Bridgewater Bancshares, Inc. Announces Record Second Quarter 2019 Earnings

BLOOMINGTON, Minn.--()--Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $8.0 million for the second quarter of 2019, an 18.7% increase over net income of $6.7 million for the second quarter of 2018. Net income per diluted common share for the second quarter of 2019 was $0.26, a 19.4% increase, compared to $0.22 per diluted common share for the same period in 2018.

“Our focus on profitable growth has led to record earnings in the second quarter of 2019,” noted Chairman, Chief Executive Officer, and President, Jerry Baack. “Double-digit loan and deposit growth supported by positive trends in net interest margin, favorable operating leverage, and consistently solid asset quality have all contributed to our strong financial results. We are encouraged by the positive momentum in new client acquisition activity since entering the St. Paul market last fall and are pleased with our growing brand awareness as we establish ourselves as the only locally led, publicly traded community bank within the Twin Cities market. ”

Second Quarter 2019 Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

Diluted

 

Adjusted

 

Tangible book

ROA

 

ROE

 

Earnings per share

 

Earnings per share

 

efficiency ratio (1)

 

value per share (2)

1.55%

 

13.88%

 

$

0.27

 

$

0.26

 

42.7%

 

$

7.78


  1. Ratio excludes the amortization of tax credit investments and represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
  2. Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

Linked-Quarter Highlights

  • Net income was $8.0 million for the second quarter of 2019, compared to $7.0 million for the first quarter of 2019, an increase of $1.0 million, or 14.1%.
  • Diluted earnings per common share were $0.26 for the second quarter of 2019, compared to $0.23 for the first quarter of 2019, an increase of 15.6%.
  • Tangible book value per share, a non-GAAP financial measure, increased 2.7%, or $0.20, to $7.78 at June 30, 2019, compared to $7.58 at March 31, 2019.
  • Annualized return on average assets (ROA) and return on average common equity (ROE) for the second quarter of 2019 were 1.55% and 13.88%, respectively, compared to annualized ROA and ROE of 1.42% and 12.60%, respectively, for the first quarter of 2019.
  • Gross loans increased $61.3 million, or 14.3% on an annualized basis, to $1.78 billion at June 30, 2019, compared to March 31, 2019.
  • Deposits increased $55.6 million, or 13.6% on an annualized basis, to $1.70 billion at June 30, 2019, compared to March 31, 2019.
  • The ratio of nonperforming assets to total assets was 0.07% at June 30, 2019, compared to 0.08% at March 31, 2019.
  • The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of the amortization of tax credit investments from noninterest expense, was 42.7% for the second quarter of 2019, compared to 43.1% for the first quarter of 2019.

Year-Over-Year Highlights

  • Net income was $8.0 million for the second quarter of 2019, compared to $6.7 million for the second quarter of 2018, an increase of $1.3 million, or 18.7%.
  • Diluted earnings per common share were $0.26 for the second quarter of 2019, compared to $0.22 for the second quarter of 2018, an increase of 19.4%.
  • Tangible book value per share, a non-GAAP financial measure, increased 15.7%, or $1.05, to $7.78 at June 30, 2019, compared to $6.73 at June 30, 2018.
  • Annualized ROA and ROE for the second quarter of 2019 were 1.55% and 13.88%, respectively, compared to annualized ROA and ROE of 1.58% and 13.39%, respectively, for the second quarter of 2018.
  • Gross loans increased $321.6 million, or 22.0%, at June 30, 2019, compared to June 30, 2018.
  • Deposits increased $284.6 million, or 20.1%, at June 30, 2019, compared to June 30, 2018.
  • The ratio of nonperforming assets to total assets was 0.07% at June 30, 2019, compared to 0.05% at June 30, 2018.
  • The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of the amortization of tax credit investments from noninterest expense, was 42.7% for the second quarter of 2019, compared to 39.0% for the second quarter of 2018.

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,

 

 

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

Per Common Share Data (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.27

 

 

$

0.23

 

 

$

0.22

 

 

$

0.50

 

 

$

0.45

 

 

Diluted Earnings Per Share

 

 

0.26

 

 

 

0.23

 

 

 

0.22

 

 

 

0.49

 

 

 

0.45

 

 

Book Value Per Share

 

 

7.90

 

 

 

7.70

 

 

 

6.85

 

 

 

7.90

 

 

 

6.85

 

 

Tangible Book Value Per Share (2)

 

 

7.78

 

 

 

7.58

 

 

 

6.73

 

 

 

7.78

 

 

 

6.73

 

 

Basic Weighted Average Shares Outstanding

 

 

29,703,024

 

 

 

30,097,638

 

 

 

30,059,374

 

 

 

29,899,241

 

 

 

27,919,457

 

 

Diluted Weighted Average Shares Outstanding

 

 

30,312,039

 

 

 

30,706,736

 

 

 

30,486,801

 

 

 

30,510,180

 

 

 

28,345,844

 

 

Shares Outstanding at Period End

 

 

28,986,729

 

 

 

30,097,674

 

 

 

30,059,374

 

 

 

28,986,729

 

 

 

30,059,374

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (Annualized)

 

 

1.55

%

 

 

1.42

%

 

 

1.58

%

 

 

1.49

%

 

 

1.53

%

 

Return on Average Common Equity (Annualized)

 

 

13.88

 

 

 

12.60

 

 

 

13.39

 

 

 

13.25

 

 

 

14.56

 

 

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

 

 

14.10

 

 

 

12.81

 

 

 

13.64

 

 

 

13.47

 

 

 

14.88

 

 

Yield on Interest Earning Assets

 

 

5.05

 

 

 

4.99

 

 

 

4.88

 

 

 

5.02

 

 

 

4.83

 

 

Yield on Total Loans, Gross

 

 

5.33

 

 

 

5.27

 

 

 

5.29

 

 

 

5.30

 

 

 

5.20

 

 

Cost of Interest Bearing Liabilities

 

 

2.07

 

 

 

2.06

 

 

 

1.52

 

 

 

2.07

 

