UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
October 25, 2023
Date of Report
(Date of earliest event reported)
BRIDGEWATER BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Minnesota (State or other jurisdiction of incorporation) |
001-38412 (Commission File Number) |
26-0113412 (I.R.S. Employer Identification No.) |
|
4450 Excelsior Boulevard, Suite 100 St. Louis Park, Minnesota (Address of principal executive offices) |
55416 (Zip Code) |
Registrant’s telephone number, including area code: (952) 893-6868
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
|
Trading Symbol |
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Name of each exchange on which registered: |
Common Stock, $0.01 Par Value Depositary Shares, each representing a 1/100th interest in a share of 5.875% Non-Cumulative Perpetual Preferred Stock, Series A |
|
BWB BWBBP |
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The NASDAQ Stock Market LLC The NASDAQ Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 25, 2023, Bridgewater Bancshares, Inc. (the “Company”) issued a press release announcing its financial results for the three and nine months ended September 30, 2023. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
The information furnished in this item of this Form 8-K, and the related exhibits, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
The Company hereby furnishes the Investor Presentation attached hereto as Exhibit 99.2.
The information furnished in this item of this Form 8-K, and the related exhibits, shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing.
Item 8.01 Other Events.
On October 25, 2023, in its 2023 third quarter earnings release, the Company announced that its Board of Directors had 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 depository 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.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit 99.1 |
Exhibit 99.2 |
Exhibit 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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Bridgewater Bancshares, Inc. |
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|
|
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Date: October 25, 2023 |
|
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By: /s/ Jerry Baack |
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Name: Jerry Baack |
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Title: Chairman, Chief Executive Officer and President |
3
Exhibit 99.1
Media Contact: |
Investor Contact: |
October 25, 2023
Bridgewater Bancshares, Inc. Announces Third Quarter 2023 Net Income
of $9.6 Million, $0.30 Diluted Earnings Per Common Share
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. |
Page 1 of 17
St. Louis Park, MN – 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
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As of and for the Three Months Ended |
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As of and for the Nine Months Ended |
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September 30, |
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June 30, |
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September 30, |
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September 30, |
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September 30, |
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|||||
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2023 |
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2023 |
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2022 |
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2023 |
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2022 |
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Per Common Share Data |
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Basic Earnings Per Share |
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$ |
0.31 |
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$ |
0.32 |
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$ |
0.49 |
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$ |
1.01 |
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$ |
1.32 |
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Diluted Earnings Per Share |
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0.30 |
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0.31 |
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0.47 |
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0.99 |
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1.27 |
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Book Value Per Share |
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12.47 |
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12.25 |
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11.44 |
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12.47 |
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11.44 |
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Tangible Book Value Per Share (1) |
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12.37 |
