Bridgewater Bancshares, Inc. Announces Third Quarter 2023 Net Income of $9.6 Million, $0.30 Diluted Earnings Per Common Share
Bridgewater Bancshares reports Q3 2023 net income of $9.6 million, down from $9.8 million in Q2 2023. Deposits increased by $97.6 million, or 10.8% annualized. Loan growth declined slightly by $13.9 million. Net interest margin declined to 2.32% from 2.40% in Q2 2023. Efficiency ratio increased to 56.5% from 52.7% in Q2 2023.
Positive
Bridgewater Bancshares reports an increase in deposits by $97.6 million, or 10.8% annualized, in Q3 2023.
Bridgewater Bancshares experiences strong core deposit growth for the second consecutive quarter.
Net interest margin stabilizes at 2.32% in Q3 2023.
Bridgewater Bancshares maintains a low efficiency ratio of 56.5% in Q3 2023.
Negative
Net income decreases to $9.6 million in Q3 2023 from $9.8 million in Q2 2023.
Loan growth declines slightly by $13.9 million in Q3 2023.
Efficiency ratio increases to 56.5% in Q3 2023 from 52.7% in Q2 2023.
10/25/2023 - 04:15 PM
Third Quarter 2023 Highlights
Annualized return on average assets (ROA) of 0.85% , compared to 0.88% for the second quarter of 2023.
Annualized return on average shareholders’ equity (ROE) of 9.23% , compared to 9.69% for the second quarter of 2023, and annualized return on average tangible common equity (ROATCE)(1) of 9.92% , compared to 10.48% for the second quarter of 2023.
Deposits increased by $97.6 million , or 10.8% annualized, from the second quarter of 2023, including an increase of core deposits(2) of $69.9 million , or 11.0% annualized.
Core deposit growth exceeded loan growth for the second consecutive quarter as gross loans declined slightly by $13.9 million from the second quarter of 2023, lowering the loan-to-deposit ratio to 101.3% .
Net interest margin (on a fully tax-equivalent basis) of 2.32% , compared to 2.40% in the second quarter of 2023.
Efficiency ratio(1) of 56.5% , compared to 52.7% for the second quarter of 2023.
No provision for credit losses on loans was recorded in the third quarter of 2023. The allowance for credit losses on loans to total loans was 1.36% at both September 30, 2023 and June 30, 2023.
Annualized net loan charge-offs as a percentage of average loans of 0.01% for the third quarter of 2023, compared to 0.00% for the second quarter of 2023.
Nonperforming assets to total assets of 0.02% at September 30, 2023 and June 30, 2023.
Tangible book value per share(1) of $12.37 at September 30, 2023, an increase of $0.23 , or 7.4% annualized, compared to $12.15 at June 30, 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 .
ST. LOUIS PARK, Minn. --(BUSINESS WIRE)--
Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $9.6 million for the third quarter of 2023, compared to $9.8 million for the second quarter of 2023, and $14.5 million for the third quarter of 2022. Earnings per diluted common share were $0.30 for the third quarter of 2023, compared to $0.31 for the second quarter of 2023, and $0.47 per diluted common share for the same period in 2022.
“Throughout the third quarter, Bridgewater saw the continuation of several encouraging trends, including signs of net interest margin stabilization, enhanced balance sheet composition, and superb asset quality,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “A second consecutive quarter of strong core deposit growth and reduced borrowings aided our net interest margin. In addition, we are being very thoughtful in how we position the balance sheet for longer term success as this unique banking environment continues to evolve.
“The quality of our loan portfolio was evident again during the quarter due to our consistent underwriting standards, active credit oversight, and experienced lending and credit teams. We also remained focused on our ongoing client engagement efforts, investments in our people, and creating efficiencies across the organization, all with an eye toward continuing our track record of consistent tangible book value growth, which has increased each of the past 27 quarters.”
Key Financial Measures
As of and for the Three Months Ended
As of and for the Nine Months Ended
September 30,
June 30,
September 30,
September 30,
September 30,
2023
2023
2022
2023
2022
Per Common Share Data
Basic Earnings Per Share
$
0.31
$
0.32
$
0.49
$
1.01
$
1.32
Diluted Earnings Per Share
0.30
0.31
0.47
0.99
1.27
Book Value Per Share
12.47
12.25
11.44
12.47
11.44
Tangible Book Value Per Share (1)
12.37
12.15
11.33
12.37
11.33
Financial Ratios
Return on Average Assets (2)
0.85
%
0.88
%
1.46
%
0.93
%
1.42
%
Pre-Provision Net Revenue Return on Average Assets (1)(2)
1.01
1.16
2.15
1.22
2.15
Return on Average Shareholders' Equity (2)
9.23
9.69
14.99
10.19
13.85
Return on Average Tangible Common Equity (1)(2)
9.92
10.48
17.03
11.07
15.63
Net Interest Margin (3)
2.32
2.40
3.53
2.47
3.57
Core Net Interest Margin (1)(3)
2.24
2.31
3.38
2.39
3.35
Cost of Total Deposits
2.99
2.66
0.73
2.57
0.55
Cost of Funds
3.10
2.91
0.93
2.81
0.73
Efficiency Ratio (1)
56.5
52.7
39.8
51.6
40.7
Noninterest Expense to Average Assets (2)
1.35
1.29
1.42
1.32
1.48
Tangible Common Equity to Tangible Assets (1)
7.61
7.39
7.57
7.61
7.57
Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4)
9.07
8.72
8.47
9.07
8.47
Balance Sheet and Asset Quality (dollars in thousands)
Total Assets
$
4,557,070
$
4,603,185
$
4,128,987
$
4,557,070
$
4,128,987
Total Loans, Gross
3,722,271
3,736,211
3,380,082
3,722,271
3,380,082
Deposits
3,675,509
3,577,932
3,305,074
3,675,509
3,305,074
Loan to Deposit Ratio
101.3
%
104.4
%
102.3
%
101.3
%
102.3
%
Net Loan Charge-Offs (Recoveries) to Average Loans (2)
0.01
0.00
(0.03
)
0.00
(0.01
)
Nonperforming Assets to Total Assets (5)
0.02
0.02
0.02
0.02
0.02
Allowance for Credit Losses to Total Loans
1.36
1.36
1.38
1.36
1.38
(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 Income and Net Interest Margin
Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2023 was 2.32% , an eight basis point decline from 2.40% in the second quarter of 2023 and a 121 basis point decline from 3.53% in the third 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 PPP balances, interest, and fees was 2.24% for the third quarter of 2023, a seven basis point decline from 2.31% in the second quarter of 2023, and a 114 basis point decline from 3.38% in the third quarter of 2022.
