Bridgewater Bancshares, Inc. Announces Fourth Quarter 2022 Net Income of $13.7 Million, $0.45 Diluted Earnings Per Common Share

Bridgewater Bancshares, Inc. Announces Fourth Quarter 2022 Net Income of $13.7 Million, $0.45 Diluted Earnings Per Common Share

ST. LOUIS PARK, Minn.–(BUSINESS WIRE)–
Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $13.7 million for the fourth quarter of 2022, a 5.4% decrease from net income of $14.5 million for the third quarter of 2022, and a 9.8% increase from net income of $12.5 million for the fourth quarter of 2021. Earnings per diluted common share for the fourth quarter of 2022 were $0.45, a 5.6% decrease compared to $0.47 per diluted common share for the third quarter of 2022, and a 14.2% increase compared to $0.39 per diluted common share for the same period in 2021.

“Bridgewater delivered another strong year of financial results in 2022 highlighted again by our robust balance sheet growth, highly efficient business model and superb asset quality, with all of these trends continuing in the fourth quarter,” said Chairman, Chief Executive Officer and President, Jerry Baack. “As expected, we also saw net interest margin compression during the quarter as the persistent rising interest rate environment created additional funding pressure given our strong loan growth. While we expect the operating environment to remain challenging as we head into 2023, we are taking steps to actively manage our balance sheet in the near-term, with a focus on profitable growth, to drive sustained success over the long-term.”

Fourth Quarter 2022 Financial Results

 

 

 

 

 

 

 

 

 

Diluted

 

 

Adjusted

 

 

Nonperforming

 

ROA

 

 

PPNR ROA (1)

 

 

ROE

 

 

earnings per share

 

 

efficiency ratio (1)

 

 

assets to total assets

 

1.28

%

 

1.82

%

 

14.06

%

 

$

0.45

 

 

43.5

%

 

0.01

%

_________________________

(1)

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

Fourth Quarter 2022 Highlights

  • Diluted earnings per common share were $0.45, compared to $0.47 per common share for the third quarter of 2022.
  • Pre-provision net revenue (PPNR), a non-GAAP financial measure, of $19.5 million, compared to $21.4 million for the third quarter of 2022, a decrease of $1.9 million, or 9.0%. PPNR ROA, a non-GAAP financial measure, was 1.82%, compared to 2.15% for the third quarter of 2022.
  • Annualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the fourth quarter of 2022 were 1.28% and 14.06%, compared to ROA and ROE of 1.46% and 14.99%, respectively, for the third quarter of 2022. Annualized return on average tangible common equity, a non-GAAP financial measure, was 15.86% for the fourth quarter of 2022, compared to 17.03% for the third quarter of 2022.
  • Gross loans increased $189.4 million, or 22.2% annualized, from the third quarter of 2022.
  • Deposits increased $111.5 million, or 13.4% annualized, from the third quarter of 2022.
  • Net interest margin (on a fully tax-equivalent basis) was 3.16%, compared to 3.53% in the third 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, was 3.05%, compared to 3.38% in the third quarter 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 43.5%, compared to 39.4% for the third quarter of 2022.
  • A loan loss provision of $1.5 million was recorded to support strong organic loan growth in the fourth quarter of 2022. The allowance for loan losses to total loans was 1.34% at December 31, 2022, compared to 1.38% at September 30, 2022.
  • Annualized net loan charge-offs (recoveries) as a percentage of average loans were 0.00% for the fourth quarter of 2022, compared to (0.03)% for the third quarter of 2022.
  • Tangible book value per share, a non-GAAP financial measure, increased $0.36, or 12.7% annualized, to $11.69 at December 31, 2022, compared to $11.33 at September 30, 2022.

Annual 2022 Highlights

  • Diluted earnings per common share for the year ended December 31, 2022 were $1.72, a 12.0% increase, compared to $1.54 for the year ended December 31, 2021.
  • PPNR, a non-GAAP financial measure, was $79.7 million for the year ended December 31, 2022, an increase of 18.8%, compared to $67.1 million for the year ended December 31, 2021. PPNR ROA, a non-GAAP financial measure, was 2.06% for the year ended December 31, 2022, compared to 2.10% for the year ended December 31, 2021.
  • Gross loans increased $750.0 million at December 31, 2022, or 26.6%, compared to December 31, 2021.
  • Deposits increased $470.3 million at December 31, 2022, or 16.0%, compared to December 31, 2021.
  • Net interest margin (on a fully tax-equivalent basis) was 3.45% for the year ended December 31, 2022, compared to 3.54% for the year ended December 31, 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, for the year ended December 31, 2022 was 3.27%, compared to 3.28% for the year ended December 31, 2021.
  • Adjusted efficiency ratio, a non-GAAP financial measure, was 41.2% for the year ended December 31, 2022, compared to 41.0% for the year ended December 31, 2021.
  • Net loan charge-offs (recoveries) as a percentage of average loans were (0.01)% for the year ended December 31, 2022, compared to 0.00% for the year ended December 31, 2021.
  • The ratio of nonperforming assets to total assets was 0.01% at December 31, 2022, compared to 0.02% at December 31, 2021.
  • Tangible book value per share, a non-GAAP financial measure, increased $0.71, or 6.5%, to $11.69 at December 31, 2022, compared to $10.98 at December 31, 2021, despite the market value depreciation of the securities portfolio due to rapidly rising interest rates, which continue to negatively impact accumulated other comprehensive income.

Key Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

As of and for the Year Ended

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

December 31,

 

December 31,

 

 

 

2022

 

2022

 

2021

 

 

2022

 

2021

 

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.46

 

$

0.49

 

$

0.41

 

 

$

1.78

 

$

1.59

 

Diluted Earnings Per Share

 

 

0.45

 

 

0.47

 

 

0.39

 

 

 

1.72

 

 

1.54

 

Book Value Per Share

 

 

11.80

 

 

11.44

 

 

11.09

 

 

 

 

 

 

 

 

Tangible Book Value Per Share (1)

 

 

11.69

 

 

11.33

 

 

10.98

 

 

 

 

 

 

 

 

Basic Weighted Average Shares Outstanding

 

 

27,558,983

 

 

27,520,117

 

 

28,004,334

 

 

 

27,758,336

 

 

28,027,454

 

Diluted Weighted Average Shares Outstanding

 

 

28,527,306

 

 

28,592,854

 

 

29,038,785

 

 

 

28,668,177

 

 

28,968,286

 

Shares Outstanding at Period End

 

 

27,751,950

 

 

27,587,978

 

 

28,206,566

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (Annualized)

 

 

1.28

%

 

1.46

%

 

1.46

%

 

 

1.38

%

 

1.43

%

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

 

 

1.82

 

 

2.15

 

 

2.11

 

 

 

2.06

 

 

2.10

 

Return on Average Shareholders’ Equity (Annualized)

 

 

14.06

 

 

14.99

 

 

13.27

 

 

 

13.90

 

 

14.45

 

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

 

 

15.86

 

 

17.03

 

 

14.78

 

 

 

15.69

 

 

15.45

 

Yield on Interest Earning Assets(2)

 

 

4.67

 

 

4.37

 

 

4.06

 

 

 

4.35

 

 

4.16

 

