13,377

 

Goodwill

 

 

2,626

 

 

 

2,626

 

 

 

2,626

 

 

 

2,626

 

 

 

2,626

 

Other Intangible Assets, Net

 

 

180

 

 

 

188

 

 

 

197

 

 

 

206

 

 

 

240

 

Bank-Owned Life Insurance

 

 

34,778

 

 

 

34,477

 

 

 

34,209

 

 

 

33,958

 

 

 

33,719

 

Other Assets

 

 

100,196

 

 

 

92,138

 

 

 

95,346

 

 

 

86,968

 

 

 

81,180

 

Total Assets

 

$

4,723,109

 

 

$

4,611,990

 

 

$

4,557,070

 

 

$

4,603,185

 

 

$

4,602,899

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing

 

$

698,432

 

 

$

756,964

 

 

$

754,297

 

 

$

751,217

 

 

$

742,198

 

Interest Bearing

 

 

3,108,793

 

 

 

2,952,984

 

 

 

2,921,212

 

 

 

2,826,715

 

 

 

2,668,925

 

Total Deposits

 

 

3,807,225

 

 

 

3,709,948

 

 

 

3,675,509

 

 

 

3,577,932

 

 

 

3,411,123

 

Federal Funds Purchased

 

 

 

 

 

 

 

 

 

 

 

195,000

 

 

 

437,000

 

Notes Payable

 

 

13,750

 

 

 

13,750

 

 

 

13,750

 

 

 

13,750

 

 

 

13,750

 

FHLB Advances

 

 

317,000

 

 

 

319,500

 

 

 

294,500

 

 

 

262,000

 

 

 

197,000

 

Subordinated Debentures, Net of Issuance Costs

 

 

79,383

 

 

 

79,288

 

 

 

79,192

 

 

 

79,096

 

 

 

79,001

 

Accrued Interest Payable

 

 

4,405

 

 

 

5,282

 

 

 

3,816

 

 

 

2,974

 

 

 

3,257

 

Other Liabilities

 

 

67,735

 

 

 

58,707

 

 

 

74,343

 

 

 

63,307

 

 

 

59,762

 

Total Liabilities

 

 

4,289,498

 

 

 

4,186,475

 

 

 

4,141,110

 

 

 

4,194,059

 

 

 

4,200,893

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 March 31, 2024 (unaudited), December 31, 2023, September 30, 2023 (unaudited), June 30, 2023 (unaudited), and March 31, 2023 (unaudited)

 

 

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 27,589,827 at March 31, 2024 (unaudited), 27,748,965 at December 31, 2023, 28,015,505 at September 30, 2023 (unaudited), 27,973,995 at June 30, 2023 (unaudited), and 27,845,244 at March 31, 2023 (unaudited)

 

 

276

 

 

 

277

 

 

 

280

 

 

 

280

 

 

 

278

 

Additional Paid-In Capital

 

 

95,069

 

 

 

96,320

 

 

 

100,120

 

 

 

99,044

 

 

 

97,716

 

Retained Earnings

 

 

287,468

 

 

 

280,650

 

 

 

272,812

 

 

 

264,196

 

 

 

255,394

 

Accumulated Other Comprehensive Loss

 

 

(15,716

)

 

 

(18,246

)

 

 

(23,766

)

 

 

(20,908

)

 

 

(17,896

)

Total Shareholders' Equity

 

 

433,611

 

 

 

425,515

 

 

 

415,960

 

 

 

409,126

 

 

 

402,006

 

Total Liabilities and Equity

 

$

4,723,109

 

 

$

4,611,990

 

 

$

4,557,070

 

 

$

4,603,185

 

 

$

4,602,899

 

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

Interest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, Including Fees

 

$

49,581

 

 

$

49,727

 

 

$

48,999

 

 

$

47,721

 

 

$

44,955

 

Investment Securities

 

 

7,916

 

 

 

7,283

 

 

 

6,507

 

 

 

