Second Quarter 2023 Highlights
- Annualized return on average assets (ROA) of 0.88%, compared to
1.07% for the first quarter of 2023.
- Annualized return on average shareholders’ equity (ROE) of
9.69%, compared to 11.70% for the first quarter of 2023, and
annualized return on average tangible common equity (ROATCE)(1) of
10.48%, compared to 12.90% for the first quarter of 2023.
- Gross loans increased $51.9 million, or 5.6% annualized, from
the first quarter of 2023.
- Deposits increased by $166.8 million, or 19.6% annualized, from
the first quarter of 2023, including an increase of core
deposits(2) of $45.3 million, or 7.4% annualized.
- Total borrowing capacity of $1.5 billion at June 30, 2023,
compared to $783.0 million at December 31, 2022.
- Net interest margin (on a fully tax-equivalent basis) of 2.40%,
compared to 2.72% in the first quarter of 2023.
- Efficiency ratio(1) of 52.7%, compared to 46.2% for the first
quarter of 2023.
- Noninterest expense increased slightly by $205,000, or 1.4%,
from the first quarter of 2023, with annualized noninterest expense
to average assets of 1.29%, compared to 1.31% for the first quarter
of 2023.
- A credit loss provision of $550,000 was recorded to support
continued loan growth, with allowance for credit losses to total
loans of 1.36% at both June 30, 2023 and March 31, 2023.
- Annualized net loan charge-offs (recoveries) as a percentage of
average loans of 0.00% for the second quarter of 2023, in-line with
the first quarter of 2023.
- Nonperforming assets to total assets of 0.02% at June 30, 2023
and March 31, 2023.
- Tangible book value per share(1) of $12.15 at June 30, 2023, an
increase of $0.20, or 6.7% annualized, compared to $11.95 at March
31, 2023.
(1) Represents a non-GAAP financial measure. See "Non-GAAP
Financial Measures" for further details. (2) Core deposits are
defined as total deposits less brokered deposits and certificates
of deposit greater than $250,000.
Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the
parent company of Bridgewater Bank (the Bank), today announced net
income of $9.8 million for the second quarter of 2023, compared to
$11.6 million for the first quarter of 2023, and $12.9 million for
the second quarter of 2022. Earnings per diluted common share for
the second quarter of 2023 were $0.31, compared to $0.37 per
diluted common share for the first quarter of 2023, and $0.41 per
diluted common share for the same period in 2022.
“Bridgewater’s second quarter results were highlighted by
several improving financial trends as we continue to manage the
business through a challenging banking environment,” said Chairman,
Chief Executive Officer, and President, Jerry Baack. “The overall
composition of our balance sheet improved with a strong inflow of
deposits, including growth in core deposits, and a reduction in
overall borrowings. While our net interest margin remained under
pressure, we saw the pace of compression slow noticeably on a
month-to-month basis during the quarter. In addition, noninterest
expense was again well controlled and asset quality remained
superb.”
“During the quarter, our teams maintained their focus on
supporting and growing our client base, both by proactively
engaging with our existing clients and cultivating new
relationships across the Twin Cities market. In July, we also
relocated our downtown Minneapolis branch to an enhanced location
with more space to better serve our clients. We believe our proven
ability to develop strong client relationships, combined with
encouraging financial trends, will continue to drive success moving
forward.”
Key Financial Measures
As of and for the Three Months
Ended
As of and for the Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Per Common Share Data
Basic Earnings Per Share
$
0.32
$
0.38
$
0.43
$
0.70
$
0.83
Diluted Earnings Per Share
0.31
0.37
0.41
0.69
0.80
Book Value Per Share
12.25
12.05
11.14
12.25
11.14
Tangible Book Value Per Share (1)
12.15
11.95
11.03
12.15
11.03
Basic Weighted Average Shares
Outstanding
27,886,425
27,726,894
27,839,260
27,807,100
27,980,749
Diluted Weighted Average Shares
Outstanding
28,198,739
28,490,046
28,803,842
28,350,705
28,991,780
Shares Outstanding at Period End
27,973,995
27,845,244
27,677,372
27,973,995
27,677,372
Selected Performance
Ratios
Return on Average Assets (Annualized)
0.88
%
1.07
%
1.38
%
0.97
%
1.40
%
Pre-Provision Net Revenue Return on
Average Assets (Annualized) (1)
1.16
1.49
2.19
1.32
2.16
Return on Average Shareholders' Equity
(Annualized)
9.69
11.70
13.55
10.69
13.27
Return on Average Tangible Common Equity
(Annualized) (1)
10.48
12.90
15.26
11.68
14.91
Yield on Interest Earning Assets (2)
5.06
4.91
4.16
4.99
4.15
Yield on Total Loans, Gross (2)
5.19
5.06
4.45
5.12
4.45
Cost of Total Deposits
2.66
2.01
0.46
2.34
0.44
Cost of Funds
2.91
2.41
0.63
2.66
0.61
Net Interest Margin (2)
2.40
2.72
3.58
2.55
3.59
Core Net Interest Margin (1)(2)
2.31
2.62
3.34
2.47
3.34
Efficiency Ratio (1)
52.7
46.2
40.2
49.3
41.2
Noninterest Expense to Average Assets
(Annualized)
1.29
1.31
1.47
1.30
1.51
Loan to Deposit Ratio
104.4
108.0
100.7
Core Deposits to Total Deposits (3)
70.3
72.4
82.9
Tangible Common Equity to Tangible Assets
(1)
7.39
7.23
7.87
Capital Ratios (Bank Only)
(4)
Tier 1 Leverage Ratio
10.69
%
10.61
%
11.43
%
Common Equity Tier 1 Risk-based Capital
Ratio
11.66
11.37
11.53
Tier 1 Risk-based Capital Ratio
11.66
11.37
11.53
Total Risk-based Capital Ratio
12.91
12.62
12.74
Capital Ratios (Consolidated)
(4)
Tier 1 Leverage Ratio
9.47
%
9.41
%
10.33
%
Common Equity Tier 1 Risk-based Capital
Ratio
8.72
8.48
8.50
Tier 1 Risk-based Capital Ratio
10.33
10.08
10.29
Total Risk-based Capital Ratio
13.50
13.25
13.98
______________________________
(1)
Represents a non-GAAP financial measure.
