Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q4 2024 Earnings Presentation
37 slides from Bridgewater Bancshares's earnings presentation, Feb 18, 2025
Slide 1: Investor Presentation Fourth Quarter 2024
INVESTOR PRESENTATION FOURTH QUARTER 2024 1 BRIDGEWATER BANCSHARES INC.
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements This presentation 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,
Slide 3: Company Overview
The Finest Entrepreneurial Bank 3 Company Overview Branch-Light Model in Attractive Twin Cities Market Name: Bridgewater Bancshares, Inc. Headquarters: St. Louis Park, MN Ticker: NASDAQ: BWB; BWBBP Assets: $5.1 Billion Loans: $3.9 Billion Deposits: $4.1 Billion Shareholders’ Equity: $457.9 Million S
Slide 4: Management Team
Jerry Baack Chairman and Chief Executive Officer • Former regulator and responsible for all aspects of BWB formation • Lead founder of BWB in 2005 • 30+ years of banking experience Jeff Shellberg EVP and Chief Credit Officer • Board member and oversees strong credit and underwriting culture • BWB fo
Slide 5: A Culture-Driven Growth Story
A Culture-Driven Growth Story 5 Truly Unconventional Culture Highly Efficient Business Model Robust Balance Sheet Growth Proactive Risk Management • Entrepreneurial spirit unlike the culture at a typical bank • Modern headquarters with an open layout promoting team member and client collaboration •
Slide 6: Our Core Values
Our Core Values 6 Unconventional. Our clients notice a difference. Responsive. Under promise, over deliver. Dedicated. Don’t stop until you get it done. Growth. If you aren’t moving forward, where are you going? Accurate. It’s more than just an expectation. 6 Our Core Values
Slide 7: An Award-Winning Workplace Culture
An Award-Winning Workplace Culture “In today’s environment, it is more important than ever to be able to recruit, retain and develop top talent. At Bridgewater, we have demonstrated an ability to do this through our unconventional culture and employee experience, extensive team member referral netwo
Slide 8: A Responsive Service Model
A Responsive Service Model 8 Our clients can expect… • Responsive support and simple solutions • A local bank of choice in a market where many local banks have been acquired by out-of-state buyers • Flexibility, market expertise and strong network connections The “Proven Process” for Our Clients • B
Slide 9: A Commitment to our Communities
A Commitment to our Communities 9 Our communities can expect… Bridgewater’s commitment to investing, lending and volunteering in ways that serve low-to-moderate income segments in the Twin Cities “Outstanding” Rating for Community Reinvestment Act Performance FDIC, 2023 $327K Total Contributions in
Slide 10: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) 10 We are committed to establishing and advancing impactful initiatives that support our corporate responsibility as one of the largest locally-led banks in the Twin Cities, while regularly sharing our progress with our stakeholders Our ESG Commitment Our E
Slide 11: Attractive Twin Cities Market Built for Business
Attractive Twin Cities Market Built for Business 11 #3 Fortune 500 companies per capita (17)1 Large Corporate Presence #1 State with highest average credit score (742)2 Credit Worthy Population #5 Best state for economic opportunity3 Economic Opportunity #6 Top state for business4 Top State for Busi
Slide 12: Deposit Market Share Momentum in the Twin Cities Continues
Deposit Market Share Momentum in the Twin Cities Continues 12 Total Deposits – Minneapolis/St. Paul MSA1 2012 2024 Continuing to Gain Market Share • Top-heavy deposit market (top 2 market share = 62%) • Top 2 have combined to steadily lose market share over the past decade-plus (2012: 77% / 2024: 62
Slide 13: History of Robust Organic Asset Growth
History of Robust Organic Asset Growth 13 $1,184 $4,821 $76 $245 $929 $1,260 $1,617 $1,974 $2,269 $2,927 $3,478 $4,346 $4,612 $5,066 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Organic Acquired Assets Proven ability to consistently generate robust asset growth primarily in the Twin Cities mark