The linked-quarter decline in the margin was primarily due to higher funding costs, offset partially by higher earning asset yields.
The year-over-year decline in the margin was primarily due to higher funding costs and increased borrowings in the rising interest rate environment, offset partially by higher earning asset yields.
Net interest income was $25.4 million for the third quarter of 2023, a decrease of $451,000 from $25.9 million in the second quarter of 2023, and a decrease of $8.7 million from $34.1 million in the third quarter of 2022.
The linked-quarter decrease in net interest income was primarily due to higher rates paid on deposits in the rising interest rate environment.
The year-over-year decrease in net interest income was primarily due to higher rates paid on deposits and increased borrowings in the rising interest rate environment.
Average interest earning assets were $4.42 billion for the third quarter of 2023, an increase of $21.4 million , or 0.5% , from $4.40 billion for the second quarter of 2023, and an increase of $544.5 million , or 14.1% , from $3.87 billion for the third quarter of 2022. The linked-quarter increase in average interest earning assets was primarily due to an increase in cash. The year-over-year increase in average interest earning assets was primarily due to strong growth in the loan portfolio and purchases of investment securities.
Interest income was $56.8 million for the third quarter of 2023, an increase of $1.8 million from $55.0 million in the second quarter of 2023, and an increase of $14.5 million from $42.4 million in the third quarter of 2022.
The yield on interest earning assets (on a fully tax-equivalent basis) was 5.14% in the third quarter of 2023, compared to 5.06% in the second quarter of 2023 and 4.37% in the third quarter of 2022.
The linked-quarter increase in the yield on interest earning assets was primarily due to the increase in market interest rates resulting in new loan originations 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, excluding PPP loans, increased to 5.26% in the third quarter of 2023, which was seven basis points higher than 5.19% in the second quarter of 2023, and 67 basis points higher than 4.59% in the third quarter of 2022.
While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods saw fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the overall decrease in fee recognition, the Company is encouraged that 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, excluding PPP loans, for the periods indicated is as follows:
Three Months Ended
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Interest
5.16
%
5.09
%
4.95
%
4.74
%
4.42
%
Fees
0.10
0.10
0.11
0.12
0.17
Yield on Loans, Excluding PPP Loans
5.26
%
5.19
%
5.06
%
4.86
%
4.59
%
Interest expense was $31.4 million for the third quarter of 2023, an increase of $2.3 million from $29.1 million in the second quarter of 2023, and an increase of $23.1 million from $8.3 million in the third quarter of 2022.
The cost of interest bearing liabilities increased 22 basis points on a linked-quarter basis from 3.59% in the second quarter of 2023 to 3.81% in the third quarter of 2023, primarily due to higher rates paid on deposits in the rising interest rate environment.
On a year-over-year basis, the cost of interest bearing liabilities increased 251 basis points from 1.30% in the third quarter of 2022 to 3.81% in the third quarter of 2023, primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.
Interest expense on deposits was $27.2 million for the third quarter of 2023, an increase of $4.2 million from $23.0 million in the second quarter of 2023, and an increase of $21.2 million from $6.0 million in the third quarter of 2022.
The cost of total deposits increased 33 basis points on a linked-quarter basis from 2.66% in the second quarter of 2023, to 2.99% in the third quarter of 2023, primarily due to the rising interest rate environment and increased competition from other market alternatives.
On a year-over-year basis, the cost of total deposits increased 226 basis points from 0.73% in the third quarter of 2022, to 2.99% in the third quarter of 2023, 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 zero for the third quarter of 2023, compared to $550,000 for the second quarter of 2023 and $1.5 million for the third quarter of 2022.
No provision for credit losses on loans was recorded in the third quarter of 2023 due to a more managed pace of loan growth.
The allowance for credit losses on loans to total loans was 1.36% at September 30, 2023, compared to 1.36% at June 30, 2023, and 1.38% at September 30, 2022.
The provision for credit losses for off-balance sheet credit exposures was a negative provision of $600,000 for the third quarter of 2023, compared to a negative $500,000 for the second quarter of 2023 and zero for the third quarter of 2022.
The negative provision during the quarter 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 $1.7 million for the third quarter of 2023, an increase of $311,000 from $1.4 million for the second quarter of 2023 and an increase of $339,000 from $1.4 million for the third quarter of 2022.
The linked-quarter increase was primarily due to $0.5 million of FHLB prepayment income, offset partially by lower other income.
The year-over-year increase was primarily due to $0.5 million of FHLB prepayment income, offset partially by decreased letter of credit fees and other income.
Noninterest Expense
Noninterest expense was $15.4 million for the third quarter of 2023, an increase of $962,000 from $14.4 million for the second quarter of 2023 and an increase of $1.2 million from $14.2 million for the third quarter of 2022. It is worth noting, on a year-to-date basis through the third quarter, noninterest expense increased $2.5 million , or 6.0% , compared to year-to-date in 2022.