Yield on Total Loans, Gross(2)

 

 

4.87

 

 

4.59

 

 

4.49

 

 

 

4.60

 

 

4.60

 

Cost of Total Deposits

 

 

1.31

 

 

0.73

 

 

0.45

 

 

 

0.75

 

 

0.51

 

Cost of Funds

 

 

1.67

 

 

0.93

 

 

0.61

 

 

 

0.99

 

 

0.68

 

Net Interest Margin (2)

 

 

3.16

 

 

3.53

 

 

3.51

 

 

 

3.45

 

 

3.54

 

Core Net Interest Margin (1)(2)

 

 

3.05

 

 

3.38

 

 

3.25

 

 

 

3.27

 

 

3.28

 

Efficiency Ratio (1)

 

 

43.8

 

 

39.8

 

 

40.8

 

 

 

41.5

 

 

42.0

 

Adjusted Efficiency Ratio (1)

 

 

43.5

 

 

39.4

 

 

40.3

 

 

 

41.2

 

 

41.0

 

Noninterest Expense to Average Assets (Annualized)

 

 

1.42

 

 

1.42

 

 

1.45

 

 

 

1.46

 

 

1.51

 

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

 

 

1.41

 

 

1.41

 

 

1.43

 

 

 

1.45

 

 

1.47

 

Loan to Deposit Ratio

 

 

104.5

 

 

102.3

 

 

95.7

 

 

 

 

 

 

 

 

Core Deposits to Total Deposits (3)

 

 

74.6

 

 

83.0

 

 

85.4

 

 

 

 

 

 

 

 

Tangible Common Equity to Tangible Assets (1)

 

 

7.48

 

 

7.57

 

 

8.91

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Only) (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

10.76

%

 

11.24

%

 

11.09

%

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-based Capital Ratio

 

 

11.29

 

 

11.46

 

 

11.69

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

11.29

 

 

11.46

 

 

11.69

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

12.47

 

 

12.67

 

 

12.94

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Consolidated) (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

9.55

%

 

9.98

%

 

10.82

%

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-based Capital Ratio

 

 

8.40

 

 

8.47

 

 

9.36

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

10.03

 

 

10.19

 

 

11.43

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

13.15

 

 

13.78

 

 

15.55

 

 

 

 

 

 

 

 

_________________________

(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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

(dollars in thousands)

 

2022

 

2022

 

2022

 

2022

 

2021

Selected Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,345,662

 

$

4,128,987

 

$

3,883,264

 

$

3,607,920

 

$

3,477,659

Total Loans, Gross

 

 

3,569,446

 

 

3,380,082

 

 

3,225,885

 

 

2,987,967

 

 

2,819,472

Allowance for Loan Losses

 

 

47,996

 

 

46,491

 

 

44,711

 

 

41,692

 

 

40,020

Goodwill and Other Intangibles

 

 

2,914

 

 

2,962

 

 

3,009

 

 

3,057

 

 

3,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,416,543

 

 

3,305,074

 

 

3,201,953

 

 

3,035,611

 

 

2,946,237

Tangible Common Equity (1)

 

 

324,636

 

 

312,531

 

 

305,360

 

 

309,870

 

 

309,653

Total Shareholders’ Equity

 

 

394,064

 

 

382,007

 

 

374,883

 

 

379,441

 

 

379,272

Average Total Assets – Quarter-to-Date

 

 

4,251,345

 

 

3,948,201

 

 

3,743,575

 

 

3,513,798

 

 

3,403,270

Average Shareholders’ Equity – Quarter-to-Date

 

 

387,589

 

 

384,020

 

 

381,448

 

 

383,024

 

 

374,035

_________________________

(1)

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

$

48,860

 

 

$

42,359

 

 

$

33,775

 

 

$

163,695

 

 

$

128,879

 

Interest Expense

 

 

15,967

 

 

 

8,264

 

 

 

4,622

 

 

 

33,997

 

 

 

19,370

 

Net Interest Income

 

 

32,893

 

 

 

34,095

 

 

 

29,153

 

 

 

129,698

 

 

 

109,509

 

Provision for Loan Losses

 

 

1,500

 

 

 

1,500

 

 

 

1,150

 

 

 

7,700

 

 

 

5,150

 

Net Interest Income after Provision for Loan Losses

 

 

31,393

 

 

 

32,595

 

 

 

28,003

 

 

 

121,998

 

 

 

104,359

 

Noninterest Income

 

 

1,738

 

 

 

1,387

 

 

 

1,288

 

 

 

6,332

 

 

 

5,309

 

Noninterest Expense

 

 

15,203

 

 

 

14,157

 

 

 

12,459

 

 

 

56,620

 

 

 

48,095

 

Income Before Income Taxes

 

 

17,928

 

 

 

19,825

 

 

 

16,832

 

 

 

71,710

 

 

 

61,573

 

Provision for Income Taxes

 

 

4,193

 

 

 

5,312

 

 

 

4,318

 

 

 

18,318

 

 

 

15,886

 

Net Income

 

 

13,735

 

 

 

14,513

 

 

 

12,514

 

 

 

53,392

 

 

 

45,687

 

Preferred Stock Dividends

 

 

(1,014

)

 

 

(1,013

)

 

 

(1,171

)

 

 

(4,054

)

 

 

(1,171

)

Net Income Available to Common Shareholders

 

$

12,721

 

 

$

13,500

 

 

$

11,343

 

 

$

49,338

 

 

$

44,516

 

Income Statement

Net Interest Income

Net interest income was $32.9 million for the fourth quarter of 2022, a decrease of $1.2 million, or 3.5%, from $34.1 million in the third quarter of 2022, and an increase of $3.7 million, or 12.8%, from $29.2 million in the fourth quarter of 2021. The linked-quarter decrease in net interest income was due to higher rates paid on deposits and increased borrowings in the rising interest rate environment. The year-over-year increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and core loans, offset partially by higher rates paid on deposits and borrowings. Average interest earning assets were $4.18 billion for the fourth quarter of 2022, an increase of $305.7 million, or 7.9%, from $3.87 billion for the third quarter of 2022, and an increase of $857.0 million, or 25.8%, from $3.32 billion for the fourth quarter of 2021. The linked-quarter increase in average interest earning assets was primarily due to strong organic growth in the loan portfolio and purchases of investment securities. The year-over-year increase in average interest earning assets was primarily due to strong organic growth in the loan portfolio and 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 fourth quarter of 2022 was 3.16%, a 37 basis point decrease from 3.53% in the third quarter of 2022, and a 35 basis point decrease from 3.51% in the fourth 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 fourth quarter of 2022 was 3.05%, a 33 basis point decrease from 3.38% in the third quarter of 2022, and a 20 basis point decrease from 3.25% in the fourth quarter of 2021. The Company remains focused on managing the impact of continued interest rate hikes and the evolving shape of the yield curve during this unique interest rate environment.

As the PPP loan portfolio has almost fully paid off, the recognition of fees associated with the originations has decreased significantly, which impacts comparability between periods. The Company recognized $45,000 of PPP origination fees during the fourth quarter of 2022, compared to $90,000 during the third quarter of 2022, and $958,000 during the fourth quarter of 2021. There were no remaining PPP origination fees to be recognized as of December 31, 2022.