See "Non-GAAP Financial Measures" for further details.
(2)
Amounts calculated on a tax-equivalent
basis using the statutory federal tax rate of 21%.
(3)
Core deposits are defined as total
deposits less brokered deposits and certificates of deposit greater
than $250,000.
(4)
Preliminary data. Current period subject
to change prior to filings with applicable regulatory agencies.
Selected Financial Data
June 30,
March 31,
December 31,
September 30,
June 30,
(dollars in thousands)
2023
2023
2022
2022
2022
Selected Balance Sheet Data
Total Assets
$
4,603,185
$
4,602,899
$
4,345,662
$
4,128,987
$
3,883,264
Total Loans, Gross
3,736,211
3,684,360
3,569,446
3,380,082
3,225,885
Allowance for Credit Losses
50,701
50,148
47,996
46,491
44,711
Goodwill and Other Intangibles
2,832
2,866
2,914
2,962
3,009
Deposits
3,577,932
3,411,123
3,416,543
3,305,074
3,201,953
Tangible Common Equity (1)
339,780
332,626
324,636
312,531
305,360
Total Shareholders' Equity
409,126
402,006
394,064
382,007
374,883
Average Total Assets - Quarter-to-Date
4,483,662
4,405,234
4,251,345
3,948,201
3,743,575
Average Shareholders' Equity -
Quarter-to-Date
406,347
403,533
387,589
384,020
381,448
______________________________
(1)
Represents a non-GAAP financial measure.
See "Non-GAAP Financial Measures" for further details.
For the Three Months
Ended
For the Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Selected Income Statement Data
Interest Income
$
55,001
$
51,992
$
37,782
$
106,993
$
72,476
Interest Expense
29,129
23,425
5,252
52,554
9,766
Net Interest Income
25,872
28,567
32,530
54,439
62,710
Provision for Credit Losses
50
625
3,025
675
4,700
Net Interest Income after Provision for
Credit Losses
25,822
27,942
29,505
53,764
58,010
Noninterest Income
1,415
1,943
1,650
3,358
3,207
Noninterest Expense
14,388
14,183
13,752
28,571
27,260
Income Before Income Taxes
12,849
15,702
17,403
28,551
33,957
Provision for Income Taxes
3,033
4,060
4,521
7,093
8,813
Net Income
9,816
11,642
12,882
21,458
25,144
Preferred Stock Dividends
(1,014
)
(1,013
)
(1,014
)
(2,027
)
(2,027
)
Net Income Available to Common
Shareholders
$
8,802
$
10,629
$
11,868
$
19,431
$
23,117
Income Statement
Net Interest Income
Net interest income was $25.9 million for the second quarter of
2023, a decrease of $2.7 million, from $28.6 million in the first
quarter of 2023, and a decrease of $6.7 million, from $32.5 million
in the second 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 $4.40
billion for the second quarter of 2023, an increase of $71.3
million, or 1.7%, from $4.32 billion for the first quarter of 2023,
and an increase of $723.3 million, or 19.7%, from $3.67 billion for
the second quarter of 2022. The linked-quarter increase in average
interest earning assets was primarily due to continued growth in
the loan portfolio. 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.
Net interest margin (on a fully tax-equivalent basis) for the
second quarter of 2023 was 2.40%, a 32 basis point decrease from
2.72% in the first quarter of 2023, and a 118 basis point decrease
from 3.58% in the second 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, for the second quarter of 2023 was 2.31%, a 31 basis
point decrease from 2.62% in the first quarter of 2023, and a 103
basis point decrease from 3.34% in the second 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.
Interest income was $55.0 million for the second quarter of
2023, an increase of $3.0 million, from $52.0 million in the first
quarter of 2023, and an increase of $17.2 million, from $37.8
million in the second quarter of 2022. The yield on interest
earning assets (on a fully tax-equivalent basis) was 5.06% in the
second quarter of 2023, compared to 4.91% in the first quarter of
2023, and 4.16% in the second 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 5.19% in the second quarter of 2023, which was 13
basis points higher than 5.06% in the first quarter of 2023, and 76
basis points higher than 4.43% in the second 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 decrease in fee recognition,
the Company is encouraged that the core loan yield continues to
rise as new loan originations and the existing portfolio reprice in
the higher rate environment.
A summary of interest and fees recognized on loans, excluding
PPP loans, for the periods indicated is as follows:
Three Months Ended
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
Interest
5.09
%
4.95
%
4.74
%
4.42
%
4.17
%
Fees
0.10
0.11
0.12
0.17
0.26
Yield on Loans, Excluding PPP Loans
5.19
%
5.06
%
4.86
%
4.59
%
4.43
%
Interest expense was $29.1 million for the second quarter of
2023, an increase of $5.7 million, from $23.4 million in the first
quarter of 2023, and an increase of $23.9 million, from $5.3
million in the second quarter of 2022. The cost of interest bearing
liabilities increased 56 basis points on a linked-quarter basis
from 3.03% in the first quarter of 2023 to 3.59% in the second
quarter of 2023, primarily due to higher rates paid on deposits and
increased utilization of FHLB advances in the rising interest rate
environment. On a year-over-year basis, the cost of interest
bearing liabilities increased 273 basis points from 0.86% in the
second quarter of 2022 to 3.59% in the second quarter of 2023,
primarily due to the rapid increase in market interest rates that
occurred between the periods, which impacted all funding
sources.
Interest expense on deposits was $23.0 million for the second
quarter of 2023, an increase of $6.6 million, from $16.4 million in
the first quarter of 2023, and an increase of $19.5 million, from
$3.5 million in the second quarter of 2022. The cost of total
deposits increased 65 basis points on a linked-quarter basis from
2.01% in the first quarter of 2023, to 2.66% in the second 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 220
basis points from 0.46% in the second quarter of 2022, to 2.66% in
the second quarter of 2023, primarily due to upward repricing of
the deposit portfolio in the higher interest rate environment.