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12.15 |
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11.33 |
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12.37 |
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11.33 |
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Financial Ratios |
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Return on Average Assets (2) |
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0.85 |
% |
|
0.88 |
% |
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1.46 |
% |
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|
0.93 |
% |
|
1.42 |
% |
Pre-Provision Net Revenue Return on Average Assets (1)(2) |
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1.01 |
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1.16 |
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2.15 |
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1.22 |
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2.15 |
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Return on Average Shareholders' Equity (2) |
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9.23 |
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9.69 |
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14.99 |
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10.19 |
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13.85 |
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Return on Average Tangible Common Equity (1)(2) |
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9.92 |
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10.48 |
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17.03 |
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11.07 |
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15.63 |
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Net Interest Margin (3) |
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2.32 |
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2.40 |
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3.53 |
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2.47 |
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3.57 |
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Core Net Interest Margin (1)(3) |
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2.24 |
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2.31 |
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3.38 |
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2.39 |
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3.35 |
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Cost of Total Deposits |
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2.99 |
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2.66 |
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0.73 |
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2.57 |
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|
0.55 |
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Cost of Funds |
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3.10 |
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2.91 |
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0.93 |
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2.81 |
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0.73 |
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Efficiency Ratio (1) |
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56.5 |
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52.7 |
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39.8 |
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51.6 |
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40.7 |
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Noninterest Expense to Average Assets (2) |
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1.35 |
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1.29 |
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1.42 |
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1.32 |
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1.48 |
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Tangible Common Equity to Tangible Assets (1) |
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7.61 |
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7.39 |
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7.57 |
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7.61 |
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7.57 |
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Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4) |
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9.07 |
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8.72 |
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8.47 |
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9.07 |
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8.47 |
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Balance Sheet and Asset Quality (dollars in thousands) |
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Total Assets |