Interest income was $48.9 million for the fourth quarter of 2022, an increase of $6.5 million, or 15.3%, from $42.4 million in the third quarter of 2022, and an increase of $15.1 million, or 44.7%, from $33.8 million in the fourth quarter of 2021. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.67% in the fourth quarter of 2022, compared to 4.37% in the third quarter of 2022, and 4.06% in the fourth quarter of 2021. The linked-quarter increase in the yield on interest earning assets was primarily due to the rapid increase in market interest rates resulting in new loan originations, loans repricing, and investment purchases at yields accretive to the existing portfolios. The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment, offset partially by the lower recognition of PPP origination fees.

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 4.86% in the fourth quarter of 2022, which was 27 basis points higher than 4.59% in the third quarter of 2022, and 45 basis points higher than 4.41% in the fourth quarter of 2021. While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods were impacted by fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the decrease in fee recognition, the Company is encouraged that the core loan yield continues to rise as new loan originations and the existing portfolio loans 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

 

 

 

December 31, 2022

 

 

September 30, 2022

 

 

June 30, 2022

 

 

March 31, 2022

 

 

December 31, 2021

 

Interest

 

4.74

%

 

4.42

%

 

4.17

%

 

4.15

%

 

4.20

%

Fees

 

0.12

 

 

0.17

 

 

0.26

 

 

0.25

 

 

0.21

 

Yield on Loans,

Excluding PPP

Loans

 

4.86

%

 

4.59

%

 

4.43

%

 

4.40

%

 

4.41

%

Interest expense was $16.0 million for the fourth quarter of 2022, an increase of $7.7 million, or 93.2%, from $8.3 million in the third quarter of 2022, and an increase of $11.3 million, or 245.4%, from $4.6 million in the fourth quarter of 2021. The cost of interest bearing liabilities increased 92 basis points on a linked-quarter basis from 1.30% in the third quarter of 2022 to 2.22% in the fourth quarter of 2022, primarily due to higher rates paid on deposits, drawing on the Company’s revolving line of credit, and the increased utilization of federal funds purchased and FHLB advances in the rising interest rate environment. On a year-over-year basis, the cost of interest bearing liabilities increased 136 basis points from 0.86% in the fourth quarter of 2021 to 2.22% in the fourth quarter of 2022, primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.

Interest expense on deposits was $10.8 million for the fourth quarter of 2022, an increase of $4.8 million, or 80.2%, from $6.0 million in the third quarter of 2022, and an increase of $7.5 million, or 232.6%, from $3.2 million in the fourth quarter of 2021. The cost of total deposits increased 58 basis points on a linked-quarter basis from 0.73% in the third quarter of 2022, to 1.31% in the fourth quarter of 2022. On a year-over-year basis, the cost of total deposits increased 86 basis points from 0.45% in the fourth quarter of 2021, to 1.31% in the fourth quarter of 2022. The linked-quarter and year-over-year increases were primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

December 31, 2022

 

September 30, 2022

 

December 31, 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

 

$

65,393

 

$

366

 

 

2.22

%

$

57,613

 

$

165

 

 

1.13

%

$

146,744

 

$

65

 

 

0.18

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

540,601

 

 

5,268

 

 

3.87

 

 

461,255

 

 

3,741

 

 

3.22

 

 

341,325

 

 

1,893

 

 

2.20

 

Tax-Exempt Investment Securities (1)

 

 

67,867

 

 

728

 

 

4.26

 

 

75,801

 

 

799

 

 

4.18

 

 

71,602

 

 

782

 

 

4.33

 

Total Investment Securities

 

 

608,468

 

 

5,996

 

 

3.91

 

 

537,056

 

 

4,540

 

 

3.35

 

 

412,927

 

 

2,675

 

 

2.57

 

Paycheck Protection Program Loans (2)

 

 

1,109

 

 

48

 

 

17.06

 

 

2,424

 

 

96

 

 

15.75

 

 

39,900

 

 

1,057

 

 

10.51

 

Loans (1)(2)

 

 

3,481,041

 

 

42,654

 

 

4.86

 

 

3,263,390

 

 

37,724

 

 

4.59

 

 

2,715,722

 

 

30,154

 

 

4.41

 

Total Loans

 

 

3,482,150

 

 

42,702

 

 

4.87

 

 

3,265,814

 

 

37,820

 

 

4.59

 

 

2,755,622

 

 

31,211

 

 

4.49

 

Federal Home Loan Bank Stock

 

 

21,633

 

 

163

 

 

2.99

 

 

11,413

 

 

156

 

 

5.42

 

 

5,310

 

 

59

 

 

4.39

 

Total Interest Earning Assets

 

 

4,177,644

 

 

49,227

 

 

4.67

%

 

3,871,896

 

 

42,681

 

 

4.37

%

 

3,320,603

 

 

34,010

 

 

4.06

%

Noninterest Earning Assets

 

 

73,701

 

 

 

 

 

 

 

76,305

 

 

 

 

 

 

 

82,667

 

 

 

 

 

 

Total Assets

 

$

4,251,345

 

 

 

 

 

 

$

3,948,201

 

 

 

 

 

 

$

3,403,270

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

464,631

 

$

2,013

 

 

1.72

%

$

517,658

 

$

1,032

 

 

0.79

%

$

499,475

 

$

548

 

 

0.43

%

Savings and Money Market Deposits

 

 

1,048,227

 

 

4,533

 

 

1.72

 

 

999,932

 

 

2,494

 

 

0.99

 

 

803,848

 

 

876

 

 

0.43

 

Time Deposits

 

 

281,334

 

 

1,007

 

 

1.42

 

 

288,621

 

 

847

 

 

1.16

 

 

299,823

 

 

830

 

 

1.10

 

Brokered Deposits

 

 

537,351

 

 

3,228

 

 

2.38

 

 

447,034

 

 

1,612

 

 

1.43

 

 

404,438

 

 

987

 

 

0.97

 

Total Interest Bearing Deposits

 

 

2,331,543

 

 

10,781

 

 

1.83

 

 

2,253,245

 

 

5,985

 

 

1.05

 

 

2,007,584

 

 

3,241

 

 

0.64

 

Federal Funds Purchased

 

 

340,471

 

 

3,379

 

 

3.94

 

 

106,826

 

 

709

 

 

2.63

 

 

10

 

 

 

 

0.67

 

Notes Payable

 

 

11,359

 

 

202

 

 

7.04

 

 

 

 

 

 

 

 

 

 

 

 

 

FHLB Advances

 

 

94,103

 

 

575

 

 

2.42

 

 

72,343

 

 

328

 

 

1.80

 

 

44,185

 

 

162

 

 

1.46

 

Subordinated Debentures

 

 

81,242

 

 

1,030

 

 

5.03

 

 

92,503

 

 

1,242

 

 

5.33

 

 

92,189

 

 

1,219

 

 

5.25

 

Total Interest Bearing Liabilities

 

 

2,858,718

 

 

15,967

 

 

2.22

%

 

2,524,917

 

 

8,264

 

 

1.30

%

 

2,143,968

 

 

4,622

 

 

0.86

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

943,232

 

 

 

 

 

 

 

991,545

 

 

 

 

 

 

 

861,473

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

61,806

 