A summary of the Company’s average balances, interest yields and
rates, and net interest margin for the three months ended June 30,
2023, March 31, 2023, and June 30, 2022 is as follows:
For the Three Months
Ended
June 30, 2023
March 31, 2023
June 30, 2022
Average
Interest
Yield/
Average
Interest
Yield/
Average
Interest
Yield/
Balance
& Fees
Rate
Balance
& Fees
Rate
Balance
& Fees
Rate
(dollars in thousands)
Interest Earning Assets:
Cash Investments
$
59,963
$
587
3.93
%
$
63,253
$
447
2.86
%
$
61,046
$
40
0.26
%
Investment Securities:
Taxable Investment Securities
568,143
6,000
4.24
574,242
5,958
4.21
417,142
2,696
2.59
Tax-Exempt Investment Securities (1)
27,081
300
4.44
29,803
330
4.49
74,261
795
4.30
Total Investment Securities
595,224
6,300
4.24
604,045
6,288
4.22
491,403
3,491
2.85
Paycheck Protection Program Loans (2)
913
2
1.00
999
2
1.00
8,335
263
12.67
Loans (1)(2)
3,715,621
48,064
5.19
3,629,447
45,263
5.06
3,099,344
34,205
4.43
Total Loans
3,716,534
48,066
5.19
3,630,446
45,265
5.06
3,107,679
34,468
4.45
Federal Home Loan Bank Stock
23,330
456
7.84
25,962
372
5.81
11,620
59
2.04
Total Interest Earning Assets
4,395,051
55,409
5.06
%
4,323,706
52,372
4.91
%
3,671,748
38,058
4.16
%
Noninterest Earning Assets
88,611
81,528
71,827
Total Assets
$
4,483,662
$
4,405,234
$
3,743,575
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
683,034
$
5,918
3.48
%
$
461,372
$
2,780
2.44
%
$
552,502
$
694
0.50
%
Savings and Money Market Deposits
861,947
7,048
3.28
1,044,794
6,499
2.52
925,354
1,185
0.51
Time Deposits
269,439
1,702
2.53
248,174
1,069
1.75
280,645
665
0.95
Brokered Deposits
896,989
8,330
3.72
743,465
6,026
3.29
403,931
912
0.91
Total Interest Bearing Deposits
2,711,409
22,998
3.40
2,497,805
16,374
2.66
2,162,432
3,456
0.64
Federal Funds Purchased
210,677
2,761
5.26
415,111
4,944
4.83
137,379
410
1.20
Notes Payable
13,750
285
8.33
13,750
263
7.77
—
—
—
FHLB Advances
242,714
2,092
3.46
128,222
861
2.72
47,511
167
1.41
Subordinated Debentures
79,041
993
5.04
78,945
983
5.05
92,396
1,219
5.29
Total Interest Bearing Liabilities
3,257,591
29,129
3.59
%
3,133,833
23,425
3.03
%
2,439,718
5,252
0.86
%
Noninterest Bearing
Liabilities:
Noninterest Bearing Transaction
Deposits
755,040
813,598
882,477
Other Noninterest Bearing Liabilities
64,684
54,270
39,932
Total Noninterest Bearing Liabilities
819,724
867,868
922,409
Shareholders' Equity
406,347
403,533
381,448
Total Liabilities and Shareholders'
Equity
$
4,483,662
$
4,405,234
$
3,743,575
Net Interest Income / Interest Rate
Spread
26,280
1.47
%
28,947
1.88
%
32,806
3.30
%
Net Interest Margin (3)
2.40
%
2.72
%
3.58
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and
Loans
(408
)
(380
)
(276
)
Net Interest Income
$
25,872
$
28,567
$
32,530
______________________________
(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.
Provision for Credit Losses
The provision for credit losses on loans was $550,000 for the
second quarter of 2023, compared to $1.5 million for the first
quarter of 2023 and $3.0 million for the second quarter of 2022.
The provision recorded in the second quarter of 2023 was primarily
attributable to the growth of the loan portfolio. The allowance for
credit losses on loans to total loans was 1.36% at June 30, 2023
and March 31, 2023, compared to 1.39% at June 30, 2022.
The following table presents the activity in the Company’s
allowance for credit losses on loans for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Balance at Beginning of Period
$
50,148
$
47,996
$
41,692
$
47,996
$
40,020
Impact of Adopting CECL
—
650
—
650
—
Provision for Credit Losses
550
1,500
3,025
2,050
4,700
Charge-offs
(3
)
(4
)
(14
)
(7
)
(29
)
Recoveries
6
6
8
12
20
Balance at End of Period
$
50,701
$
50,148
$
44,711
$
50,701
$
44,711
The provision for credit losses for off-balance sheet credit
exposures was a negative provision of $500,000 for the second
quarter of 2023, compared to a negative $875,000 for the first
quarter of 2023 and zero for the second 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.
The following table presents a summary of the activity in the
provision for credit losses for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Provision for Credit Losses on Loans
$
550
$
1,500
$
3,025
$
2,050
$
4,700
Provision for Credit Losses for
Off-Balance Sheet Credit Exposures
(500
)
(875
)
—
(1,375
)
—
Provision for Credit Losses
$
50
$
625
$
3,025
$
675
$
4,700
Noninterest Income
Noninterest income was $1.4 million for the second quarter of
2023, a decrease of $528,000 from $1.9 million for the first
quarter of 2023, and a decrease of $235,000 from $1.7 million for
the second quarter of 2022. The linked-quarter decrease was
primarily due to a decrease in letter of credit fees and FHLB
prepayment income. The year-over-year decrease was primarily due to
decreased letter of credit fees and other income, offset partially
by an increase in customer service fees and bank-owned life
insurance income.