 

 

1.45

 

 

Cost of Total Deposits

 

 

1.46

 

 

 

1.46

 

 

 

1.03

 

 

 

1.46

 

 

 

0.97

 

 

Net Interest Margin (3)

 

 

3.60

 

 

 

3.54

 

 

 

3.82

 

 

 

3.57

 

 

 

3.80

 

 

Efficiency Ratio (2)

 

 

50.1

 

 

 

44.1

 

 

 

39.0

 

 

 

47.2

 

 

 

40.8

 

 

Adjusted Efficiency Ratio (4)

 

 

42.7

 

 

 

43.1

 

 

 

39.0

 

 

 

42.9

 

 

 

40.8

 

 

Noninterest Expense to Average Assets (Annualized)

 

 

1.84

 

 

 

1.59

 

 

 

1.51

 

 

 

1.72

 

 

 

1.57

 

 

Adjusted Noninterest Expense to Average Assets (Annualized) (4)

 

 

1.57

 

 

 

1.55

 

 

 

1.51

 

 

 

1.56

 

 

 

1.57

 

 

Loan to Deposit Ratio

 

 

105.0

 

 

 

104.9

 

 

 

103.4

 

 

 

 

 

 

 

 

 

 

Core Deposits to Total Deposits

 

 

78.3

 

 

 

75.8

 

 

 

76.4

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity to Tangible Assets (2)

 

 

10.64

 

 

 

11.16

 

 

 

11.56

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Only)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

10.99

%

 

 

10.88

%

 

 

11.32

%

 

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

11.73

 

 

 

11.71

 

 

 

12.44

 

 

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

12.67

 

 

 

12.83

 

 

 

13.60

 

 

 

 

 

 

 

 

 

 


  1. Includes shares of common stock and non-voting common stock. On October 25, 2018, the Company exchanged shares of common stock for all of the outstanding shares of non-voting common stock. Following the exchange, no shares of non-voting common stock were outstanding.
  2. Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
  3. Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
  4. Ratio excludes the amortization of tax credit investments and represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

Selected Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(dollars in thousands)

 

2019

 

2019

 

2018

 

2018

 

2018

Selected Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

2,123,631

 

$

2,048,111

 

$

1,973,741

 

$

1,885,793

 

$

1,752,918

Total Loans, Gross

 

 

1,784,903

 

 

1,723,629

 

 

1,664,931

 

 

1,599,964

 

 

1,463,320

Allowance for Loan Losses

 

 

21,362

 

 

20,607

 

 

20,031

 

 

18,949

 

 

17,666

Goodwill and Other Intangibles

 

 

3,582

 

 

3,630

 

 

3,678

 

 

3,726

 

 

3,773

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

1,699,265

 

 

1,643,666

 

 

1,560,934

 

 

1,479,088

 

 

1,414,691

Tangible Common Equity (1)

 

 

225,555

 

 

228,145

 

 

217,320

 

 

207,126

 

 

202,154

Total Shareholders' Equity

 

 

229,137

 

 

231,775

 

 

220,998

 

 

210,852

 

 

205,927

Average Total Assets - Quarter-to-Date

 

 

2,069,707

 

 

2,011,174

 

 

1,948,909

 

 

1,816,485

 

 

1,715,335

Average Common Equity - Quarter-to-Date

 

 

231,374

 

 

225,844

 

 

215,254

 

 

208,773

 

 

202,101


  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)

 

2019

 

2019

 

2018

 

2019

 

2018

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

$

25,520

 

$

24,267

 

$

20,392

 

$

49,787

 

$

39,102

Interest Expense

 

 

7,382

 

 

7,136

 

 

4,493

 

 

14,518

 

 

8,440

Net Interest Income

 

 

18,138

 

 

17,131

 

 

15,899

 

 

35,269

 

 

30,662

Provision for Loan Losses

 

 

600

 

 

600

 

 

900

 

 

1,200

 

 

1,500

Net Interest Income after Provision for Loan Losses

 

 

17,538

 

 

16,531

 

 

14,999

 

 

34,069

 

 

29,162

Noninterest Income

 

 

1,134

 

 

634

 

 

485

 

 

1,768

 

 

872

Noninterest Expense

 

 

9,474

 

 

7,885

 

 

6,464

 

 

17,359

 

 

12,996

Income Before Income Taxes

 

 

9,198

 

 

9,280

 

 

9,020

 

 

18,478

 

 

17,038

Provision for Income Taxes

 

 

1,189

 

 

2,262

 

 

2,274

 

 

3,451

 

 

4,342

Net Income

 

$

8,009

 

$

7,018

 

$

6,746

 

$

15,027

 

$

12,696

Income Statement

Net Interest Income

Net interest income was $18.1 million for the second quarter of 2019, an increase of $1.0 million, or 5.9%, from $17.1 million in the first quarter of 2019, and an increase of $2.2 million, or 14.1%, from $15.9 million in the second quarter of 2018. The linked-quarter increase in net interest income was driven by growth in average loans at higher rates. The year-over-year increase in net interest income was largely attributable to growth in average interest earning assets, which increased by 20.5% to $2.05 billion for the second quarter of 2019, from $1.70 billion for the second quarter of 2018. This increase in average interest earning assets was primarily due to continued organic growth in the loan portfolio.

Net interest margin (on a fully tax-equivalent basis) for the second quarter of 2019 was 3.60%, a six basis point increase from 3.54% in the first quarter of 2019 and a 22 basis point decrease from 3.82% in the second quarter of 2018. While the linked-quarter increase in net interest margin can be attributed to the repricing of variable-rate loans and the origination of new loans at higher rates, the primary driver of margin expansion was the cost of funds stabilization. On a year-over-year basis, net interest margin also benefitted from increased repricing of variable-rate loans and the origination of new loans at higher rates; however, it compressed due to decreased loan fees recognized and increased rates paid on deposits and borrowings.