 

 

 

 

 

 

47,719

 

 

 

 

 

 

 

23,794

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

1,005,038

 

 

 

 

 

 

 

1,039,264

 

 

 

 

 

 

 

885,267

 

 

 

 

 

 

Shareholders’ Equity

 

 

387,589

 

 

 

 

 

 

 

384,020

 

 

 

 

 

 

 

374,035

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

4,251,345

 

 

 

 

 

 

$

3,948,201

 

 

 

 

 

 

$

3,403,270

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

33,260

 

 

2.45

%

 

 

 

 

34,417

 

 

3.07

%

 

 

 

 

29,388

 

 

3.20

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.16

%

 

 

 

 

 

 

3.53

%

 

 

 

 

 

 

3.51

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(367

)

 

 

 

 

 

 

 

(322

)

 

 

 

 

 

 

 

(235

)

 

 

 

Net Interest Income

 

 

 

 

$

32,893

 

 

 

 

 

 

 

$

34,095

 

 

 

 

 

 

 

$

29,153

 

 

 

 

_________________________

(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 $1.5 million for both the third and fourth quarter of 2022 and $350,000 higher than the $1.2 million provided in the fourth quarter of 2021. The provision recorded in the fourth quarter of 2022 was primarily attributable to the growth of the loan portfolio. The allowance for loan losses to total loans was 1.34% at December 31, 2022, compared to 1.38% at September 30, 2022, and 1.42% at December 31, 2021.

As an emerging growth company, the Company anticipates adopting Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,” as of January 1, 2023 and does not expect a material adjustment upon adoption. The current estimate and future calculations are highly dependent on loan composition, macroeconomic conditions and forecasts, and other management assumptions and judgements.

The following table presents the activity in the Company’s allowance for loan losses for the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Balance at Beginning of Period

 

$

46,491

 

 

$

44,711

 

 

$

38,901

 

 

$

40,020

 

 

$

34,841

 

Provision for Loan Losses

 

 

1,500

 

 

 

1,500

 

 

 

1,150

 

 

 

7,700

 

 

 

5,150

 

Charge-offs

 

 

(3

)

 

 

(5

)

 

 

(37

)

 

 

(37

)

 

 

(74

)

Recoveries

 

 

8

 

 

 

285

 

 

 

6

 

 

 

313

 

 

 

103

 

Balance at End of Period

 

$

47,996

 

 

$

46,491

 

 

$

40,020

 

 

$

47,996

 

 

$

40,020

 

Noninterest Income

Noninterest income was $1.7 million for the fourth quarter of 2022, an increase of $351,000 from $1.4 million for the third quarter of 2022, and an increase of $450,000 from $1.3 million for the fourth quarter of 2021. The linked-quarter increase was primarily due to an increase in other income, which included $306,000 of rate lock fees, offset partially by a decrease in letter of credit fees. The year-over-year increase was primarily due to increased customer service fees, an increase in bank-owned life insurance income and an increase in other income, 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

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Noninterest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

$

344

 

$

313

 

$

274

 

$

1,236

 

$

1,007

Net Gain on Sales of Securities

 

 

30

 

 

 

 

 

 

82

 

 

750

Letter of Credit Fees

 

 

358

 

 

428

 

 

541

 

 

1,592

 

 

1,676

Debit Card Interchange Fees

 

 

148

 

 

153

 

 

149

 

 

586

 

 

563

Swap Fees

 

 

 

 

 

 

 

 

557

 

 

Bank-Owned Life Insurance

 

 

238

 

 

227

 

 

150

 

 

762

 

 

316

Other Income

 

 

620

 

 

266

 

 

174

 

 

1,517

 

 

997

Totals

 

$

1,738

 

$

1,387

 

$

1,288

 

$

6,332

 

$

5,309

Noninterest Expense

Noninterest expense was $15.2 million for the fourth quarter of 2022, an increase of $1.0 million from $14.2 million for the third quarter of 2022, and an increase of $2.7 million from $12.5 million for the fourth quarter of 2021. The linked-quarter increase was primarily due to increases in salaries and employee benefits, derivative collateral fees, and other expense. The year-over-year increase was primarily attributable to increases in salaries and employee benefits, occupancy and equipment, and derivative collateral fees.

The following table presents the major components of noninterest expense for the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Noninterest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

$

9,821

 

$

9,449

 

$

7,966

 

$

36,941

 

$

30,889

Occupancy and Equipment

 

 

1,177

 

 

1,086

 

 

939

 

 

4,390

 

 

3,916

FDIC Insurance Assessment

 

 

360

 

 

315

 

 

345

 

 

1,365

 

 

1,305

Data Processing

 

 

371

 

 

372

 

 

306

 

 

1,396

 

 

1,222

Professional and Consulting Fees

 

 

635

 

 

594

 

 

718

 

 

2,664

 

 

2,520

Derivative Collateral Fees

 

 

535

 

 

122

 

 

1

 

 

687

 

 

3

Information Technology and Telecommunications

 

 

673

 

 

650

 

 

554

 

 

2,495

 

 

2,163

Marketing and Advertising

 

 

403

 

 

479

 

 

469

 

 

2,032

 

 

1,487

Intangible Asset Amortization

 

 

48

 

 

48

 

 

48

 

 

191

 

 

191

Amortization of Tax Credit Investments

 

 

114

 

 

114

 

 

152

 

 

408

 

 

562

Debt Prepayment Fees

 

 

 

 

 

 

 

 

 

 

582

Other Expense

 

 

1,066

 

 

928

 

 

961

 

 

4,051

 

 

3,255

Totals

 

$

15,203

 

$

14,157

 

$

12,459

 

$

56,620

 

$

48,095

The Company continues to invest in its people across the organization, with 246 full-time equivalent employees at December 31, 2022, and September 30, 2022, and 220 employees at December 31, 2021.

The efficiency ratio, a non-GAAP financial measure, was 43.8% for the fourth quarter of 2022, compared to 39.8% for the third quarter of 2022, and 40.8% for the fourth quarter of 2021. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 43.5% for the fourth quarter of 2022, 39.4% for the third quarter of 2022, and 40.3% for the fourth quarter of 2021.

Income Taxes

The effective combined federal and state income tax rate for the fourth quarter of 2022 was 23.4%, a decrease from 26.8% for the third quarter of 2022 and 25.7% for the fourth quarter of 2021.

Balance Sheet

Total assets at December 31, 2022 were $4.35 billion, a 5.2% increase from $4.13 billion at September 30, 2022, and a 25.0% increase from $3.48 billion at December 31, 2021. The linked-quarter increase in total assets was primarily due to strong 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, purchases of investment securities and an increase of other assets, offset partially by a decrease in cash and cash equivalents.