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$ |
4,557,070 |
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$ |
4,603,185 |
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$ |
4,128,987 |
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$ |
4,557,070 |
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$ |
4,128,987 |
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Total Loans, Gross |
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3,722,271 |
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3,736,211 |
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3,380,082 |
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3,722,271 |
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3,380,082 |
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Deposits |
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3,675,509 |
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3,577,932 |
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3,305,074 |
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|
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3,675,509 |
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|
3,305,074 |
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Loan to Deposit Ratio |
|
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101.3 |
% |
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104.4 |
% |
|
102.3 |
% |
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101.3 |
% |
|
102.3 |
% |
Net Loan Charge-Offs (Recoveries) to Average Loans (2) |
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0.01 |
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0.00 |
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(0.03) |
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0.00 |
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|
(0.01) |
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Nonperforming Assets to Total Assets (5) |
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0.02 |
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0.02 |
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|
0.02 |
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|
|
0.02 |
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|
0.02 |
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Allowance for Credit Losses to Total Loans |
|
|
1.36 |
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|
1.36 |
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|
1.38 |
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|
1.36 |
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|
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. |
Page 2 of 17
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:
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Three Months Ended |
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September 30, 2023 |
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June 30, 2023 |
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March 31, 2023 |
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December 31, 2022 |
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September 30, 2022 |
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Interest |
|
5.16 |
% |
|
5.09 |
% |
|
4.95 |
% |
|
4.74 |
% |
|
4.42 |
% |
|
Fees |
|
0.10 |
|
|
0.10 |
|
|
0.11 |
|
|
0.12 |
|
|
0.17 |
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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. |
Page 3 of 17
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.
Page 4 of 17
Balance Sheet
Loans
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
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(dollars in thousands) |
|
September 30, 2023 |
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June 30, 2023 |
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March 31, 2023 |
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December 31, 2022 |
|
September 30, 2022 |
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|||||
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. |
Page 5 of 17
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. |
Page 6 of 17
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 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.
Page 7 of 17
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.
Page 8 of 17
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%. |
Page 9 of 17
(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. |
Page 10 of 17
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 |
Page 11 of 17
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 |
Page 12 of 17
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. |
Page 13 of 17
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. |
Page 14 of 17
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 |
|
Page 15 of 17
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 |
% |
Page 16 of 17
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 |
% |
Page 17 of 17