The linked-quarter increase was primarily due to increases in salaries and employee benefits and industry-wide increases in the FDIC insurance assessment, offset partially by a decrease in professional and consulting fees.
The year-over-year increase was primarily attributable to increases in the FDIC insurance assessment and derivative collateral fees, offset partially by decreases in marketing and advertising.
The efficiency ratio, a non-GAAP financial measure, was 56.5% for the third quarter of 2023, compared to 52.7% for the second quarter of 2023, and 39.8% for the third quarter of 2022.
The Company had 255 full-time equivalent employees at September 30, 2023, compared to 253 employees at June 30, 2023, and 246 employees at September 30, 2022.
Income Taxes
The effective combined federal and state income tax rate for the third quarter of 2023 was 22.3% , a decrease from 23.6% for the second quarter of 2023 and 26.8% for the third quarter of 2022. The effective combined federal and state rate for the nine months ended September 30, 2023 and 2022 was 24.1% and 26.3% , respectively.
Balance Sheet
Loans
(dollars in thousands)
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Commercial
$
459,063
$
459,184
$
454,193
$
435,344
$
412,448
Paycheck Protection Program
791
877
963
1,049
1,192
Construction and Land Development
294,818
351,069
312,277
295,554
280,380
1 - 4 Family Construction
64,463
69,648
85,797
70,242
55,177
Real Estate Mortgage:
1 - 4 Family Mortgage
404,716
400,708
380,210
355,474
341,102
Multifamily
1,378,669
1,314,524
1,320,081
1,306,738
1,230,509
CRE Owner Occupied
159,485
159,088
158,650
149,905
151,088
CRE Nonowner Occupied
951,263
971,532
962,671
947,008
900,691
Total Real Estate Mortgage Loans
2,894,133
2,845,852
2,821,612
2,759,125
2,623,390
Consumer and Other
9,003
9,581
9,518
8,132
7,495
Total Loans, Gross
3,722,271
3,736,211
3,684,360
3,569,446
3,380,082
Allowance for Loan Losses
(50,585
)
(50,701
)
(50,148
)
(47,996
)
(46,491
)
Net Deferred Loan Fees
(7,222
)
(7,718
)
(8,735
)
(9,293
)
(9,088
)
Total Loans, Net
$
3,664,464
$
3,677,792
$
3,625,477
$
3,512,157
$
3,324,503
Total gross loans at September 30, 2023 were $3.72 billion , a slight decrease of $13.9 million , or 1.5% annualized, over total gross loans of $3.74 billion at June 30, 2023, and an increase of $342.2 million , or 10.1% , over total gross loans of $3.38 billion at September 30, 2022.
The decrease in the loan portfolio during the third quarter of 2023 was primarily due to moderating loan originations and elevated payoffs and paydowns.
Deposits
(dollars in thousands)
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
Noninterest Bearing Transaction Deposits
$
754,297
$
751,217
$
742,198
$
884,272
$
961,084
Interest Bearing Transaction Deposits
780,863
719,488
630,037
451,992
510,396
Savings and Money Market Deposits
872,534
860,613
913,013
1,031,873
1,077,333
Time Deposits
265,737
271,783
266,213
272,253
293,052
Brokered Deposits
1,002,078
974,831
859,662
776,153
463,209
Total Deposits
$
3,675,509
$
3,577,932
$
3,411,123
$
3,416,543
$
3,305,074
Total deposits at September 30, 2023 were $3.68 billion , an increase of $97.6 million , or 10.8% annualized, over total deposits of $3.58 billion at June 30, 2023, and an increase of $370.4 million , or 11.2% , over total deposits of $3.31 billion at September 30, 2022.
Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000 , increased $69.9 million , or 11.0% annualized, from the second quarter 2023.
Brokered deposits continue to be used as a supplemental funding source, as needed.
Uninsured deposits were 22% of total deposits as of September 30, 2023 and June 30, 2023.
Liquidity
Total on- and off-balance sheet liquidity was $2.18 billion as of September 30, 2023, compared to $1.96 billion at June 30, 2023 and $1.41 billion at September 30, 2022. The Company did not utilize the Bank Term Funding Program (BTFP) or Federal Reserve Discount Window during the third quarter of 2023.
Primary Liquidity—On-Balance Sheet
September 30, 2023
June 30. 2023
March 31, 2023
December 31, 2022
September 30, 2022
(dollars in thousands)
Cash and Cash Equivalents
$
77,617
$
138,618
$
177,116
$
48,090
$
36,332
Securities Available for Sale
553,076
538,220
559,430
548,613
542,007
Less: Pledged Securities
(164,277)
(236,206)
(234,452)
—
—
Total Primary Liquidity
$
466,416
$
440,632
$
502,094
$
596,703
$
578,339
Ratio of Primary Liquidity to Total Deposits
12.7
%
12.3
%
14.7
%
17.5
%
17.5
%
Secondary Liquidity—Off-Balance Sheet Borrowing Capacity
Net Secured Borrowing Capacity with the FHLB
$
516,501
$
400,792
$
246,795
$
390,898
$
426,604
Net Secured Borrowing Capacity with the Federal Reserve Bank
1,022,128
986,644
990,685
157,827
156,534
Unsecured Borrowing Capacity with Correspondent Lenders
150,000
108,000
158,000
208,000
208,000
Secured Borrowing Capacity with Correspondent Lender
26,250
26,250
26,250
26,250
40,000
Total Secondary Liquidity
$
1,714,879
$
1,521,686
$
1,421,730
$
782,975
$
831,138
Total Primary and Secondary Liquidity
$
2,181,295
$
1,962,318
$
1,923,824
$
1,379,678
$
1,409,477
Ratio of Primary and Secondary Liquidity to Total Deposits
59.3
%
54.8
%
56.4
%
40.4
%
42.6
%
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 (recoveries) as a percentage of average loans were 0.01% for the third quarter of 2023, compared to 0.00% for the second quarter of 2023, and (0.03)% for the third quarter of 2022.
