Bridgewater Bancshares, Inc. Announces Second Quarter 2023 Net Income of $9.8 Million, $0.31 Diluted Earnings Per Common Share

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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.

ST. LOUIS PARK, Minn., July 26, 2023--(BUSINESS WIRE)--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/

Contacts

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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