Total gross loans at December 31, 2022 were $3.57 billion, an increase of $189.4 million, or 5.6%, over total gross loans of $3.38 billion at September 30, 2022, and an increase of $750.0 million, or 26.6%, over total gross loans of $2.82 billion at December 31, 2021. The increase in the loan portfolio during the fourth quarter of 2022 was primarily due to growth in the construction and land development, multifamily, and CRE nonowner occupied segments.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

435,344

 

 

$

412,448

 

 

$

403,569

 

 

$

363,290

 

 

$

360,169

 

Paycheck Protection Program

 

 

1,049

 

 

 

1,192

 

 

 

4,860

 

 

 

12,309

 

 

 

26,162

 

Construction and Land Development

 

 

365,796

 

 

 

335,557

 

 

 

359,191

 

 

 

321,131

 

 

 

281,474

 

Real Estate Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 – 4 Family Mortgage

 

 

355,474

 

 

 

341,102

 

 

 

334,815

 

 

 

312,201

 

 

 

305,317

 

Multifamily

 

 

1,306,738

 

 

 

1,230,509

 

 

 

1,087,865

 

 

 

1,012,623

 

 

 

910,243

 

CRE Owner Occupied

 

 

149,905

 

 

 

151,088

 

 

 

142,214

 

 

 

117,969

 

 

 

111,096

 

CRE Nonowner Occupied

 

 

947,008

 

 

 

900,691

 

 

 

886,432

 

 

 

840,463

 

 

 

818,569

 

Total Real Estate Mortgage Loans

 

 

2,759,125

 

 

 

2,623,390

 

 

 

2,451,326

 

 

 

2,283,256

 

 

 

2,145,225

 

Consumer and Other

 

 

8,132

 

 

 

7,495

 

 

 

6,939

 

 

 

7,981

 

 

 

6,442

 

Total Loans, Gross

 

 

3,569,446

 

 

 

3,380,082

 

 

 

3,225,885

 

 

 

2,987,967

 

 

 

2,819,472

 

Allowance for Loan Losses

 

 

(47,996

)

 

 

(46,491

)

 

 

(44,711

)

 

 

(41,692

)

 

 

(40,020

)

Net Deferred Loan Fees

 

 

(9,293

)

 

 

(9,088

)

 

 

(9,536

)

 

 

(9,065

)

 

 

(9,535

)

Total Loans, Net

 

$

3,512,157

 

 

$

3,324,503

 

 

$

3,171,638

 

 

$

2,937,210

 

 

$

2,769,917

 

Total deposits at December 31, 2022 were $3.42 billion, an increase of $111.5 million, or 3.4%, over total deposits of $3.31 billion at September 30, 2022, and an increase of $470.3 million, or 16.0%, over total deposits of $2.95 billion at December 31, 2021. Deposit growth in the fourth quarter of 2022 was primarily due to an increase in brokered deposits, offset partially by a decline in all other deposit portfolios. Brokered deposits were being used as a supplemental funding source, as needed, to support the loan portfolio growth.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2022

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

$

884,272

 

$

961,084

 

$

961,998

 

$

835,482

 

$

875,084

Interest Bearing Transaction Deposits

 

 

451,992

 

 

510,396

 

 

522,151

 

 

598,402

 

 

544,789

Savings and Money Market Deposits

 

 

1,031,873

 

 

1,077,333

 

 

952,138

 

 

890,926

 

 

863,567

Time Deposits

 

 

272,253

 

 

293,052

 

 

272,424

 

 

286,674

 

 

293,474

Brokered Deposits

 

 

776,153

 

 

463,209

 

 

493,242

 

 

424,127

 

 

369,323

Total Deposits

 

$

3,416,543

 

$

3,305,074

 

$

3,201,953

 

$

3,035,611

 

$

2,946,237

Capital

Total shareholders’ equity at December 31, 2022 was $394.1 million, an increase of $12.1 million compared to total shareholders’ equity of $382.0 million at September 30, 2022, and an increase of $14.8 million, or 3.9%, over total shareholders’ equity of $379.3 million at December 31, 2021. The linked-quarter increase was due to net income retained, offset partially by unrealized losses in the securities portfolio. The year-over-year increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by stock repurchases made under the Company’s stock repurchase program and an increase in unrealized losses in the securities portfolio. The Company did not purchase any shares of its common stock during the fourth quarter of 2022.

Tangible book value per share, a non-GAAP financial measure, was $11.69 as of December 31, 2022, an increase of 3.2% from $11.33 as of September 30, 2022, and an increase of 6.5% from $10.98 as of December 31, 2021. The linked-quarter and year-over-year increase occurred despite the market value depreciation of the securities portfolio driven by the rapidly 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 7.48% at December 31, 2022, compared to 7.57% at September 30, 2022, and 8.91% at December 31, 2021.

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 March 1, 2023 to shareholders of record of the Series A Preferred Stock at the close of business on February 15, 2023.

Asset Quality

Annualized net charge-offs (recoveries) as a percent of average loans were 0.00% for the fourth quarter of 2022, compared to (0.03)% for the third quarter of 2022 and 0.00% for each of the previous three quarters. At December 31, 2022, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $639,000, or 0.01% of total assets, as compared to $663,000, or 0.02% of total assets at September 30, 2022, and $722,000, or 0.02% of total assets at December 31, 2021.

Loans that have potential weaknesses that warrant a watchlist risk rating at December 31, 2022 totaled $32.3 million, compared to $22.8 million at September 30, 2022, and $49.3 million at December 31, 2021. The linked-quarter increase was primarily due to the migration of two loan relationships. The increased uncertainty in the economic environment may result in further watchlist or adverse classifications in the loan portfolio. Loans that warranted a substandard risk rating at December 31, 2022 totaled $28.0 million, compared to $30.8 million at September 30, 2022, and $22.6 million at December 31, 2021.

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

 

December 31,

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

(dollars in thousands)

 

2022

 

2022

 

2022

 

2022

 

2021

 

Selected Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

$

186

 

$

38

 

$

225

 

$

13

 

$

49

 

Loans 30-89 Days Past Due to Total Loans

 

 

0.01

%

 

0.00

%

 

0.01

%

 

0.00

%

 

0.00

%

Nonperforming Loans

 

$

639

 

$

663

 

$

688

 

$

706

 

$

722

 

Nonperforming Loans to Total Loans

 

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.03

%

Foreclosed Assets

 

$

 

$

 

$

 

$

 

$

 

Nonaccrual Loans to Total Loans

 

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.03

%

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

 

 

0.02

 

 

0.02

 

 

0.02

 

 

0.02

 

 

0.03

 

Nonperforming Assets (1)

 

$

639

 

$

663

 

$

688

 

$

706

 

$

722

 

Nonperforming Assets to Total Assets (1)

 

 

0.01

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

Allowance for Loan Losses to Total Loans

 

 

1.34

 

 

1.38

 

 

1.39

 

 

1.40

 

 

1.42

 

Allowance for Loan Losses to Total Loans, Excluding PPP Loans

 

 

1.35

 

 

1.38

 

 

1.39

 

 

1.40

 

 

1.43

 

Allowance for Loans Losses to Nonaccrual Loans

 

 

7,511.11

 

 

7,012.22

 

 

6,498.69

 

 

5,905.38

 

 

5,542.94

 

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

 

 

0.00

 

 

(0.03)

 

 

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 will host a conference call to discuss its fourth quarter 2022 financial results on Thursday, January 26, 2023 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 877-270-2148 and requesting to join the Bridgewater Bancshares earnings call. To listen to a replay of the conference call via phone, please dial 877-344-7529 and enter access code 1810249. The replay will be available through February 2, 2023. The conference call will also be available via a live webcast on the Investor Relations section of the Company’s website, investors.bridgewaterbankmn.com, and archived for replay.