At September 30, 2023, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $749,000 , or 0.02% of total assets, as compared to $778,000 , or 0.02% of total assets at June 30, 2023, and $663,000 , or 0.02% of total assets at September 30, 2022.
Loans with potential weaknesses that warrant a watchlist risk rating at September 30, 2023 totaled $26.9 million , compared to $27.2 million at June 30, 2023, and $22.8 million at September 30, 2022.
Loans that warranted a substandard risk rating at September 30, 2023 totaled $35.6 million , compared to $33.8 million at June 30, 2023, and $30.8 million at September 30, 2022. Increased uncertainty in the economic environment may result in future watchlist or adverse classifications in the loan portfolio.
Capital
Total shareholders’ equity at September 30, 2023 was $416.0 million , an increase of $6.8 million , or 1.7% , compared to total shareholders’ equity of $409.1 million at June 30, 2023, and an increase of $34.0 million , or 8.9% , over total shareholders’ equity of $382.0 million at September 30, 2022.
The linked-quarter increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by an increase in unrealized losses in the securities portfolio and preferred stock dividends.
The year-over-year increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by an increase in unrealized losses in the securities portfolio, the adoption of the Current Expected Credit Losses (CECL) accounting methodology and preferred stock dividends.
The common equity Tier 1 risk-based capital ratio was 9.07% at September 30, 2023, compared to 8.72% at June 30, 2023 and 8.47% at September 30, 2022.
Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.61% at September 30, 2023, compared to 7.39% at June 30, 2023, and 7.57% at September 30, 2022.
Tangible book value per share, a non-GAAP financial measure, was $12.37 as of September 30, 2023, an increase of 1.9% from $12.15 as of June 30, 2023, and an increase of 9.2% from $11.33 as of September 30, 2022.
The linked-quarter and year-over-year increases occurred despite the market value depreciation of the securities portfolio driven by the rising interest rate environment.
The Company did not purchase any shares of its common stock during the third quarter of 2023.
The Company has $25.0 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 $0.36 72 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2023 to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2023.
Conference Call and Webcast
The Company will host a conference call to discuss its third quarter 2023 financial results on Thursday, October 26, 2023 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 1859973. The replay will be available through November 2, 2023. 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 September 30, 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 recent 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 loan losses; new or revised accounting standards, including as a result of the implementation of the Current Expected Credit Loss standard; 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 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 failures of Silicon Valley Bank, Signature Bank and First Republic Bank; 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 (including the COVID-19 pandemic), 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; 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
September 30,
June 30,
March 31,
December 31
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
Income Statement
Net Interest Income
$
25,421
$
25,872
$
28,567
$
32,893
$
34,095
Provision for (Recovery of) Credit Losses
(600
)
50
625
1,500
1,500
Noninterest Income
1,726
1,415
1,943
1,738
1,387
Noninterest Expense
15,350
14,388
14,183
15,203
14,157
Net Income
9,629
9,816
11,642
13,735
14,513
Net Income Available to Common Shareholders
8,616
8,802
10,629
12,721
13,500
Per Common Share Data
Basic Earnings Per Share
$
0.31
$
0.32
$
0.38
$
0.46
$
0.49
Diluted Earnings Per Share
0.30
0.31
0.37
0.45
0.47
Book Value Per Share
12.47
12.25
12.05
11.80
11.44
Tangible Book Value Per Share (1)
12.37
12.15
11.95
11.69
11.33
Basic Weighted Average Shares Outstanding
27,943,409
27,886,425
27,726,894
27,558,983
27,520,117
Diluted Weighted Average Shares Outstanding
28,311,778
28,198,739
28,490,046
28,527,306
28,592,854
Shares Outstanding at Period End
28,015,505
27,973,995
27,845,244
27,751,950
27,587,978
Financial Ratios
Return on Average Assets (2)
0.85
%
0.88
%
1.07
%
1.28
%
1.46
%
Pre-Provision Net Revenue Return on Average Assets (1)(2)
1.01
1.16
1.49
1.82
2.15
Return on Average Shareholders' Equity (2)
9.23
9.69
11.70
14.06
14.99
Return on Average Tangible Common Equity (1)(2)
