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Bridgewater Bancshares, Inc. Announces Second Quarter 2022 Net Income of $12.9 Million, $0.41 Diluted Earnings Per Common Share

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $12.9 million for the second quarter of 2022, a 5.1% increase over net income of $12.3 million for the first quarter of 2022, and a 17.2% increase over net income of $11.0 million for the second quarter of 2021. Earnings per diluted common share for the second quarter of 2022 were $0.41, a 6.8% increase compared to $0.39 per diluted common share for the first quarter of 2022, and a 9.2% increase compared to $0.38 per diluted common share for the same period in 2021.

“Bridgewater produced another strong quarter of financial results highlighted by record revenue and continued robust balance sheet growth,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “During the quarter, we were able to maintain a stable net interest margin with well-controlled expenses, all while providing responsive support and simple solutions to our growing client base. While our asset quality continues to be superb, we remain diligent in how we are managing the business in this uncertain macroeconomic environment. We were also active in repurchasing our common stock during the quarter, demonstrating our continued confidence in the momentum we have established.

“This momentum is a direct result of our unconventional corporate culture. We were once again recognized as a top workplace in 2022 by the Star Tribune and as the best business bank, small business bank and commercial mortgage lender in the Twin Cities by the Finance & Commerce reader rankings. The hard work and dedication of our team members remain primary catalysts for our continued growth.”

Today the Company also announced that its Board of Directors declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A ("Series A Preferred Stock"). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on September 1, 2022 to shareholders of record of the Series A Preferred Stock at the close of business on August 15, 2022.

Second Quarter 2022 Financial Results

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted

 

 

Adjusted

 

 

Nonperforming

 

ROA

 

 

PPNR ROA (1)

 

 

ROE

 

 

earnings per share

 

 

efficiency ratio (1)

 

 

assets to total assets

 

1.38

%

 

2.19

%

 

13.55

%

 

$

0.41

 

 

40.0

%

 

0.02

%

(1)

Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

Second Quarter 2022 Highlights

  • Diluted earnings per common share were $0.41 for the second quarter of 2022, compared to $0.39 per common share for the first quarter of 2022.
  • Record pre-provision net revenue (PPNR), a non-GAAP financial measure, of $20.4 million for the second quarter of 2022, compared to $18.3 million for the first quarter of 2022, an increase of $2.1 million, or 11.4%. PPNR ROA, a non-GAAP financial measure, was 2.19% for the second quarter of 2022, compared to 2.12% for the first quarter of 2022.
  • Annualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the second quarter of 2022 were 1.38% and 13.55%, compared to ROA and ROE of 1.42% and 12.98%, respectively, for the first quarter of 2022. Annualized return on average tangible common equity, a non-GAAP financial measure, was 15.26% for the second quarter of 2022, compared to 14.56% for the first quarter of 2022.
  • Gross loans increased $237.9 million in the second quarter of 2022, or 31.9% annualized, compared to the first quarter of 2022.
  • Deposits increased $166.3 million in the second quarter of 2022, or 22.0% annualized, compared to the first quarter of 2022.
  • Net interest margin (on a fully tax-equivalent basis) was 3.58% for the second quarter of 2022, compared to 3.60% in the first quarter of 2022. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, remained stable at 3.34% in the first and second quarters of 2022.
  • Adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 40.0% for the second quarter of 2022, compared to 42.0% for the first quarter of 2022.
  • A loan loss provision of $3.0 million was recorded in the second quarter of 2022 to support strong organic loan growth. The allowance for loan losses to total loans was 1.39% at June 30, 2022, compared to 1.40% at March 31, 2022.
  • Annualized net loan charge-offs as a percentage of average loans were 0.00% for both the first and second quarters of 2022.
  • Tangible book value per share, a non-GAAP financial measure, was $11.03 at June 30, 2022, a slight increase compared to $11.01 at March 31, 2022, despite the continued market value depreciation of the securities portfolio due to rising interest rates, which negatively impacted accumulated other comprehensive income.

Year-Over-Year Highlights

  • Net income was $12.9 million for the second quarter of 2022, compared to $11.0 million for the second quarter of 2021, an increase of $1.9 million, or 17.2%.
  • Diluted earnings per common share for the second quarter of 2022 were $0.41, compared to $0.38 for the second quarter of 2021, an increase of 9.2%.
  • Net interest margin (on a fully tax-equivalent basis) was 3.58% for the second quarter of 2022, compared to 3.52% for the second quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, was 3.34% for the second quarter of 2022, compared to 3.31% for the second quarter of 2021.
  • Gross loans increased $631.7 million at June 30, 2022, or 24.4%, compared to June 30, 2021.
  • Deposits increased $481.0 million at June 30, 2022, or 17.7%, compared to June 30, 2021.

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,

 

 

 

2022

 

2022

 

2021

 

 

2022

 

2021

 

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.43

 

$

0.40

 

$

0.39

 

 

$

0.83

 

$

0.77

 

Diluted Earnings Per Share

 

 

0.41

 

 

0.39

 

 

0.38

 

 

 

0.80

 

 

0.75

 

Book Value Per Share

 

 

11.14

 

 

11.12

 

 

10.33

 

 

 

11.14

 

 

10.33

 

Tangible Book Value Per Share (1)

 

 

11.03

 

 

11.01

 

 

10.22

 

 

 

11.03

 

 

10.22

 

Basic Weighted Average Shares Outstanding

 

 

27,839,260

 

 

28,123,809

 

 

28,040,762

 

 

 

27,980,749

 

 

28,029,129

 

Diluted Weighted Average Shares Outstanding

 

 

28,803,842

 

 

29,156,085

 

 

29,128,181

 

 

 

28,991,780

 

 

29,048,424

 

Shares Outstanding at Period End

 

 

27,677,372

 

 

28,150,389

 

 

28,162,777

 

 

 

27,677,372

 

 

28,162,777

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (Annualized)

 

 

1.38

%

 

1.42

%

 

1.43

%

 

 

1.40

%

 

1.45

%

Pre-Provision Net Revenue Return on Average Assets (Annualized) (1)

 

 

2.19

 

 

2.12

 

 

2.07

 

 

 

2.16

 

 

2.11

 

Return on Average Shareholders' Equity (Annualized)

 

 

13.55

 

 

12.98

 

 

15.40

 

 

 

13.27

 

 

15.63

 

Return on Average Tangible Common Equity (Annualized) (1)

 

 

15.26

 

 

14.56

 

 

15.58

 

 

 

14.91

 

 

15.81

 

Yield on Interest Earning Assets

 

 

4.16

 

 

4.13

 

 

4.17

 

 

 

4.15

 

 

4.24

 

Yield on Total Loans, Gross

 

 

4.45

 

 

4.45

 

 

4.56

 

 

 

4.45

 

 

4.64

 

Cost of Interest Bearing Liabilities

 

 

0.86

 

 

0.80

 

 

0.96

 

 

 

0.83

 

 

1.00

 

Cost of Total Deposits

 

 

0.46

 

 

0.43

 

 

0.54

 

 

 

0.44

 

 

0.56

 

Net Interest Margin (2)

 

 

3.58

 

 

3.60

 

 

3.52

 

 

 

3.59

 

 

3.56

 

Core Net Interest Margin (1)(2)

 

 

3.34

 

 

3.34

 

 

3.31

 

 

 

3.34

 

 