The following table presents the major components of noninterest
income for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Noninterest Income:
Customer Service Fees
$
368
$
349
$
298
$
717
$
579
Net Gain (Loss) on Sales of Securities
50
(56
)
52
(6
)
52
Letter of Credit Fees
379
634
564
1,013
806
Debit Card Interchange Fees
155
138
152
293
285
Swap Fees
—
—
—
—
557
Bank-Owned Life Insurance
238
234
149
472
297
FHLB Prepayment Income
—
299
—
299
—
Other Income
225
345
435
570
631
Totals
$
1,415
$
1,943
$
1,650
$
3,358
$
3,207
Noninterest Expense
Noninterest expense was $14.4 million for the second quarter of
2023, an increase of $205,000 from $14.2 million for the first
quarter of 2023, and an increase of $636,000 from $13.8 million for
the second quarter of 2022. The linked-quarter increase was
primarily due to industry-wide increases in the FDIC insurance
assessment, offset partially by a decrease in salaries and employee
benefits resulting from lower discretionary incentive accruals and
a decrease in occupancy and equipment. The year-over-year increase
was primarily attributable to increases in the FDIC insurance
assessment and derivative collateral fees, offset partially by
decreases in salaries and employee benefits and marketing and
advertising.
The following table presents the major components of noninterest
expense for the periods indicated:
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
(dollars in thousands)
2023
2023
2022
2023
2022
Noninterest Expense:
Salaries and Employee Benefits
$
8,589
$
8,815
$
8,977
$
17,404
$
17,671
Occupancy and Equipment
1,075
1,209
1,042
2,284
2,127
FDIC Insurance Assessment
900
665
330
1,565
690
Data Processing
401
357
356
758
653
Professional and Consulting Fees
829
755
742
1,584
1,436
Derivative Collateral Fees
404
380
27
784
29
Information Technology and
Telecommunications
711
683
594
1,394
1,172
Marketing and Advertising
321
262
524
583
1,150
Intangible Asset Amortization
34
48
47
82
95
Amortization of Tax Credit Investments
114
114
63
228
180
Other Expense
1,010
895
1,050
1,905
2,057
Totals
$
14,388
$
14,183
$
13,752
$
28,571
$
27,260
The Company had 253 full-time equivalent employees at June 30,
2023, compared to 246 employees at March 31, 2023, and 236
employees at June 30, 2022. The efficiency ratio, a non-GAAP
financial measure, was 52.7% for the second quarter of 2023,
compared to 46.2% for the first quarter of 2023, and 40.2% for the
second quarter of 2022.
Income Taxes
The effective combined federal and state income tax rate for the
second quarter of 2023 was 23.6%, a decrease from 25.9% for the
first quarter of 2023, and 26.0% for the second quarter of
2022.
Balance Sheet
Total assets at June 30, 2023 and March 31, 2023 were $4.60
billion, an 18.5% increase from $3.88 billion at June 30, 2022. The
year-over-year increase in total assets was primarily due to strong
loan growth, purchases of investment securities, and an increase in
cash and cash equivalent balances.
Total gross loans at June 30, 2023 were $3.74 billion, an
increase of $51.9 million, or 5.6% annualized, over total gross
loans of $3.68 billion at March 31, 2023, and an increase of $510.3
million, or 15.8%, over total gross loans of $3.23 billion at June
30, 2022. The increase in the loan portfolio during the second
quarter of 2023 was primarily due to the funding of existing
construction and land development loans and growth in the 1-4
family mortgage segment, offset partially by a decrease in the 1-4
family construction segment.
The following table presents the dollar composition of the
Company’s loan portfolio, by category, at the dates indicated:
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
(dollars in thousands)
Commercial
$
459,184
$
454,193
$
435,344
$
412,448
$
403,569
Paycheck Protection Program
877
963
1,049
1,192
4,860
Construction and Land Development
351,069
312,277
295,554
280,380
305,552
1 - 4 Family Construction
69,648
85,797
70,242
55,177
53,639
Real Estate Mortgage:
1 - 4 Family Mortgage
400,708
380,210
355,474
341,102
334,815
Multifamily
1,314,524
1,320,081
1,306,738
1,230,509
1,087,865
CRE Owner Occupied
159,088
158,650
149,905
151,088
142,214
CRE Nonowner Occupied
971,532
962,671
947,008
900,691
886,432
Total Real Estate Mortgage Loans
2,845,852
2,821,612
2,759,125
2,623,390
2,451,326
Consumer and Other
9,581
9,518
8,132
7,495
6,939
Total Loans, Gross
3,736,211
3,684,360
3,569,446
3,380,082
3,225,885
Allowance for Loan Losses
(50,701
)
(50,148
)
(47,996
)
(46,491
)
(44,711
)
Net Deferred Loan Fees
(7,718
)
(8,735
)
(9,293
)
(9,088
)
(9,536
)
Total Loans, Net
$
3,677,792
$
3,625,477
$
3,512,157
$
3,324,503
$
3,171,638
Total deposits at June 30, 2023 were $3.58 billion, an increase
of $166.8 million, or 19.6% annualized, over total deposits of
$3.41 billion at March 31, 2023, and an increase of $376.0 million,
or 11.7%, over total deposits of $3.20 billion at June 30, 2022.
Deposits increased in the second quarter of 2023 primarily due to
inflows of core deposits, defined as deposits excluding brokered
deposits and time deposits greater than $250,000, and brokered
deposits. Brokered deposits continue to be used as a supplemental
funding source, as needed, to support continued loan portfolio
growth. Uninsured deposits as of June 30, 2023 were 22% of total
deposits, down from 24% as of March 31, 2023.
