BLOOMINGTON, Minn.--(BUSINESS WIRE)--Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $7.8 million for the third quarter of 2019, a 20.8% increase over net income of $6.5 million for the third quarter of 2018. Net income per diluted common share for the third quarter of 2019 was $0.27, a 24.8% increase, compared to $0.21 per diluted common share for the same period in 2018.
“We produced solid financial results in the third quarter as we continue to drive shareholder value,” commented Chairman, Chief Executive Officer, and President, Jerry Baack. “We could not be more pleased with our deposit growth of $103.0 million during the quarter, representing 24.0% annualized growth. This result reflects our ongoing investment in our deposit offering platform and brand awareness efforts. Profitable loan growth continues to be at the forefront of our business plan and we remain focused on disciplined loan pricing in this challenging rate environment. Our asset quality remains strong as demonstrated by our nonperforming assets to total assets ratio of 0.04%, which speaks to our diligent underwriting practices and the health of the diversified Twin Cities economy.”
Third Quarter 2019 Financial Results
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Diluted |
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Adjusted |
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Tangible book |
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ROA |
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ROE |
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Earnings per share |
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efficiency ratio (1) |
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value per share (2) |
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1.43% |
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13.31% |
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$ |
0.27 |
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42.9% |
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$ |
8.08 |
- Ratio excludes the amortization of tax credit investments and represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
- Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
Linked-Quarter Highlights
- Net income was $7.8 million for the third quarter of 2019, compared to $8.0 million for the second quarter of 2019.
- Diluted earnings per common share were $0.27 for the third quarter of 2019, compared to $0.26 for the second quarter of 2019.
- Tangible book value per share, a non-GAAP financial measure, was $8.08 at September 30, 2019, compared to $7.78 at June 30, 2019.
- Annualized return on average assets (ROA) and return on average common equity (ROE) for the third quarter of 2019 were 1.43% and 13.31%, respectively, compared to annualized ROA and ROE of 1.55% and 13.88%, respectively, for the second quarter of 2019.
- Gross loans increased $61.3 million, or 13.6% on an annualized basis, to $1.85 billion at September 30, 2019, compared to June 30, 2019.
- Deposits increased $103.0 million, or 24.0% on an annualized basis, to $1.80 billion at September 30, 2019, compared to June 30, 2019.
- The ratio of nonperforming assets to total assets was 0.04% at September 30, 2019, compared to 0.07% at June 30, 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 42.9% for the third quarter of 2019, compared to 42.7% for the second quarter of 2019.
Year-Over-Year Highlights
- Net income was $7.8 million for the third quarter of 2019, compared to $6.5 million for the third quarter of 2018, an increase of $1.3 million, or 20.8%.
- Diluted earnings per common share were $0.27 for the third quarter of 2019, compared to $0.21 for the third quarter of 2018, an increase of 24.8%.
- Tangible book value per share, a non-GAAP financial measure, increased 17.2%, or $1.19, to $8.08 at September 30, 2019, compared to $6.89 at September 30, 2018.
- Annualized ROA and ROE for the third quarter of 2019 were 1.43% and 13.31%, respectively, compared to annualized ROA and ROE of 1.41% and 12.28%, respectively, for the third quarter of 2018.
- Gross loans increased $246.3 million, or 15.4%, at September 30, 2019, compared to September 30, 2018.
- Deposits increased $323.1 million, or 21.8%, at September 30, 2019, compared to September 30, 2018.
- The ratio of nonperforming assets to total assets was 0.04% at September 30, 2019 and September 30, 2018.
- The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of the amortization of tax credit investments from noninterest expense, was 42.9% for the third quarter of 2019, compared to 42.7% for the third quarter of 2018.
Key Financial Measures
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As of and for the Three Months Ended |
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As of and for the Nine Months Ended |
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September 30, |
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June 30, |
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September 30, |
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September 30, |
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September 30, |
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2019 |
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2019 |
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2018 |
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2019 |
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2018 |
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Per Common Share Data (1) |
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Basic Earnings Per Share |
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$ |
0.27 |
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$ |
0.27 |
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$ |
0.22 |
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$ |
0.77 |
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$ |
0.67 |
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Diluted Earnings Per Share |
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0.27 |
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0.26 |
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0.21 |
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0.76 |
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0.66 |
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Book Value Per Share |
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8.20 |
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7.90 |
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7.01 |
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8.20 |
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7.01 |
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Tangible Book Value Per Share (2) |
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8.08 |
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7.78 |
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6.89 |
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8.08 |
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6.89 |
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Basic Weighted Average Shares Outstanding |
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28,820,144 |
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29,703,024 |
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30,059,374 |
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29,535,589 |
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28,640,601 |
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Diluted Weighted Average Shares Outstanding |
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29,497,961 |
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30,312,039 |
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30,489,648 |
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30,181,556 |
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29,070,876 |
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Shares Outstanding at Period End |
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28,781,162 |
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28,986,729 |
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30,059,374 |
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28,781,162 |
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30,059,374 |
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Selected Performance Ratios |
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Return on Average Assets (Annualized) |
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1.43 |
% |
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1.55 |
% |
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1.41 |
% |
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1.46 |
% |
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1.49 |
% |
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Return on Average Common Equity (Annualized) |
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13.31 |
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13.88 |
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12.28 |
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13.27 |
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13.70 |
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Return on Average Tangible Common Equity (Annualized) (2) |
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13.52 |
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14.10 |
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12.51 |
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13.49 |
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13.99 |
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Yield on Interest Earning Assets |
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4.98 |
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5.05 |
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4.92 |
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5.01 |
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4.85 |
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Yield on Total Loans, Gross |
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5.32 |
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5.33 |
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5.25 |
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5.31 |
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5.22 |
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Cost of Interest Bearing Liabilities |
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2.04 |
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2.07 |
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1.73 |
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2.06 |
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1.54 |
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Cost of Total Deposits |
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1.42 |
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1.46 |
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1.19 |
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1.44 |
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1.05 |
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Net Interest Margin (3) |
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3.56 |
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3.60 |
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3.71 |
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3.57 |
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3.76 |
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Efficiency Ratio (2) |
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45.6 |
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50.1 |
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42.7 |
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46.6 |
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41.5 |
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Adjusted Efficiency Ratio (4) |
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42.9 |
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42.7 |
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42.7 |
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42.9 |
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41.5 |
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Noninterest Expense to Average Assets (Annualized) |
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1.66 |
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1.84 |
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1.64 |
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1.70 |
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1.60 |
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Adjusted Noninterest Expense to Average Assets (Annualized) (4) |
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1.56 |
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1.57 |
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1.64 |
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1.56 |
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1.59 |
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Loan to Deposit Ratio |
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102.4 |
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105.0 |
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108.2 |
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Core Deposits to Total Deposits |
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79.9 |
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78.3 |
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76.6 |
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Tangible Common Equity to Tangible Assets (2) |
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10.43 |
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10.64 |
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11.01 |
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Capital Ratios (Bank Only) |
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Tier 1 Leverage Ratio |
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10.88 |
% |
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10.99 |
% |
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11.16 |
% |
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Tier 1 Risk-based Capital Ratio |
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11.61 |
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11.73 |
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11.82 |
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Total Risk-based Capital Ratio |
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12.44 |
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12.67 |
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12.95 |
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- 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.
- Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
- Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
- 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
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September 30, |
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June 30, |
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March 31, |
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December 31, |
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September 30, |
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(dollars in thousands) |
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2019 |
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2019 |
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2019 |
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2018 |
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2018 |
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Selected Balance Sheet Data |
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Total Assets |
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$ |
2,232,339 |
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$ |
2,123,631 |
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$ |
2,048,111 |
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$ |
1,973,741 |
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$ |
1,885,793 |
Total Loans, Gross |
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1,846,218 |
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1,784,903 |
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1,723,629 |
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1,664,931 |
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1,599,964 |
Allowance for Loan Losses |
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22,124 |
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21,362 |
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20,607 |
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20,031 |
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18,949 |
Goodwill and Other Intangibles |
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3,535 |
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3,582 |
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3,630 |
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3,678 |
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3,726 |
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Deposits |
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1,802,236 |
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1,699,265 |
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1,643,666 |
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1,560,934 |
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|
1,479,088 |
Tangible Common Equity (1) |
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232,524 |
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225,555 |
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228,145 |
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217,320 |
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|
207,126 |
Total Shareholders' Equity |
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236,059 |
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|
229,137 |
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231,775 |
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|
220,998 |
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|
210,852 |
Average Total Assets - Quarter-to-Date |
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2,168,909 |
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2,069,707 |
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2,011,174 |
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1,948,909 |
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1,816,485 |
Average Common Equity - Quarter-to-Date |
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232,590 |
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231,374 |
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225,844 |
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|
215,254 |
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|
208,773 |
- Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
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For the Three Months Ended |
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For the Nine Months Ended |
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September 30, |
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June 30, |
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September 30, |
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September 30, |
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September 30, |
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(dollars in thousands) |
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2019 |
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2019 |
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2018 |
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2019 |
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2018 |
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Selected Income Statement Data |
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Interest Income |
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$ |
26,572 |
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$ |
25,520 |
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$ |
22,136 |
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$ |
76,359 |
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$ |
61,238 |
Interest Expense |
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|
7,637 |
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|
7,382 |
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|
5,502 |
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|
22,155 |
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|
13,942 |
Net Interest Income |
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18,935 |
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|
18,138 |
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|
16,634 |
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|
54,204 |
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|
47,296 |
Provision for Loan Losses |
|
|
900 |
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|
600 |
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|
1,275 |
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|
2,100 |
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|
2,775 |
Net Interest Income after Provision for Loan Losses |
|
|
18,035 |
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|
17,538 |
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|
15,359 |
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|
52,104 |
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|
44,521 |
Noninterest Income |
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|
946 |
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|
1,134 |
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|
814 |
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|
2,714 |
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|
1,686 |
Noninterest Expense |
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|
9,084 |
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|
9,474 |
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|
7,526 |
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|
26,443 |
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|
20,522 |
Income Before Income Taxes |
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|
9,897 |
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|
9,198 |
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|
8,647 |
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|
28,375 |
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|
25,685 |
Provision for Income Taxes |
|
|
2,092 |
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|
1,189 |
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|
2,184 |
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|
5,543 |
|
|
6,526 |
Net Income |
|
$ |
7,805 |
|
$ |
8,009 |
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$ |
6,463 |
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$ |
22,832 |
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$ |
19,159 |
Income Statement
Net Interest Income
Net interest income was $18.9 million for the third quarter of 2019, an increase of $797,000, or 4.4%, from $18.1 million in the second quarter of 2019, and an increase of $2.3 million, or 13.8%, from $16.6 million in the third quarter of 2018. The linked-quarter increase in net interest income was driven by growth in average interest earning assets. The year-over-year increase in net interest income was largely attributable to growth in average interest earning assets, which increased by $329.5 million, or 18.2%, to $2.13 billion for the third quarter of 2019, from $1.81 billion for the third 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 third quarter of 2019 was 3.56%, a 4 basis point decrease from 3.60% in the second quarter of 2019, and a 15 basis point decrease from 3.71% in the third quarter of 2018. While yield curve dynamics and lower market rates have weighed on earning asset yields, and subsequently the Company’s net interest margin, funding costs have benefitted as evidenced by the 3 basis point decline over the linked-quarter. On a year-over-year basis, net interest margin benefitted from repricing of variable-rate loans and the origination of new loans at higher rates; however, it compressed due to elevated cash balances, lower loan fees recognized, and increased rates paid on deposits and borrowings.
Interest income was $26.6 million for the third quarter of 2019, an increase of $1.1 million, or 4.1%, from $25.5 million in the second quarter of 2019, and an increase of $4.4 million, or 20.0%, from $22.1 million in the third quarter of 2018. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.98% in the third quarter of 2019, compared to 5.05% in the second quarter of 2019 and 4.92% in the third quarter of 2018.