3.33

 

Efficiency Ratio (1)

 

 

40.2

 

 

42.4

 

 

42.0

 

 

 

41.2

 

 

41.6

 

Adjusted Efficiency Ratio (1)

 

 

40.0

 

 

42.0

 

 

41.5

 

 

 

41.0

 

 

41.1

 

Noninterest Expense to Average Assets (Annualized)

 

 

1.47

 

 

1.56

 

 

1.50

 

 

 

1.51

 

 

1.50

 

Adjusted Noninterest Expense to Average Assets (Annualized) (1)

 

 

1.47

 

 

1.55

 

 

1.48

 

 

 

1.50

 

 

1.48

 

Loan to Deposit Ratio

 

 

100.7

 

 

98.4

 

 

95.3

 

 

 

 

 

 

 

 

Core Deposits to Total Deposits (3)

 

 

82.9

 

 

84.3

 

 

81.2

 

 

 

 

 

 

 

 

Tangible Common Equity to Tangible Assets (1)

 

 

7.87

 

 

8.60

 

 

9.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Only) (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

11.43

%

 

11.13

%

 

10.57

%

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-based Capital Ratio

 

 

11.53

 

 

11.42

 

 

11.24

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

11.53

 

 

11.42

 

 

11.24

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

12.74

 

 

12.65

 

 

12.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Consolidated) (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

10.33

%

 

10.78

%

 

9.08

%

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-based Capital Ratio

 

 

8.50

 

 

9.13

 

 

9.67

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

10.29

 

 

11.08

 

 

9.67

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

13.98

 

 

15.02

 

 

13.49

 

 

 

 

 

 

 

 

(1)

Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

(2)

Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.

(3)

Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.

(4)

Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.

Selected Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2021

 

2021

Selected Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

3,883,264

 

$

3,607,920

 

$

3,477,659

 

$

3,389,125

 

$

3,162,612

Total Loans, Gross

 

 

3,225,885

 

 

2,987,967

 

 

2,819,472

 

 

2,712,012

 

 

2,594,186

Allowance for Loan Losses

 

 

44,711

 

 

41,692

 

 

40,020

 

 

38,901

 

 

37,591

Goodwill and Other Intangibles

 

 

3,009

 

 

3,057

 

 

3,105

 

 

3,153

 

 

3,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,201,953

 

 

3,035,611

 

 

2,946,237

 

 

2,854,157

 

 

2,720,906

Tangible Common Equity (1)

 

 

305,360

 

 

309,870

 

 

309,653

 

 

298,135

 

 

287,630

Total Shareholders' Equity

 

 

374,883

 

 

379,441

 

 

379,272

 

 

367,803

 

 

290,830

Average Total Assets - Quarter-to-Date

 

 

3,743,575

 

 

3,513,798

 

 

3,403,270

 

 

3,332,301

 

 

3,076,712

Average Shareholders' Equity - Quarter-to-Date

 

 

381,448

 

 

383,024

 

 

374,035

 

 

330,604

 

 

286,311

(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)

 

2022

 

2022

 

2021

 

2022

 

2021

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

$

37,782

 

 

$

34,694

 

 

$

31,147

 

$

72,476

 

 

$

61,587

Interest Expense

 

 

5,252

 

 

 

4,514

 

 

 

4,859

 

 

9,766

 

 

 

9,904

Net Interest Income

 

 

32,530

 

 

 

30,180

 

 

 

26,288

 

 

62,710

 

 

 

51,683

Provision for Loan Losses

 

 

3,025

 

 

 

1,675

 

 

 

1,600

 

 

4,700

 

 

 

2,700

Net Interest Income after Provision for Loan Losses

 

 

29,505

 

 

 

28,505

 

 

 

24,688

 

 

58,010

 

 

 

48,983

Noninterest Income

 

 

1,650

 

 

 

1,557

 

 

 

1,603

 

 

3,207

 

 

 

2,611

Noninterest Expense

 

 

13,752

 

 

 

13,508

 

 

 

11,477

 

 

27,260

 

 

 

22,400

Income Before Income Taxes

 

 

17,403

 

 

 

16,554

 

 

 

14,814

 

 

33,957

 

 

 

29,194

Provision for Income Taxes

 

 

4,521

 

 

 

4,292

 

 

 

3,821

 

 

8,813

 

 

 

7,530

Net Income

 

 

12,882

 

 

 

12,262

 

 

 

10,993

 

 

25,144

 

 

 

21,664

Preferred Stock Dividends

 

 

(1,014

)

 

 

(1,013

)

 

 

 

 

(2,027

)

 

 

Net Income Available to Common Shareholders

 

$

11,868

 

 

$

11,249

 

 

$

10,993

 

$

23,117

 

 

$

21,664

Income Statement

Net Interest Income

Net interest income was $32.5 million for the second quarter of 2022, an increase of $2.4 million, or 7.8%, from $30.2 million in the first quarter of 2022, and an increase of $6.2 million, or 23.7%, from $26.3 million in the second quarter of 2021. The linked-quarter increase in net interest income was primarily due to growth in average interest earning assets. The year-over-year increase in net interest income was primarily due to growth in average interest earning assets and lower rates paid on deposits, offset partially by declining yields on loans and lower PPP fee recognition. Average interest earning assets were $3.67 billion for the second quarter of 2022, an increase of $241.0 million, or 7.0%, from $3.43 billion for the first quarter of 2022, and an increase of $652.3 million, or 21.6%, from $3.02 billion for the second quarter of 2021. The linked-quarter and year-over-year increases in average interest earning assets were primarily due to strong organic growth in the loan portfolio and continued purchases of investment securities, offset partially by the forgiveness of PPP loans and the reduction of cash balances.

Net interest margin (on a fully tax-equivalent basis) for the second quarter of 2022 was 3.58%, a modest two basis point decline from 3.60% in the first quarter of 2022, and a six basis point increase from 3.52% in the second quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, for the second quarter of 2022 was 3.34%, which was stable compared to 3.34% in the first quarter of 2022, and a three basis point increase from 3.31% in the second quarter of 2021. The stability in core net interest margin on a linked-quarter basis was primarily due to rising earning asset yields in conjunction with increasing funding costs associated with the higher interest rate environment. With the rapid increase in interest rates in 2022, earning asset yields and funding costs have both reached a bottom. The Company remains focused on the impact of continued interest rate hikes and the evolving shape of the yield curve throughout 2022.

As the PPP loan portfolio pays down, the recognition of fees associated with the originations has decreased, which impacts comparability between periods. The Company recognized $244,000 of PPP origination fees during the second quarter of 2022, compared to $519,000 during the first quarter of 2022, and $1.4 million during the second quarter of 2021. Remaining PPP origination fees to be recognized as of June 30, 2022 were $135,000.

Interest income was $37.8 million for the second quarter of 2022, an increase of $3.1 million, or 8.9%, from $34.7 million in the first quarter of 2022, and an increase of $6.6 million, or 21.3%, from $31.1 million in the second quarter of 2021. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.16% in the second quarter of 2022, compared to 4.13% in the first quarter of 2022, and 4.17% in the second quarter of 2021. The linked-quarter expansion in the yield on interest earning assets was primarily due to the rapid increase in market interest rates resulting in new loan originations and investment purchases at yields accretive to the existing portfolios. The year-over-year decline in the yield on interest earning assets was primarily due to the lower recognition of PPP origination fees, offset partially by rising yields in the investment securities portfolio.