Disclaimer Forward-Looking Statements This presentation 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 presentation is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertake 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. Certain of the information contained in this presentation is derived from information provided by industry sources. Although the Company believe that such information is accurate and that the sources from which it has been obtained are reliable, the Company cannot guarantee the accuracy of, and have not independently verified, such information. Use of Non-GAAP financial measures In addition to the results presented in accordance with U.S. General 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 to the comparable GAAP measures are provided in this presentation. 2 |
0.02% 3Q23 Earnings Highlights 3 • Deposit balances up $97.6 million, or 10.8% annualized, from 2Q23, including core deposit2 growth of 11.0% annualized • Borrowings declined $162.4 million, or 29.5%, from 2Q23, with no overnight borrowings as of September 30, 2023 • Loan balances declined $13.9 million, or 1.5% annualized, from 2Q23, impacted by increased payoffs and paydowns • Loan-to-deposit ratio of 101.3%, down from 104.4% at June 30, 2023 • Net interest margin (NIM) of 2.32%, down 8 bps from 2Q23 • September 2023 NIM of 2.30%, down 3 bps from June 2023 NIM of 2.33% • Yield on interest-earning assets of 5.14%, up 8 bps from 2Q23 • Total cost of funds of 3.10%, up 19 bps from 2Q23 • Noninterest expense up $1.0 million, or 6.7%, from 2Q23 • 2023 YTD noninterest expense up $2.5 million, or 6.0%, from 2022 YTD • Noninterest expense to average assets of 1.35% annualized, up 6 bps from 2Q23 • Annualized net charge-offs to average loans of 0.01%, up 1 bp from 2Q23 • Nonperforming assets to total assets of 0.02%, in-line with 2Q23 • No provision for credit losses; well-reserved with allowance to total loans of 1.36% Enhanced Balance Sheet Composition Net Interest Margin Shows Signs of Stabilization Well-Controlled Expenses YTD Superb Asset Quality $0.30 Diluted EPS Nonperforming Assets to Total Assets Efficiency Ratio1 Return on Average Assets Return on Avg. Tangible Common Equity1 0.85% 9.92% 56.5% 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation 2 Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000 |
Net Interest Income Impacted by Managed Loan Growth as NIM Stabilizes 4 $32,599 $31,745 $27,567 $24,928 $24,505 $96 $48 $2 $3 $2 $1,400 $1,100 $998 $941 $914 $34,095 $32,893 $28,567 $25,872 $25,421 3.53% 3.16% 2.72% 2.40% 2.32% 3.38% 3.05% 2.62% 2.31% 2.24% 3Q22 4Q22 1Q23 2Q23 3Q23 Core Net Interest Margin1,2 Net Interest Margin1 Net Interest Income (ex. interest income on loan fees and PPP loans) Interest Income and fees on PPP loans Loan fees Net Interest Income and Margin Trends Net Interest Margin Drivers Core NIM2 down 7 bps Core NIM Stabilization in 3Q23 1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21% 2 Excludes loan fees and PPP loan balances, interest and fees; represents a Non-GAAP financial measure, see Appendix for Non-GAAP reconciliation Dollars in thousands (1) (6) (13) (16) (14) (14) (15) (14) (10) (7) (6) (2) 1 0 Aug. 22 Sep. 22 Oct. 22 Nov. 22 Dec. 22 Jan. 23 Feb. 23 Mar. 23 Apr. 23 May 23 Jun. 23 Jul. 23 Aug. 23 Sep. 23 Core NIM1,2 Expansion (Compression) by Month (bps) |
Rising Funding Costs Begin to Slow as Asset Yields Move Higher 5 $2,253 $2,332 $2,498 $2,711 $2,857 $992 $943 $814 $272 $755 $755 $527 $636 $546 $408 $3,517 $3,802 $3,948 $4,012 $4,020 0.93% 1.67% 2.41% 2.91% 3.10% 3Q22 4Q22 1Q23 2Q23 3Q23 $3,266 $3,482 $3,630 $3,717 $3,723 4.59% 4.86% 5.06% 5.19% 5.26% 4.42% 4.74% 4.95% 5.09% 5.16% 3Q22 4Q22 1Q23 2Q23 3Q23 $3,245 $3,275 $3,311 $3,466 $3,611 0.73% 1.31% 2.01% 2.66% 2.99% 3Q22 4Q22 1Q23 2Q23 3Q23 Loan Yield (ex. Loan Fees and PPP)2 Loan Portfolio Repricing Higher as Growth Slows High-Yielding Securities Portfolio Rising Deposit Costs Begin to Slow Overall Funding Costs Slow as Borrowings Decline $537 $608 $604 $595 $595 3.35% 3.91% 4.22% 4.24% 4.39% 3Q22 4Q22 1Q23 2Q23 3Q23 Average Interest-Bearing Deposits Average Noninterest-Bearing Deposits Average Borrowings Cost of Liability Funding Average Loans Loan Yield1 Average Investments Investment Yield1 Average Total Deposits Cost of Total Deposits 1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21% 2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation Dollars in millions |
Revenue Trends Impacted by Current Interest Rate Environment 6 PPNR ROA1 Continued Profitability in the Current Environment Spread-Based Revenue Model $34,095 $32,893 $28,567 $25,872 $25,421 $1,387 $1,738 $1,943 $1,415 $1,726 $35,482 $34,631 $30,510 $27,287 $27,147 3Q22 4Q22 1Q23 2Q23 3Q23 $21,439 $19,512 $16,198 $12,963 $11,417 $14,513 $13,735 $11,642 $9,816 $9,629 2.15% 1.82% 1.49% 1.16% 1.01% 1.46% 1.28% 1.07% 0.88% 0.85% 3Q22 4Q22 1Q23 2Q23 3Q23 PPNR Net Income 1 ROA Net Interest Income Noninterest Income 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation Dollars in thousands |