Interest income was $25.5 million for the second quarter of 2019, an increase of $1.3 million, or 5.2%, from $24.3 million in the first quarter of 2019, and an increase of $5.1 million, or 25.1%, from $20.4 million in the second quarter of 2018. The yield on interest earning assets (on a fully tax-equivalent basis) rose to 5.05% in the second quarter of 2019, compared to 4.99% in the first quarter of 2019 and 4.88% in the second quarter of 2018.

Loan interest income and loan fees remain the primary contributing factors to the increase in yield on interest earning assets, driving the aggregate loan yield 4 basis points higher from 5.29% in the second quarter of 2018 to 5.33% in the second quarter of 2019. As the composition of the aggregate loan yield has shifted, solid loan growth at yields accretive to the existing portfolio yield has enabled the Company to offset the decrease in loan fee income. While deferred loan fees are regularly amortized into income, fluctuations in the level of loan fees recognized can vary based on prepayments and other factors.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2019

 

 

March 31, 2019

 

 

December 31, 2018

 

 

 

September 30, 2018

 

 

June 30, 2018

 

Interest

 

5.10

%

 

5.07

%

 

4.98

%

 

 

4.87

%

 

4.80

%

Fees

 

0.23

 

 

0.20

 

 

0.29

 

 

 

0.38

 

 

0.49

 

Yield on Loans

 

5.33

%

 

5.27

%

 

5.27

%

 

 

5.25

%

 

5.29

%

Interest expense was $7.4 million for the second quarter of 2019, an increase of $246,000, or 3.4%, from $7.1 million in the first quarter of 2019, and an increase of $2.9 million, or 64.3%, from $4.5 million in the second quarter of 2018. The cost of interest bearing liabilities increased to 2.07% in the second quarter of 2019 from 2.06% in the first quarter of 2019, and 1.52% in the second quarter of 2018. These increases are due to higher costs and repricing of deposits and borrowings during both periods. Notably, since the Federal Open Market Committee began communicating its dovish policy pivot, the pace of rate increases on deposits decelerated significantly, and the Company only experienced a one basis point rise in funding costs on a linked-quarter basis. At the same time, local market competition for deposits remains fierce.

A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended June 30, 2019, March 31, 2019, and June 30, 2018 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

June 30, 2019

 

March 31, 2019

 

June 30, 2018

 

 

 

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

 

$

38,142

 

$

171

 

1.80

%

$

27,945

 

$

87

 

1.27

%

$

25,082

 

$

65

 

1.04

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

140,890

 

 

1,058

 

3.01

 

 

138,397

 

 

973

 

2.85

 

 

119,244

 

 

488

 

1.64

 

Tax-Exempt Investment Securities (1)

 

 

103,223

 

 

1,103

 

4.28

 

 

110,463

 

 

1,173

 

4.31

 

 

120,965

 

 

1,247

 

4.13

 

Total Investment Securities

 

 

244,113

 

 

2,161

 

3.55

 

 

248,860

 

 

2,146

 

3.50

 

 

240,209

 

 

1,735

 

2.90

 

Loans (2)

 

 

1,755,686

 

 

23,321

 

5.33

 

 

1,707,908

 

 

22,179

 

5.27

 

 

1,426,751

 

 

18,800

 

5.29

 

Federal Home Loan Bank Stock

 

 

7,694

 

 

100

 

5.23

 

 

7,911

 

 

100

 

5.12

 

 

5,486

 

 

54

 

3.95

 

Total Interest Earning Assets

 

 

2,045,635

 

 

25,753

 

5.05

%

 

1,992,624

 

 

24,512

 

4.99

%

 

1,697,528

 

 

20,654

 

4.88

%

Noninterest Earning Assets

 

 

24,072

 

 

 

 

 

 

 

18,550

 

 

 

 

 

 

 

17,807

 

 

 

 

 

 

Total Assets

 

$

2,069,707

 

 

 

 

 

 

$

2,011,174

 

 

 

 

 

 

$

1,715,335

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

 

202,886

 

 

387

 

0.77

%

 

181,033

 

 

232

 

0.52

%

 

178,775

 

 

160

 

0.36

%

Savings and Money Market Deposits

 

 

431,716

 

 

1,938

 

1.80

 

 

414,811

 

 

1,766

 

1.73

 

 

346,009

 

 

877

 

1.02

 

Time Deposits

 

 

354,026

 

 

2,120

 

2.40

 

 

329,511

 

 

1,880

 

2.31

 

 

305,077

 

 

1,386

 

1.82

 

Brokered Deposits

 

 

266,804

 

 

1,575

 

2.37

 

 

292,067

 

 

1,825

 

2.53

 

 

225,532

 

 

1,099

 

1.95

 

Federal Funds Purchased

 

 

2,089

 

 

12

 

2.24

 

 

24,956

 

 

160

 

2.59

 

 

12,340

 

 

56

 

1.82

 

Notes Payable

 

 

14,000

 

 

130

 

3.72

 

 

14,500

 

 

121

 

3.38

 

 

16,000

 

 

146

 

3.66

 

FHLB Advances

 

 

131,385

 

 

827

 

2.52

 

 

124,000

 

 

775

 

2.54

 

 

76,473

 

 

372

 

1.95

 

Subordinated Debentures

 

 

24,673

 

 

393

 

6.39

 

 

24,647

 

 

377

 

6.20

 

 

24,570

 

 

397

 

6.48

 

Total Interest Bearing Liabilities

 

 

1,427,579

 

 

7,382

 

2.07

%

 

1,405,525

 

 

7,136

 

2.06

%

 

1,184,776

 

 

4,493

 

1.52

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

401,480

 

 

 

 

 

 

 

369,912

 

 

 

 

 

 

 

320,581

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

9,274

 

 

 

 

 

 

 

9,893

 

 

 

 

 

 

 

7,877

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

410,754

 

 

 

 

 

 

 

379,805

 

 

 

 

 

 

 

328,458

 

 

 

 

 

 

Shareholders' Equity

 

 

231,374

 

 

 

 

 

 

 

225,844

 

 

 

 

 

 

 

202,101

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

2,069,707

 

 

 

 