Loan interest income and loan fees remain the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield, excluding PPP loans, increased to 4.43% in the second quarter of 2022, which was three basis points higher than 4.40% in the first quarter of 2022, and 11 basis points lower than 4.54% in the second quarter of 2021. Given the stability in the core loan yield on a linked-quarter basis, the Company is encouraged that the portfolio yield has bottomed as new loan originations and the existing portfolio continue to reprice in the higher rate environment.

A summary of interest and fees recognized on loans, excluding PPP loans, for the periods indicated is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 30, 2022

 

 

March 31, 2022

 

 

December 31, 2021

 

 

September 30, 2021

 

 

June 30, 2021

 

Interest

 

4.17

%

 

4.15

%

 

4.20

%

 

4.28

%

 

4.37

%

Fees

 

0.26

 

 

0.25

 

 

0.21

 

 

0.23

 

 

0.17

 

Yield on Loans, Excluding PPP Loans

 

4.43

%

 

4.40

%

 

4.41

%

 

4.51

%

 

4.54

%

Interest expense was $5.3 million for the second quarter of 2022, an increase of $738,000, or 16.3%, from $4.5 million in the first quarter of 2022, and an increase of $393,000, or 8.1%, from $4.9 million in the second quarter of 2021. The cost of interest bearing liabilities increased six basis points on a linked-quarter basis from 0.80% in the first quarter of 2022 to 0.86% in the second quarter of 2022, primarily due to the rapid increase in market interest rates that occurred during the quarter. On a year-over-year basis, the cost of interest bearing liabilities decreased 10 basis points from 0.96% in the second quarter of 2021 to 0.86% in the second quarter of 2022, primarily due to the downward repricing of time and brokered deposits over the course of the year.

Interest expense on deposits was $3.5 million for the second quarter of 2022, an increase of $298,000, or 9.4%, from $3.2 million in the first quarter of 2022, and a decrease of $57,000, or 1.6%, from $3.5 million in the second quarter of 2021. The cost of total deposits increased three basis points on a linked-quarter basis from 0.43% in the first quarter of 2022, to 0.46% in the second quarter of 2022, primarily due to the rapid increase in the interest rate environment. On a year-over-year basis, the cost of total deposits declined 8 basis points from 0.54% in the second quarter of 2021, to 0.46% in the second quarter of 2022, primarily due to the downward repricing of time and brokered deposits over the course of the year.

A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended June 30, 2022, March 31, 2022, and June 30, 2021 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

June 30, 2022

 

March 31, 2022

 

June 30, 2021

 

 

 

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

 

$

61,046

 

$

40

 

 

0.26

%

$

80,497

 

$

26

 

 

0.13

%

$

88,067

 

$

33

 

 

0.15

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

417,142

 

 

2,696

 

 

2.59

 

 

373,021

 

 

2,255

 

 

2.45

 

 

314,049

 

 

1,647

 

 

2.10

 

Tax-Exempt Investment Securities (1)

 

 

74,261

 

 

795

 

 

4.30

 

 

71,591

 

 

779

 

 

4.41

 

 

77,029

 

 

842

 

 

4.38

 

Total Investment Securities

 

 

491,403

 

 

3,491

 

 

2.85

 

 

444,612

 

 

3,034

 

 

2.77

 

 

391,078

 

 

2,489

 

 

2.55

 

Paycheck Protection Program Loans (2)

 

 

8,335

 

 

263

 

 

12.67

 

 

18,140

 

 

563

 

 

12.58

 

 

149,312

 

 

1,767

 

 

4.75

 

Loans (1)(2)

 

 

3,099,344

 

 

34,205

 

 

4.43

 

 

2,881,845

 

 

31,275

 

 

4.40

 

 

2,384,759

 

 

27,011

 

 

4.54

 

Total Loans

 

 

3,107,679

 

 

34,468

 

 

4.45

 

 

2,899,985

 

 

31,838

 

 

4.45

 

 

2,534,071

 

 

28,778

 

 

4.56

 

Federal Home Loan Bank Stock

 

 

11,620

 

 

59

 

 

2.04

 

 

5,680

 

 

54

 

 

3.84

 

 

6,221

 

 

54

 

 

3.51

 

Total Interest Earning Assets

 

 

3,671,748

 

 

38,058

 

 

4.16

%

 

3,430,774

 

 

34,952

 

 

4.13

%

 

3,019,437

 

 

31,354

 

 

4.17

%

Noninterest Earning Assets

 

 

71,827

 

 

 

 

 

 

 

83,024

 

 

 

 

 

 

 

57,275

 

 

 

 

 

 

Total Assets

 

$

3,743,575

 

 

 

 

 

 

$

3,513,798

 

 

 

 

 

 

$

3,076,712

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

552,502

 

$

694

 

 

0.50

%

$

566,279

 

$

597

 

 

0.43

%

$

421,132

 

$

520

 

 

0.50

%

Savings and Money Market Deposits

 

 

925,354

 

 

1,185

 

 

0.51

 

 

876,580

 

 

918

 

 

0.42

 

 

764,632

 

 

940

 

 

0.49

 

Time Deposits

 

 

280,645

 

 

665

 

 

0.95

 

 

288,914

 

 

745

 

 

1.05

 

 

332,346

 

 

1,075

 

 

1.30

 

Brokered Deposits

 

 

403,931

 

 

912

 

 

0.91

 

 

406,648

 

 

898

 

 

0.90

 

 

379,768

 

 

978

 

 

1.03

 

Total Interest Bearing Deposits

 

 

2,162,432

 

 

3,456

 

 

0.64

 

 

2,138,421

 

 

3,158

 

 

0.60

 

 

1,897,878

 

 

3,513

 

 

0.74

 

Federal Funds Purchased

 

 

137,379

 

 

410

 

 

1.20

 

 

10,600

 

 

9

 

 

0.35

 

 

9,932

 

 

6

 

 

0.24

 

FHLB Advances

 

 

47,511

 

 

167

 

 

1.41

 

 

42,500

 

 

150

 

 

1.43

 

 

57,500

 

 

228

 

 

1.59

 

Subordinated Debentures

 

 

92,396

 

 

1,219

 

 

5.29

 

 

92,286

 

 

1,197

 

 

5.26

 

 

73,862

 

 

1,112

 

 

6.04

 

Total Interest Bearing Liabilities

 

 

2,439,718

 

 

5,252

 

 

0.86

%

 

2,283,807

 

 

4,514

 

 

0.80

%

 

2,039,172

 

 

4,859

 

 

0.96

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

882,477

 

 

 

 

 

 

 

822,488

 

 

 

 

 

 

 

732,299

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

39,932

 

 

 

 

 

 

 

24,479

 

 

 

 

 

 

 

18,930

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

922,409

 

 

 

 

 

 

 

846,967

 

 

 

 

 

 

 

751,229

 

 

 

 

 

 

Shareholders' Equity

 

 

381,448

 

 

 

 

 

 

 

383,024

 

 

 

 

 

 

 

286,311

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

3,743,575

 

 

 

 

 

 

$

3,513,798

 

 

 

 

 

 

$

3,076,712

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

32,806

 

 

3.30

%

 

 

 

 

30,438

 

 

3.33

%

 

 

 

 

26,495

 

 

3.21

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.58

%

 

 

 

 

 

 

3.60

%

 

 

 

 

 

 

3.52

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(276

)

 

 

 

 

 

 

 

(258

)

 

 

 

 

 

 

 

(207

)

 

 

 

Net Interest Income

 

 

 

 

$

32,530

 

 

 

 

 

 

 

$

30,180

 

 

 

 

 

 

 

$

26,288

 

 

 

 

(1)

Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%.