9.92
10.48
12.90
15.86
17.03
Net Interest Margin (3)
2.32
2.40
2.72
3.16
3.53
Core Net Interest Margin (1)(3)
2.24
2.31
2.62
3.05
3.38
Cost of Total Deposits
2.99
2.66
2.01
1.31
0.73
Cost of Funds
3.10
2.91
2.41
1.67
0.93
Efficiency Ratio (1)
56.5
52.7
46.2
43.8
39.8
Noninterest Expense to Average Assets (2)
1.35
1.29
1.31
1.42
1.42
Balance Sheet
Total Assets
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
$
4,128,987
Total Loans, Gross
3,722,271
3,736,211
3,684,360
3,569,446
3,380,082
Deposits
3,675,509
3,577,932
3,411,123
3,416,543
3,305,074
Total Shareholders' Equity
415,960
409,126
402,006
394,064
382,007
Loan to Deposit Ratio
101.3
%
104.4
%
108.0
%
104.5
%
102.3
%
Core Deposits to Total Deposits (4)
70.3
70.3
72.4
74.6
83.0
Uninsured Deposits to Total Deposits
22.2
22.1
24.0
38.5
42.5
Asset Quality
Net Loan Charge-Offs (Recoveries) to Average Loans (2)
0.01
%
0.00
%
0.00
%
0.00
%
(0.03
)%
Nonperforming Assets to Total Assets (5)
0.02
0.02
0.02
0.01
0.02
Allowance for Credit Losses to Total Loans
1.36
1.36
1.36
1.34
1.38
Capital Ratios (Consolidated) (6)
Tier 1 Leverage Ratio
9.62
%
9.47
%
9.41
%
9.55
%
9.98
%
Common Equity Tier 1 Risk-based Capital Ratio
9.07
8.72
8.48
8.40
8.47
Tier 1 Risk-based Capital Ratio
10.69
10.33
10.08
10.03
10.19
Total Risk-based Capital Ratio
13.88
13.50
13.25
13.15
13.78
Tangible Common Equity to Tangible Assets (1)
7.61
7.39
7.23
7.48
7.57
(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)
September 30,
June 30,
March 31,
December 31,
September 30,
2023
2023
2023
2022
2022
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Assets
Cash and Cash Equivalents
$
124,358
$
177,101
$
209,192
$
87,043
$
75,496
Bank-Owned Certificates of Deposit
1,225
1,225
1,225
1,181
1,182
Securities Available for Sale, at Fair Value
553,076
538,220
559,430
548,613
542,007
Loans, Net of Allowance for Credit Losses
3,664,464
3,677,792
3,625,477
3,512,157
3,324,503
Federal Home Loan Bank (FHLB) Stock, at Cost
17,056
21,557
28,632
19,606
15,603
Premises and Equipment, Net
49,331
49,710
47,801
48,445
48,941
Foreclosed Assets
—
116
116
—
—
Accrued Interest
15,182
13,822
13,377
13,479
11,198
Goodwill
2,626
2,626
2,626
2,626
2,626
Other Intangible Assets, Net
197
206
240
288
336
Bank-Owned Life Insurance
34,209
33,958
33,719
33,485
33,248
Other Assets
95,346
86,852
81,064
78,739
73,847
Total Assets
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
$
4,128,987
Liabilities and Equity
Liabilities
Deposits:
Noninterest Bearing
$
754,297
$
751,217
$
742,198
$
884,272
$
961,084
Interest Bearing
2,921,212
2,826,715
2,668,925
2,532,271
2,343,990
Total Deposits
3,675,509
3,577,932
3,411,123
3,416,543
3,305,074
Federal Funds Purchased
—
195,000
437,000
287,000
212,000
Notes Payable
13,750
13,750
13,750
13,750
—
FHLB Advances
294,500
262,000
197,000
97,000
71,500
Subordinated Debentures, Net of Issuance Costs
79,192
79,096
79,001
78,905
92,559
Accrued Interest Payable
3,816
2,974
3,257
2,831
2,214
Other Liabilities
74,343
63,307
59,762
55,569
63,633
Total Liabilities
4,141,110
4,194,059
4,200,893
3,951,598
3,746,980
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 September 30, 2023 (unaudited), June 30, 2023 (unaudited), March 31, 2023 (unaudited), December 31, 2022, and September 30, 2022 (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 28,015,505 at September 30, 2023 (unaudited), 27,973,995 at June 30, 2023 (unaudited), 27,845,244 at March 31, 2023 (unaudited), 27,751,950 at December 31, 2022 and 27,587,978 at September 30, 2022 (unaudited)
280
280
278
278
276
Additional Paid-In Capital
100,120
99,044
97,716
96,529
95,973
Retained Earnings
272,812
264,196
255,394
248,685
235,964
Accumulated Other Comprehensive Loss
(23,766
)
(20,908
)
(17,896
)
(17,942
)
(16,720
)
Total Shareholders' Equity
415,960
409,126
402,006
394,064
382,007
Total Liabilities and Equity
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
$
4,128,987
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended
Nine Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
Interest Income
Loans, Including Fees
$
48,999
$
47,721
$
44,955
$
42,488
$
37,666
$
141,675
$
103,768
Investment Securities
6,507
6,237
6,218
5,843
4,372
18,962
10,567
Other
1,303
1,043
819
529
321
3,165
500
Total Interest Income
56,809
55,001
51,992
48,860
42,359
163,802
114,835
Interest Expense
Deposits
27,225
22,998
16,374
10,781
5,984
66,597
12,598
Notes Payable
296
285
263
202
—
844
—
FHLB Advances
2,316
2,092
861
575
329
5,269
646
Subordinated Debentures
1,003
993
983
1,030
1,242
2,979
3,658
Federal Funds Purchased
548
2,761
4,944
3,379
709
8,253
1,128
Total Interest Expense
31,388
29,129
23,425
15,967
8,264
83,942
18,030
Net Interest Income
25,421
25,872
28,567