Loan interest income and loan fees remain the primary contributing factors to the year-over-year increase in yield on interest earning assets, driving the aggregate loan yield 7 basis points higher from 5.25% in the third quarter of 2018 to 5.32% in the third quarter of 2019. The linked-quarter decrease of the aggregate loan yield of 1 basis point was primarily due to competitive market pressures and lower interest rates. On a year-over-year basis, 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 periods indicated is as follows:
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Three Months Ended |
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September 30, 2019 |
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June 30, 2019 |
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March 31, 2019 |
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December 31, 2018 |
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|
September 30, 2018 |
|
Interest |
|
5.07 |
% |
|
5.10 |
% |
|
5.07 |
% |
|
|
4.98 |
% |
|
4.87 |
% |
Fees |
|
0.25 |
|
|
0.23 |
|
|
0.20 |
|
|
|
0.29 |
|
|
0.38 |
|
Yield on Loans |
|
5.32 |
% |
|
5.33 |
% |
|
5.27 |
% |
|
|
5.27 |
% |
|
5.25 |
% |
Interest expense was $7.6 million for the third quarter of 2019, an increase of $255,000, or 3.5%, from $7.4 million in the second quarter of 2019, and an increase of $2.1 million, or 38.8%, from $5.5 million in the third quarter of 2018. The cost of interest bearing liabilities decreased to 2.04% in the third quarter of 2019 from 2.07% in the second quarter of 2019, primarily due to the Company exercising embedded optionality in the brokered deposit portfolio and supplementing the portfolio with strong core deposit growth at lower rates. On a year-over-year basis, the cost of interest bearing liabilities was up 31 basis points from 1.73% in the third quarter of 2018 to 2.04% in the third quarter of 2019 due to higher costs and repricing of deposits and borrowings during the period. Despite the Federal Open Market Committee cutting rates by 25 basis points twice during the period, 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 September 30, 2019, June 30, 2019 and September 30, 2018 is as follows:
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For the Three Months Ended |
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September 30, 2019 |
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June 30, 2019 |
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September 30, 2018 |
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Average |
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Interest |
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Yield/ |
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Average |
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Interest |
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Yield/ |
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Average |
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Interest |
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Yield/ |
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Balance |
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& Fees |
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Rate |
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Balance |
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& Fees |
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Rate |
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Balance |
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& Fees |
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Rate |
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(dollars in thousands) |
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Interest Earning Assets: |
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Cash Investments |
|
$ |
73,970 |
|
$ |
346 |
|
1.86 |
% |
$ |
38,142 |
|
$ |
171 |
|
1.80 |
% |
$ |
23,822 |
|
$ |
72 |
|
1.20 |
% |
Investment Securities: |
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Taxable Investment Securities |
|
|
151,319 |
|
|
1,095 |
|
2.87 |
|
|
140,890 |
|
|
1,058 |
|
3.01 |
|
|
132,197 |
|
|
839 |
|
2.52 |
|
Tax-Exempt Investment Securities (1) |
|
|
95,575 |
|
|
1,031 |
|
4.28 |
|
|
103,223 |
|
|
1,103 |
|
4.28 |
|
|
116,042 |
|
|
1,204 |
|
4.12 |
|
Total Investment Securities |
|
|
246,894 |
|
|
2,126 |
|
3.42 |
|
|
244,113 |
|
|
2,161 |
|
3.55 |
|
|
248,239 |
|
|
2,043 |
|
3.27 |
|
Loans (2) |
|
|
1,805,920 |
|
|
24,220 |
|
5.32 |
|
|
1,755,686 |
|
|
23,321 |
|
5.33 |
|
|
1,526,765 |
|
|
20,207 |
|
5.25 |
|
Federal Home Loan Bank Stock |
|
|
8,111 |
|
|
96 |
|
4.72 |
|
|
7,694 |
|
|
100 |
|
5.23 |
|
|
6,619 |
|
|
67 |
|
4.02 |
|
Total Interest Earning Assets |
|
|
2,134,895 |
|
|
26,788 |
|
4.98 |
% |
|
2,045,635 |
|
|
25,753 |
|
5.05 |
% |
|
1,805,445 |
|
|
22,389 |
|
4.92 |
% |
Noninterest Earning Assets |
|
|
34,014 |
|
|
|
|
|
|
|
24,072 |
|
|
|
|
|
|
|
11,040 |
|
|
|
|
|
|
Total Assets |
|
$ |
2,168,909 |
|
|
|
|
|
|
$ |
2,069,707 |
|
|
|
|
|
|
$ |
1,816,485 |
|
|
|
|
|
|
Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Transaction Deposits |
|
|
250,667 |
|
|
511 |
|
0.81 |
% |
|
202,886 |
|
|
387 |
|
0.77 |
% |
|
171,923 |
|
|
165 |
|
0.38 |
% |
Savings and Money Market Deposits |
|
|
453,340 |
|
|
2,080 |
|
1.82 |
|
|
431,716 |
|
|
1,938 |
|
1.80 |
|
|
398,092 |
|
|
1,373 |
|
1.37 |
|
Time Deposits |
|
|
359,329 |
|
|
2,229 |
|
2.46 |
|
|
354,026 |
|
|
2,120 |
|
2.40 |
|
|
295,320 |
|
|
1,490 |
|
2.00 |
|
Brokered Deposits |
|
|
242,600 |
|
|
1,389 |
|
2.27 |
|
|
266,804 |
|
|
1,575 |
|
2.37 |
|
|
241,355 |
|
|
1,294 |
|
2.13 |
|
Federal Funds Purchased |
|
|
— |
|
|
— |
|
— |
|
|
2,089 |
|
|
12 |
|
2.24 |
|
|
27,391 |
|
|
147 |
|
2.13 |
|
Notes Payable |
|
|
13,500 |
|
|
127 |
|
3.73 |
|
|
14,000 |
|
|
130 |
|
3.72 |
|
|
15,500 |
|
|
144 |
|
3.69 |
|
FHLB Advances |
|
|
143,690 |
|
|
908 |
|
2.51 |
|
|
131,385 |
|
|
827 |
|
2.52 |
|
|
89,652 |
|
|
488 |
|
2.16 |
|
Subordinated Debentures |
|
|
24,699 |
|
|
393 |
|
6.31 |
|
|
24,673 |
|
|
393 |
|
6.39 |
|
|
24,595 |
|
|
401 |
|
6.47 |
|
Total Interest Bearing Liabilities |
|
|
1,487,825 |
|
|
7,637 |
|
2.04 |
% |
|
1,427,579 |
|
|
7,382 |
|
2.07 |
% |
|
1,263,828 |
|
|
5,502 |
|
1.73 |
% |
Noninterest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Bearing Transaction Deposits |
|
|
434,021 |
|
|
|
|
|
|
|
401,480 |
|
|
|
|
|
|
|
335,483 |
|
|
|
|
|
|
Other Noninterest Bearing Liabilities |
|
|
14,473 |
|
|
|
|
|
|
|
9,274 |
|
|
|
|
|
|
|
8,401 |
|
|
|
|
|
|
Total Noninterest Bearing Liabilities |
|
|
448,494 |
|
|
|
|
|
|
|
410,754 |
|
|
|
|
|
|
|
343,884 |
|
|
|
|
|
|
Shareholders' Equity |
|
|
232,590 |
|
|
|
|
|
|
|
231,374 |
|
|
|
|
|
|
|
208,773 |
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
2,168,909 |
|
|
|
|
|
|
$ |
2,069,707 |
|
|
|
|
|
|
$ |
1,816,485 |
|
|
|
|
|
|
Net Interest Income / Interest Rate Spread |
|
|
|
|
|
19,151 |
|
2.94 |
% |
|
|
|
|
18,371 |
|
2.98 |
% |
|
|
|
|
16,887 |
|
3.19 |
% |
Net Interest Margin (3) |
|
|
|
|
|
|
|
3.56 |
% |
|
|
|
|
|
|
3.60 |
% |
|
|
|
|
|
|
3.71 |
% |
Taxable Equivalent Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-Exempt Investment Securities |
|
|
|
|
|
(216) |
|
|
|
|
|
|
|
(233) |
|
|
|
|
|
|
|
(253) |
|
|
|
Net Interest Income |
|
|
|
|
$ |
18,935 |
|
|
|
|
|
|
$ |
18,138 |
|
|
|
|
|
|
$ |
16,634 |
|
|
|
- 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%.
- Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
- 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 $900,000 for the third quarter of 2019, an increase of $300,000 from $600,000 for the second quarter of 2019, and a decrease of $375,000 from $1.3 million for the third quarter of 2018. The provision for loan losses increased in the third quarter of 2019 due to an increase in charge-offs and decrease in recoveries, compared to the second quarter of 2019. The year-over-year decrease was attributable to the strong asset quality and consistent performance of the loan portfolio within the diversified Twin Cities economy.
The following table presents a reconciliation of the Company’s allowance for loan losses for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|||||
(dollars in thousands) |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||
Balance at Beginning of Period |
|
$ |
21,362 |
|
$ |
20,607 |
|
$ |
17,666 |
|
$ |
20,031 |
|
$ |
16,502 |
Provision for Loan Losses |
|
|
900 |
|
|
600 |
|
|
1,275 |
|
|
2,100 |
|
|
2,775 |
Charge-offs |
|
|
(144) |
|
|
(3) |
|
|
(11) |
|
|
(183) |
|
|
(384) |
Recoveries |
|
|
6 |
|
|
158 |
|
|
19 |
|
|
176 |
|
|
56 |
Balance at End of Period |
|
$ |
22,124 |
|
$ |
21,362 |
|
$ |
18,949 |
|
$ |
22,124 |
|
$ |
18,949 |
Noninterest Income
Noninterest income was $946,000 for the third quarter of 2019, a decrease of $188,000 from $1.1 million for the second quarter of 2019, and an increase of $132,000 from $814,000 for the third quarter of 2018. The linked-quarter decrease was primarily due to decreased gains on sales of securities. The year-over-year increase was primarily due to increased gains on sales of securities and foreclosed assets, offset partially by decreased letter of credit fees.
The following table presents the major components of noninterest income for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|||||
(dollars in thousands) |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|||||
Noninterest Income: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Service Fees |
|
$ |
184 |
|
$ |
189 |
|
$ |
184 |
|
$ |
564 |
|
$ |
539 |
|
Net Gain (Loss) on Sales of Securities |
|
|
58 |
|
|
463 |
|
|
(49) |
|
|
516 |
|
|
(108) |
|
Net Gain (Loss) on Sales of Foreclosed Assets |
|
|
69 |
|
|
— |
|
|
(88) |
|
|
69 |
|
|
(225) |
|
Letter of Credit Fees |
|
|
331 |
|
|
213 |
|
|
447 |
|
|
790 |
|
|
814 |
|
Debit Card Interchange Fees |
|
|
116 |
|
|
109 |
|
|
99 |
|
|
313 |
|
|
287 |
|
Other Income |
|
|
188 |
|
|
160 |
|
|
221 |
|
|
462 |
|
|
379 |
|
Totals |
|
$ |
946 |
|
$ |
1,134 |
|
$ |
814 |
|
$ |
2,714 |
|
$ |
1,686 |
|
Noninterest Expense
Noninterest expense was $9.1 million for the third quarter of 2019, a decrease of $390,000 from $9.5 million for the second quarter of 2019, and an increase of $1.6 million from $7.5 million for the third quarter of 2018. The linked-quarter decrease was primarily due to decreased amortization of tax credit investments and an FDIC insurance assessment credit applied in the current period, offset partially by increased salaries and employee benefits expense. The year-over-year increase 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 |
|
Nine Months Ended |
|
|
|||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|
September 30, |
|
September 30, |
|
|
|||||
(dollars in thousands) |
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
|||||
Noninterest Expense: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and Employee Benefits |
|
$ |
5,915 |
|
$ |
5,124 |
|
$ |
4,910 |
|
$ |
15,841 |
|
$ |
13,534 |
|
|
Occupancy and Equipment |
|
|
761 |
|
|
785 |
|
|
596 |
|
|
2,202 |
|
|
1,767 |
|
|
FDIC Insurance Assessment |
|
|
— |
|
|
285 |
|
|
240 |
|
|
570 |
|
|
675 |
|
|
Data Processing |
|
|
182 |
|
|
151 |
|
|
167 |
|
|
486 |
|
|
325 |
|
|
Professional and Consulting Fees |
|
|
414 |
|
|
451 |
|
|
313 |
|
|
1,253 |
|
|
836 |
|
|
Information Technology and Telecommunications |
|
|
233 |
|
|
208 |
|
|
271 |
|
|
677 |
|
|
674 |
|
|
Marketing and Advertising |
|
|
339 |
|
|
404 |
|
|
347 |
|
|
1,208 |
|
|
911 |
|
|
Intangible Asset Amortization |
|
|
48 |
|
|
47 |
|
|
48 |
|
|
143 |
|
|
143 |
|
|
Amortization of Tax Credit Investments |
|
|
530 |
|
|
1,390 |
|
|
15 |
|
|
2,097 |
|
|
15 |
|
|
Other Expense |
|
|
662 |
|
|
629 |
|
|
619 |
|
|
1,966 |
|
|
1,642 |
|
|
Totals |
|
$ |
9,084 |
|
$ |
9,474 |
|
$ |
7,526 |
|
$ |
26,443 |
|
$ |
20,522 |
|
|
The Company had 158 full-time equivalent employees at September 30, 2019, compared to 150 employees at June 30, 2019, and 139 employees at September 30, 2018. The increases include strategic hires in deposit gathering, lending, technology, 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 45.6% for the third quarter of 2019, compared to 50.1% for the second quarter of 2019, and 42.7% for the third quarter of 2018. Excluding the impact of the amortization of tax credit investments, the adjusted efficiency ratio, a non-GAAP financial measure, was 42.9% for the third quarter of 2019, and 42.7% for the second quarter of 2019 and third quarter of 2018.
Income Taxes
The effective combined federal and state income tax rate for the third quarter of 2019 was 21.1%, an increase from 12.9% for the second quarter of 2019, and a decrease from 25.3% for the third quarter of 2018. The lower effective combined rates in 2019 compared to 2018 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 nine months ended September 30, 2019 was 19.5%.