(2)

Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

(3)

Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

Provision for Loan Losses

The provision for loan losses was $3.0 million for the second quarter of 2022, an increase of $1.4 million from $1.7 million for the first quarter of 2022, and an increase of $1.4 million from $1.6 million for the second quarter of 2021. The provision recorded in the second quarter of 2022 was primarily attributable to the robust growth of the loan portfolio. The allowance for loan losses to total loans was 1.39% at June 30, 2022, compared to 1.40% at March 31, 2022, and 1.45% at June 30, 2021.

As an emerging growth company, the Company is not subject to Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,“ or CECL, until January 1, 2023.

The following table presents the activity in 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)

 

2022

 

2022

 

2021

 

2022

 

2021

Balance at Beginning of Period

 

$

41,692

 

 

$

40,020

 

 

$

35,987

 

 

$

40,020

 

 

$

34,841

 

Provision for Loan Losses

 

 

3,025

 

 

 

1,675

 

 

 

1,600

 

 

 

4,700

 

 

 

2,700

 

Charge-offs

 

 

(14

)

 

 

(15

)

 

 

(3

)

 

 

(29

)

 

 

(17

)

Recoveries

 

 

8

 

 

 

12

 

 

 

7

 

 

 

20

 

 

 

67

 

Balance at End of Period

 

$

44,711

 

 

$

41,692

 

 

$

37,591

 

 

$

44,711

 

 

$

37,591

 

Noninterest Income

Noninterest income was $1.7 million for the second quarter of 2022, an increase of $93,000 from $1.6 million for the first quarter of 2022, and an increase of $47,000 from $1.6 million for the second quarter of 2021. The linked-quarter increase was primarily due to an increase in letter of credit fees and other income, offset partially by a decrease in swap fees. The year-over-year increase was primarily due to an increase in letter of credit fees, bank-owned life insurance income and other income, offset partially by lower 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)

 

2022

 

2022

 

2021

 

2022

 

2021

Noninterest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

$

298

 

$

281

 

$

231

 

$

579

 

$

465

Net Gain on Sales of Securities

 

 

52

 

 

 

 

702

 

 

52

 

 

702

Letter of Credit Fees

 

 

564

 

 

242

 

 

231

 

 

806

 

 

558

Debit Card Interchange Fees

 

 

152

 

 

133

 

 

141

 

 

285

 

 

271

Swap Fees

 

 

 

 

557

 

 

 

 

557

 

 

Bank-Owned Life Insurance

 

 

149

 

 

148

 

 

 

 

297

 

 

Other Income

 

 

435

 

 

196

 

 

298

 

 

631

 

 

615

Totals

 

$

1,650

 

$

1,557

 

$

1,603

 

$

3,207

 

$

2,611

Noninterest Expense

Noninterest expense was $13.8 million for the second quarter of 2022, an increase of $244,000 from $13.5 million for the first quarter of 2022, and an increase of $2.3 million from $11.5 million for the second quarter of 2021. The linked-quarter increase was primarily due to an increase in salaries and employee benefits, offset partially by a decrease in marketing and advertising expenses. The year-over-year increase was primarily attributable to increases in salaries and employee benefits, professional and consulting fees, marketing and advertising, and other expenses.

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)

 

2022

 

2022

 

2021

 

2022

 

2021

Noninterest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

$

8,977

 

$

8,694

 

$

7,512

 

$

17,671

 

$

14,614

Occupancy and Equipment

 

 

1,042

 

 

1,085

 

 

980

 

 

2,127

 

 

2,035

FDIC Insurance Assessment

 

 

330

 

 

360

 

 

290

 

 

690

 

 

605

Data Processing

 

 

356

 

 

297

 

 

300

 

 

653

 

 

591

Professional and Consulting Fees

 

 

769

 

 

696

 

 

552

 

 

1,465

 

 

1,096

Information Technology and Telecommunications

 

 

594

 

 

578

 

 

549

 

 

1,172

 

 

1,011

Marketing and Advertising

 

 

524

 

 

626

 

 

314

 

 

1,150

 

 

600

Intangible Asset Amortization

 

 

47

 

 

48

 

 

47

 

 

95

 

 

95

Amortization of Tax Credit Investments

 

 

63

 

 

117

 

 

140

 

 

180

 

 

258

Other Expense

 

 

1,050

 

 

1,007

 

 

793

 

 

2,057

 

 

1,495

Totals

 

$

13,752

 

$

13,508

 

$

11,477

 

$

27,260

 

$

22,400

The Company continues to add key talent across the organization, reaching 236 full-time equivalent employees at June 30, 2022, compared to 229 employees at March 31, 2022, and 214 employees at June 30, 2021.

The efficiency ratio, a non-GAAP financial measure, was 40.2% for the second quarter of 2022, compared to 42.4% for the first quarter of 2022, and 42.0% for the second quarter of 2021. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 40.0% for the second quarter of 2022, 42.0% for the first quarter of 2022 and 41.5% for the second quarter of 2021.

Income Taxes

The effective combined federal and state income tax rate for the second quarter of 2022 was 26.0%, a slight increase from 25.9% for the first quarter of 2022 and 25.8% for the second quarter of 2021.

Balance Sheet

Total assets at June 30, 2022 were $3.88 billion, a 7.6% increase from $3.61 billion at March 31, 2022, and a 22.8% increase from $3.16 billion at June 30, 2021. The linked-quarter increase in total assets was primarily due to robust organic loan growth and continued purchases of investment securities. The year-over-year increase in total assets was primarily due to strong organic loan growth and purchases of investment securities, offset partially by a decrease in cash and cash equivalents.

Total gross loans at June 30, 2022 were $3.23 billion, an increase of $237.9 million, or 8.0%, over total gross loans of $2.99 billion at March 31, 2022, and an increase of $631.7 million, or 24.4%, over total gross loans of $2.59 billion at June 30, 2021. The increase in the loan portfolio during the second quarter of 2022 was primarily due to growth in the commercial, construction and land development, multifamily, and CRE nonowner occupied segments, offset partially by the forgiveness of PPP loans. The Company's continued strong loan growth has been driven by the expansion of its talented lending teams, the strong, growing brand of the Bank in the Twin Cities market and the M&A-related market disruption in the Twin Cities resulting in client and banker acquisition opportunities.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

403,569

 

 

$

363,290

 

 

$

360,169

 

 

$

350,081

 

 

$

321,474

 

 

Paycheck Protection Program

 

 

4,860

 

 

 

12,309

 

 

 

26,162

 

 

 

54,190

 

 

 

99,072

 

 

Construction and Land Development

 

 

359,191

 

 

 

321,131

 

 

 

281,474

 

 

 

257,167

 

 

 

251,573

 

 

Real Estate Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 - 4 Family Mortgage

 

 

334,815

 

 

 

312,201

 

 

 

305,317

 

 

 

290,535

 

 

 

277,943

 

 

Multifamily

 

 

1,087,865

 

 

 

1,012,623

 

 

 

910,243

 