The following table presents the dollar composition of the
Company’s deposit portfolio, by category, at the dates
indicated:
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
(dollars in thousands)
Noninterest Bearing Transaction
Deposits
$
751,217
$
742,198
$
884,272
$
961,084
$
961,998
Interest Bearing Transaction Deposits
719,488
630,037
451,992
510,396
522,151
Savings and Money Market Deposits
860,613
913,013
1,031,873
1,077,333
952,138
Time Deposits
271,783
266,213
272,253
293,052
272,424
Brokered Deposits
974,831
859,662
776,153
463,209
493,242
Total Deposits
$
3,577,932
$
3,411,123
$
3,416,543
$
3,305,074
$
3,201,953
Capital
Total shareholders’ equity at June 30, 2023 was $409.1 million,
an increase of $7.1 million, or 1.8%, compared to total
shareholders’ equity of $402.0 million at March 31, 2023, and an
increase of $34.2 million, or 9.1%, over total shareholders’ equity
of $374.9 million at June 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, stock
repurchases, the adoption of the Current Expected Credit Losses
(CECL) accounting methodology and preferred stock dividends. The
Company did not purchase any shares of its common stock during the
second quarter of 2023.
Tangible book value per share, a non-GAAP financial measure, was
$12.15 as of June 30, 2023, an increase of 1.7% from $11.95 as of
March 31, 2023, and an increase of 10.1% from $11.03 as of June 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. Tangible common
equity as a percentage of tangible assets, a non-GAAP financial
measure, was 7.39% at June 30, 2023, compared to 7.23% at March 31,
2023, and 7.87% at June 30, 2022.
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 September 1, 2023 to shareholders of record of the Series A
Preferred Stock at the close of business on August 15, 2023.
Liquidity
Total on- and off-balance sheet liquidity was $1.96 billion as
of June 30, 2023, compared to $1.92 billion at March 31, 2023 and
$1.53 billion at June 30, 2022. The Company did not utilize the
Bank Term Funding Program (BTFP) or Federal Reserve Discount Window
during the second quarter of 2023.
Primary Liquidity—On-Balance
Sheet
June 30, 2023
March 31, 2023
December 31, 2022
September 30, 2022
June 30, 2022
(dollars in thousands)
Cash and Cash Equivalents
$
138,618
$
177,116
$
48,090
$
36,332
$
43,168
Securities Available for Sale
538,220
559,430
548,613
542,007
482,583
Less: Pledged Securities
(236,206
)
(234,452
)
—
—
—
Total Primary Liquidity
$
440,632
$
502,094
$
596,703
$
578,339
$
525,751
Ratio of Primary Liquidity to Total
Deposits
12.3
%
14.7
%
17.5
%
17.5
%
16.4
%
Secondary Liquidity—Off-Balance
Sheet
Borrowing Capacity
Net Secured Borrowing Capacity with the
FHLB
$
400,792
$
246,795
$
390,898
$
426,604
$
569,076
Net Secured Borrowing Capacity with the
Federal Reserve Bank
986,644
990,685
157,827
156,534
169,766
Unsecured Borrowing Capacity with
Correspondent Lenders
108,000
158,000
208,000
208,000
208,000
Secured Borrowing Capacity with
Correspondent Lender
26,250
26,250
26,250
40,000
25,000
Total Secondary Liquidity
1,521,686
1,421,730
782,975
831,138
971,842
Total Primary and Secondary Liquidity
$
1,962,318
$
1,923,824
$
1,379,678
$
1,409,477
$
1,497,593
Ratio of Primary and Secondary Liquidity
to Total Deposits
54.8
%
56.4
%
40.4
%
42.6
%
46.8
%
Asset Quality
Annualized net charge-offs (recoveries) as a percentage of
average loans were 0.00% for the second quarter of 2023, first
quarter of 2023 and second quarter of 2022. At June 30, 2023, the
Company’s nonperforming assets, which include nonaccrual loans,
loans past due 90 days and still accruing, and foreclosed assets,
were $778,000, or 0.02% of total assets, as compared to $809,000,
or 0.02% of total assets at March 31, 2023, and $688,000, or 0.02%
of total assets at June 30, 2022.
Loans that have potential weaknesses that warrant a watchlist
risk rating at June 30, 2023 totaled $27.2 million, compared to
$27.6 million at March 31, 2023, and $34.7 million at June 30,
2022. Loans that warranted a substandard risk rating at June 30,
2023 totaled $33.8 million, compared to $36.3 million at March 31,
2023, and $27.0 million at June 30, 2022. The linked-quarter
decrease was primarily due to the upgrade of one loan relationship;
however, increased uncertainty in the economic environment may
result in future watchlist or adverse classifications in the loan
portfolio.
The following table presents a summary of asset quality
measurements at the dates indicated:
As of and for the Three Months
Ended
June 30,
March 31,
December 31
September 30,
June 30,
(dollars in thousands)
2023
2023
2022
2022
2022
Selected Asset Quality Data
Loans 30-89 Days Past Due
$
—
$
21
$
186
$
38
$
225
Loans 30-89 Days Past Due to Total
Loans
0.00
%
0.00
%
0.01
%
0.00
%
0.01
%
Nonperforming Loans
$
662
$
693
$
639
$
663
$
688
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)
$
778
$
809
$
639
$
663
$
688
Nonperforming Assets to Total Assets
(1)
0.02
%
0.02
%
0.01
%
0.02
%
0.02
%
Allowance for Credit Losses to Total
Loans
1.36
1.36
1.34
1.38
1.39
Allowance for Credit Losses to Nonaccrual
Loans
7,658.76
7,236.36
7,511.11
7,012.22
6,498.69
Net Loan Charge-Offs (Recoveries)
(Annualized) to Average Loans
0.00
0.00
0.00
(0.03
)
0.00
______________________________
(1)
Nonperforming assets are defined as
nonaccrual loans plus loans 90 days past due and still accruing
plus foreclosed assets.
The Company will host a conference call to discuss its second
quarter 2023 financial results on Thursday, July 27, 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 5127957. The
replay will be available through August 3, 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 June 30,
2023, Bridgewater is considered one of the largest locally led
banks in the State of Minnesota, and has received numerous awards
for its growth, banking services, and esteemed corporate
culture.
Use of Non-GAAP financial measures
In addition to the results presented in accordance with U.S.