6,237

 

 

 

6,218

 

Other

 

 

1,172

 

 

 

1,543

 

 

 

1,303

 

 

 

1,043

 

 

 

819

 

Total Interest Income

 

 

58,669

 

 

 

58,553

 

 

 

56,809

 

 

 

55,001

 

 

 

51,992

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

30,190

 

 

 

29,448

 

 

 

27,225

 

 

 

22,998

 

 

 

16,374

 

Federal Funds Purchased

 

 

304

 

 

 

268

 

 

 

548

 

 

 

2,761

 

 

 

4,944

 

Notes Payable

 

 

295

 

 

 

299

 

 

 

296

 

 

 

285

 

 

 

263

 

FHLB Advances

 

 

2,258

 

 

 

2,220

 

 

 

2,316

 

 

 

2,092

 

 

 

861

 

Subordinated Debentures

 

 

991

 

 

 

1,004

 

 

 

1,003

 

 

 

993

 

 

 

983

 

Total Interest Expense

 

 

34,038

 

 

 

33,239

 

 

 

31,388

 

 

 

29,129

 

 

 

23,425

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

24,631

 

 

 

25,314

 

 

 

25,421

 

 

 

25,872

 

 

 

28,567

 

Provision for (Recovery of) Credit Losses

 

 

750

 

 

 

(250

)

 

 

(600

)

 

 

50

 

 

 

625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income After Provision for Credit Losses

 

 

23,881

 

 

 

25,564

 

 

 

26,021

 

 

 

25,822

 

 

 

27,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

 

342

 

 

 

359

 

 

 

379

 

 

 

368

 

 

 

349

 

Net Gain (Loss) on Sales of Securities

 

 

93

 

 

 

(27

)

 

 

 

 

 

50

 

 

 

(56

)

Letter of Credit Fees

 

 

316

 

 

 

418

 

 

 

315

 

 

 

379

 

 

 

634

 

Debit Card Interchange Fees

 

 

141

 

 

 

152

 

 

 

150

 

 

 

155

 

 

 

138

 

Bank-Owned Life Insurance

 

 

301

 

 

 

268

 

 

 

252

 

 

 

238

 

 

 

234

 

FHLB Prepayment Income

 

 

 

 

 

 

 

 

493

 

 

 

 

 

 

299

 

Other Income

 

 

357

 

 

 

239

 

 

 

137

 

 

 

225

 

 

 

345

 

Total Noninterest Income

 

 

1,550

 

 

 

1,409

 

 

 

1,726

 

 

 

1,415

 

 

 

1,943

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

 

9,433

 

 

 

9,615

 

 

 

9,519

 

 

 

8,589

 

 

 

8,815

 

Occupancy and Equipment

 

 

1,057

 

 

 

1,062

 

 

 

1,101

 

 

 

1,075

 

 

 

1,209

 

FDIC Insurance Assessment

 

 

875

 

 

 

1,050

 

 

 

1,075

 

 

 

900

 

 

 

665

 

Data Processing

 

 

412

 

 

 

424

 

 

 

392

 

 

 

401

 

 

 

357

 

Professional and Consulting Fees

 

 

889

 

 

 

782

 

 

 

715

 

 

 

829

 

 

 

755

 

Derivative Collateral Fees

 

 

486

 

 

 

573

 

 

 

543

 

 

 

404

 

 

 

380

 

Information Technology and Telecommunications

 

 

796

 

 

 

812

 

 

 

683

 

 

 

711

 

 

 

683

 

Marketing and Advertising

 

 

322

 

 

 

324

 

 

 

222

 

 

 

321

 

 

 

262

 

Intangible Asset Amortization

 

 

9

 

 

 

9

 

 

 

9

 

 

 

34

 

 

 

48

 

Other Expense

 

 

910

 

 

 

1,089

 

 

 

978

 

 

 

1,010

 

 

 

895

 

Total Noninterest Expense

 

 

15,189

 

 

 