 

 

$

2,011,174

 

 

 

 

 

 

$

1,715,335

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

18,371

 

2.98

%

 

 

 

 

17,376

 

2.93

%

 

 

 

 

16,161

 

3.36

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.60

%

 

 

 

 

 

 

3.54

%

 

 

 

 

 

 

3.82

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities

 

 

 

 

 

(233)

 

 

 

 

 

 

 

(245)

 

 

 

 

 

 

 

(262)

 

 

 

Net Interest Income

 

 

 

 

$

18,138

 

 

 

 

 

 

$

17,131

 

 

 

 

 

 

$

15,899

 

 

 


  1. Interest income and average rates for tax-exempt investment securities 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 Loan Losses

The provision for loan losses was $600,000 for the second quarter of 2019 and the first quarter of 2019. The provision for loan losses decreased $300,000 in the second quarter of 2019, compared to $900,000 for the second quarter of 2018. The provision for loan losses decreased in the second quarter of 2019 due to a decrease in charge-offs and increase in recoveries, in comparison to the second quarter of 2018.

The following table presents a reconciliation of the Company’s allowance for loan losses for the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

(dollars in thousands)

 

2019

 

2019

 

2018

 

2019

 

2018

Balance at Beginning of Period

 

$

20,607

 

 

$

20,031

 

 

$

17,121

 

 

$

20,031

 

 

$

16,502

 

Provision for Loan Losses

 

 

600

 

 

 

600

 

 

 

900

 

 

 

1,200

 

 

 

1,500

 

Charge-offs

 

 

(3

)

 

 

(36

)

 

 

(361

)

 

 

(39

)

 

 

(373

)

Recoveries

 

 

158

 

 

 

12

 

 

 

6

 

 

 

170

 

 

 

37

 

Balance at End of Period

 

$

21,362

 

 

$

20,607

 

 

$

17,666

 

 

$

21,362

 

 

$

17,666

 

Noninterest Income

Noninterest income was $1.1 million for the second quarter of 2019, an increase of $500,000 from $634,000 for the first quarter of 2019, and an increase of $649,000 from $485,000 for the second quarter of 2018. The increase compared to both prior periods was primarily due to increased gains on sales of securities.

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)

 

2019

 

2019

 

2018

 

2019

 

2018

 

Noninterest Income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

$

189

 

$

191

 

 

$

185

 

 

$

380

 

$

355

 

 

Net Gain (Loss) on Sales of Securities

 

 

463

 

 

(5

)

 

 

(59

)

 

 

458

 

 

(59

)

 

Net Loss on Sales of Foreclosed Assets

 

 

 

 

(141

)

 

 

 

(137

)

 

Letter of Credit Fees

 

 

213

 

 

246

 

 

 

297

 

 

 

459

 

 

367

 

 

Debit Card Interchange Fees

 

 

109

 

 

88

 

 

 

96

 

 

 

197

 

 

188

 

 

Other Income

 

 

160

 

 

114

 

 

 

107

 

 

 

274

 

 

158

 

 

Totals

 

$

1,134

 

$

634

 

 

$

485

 

 

$

1,768

 

$

872

 

 

Noninterest Expense

Noninterest expense was $9.5 million for the second quarter of 2019, an increase of $1.6 million from $7.9 million for the first quarter of 2019, and an increase of $3.0 million from $6.5 million for the second quarter of 2018. The increase compared to both prior periods was attributed to the amortization of tax credit investments and continued investments in employees, technology, marketing, and other operating costs to meet the needs of the Company’s growth and brand awareness efforts.

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)

 

2019

 

2019

 

2018

 

2019

 

2018

 

 

Noninterest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

$

5,124

 

$

4,802

 

$

4,306

 

$

9,926

 

$

8,624

 

 

Occupancy and Equipment

 

 

785

 

 

656

 

 

597

 

 

1,441

 

 

1,171

 

 

FDIC Insurance Assessment

 

 

285

 

 

285

 

 

165

 

 

570

 

 

435

 

 

Data Processing

 

 

151

 

 

153

 

 

126

 

 

304

 

 

158

 

 

Professional and Consulting Fees

 

 

451

 

 

388

 

 

222

 

 

839

 

 

523

 

 

Information Technology and Telecommunications

 

 

208

 

 

236

 

 

220

 

 

444

 

 

403

 

 

Marketing and Advertising

 

 

404

 

 

465

 

 

280

 

 

869

 

 

564

 

 

Intangible Asset Amortization

 

 

47

 

 

48

 

 

47

 

 

95

 

 

95

 

 

Amortization of Tax Credit Investments

 

 

1,390

 

 

177

 

 

 

 

1,567

 

 

 

 

Other Expense

 

 

629

 

 

675

 

 

501

 

 

1,304

 

 

1,023

 

 

Totals

 

$

9,474

 

$

7,885

 

$

6,464

 

$

17,359

 

$

12,996

 

 

The Company had 150 full-time equivalent employees at June 30, 2019, compared to 143 employees at March 31, 2019, and 125 employees at June 30, 2018. The increases include key strategic hires in deposit gathering, lending, and other supportive roles. While the recognition of tax credit investments creates volatility in the level of total noninterest expense and concurrently the efficiency ratio, it directly reduces income tax expense and the effective tax rate. The efficiency ratio, a non-GAAP financial measure, was 50.1% for the second quarter of 2019, compared to 44.1% for the first quarter of 2019, and 39.0% for the second quarter of 2018. Excluding the impact of the amortization of tax credit investments, the adjusted efficiency ratio, a non-GAAP financial measure, was 42.7% for the second quarter of 2019, 43.1% for the first quarter of 2019, and 39.0% for the second quarter of 2018.

Income Taxes

The effective combined federal and state income tax rate for the second quarter of 2019 was 12.9%, a decrease from 24.4% for the first quarter of 2019, and a decrease from 25.2% for the second quarter of 2018. The lower effective combined rate compared to both periods was due to the recognition of tax credits that became eligible to be applied in 2019. The effective combined federal and state income tax rate for the six months ended June 30, 2019 was 18.7%.