Generally Accepted Accounting Principles (GAAP), the Company
routinely supplements its evaluation with an analysis of certain
non-GAAP financial measures. The Company believes these non-GAAP
financial measures, in addition to the related GAAP measures,
provide meaningful information to investors to help them understand
the Company’s operating performance and trends, and to facilitate
comparisons with the performance of peers. These disclosures should
not be viewed as a substitute for operating results determined in
accordance with GAAP, nor are they necessarily comparable to
non-GAAP performance measures that may be presented by other
companies. Reconciliations of non-GAAP disclosures used in this
earnings release to the comparable GAAP measures are provided in
the accompanying tables.
Forward-Looking Statements
This earnings release contains “forward-looking statements”
within the meaning of the safe harbor provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Forward-looking
statements include, without limitation, statements concerning
plans, estimates, calculations, forecasts and projections with
respect to the anticipated future performance of the Company. These
statements are often, but not always, identified by words such as
“may”, “might”, “should”, “could”, “predict”, “potential”,
“believe”, “expect”, “continue”, “will”, “anticipate”, “seek”,
“estimate”, “intend”, “plan”, “projection”, “would”, “annualized”,
“target” and “outlook”, or the negative version of those words or
other comparable words of a future or forward-looking nature.
Forward-looking statements are neither historical facts nor
assurances of future performance. Instead, they are based only on
our current beliefs, expectations and assumptions regarding our
business, future plans and strategies, projections, anticipated
events and trends, the economy and other future conditions. Because
forward-looking statements relate to the future, they are subject
to inherent uncertainties, risks and changes in circumstances that
are difficult to predict and many of which are outside of our
control. Our actual results and financial condition may differ
materially from those indicated in the forward-looking statements.
Therefore, you should not rely on any of these forward-looking
statements. Important factors that could cause our actual results
and financial condition to differ materially from those indicated
in the forward-looking statements include, among others, the
following: interest rate risk, including the effects of recent and
anticipated rate increases by the Federal Reserve; fluctuations in
the values of the securities held in our securities portfolio,
including as the result of rising interest rates, which has
resulted in unrealized losses in our portfolio; 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 and Signature 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 and may withdraw
deposits to diversify their exposure; 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; developments and uncertainty
related to the future use and availability of some reference rates,
such as the expected discontinuation of the London Interbank
Offered Rate, as well as other alternative reference rates; 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; 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 and
Signature Bank; risks related to climate change and the negative
impact it may have on our customers and their businesses; the
imposition of tariffs or 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 Russian invasion of
Ukraine; potential impairment to the goodwill the Company recorded
in connection with our past acquisition; changes to U.S. or state
tax laws, regulations and guidance, including the new 1% excise tax
on stock buybacks by publicly traded companies; and any other risks
described in the “Risk Factors” sections of reports filed by the
Company with the Securities and Exchange Commission.
Any forward-looking statement made by us in this press release
is based only on information currently available to us and speaks
only as of the date on which it is made. The Company undertakes no
obligation to publicly update any forward-looking statement,
whether written or oral, that may be made from time to time,
whether as a result of new information, future developments or
otherwise.
Bridgewater Bancshares, Inc. and
Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share
data)
June 30,
December 31,
June 30,
2023
2022
2022
(Unaudited)
(Unaudited)
ASSETS
Cash and Cash Equivalents
$
177,101
$
87,043
$
73,517
Bank-Owned Certificates of Deposit
1,225
1,181
1,138
Securities Available for Sale, at Fair
Value
538,220
548,613
482,583
Loans, Net of Allowance for Credit Losses
of $50,701 at June 30, 2023 (unaudited), $47,996 at December 31,
2022 and $44,711 at June 30, 2022 (unaudited)
3,677,792
3,512,157
3,171,638
Federal Home Loan Bank (FHLB) Stock, at
Cost
21,557
19,606
9,921
Premises and Equipment, Net
49,710
48,445
49,294
Foreclosed Assets
116
—
—
Accrued Interest
13,822
13,479
10,010
Goodwill
2,626
2,626
2,626
Other Intangible Assets, Net
206
288
383
Bank-Owned Life Insurance
33,958
33,485
25,614
Other Assets
86,852
78,739
56,540
Total Assets
$
4,603,185
$
4,345,662
$
3,883,264
LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing
$
751,217
$
884,272
$
961,998
Interest Bearing
2,826,715
2,532,271
2,239,955
Total Deposits
3,577,932
3,416,543
3,201,953
Federal Funds Purchased
195,000
287,000
86,000
Notes Payable
13,750
13,750
—