Balance Sheet
Total assets at September 30, 2019 were $2.23 billion, a 5.1% increase from $2.12 billion at June 30, 2019, and a 18.4% increase from $1.89 billion at September 30, 2018. The increase in total assets was primarily due to organic loan growth.
Total gross loans at September 30, 2019 were $1.85 billion, a net increase of $61.3 million, or 3.4%, over total gross loans of $1.78 billion at June 30, 2019, and an increase of $246.3 million, or 15.4%, over total gross loans of $1.60 billion at September 30, 2018.
The following table details the composition of the Company’s loan portfolio, by category, at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 |
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
|||||
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial and Industrial |
|
$ |
291,723 |
|
$ |
287,804 |
|
$ |
284,807 |
|
$ |
260,833 |
|
$ |
235,502 |
|
Construction and Land Development |
|
|
216,054 |
|
|
195,568 |
|
|
178,782 |
|
|
210,041 |
|
|
187,919 |
|
Real Estate Mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 - 4 Family Mortgage |
|
|
254,782 |
|
|
247,029 |
|
|
233,131 |
|
|
226,773 |
|
|
224,124 |
|
Multifamily |
|
|
456,257 |
|
|
437,198 |
|
|
417,975 |
|
|
407,934 |
|
|
389,511 |
|
CRE Owner Occupied |
|
|
71,209 |
|
|
68,681 |
|
|
66,130 |
|
|
64,458 |
|
|
65,905 |
|
CRE Nonowner Occupied |
|
|
551,992 |
|
|
544,579 |
|
|
538,998 |
|
|
490,632 |
|
|
492,499 |
|
Total Real Estate Mortgage Loans |
|
|
1,334,240 |
|
|
1,297,487 |
|
|
1,256,234 |
|
|
1,189,797 |
|
|
1,172,039 |
|
Consumer and Other |
|
|
4,201 |
|
|
4,044 |
|
|
3,806 |
|
|
4,260 |
|
|
4,504 |
|
Total Loans, Gross |
|
|
1,846,218 |
|
|
1,784,903 |
|
|
1,723,629 |
|
|
1,664,931 |
|
|
1,599,964 |
|
Allowance for Loan Losses |
|
|
(22,124) |
|
|
(21,362) |
|
|
(20,607) |
|
|
(20,031) |
|
|
(18,949) |
|
Net Deferred Loan Fees |
|
|
(5,788) |
|
|
(5,157) |
|
|
(4,791) |
|
|
(4,515) |
|
|
(4,308) |
|
Total Loans, Net |
|
$ |
1,818,306 |
|
$ |
1,758,384 |
|
$ |
1,698,231 |
|
$ |
1,640,385 |
|
$ |
1,576,707 |
|
Total deposits at September 30, 2019 were $1.80 billion, an increase of $103.0 million, or 6.1%, over total deposits of $1.70 billion at June 30, 2019, and an increase of $323.1 million, or 21.8%, over total deposits of $1.48 billion at September 30, 2018.
The following table details the composition of the Company’s deposit portfolio, by category, at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019 |
|
June 30, 2019 |
|
March 31, 2019 |
|
December 31, 2018 |
|
September 30, 2018 |
|
|
|||||
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Bearing Transaction Deposits |
|
$ |
478,493 |
|
$ |
409,198 |
|
$ |
404,937 |
|
$ |
369,203 |
|
$ |
342,292 |
|
|
Interest Bearing Transaction Deposits |
|
|
243,889 |
|
|
231,318 |
|
|
180,459 |
|
|
179,567 |
|
|
175,455 |
|
|
Savings and Money Market Deposits |
|
|
470,518 |
|
|
456,447 |
|
|
434,186 |
|
|
402,639 |
|
|
416,140 |
|
|
Time Deposits |
|
|
363,308 |
|
|
359,338 |
|
|
346,163 |
|
|
318,356 |
|
|
290,887 |
|
|
Brokered Deposits |
|
|
246,028 |
|
|
242,964 |
|
|
277,921 |
|
|
291,169 |
|
|
254,314 |
|
|
Total Deposits |
|
$ |
1,802,236 |
|
$ |
1,699,265 |
|
$ |
1,643,666 |
|
$ |
1,560,934 |
|
$ |
1,479,088 |
|
|
Total shareholders’ equity at September 30, 2019 was $236.1 million, an increase of $6.9 million, or 3.0%, over total shareholders’ equity of $229.1 million at June 30, 2019, and an increase of $25.2 million, or 12.0%, over total shareholders’ equity of $210.9 million at September 30, 2018. The increase compared to both periods is due to net income retained and increased unrealized gains, partially offset by stock repurchases made under the Company’s stock buyback program.
During the third quarter of 2019, the Company repurchased 205,567 shares of its common stock, representing less than 1% of the Company’s outstanding shares. Shares were repurchased at a weighted average price of $11.41 for a total of $2.3 million. Strong profitability and 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 $8.08 as of September 30, 2019, an increase of 3.8% from $7.78 as of June 30, 2019, and an increase of 17.2% from $6.89 as of September 30, 2018.
Asset Quality
Asset quality metrics for the Company remained strong at September 30, 2019. Annualized net charge-offs (recoveries) as a percent of average loans for the third quarter of 2019 were 0.03%, compared to (0.04)% for the second quarter of 2019, and 0.00% for the third quarter of 2018. At September 30, 2019, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $828,000, or 0.04% of total assets, as compared to $1.6 million, or 0.07% of total assets at June 30, 2019, and $718,000, or 0.04% of total assets at September 30, 2018. Notably, the Company had zero loans 30-89 days past due at September 30, 2019.