 

 

865,172

 

 

 

790,275

 

 

CRE Owner Occupied

 

 

142,214

 

 

 

117,969

 

 

 

111,096

 

 

 

101,834

 

 

 

87,507

 

 

CRE Nonowner Occupied

 

 

886,432

 

 

 

840,463

 

 

 

818,569

 

 

 

786,271

 

 

 

758,101

 

 

Total Real Estate Mortgage Loans

 

 

2,451,326

 

 

 

2,283,256

 

 

 

2,145,225

 

 

 

2,043,812

 

 

 

1,913,826

 

 

Consumer and Other

 

 

6,939

 

 

 

7,981

 

 

 

6,442

 

 

 

6,762

 

 

 

8,241

 

 

Total Loans, Gross

 

 

3,225,885

 

 

 

2,987,967

 

 

 

2,819,472

 

 

 

2,712,012

 

 

 

2,594,186

 

 

Allowance for Loan Losses

 

 

(44,711

)

 

 

(41,692

)

 

 

(40,020

)

 

 

(38,901

)

 

 

(37,591

)

 

Net Deferred Loan Fees

 

 

(9,536

)

 

 

(9,065

)

 

 

(9,535

)

 

 

(10,199

)

 

 

(11,450

)

 

Total Loans, Net

 

$

3,171,638

 

 

$

2,937,210

 

 

$

2,769,917

 

 

$

2,662,912

 

 

$

2,545,145

 

 

Total deposits at June 30, 2022 were $3.20 billion, an increase of $166.3 million, or 5.5%, over total deposits of $3.04 billion at March 31, 2022, and an increase of $481.0 million, or 17.7%, over total deposits of $2.72 billion at June 30, 2021. Deposit growth in the second quarter of 2022 was primarily due to an increase in noninterest bearing transaction deposits, savings and money market deposits, and brokered deposits, offset partially by declines in interest bearing transaction deposits and time deposits. On a linked-quarter basis, noninterest bearing transaction deposits increased $126.5 million, or 15.1%, compared to March 31, 2022. Similar to the loan portfolio, the growth in core deposits has been a result of successful new client and banker acquisition initiatives, expansion of commercial client relationships, and the strong, growing brand of the Bank in the Twin Cities market. Given the rapid rise in interest rates and the prospect for more, management believes deposits could experience fluctuations in future periods.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

June 30, 2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

$

961,998

 

$

835,482

 

$

875,084

 

$

846,490

 

$

758,023

 

Interest Bearing Transaction Deposits

 

 

522,151

 

 

598,402

 

 

544,789

 

 

488,785

 

 

432,123

 

Savings and Money Market Deposits

 

 

952,138

 

 

890,926

 

 

863,567

 

 

791,861

 

 

761,485

 

Time Deposits

 

 

272,424

 

 

286,674

 

 

293,474

 

 

309,824

 

 

321,857

 

Brokered Deposits

 

 

493,242

 

 

424,127

 

 

369,323

 

 

417,197

 

 

447,418

 

Total Deposits

 

$

3,201,953

 

$

3,035,611

 

$

2,946,237

 

$

2,854,157

 

$

2,720,906

 

Capital

Total shareholders’ equity at June 30, 2022 was $374.9 million, a decrease of $4.6 million compared to total shareholders’ equity of $379.4 million at March 31, 2022, and an increase of $84.1 million, or 28.9%, over total shareholders’ equity of $290.8 million at June 30, 2021. The linked-quarter decrease was due to an increase unrealized losses in the securities portfolio and stock repurchases made under the Company’s stock repurchase program, offset by net income retained and unrealized gains in the derivatives portfolio. The year-over-year increase was due to net income retained, the issuance of preferred stock, and unrealized gains in the derivatives portfolio, offset partially by an increase in stock repurchases made under the Company’s stock repurchase program and an increase in unrealized losses in the securities portfolio.

During the second quarter of 2022, the Company repurchased 492,417 shares of its common stock. Shares were repurchased at a weighted average price of $16.16 per share for a total of $8.0 million. As of June 30, 2022, the Company had $3.2 million remaining under the current stock repurchase program. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program based on various factors including valuation, capital levels and other uses of capital.

Tangible book value per share, a non-GAAP financial measure, was $11.03 as of June 30, 2022, a slight increase of 0.2% from $11.01 as of March 31, 2022, and an increase of 7.9% from $10.22 as of June 30, 2021. The linked-quarter increase occurred despite the market value depreciation of the securities portfolio driven by the rising interest rate environment, which continues to negatively impact accumulated other comprehensive income. Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.87% at June 30, 2022, compared to 8.60% at March 31, 2022, and 9.10% at June 30, 2021.

Asset Quality

Annualized net charge-offs (recoveries) as a percent of average loans have been 0.00% for the past 5 quarters. At June 30, 2022, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $688,000, or 0.02% of total assets, as compared to $706,000, or 0.02% of total assets at March 31, 2022, and $761,000 or 0.02% of total assets at June 30, 2021.

Loans that have potential weaknesses that warrant a watchlist risk rating at June 30, 2022 totaled $34.7 million, compared to $46.8 million at March 31, 2022, and $56.7 million at June 30, 2021. Loans that warranted a substandard risk rating at June 30, 2022 totaled $27.0 million, compared to $18.6 million at March 31, 2022, and $7.2 million at June 30, 2021. The linked-quarter increase was due to the migration of one relationship from watch to a substandard risk rating.

The following table presents a summary of asset quality measurements at the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

(dollars in thousands)

 

2022

 

2022

 

2021

 

2021

 

2021

 

Selected Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

$

225

 

$

13

 

$

49

 

$

18

 

$

 

Loans 30-89 Days Past Due to Total Loans

 

 

0.01

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

Nonperforming Loans

 

$

688

 

$

706

 

$

722

 

$

734

 

$

761

 

Nonperforming Loans to Total Loans

 

 

0.02

%

 

0.02

%

 

0.03

%

 

0.03

%

 

0.03

%

Foreclosed Assets

 

$

 

$

 

$

 

$

 

$

 

Nonaccrual Loans to Total Loans

 

 

0.02

%

 

0.02

%

 

0.03

%

 

0.03

%

 

0.03

%

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

 

 

0.02

 

 

0.02

 

 

0.03

 

 

0.03

 

 

0.03

 

Nonperforming Assets (1)

 

$

688

 

$

706

 

$

722

 

$

734

 

$

761

 

Nonperforming Assets to Total Assets (1)

 

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

Allowance for Loan Losses to Total Loans

 

 

1.39

 

 

1.40

 

 

1.42

 

 

1.43

 

 

1.45

 

Allowance for Loan Losses to Total Loans, Excluding PPP Loans

 

 

1.39

 

 

1.40

 

 

1.43

 

 

1.46

 

 

1.50

 

Allowance for Loans Losses to Nonaccrual Loans

 

 

6,498.69

 

 

5,905.38

 

 

5,542.94

 

 

5,299.86

 

 

4,939.68

 

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

 

 

0.00

 

 

0.00

 

 

0.00

 

 

0.00

 

 

0.00

 

(1)

Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due and still accruing plus foreclosed assets.