Balance Sheet

Total assets at June 30, 2019 were $2.12 billion, a 3.7% increase from $2.05 billion at March 31, 2019, and a 21.1% increase from $1.75 billion at June 30, 2018. The increase in total assets was primarily due to organic loan growth.

Total gross loans at June 30, 2019 were $1.78 billion, an increase of $61.3 million, or 3.6%, over total gross loans of $1.72 billion at March 31, 2019, and an increase of $321.6 million, or 22.0%, over total gross loans of $1.46 billion at June 30, 2018.

The following table details the composition of the Company’s loan portfolio, by category, at the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

March 31, 2019

 

December 31, 2018

 

September 30, 2018

 

June 30, 2018

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

Commercial and Industrial

 

$

287,804

 

 

$

284,807

 

 

$

260,833

 

 

$

235,502

 

 

$

204,072

 

 

Construction and Land Development

 

 

195,568

 

 

 

178,782

 

 

 

210,041

 

 

 

187,919

 

 

 

164,492

 

 

Real Estate Mortgage:

 

 

 

 

 

 

 

 

 

 

 

1 - 4 Family Mortgage

 

 

247,029

 

 

 

233,131

 

 

 

226,773

 

 

 

224,124

 

 

 

213,265

 

 

Multifamily

 

 

437,198

 

 

 

417,975

 

 

 

407,934

 

 

 

389,511

 

 

 

340,888

 

 

CRE Owner Occupied

 

 

68,681

 

 

 

66,130

 

 

 

64,458

 

 

 

65,905

 

 

 

65,891

 

 

CRE Nonowner Occupied

 

 

544,579

 

 

 

538,998

 

 

 

490,632

 

 

 

492,499

 

 

 

470,437

 

 

Total Real Estate Mortgage Loans

 

 

1,297,487

 

 

 

1,256,234

 

 

 

1,189,797

 

 

 

1,172,039

 

 

 

1,090,481

 

 

Consumer and Other

 

 

4,044

 

 

 

3,806

 

 

 

4,260

 

 

 

4,504

 

 

 

4,275

 

 

Total Loans, Gross

 

 

1,784,903

 

 

 

1,723,629

 

 

 

1,664,931

 

 

 

1,599,964

 

 

 

1,463,320

 

 

Allowance for Loan Losses

 

 

(21,362

)

 

 

(20,607

)

 

 

(20,031

)

 

 

(18,949

)

 

 

(17,666

)

 

Net Deferred Loan Fees

 

 

(5,157

)

 

 

(4,791

)

 

 

(4,515

)

 

 

(4,308

)

 

 

(4,058

)

 

Total Loans, Net

 

$

1,758,384

 

 

$

1,698,231

 

 

$

1,640,385

 

 

$

1,576,707

 

 

$

1,441,596

 

 

Total deposits at June 30, 2019 were $1.70 billion, an increase of $55.6 million, or 3.4%, over total deposits of $1.64 billion at March 31, 2019, and an increase of $284.6 million, or 20.1%, over total deposits of $1.41 billion at June 30, 2018.

The following table details the composition of the Company’s deposit portfolio, by category, at the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

March 31, 2019

 

December 31, 2018

 

September 30, 2018

 

June 30, 2018

 

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

$

409,198

 

$

404,937

 

$

369,203

 

$

342,292

 

$

323,320

 

 

Interest Bearing Transaction Deposits

 

 

231,318

 

 

180,459

 

 

179,567

 

 

175,455

 

 

178,045

 

 

Savings and Money Market Deposits

 

 

456,447

 

 

434,186

 

 

402,639

 

 

416,140

 

 

381,942

 

 

Time Deposits

 

 

359,338

 

 

346,163

 

 

318,356

 

 

290,887

 

 

300,701

 

 

Brokered Deposits

 

 

242,964

 

 

277,921

 

 

291,169

 

 

254,314

 

 

230,683

 

 

Total Deposits

 

$

1,699,265

 

$

1,643,666

 

$

1,560,934

 

$

1,479,088

 

$

1,414,691

 

 

Total shareholders’ equity at June 30, 2019 was $229.1 million, a decrease of $2.6 million, or 1.1%, over total shareholders’ equity of $231.8 million at March 31, 2019, and an increase of $23.2 million, or 11.3%, over total shareholders’ equity of $205.9 million at June 30, 2018. The linked-quarter decrease is due to the execution of repurchases under the Company’s stock buyback program, partially offset by net income retained and increased unrealized gains. The year-over-year increase is due to net income retained and increased unrealized gains, partially offset by stock repurchases.

During the second quarter of 2019, the Company repurchased 1.1 million shares of its common stock, representing approximately 4% of the Company’s outstanding shares. Shares were repurchased at a weighted average price of $11.20 for a total of $12.6 million. Strong profitability and superior capital growth allowed the Company to strategically execute its stock buyback program to enhance shareholder value while maintaining adequate capital levels.

Tangible book value per share, a non-GAAP financial measure, was $7.78 as of June 30, 2019, an increase of 2.7% from $7.58 as of March 31, 2019, and an increase of 15.7% from $6.73 as of June 30, 2018.

Asset Quality

Asset quality metrics for the Company remained strong at June 30, 2019. Annualized net charge-offs (recoveries) as a percent of average loans for the second quarter of 2019 were (0.04)%, compared to 0.01% for the first quarter of 2019, and 0.10% for the second quarter of 2018. At June 30, 2019, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $1.6 million, or 0.07% of total assets, as compared to $1.6 million, or 0.08% of total assets at March 31, 2019, and $894,000, or 0.05% of total assets at June 30, 2018.

About the Company

Bridgewater Bancshares, Inc. is a financial holding company headquartered in Bloomington, Minnesota. The Company has two wholly owned subsidiaries, Bridgewater Bank, a Minnesota-chartered commercial bank founded in November 2005, and Bridgewater Risk Management, Inc., a captive insurance company founded in December 2016. Bridgewater Bank has two wholly owned subsidiaries, Bridgewater Investment Management, Inc. and BWB Holdings, LLC. Bridgewater Bank currently operates through 7 branches in Bloomington, Greenwood, Minneapolis (2), St. Louis Park, Orono, and St. Paul, all located within the Minneapolis-St. Paul-Bloomington metropolitan statistical area.