About the Company

Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding company. Bridgewater’s banking subsidiary, Bridgewater Bank, is a premier, full-service Twin Cities bank dedicated to serving the diverse needs of commercial real estate investors, entrepreneurs, business clients and successful individuals. By pairing a range of deposit, lending, and business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $4.3 billion and seven branches as of December 31, 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: interest rate risk, including the effects of recent and anticipated rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of rising interest rates, which has resulted in unrealized losses in our portfolio; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the expected discontinuation of the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including changes to federal and state corporate tax rates; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events including the Russian invasion of Ukraine; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

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

 

 

 

 

 

 

 

 

 

 

 

 

December 31,

 

September 30,

 

December 31,

 

 

2022

 

2022

 

2021

ASSETS

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

87,043

 

 

$

75,496

 

 

$

143,473

Bank-Owned Certificates of Deposit

 

 

1,181

 

 

 

1,182

 

 

 

1,876

Securities Available for Sale, at Fair Value

 

 

548,613

 

 

 

542,007

 

 

 

439,362

Loans, Net of Allowance for Loan Losses of $47,996 at December 31, 2022 (unaudited), $46,491 at September 30, 2022 (unaudited) and $40,020 at December 31, 2021

 

 

3,512,157

 

 

 

3,324,503

 

 

 

2,769,917

Federal Home Loan Bank (FHLB) Stock, at Cost

 

 

19,606

 

 

 

15,603

 

 

 

5,242

Premises and Equipment, Net

 

 

48,445

 

 

 

48,941

 

 

 

49,395

Accrued Interest

 

 

13,479

 

 

 

11,198

 

 

 

9,186

Goodwill

 

 

2,626

 

 

 

2,626

 

 

 

2,626

Other Intangible Assets, Net

 

 

288

 

 

 

336

 

 

 

479

Other Assets

 

 

112,224

 

 

 

107,095

 

 

 

56,103

Total Assets

 

$

4,345,662

 

 

$

4,128,987

 

 

$

3,477,659

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest Bearing

 

$

884,272

 

 

$

961,084

 

 

$

875,084

Interest Bearing

 

 

2,532,271

 

 

 

2,343,990

 

 

 

2,071,153

Total Deposits

 

 

3,416,543

 

 

 

3,305,074

 

 

 

2,946,237

Federal Funds Purchased

 

 

287,000

 

 

 

212,000

 

 

 

Notes Payable

 

 

13,750

 

 

 

 

 

 

FHLB Advances

 

 

97,000

 

 

 

71,500

 

 

 

42,500

Subordinated Debentures, Net of Issuance Costs

 

 

78,905

 

 

 

92,559

 

 

 

92,239

Accrued Interest Payable

 

 

2,831

 

 

 

2,214

 

 

 

1,409

Other Liabilities

 

 

55,569

 

 

 

63,633

 

 

 

16,002

Total Liabilities

 

 

3,951,598

 

 

 

3,746,980

 

 

 

3,098,387

 

 

 

 

 

 

 

 

 

 

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 December 31, 2022 (unaudited), September 30, 2022 (unaudited) and December 31, 2021

 

 

66,514

 

 

 

66,514

 

 

 

66,514

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

 

 

 

 

 

 

 

 

 

Common Stock – Issued and Outstanding 27,751,950 at December 31, 2022 (unaudited), 27,587,978 at September 30, 2022 (unaudited) and 28,206,566 at December 31, 2021

 

 

278

 

 

 

276

 

 

 

282

Additional Paid-In Capital

 

 

96,529

 

 

 

95,973

 

 

 

104,123

Retained Earnings

 

 

248,685

 

 

 

235,964

 

 

 

199,347

Accumulated Other Comprehensive Income (Loss)

 

 

(17,942

)

 

 

(16,720

)

 

 

9,006

Total Shareholders’ Equity

 

 

394,064

 

 

 

382,007

 

 

 

379,272

Total Liabilities and Equity

 

$

4,345,662

 

 

$

4,128,987

 

 

$

3,477,659

 

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Year Ended

 

 

December 31,

 

September 30,

 

December 31,

 

December 31,

 

December 31,

 

 

2022

 

2022

 

2021

 

2022

 

2021

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, Including Fees

 

$

42,488

 

 

$

37,666

 

 

$

31,140

 

 

$

146,256

 

 

$

118,845

 

Investment Securities

 

 

5,843

 

 

 

4,372

 

 

 

2,511

 

 

 

16,410

 

 

 

9,576

 

Other

 

 

529

 

 

 

321

 

 

 

124

 

 

 

1,029

 

 

 

458

 

Total Interest Income

 

 

48,860

 

 

 

42,359

 

 

 

33,775

 

 

 

163,695

 

 

 

128,879

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

10,781

 

 

 

5,984

 

 

 

3,241

 

 

 

23,379

 

 

 

13,842

 

Notes Payable

 

 

202

 

 

 

 

 

 

 

 

 

202

 

 

 

61

 

FHLB Advances

 

 

575

 

 

 

329

 

 

 

162

 

 

 

1,221

 

 

 

831

 

Subordinated Debentures

 

 

1,030

 

 

 

1,242

 

 

 

1,219

 

 

 

4,688

 

 

 

4,630

 

Federal Funds Purchased

 

 

3,379

 

 

 

709

 

 

 

 

 

 

4,507

 

 

 

6

 

Total Interest Expense

 

 

15,967

 

 

 

8,264

 

 

 

4,622

 

 

 

33,997

 

 

 

19,370

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

32,893

 

 

 

34,095

 

 

 

29,153

 

 

 

129,698

 

 

 

109,509

 

Provision for Loan Losses

 

 

1,500

 

 

 

1,500

 

 

 

1,150

 

 

 

7,700

 

 

 

5,150

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES

 

 

31,393

 

 

 

32,595

 

 

 

28,003

 

 

 

121,998

 

 

 

104,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

 

344

 

 

 

313

 

 

 

274

 

 

 

1,236

 

 

 

1,007

 

Net Gain on Sales of Available for Sale Securities

 

 

30

 

 

 

 

 

 

 

 

 

82

 

 

 

750

 

Other Income

 

 

1,364

 

 

 

1,074

 

 

 

1,014

 

 

 

5,014

 

 

 

3,552

 

Total Noninterest Income

 

 

1,738

 

 

 

1,387

 

 

 

1,288

 

 

 

6,332

 

 

 

5,309

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

 

9,821

 

 

 

9,449

 

 

 

7,966

 

 

 

36,941

 

 

 

30,889

 

Occupancy and Equipment

 

 

1,177

 

 

 

1,086

 

 

 

939

 

 

 

4,390

 

 

 

3,916

 

Other Expense

 

 

4,205

 

 

 

3,622

 

 

 

3,554

 

 

 

15,289

 

 

 

13,290

 

Total Noninterest Expense

 

 

15,203

 

 

 

14,157

 

 

 

12,459

 

 

 

56,620

 

 

 

48,095

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

17,928

 

 

 

19,825

 

 

 

16,832

 

 

 

71,710

 

 

 

61,573

 

Provision for Income Taxes

 

 

4,193

 

 

 

5,312

 

 

 