$9,449 $9,821 $8,815 $8,589 $9,519 $1,086 $1,177 $1,209 $1,075 $1,101 $1,022 $1,044 $1,040 $1,112 $1,075 $2,600 $3,161 $3,119 $3,612 $3,655 $14,157 $15,203 $14,183 $14,388 $15,350 3Q22 4Q22 1Q23 2Q23 3Q23 Well-Controlled Expenses YTD 7 1.42% 1.42% 1.31% 1.29% 1.35% 39.8% 43.8% 46.2% 52.7% 56.5% 3Q22 4Q22 1Q23 2Q23 3Q23 NIE / Avg. Assets2 Efficiency Ratio2 Highly Efficient Business Model Despite Recent Revenue Pressures Well-Controlled Expense Base in the Current Environment Industry median efficiency ratio of 62%1 in 2Q23 2023 YTD NIE up 6.0% vs. YTD 2022, below YoY asset growth of 10.4% Personnel Occupancy Technology Other 1 2Q23 median efficiency ratio for publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion (Source: S&P Capital IQ) 2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation Dollars in thousands |
Deposit Momentum Continues 8 29% 26% 22% 21% 21% 15% 13% 18% 20% 21% 33% 30% 27% 24% 24% 9% 8% 8% 8% 7% 14% 23% 25% 27% 27% $3,305 $3,417 $3,411 $3,578 $3,676 3Q22 4Q22 1Q23 2Q23 3Q23 Noninterest-Bearing Transaction Interest-Bearing Transaction Savings & Money Market Time Brokered • Total deposit balances up 10.8% annualized • Core deposit1 balances up 11.0% annualized • Overall mix shift continued from noninterest-bearing into interest-bearing deposits • Continued to supplement core deposits with wholesale funding to support future loan growth • Uninsured deposits made up 22% of total deposits, down from 38% in 4Q22 Strong Deposit Growth Again in 3Q23 1 Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000 2 Calculated as the change in ending deposit rate over the change in ending Fed Funds rate from February 2022 Dollars in millions Cumulative Total Deposit Beta2 Stabilization 12% 20% 34% 40% 48% 49% 6/30/2022 9/30/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 |
Managing Loan Growth in the Current Environment 9 $3,380 $3,569 $3,684 $3,736 $3,722 3Q22 4Q22 1Q23 2Q23 3Q23 Gross Loans Dollars in millions • Loan balances down $13.9M, or 1.5% annualized • Focused on better aligning loan growth with core deposit growth over time • Core deposit growth outpaced loan growth over the past two quarters • Loan-to-deposit ratio of 101.3%, down from 108.0% in 1Q23 • Increased payoffs and paydowns muted loan growth in 3Q23 • Continued to leverage sales of participations on new originations to manage overall growth • Expect limited near-term loan growth in the current environment to position the balance sheet for more profitable longer term growth Focus on Profitable Growth |
Increased Loan Payoffs and Paydowns 10 New Loan Originations and Advances $169 $186 $75 $47 $71 $139 $127 $145 $84 $87 $308 $313 $220 $131 $158 3Q22 4Q22 1Q23 2Q23 3Q23 New Originations Advances Loan Payoffs and Amortization/Paydowns $117 $99 $69 $54 $106 $36 $42 $42 $45 $60 $153 $141 $111 $99 $166 3Q22 4Q22 1Q23 2Q23 3Q23 Payoffs Amortization/Paydowns $373 $427 $508 $537 $561 3Q22 4Q22 1Q23 2Q23 3Q23 Selling Participations on Larger Loans to Manage Growth Loan Participation Portfolio Balance Sold $134M of participations in 2023 YTD Dollars in millions |
Well-Diversified Loan Portfolio with a Multifamily Focus 11 Dollars in millions CRE NOO 26% Multifamily 37% C&D 10% 1-4 Family Mortgage 11% CRE OO 4% C&I 12% Consumer & Other 0% Loan Mix by Type $3.7 Billion 3Q23 Loan Growth by Type (vs. 2Q23) $(61) $(20) $(1) $0 $0 $4 Multifamily $64 1-4 Family Mortgage Construction & Development C&I CRE Owner Occupied CRE Nonowner Occupied Consumer & Other • Migration from Construction & Development to Multifamily as deals completed the ‘construction’ phase • Remain comfortable with the diversity of the loan portfolio, including CRE and Multifamily concentrations given portfolio performance and expertise |
¹ Nonaccrual loans plus loans 90 days past due and still accruing and foreclosed assets Dollars in thousands Superb Asset Quality Continues 12 $(280) $(5) $(2) $(3) $116 (0.03)% 0.00% 0.00% 0.00% 0.01% 3Q22 4Q22 1Q23 2Q23 3Q23 Net Charge-Offs Cumulative NCOs of $446K since 2019 Net Charge-offs (recoveries) % of Average Loans (annualized) $46,491 $47,996 $50,148 $50,701 $50,585 1.38% 1.34% 1.36% 1.36% 1.36% 3Q22 4Q22 1Q23 2Q23 3Q23 Allowance for Credit Losses Modest CECL Day 1 impact of $650K on January 1, 2023 Allowance for Credit Losses % of Gross Loans $663 $639 $809 $778 $749 0.02% 0.01% 0.02% 0.02% 0.02% 3Q22 4Q22 1Q23 2Q23 3Q23 Nonperforming Assets1 Consistently low NPA levels NPAs % of Assets |
Watch and Substandard Loans Remain Stable 13 C&I 16.2% Multifamily 10.9% CRE NOO Senior Housing 37.9% CRE NOO Retail 26.0% CRE Other 9.0% $27 Million Watch List Loans Substandard Loans C&I 44.4% CRE NOO Office 27.0% CRE NOO Hotels 9.2% CRE NOO Retail 12.8% CRE OO 4.4% C&D 0.2% 1-4 Family 2.0% $36 Million Watch List Characteristics Loan Balances Outstanding $26,877 % of Total Loans, Gross 0.7% Number of Loans 18 Average Loan Size $1,493 Substandard Characteristics Loan Balances Outstanding $35,621 % of Total Loans, Gross 1.0% Number of Loans 21 Average Loan Size $1,696 % of Bank Risk-Based Capital 6.55% $22,759 $32,252 $27,574 $27,215 $26,877 3Q22 4Q22 1Q23 2Q23 3Q23 Watch List Loans $30,767 $28,049 $36,258 $33,821 $35,621 3Q22 4Q22 1Q23 2Q23 3Q23 Substandard Loans Dollars in thousands |