15,740

 

 

 

15,237

 

 

 

14,274

 

 

 

14,069

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income Before Income Taxes

 

 

10,242

 

 

 

11,233

 

 

 

12,510

 

 

 

12,963

 

 

 

15,816

 

Provision for Income Taxes

 

 

2,411

 

 

 

2,360

 

 

 

2,881

 

 

 

3,147

 

 

 

4,174

 

Net Income

 

 

7,831

 

 

 

8,873

 

 

 

9,629

 

 

 

9,816

 

 

 

11,642

 

Preferred Stock Dividends

 

 

(1,013

)

 

 

(1,014

)

 

 

(1,013

)

 

 

(1,014

)

 

 

(1,013

)

Net Income Available to Common Shareholders

 

$

6,818

 

 

$

7,859

 

 

$

8,616

 

 

$

8,802

 

 

$

10,629

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.25

 

 

$

0.28

 

 

$

0.31

 

 

$

0.32

 

 

$

0.38

 

Diluted

 

 

0.24

 

 

 

0.28

 

 

 

0.30

 

 

 

0.31

 

 

 

0.37

 

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

 

 

 

March 31, 2024

 

December 31, 2023

 

March 31, 2023

 

 

 

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

 

$

75,089

 

$

829

 

 

4.44

%

$

106,275

 

$

1,233

 

 

4.60

%

$

63,253

 

$

447

 

 

2.86

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

638,509

 

 

7,600

 

 

4.79

 

 

600,856

 

 

7,007

 

 

4.63

 

 

574,242

 

 

5,958

 

 

4.21

 

Tax-Exempt Investment Securities (1)

 

 

31,745

 

 

400

 

 

5.07

 

 

29,172

 

 

350

 

 

4.75

 

 

29,803

 

 

330

 

 

4.49

 

Total Investment Securities

 

 

670,254

 

 

8,000

 

 

4.80

 

 

630,028

 

 

7,357

 

 

4.63

 

 

604,045

 

 

6,288

 

 

4.22

 

Loans (1)(2)

 

 

3,729,355

 

 

49,858

 

 

5.38

 

 

3,726,126

 

 

50,022

 

 

5.33

 

 

3,630,446

 

 

45,265

 

 

5.06

 

Federal Home Loan Bank Stock

 

 

18,058

 

 

343

 

 

7.64

 

 

17,999

 

 

310

 

 

6.85

 

 

25,962

 

 

372

 

 

5.81

 

Total Interest Earning Assets

 

 

4,492,756

 

 

59,030

 

 

5.28

%

 

4,480,428

 

 

58,922

 

 

5.22

%

 

4,323,706

 

 

52,372

 

 

4.91

%

Noninterest Earning Assets

 

 

100,082

 

 

 

 

 

 

 

87,018

 

 

 

 

 

 

 

81,528

 

 

 

 

 

 

Total Assets

 

$

4,592,838

 

 

 

 

 

 

$

4,567,446

 

 

 

 

 

 

$

4,405,234

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

732,186

 

 

7,693

 

 

4.23

%

$

719,630

 

$

7,546

 

 

4.16

%

$

461,372

 

$

2,780

 

 

2.44

%

Savings and Money Market Deposits

 

 

896,844

 

 

8,781

 

 

3.94

 

 

911,835

 

 

9,003

 

 

3.92

 

 

1,044,794

 

 

6,499

 

 

2.52

 

Time Deposits

 

 

317,595

 

 

3,167

 

 

4.01

 

 

268,140

 

 

2,330

 

 

3.45

 

 

248,174

 

 

1,069

 

 

1.75

 

Brokered Deposits

 

 

1,014,197

 

 

10,549

 

 

4.18

 

 

1,009,166

 

 

10,569

 

 

4.16

 

 

743,465

 

 

6,026

 

 

3.29

 

Total Interest Bearing Deposits

 

 

2,960,822

 

 

30,190

 

 

4.10

 

 