4,318

 

 

 

18,318

 

 

 

15,886

 

NET INCOME

 

 

13,735

 

 

 

14,513

 

 

 

12,514

 

 

 

53,392

 

 

 

45,687

 

Preferred Stock Dividends

 

 

(1,014

)

 

 

(1,013

)

 

 

(1,171

)

 

 

(4,054

)

 

 

(1,171

)

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

 

$

12,721

 

 

$

13,500

 

 

$

11,343

 

 

$

49,338

 

 

$

44,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.46

 

 

$

0.49

 

 

$

0.41

 

 

$

1.78

 

 

$

1.59

 

Diluted

 

 

0.45

 

 

 

0.47

 

 

 

0.39

 

 

 

1.72

 

 

 

1.54

 

Dividends Paid Per Common Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bridgewater Bancshares, Inc. and Subsidiaries

Analysis of Average Balances, Yields and Rates

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Year Ended

 

 

 

December 31, 2022

 

December 31, 2021

 

 

 

Average

 

Interest

 

Yield/

 

Average

 

Interest

 

Yield/

 

 

 

Balance

 

& Fees

 

Rate

 

Balance

 

& Fees

 

Rate

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Investments

 

$

66,072

 

$

597

 

 

0.90

%

$

132,188

 

$

199

 

 

0.15

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

448,500

 

 

13,960

 

 

3.11

 

 

317,954

 

 

7,015

 

 

2.21

 

Tax-Exempt Investment Securities (1)

 

 

72,379

 

 

3,101

 

 

4.29

 

 

75,313

 

 

3,242

 

 

4.30

 

Total Investment Securities

 

 

520,879

 

 

17,061

 

 

3.28

 

 

393,267

 

 

10,257

 

 

2.61

 

Paycheck Protection Program Loans (2)

 

 

7,441

 

 

970

 

 

13.03

 

 

103,151

 

 

6,441

 

 

6.24

 

Loans (1)(2)

 

 

3,183,271

 

 

145,857

 

 

4.58

 

 

2,481,706

 

 

112,587

 

 

4.54

 

Total Loans

 

 

3,190,712

 

 

146,827

 

 

4.60

 

 

2,584,857

 

 

119,028

 

 

4.60

 

Federal Home Loan Bank Stock

 

 

12,628

 

 

432

 

 

3.42

 

 

5,571

 

 

259

 

 

4.65

 

Total Interest Earning Assets

 

 

3,790,291

 

 

164,917

 

 

4.35

%

 

3,115,883

 

 

129,743

 

 

4.16

%

Noninterest Earning Assets

 

 

76,189

 

 

 

 

 

 

 

73,917

 

 

 

 

 

 

Total Assets

 

$

3,866,480

 

 

 

 

 

 

$

3,189,800

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

524,968

 

$

4,336

 

 

0.83

%

$

441,528

 

$

2,052

 

 

0.46

%

Savings and Money Market Deposits

 

 

963,096

 

 

9,129

 

 

0.95

 

 

773,779

 

 

3,729

 

 

0.48

 

Time Deposits

 

 

284,868

 

 

3,264

 

 

1.15

 

 

323,638

 

 

4,099

 

 

1.27

 

Brokered Deposits

 

 

449,095

 

 

6,650

 

 

1.48

 

 

406,863

 

 

3,962

 

 

0.97

 

Total Interest Bearing Deposits

 

 

2,222,027

 

 

23,379

 

 

1.05

 

 

1,945,808

 

 

13,842

 

 

0.71

 

Federal Funds Purchased

 

 

149,608

 

 

4,507

 

 

3.01

 

 

2,479

 

 

6

 

 

0.24

 

Notes Payable

 

 

2,863

 

 

202

 

 

7.04

 

 

1,658

 

 

61

 

 

3.66

 

FHLB Advances

 

 

64,278

 

 

1,221

 

 

1.90

 

 

53,294

 

 

831

 

 

1.56

 

Subordinated Debentures

 

 

89,584

 

 

4,688

 

 

5.23

 

 

82,865

 

 

4,630

 

 

5.59

 

Total Interest Bearing Liabilities

 

 

2,528,360

 

 

33,997

 

 

1.34

%

 

2,086,104

 

 

19,370

 

 

0.93

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

910,490

 

 

 

 

 

 

 

764,087

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

43,597

 

 

 

 

 

 

 

23,372

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

954,087

 

 

 

 

 

 

 

787,459

 

 

 

 

 

 

Shareholders’ Equity

 

 

384,033

 

 

 

 

 

 

 

316,237

 

 

 

 

 

 

Total Liabilities and Shareholders’ Equity

 

$

3,866,480

 

 

 

 

 

 

$

3,189,800

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

130,920

 

 

3.01

%

 

 

 

 

110,373

 

 

3.23

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.45

%

 

 

 

 

 

 

3.54

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(1,222

)

 

 

 

 

 

 

 

(864

)

 

 

 

Net Interest Income

 

 

 

 

$

129,698

 

 

 

 

 

 

 

$

109,509

 

 

 

 

_________________________

(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 Year Ended

 

 

December 31,

September 30,

December 31,

December 31,

December 31,

 

 

2022

2022

2021

2022

2021

Pre-Provision Net Revenue

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

$

1,738

 

$

1,387

 

$

1,288

 

$

6,332

 

$

5,309

 

Less: Gain on Sales of Securities

 

 

(30

)

 

 

 

 

 

(82

)

 

(750

)

Total Operating Noninterest Income

 

 

1,708

 

 

1,387

 

 

1,288

 

 

6,250

 

 

4,559

 

Plus: Net Interest Income

 

 

32,893

 

 

34,095

 

 

29,153

 

 

129,698

 

 

109,509

 

Net Operating Revenue

 

$

34,601

 

$

35,482

 

$

30,441

 

$

135,948

 

$

114,068

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

15,203

 

$

14,157

 

$

12,459

 

$

56,620

 

$

48,095

 

Less: Amortization of Tax Credit Investments

 

 

(114

)

 

(114

)

 

(152

)

 

(408

)

 

(562

)

Less: Debt Prepayment Fees

 

 

 

 

 

 

 

 

 

 

(582

)

Total Operating Noninterest Expense

 

$

15,089

 

$

14,043

 

$

12,307

 

$

56,212

 

$

46,951

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Provision Net Revenue

 

$

19,512

 

$

21,439

 

$

18,134

 

$

79,736

 

$

67,117

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

Non-Operating Revenue Adjustments

 

 

30

 

 

 

 

 

 

82

 

 

750

 

Less:

 

 

 

 

 

 

 

 

 

 

 

Provision for Loan Losses

 

 

1,500

 

 

1,500

 

 

1,150

 

 

7,700

 

 

5,150

 

Non-Operating Expense Adjustments

 

 

114

 

 

114

 

 

152

 

 

408

 

 

1,144

 

Provision for Income Taxes

 

 

4,193

 

 

5,312

 

 

4,318

 

 

18,318

 

 

15,886

 

Net Income

 

$

13,735

 

$

14,513

 

$

12,514

 

$

53,392

 

$

45,687

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

4,251,345

 

$

3,948,201

 

$

3,403,270

 

$

3,866,480

 

$

3,189,800

 