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: loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area; our ability to maintain an adequate level of allowance for loan losses; the concentration of large loans to certain borrowers; the concentration of large deposits from certain customers; our ability to successfully manage liquidity risk; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; the composition of our senior leadership team and our ability to attract and retain key personnel; 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; 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; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; and any other risks described in the “Risk Factors” sections of other 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. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Bridgewater Bancshares, Inc. and Subsidiaries

   

Consolidated Balance Sheets

   

(dollars in thousands, except share data)

   

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

June 30,

 

 

2019

 

2018

 

2018

 

 

(Unaudited)

 

 

 

 

(Unaudited)

ASSETS

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

66,389

 

$

28,444

 

 

$

21,917

 

Bank-Owned Certificates of Deposit

 

 

2,699

 

 

3,305

 

 

 

3,803

 

Securities Available for Sale, at Fair Value

 

 

241,925

 

 

253,378

 

 

 

246,071

 

Loans, Net of Allowance for Loan Losses of $21,362 at June 30, 2019 (unaudited), $20,031 at December 31, 2018 and $17,666 at June 30, 2018 (unaudited)

 

 

1,758,384

 

 

1,640,385

 

 

 

1,441,596

 

Federal Home Loan Bank (FHLB) Stock, at Cost

 

 

8,064

 

 

7,614

 

 

 

5,294

 

Premises and Equipment, Net

 

 

18,623

 

 

13,074

 

 

 

10,457

 

Foreclosed Assets

 

 

1,033

 

 

 

 

148

 

Accrued Interest

 

 

7,583

 

 

6,589

 

 

 

5,971

 

Goodwill

 

 

2,626

 

 

2,626

 

 

 

2,626

 

Other Intangible Assets, Net

 

 

956

 

 

1,052

 

 

 

1,147

 

Other Assets

 

 

15,349

 

 

17,274

 

 

 

13,888

 

Total Assets

 

$

2,123,631

 

$

1,973,741

 

 

$

1,752,918

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

Noninterest Bearing

 

$

409,198

 

$

369,203

 

 

$

323,320

 

Interest Bearing

 

 

1,290,067

 

 

1,191,731

 

 

 

1,091,371

 

Total Deposits

 

 

1,699,265

 

 

1,560,934

 

 

 

1,414,691

 

Federal Funds Purchased

 

 

 

18,000

 

 

 

Notes Payable

 

 

14,000

 

 

15,000

 

 

 

16,000

 

FHLB Advances

 

 

142,500

 

 

124,000

 

 

 

84,000

 

Subordinated Debentures, Net of Issuance Costs

 

 

24,681

 

 

24,630

 

 

 

24,578

 

Accrued Interest Payable

 

 

2,109

 

 

1,806

 

 

 

1,502

 

Other Liabilities

 

 

11,939

 

 

8,373

 

 

 

6,220

 

Total Liabilities

 

 

1,894,494

 

 

1,752,743

 

 

 

1,546,991

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Preferred Stock- $0.01 par value

 

 

 

 

 

 

 

 

Authorized 10,000,000; None Issued and Outstanding at June 30, 2019 (unaudited), December 31, 2018 and June 30, 2018 (unaudited)

 

 

 

 

 

Common Stock- $0.01 par value

 

 

 

 

 

 

 

 

Common Stock - Authorized 75,000,000; Issued and Outstanding 28,986,729 at June 30, 2019 (unaudited), 30,097,274 at December 31, 2018 and 27,235,832 at June 30, 2018 (unaudited)

 

 

290

 

 

301

 

 

 

272

 

Non-voting Common Stock- Authorized 10,000,000; Issued and Outstanding -0- at June 30, 2019 (unaudited) and December 31, 2018 and 2,823,542 at June 30, 2018 (unaudited)

 

 

 

 

 

28

 

Additional Paid-In Capital

 

 

113,838

 

 

126,031

 

 

 

125,516

 

Retained Earnings

 

 

111,261

 

 

96,234

 

 

 

82,010

 

Accumulated Other Comprehensive Income (Loss)

 

 

3,748

 

 

(1,568

)

 

 

(1,899

)

Total Shareholders' Equity

 

 

229,137

 

 

220,998

 

 

 

205,927

 

Total Liabilities and Equity

 

$

2,123,631

 

$

1,973,741

 

 

$

1,752,918

 

Bridgewater Bancshares, Inc. and Subsidiaries

     

Consolidated Statements of Income

     

(dollars in thousands, except per share data)

     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

March 31,

 

June 30,

 

June 30,

 

June 30,

 

 

2019

 

2019

 

2018

 

2019

 

2018

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, Including Fees

 

$

23,321

 

$

22,179

 

 

$

18,800

 

 

$

45,500

 

$

35,848

 

Investment Securities

 

 

1,928

 

 

1,901

 

 

 

1,473

 

 

 

3,829

 

 

3,040

 

Other

 

 

271

 

 

187

 

 

 

119

 

 

 

458

 

 

214

 

Total Interest Income

 

 

25,520

 

 

24,267

 

 

 

20,392

 

 

 

49,787

 

 

39,102

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

6,020

 

 

5,703

 

 

 

3,522

 

 

 

11,723

 

 

6,531

 

Notes Payable

 

 

130

 

 

121

 

 

 

146

 

 

 

251

 

 

298

 

FHLB Advances

 

 

827

 

 

775

 

 

 

372

 

 

 

1,602

 

 

671

 

Subordinated Debentures

 

 

393

 

 

377

 

 

 

397

 

 

 

770

 

 

766

 

Federal Funds Purchased

 

 

12

 

 

160

 

 

 

56

 

 

 

172

 

 

174

 

Total Interest Expense

 