Managing CRE and Office-Related Risk 14 1 Excludes medical office of $87M at September 30, 2023 Dollars in millions Addressing CRE NOO Repricing Risk • CRE NOO loans primarily located in the Twin Cities market • Ongoing active client engagement • Clients with maturing loans or resetting rates over the next 12 months • Identify situations of possible cash flow strain • Recommend solutions early in the process Well-Managed CRE NOO Office Exposure1 Small CRE NOO Office Portfolio Low Average Loan Size LTVs In-Line with the Total Loan Portfolio 5.2% of Total Loans $2.3M Average Loan Size 62% Weighted Average LTV CRE NOO Office by Geography Twin Cities Suburban 53% Minneapolis-St. Paul CBD 13% Minneapolis-St. Paul Non-CBD 20% Out-of-State 14% $195M • Majority of CRE NOO office exposure in the Twin Cities suburbs • Only 4 loans totaling $35M located in central business districts (CBD) • Only 3 loans totaling $27M outside of Minnesota – out-of-state projects for existing local clients Lower Repricing Risk Fixed-Rate Maturity Schedule Low LTVs 81% are Fixed-Rate $146M Maturing Over the Next 12 Months 59% Weighted Average LTV |
Ample Liquidity and Borrowing Capacity 15 1 Excludes $164M of pledged securities at September 30, 2023 Dollars in millions 14.0% 13.7% 10.9% 9.6% 10.2% 20.1% 17.0% 30.9% 33.1% 37.6% $1,409 $1,380 $1,924 $1,962 $2,181 3Q22 4Q22 1Q23 2Q23 3Q23 Off-Balance Sheet Liquidity as a % of Assets On-Balance Sheet Liquidity as a % of Assets Liquidity Position with 2.7x Coverage of Uninsured Deposits Diverse Liquidity Mix 2023 YTD Liquidity Actions • Added $801M of on- and off-balance sheet liquidity YTD • $864M increase in borrowing capacity with the FRB following additional loan and securities pledging • $125M increase in FHLB borrowing capacity • $30M increase to cash and cash equivalents • Did not utilize any borrowings from the Discount Window or the Bank Term Funding Program (BTFP) in 2023 YTD Funding Source 9/30/2023 12/31/2022 Change Cash $ 78 $ 4 8 $ 3 0 Unpledged Securities1 389 549 (160) FHLB Capacity 516 391 125 FRB Discount Window 1,022 158 864 Unsecured Lines of Credit 150 208 (58) Secured Line of Credit 26 26 (0) Total $ 2,181 $ 1,380 $ 801 Available Balance |
Well-Capitalized with Steady Tangible Book Value Per Share Growth 16 9.98% 9.55% 9.41% 9.47% 9.62% 8.47% 8.40% 8.48% 8.72% 9.07% 13.78% 13.15% 13.25% 13.50% 13.88% 7.57% 7.48% 7.23% 7.39% 7.61% 3Q22 4Q22 1Q23 2Q23 3Q23 Total Risk-Based Capital Ratio Common Equity Tier 1 Capital Ratio Tier 1 Leverage Ratio Increased Consolidated Capital Ratios in 3Q23 Tangible Common Equity Ratio1 $4.52 $5.40 $7.22 $8.33 $9.31 $10.98 $11.69 $12.37 2016 2017 2018 2019 2020 2021 2022 3Q23 Steady Tangible Book Value Per Share1 Growth 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation |
Near-Term Expectations 17 • Limited near-term loan growth in the current environment; position the balance sheet for more profitable longer term growth • Focus on aligning loan growth more closely with core deposit growth over time • Continued core deposit growth over time, but may not be linear quarter-over-quarter • Target loan-to-deposit ratio between 95% and 105% Balance Sheet Growth • Near-term stabilization as net interest margin compression continues to slow • Dependent on the path of interest rates, shape of the yield curve, and pace of core deposit growth and loan payoffs Net Interest Margin • Ongoing noninterest expense growth, with continued investments in people and technology initiatives • Noninterest expense growth aligned with asset growth over time • Maintain lower provision expense given unfunded commitment decline and limited near-term loan growth outlook Expenses • Build tangible common equity and CET1 ratios, aided by retained earnings and limited pace of loan growth • Ongoing evaluation of potential share repurchases Capital Levels |
2023 Strategic Priorities – Positioning for Long-Term Success 18 Manage High Quality Balance Sheet Growth 1 2 3 4 Maintain High Efficiency While Investing in the Business Continue Scalability of ERM Function, Including Proactive Assessment of Asset Quality Risks Implement Longer Term Strategic Readiness Initiatives • Slower pace of balance sheet growth in the current environment • Manage the balance sheet to optimize net interest income • Increase emphasis on generating core deposit growth to support loan growth over the course of 2023 • Identify opportunities to better manage the discretionary spend to align expense growth with a slower pace of asset growth • Continue to invest in people and technology • Make proactive investments to scale the business and position for longer-term growth • Continued build-out of the enterprise risk management function, including enhanced stress testing capabilities • Ongoing monitoring of the loan portfolio for signs of credit weakness given the economic uncertainty heading into 2023 • Expand covenant testing and assess repricing risk on maturing loans • Complete CECL adoption in early 2023 • Expand C&I function to support further diversification of the loan portfolio and new deposit growth channels over time • Continue evaluating potential M&A opportunities and be ready to act as the right opportunity becomes available Year-to-Date Progress Core deposit growth outpaced loan growth over the past two quarters YTD NIE growth of 6.0% (vs. 2022), compared to YoY asset growth of 10.4% Ongoing 12-month forward assessment of loan covenants and repricing risks Expanding C&I outreach to targeted verticals including women business leaders and entrepreneurs |