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) |
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
September 30, |
|||
|
|
2019 |
|
2018 |
|
2018 |
|||
|
|
(Unaudited) |
|
|
|
|
(Unaudited) |
||
ASSETS |
|
|
|
|
|
|
|
|
|
Cash and Cash Equivalents |
|
$ |
89,619 |
|
$ |
28,444 |
|
$ |
21,537 |
Bank-Owned Certificates of Deposit |
|
|
2,654 |
|
|
3,305 |
|
|
3,305 |
Securities Available for Sale, at Fair Value |
|
|
263,803 |
|
|
253,378 |
|
|
240,786 |
Loans, Net of Allowance for Loan Losses of $22,124 at September 30, 2019 (unaudited), $20,031 at December 31, 2018 and $18,949 at September 30, 2018 (unaudited) |
|
|
1,818,306 |
|
|
1,640,385 |
|
|
1,576,707 |
Federal Home Loan Bank (FHLB) Stock, at Cost |
|
|
8,024 |
|
|
7,614 |
|
|
7,814 |
Premises and Equipment, Net |
|
|
25,764 |
|
|
13,074 |
|
|
11,387 |
Accrued Interest |
|
|
6,519 |
|
|
6,589 |
|
|
6,400 |
Goodwill |
|
|
2,626 |
|
|
2,626 |
|
|
2,626 |
Other Intangible Assets, Net |
|
|
909 |
|
|
1,052 |
|
|
1,100 |
Other Assets |
|
|
14,115 |
|
|
17,274 |
|
|
14,131 |
Total Assets |
|
$ |
2,232,339 |
|
$ |
1,973,741 |
|
$ |
1,885,793 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
Noninterest Bearing |
|
$ |
478,493 |
|
$ |
369,203 |
|
$ |
342,292 |
Interest Bearing |
|
|
1,323,743 |
|
|
1,191,731 |
|
|
1,136,796 |
Total Deposits |
|
|
1,802,236 |
|
|
1,560,934 |
|
|
1,479,088 |
Federal Funds Purchased |
|
|
— |
|
|
18,000 |
|
|
53,000 |
Notes Payable |
|
|
13,500 |
|
|
15,000 |
|
|
15,500 |
FHLB Advances |
|
|
141,500 |
|
|
124,000 |
|
|
94,000 |
Subordinated Debentures, Net of Issuance Costs |
|
|
24,707 |
|
|
24,630 |
|
|
24,604 |
Accrued Interest Payable |
|
|
1,763 |
|
|
1,806 |
|
|
1,230 |
Other Liabilities |
|
|
12,574 |
|
|
8,373 |
|
|
7,519 |
Total Liabilities |
|
|
1,996,280 |
|
|
1,752,743 |
|
|
1,674,941 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
Preferred Stock- $0.01 par value |
|
|
|
|
|
|
|
|
|
Authorized 10,000,000; None Issued and Outstanding at September 30, 2019 (unaudited), December 31, 2018 and September 30, 2018 (unaudited) |
|
|
— |
|
|
— |
|
|
— |
Common Stock- $0.01 par value |
|
|
|
|
|
|
|
|
|
Common Stock - Authorized 75,000,000; Issued and Outstanding 28,781,162 at September 30, 2019 (unaudited), 30,097,274 at December 31, 2018 and 27,235,832 at September 30, 2018 (unaudited) |
|
|
288 |
|
|
301 |
|
|
272 |
Non-voting Common Stock- Authorized 10,000,000; Issued and Outstanding -0- at September 30, 2019 (unaudited) and December 31, 2018 and 2,823,542 at September 30, 2018 (unaudited) |
|
|
— |
|
|
— |
|
|
28 |
Additional Paid-In Capital |
|
|
111,670 |
|
|
126,031 |
|
|
125,715 |
Retained Earnings |
|
|
119,066 |
|
|
96,234 |
|
|
88,473 |
Accumulated Other Comprehensive Income (Loss) |
|
|
5,035 |
|
|
(1,568) |
|
|
(3,636) |
Total Shareholders' Equity |
|
|
236,059 |
|
|
220,998 |
|
|
210,852 |
Total Liabilities and Equity |
|
$ |
2,232,339 |
|
$ |
1,973,741 |
|
$ |
1,885,793 |
Bridgewater Bancshares, Inc. and Subsidiaries |
|||||||||||||||
Consolidated Statements of Income |
|||||||||||||||
(dollars in thousands, except per share data) |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|||||||||||
|
|
September 30, |
|
June 30 |
|
September 30, |
|
September 30, |
|
September 30, |
|||||
|
|
2019 |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|||||
INTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans, Including Fees |
|
$ |
24,220 |
|
$ |
23,321 |
|
$ |
20,207 |
|
$ |
69,720 |
|
$ |
56,055 |
Investment Securities |
|
|
1,910 |
|
|
1,928 |
|
|
1,790 |
|
|
5,739 |
|
|
4,830 |
Other |
|
|
442 |
|
|
271 |
|
|
139 |
|
|
900 |
|
|
353 |
Total Interest Income |
|
|
26,572 |
|
|
25,520 |
|
|
22,136 |
|
|
76,359 |
|
|
61,238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
6,209 |
|
|
6,020 |
|
|
4,322 |
|
|
17,932 |
|
|
10,853 |
Notes Payable |
|
|
127 |
|
|
130 |
|
|
144 |
|
|
378 |
|
|
442 |
FHLB Advances |
|
|
908 |
|
|
827 |
|
|
488 |
|
|
2,510 |
|
|
1,159 |
Subordinated Debentures |
|
|
393 |
|
|
393 |
|
|
401 |
|
|
1,163 |
|
|
1,167 |
Federal Funds Purchased |
|
|
— |
|
|
12 |
|
|
147 |
|
|
172 |
|
|
321 |
Total Interest Expense |
|
|
7,637 |
|
|
7,382 |
|
|
5,502 |
|
|
22,155 |
|
|
13,942 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME |
|
|
18,935 |
|
|
18,138 |
|
|
16,634 |
|
|
54,204 |
|
|
47,296 |
Provision for Loan Losses |
|
|
900 |
|
|
600 |
|
|
1,275 |
|
|
2,100 |
|
|
2,775 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME AFTER |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN LOSSES |
|
|
18,035 |
|
|
17,538 |
|
|
15,359 |
|
|
52,104 |
|
|
44,521 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Customer Service Fees |
|
|
184 |
|
|
189 |
|
|
184 |
|
|
564 |
|
|
539 |
Net Gain (Loss) on Sales of Available for Sale Securities |
|
|
58 |
|
|
463 |
|
|
(49) |
|
|
516 |
|
|
(108) |
Net Gain (Loss) on Sales of Foreclosed Assets |
|
|
69 |
|
|
— |
|
|