FHLB Advances
262,000
97,000
56,500
Subordinated Debentures, Net of Issuance
Costs
79,096
78,905
92,459
Accrued Interest Payable
2,974
2,831
1,393
Other Liabilities
63,307
55,569
70,076
Total Liabilities
4,194,059
3,951,598
3,508,381
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 June 30,
2023 (unaudited), December 31, 2022, and June 30, 2022
(unaudited)
66,514
66,514
66,514
Common Stock- $0.01 par value; Authorized
75,000,000
Common Stock - Issued and Outstanding
27,973,995 at June 30, 2023 (unaudited), 27,751,950 at December 31,
2022 and 27,677,372 at June 30, 2022 (unaudited)
280
278
277
Additional Paid-In Capital
99,044
96,529
96,689
Retained Earnings
264,196
248,685
222,464
Accumulated Other Comprehensive Loss
(20,908
)
(17,942
)
(11,061
)
Total Shareholders' Equity
409,126
394,064
374,883
Total Liabilities and Equity
$
4,603,185
$
4,345,662
$
3,883,264
Bridgewater Bancshares, Inc. and
Subsidiaries
Consolidated Statements of
Income
(dollars in thousands, except per share
data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
INTEREST INCOME
Loans, Including Fees
$
47,721
$
44,955
$
34,358
$
92,676
$
66,102
Investment Securities
6,237
6,218
3,325
12,455
6,195
Other
1,043
819
99
1,862
179
Total Interest Income
55,001
51,992
37,782
106,993
72,476
INTEREST EXPENSE
Deposits
22,998
16,374
3,456
39,372
6,614
Notes Payable
285
263
—
548
—
FHLB Advances
2,092
861
167
2,953
317
Subordinated Debentures
993
983
1,219
1,976
2,416
Federal Funds Purchased
2,761
4,944
410
7,705
419
Total Interest Expense
29,129
23,425
5,252
52,554
9,766
NET INTEREST INCOME
25,872
28,567
32,530
54,439
62,710
Provision for Credit Losses
50
625
3,025
675
4,700
NET INTEREST INCOME AFTER
PROVISION FOR CREDIT LOSSES
25,822
27,942
29,505
53,764
58,010
NONINTEREST INCOME
Customer Service Fees
368
349
298
717
579
Net Gain (Loss) on Sales of Available for
Sale Securities
50
(56
)
52
(6
)
52
Other Income
997
1,650
1,300
2,647
2,576
Total Noninterest Income
1,415
1,943
1,650
3,358
3,207
NONINTEREST EXPENSE
Salaries and Employee Benefits
8,589
8,815
8,977
17,404
17,671
Occupancy and Equipment
1,075
1,209
1,042
2,284
2,127
Other Expense
4,724
4,159
3,733
8,883
7,462
Total Noninterest Expense
14,388
14,183
13,752
28,571
27,260
INCOME BEFORE INCOME TAXES
12,849
15,702
17,403
28,551
33,957
Provision for Income Taxes
3,033
4,060
4,521
7,093
8,813
NET INCOME
9,816
11,642
12,882
21,458
25,144
Preferred Stock Dividends
(1,014
)
(1,013
)
(1,014
)
(2,027
)
(2,027
)
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS
$
8,802
$
10,629
$
11,868
$
19,431
$
23,117
EARNINGS PER SHARE
Basic
$
0.32
$
0.38
$
0.43
$
0.70
$
0.83
Diluted
0.31
0.37
0.41
0.69
0.80
Bridgewater Bancshares, Inc. and
Subsidiaries
Analysis of Average Balances, Yields
and Rates
(dollars in thousands, except per share
data)
(Unaudited)
For the Six Months
Ended
June 30, 2023
June 30, 2022
Average
Interest
Yield/
Average
Interest
Yield/
Balance
& Fees
Rate
Balance
& Fees
Rate
(dollars in thousands)
Interest Earning Assets:
Cash Investments
$
61,599
$
1,034
3.38
%
$
70,718
$
66
0.19
%
Investment Securities:
Taxable Investment Securities
571,176
11,958
4.22
395,203
4,951
2.53
Tax-Exempt Investment Securities (1)
28,435
629
4.46
72,933
1,574
4.35
Total Investment Securities
599,611
12,587
4.23
468,136
6,525
2.81
Paycheck Protection Program Loans (2)
956
5
1.00
13,210
826
12.61
Loans (1)(2)
3,672,772
93,327
5.12
2,991,195
65,480
4.41
Total Loans
3,673,728
93,332
5.12
3,004,405
66,306
4.45
Federal Home Loan Bank Stock
24,639
828
6.77
8,667
113
2.63
Total Interest Earning Assets
4,359,577
107,781
4.99
%
3,551,926
73,010
4.15
%
Noninterest Earning Assets
85,087
77,395
Total Assets
$
4,444,664
$
3,629,321
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits
$
570,964
$
8,698
3.07
%
$
559,352
$
1,291
0.47
%
Savings and Money Market Deposits
952,865
13,547
2.87
901,102
2,103
0.47
Time Deposits
258,865
2,771
2.16
284,757
1,410
1.00
Brokered Deposits
820,651
14,356
3.53
405,282
1,810
0.90
Total Interest Bearing Deposits
2,603,345
39,372
3.05
2,150,493
6,614
0.62
Federal Funds Purchased
312,329
7,705
4.97
74,340
419
1.14
Notes Payable
13,750
548
8.03
—
—
—
FHLB Advances
185,785
2,953
3.21
45,019
317
1.42
Subordinated Debentures
78,994
1,976
5.05
92,341
2,416
5.28
Total Interest Bearing Liabilities
3,194,203
52,554
3.32
%
2,362,193
9,766
0.83
%
Noninterest Bearing
Liabilities:
Noninterest Bearing Transaction
Deposits
786,009
852,648
Other Noninterest Bearing Liabilities
59,504
32,248
Total Noninterest Bearing Liabilities
845,513
884,896
Shareholders' Equity
404,948
382,232
Total Liabilities and Shareholders'
Equity
$
4,444,664
$
3,629,321
Net Interest Income / Interest Rate
Spread
55,227
1.67
%
63,244
3.32
%
Net Interest Margin (3)
2.55
%
3.59
%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and
Loans
(788
)
(534
)
Net Interest Income
$
54,439
$
62,710
______________________________
(1)
Interest income and average rates for
tax-exempt investment securities and loans are presented on a
tax-equivalent basis, assuming a statutory federal income tax rate
of 21%.
(2)
Average loan balances include nonaccrual
loans. Interest income on loans includes amortization of deferred
loan fees, net of deferred loan costs.
(3)
Net interest margin includes the tax
equivalent adjustment and represents the annualized results of: (i)
the difference between interest income on interest earning assets
and the interest expense on interest bearing liabilities, divided
by (ii) average interest earning assets for the period.