 

7,382

 

 

7,136

 

 

 

4,493

 

 

 

14,518

 

 

8,440

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

18,138

 

 

17,131

 

 

 

15,899

 

 

 

35,269

 

 

30,662

 

Provision for Loan Losses

 

 

600

 

 

600

 

 

 

900

 

 

 

1,200

 

 

1,500

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES

 

 

17,538

 

 

16,531

 

 

 

14,999

 

 

 

34,069

 

 

29,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

 

189

 

 

191

 

 

 

185

 

 

 

380

 

 

355

 

Net Gain (Loss) on Sales of Available for Sale Securities

 

 

463

 

 

(5

)

 

 

(59

)

 

 

458

 

 

(59

)

Net Loss on Sales of Foreclosed Assets

 

 

 

 

 

(141

)

 

 

 

(137

)

Other Income

 

 

482

 

 

448

 

 

 

500

 

 

 

930

 

 

713

 

Total Noninterest Income

 

 

1,134

 

 

634

 

 

 

485

 

 

 

1,768

 

 

872

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

 

5,124

 

 

4,802

 

 

 

4,306

 

 

 

9,926

 

 

8,624

 

Occupancy and Equipment

 

 

785

 

 

656

 

 

 

597

 

 

 

1,441

 

 

1,171

 

Other Expense

 

 

3,565

 

 

2,427

 

 

 

1,561

 

 

 

5,992

 

 

3,201

 

Total Noninterest Expense

 

 

9,474

 

 

7,885

 

 

 

6,464

 

 

 

17,359

 

 

12,996

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

9,198

 

 

9,280

 

 

 

9,020

 

 

 

18,478

 

 

17,038

 

Provision for Income Taxes

 

 

1,189

 

 

2,262

 

 

 

2,274

 

 

 

3,451

 

 

4,342

 

NET INCOME

 

$

8,009

 

$

7,018

 

 

$

6,746

 

 

$

15,027

 

$

12,696

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.27

 

$

0.23

 

 

$

0.22

 

 

$

0.50

 

$

0.45

 

Diluted

 

 

0.26

 

 

0.23

 

 

 

0.22

 

 

 

0.49

 

 

0.45

 

Dividends Paid Per Share

 

 

 

 

 

 

 

 

 

Bridgewater Bancshares, Inc. and Subsidiaries

 

Summary Quarterly Consolidated Financial Data

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

 

2019

 

2019

 

2018

 

2018

 

2018

 

Selected Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

$

470

 

$

387

 

$

311

 

$

12

 

$

645

 

Loans 30-89 Days Past Due to Total Loans

 

 

0.03

%

 

0.02

%

 

0.02

%

 

0.00

%

 

0.04

%

Nonperforming Loans

 

$

555

 

$

1,557

 

$

581

 

$

718

 

$

746

 

Nonperforming Loans to Total Loans

 

 

0.03

%

 

0.09

%

 

0.03

%

 

0.04

%

 

0.05

%

Foreclosed Assets

 

$

1,033

 

$

 

$

 

$

 

$

148

 

Nonaccrual Loans to Total Loans

 

 

0.03

%

 

0.09

%

 

0.03

%

 

0.04

%

 

0.05

%

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

 

 

0.03

 

 

0.09

 

 

0.03

 

 

0.04

 

 

0.05

 

Nonperforming Assets (1)

 

$

1,588

 

$

1,557

 

$

581

 

$

718

 

$

894

 

Nonperforming Assets to Total Assets (1)

 

 

0.07

%

 

0.08

%

 

0.03

%

 

0.04

%

 

0.05

%

Allowance for Loan Losses to Total Loans

 

 

1.20

 

 

1.20

 

 

1.20

 

 

1.18

 

 

1.21

 

Allowance for Loans Losses to Nonperforming Loans

 

 

3,849.01

 

 

1,323.51

 

 

3,447.68

 

 

2,639.14

 

 

2,368.10

 

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

(0.04

)

0.01

 

(0.07

)

 

0.00

 

 

0.10


  1. Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due plus foreclosed assets.

 

Non-GAAP Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

March 31,

 

June 30,

 

 

June 30,

 

June 30,

 

 

 

2019

 

2019

 

2018

 

 

2019

 

2018

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

9,474

 

$

7,885

 

$

6,464

 

 

$

17,359

 

$

12,996

 

Less: Amortization of Intangible Assets

 

 

(47)

 

 

(48)

 

 

(47)

 

 

 

(95)

 

 

(95)

 

Adjusted Noninterest Expense

 

$

9,427

 

$

7,837

 

$

6,417

 

 

$

17,264

 

$

12,901

 

Net Interest Income

 

 

18,138

 

 

17,131

 

 

15,899

 

 

 

35,269

 

 

30,662

 

Noninterest Income

 

 

1,134

 

 

634

 

 

485

 

 

 

1,768

 

 

872

 

Less: (Gain) Loss on Sales of Securities

 

 

(463)

 

 

5

 

 

59

 

 

 

(458)

 

 

59

 

Adjusted Operating Revenue

 

$

18,809

 

$

17,770

 

$

16,443

 

 

$

36,579

 

$

31,593

 

Efficiency Ratio

 

 

50.1

%

 

44.1

%

 

39.0

%

 

 

47.2

%

 

40.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

9,474

 

$

7,885

 

$

6,464

 

 

$

17,359

 

$

12,996

 

Less: Amortization of Tax Credit Investments

 

 

(1,390)

 

 

(177)

 

 

 

 

 

(1,567)

 

 

 

Less: Amortization of Intangible Assets

 

 

(47)

 

 

(48)

 

 

(47)

 

 

 

(95)

 

 

(95)

 

Adjusted Noninterest Expense

 

$

8,037

 

$

7,660

 

$

6,417

 

 

$

15,697

 

$

12,901

 

Net Interest Income

 

 

18,138

 

 

17,131

 

 

15,899

 

 

 

35,269

 

 

30,662

 

Noninterest Income

 

 

1,134

 

 

634

 

 

485

 