(88) |
|
|
69 |
|
|
(225) |
Other Income |
|
|
635 |
|
|
482 |
|
|
767 |
|
|
1,565 |
|
|
1,480 |
Total Noninterest Income |
|
|
946 |
|
|
1,134 |
|
|
814 |
|
|
2,714 |
|
|
1,686 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NONINTEREST EXPENSE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and Employee Benefits |
|
|
5,915 |
|
|
5,124 |
|
|
4,910 |
|
|
15,841 |
|
|
13,534 |
Occupancy and Equipment |
|
|
761 |
|
|
785 |
|
|
596 |
|
|
2,202 |
|
|
1,767 |
Other Expense |
|
|
2,408 |
|
|
3,565 |
|
|
2,020 |
|
|
8,400 |
|
|
5,221 |
Total Noninterest Expense |
|
|
9,084 |
|
|
9,474 |
|
|
7,526 |
|
|
26,443 |
|
|
20,522 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
9,897 |
|
|
9,198 |
|
|
8,647 |
|
|
28,375 |
|
|
25,685 |
Provision for Income Taxes |
|
|
2,092 |
|
|
1,189 |
|
|
2,184 |
|
|
5,543 |
|
|
6,526 |
NET INCOME |
|
$ |
7,805 |
|
$ |
8,009 |
|
$ |
6,463 |
|
$ |
22,832 |
|
$ |
19,159 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.27 |
|
$ |
0.27 |
|
$ |
0.22 |
|
$ |
0.77 |
|
$ |
0.67 |
Diluted |
|
|
0.27 |
|
|
0.26 |
|
|
0.21 |
|
|
0.76 |
|
|
0.66 |
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 |
|
|||||||||||||
|
|
September 30, |
|
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
|||||
|
|
2019 |
|
2019 |
|
2019 |
|
2018 |
|
2018 |
|
|||||
Selected Asset Quality Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans 30-89 Days Past Due |
|
$ |
— |
|
$ |
470 |
|
$ |
387 |
|
$ |
311 |
|
$ |
12 |
|
Loans 30-89 Days Past Due to Total Loans |
|
|
0.00 |
% |
|
0.03 |
% |
|
0.02 |
% |
|
0.02 |
% |
|
0.00 |
% |
Nonperforming Loans |
|
$ |
828 |
|
$ |
555 |
|
$ |
1,557 |
|
$ |
581 |
|
$ |
718 |
|
Nonperforming Loans to Total Loans |
|
|
0.04 |
% |
|
0.03 |
% |
|
0.09 |
% |
|
0.03 |
% |
|
0.04 |
% |
Foreclosed Assets |
|
$ |
— |
|
$ |
1,033 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
Nonaccrual Loans to Total Loans |
|
|
0.04 |
% |
|
0.03 |
% |
|
0.09 |
% |
|
0.03 |
% |
|
0.04 |
% |
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans |
|
|
0.04 |
|
|
0.03 |
|
|
0.09 |
|
|
0.03 |
|
|
0.04 |
|
Nonperforming Assets (1) |
|
$ |
828 |
|
$ |
1,588 |
|
$ |
1,557 |
|
$ |
581 |
|
$ |
718 |
|
Nonperforming Assets to Total Assets (1) |
|
|
0.04 |
% |
|
0.07 |
% |
|
0.08 |
% |
|
0.03 |
% |
|
0.04 |
% |
Allowance for Loan Losses to Total Loans |
|
|
1.20 |
|
|
1.20 |
|
|
1.20 |
|
|
1.20 |
|
|
1.18 |
|
Allowance for Loans Losses to Nonperforming Loans |
|
|
2,671.98 |
|
|
3,849.01 |
|
|
1,323.51 |
|
|
3,447.68 |
|
|
2,639.14 |
|
Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans |
|
|
0.03 |
|
|
(0.04) |
|
|
0.01 |
|
|
(0.07) |
|
|
0.00 |
|
- 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 Nine Months Ended |
|
|||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
|||||
|
|
2019 |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|||||
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense |
|
$ |
9,084 |
|
$ |
9,474 |
|
$ |
7,526 |
|
|
$ |
26,443 |
|
$ |
20,522 |
|
Less: Amortization of Intangible Assets |
|
|
(48) |
|
|
(47) |
|
|
(48) |
|
|
|
(143) |
|
|
(143) |
|
Adjusted Noninterest Expense |
|
$ |
9,036 |
|
$ |
9,427 |
|
$ |
7,478 |
|
|
$ |
26,300 |
|
$ |
20,379 |
|
Net Interest Income |
|
|
18,935 |
|
|
18,138 |
|
|
16,634 |
|
|
|
54,204 |
|
|
47,296 |
|
Noninterest Income |
|
|
946 |
|
|
1,134 |
|
|
814 |
|
|
|
2,714 |
|
|
1,686 |
|
Less: (Gain) Loss on Sales of Securities |
|
|
(58) |
|
|
(463) |
|
|
49 |
|
|
|
(516) |
|
|
108 |
|
Adjusted Operating Revenue |
|
$ |
19,823 |
|
$ |
18,809 |
|
$ |
17,497 |
|
|
$ |
56,402 |
|
$ |
49,090 |
|
Efficiency Ratio |
|
|
45.6 |
% |
|
50.1 |
% |
|
42.7 |
% |
|
|
46.6 |
% |
|
41.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Efficiency Ratio |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Expense |
|
$ |
9,084 |
|
$ |
9,474 |
|
$ |
7,526 |
|
|
$ |
26,443 |
|
$ |
20,522 |
|
Less: Amortization of Tax Credit Investments |
|
|
(530) |
|
|
(1,390) |
|
|
(15) |
|
|
|
(2,097) |
|
|
(15) |
|
Less: Amortization of Intangible Assets |
|
|
(48) |
|
|
(47) |
|
|
(48) |
|
|
|
(143) |
|
|
(143) |
|
Adjusted Noninterest Expense |
|
$ |
8,506 |
|
$ |
8,037 |
|
$ |
7,463 |
|
|
$ |
24,203 |
|
$ |
20,364 |
|
Net Interest Income |
|
|
18,935 |
|
|
18,138 |
|
|
16,634 |
|
|
|
54,204 |
|
|
47,296 |
|
Noninterest Income |
|
|
946 |
|
|
1,134 |
|
|
814 |
|
|
|
2,714 |
|
|
1,686 |
|
Less: (Gain) Loss on Sales of Securities |
|
|
(58) |
|
|
(463) |
|
|
49 |
|
|
|
(516) |
|
|
108 |
|
Adjusted Operating Revenue |
|
$ |
19,823 |
|
$ |
18,809 |
|
$ |
17,497 |
|
|
$ |
56,402 |
|
$ |
49,090 |
|
Adjusted Efficiency Ratio |
|
|
42.9 |
% |
|
42.7 |
% |
|
42.7 |
% |
|
|
42.9 |
% |
|
41.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Three Months Ended |
|
|
As of and for the Nine Months Ended |
|
|||||||||||
|
|
September 30, |
|
June 30, |
|
September 30, |
|
|
September 30, |
|
September 30, |
|
|||||
|
|
2019 |
|
2019 |
|
2018 |
|
|