APPENDIX 19 |
Interest Rate Sensitivity 20 Estimated Change in NII From Immediate Interest Rate Shocks +100 bps -100 bps (1.7)% +3.1% Liability-sensitive balance sheet well positioned for potential future interest rate cuts Loan Portfolio Considerations • Loan portfolio most sensitive to changes in the 3- to 5-year portion of the yield curve • Fixed-rate nature of the loan portfolio (68%) results in slower repricing compared to deposits • Leveraging prepayment penalties on new loan originations to help maintain benefit of higher rates over time Deposit Considerations • Momentum in core deposit growth over the past two quarters • Continue to supplement core deposits with wholesale funding to support loan growth over time • Deposit base is more sensitive to changing interest rates • Stabilizing cumulative deposit beta of 49%1 at September 30, 2023, up from 48%1 at June 30, 2023 3Q22 -200 bps +2.4% (1.2)% +1.0% 4Q22 +1.3% (4.6)% +6.2% 1Q23 +12.2% 1 Calculated as the change in ending deposit rate over the change in ending Fed Funds rate from February 2022 (1.9)% +4.0% 2Q23 +7.5% (0.6)% +2.5% 3Q23 +4.9% -300 bps +1.2% +1.7% +17.9% +11.2% +7.2% |
14% 8% 26% 20% 17% 15% $84 $44 $151 $119 $99 $87 Less Than 1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years 5+ Years 18% 14% 11% 15% 14% 28% $459 $353 $297 $377 $354 $708 Less Than 1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years 5+ Years Loan Portfolio Repricing 21 Fixed, 68.4% Variable, 15.9% Adjustable, 15.7% Loan Portfolio Mix Fixed-Rate Portfolio ($2.5B) Variable-Rate Portfolio ($591M) Adjustable-Rate Portfolio ($584M) Years to Maturity Slowing pace of loan growth results in a slower turn of the loan portfolio and repricing: • 10% year-over-year total loan growth • $822M of total loan originations and advances over prior 12 months Variable-Rate Loan Floors 100% 100% 100% 100% 100% $501 $501 $501 $501 $501 At or Above Floor (9/30/23) Up 25 bps Up 50 bps Up 75 bps Up 100+ bps Cumulative Percent of balances at or above floor as rates rise • 85% of variable-rate portfolio have floors, all of which are at or above their floors • 98% of variable-rate loans are currently tied to SOFR or Prime Adjustable-Rate Repricing Schedule • 100% of the adjustable-rate loans are at or above their floors • Implies immediate repricing as rates rise, depending on the repricing schedule Dollars in millions Larger fixed-rate portfolio helps to mitigate repricing risk |
High Quality Securities Portfolio 22 35% 43% 41% 41% 38% 31% 24% 23% 24% 22% 20% 20% 21% 21% 22% 13% 13% 15% 14% 18% $542 $549 $559 $538 $553 3Q22 4Q22 1Q23 2Q23 3Q23 Mortgage-Backed Securities Municipal Bonds Corporate Securities Other Securities Available for Sale Portfolio AAA, 23% AA, 46% A, 3% BBB, 13% NR, 15% Rating Mix Derivatives Portfolio Offsetting AOCI Impact $(47,884) $(62,216) $28,581 $34,145 $(17,942) $(23,766) 4Q22 3Q23 MTM Securities MTM Derivatives Net Impact on AOCI1 • No held-to-maturity securities • Securities portfolio average duration of 5.0 years • Average securities portfolio yield of 4.39% • Unrealized losses on AFS securities were 15.0% of stockholders’ equity • AOCI / Total RBC of 4.0% vs. peer bank median of 9.2%2 1 Includes the tax-effected impact of $7,232 in 4Q22 and $9,583 in 3Q23 2 2Q23 median for publicly-traded banks on major exchanges with total assets between $3 billion and $10 billion (Source: S&P Capital IQ) Dollars in thousands |
Reconciliation of Non-GAAP Financial Measures – Annual 23 Dollars in thousands Tangible Common Equity & Tangible Common Equity/Tangible Assets 2016 2017 2018 2019 2020 2021 2022 Common Equity $ 115,366 $ 137,162 $ 220,998 $ 244,794 $ 265,405 $ 379,272 $ 394,064 Less: Preferred Stock - - - - - (66,514) (66,514) Less: Intangible Assets (4,060) (3,869) (3,678) (3,487) (3,296) (3,105) (2,914) Tangible Common Equity $ 111,306 $ 133,293 $ 217,320 $ 241,307 $ 262,109 $ 309,653 $ 324,636 Total Assets $ 1,260,394 $ 1,616,612 $ 1,973,741 $ 2,268,830 $ 2,927,345 $ 3,477,659 $ 4,345,662 Less: Intangible Assets (4,060) (3,869) (3,678) (3,487) (3,296) (3,105) (2,914) Tangible Assets $ 1,256,334 $ 1,612,743 $ 1,970,063 $ 2,265,343 $ 2,924,049 $ 3,474,554 $ 4,342,748 Tangible Common Equity/Tangible Assets 8.86% 8.26% 11.03% 10.65% 8.96% 8.91% 7.48% Tangible Book Value Per Share 2016 2017 2018 2019 2020 2021 2022 Book Value Per Common Share $ 4.69 $ 5.56 $ 7.34 $ 8.45 $ 9.43 $ 11.09 $ 11.80 Less: Effects of Intangible Assets (0.17) (0.16) (0.12) (0.12) (0.12) (0.11) (0.11) Tangible Book Value Per Common Share $ 4.52 $ 5.40 $ 7.22 $ 8.33 $ 9.31 $ 10.98 $ 11.69 Total Common Shares 24,589,861 24,679,861 30,097,274 28,973,572 28,143,493 28,206,566 27,751,950 As of and for the year ended December 31, |