The Company developed programs for clients who experienced business and personal disruptions due to the COVID-19 pandemic by providing interest-only modifications, loan payment deferrals, and extended amortization modifications. In accordance with interagency regulatory guidance and the CARES Act, qualifying loans modified in response to the COVID-19 pandemic are not considered troubled debt restructurings. The Company had 7 modified loans totaling $29.8 million outstanding as of June 30, 2022, representing 0.9% of the total loan portfolio, excluding PPP loans, which is down from $30.4 million at March 31, 2022.

About the Company

Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding company. Bridgewater's banking subsidiary, Bridgewater Bank, is a premier, full-service Twin Cities bank dedicated to serving the diverse needs of commercial real estate investors, entrepreneurs, business clients and successful individuals. By pairing a range of deposit, lending and business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $3.9 billion and seven branches as of June 30, 2022, Bridgewater is considered one of the largest locally led banks in the State of Minnesota, and has received numerous awards for its growth, banking services and esteemed corporate culture.

Use of Non-GAAP financial measures

In addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

Forward-Looking Statements

This earnings release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: the negative effects of the ongoing COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, including due to supply chain disruptions, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; 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, including rising rates of inflation; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk, especially in light of recent excess liquidity at the Bank; 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; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including changes to federal and state corporate tax rates; interest rate risk, including the effects of recent and anticipated rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events including the Russian invasion of Ukraine; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including recent proposals to increase the federal corporate tax rate; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. 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,

 

 

2022

 

 

2021

 

2021

 

 

(Unaudited)

 

 

 

 

(Unaudited)

ASSETS

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

73,517

 

 

$

143,473

 

$

92,197

Bank-Owned Certificates of Deposit

 

 

1,138

 

 

 

1,876

 

 

2,368

Securities Available for Sale, at Fair Value

 

 

482,583

 

 

 

439,362

 

 

402,786

Loans, Net of Allowance for Loan Losses of $44,711 at June 30, 2022 (unaudited), $40,020 at December 31, 2021 and $37,591 at June 30, 2021 (unaudited)

 

 

3,171,638

 

 

 

2,769,917

 

 

2,545,145

Federal Home Loan Bank (FHLB) Stock, at Cost

 

 

9,921

 

 

 

5,242

 

 

5,832

Premises and Equipment, Net

 

 

49,294

 

 

 

49,395

 

 

50,177

Accrued Interest

 

 

10,010

 

 

 

9,186

 

 

8,728

Goodwill

 

 

2,626

 

 

 

2,626

 

 

2,626

Other Intangible Assets, Net

 

 

383

 

 

 

479

 

 

574

Other Assets

 

 

82,154

 

 

 

56,103

 

 

52,179

Total Assets

 

$

3,883,264

 

 

$

3,477,659

 

$

3,162,612

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest Bearing

 

$

961,998

 

 

$

875,084

 

$

758,023

Interest Bearing

 

 

2,239,955

 

 

 

2,071,153

 

 

1,962,883

Total Deposits

 

 

3,201,953

 

 

 

2,946,237

 

 

2,720,906

Federal Funds Purchased

 

 

86,000

 

 

 

 

 

FHLB Advances

 

 

56,500

 

 

 

42,500

 

 

57,500

Subordinated Debentures, Net of Issuance Costs

 

 

92,459

 

 

 

92,239

 

 

73,913

Accrued Interest Payable

 

 

1,393

 

 

 

1,409

 

 

2,654

Other Liabilities

 

 

70,076

 

 

 

16,002

 

 

16,809

Total Liabilities

 

 

3,508,381

 

 

 

3,098,387

 

 

2,871,782

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Preferred Stock- $0.01 par value; Authorized 10,000,000

 

 

 

 

 

 

 

 

 

Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at June 30, 2022 (unaudited), 27,600 at December 31, 2021 and -0- at June 30, 2021 (unaudited)

 

 

66,514

 

 

 

66,514

 

 

Common Stock- $0.01 par value; Authorized 75,000,000

 

 

 

 

 

 

 

 

 

Common Stock - Issued and Outstanding 27,677,372 at June 30, 2022 (unaudited), 28,206,566 at December 31, 2021 and 28,162,777 at June 30, 2021 (unaudited)

 

 

277

 

 

 

282

 

 

282

Additional Paid-In Capital

 

 

96,689

 

 

 

104,123

 

 

104,811

Retained Earnings

 

 

222,464

 

 

 

199,347

 

 

176,495

Accumulated Other Comprehensive Income (Loss)

 

 

(11,061

)

 

 

9,006

 

 

9,242

Total Shareholders' Equity

 

 

374,883

 

 

 

379,272

 

 

290,830

Total Liabilities and Equity

 

$

3,883,264

 

 

$

3,477,659

 

$

3,162,612

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

March 31

 

June 30,

 

June 30,

 

June 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, Including Fees

 

$

34,358

 

 

$

31,744

 

 

$

28,748

 

$

66,102

 

 

$

56,656

Investment Securities

 

 

3,325

 

 

 

2,870

 

 

 

2,312

 

 

6,195

 

 

 

4,732

Other

 

 

99

 

 

 

80

 

 

 

87

 

 

179

 

 

 

199

Total Interest Income

 

 

37,782

 

 

 

34,694

 

 

 

31,147

 

 

72,476

 

 

 

61,587

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,456

 

 

 

3,158

 

 

 

3,513

 

 

6,614

 

 

 

7,184

Notes Payable

 

 

 

 

 

 

 

 

 

 

 

 

 

61

FHLB Advances

 

 

167

 

 

 

150

 

 

 

228

 

 

317

 

 

 

456

Subordinated Debentures

 

 

1,219

 

 

 

1,197

 

 

 

1,112

 

 

2,416

 

 

 

2,197

Federal Funds Purchased

 

 

410

 

 

 

9

 

 

 

6

 

 

419

 

 

 

6

Total Interest Expense

 

 

5,252

 

 

 

4,514

 

 

 

4,859

 

 

9,766

 

 

 

9,904

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

32,530

 

 

 

30,180

 

 

 

26,288

 

 

62,710

 

 

 

51,683

Provision for Loan Losses

 

 

3,025

 

 

 

1,675

 

 

 

1,600

 

 

4,700

 

 

 

2,700

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES

 

 

29,505

 

 

 

28,505

 

 

 

24,688

 

 

58,010

 

 

 

48,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

 

298

 

 

 

281

 

 

 

231

 

 

579

 

 

 

465

Net Gain on Sales of Available for Sale Securities

 

 

52

 

 

 

 

 

 

702

 

 

52

 

 

 

702

Other Income

 

 

1,300

 

 

 

1,276

 

 

 

670

 

 

2,576

 

 

 

1,444

Total Noninterest Income

 

 

1,650

 

 

 

1,557

 

 

 

1,603

 

 

3,207

 

 

 

2,611

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

 

8,977

 

 

 

8,694

 

 

 

7,512

 

 

17,671

 

 

 

14,614

Occupancy and Equipment

 

 

1,042

 

 

 

1,085

 

 

 

980

 

 

2,127

 

 

 

2,035

Other Expense

 

 

3,733

 

 

 

3,729

 

 

 

2,985

 

 

7,462

 

 

 

5,751

Total Noninterest Expense

 

 

13,752

 

 

 

13,508

 

 

 

11,477

 

 

27,260

 

 

 

22,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

17,403

 

 

 

16,554

 

 

 

14,814

 

 

33,957

 

 

 

29,194

Provision for Income Taxes

 

 

4,521

 

 

 

4,292

 

 

 

3,821

 