2019 |
|
2018 |
|
|||||
(dollars in thousands, except share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity and Tangible Common Equity/Tangible Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Equity |
|
$ |
236,059 |
|
$ |
229,137 |
|
$ |
210,852 |
|
|
|
|
|
|
|
|
Less: Intangible Assets |
|
|
(3,535) |
|
|
(3,582) |
|
|
(3,726) |
|
|
|
|
|
|
|
|
Tangible Common Equity |
|
|
232,524 |
|
|
225,555 |
|
|
207,126 |
|
|
|
|
|
|
|
|
Total Assets |
|
|
2,232,339 |
|
|
2,123,631 |
|
|
1,885,793 |
|
|
|
|
|
|
|
|
Less: Intangible Assets |
|
|
(3,535) |
|
|
(3,582) |
|
|
(3,726) |
|
|
|
|
|
|
|
|
Tangible Assets |
|
$ |
2,228,804 |
|
$ |
2,120,049 |
|
$ |
1,882,067 |
|
|
|
|
|
|
|
|
Tangible Common Equity/Tangible Assets |
|
|
10.43 |
% |
|
10.64 |
% |
|
11.01 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per Share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Book Value Per Common Share |
|
$ |
8.20 |
|
$ |
7.90 |
|
$ |
7.01 |
|
|
|
|
|
|
|
|
Less: Effects of Intangible Assets |
|
|
(0.12) |
|
|
(0.12) |
|
|
(0.12) |
|
|
|
|
|
|
|
|
Tangible Book Value Per Common Share |
|
$ |
8.08 |
|
$ |
7.78 |
|
$ |
6.89 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Tangible Common Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Common Equity |
|
$ |
232,590 |
|
$ |
231,374 |
|
$ |
208,773 |
|
|
$ |
229,961 |
|
$ |
186,949 |
|
Less: Effects of Average Intangible Assets |
|
|
(3,558) |
|
|
(3,605) |
|
|
(3,748) |
|
|
|
(3,605) |
|
|
(3,797) |
|
Average Tangible Common Equity |
|
$ |
229,032 |
|
$ |
227,769 |
|
$ |
205,025 |
|
|
$ |
226,356 |
|
$ |
183,152 |
|
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 Nine Months Ended |
|
||||||||||||||
|
|
September 30, 2019 |
|
September 30, 2018 |
|
||||||||||||
|
|
Average |
|
Interest |
|
Yield/ |
|
Average |
|
Interest |
|
Yield/ |
|
||||
|
|
Balance |
|
& Fees |
|
Rate |
|
Balance |
|
& Fees |
|
Rate |
|
||||
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Earning Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Investments |
|
$ |
46,158 |
|
$ |
604 |
|
1.75 |
% |
$ |
23,540 |
|
$ |
188 |
|
1.07 |
% |
Investment Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Investment Securities |
|
|
143,583 |
|
|
3,126 |
|
2.91 |
|
|
125,668 |
|
|
1,960 |
|
2.09 |
|
Tax-Exempt Investment Securities (1) |
|
|
103,032 |
|
|
3,307 |
|
4.29 |
|
|
117,284 |
|
|
3,634 |
|
4.14 |
|
Total Investment Securities |
|
|
246,615 |
|
|
6,433 |
|
3.49 |
|
|
242,952 |
|
|
5,594 |
|
3.08 |
|
Loans (2) |
|
|
1,756,855 |
|
|
69,720 |
|
5.31 |
|
|
1,436,152 |
|
|
56,055 |
|
5.22 |
|
Federal Home Loan Bank Stock |
|
|
7,906 |
|
|
296 |
|
5.00 |
|
|
5,837 |
|
|
165 |
|
3.78 |
|
Total Interest Earning Assets |
|
|
2,057,534 |
|
|
77,053 |
|
5.01 |
% |
|
1,708,481 |
|
|
62,002 |
|
4.85 |
% |
Noninterest Earning Assets |
|
|
26,303 |
|
|
|
|
|
|
|
11,410 |
|
|
|
|
|
|
Total Assets |
|
$ |
2,083,837 |
|
|
|
|
|
|
$ |
1,719,891 |
|
|
|
|
|
|
Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Transaction Deposits |
|
|
211,784 |
|
|
1,130 |
|
0.71 |
% |
|
178,518 |
|
|
438 |
|
0.33 |
% |
Savings and Money Market Deposits |
|
|
433,430 |
|
|
5,784 |
|
1.78 |
|
|
366,198 |
|
|
3,006 |
|
1.10 |
|
Time Deposits |
|
|
347,731 |
|
|
6,230 |
|
2.40 |
|
|
299,566 |
|
|
4,099 |
|
1.83 |
|
Brokered Deposits |
|
|
266,976 |
|
|
4,788 |
|
2.40 |
|
|
220,733 |
|
|
3,310 |
|
2.00 |
|
Federal Funds Purchased |
|
|
8,923 |
|
|
172 |
|
2.58 |
|
|
22,743 |
|
|
321 |
|
1.89 |
|
Notes Payable |
|
|
14,000 |
|
|
378 |
|
3.61 |
|
|
16,000 |
|
|
442 |
|
3.69 |
|
FHLB Advances |
|
|
133,097 |
|
|
2,510 |
|
2.52 |
|
|
78,212 |
|
|
1,159 |
|
1.98 |
|
Subordinated Debentures |
|
|
24,673 |
|
|
1,163 |
|
6.30 |
|
|
24,570 |
|
|
1,167 |
|
6.35 |
|
Total Interest Bearing Liabilities |
|
|
1,440,614 |
|
|
22,155 |
|
2.06 |
% |
|
1,206,540 |
|
|
13,942 |
|
1.54 |
% |
Noninterest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Bearing Transaction Deposits |
|
|
401,973 |
|
|
|
|
|
|
|
317,437 |
|
|
|
|
|
|
Other Noninterest Bearing Liabilities |
|
|
11,289 |
|
|
|
|
|
|
|
8,965 |
|
|
|
|
|
|
Total Noninterest Bearing Liabilities |
|
|
413,262 |
|
|
|
|
|
|
|
326,402 |
|
|
|
|
|
|
Shareholders' Equity |
|
|
229,961 |
|
|
|
|
|
|
|
186,949 |
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
2,083,837 |
|
|
|
|
|
|
$ |
1,719,891 |
|
|
|
|
|
|
Net Interest Income / Interest Rate Spread |
|
|
|
|
|
54,898 |
|
2.95 |
% |
|
|
|
|
48,060 |
|
3.31 |
% |
Net Interest Margin (3) |
|
|
|
|
|
|
|
3.57 |
% |
|
|
|
|
|
|
3.76 |
% |
Taxable Equivalent Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-Exempt Investment Securities |
|
|
|
|
|
(694) |
|
|
|
|
|
|
|
(764) |
|
|
|
Net Interest Income |
|
|
|
|
$ |
54,204 |
|
|
|
|
|
|
$ |
47,296 |
|
|
|
- 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%.
- Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
- 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.