Reconciliation of Non-GAAP Financial Measures – Profitability, TCE and TBV 24 Dollars in thousands Efficiency Ratio September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Noninterest Expense $ 14,157 $ 15,203 $ 14,183 $ 14,388 $ 15,350 Net Income Available to Common Shareholders Less: Amortization Intangible Assets (48) (48) (48) (34) (9) Adjusted Noninterest Expense $ 14,109 $ 15,155 $ 14,135 $ 14,354 $ 15,341 Average Total Shareholders' Equity Less: Average Preferred Stock Net Interest Income $ 34,095 $ 32,893 $ 28,567 $ 25,872 $ 25,421 Average Total Common Shareholders' Equity Noninterest Income 1,387 1,738 1,943 1,415 1,726 Less: Effects of Average Intangible Assets Less: (Gain) Loss on Sales of Securities - (30) 56 (50) - Average Tangible Common Equity Adjusted Operating Revenue $ 35,482 $ 34,601 $ 30,566 $ 27,237 $ 27,147 Annualized Return on Average Tangible Common Equity Efficiency Ratio 39.8% 43.8% 46.2% 52.7% 56.5% Tangible Common Equity & Tangible Common Equity/Tangible Assets September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Total Shareholders' Equity $ 382,007 $ 394,064 $ 402,006 $ 409,126 $ 415,960 Less: Preferred Stock (66,514) (66,514) (66,514) (66,514) (66,514) Total Common Shareholders' Equity 315,493 327,550 335,492 342,612 349,446 Less: Intangible Assets (2,962) (2,914) (2,866) (2,832) (2,823) Tangible Common Equity $ 312,531 $ 324,636 $ 332,626 $ 339,780 $ 346,623 Total Assets $ 4,128,987 $ 4,345,662 $ 4,602,899 $ 4,603,185 $ 4,557,070 Less: Intangible Assets (2,962) (2,914) (2,866) (2,832) (2,823) Tangible Assets $ 4,126,025 $ 4,342,748 $ 4,600,033 $ 4,600,353 $ 4,554,247 Tangible Common Equity/Tangible Assets 7.57% 7.48% 7.23% 7.39% 7.61% Tangible Book Value Per Share September 30, 2022 December 31, 2022 March 31, 2023 March 31, 2023 September 30, 2023 Book Value Per Common Share $ 11.44 $ 11.80 $ 12.05 $ 12.25 $ 12.47 Less: Effects of Intangible Assets (0.11) (0.11) (0.10) (0.10) (0.10) Tangible Book Value Per Common Share $ 11.33 $ 11.69 $ 11.95 $ 12.15 $ 12.37 Total Common Shares 27,587,978 27,751,950 27,845,244 27,973,995 28,015,505 As of and for the quarter ended, As of and for the quarter ended, As of and for the quarter ended, ROATCE As of and for the quarter ended, September 30, 2023 $ 8,616 $ 414,047 (66,514) $ 347,533 (2,828) $ 344,705 9.92% |
Reconciliation of Non-GAAP Financial Measures – PPNR 25 Dollars in thousands Pre-Provision Net Revenue September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Noninterest Income $ 1,387 $ 1,738 $ 1,943 $ 1,415 $ 1,726 Less: (Gain) Loss on Sales on Securities - (30) 5 6 (50) - Less: FHLB Advance Prepayment Income - - (299) - (493) Total Operating Noninterest Income 1,387 1,708 1,700 1,365 1,233 Plus: Net Interest Income 34,095 32,893 28,567 25,872 25,421 Net Operating Revenue 35,482 34,601 30,267 27,237 26,654 Noninterest Expense $ 14,157 $ 15,203 $ 14,183 $ 14,388 $ 15,350 Less: Amortization of Tax Credit Investments (114) (114) (114) (114) (113) Total Operating Noninterest Expense 14,043 15,089 14,069 14,274 15,237 Pre-Provision Net Revenue $ 21,439 $ 19,512 $ 16,198 $ 12,963 $ 11,417 Plus: Non-Operating Revenue Adjustments - 30 243 5 0 493 Less: Provision for Credit Losses 1,500 1,500 625 5 0 (600) Non-Operating Expense Adjustments 114 114 114 114 113 Provision for Income Taxes 5,312 4,193 4,060 3,033 2,768 Net Income $ 14,513 $ 13,735 $ 11,642 $ 9,816 $ 9,629 Average Assets $ 3,948,201 $ 4,251,345 $ 4,405,234 $ 4,483,662 $ 4,504,937 Pre-Provision Net Revenue Return on Average Assets 2.15% 1.82% 1.49% 1.16% 1.01% As of and for the quarter ended, |
Reconciliation of Non-GAAP Financial Measures – Core NIM 26 Dollars in thousands Core Net Interest Margin September 30, 2022 December 31, 2022 March 31, 2023 June 30, 2023 September 30, 2023 Net Interest Income (Tax-Equivalent Basis) $ 34,418 $ 33,260 $ 28,947 $ 26,280 $ 25,822 Less: Loan Fees (1,400) (1,100) (998) (941) (914) Less: PPP Interest and Fees (96) (48) (2) (3) (2) Core Net Interest Margin $ 32,922 $ 32,112 $ 27,947 $ 25,336 $ 24,906 Average Interest Earning Assets $ 3,871,896 $ 4,177,644 $ 4,323,706 $ 4,395,050 $ 4,416,424 Less: Average PPP Loans (2,424) (1,109) (999) (913) (828) Core Average Interest Earning Assets $ 3,869,472 $ 4,176,535 $ 4,322,707 $ 4,394,137 $ 4,415,596 Core Net Interest Margin 3.38% 3.05% 2.62% 2.31% 2.24% Loan Interest Income (Tax-Equivalent Basis) $ 37,820 $ 42,702 $ 45,265 $ 48,066 $ 49,326 Less: Loan Fees (1,400) (1,100) (998) (941) (914) Less: PPP Interest and Fees (96) (48) (2) (3) (2) Core Loan Interest Income $ 36,324 $ 41,554 $ 44,265 $ 47,122 $ 48,410 Average Loans $ 3,265,814 $ 3,482,150 $ 3,630,446 $ 3,716,534 $ 3,722,594 Less: Average PPP Loans (2,424) (1,109) (999) (913) (828) Core Average Loans $ 3,263,390 $ 3,481,041 $ 3,629,447 $ 3,715,621 $ 3,721,766 Core Loan Yield 4.42% 4.74% 4.95% 5.09% 5.16% As of and for the quarter ended, |