 

 

1,768

 

 

872

 

Less: (Gain) Loss on Sales of Securities

 

 

(463)

 

 

5

 

 

59

 

 

 

(458)

 

 

59

 

Adjusted Operating Revenue

 

$

18,809

 

$

17,770

 

$

16,443

 

 

$

36,579

 

$

31,593

 

Adjusted Efficiency Ratio

 

 

42.7

%

 

43.1

%

 

39.0

%

 

 

42.9

%

 

40.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

As of and for the Six Months Ended

 

 

 

June 30,

 

June 30,

 

 

June 30,

 

June 30,

 

 

 

2019

 

2018

 

 

2019

 

2018

 

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity and Tangible Common Equity/Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common Equity

 

$

229,137

 

$

205,927

 

 

 

 

 

 

 

 

Less: Intangible Assets

 

 

(3,582)

 

 

(3,773)

 

 

 

 

 

 

 

 

Tangible Common Equity

 

 

225,555

 

 

202,154

 

 

 

 

 

 

 

 

Total Assets

 

 

2,123,631

 

 

1,752,918

 

 

 

 

 

 

 

 

Less: Intangible Assets

 

 

(3,582)

 

 

(3,773)

 

 

 

 

 

 

 

 

Tangible Assets

 

$

2,120,049

 

$

1,749,145

 

 

 

 

 

 

 

 

Tangible Common Equity/Tangible Assets

 

 

10.64

%

 

11.56

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Value Per Common Share

 

$

7.90

 

$

6.85

 

 

 

 

 

 

 

 

Less: Effects of Intangible Assets

 

 

(0.12)

 

 

(0.12)

 

 

 

 

 

 

 

 

Tangible Book Value Per Common Share

 

$

7.78

 

$

6.73

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Common Equity

 

$

231,374

 

$

202,101

 

 

$

228,625

 

$

175,855

 

Less: Effects of Average Intangible Assets

 

 

(3,605)

 

 

(3,796)

 

 

 

(3,630)

 

 

(3,820)

 

Average Tangible Common Equity

 

$

227,769

 

$

198,305

 

 

$

224,995

 

$

172,035

 

 

Bridgewater Bancshares, Inc. and Subsidiaries

 

Analysis of Average Balances, Yields and Rates (year-to-date)

 

(dollars in thousands, except per share data) (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

 

June 30, 2019

 

June 30, 2018

 

 

 

Average

 

Interest

 

Yield/

 

Average

 

Interest

 

Yield/

 

 

 

Balance

 

& Fees

 

Rate

 

Balance

 

& Fees

 

Rate

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Investments

 

$

33,071

 

$

258

 

1.57

%

$

23,396

 

$

115

 

0.98

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

139,651

 

 

2,031

 

2.93

 

 

118,485

 

 

1,121

 

1.91

 

Tax-Exempt Investment Securities (1)

 

 

106,823

 

 

2,276

 

4.30

 

 

117,913

 

 

2,430

 

4.16

 

Total Investment Securities

 

 

246,474

 

 

4,307

 

3.52

 

 

236,398

 

 

3,551

 

3.03

 

Loans (2)

 

 

1,731,928

 

 

45,500

 

5.30

 

 

1,390,094

 

 

35,848

 

5.20

 

Federal Home Loan Bank Stock

 

 

7,802

 

 

200

 

5.17

 

 

5,439

 

 

99

 

3.67

 

Total Interest Earning Assets

 

 

2,019,275

 

 

50,265

 

5.02

%

 

1,655,327

 

 

39,613

 

4.83

%

Noninterest Earning Assets

 

 

21,327

 

 

 

 

 

 

 

15,462

 

 

 

 

 

 

Total Assets

 

$

2,040,602

 

 

 

 

 

 

$

1,670,789

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

 

192,020

 

 

619

 

0.65

%

 

180,348

 

 

272

 

0.30

%

Savings and Money Market Deposits

 

 

423,310

 

 

3,704

 

1.76

 

 

349,987

 

 

1,633

 

0.94

 

Time Deposits

 

 

341,836

 

 

4,001

 

2.36

 

 

301,724

 

 

2,643

 

1.77

 

Brokered Deposits

 

 

279,366

 

 

3,399

 

2.45

 

 

211,657

 

 

1,983

 

1.89

 

Federal Funds Purchased

 

 

13,459

 

 

172

 

2.58

 

 

20,381

 

 

174

 

1.72

 

Notes Payable

 

 

14,250

 

 

251

 

3.55

 

 

16,250

 

 

298

 

3.70

 

FHLB Advances

 

 

127,713

 

 

1,602

 

2.53

 

 

72,398

 

 

671

 

1.87

 

Subordinated Debentures

 

 

24,660

 

 

770

 

6.30

 

 

24,557

 

 

766

 

6.29

 

Total Interest Bearing Liabilities

 

 

1,416,614

 

 

14,518

 

2.07

%

 

1,177,302

 

 

8,440

 

1.45

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

385,758

 

 

 

 

 

 

 

308,216

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

9,605

 

 

 

 

 

 

 

9,416

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

395,363

 

 

 

 

 

 

 

317,632

 

 

 

 

 

 

Shareholders' Equity

 

 

228,625

 

 

 

 

 

 

 

175,855

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

2,040,602

 

 

 

 

 

 

$

1,670,789

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

35,747

 

2.95

%

 

 

 

 

31,173

 

3.38

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.57

%

 

 

 

 

 

 

3.80

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities

 

 

 

 

 

(478)

 

 

 

 

 

 

 

(511)

 

 

 

Net Interest Income

 

 

 

 

$

35,269

 

 

 

 

 

 

$

30,662

 

 

 


  1. Interest income and average rates for tax-exempt investment securities 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.

 

Contacts

Investor Relations Contact:
Jerry Baack
Chief Executive Officer
investorrelations@bwbmn.com
952-893-6866

Contacts

Investor Relations Contact:
Jerry Baack
Chief Executive Officer
investorrelations@bwbmn.com
952-893-6866