2,908,771

 

 

29,448

 

 

4.02

 

 

2,497,805

 

 

16,374

 

 

2.66

 

Federal Funds Purchased

 

 

21,824

 

 

304

 

 

5.60

 

 

18,932

 

 

268

 

 

5.62

 

 

415,111

 

 

4,944

 

 

4.83

 

Notes Payable

 

 

13,750

 

 

295

 

 

8.64

 

 

13,750

 

 

299

 

 

8.62

 

 

13,750

 

 

263

 

 

7.77

 

FHLB Advances

 

 

318,648

 

 

2,258

 

 

2.85

 

 

303,467

 

 

2,220

 

 

2.90

 

 

128,222

 

 

861

 

 

2.72

 

Subordinated Debentures

 

 

79,328

 

 

991

 

 

5.02

 

 

79,233

 

 

1,004

 

 

5.02

 

 

78,945

 

 

983

 

 

5.05

 

Total Interest Bearing Liabilities

 

 

3,394,372

 

 

34,038

 

 

4.03

%

 

3,324,153

 

 

33,239

 

 

3.97

%

 

3,133,833

 

 

23,425

 

 

3.03

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

701,175

 

 

 

 

 

 

 

753,430

 

 

 

 

 

 

 

813,598

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

69,043

 

 

 

 

 

 

 

72,074

 

 

 

 

 

 

 

54,270

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

770,218

 

 

 

 

 

 

 

825,504

 

 

 

 

 

 

 

867,868

 

 

 

 

 

 

Shareholders' Equity

 

 

428,248

 

 

 

 

 

 

 

417,789

 

 

 

 

 

 

 

403,533

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

4,592,838

 

 

 

 

 

 

$

4,567,446

 

 

 

 

 

 

$

4,405,234

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

24,992

 

 

1.25

%

 

 

 

 

25,683

 

 

1.25

%

 

 

 

 

28,947

 

 

1.88

%

Net Interest Margin (3)

 

 

 

 

 

 

 

2.24

%

 

 

 

 

 

 

2.27

%

 

 

 

 

 

 

2.72

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(361

)

 

 

 

 

 

 

 

(369

)

 

 

 

 

 

 

 

(380

)

 

 

 

Net Interest Income

 

 

 

 

$

24,631

 

 

 

 

 

 

 

$

25,314

 

 

 

 

 

 

 

$

28,567

 

 

 

 

___________________________________

(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

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

Allowance for Credit Losses

 

 

 

 

 

 

 

 

 

 

 

Balance at Beginning of Period

 

$

50,494

 

$

50,585

 

$

50,701

 

$

50,148

 

$

47,996

 

Impact of Adopting CECL

 

 

 

 

 

 

 

 

 

 

650

 

Provision for Credit Losses

 

 

850

 

 

 

 

 

 

550

 

 

1,500

 

Charge-offs

 

 

(2

)

 

(95

)

 

(122

)

 

(3

)

 

(4

)

Recoveries

 

 

5

 

 

4

 

 

6

 

 

6

 

 

6

 

Net Charge-offs

 

$

3

 

$

(91

)

$

(116

)

$

3

 

$

2

 

Balance at End of Period

 

 

51,347

 

 

50,494

 

 

50,585

 

 

50,701

 

 

50,148

 

Allowance for Credit Losses to Total Loans

 

 

1.36

%

 

1.36

%

 

1.36

%

 

1.36

%

 

1.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

Provision for Credit Losses on Loans

 

$

850

 

$

 

$

 

$

550

 

$

1,500

 

Recovery of Credit Losses for Off-Balance Sheet Credit Exposures

 

 

(100

)

 

(250

)

 

(600

)

 

(500

)

 

(875

)

Provision for (Recovery of) Credit Losses

 

$

750

 

$

(250

)

$

(600

)

$

50

 

$

625

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

Selected Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

$

 

$

15,110

 

$

11

 

$

 

$

21

 