 

8,813

 

 

 

7,530

NET INCOME

 

 

12,882

 

 

 

12,262

 

 

 

10,993

 

 

25,144

 

 

 

21,664

Preferred Stock Dividends

 

 

(1,014

)

 

 

(1,013

)

 

 

 

 

(2,027

)

 

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

 

$

11,868

 

 

$

11,249

 

 

$

10,993

 

$

23,117

 

 

$

21,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.43

 

 

$

0.40

 

 

$

0.39

 

$

0.83

 

 

$

0.77

Diluted

 

 

0.41

 

 

 

0.39

 

 

 

0.38

 

 

0.80

 

 

 

0.75

Bridgewater Bancshares, Inc. and Subsidiaries

Analysis of Average Balances, Yields and Rates

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Six Months Ended

 

 

June 30, 2022

 

June 30, 2021

 

 

Average

 

Interest

 

Yield/

 

Average

 

Interest

 

Yield/

 

 

Balance

 

& Fees

 

Rate

 

Balance

 

& Fees

 

Rate

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Investments

 

$

70,718

 

$

66

 

 

0.19

%

$

96,724

 

$

67

 

 

0.14

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

395,203

 

 

4,951

 

 

2.53

 

 

307,898

 

 

3,371

 

 

2.21

 

Tax-Exempt Investment Securities (1)

 

 

72,933

 

 

1,574

 

 

4.35

 

 

78,985

 

 

1,723

 

 

4.40

 

Total Investment Securities

 

 

468,136

 

 

6,525

 

 

2.81

 

 

386,883

 

 

5,094

 

 

2.66

 

Paycheck Protection Program Loans (2)

 

 

13,210

 

 

826

 

 

12.61

 

 

149,098

 

 

3,631

 

 

4.91

 

Loans (1)(2)

 

 

2,991,195

 

 

65,480

 

 

4.41

 

 

2,313,295

 

 

53,085

 

 

4.63

 

Total Loans

 

 

3,004,405

 

 

66,306

 

 

4.45

 

 

2,462,393

 

 

56,716

 

 

4.64

 

Federal Home Loan Bank Stock

 

 

8,667

 

 

113

 

 

2.63

 

 

5,636

 

 

132

 

 

4.74

 

Total Interest Earning Assets

 

 

3,551,926

 

 

73,010

 

 

4.15

%

 

2,951,636

 

 

62,009

 

 

4.24

%

Noninterest Earning Assets

 

 

77,395

 

 

 

 

 

 

 

57,228

 

 

 

 

 

Total Assets

 

$

3,629,321

 

 

 

 

 

 

$

3,008,864

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

559,352

 

$

1,291

 

 

0.47

%

$

392,732

 

$

942

 

 

0.48

%

Savings and Money Market Deposits

 

 

901,102

 

 

2,103

 

 

0.47

 

 

744,480

 

 

1,949

 

 

0.53

 

Time Deposits

 

 

284,757

 

 

1,410

 

 

1.00

 

 

338,497

 

 

2,341

 

 

1.39

 

Brokered Deposits

 

 

405,282

 

 

1,810

 

 

0.90

 

 

391,167

 

 

1,952

 

 

1.01

 

Total Interest Bearing Deposits

 

 

2,150,493

 

 

6,614

 

 

0.62

 

 

1,866,876

 

 

7,184

 

 

0.78

 

Federal Funds Purchased

 

 

74,340

 

 

419

 

 

1.14

 

 

4,993

 

 

6

 

 

0.24

 

Notes Payable

 

 

 

 

 

 

 

 

3,343

 

 

61

 

 

3.66

 

FHLB Advances

 

 

45,019

 

 

317

 

 

1.42

 

 

57,500

 

 

456

 

 

1.60

 

Subordinated Debentures

 

 

92,341

 

 

2,416

 

 

5.28

 

 

73,819

 

 

2,197

 

 

6.00

 

Total Interest Bearing Liabilities

 

 

2,362,193

 

 

9,766

 

 

0.83

%

 

2,006,531

 

 

9,904

 

 

1.00

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

852,648

 

 

 

 

 

 

 

704,391

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

32,248

 

 

 

 

 

 

 

18,384

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

884,896

 

 

 

 

 

 

 

722,775

 

 

 

 

 

Shareholders' Equity

 

 

382,232

 

 

 

 

 

 

 

279,558

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

3,629,321

 

 

 

 

 

 

$

3,008,864

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

63,244

 

 

3.32

%

 

 

 

 

52,105

 

 

3.24

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.59

%

 

 

 

 

 

 

3.56

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(534

)

 

 

 

 

 

 

 

(422

)

 

 

Net Interest Income

 

 

 

 

$

62,710

 

 

 

 

 

 

 

$

51,683

 

 

 

(1)

Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%

(2)

Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

(3)

Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

Bridgewater Bancshares, Inc. and Subsidiaries

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

For the Six Months Ended

 

 

June 30,

March 31,

June 30,

June 30,

June 30,

 

 

2022

2022

2021

2022

2021

Pre-Provision Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

$

1,650

 

$

1,557

 

$

1,603

 

$

3,207

 

$

2,611

 

Less: Gain on Sales of Securities

 

 

(52

)

 

 

 

(702

)

 

(52

)

 

(702

)

Total Operating Noninterest Income

 

 

1,598

 

 

1,557

 

 

901

 

 

3,155

 

 

1,909

 

Plus: Net Interest Income

 

 

32,530

 

 

30,180

 

 

26,288

 

 

62,710

 

 

51,683

 

Net Operating Revenue

 

$

34,128

 

$

31,737

 

$

27,189

 

$

65,865

 

$

53,592

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

13,752

 

$

13,508

 

$

11,477

 

$

27,260

 

$

22,400

 

Less: Amortization of Tax Credit Investments

 

 

(63

)

 

(117

)

 

(140

)

 

(180

)

 

(258

)

Total Operating Noninterest Expense

 

$

13,689

 

$

13,391

 

$

11,337

 

$

27,080

 

$

22,142

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Provision Net Revenue

 

$

20,439

 

$

18,346

 

$

15,852

 

$

38,785

 

$

31,450

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

Non-Operating Revenue Adjustments

 

 

52

 

 

 

 

702

 

 

52

 

 

702

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Provision for Loan Losses

 

 

3,025

 

 

1,675

 

 

1,600

 

 

4,700

 

 

2,700

 

Non-Operating Expense Adjustments

 

 

63

 

 

117

 

 

140

 

 

180

 

 

258

 

Provision for Income Taxes

 

 

4,521

 

 

4,292

 

 

3,821

 

 

8,813

 

 

7,530

 

Net Income

 

$

12,882

 

$

12,262

 

$

10,993

 

$

25,144

 

$

21,664

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

3,743,575

 

$

3,513,798

 

$

3,076,712

 

$

3,629,321

 

$

3,008,864

 

Pre-Provision Net Revenue Return on Average Assets

 

 

2.19

%

 

2.12

%

 

2.07

%

 

2.16

%

 

2.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

2022

2022

2021

 

2022

2021

Core Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income (Tax-Equivalent Basis)

 

$

32,806

 

$

30,438

 

$

26,495

 

 

$

63,244

 

$

52,105

 

Less: Loan Fees

 

 

(2,030

)

 

(1,743

)

 

(1,023

)

 

 

(3,773

)

 

(2,225

)