32,893
34,095
79,860
96,805
Provision for (Recovery of) Credit Losses
(600)
50
625
1,500
1,500
75
6,200
Net Interest Income After Provision for Credit Losses
26,021
25,822
27,942
31,393
32,595
79,785
90,605
Noninterest Income
Customer Service Fees
379
368
349
344
313
1,096
892
Net Gain (Loss) on Sales of Securities
—
50
(56)
30
—
(6)
52
Letter of Credit Fees
315
379
634
358
428
1,328
1,234
Debit Card Interchange Fees
150
155
138
148
153
443
438
Swap Fees
—
—
—
—
—
—
557
Bank-Owned Life Insurance
252
238
234
238
227
724
524
FHLB Prepayment Income
493
—
299
—
—
792
—
Other Income
137
225
345
620
266
707
897
Total Noninterest Income
1,726
1,415
1,943
1,738
1,387
5,084
4,594
Noninterest Expense
Salaries and Employee Benefits
9,519
8,589
8,815
9,821
9,449
26,923
27,120
Occupancy and Equipment
1,101
1,075
1,209
1,177
1,086
3,385
3,213
FDIC Insurance Assessment
1,075
900
665
360
315
2,640
1,005
Data Processing
392
401
357
371
372
1,150
1,025
Professional and Consulting Fees
715
829
755
635
594
2,299
2,030
Derivative Collateral Fees
543
404
380
535
122
1,327
151
Information Technology and Telecommunications
683
711
683
673
650
2,077
1,822
Marketing and Advertising
222
321
262
403
479
805
1,629
Intangible Asset Amortization
9
34
48
48
48
91
143
Amortization of Tax Credit Investments
113
114
114
114
114
341
294
Other Expense
978
1,010
895
1,066
928
2,883
2,985
Total Noninterest Expense
15,350
14,388
14,183
15,203
14,157
43,921
41,417
Income Before Income Taxes
12,397
12,849
15,702
17,928
19,825
40,948
53,782
Provision for Income Taxes
2,768
3,033
4,060
4,193
5,312
9,861
14,125
Net Income
9,629
9,816
11,642
13,735
14,513
31,087
39,657
Preferred Stock Dividends
(1,013)
(1,014)
(1,013)
(1,014)
(1,013)
(3,040)
(3,040)
Net Income Available to Common Shareholders
$
8,616
$
8,802
$
10,629
$
12,721
$
13,500
$
28,047
$
36,617
Earnings Per Share
Basic
$
0.31
$
0.32
$
0.38
$
0.46
$
0.49
$
1.01
$
1.32
Diluted
0.30
0.31
0.37
0.45
0.47
0.99
1.27
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
September 30, 2023
June 30, 2023
September 30, 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
$
81,038
$
903
4.42
%
$
59,963
$
587
3.93
%
$
57,613
$
165
1.13
%
Investment Securities:
Taxable Investment Securities
565,008
6,234
4.38
568,143
6,000
4.24
461,255
3,741
3.22
Tax-Exempt Investment Securities (1)
29,955
346
4.58
27,081
300
4.44
75,801
799
4.18
Total Investment Securities
594,963
6,580
4.39
595,224
6,300
4.24
537,056
4,540
3.35
Paycheck Protection Program Loans (2)
828
2
1.00
913
2
1.00
2,424
96
15.75
Loans (1)(2)
3,721,766
49,324
5.26
3,715,621
48,064
5.19
3,263,390
37,724
4.59
Total Loans
3,722,594
49,326
5.26
3,716,534
48,066
5.19
3,265,814
37,820
4.59
Federal Home Loan Bank Stock
17,829
400
8.89
23,330
456
7.84
11,413
156
5.42
Total Interest Earning Assets
4,416,424
57,209
5.14
%
4,395,051
55,409
5.06
%
3,871,896
42,681
4.37
%
Noninterest Earning Assets
88,513
88,611
76,305
Total Assets
$
4,504,937
$
4,483,662
$
3,948,201
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
730,244
$
7,136
3.88
%
$
683,034
$
5,918
3.48
%
$
517,658
$
1,032
0.79
%
Savings and Money Market Deposits
874,612
8,089
3.67
861,947
7,048
3.28
999,932
2,494
0.99
Time Deposits
266,635
1,962
2.92
269,439
1,702
2.53
288,621
847
1.16
Brokered Deposits
985,276
10,038
4.04
896,989
8,330
3.72
447,034
1,612
1.43
Total Interest Bearing Deposits
2,856,767
27,225
3.78
2,711,409
22,998
3.40
2,253,245
5,985
1.05
Federal Funds Purchased
39,641
548
5.48
210,677
2,761
5.26
106,826
709
2.63
Notes Payable
13,750
296
8.58
13,750
285
8.33
—
—
—
FHLB Advances
275,261
2,316
3.34
242,714
2,092
3.46
72,343
328
1.80
Subordinated Debentures
79,137
1,003
5.03
79,041
993
5.04
92,503
1,242
5.33
Total Interest Bearing Liabilities
3,264,556
31,388
3.81
%
3,257,591
29,129
3.59
%
2,524,917
8,264
1.30
%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits
754,567
755,040
991,545
Other Noninterest Bearing Liabilities
71,767
64,684
47,719
Total Noninterest Bearing Liabilities
826,334
819,724
1,039,264
Shareholders' Equity
414,047
406,347
384,020
Total Liabilities and Shareholders' Equity
$
4,504,937
$
4,483,662
$
3,948,201
Net Interest Income / Interest Rate Spread
25,821
1.33
%
26,280
1.47
%
34,417
3.07
%
Net Interest Margin (3)
2.32
%
2.40
%
3.53
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans
(400)
(408)
(322)
Net Interest Income
$
25,421
$
25,872
$
34,095
(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 Nine Months Ended
September 30, 2023
September 30, 2022
Average
Interest
Yield/
Average
Interest
Yield/
(dollars in thousands)
Balance
& Fees
Rate
Balance
& Fees
Rate
Interest Earning Assets:
Cash Investments
$
68,150
$
1,937
3.80
%
$
66,301
$
231
0.47
%
Investment Securities:
Taxable Investment Securities
569,097
18,192
4.27
417,462
8,692
2.78
Tax-Exempt Investment Securities (1)
28,947
975
4.50
73,900
2,373
4.29
Total Investment Securities
598,044
19,167
4.29
491,362
11,065
3.01
Paycheck Protection Program Loans (2)
913
7
1.00
9,575
922
12.88
Loans (1)(2)
3,689,283
142,652
5.17
3,082,924
103,204
4.48
Total Loans
3,690,196
142,659
5.17
3,092,499
104,126
4.50
Federal Home Loan Bank Stock
22,343
1,228
7.34
9,593
269
3.75
Total Interest Earning Assets
4,378,733
164,991
5.04
%
3,659,755
115,691
4.23
%
Noninterest Earning Assets
86,243
77,028
Total Assets
$
4,464,976
$
3,736,783
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
625,531
$
15,833
3.38
%
$
545,301
$
2,322
0.57
%
Savings and Money Market Deposits
926,494
21,636
3.12
934,408
4,597
0.66
Time Deposits
261,474
4,734
2.42
286,059
2,257
1.05
Brokered Deposits
876,130
24,394
3.72
419,352
3,422
1.09
Total Interest Bearing Deposits
2,689,629
66,597
3.31
2,185,120
12,598
0.77
Federal Funds Purchased
220,434
8,253
5.01
85,287
1,128
1.77
Notes Payable
13,750
844
8.21
—
—
—
FHLB Advances
215,938
5,269
3.26
54,227
646
1.59
Subordinated Debentures
79,042
2,979
5.04
92,396
3,658
5.29
Total Interest Bearing Liabilities
3,218,793
83,942
3.49
%
2,417,030
18,030
1.00
%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits
774,523
899,456
Other Noninterest Bearing Liabilities
63,646
37,463
Total Noninterest Bearing Liabilities
838,169
936,919
Shareholders' Equity
408,014
382,834
Total Liabilities and Shareholders' Equity
$
4,464,976
$
3,736,783
Net Interest Income / Interest Rate Spread
81,049
1.55
%
97,661
3.23
%
Net Interest Margin (3)
2.47
%
3.57
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans
(1,189
)
(856
)
Net Interest Income
$
79,860
$
96,805
(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 Nine Months Ended
September 30,
June 30,
March 31,
December 31
September 30,
September 30,
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
Allowance for Credit Losses
Balance at Beginning of Period
$
50,701
$
50,148
$
47,996
$
46,491
$
44,711
$
47,996
$
40,020
Impact of Adopting CECL
—
—
650
—
—
650
—
Provision for Credit Losses
—
550
1,500
1,500
1,500
2,050
6,200
Charge-offs
(122
)
(3
)
(4
)
(3
)
(5
)
(129
)
(34
)
Recoveries
6
6
6
8
285
18
305
Net Charge-offs
$
(116
)
$
3
$
2
$
5
$
280
$
(111
)
$
271
Balance at End of Period
50,585
50,701
50,148
47,996
46,491
50,585
46,491
Allowance for Credit Losses to Total Loans
1.36
%
1.36
%
1.36
%
1.34
%
1.38
%
1.36
%
1.38
%
As of and for the Three Months Ended
As of and for the Nine Months Ended
September 30,
June 30,
March 31,
December 31
September 30,
September 30,
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
2023
2022
Provision for Credit Losses on Loans
$
—
$
550
$
1,500
$
1,500
$
1,500
$
2,050
$
6,200
Provision for (Recovery of) Credit Losses for Off-Balance Sheet Credit Exposures
(600
)
(500
)
(875
)
—
—
(1,975
)
—
Provision for (Recovery of) Credit Losses
$
(600
)
$
50
$
625
$
1,500
$
1,500
$
75
$
6,200
As of and for the Three Months Ended
September 30,
June 30,
March 31,
December 31
September 30,
(dollars in thousands)
2023
2023
2023
2022
2022
Selected Asset Quality Data
Loans 30-89 Days Past Due
$
11
$
—
$
21
$
186
$
38
Loans 30-89 Days Past Due to Total Loans
0.00
%
0.00
%
0.00
%
0.01
%
0.00
%
Nonperforming Loans
$
749
$
662
$
693
$
639
$
663
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)
$
749
$
778
$
809
$
639
$
663
Nonperforming Assets to Total Assets (1)
0.02
%
0.02
%
0.02
%
0.01
%
0.02
%
Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans
0.01
0.00
0.00
0.00
(0.03
)
Watchlist Risk Rating Loans
$
26,877
$
27,215
$
27,574
$
32,252
$
22,759
Substandard Risk Rating Loans
35,621
33,821
36,258
28,049
30,767
Bridgewater Bancshares, Inc. and Subsidiaries
Non-GAAP Financial Measures
(dollars in thousands) (unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(dollars in thousands)
2023
2023
2022
2022
2022
2023
2022
Pre-Provision Net Revenue
Noninterest Income
$
1,726
$
1,415
$
1,943
$
1,738
$
1,387
$
5,084
$
4,594
Less: (Gain) Loss on Sales of Securities
—
(50
)
56
(30
)
—
6
(52
)
Less: FHLB Advance Prepayment Income
(493
)
—
(299
)
—
—
(792
)
—
Total Operating Noninterest Income
1,233
1,365
1,700
1,708
1,387
4,298
4,542
Plus: Net Interest Income
25,421
25,872
28,567
32,893
34,095
79,860
96,805
Net Operating Revenue
$
26,654
$
27,237
$
30,267
$
34,601
$
35,482
$
84,158
$
101,347
Noninterest Expense
$
15,350
$
14,388
$
14,183
$
15,203
$
14,157
$
43,921
$
41,417
Less: Amortization of Tax Credit Investments
(113
)
(114
)
(114
)
(114
)
(114
)
(341
)
(294
)
Total Operating Noninterest Expense
$
15,237
$
14,274
$
14,069
$
15,089
$
14,043
$
43,580
$
41,123
Pre-Provision Net Revenue
$
11,417
$
12,963