Bridgewater Bancshares, Inc. and
Subsidiaries
Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
For the Three Months
Ended
For the Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Pre-Provision Net Revenue
Noninterest Income
$
1,415
$
1,943
$
1,650
$
3,358
$
3,207
Less: (Gain) Loss on Sales of
Securities
(50
)
56
(52
)
6
(52
)
Less: FHLB Advance Prepayment Income
—
(299
)
—
(299
)
—
Total Operating Noninterest
Income
1,365
1,700
1,598
3,065
3,155
Plus: Net Interest Income
25,872
28,567
32,530
54,439
62,710
Net Operating Revenue
$
27,237
$
30,267
$
34,128
$
57,504
$
65,865
Noninterest Expense
$
14,388
$
14,183
$
13,752
$
28,571
$
27,260
Less: Amortization of Tax Credit
Investments
(114
)
(114
)
(63
)
(228
)
(180
)
Total Operating Noninterest
Expense
$
14,274
$
14,069
$
13,689
$
28,343
$
27,080
Pre-Provision Net Revenue
$
12,963
$
16,198
$
20,439
$
29,161
$
38,785
Plus:
Non-Operating Revenue Adjustments
50
243
52
293
52
Less:
Provision for Credit Losses
50
625
3,025
675
4,700
Non-Operating Expense Adjustments
114
114
63
228
180
Provision for Income Taxes
3,033
4,060
4,521
7,093
8,813
Net Income
$
9,816
$
11,642
$
12,882
$
21,458
$
25,144
Average Assets
$
4,483,662
$
4,405,234
$
3,743,575
$
4,444,664
$
3,629,321
Pre-Provision Net Revenue Return on
Average Assets
1.16
%
1.49
%
2.19
%
1.32
%
2.16
%
As of and for the Three Months
Ended
As of and for the Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Core Net Interest Margin
Net Interest Income (Tax-Equivalent
Basis)
$
26,280
$
28,947
$
32,806
$
55,227
$
63,244
Less: Loan Fees
(941
)
(998
)
(2,030
)
(1,939
)
(3,773
)
Less: PPP Interest and Fees
(3
)
(2
)
(263
)
(5
)
(826
)
Core Net Interest Income
$
25,336
$
27,947
$
30,513
$
53,283
$
58,645
Average Interest Earning Assets
$
4,395,050
$
4,323,706
$
3,671,748
$
4,359,576
$
3,551,926
Less: Average PPP Loans
(913
)
(999
)
(8,335
)
(956
)
(13,210
)
Core Average Interest Earning Assets
$
4,394,137
$
4,322,707
$
3,663,413
$
4,358,620
$
3,538,716
Core Net Interest Margin
2.31
%
2.62
%
3.34
%
2.47
%
3.34
%
Non-GAAP Financial Measures
(dollars in thousands)
(unaudited)
For the Three Months
Ended
For the Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Efficiency Ratio
Noninterest Expense
$
14,388
$
14,183
$
13,752
$
28,571
$
27,260
Less: Amortization of Intangible
Assets
(34
)
(48
)
(47
)
(82
)
(95
)
Adjusted Noninterest Expense
$
14,354
$
14,135
$
13,705
$
28,489
$
27,165
Net Interest Income
25,872
28,567
32,530
54,439
62,710
Noninterest Income
1,415
1,943
1,650
3,358
3,207
Less: (Gain) Loss on Sales of
Securities
(50
)
56
(52
)
6
(52
)
Adjusted Operating Revenue
$
27,237
$
30,566
$
34,128
$
57,803
$
65,865
Efficiency Ratio
52.7
%
46.2
%
40.2
%
49.3
%
41.2
%
As of and for the Three Months
Ended
As of and for the Six Months
Ended
June 30,
March 31,
June 30,
June 30,
June 30,
2023
2023
2022
2023
2022
Tangible Common Equity and Tangible
Common Equity/Tangible Assets
Total Shareholders' Equity
$
409,126
$
402,006
$
374,883
Less: Preferred Stock
(66,514
)
(66,514
)
(66,514
)
Total Common Shareholders' Equity
342,612
335,492
308,369
Less: Intangible Assets
(2,832
)
(2,866
)
(3,009
)
Tangible Common Equity
$
339,780
$
332,626
$
305,360
Total Assets
$
4,603,185
$
4,602,899
$
3,883,264
Less: Intangible Assets
(2,832
)
(2,866
)
(3,009
)
Tangible Assets
$
4,600,353
$
4,600,033
$
3,880,255
Tangible Common Equity/Tangible Assets
7.39
%
7.23
%
7.87
%
Tangible Book Value Per Share
Book Value Per Common Share
$
12.25
$
12.05
$
11.14
Less: Effects of Intangible Assets
(0.10
)
(0.10
)
(0.11
)
Tangible Book Value Per Common Share
$
12.15
$
11.95
$
11.03
Return on Average Tangible Common
Equity
Net Income Available to Common
Shareholders
$
8,802
$
10,629
$
11,868
$
19,431
$
23,117
Average Shareholders' Equity
$
406,347
$
403,533
$
381,448
$
404,948
$
382,232
Less: Average Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Average Common Equity
339,833
337,019
314,934
338,434
315,718
Less: Effects of Average Intangible
Assets
(2,846
)
(2,894
)
(3,037
)
(2,870
)
(3,060
)
Average Tangible Common Equity
$
336,987
$
334,125
$
311,897
$
335,564
$
312,658
Return on Average Tangible Common
Equity
10.48
%
12.90
%
15.26
%
11.68
%
14.91
%
Three Months Ended
June 30,
March 31,
December 31,
September 30,
June 30,
2023
2023
2022
2022
2022
Tangible Common Equity
Total Shareholders' Equity
$
409,126
$
402,006
$
394,064
$
382,007
$
374,883
Less: Preferred Stock
(66,514
)
(66,514
)
(66,514
)
(66,514
)
(66,514
)
Common Shareholders' Equity
342,612
335,492
327,550
315,493
308,369
Less: Intangible Assets
(2,832
)
(2,866
)
(2,914
)
(2,962
)
(3,009
)
Tangible Common Equity
$
339,780
$
332,626
$
324,636
$
312,531
$
305,360
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230725009497/en/
Media Contact: Jessica Stejskal | SVP Marketing
Jessica.stejskal@bwbmn.com | 952.893.6860
Investor Contact: Justin Horstman | Director of Investor
Relations Justin.Horstman@bwbmn.com | 952.542.5169
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