Less: PPP Interest and Fees

 

 

(263

)

 

(563

)

 

(1,767

)

 

 

(826

)

 

(3,631

)

Core Net Interest Income

 

$

30,513

 

$

28,132

 

$

23,705

 

 

$

58,645

 

$

46,249

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest Earning Assets

 

$

3,671,748

 

$

3,430,774

 

$

3,019,437

 

 

$

3,551,926

 

$

2,951,636

 

Less: Average PPP Loans

 

 

(8,335

)

 

(18,140

)

 

(149,312

)

 

 

(13,210

)

 

(149,098

)

Core Average Interest Earning Assets

 

$

3,663,413

 

$

3,412,634

 

$

2,870,125

 

 

$

3,538,716

 

$

2,802,538

 

Core Net Interest Margin

 

 

3.34

%

 

3.34

%

 

3.31

%

 

 

3.34

%

 

3.33

%

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

March 31,

June 30,

 

June 30,

June 30,

 

 

2022

2022

2021

 

2022

2021

Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

13,752

 

$

13,508

 

$

11,477

 

 

$

27,260

 

$

22,400

 

Less: Amortization of Intangible Assets

 

 

(47

)

 

(48

)

 

(47

)

 

 

(95

)

 

(95

)

Adjusted Noninterest Expense

 

$

13,705

 

$

13,460

 

$

11,430

 

 

$

27,165

 

$

22,305

 

Net Interest Income

 

 

32,530

 

 

30,180

 

 

26,288

 

 

 

62,710

 

 

51,683

 

Noninterest Income

 

 

1,650

 

 

1,557

 

 

1,603

 

 

 

3,207

 

 

2,611

 

Less: Gain on Sales of Securities

 

 

(52

)

 

 

 

(702

)

 

 

(52

)

 

(702

)

Adjusted Operating Revenue

 

$

34,128

 

$

31,737

 

$

27,189

 

 

$

65,865

 

$

53,592

 

Efficiency Ratio

 

 

40.2

%

 

42.4

%

 

42.0

%

 

 

41.2

%

 

41.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

13,752

 

$

13,508

 

$

11,477

 

 

$

27,260

 

$

22,400

 

Less: Amortization of Tax Credit Investments

 

 

(63

)

 

(117

)

 

(140

)

 

 

(180

)

 

(258

)

Less: Amortization of Intangible Assets

 

 

(47

)

 

(48

)

 

(47

)

 

 

(95

)

 

(95

)

Adjusted Noninterest Expense

 

$

13,642

 

$

13,343

 

$

11,290

 

 

$

26,985

 

$

22,047

 

Net Interest Income

 

 

32,530

 

 

30,180

 

 

26,288

 

 

 

62,710

 

 

51,683

 

Noninterest Income

 

 

1,650

 

 

1,557

 

 

1,603

 

 

 

3,207

 

 

2,611

 

Less: Gain on Sales of Securities

 

 

(52

)

 

 

 

(702

)

 

 

(52

)

 

(702

)

Adjusted Operating Revenue

 

$

34,128

 

$

31,737

 

$

27,189

 

 

$

65,865

 

$

53,592

 

Adjusted Efficiency Ratio

 

 

40.0

%

 

42.0

%

 

41.5

%

 

 

41.0

%

 

41.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Six Months Ended

 

 

June 30,

March 31,

June 30,

 

June 30,

June 30,

 

 

2022

2022

2021

 

2022

2021

Adjusted Noninterest Expense to Average Assets (Annualized)

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

13,752

 

$

13,508

 

$

11,477

 

 

$

27,260

 

$

22,400

 

Less: Amortization of Tax Credit Investments

 

 

(63

)

 

(117

)

 

(140

)

 

 

(180

)

 

(258

)

Adjusted Noninterest Expense

 

$

13,689

 

$

13,391

 

$

11,337

 

 

$

27,080

 

$

22,142

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

3,743,575

 

$

3,513,798

 

$

3,076,712

 

 

$

3,629,321

 

$

3,008,864

 

Adjusted Noninterest Expense to Average Assets (Annualized)

 

 

1.47

%

 

1.55

%

 

1.48

%

 

 

1.50

%

 

1.48

%

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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,

 

 

2022

2022

2021

 

2022

2021

Tangible Common Equity and Tangible Common Equity/Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

374,883

 

$

379,441

 

$

290,830

 

 

 

 

 

 

Less: Preferred Stock

 

 

(66,514

)

 

(66,514

)

 

 

 

 

 

 

 

Total Common Shareholders' Equity

 

 

308,369

 

 

312,927

 

 

290,830

 

 

 

 

 

 

Less: Intangible Assets

 

 

(3,009

)

 

(3,057

)

 

(3,200

)

 

 

 

 

 

Tangible Common Equity

 

$

305,360

 

$

309,870

 

$

287,630

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

3,883,264

 

$

3,607,920

 

$

3,162,612

 

 

 

 

 

 

Less: Intangible Assets

 

 

(3,009

)

 

(3,057

)

 

(3,200

)

 

 

 

 

 

Tangible Assets

 

$

3,880,255

 

$

3,604,863

 

$

3,159,412

 

 

 

 

 

 

Tangible Common Equity/Tangible Assets

 

 

7.87

%

 

8.60

%

 

9.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Book Value Per Common Share

 

$

11.14

 

$

11.12

 

$

10.33

 

 

 

 

 

 

Less: Effects of Intangible Assets

 

 

(0.11

)

 

(0.11

)

 

(0.11

)

 

 

 

 

 

Tangible Book Value Per Common Share

 

$

11.03

 

$

11.01

 

$

10.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available to Common Shareholders

 

$

11,868

 

$

11,249

 

$

10,993

 

 

$

23,117

 

$

21,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders' Equity

 

$

381,448

 

$

383,024

 

$

286,311

 

 

$

382,232

 

$

279,558

 

Less: Average Preferred Stock

 

 

(66,514

)

 

(66,514

)

 

 

 

 

(66,514

)

 

 

Average Common Equity

 

 

314,934

 

 

316,510

 

 

286,311

 

 

 

315,718

 

 

279,558

 

Less: Effects of Average Intangible Assets

 

 

(3,037

)

 

(3,084

)

 

(3,228

)

 

 

(3,060

)

 

(3,251

)

Average Tangible Common Equity

 

$

311,897

 

$

313,426

 

$

283,083

 

 

$

312,658

 

$

276,307

 

Return on Average Tangible Common Equity

 

 

15.26

%

 

14.56

%

 

15.58

%

 

 

14.91

%

 

15.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

June 30,

 

 

2022

 

2022

 

2021

 

2021

 

2021

Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

374,883

 

 

$

379,441

 

 

$

379,272

 

 

$

367,803

 

 

$

290,830

 

Less: Preferred Stock

 

 

(66,514

)

 

 

(66,514

)

 

 

(66,514

)

 

 

(66,515

)

 

 

 

Common Shareholders' Equity

 

 

308,369

 

 

 

312,927

 

 

 

312,758

 

 

 

301,288

 

 

 

290,830

 

Less: Intangible Assets

 

 

(3,009

)

 

 

(3,057

)

 

 

(3,105

)

 

 

(3,153

)

 

 

(3,200

)

Tangible Common Equity

 

$

305,360

 

 

$

309,870

 

 

$

309,653

 

 

$

298,135

 

 

$

287,630

 

 

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