$
16,198
$
19,512
$
21,439
$
40,578
$
60,224
Plus:
Non-Operating Revenue Adjustments
493
50
243
30
—
786
52
Less:
Provision (Recovery of) for Credit Losses
(600
)
50
625
1,500
1,500
75
6,200
Non-Operating Expense Adjustments
113
114
114
114
114
341
294
Provision for Income Taxes
2,768
3,033
4,060
4,193
5,312
9,861
14,125
Net Income
$
9,629
$
9,816
$
11,642
$
13,735
$
14,513
$
31,087
$
39,657
Average Assets
$
4,504,937
$
4,483,662
$
4,405,234
$
4,251,345
$
3,948,201
$
4,464,974
$
3,736,783
Pre-Provision Net Revenue Return on Average Assets
1.01
%
1.16
%
1.49
%
1.82
%
2.15
%
1.22
%
2.15
%
Core Net Interest Margin
Net Interest Income (Tax-equivalent Basis)
$
25,822
$
26,280
$
28,947
$
33,260
$
34,417
$
81,049
$
97,661
Less: Loan Fees
(914
)
(941
)
(998
)
(1,100
)
(1,400
)
(2,853
)
(5,173
)
Less: PPP Interest and Fees
(2
)
(3
)
(2
)
(48
)
(96
)
(7
)
(922
)
Core Net Interest Income
$
24,906
$
25,336
$
27,947
$
32,112
$
32,921
$
78,189
$
91,566
Average Interest Earning Assets
$
4,416,424
$
4,395,050
$
4,323,706
$
4,177,644
$
3,871,896
$
4,378,733
$
3,659,755
Less: Average PPP Loans
(828
)
(913
)
(999
)
(1,109
)
(2,424
)
(913
)
(9,575
)
Core Average Interest Earning Assets
$
4,415,596
$
4,394,137
$
4,322,707
$
4,176,535
$
3,869,472
$
4,377,820
$
3,650,180
Core Net Interest Margin
2.24
%
2.31
%
2.62
%
3.05
%
3.38
%
2.39
%
3.35
%
Efficiency Ratio
Noninterest Expense
$
15,350
$
14,388
$
14,183
$
15,203
$
14,157
$
43,921
$
41,417
Less: Amortization of Intangible Assets
(9
)
(34
)
(48
)
(48
)
(48
)
(91
)
(143
)
Adjusted Noninterest Expense
$
15,341
$
14,354
$
14,135
$
15,155
$
14,109
$
43,830
$
41,274
Net Interest Income
25,421
25,872
28,567
32,893
34,095
79,860
96,805
Noninterest Income
1,726
1,415
1,943
1,738
1,387
5,084
4,594
Less: Gain (Loss) on Sales of Securities
—
(50
)
56
(30
)
—
6
(52
)
Adjusted Operating Revenue
$
27,147
$
27,237
$
30,566
$
34,601
$
35,482
$
84,950
$
101,347
Efficiency Ratio
56.5
%
52.7
%
46.2
%
43.8
%
39.8
%
51.6
%
40.7
%
Bridgewater Bancshares, Inc. and Subsidiaries
Non-GAAP Financial Measures
(dollars in thousands) (unaudited)
For the Three Months Ended
For the Nine Months Ended
September 30,
June 30,
March 31,
December 31,
September 30,
September 30,
September 30,
(dollars in thousands)
2023
2023
2022
2022
2022
2023
2022
Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity
$
415,960
$
409,126
$
402,006
$
394,064
$
382,007
Less: Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Total Common Shareholders' Equity
349,446
342,612
335,492
327,550
315,493
Less: Intangible Assets
(2,823
)
(2,832
)
(2,866
)
(2,914
)
(2,962
)
Tangible Common Equity
$
346,623
$
339,780
$
332,626
$
324,636
$
312,531
Total Assets
$
4,557,070
$
4,603,185
$
4,602,899
$
4,345,662
$
4,128,987
Less: Intangible Assets
(2,823
)
(2,832
)
(2,866
)
(2,914
)
(2,962
)
Tangible Assets
$
4,554,247
$
4,600,353
$
4,600,033
$
4,342,748
$
4,126,025
Tangible Common Equity/Tangible Assets
7.61
%
7.39
%
7.23
%
7.48
%
7.57
%
Tangible Book Value Per Share
Book Value Per Common Share
$
12.47
$
12.25
$
12.05
$
11.80
$
11.44
Less: Effects of Intangible Assets
(0.10
)
(0.10
)
(0.10
)
(0.11
)
(0.11
)
Tangible Book Value Per Common Share
$
12.37
$
12.15
$
11.95
$
11.69
$
11.33
Return on Average Tangible Common Equity
Net Income Available to Common Shareholders
$
8,616
$
8,802
$
10,629
$
12,721
$
13,500
$
28,047
$
36,617
Average Shareholders' Equity
$
414,047
$
406,347
$
403,533
$
387,589
$
384,020
$
408,014
$
382,834
Less: Average Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Average Common Equity
347,533
339,833
337,019
321,075
317,506
341,500
316,320
Less: Effects of Average Intangible Assets
(2,828
)
(2,846
)
(2,894
)
(2,941
)
(2,989
)
(2,856
)
(3,036
)
Average Tangible Common Equity
$
344,705
$
336,987
$
334,125
$
318,134
$
314,517
$
338,644
$
313,284
Return on Average Tangible Common Equity
9.92
%
10.48
%
12.90
%
15.86
%
17.03
%
11.07
%
15.63
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20231024186087/en/
Media Contact:
Jessica Stejskal | SVP Marketing
Jessica.stejskal@bwbmn.com | 952.893.6860
Investor Contact:
Justin Horstman | Director of Investor Relations
Justin.Horstman@bwbmn.com | 952.542.5169
Source: Bridgewater Bancshares, Inc.
What is the net income of Bridgewater Bancshares in Q3 2023?
The net income of Bridgewater Bancshares in Q3 2023 is $9.6 million.
How much did deposits increase by in Q3 2023?
Deposits increased by $97.6 million, or 10.8% annualized, in Q3 2023.
What is the net interest margin of Bridgewater Bancshares in Q3 2023?
The net interest margin of Bridgewater Bancshares in Q3 2023 is 2.32%.
What is the efficiency ratio of Bridgewater Bancshares in Q3 2023?
The efficiency ratio of Bridgewater Bancshares in Q3 2023 is 56.5%.