Pre-Provision Net Revenue Return on Average Assets

 

 

1.82

%

 

2.15

%

 

2.11

%

 

2.06

%

 

2.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

As of and for the Year Ended

 

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

 

 

2022

2022

2021

 

2022

2021

Core Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income (Tax-Equivalent Basis)

 

$

33,260

 

$

34,417

 

$

29,388

 

 

$

130,920

 

$

110,373

 

Less: Loan Fees

 

 

(1,100

)

 

(1,400

)

 

(1,462

)

 

 

(6,273

)

 

(5,173

)

Less: PPP Interest and Fees

 

 

(48

)

 

(96

)

 

(1,057

)

 

 

(970

)

 

(6,441

)

Core Net Interest Income

 

$

32,112

 

$

32,921

 

$

26,869

 

 

$

123,677

 

$

98,759

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest Earning Assets

 

$

4,177,644

 

$

3,871,896

 

$

3,320,603

 

 

$

3,790,291

 

$

3,115,883

 

Less: Average PPP Loans

 

 

(1,109

)

 

(2,424

)

 

(39,900

)

 

 

(7,441

)

 

(103,151

)

Core Average Interest Earning Assets

 

$

4,176,535

 

$

3,869,472

 

$

3,280,703

 

 

$

3,782,850

 

$

3,012,732

 

Core Net Interest Margin

 

 

3.05

%

 

3.38

%

 

3.25

%

 

 

3.27

%

 

3.28

%

 

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

 

 

2022

2022

2021

 

2022

2021

Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

15,203

 

$

14,157

 

$

12,459

 

 

$

56,620

 

$

48,095

 

Less: Amortization of Intangible Assets

 

 

(48

)

 

(48

)

 

(48

)

 

 

(191

)

 

(191

)

Adjusted Noninterest Expense

 

$

15,155

 

$

14,109

 

$

12,411

 

 

$

56,429

 

$

47,904

 

Net Interest Income

 

 

32,893

 

 

34,095

 

 

29,153

 

 

 

129,698

 

 

109,509

 

Noninterest Income

 

 

1,738

 

 

1,387

 

 

1,288

 

 

 

6,332

 

 

5,309

 

Less: Gain on Sales of Securities

 

 

(30

)

 

 

 

 

 

 

(82

)

 

(750

)

Adjusted Operating Revenue

 

$

34,601

 

$

35,482

 

$

30,441

 

 

$

135,948

 

$

114,068

 

Efficiency Ratio

 

 

43.8

%

 

39.8

%

 

40.8

%

 

 

41.5

%

 

42.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

15,203

 

$

14,157

 

$

12,459

 

 

$

56,620

 

$

48,095

 

Less: Amortization of Tax Credit Investments

 

 

(114

)

 

(114

)

 

(152

)

 

 

(408

)

 

(562

)

Less: Debt Prepayment Fees

 

 

 

 

 

 

 

 

 

 

 

(582

)

Less: Amortization of Intangible Assets

 

 

(48

)

 

(48

)

 

(48

)

 

 

(191

)

 

(191

)

Adjusted Noninterest Expense

 

$

15,041

 

$

13,995

 

$

12,259

 

 

$

56,021

 

$

46,760

 

Net Interest Income

 

 

32,893

 

 

34,095

 

 

29,153

 

 

 

129,698

 

 

109,509

 

Noninterest Income

 

 

1,738

 

 

1,387

 

 

1,288

 

 

 

6,332

 

 

5,309

 

Less: Gain on Sales of Securities

 

 

(30

)

 

 

 

 

 

 

(82

)

 

(750

)

Adjusted Operating Revenue

 

$

34,601

 

$

35,482

 

$

30,441

 

 

$

135,948

 

$

114,068

 

Adjusted Efficiency Ratio

 

 

43.5

%

 

39.4

%

 

40.3

%

 

 

41.2

%

 

41.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Year Ended

 

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

 

 

2022

2022

2021

 

2022

2021

Adjusted Noninterest Expense to Average Assets (Annualized)

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

15,203

 

$

14,157

 

$

12,459

 

 

$

56,620

 

$

48,095

 

Less: Amortization of Tax Credit Investments

 

 

(114

)

 

(114

)

 

(152

)

 

 

(408

)

 

(562

)

Less: Debt Prepayment Fees

 

 

 

 

 

 

 

 

 

 

 

(582

)

Adjusted Noninterest Expense

 

$

15,089

 

$

14,043

 

$

12,307

 

 

$

56,212

 

$

46,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

4,251,345

 

$

3,948,201

 

$

3,403,270

 

 

$

3,866,480

 

$

3,189,800

 

Adjusted Noninterest Expense to Average Assets (Annualized)

 

 

1.41

%

 

1.41

%

 

1.43

%

 

 

1.45

%

 

1.47

%

 

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

As of and for the Year Ended

 

 

December 31,

September 30,

December 31,

 

December 31,

December 31,

 

 

2022

2022

2021

 

2022

2021

Tangible Common Equity and Tangible Common Equity/Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders’ Equity

 

$

394,064

 

$

382,007

 

$

379,272

 

 

 

 

 

 

Less: Preferred Stock

 

 

(66,514

)

 

(66,514

)

 

(66,514

)

 

 

 

 

 

Total Common Shareholders’ Equity

 

 

327,550

 

 

315,493

 

 

312,758

 

 

 

 

 

 

Less: Intangible Assets

 

 

(2,914

)

 

(2,962

)

 

(3,105

)

 

 

 

 

 

Tangible Common Equity

 

$

324,636

 

$

312,531

 

$

309,653

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,345,662

 

$

4,128,987

 

$

3,477,659

 

 

 

 

 

 

Less: Intangible Assets

 

 

(2,914

)

 

(2,962

)

 

(3,105

)

 

 

 

 

 

Tangible Assets

 

$

4,342,748

 

$

4,126,025

 

$

3,474,554

 

 

 

 

 

 

Tangible Common Equity/Tangible Assets

 

 

7.48

%

 

7.57

%

 

8.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value Per Share

 

 

 

 

 

 

 

 

 

 

 

 

Book Value Per Common Share

 

$

11.80

 

$

11.44

 

$

11.09

 

 

 

 

 

 

Less: Effects of Intangible Assets

 

 

(0.11

)

 

(0.11

)

 

(0.11

)

 

 

 

 

 

Tangible Book Value Per Common Share

 

$

11.69

 

$

11.33

 

$

10.98

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available to Common Shareholders

 

$

12,721

 

$

13,500

 

$

11,343

 

 

$

49,338

 

$

44,516

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders’ Equity

 

$

387,589

 

$

384,020

 

$

374,035

 

 

$

384,033

 

$

316,237

 

Less: Average Preferred Stock

 

 

(66,514

)

 

(66,514

)

 

(66,515

)

 

 

(66,514

)

 

(24,915

)

Average Common Equity

 

 

321,075

 

 

317,506

 

 

307,520

 

 

 

317,519

 

 

291,322

 

Less: Effects of Average Intangible Assets

 

 

(2,941

)

 

(2,989

)

 

(3,132

)

 

 

(3,012

)

 

(3,204

)

Average Tangible Common Equity

 

$

318,134

 

$

314,517

 

$

304,388

 

 

$

314,507