Slide 14: Loan Growth Returns as Demand Continues
Loan Growth Returns as Demand Continues 14 $3,752 $117 $3,724 $3,784 $3,800 $3,686 $3,869 4Q23 1Q24 2Q24 3Q24 4Q24 Dollars in millions $2,326 $2,819 $3,569 $3,724 $3,869 2020 2021 2022 2023 2024 After moderating through much of 2024 due to the higher interest rate environment, organic loan growth re
Slide 15: Strong Diversification Within Key Loan Portfolios
Class A 30% Class B 9% Class C 36% Affordable Housing 25% Strong Diversification Within Key Loan Portfolios 15 Size YoY Growth Go-to-Market Strategy Competitors Growth Outlook Key Stats Portfolio Diversification Multifamily CRE Nonowner Occupied Construction & Development C&I Bank of choice in the T
Slide 16: Well-Diversified Loan Portfolio With Multifamily and CRE Expertise
CRE NOO 28% Multifamily 37% C&D 4% C&I 13% CRE OO 5% 1-4 Family 12% Leases 1% Consumer & Other 0% Well-Diversified Loan Portfolio With Multifamily and CRE Expertise 16 CRE NOO 27% Multifamily 21% C&D 15% C&I 13% CRE OO 6% 1-4 Family 18% Consumer & Other 0% $0.8B Evolution of Loan Mix by Type 2015 20
Slide 17: CRE Concentration Driven by a Proven, Lower Risk Multifamily Portfolio
Class A 30% Class B 9% Class C 36% Affordable Housing 25% CRE Concentration Driven by a Proven, Lower Risk Multifamily Portfolio 17 (0.20)% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% Multi-family CRE 1-4 Family C&I C&D Consumer (ex. cards & auto) Total Loans Last 5 Years Last 10 Years Last 15 Y
Slide 18: Supporting Affordable Housing Initiatives
81-unit affordable housing property in Bloomington, MN Supporting Affordable Housing Initiatives 18 ¹ Source: Minnesota Housing Partnership, 2024 State of the State’s Housing 2 Includes formally subsidized properties (51%) and market rate properties with affordable set-asides (20%) 62-unit affordabl
Slide 19: Managing Office-Related Risk
Managing Office-Related Risk 19 1 Excludes medical office of $108 million Data as of December 31, 2024 Percent of Total Loans Average Loan Size 5.0% $2.3M Weighted Average LTV 60% CRE NOO Office by Geography • Majority of CRE NOO office exposure in the Twin Cities suburbs • Only 3 loans totaling $22
Slide 20: Strong Core Deposit Momentum Continues
Strong Core Deposit Momentum Continues 20 Dollars in millions 1 Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000 A track record of strong deposit growth… • Strong and growing brand taking market share in the Twin Cities • New client
Slide 21: A Spread-Based Revenue Model
$32,530 $34,095 $32,893 $28,567 $25,872 $25,421 $25,314 $24,631 $24,996 $25,599 $26,967 $1,650 $1,387 $1,738 $1,943 $1,415 $1,726 $1,409 $1,550 $1,763 $1,522 $2,533 $34,180 $35,482 $34,631 $30,510 $27,287 $27,147 $26,723 $26,181 $26,759 $27,121 $29,500 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 1Q24 2Q24 3Q
Slide 22: NIM Expansion and Net Interest Income Growth
NIM Expansion and Net Interest Income Growth 22 $24,563 $24,023 $24,229 $24,631 $26,220 $751 $608 $767 $968 $747 $25,314 $24,631 $24,996 $25,599 $26,967 2.27% 2.24% 2.24% 2.24% 2.32% 4Q23 1Q24 2Q24 3Q24 4Q24 Net Interest Margin1 Net Interest Income (ex. Loan Fees) Loan Fees Net Interest Income and M
Slide 23: Loan Portfolio Repricing
16% 21% 29% 13% 13% 8% $96 $127 $172 $76 $80 $51 Less Than 1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years 5+ Years 21% 15% 18% 11% 16% 19% $584 $406 $484 $313 $428 $507 Less Than 1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years 5+ Years Loan Portfolio Repricing 23 Fixed, 70% Va
Slide 24: A Highly Efficient Business Model
A Highly Efficient Business Model 24 49.0% 42.0% 41.5% 53.0% 57.9% 57.5% 56.6% 56.3% 60.7% 61.6% 2020 2021 2022 2023 2024 BWB1 An Efficiency Ratio Consistently Below Peers 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. 2 Includes publicly-traded banks on major e
Slide 25: Modernizing Technology Tools to Support Growth and Efficiency