Loans 30-89 Days Past Due to Total Loans

 

 

0.00

%

 

0.41

%

 

0.00

%

 

0.00

%

 

0.00

%

Nonperforming Loans

 

$

249

 

$

919

 

$

749

 

$

662

 

$

693

 

Nonperforming Loans to Total Loans

 

 

0.01

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

Nonaccrual Loans to Total Loans

 

 

0.01

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans

 

 

0.01

 

 

0.02

 

 

0.02

 

 

0.02

 

 

0.02

 

Foreclosed Assets

 

$

20

 

$

 

$

 

$

116

 

$

116

 

Nonperforming Assets (1)

 

 

269

 

 

919

 

 

749

 

 

778

 

 

809

 

Nonperforming Assets to Total Assets (1)

 

 

0.01

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

Net Loan Charge-Offs (Annualized) to Average Loans

 

 

0.00

 

 

0.01

 

 

0.01

 

 

0.00

 

 

0.00

 

Watchlist Risk Rating Loans

 

$

21,624

 

$

26,485

 

$

26,877

 

$

27,215

 

$

27,574

 

Substandard Risk Rating Loans

 

 

33,829

 

 

35,858

 

 

35,621

 

 

33,821

 

 

36,258

 

__________________________________

(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

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Provision Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

$

1,550

 

$

1,409

 

$

1,726

 

$

1,415

 

$

1,943

 

Less: (Gain) Loss on Sales of Securities

 

 

(93

)

 

27

 

 

 

 

(50

)

 

56

 

Less: FHLB Advance Prepayment Income

 

 

 

 

 

 

(493

)

 

 

 

(299

)

Total Operating Noninterest Income

 

 

1,457

 

 

1,436

 

 

1,233

 

 

1,365

 

 

1,700

 

Plus: Net Interest Income

 

 

24,631

 

 

25,314

 

 

25,421

 

 

25,872

 

 

28,567

 

Net Operating Revenue

 

$

26,088

 

$

26,750

 

$

26,654

 

$

27,237

 

$

30,267

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

15,189

 

$

15,740

 

$

15,237

 

$

14,274

 

$

14,069

 

Total Operating Noninterest Expense

 

$

15,189

 

$

15,740

 

$

15,237

 

$

14,274

 

$

14,069

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Provision Net Revenue

 

$

10,899

 

$

11,010

 

$

11,417

 

$

12,963

 

$

16,198

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

Non-Operating Revenue Adjustments

 

 

93

 

 

(27

)

 

493

 

 

50

 

 

243

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Provision (Recovery of) for Credit Losses

 

 

750

 

 

(250

)

 

(600

)

 

50

 

 

625

 

Provision for Income Taxes

 

 

2,411

 

 

2,360

 

 

2,881

 

 

3,147

 

 

4,174

 

Net Income

 

$

7,831

 

$

8,873

 

$

9,629

 

$

9,816

 

$

11,642

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

4,592,838

 

$

4,567,446

 

$

4,504,937

 

$

4,483,662

 

$

4,405,234

 

Pre-Provision Net Revenue Return on Average Assets

 

 

0.95

%

 

0.96

%

 

1.01

%

 

1.16

%

 

1.49

%

 

 

 

 

 

 

 

 

 

 

 

 

Core Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income (Tax-equivalent Basis)

 

$

24,992

 

$

25,683

 

$

25,822

 

$

26,280

 

$

28,947

 

Less: Loan Fees

 

 

(608

)

 

(751

)

 

(914

)

 

(941

)

 

(998

)

Core Net Interest Income

 

$

24,384

 

$

24,932

 

$

24,908

 

$

25,339

 

$

27,949

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest Earning Assets

 

$

4,492,756

 

$

4,480,428

 

$

4,416,424

 

$

4,395,050

 

$

4,323,706

 

Core Net Interest Margin

 

 

2.18

%

 

2.21

%

 

2.24

%

 

2.31

%

 

2.62

%

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

15,189

 

$

15,740

 

$

15,237

 

$

14,274

 

$

14,069

 

Less: Amortization of Intangible Assets

 

 

(9

)

 

(9

)

 

(9

)

 

(34

)

 

(48

)

Adjusted Noninterest Expense

 

$

15,180

 

$

15,731

 

$

15,228

 

$

14,240

 

$

14,021

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income

 

 

24,631

 

 

25,314

 

$

25,421

 

$

25,872

 

$

28,567

 

Noninterest Income

 

 

1,550

 

 

1,409

 

 

1,726

 

 

1,415

 

 

1,943

 

Less: Gain (Loss) on Sales of Securities

 

 

(93

)

 

27

 

 

 

 

(50

)

 

56

 

Adjusted Operating Revenue

 

$

26,088

 

$

26,750

 

$

27,147

 

$

27,237

 

$

30,566

 

Efficiency Ratio

 

 

58.2

%

 

58.8

%

 

56.1

%

 

52.3

%

 

45.9

%

Bridgewater Bancshares, Inc. and Subsidiaries

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

March 31,

(dollars in thousands)

 

2024

 

2023

 

2023

 

2023

 

2023

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity and Tangible Common Equity/Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

433,611

 

$

425,515

 

$

415,960

 

$

409,126

 

$

402,006

 

Less: Preferred Stock

 

 

(66,514

)

 

(66,514

)

 

(66,514

)

 

(66,514

)

 

(66,514

)

Total Common Shareholders' Equity

 

 

367,097

 

 

359,001

 

 

349,446

 

 

342,612

 

 

335,492

 

Less: Intangible Assets

 

 

(2,806

)

 

(2,814

)

 

(2,823

)

 

(2,832

)

 

(2,866

)

Tangible Common Equity

 

$

364,291

 

$

356,187

 

$

346,623

 

$

339,780

 

$

332,626

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,723,109

 

$

4,611,990

 

$

4,557,070

 

$

4,603,185

 

$

4,602,899

 

Less: Intangible Assets

 

 

(2,806

)

 

(2,814

)

 

(2,823

)

 

(2,832

)

 

(2,866

)

Tangible Assets

 

$

4,720,303

 

$

4,609,176

 

$

4,554,247

 

$

4,600,353

 

$

4,600,033

 

Tangible Common Equity/Tangible Assets

 

 

7.72

%

 

7.73

%

 

7.61

%

 

7.39

%

 

7.23

%

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value Per Share

 

 

 

 

 

 

 

 

 

 

 

Book Value Per Common Share

 

$

13.30

 

$

12.94

 

$

12.47

 

$

12.25

 

$

12.05

 

Less: Effects of Intangible Assets

 

 

(0.10

)

 

(0.10

)

 

(0.10

)

 

(0.10

)

 

(0.10

)

Tangible Book Value Per Common Share

 

$

13.20

 

$

12.84

 

$

12.37

 

$

12.15

 

$

11.95

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

Net Income Available to Common Shareholders

 

$

6,818

 

$

7,859

 

$

8,616

 

$

8,802

 

$

10,629

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders' Equity

 

$

428,248

 

$

417,789

 

$

414,047

 

$

406,347

 

$

403,533

 

Less: Average Preferred Stock

 

 

(66,514

)

 

(66,514

)

 

(66,514

)

 

(66,514

)

 

(66,514

)

Average Common Equity

 

 

361,734

 

 

351,275

 

 

347,533

 

 

339,833

 

 

337,019

 

Less: Effects of Average Intangible Assets

 

 

(2,811

)

 

(2,819

)

 

(2,828

)

 

(2,846

)

 

(2,894

)

Average Tangible Common Equity

 

$

358,923

 

$

348,456

 

$

344,705

 

$

336,987

 

$

334,125

 

Return on Average Tangible Common Equity

 

 

7.64

%

 

8.95

%

 

9.92

%

 

10.48

%

 

12.90

%

 

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