Modernizing Technology Tools to Support Growth and Efficiency 25 Client-Facing • Commercial online banking upgrade completed in 2023 • Collaborative technology tools integrated into BWB Corporate Center • Cybersecurity threat detection and response Scalable core to support growth outlook Core Bankin
Slide 26: Scaling Enterprise Risk Management Across a Growing Organization
Scaling Enterprise Risk Management Across a Growing Organization 26 Manage and mitigate dynamic risks while enhancing shareholder value, being responsive to clients, and delivering simple solutions in unconventional ways BWB Risk Management Philosophy Enterprise Risk Management Attributes in Place T
Slide 27: A Strong Credit Culture
A Strong Credit Culture 27 5-Year Peak Annual Net Charge-off Ratio vs. Peers 5-Year Peak Year-End Nonperforming Assets2 / Assets vs. Peers 0.03% BWB Peer Bank Median1 0.14% 0.03% BWB Peer Bank Median1 0.62% 1 Includes publicly-traded banks on major exchanges with total assets between $3 billion and
Slide 28: Credit Risk Management and Oversight Driving Strong Asset Quality
$775 $722 $639 $919 $301 0.03% 0.02% 0.01% 0.02% 0.01% 2020 2021 2022 2023 2024 $34,841 $40,020 $47,996 $50,494 $52,277 1.50% 1.42% 1.34% 1.36% 1.35% 2020 2021 2022 2023 2024 Credit Risk Management and Oversight Driving Strong Asset Quality 28 Nonperforming Assets2 Low levels of nonperforming assets
Slide 29: High Quality Securities Portfolio
High Quality Securities Portfolio 29 39% 38% 34% 31% 18% 22% 21% 22% 17% 16% 22% 21% 23% 21% 17% 16% 22% 17% 20% 21% 15% $604 27% $633 $601 $665 $768 4Q23 1Q24 2Q24 3Q24 4Q24 Mortgage-Backed Securities Municipal Bonds U.S. Treasuries Corporate Securities Securities Available for Sale Portfolio (doll
Slide 30: Ample Liquidity and Borrowing Capacity
Ample Liquidity and Borrowing Capacity 30 1 Excludes $290M of pledged securities at December 31, 2024 Dollars in millions 11.5% 12.1% 11.3% 14.5% 13.2% 37.0% 35.5% 36.1% 34.2% 32.2% $2,234 $2,249 $2,222 $2,290 $2,296 4Q23 1Q24 2Q24 3Q24 4Q24 Off-Balance Sheet Liquidity as a % of Assets On-Balance Sh
Slide 31: Capital Ratios Impacted by Acquisition
Capital Ratios Impacted by Acquisition 31 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation Capital Priorities 1 3 2 Organic Growth Share Repurchases M&A 4 Dividends Drive profitability by supporting a proven organic loan growth engine Opportunistically return capit
Slide 32: 2025 Expectations
2025 Expectations 32 • Mid-to-high single digit loan growth over the course of the year • Focus on profitable growth while aligning loan growth with core deposit growth over time • Target loan-to-deposit ratio between 95% and 105% Balance Sheet Growth • Modest NIM expansion in the current interest r
Slide 33: 2025 Strategic Priorities
2025 Strategic Priorities 33 Return to More Normalized Levels of Profitable Growth Continue to Gain Market Share in the Twin Cities Leverage Technology to Support Business Growth Execute on M&A Integration and Readiness Initiatives • Well positioned given efforts to optimize the balance sheet in 202
Slide 34: Bridgewater Bancshares, Inc.
-— BRIDGEWATER BANCSHARES, INC.
Slide 35: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 35 Dollars in thousands December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Adjusted Diluted Earnings Per Common Share Net Income Available to Common Shareholders $ 7,859 $ 6,818 $ 7,101 $ 7,662 $ 7,190 Add: Merger-related
Slide 36: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 36 Dollars in thousands December 31, 2023 March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Adjusted Return on Average Assets Net Income $ 8,873 $ 7,831 $ 8,115 $ 8,675 $ 8,204 Add: Merger-related Expenses - - - 224 488 Less: Tax Impact -
Slide 37: Reconciliation of Non-GAAP Financial Measures: Tangible Book Value Per Share
Reconciliation of Non-GAAP Financial Measures 37 Tangible Book Value Per Share December 31, 2016 March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 March 31, 2019 Book Value Per Common Share $ 4.69 $ 4.91 $ 5.23 $ 5.43
Bridgewater Bancshares — Q4 2024 Earnings Presentation on 6ix