Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q4 2021 Earnings Presentation
32 slides from Bridgewater Bancshares's earnings presentation, Feb 24, 2022
Slide 1: Investor Presentation Fourth Quarter 2021
Investor Presentation Fourth Quarter 2021
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 Sec urities Litigation Reform Act of 1995. Forward - looking statements include, without limitation, statements concerning plans, est
Slide 3: The Finest Entrepreneurial Bank in the Twin Cities: Company Overview
The Finest Entrepreneurial Bank in the Twin Cities Company Overview Branch - Light Model in Attractive Twin Cities Market Twin Cities MSA Name: Bridgewater Bancshares, Inc. Headquarters: St. Louis Park, MN Ticker: NASDAQ: BWB; BWBBP Assets: $3.5 Billion Loans: $2.8 Billion Deposits: $2.9 Billion Equ
Slide 4: Strategic Leadership Team with Broad Skill Sets and Industry Expertise
Strategic Leadership Team with Broad Skill Sets and Industry Expertise 4 Jerry Baack Chairman, CEO and President • Past 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 • Holding com
Slide 5: A Culture-Driven Organic Growth Story
A Culture - Driven Organic Growth Story 5 Consistent Profitability and Shareholder Return Truly Unconventional Culture Highly Efficient Business Model Robust Balance Sheet Growth Proactive Risk Management • Entrepreneurial spirit unlike the culture at a typical bank • New HQ with modern, open layout
Slide 6: Our Core Values
Our Core Values 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
Slide 7: An Award-Winning Workplace Culture
An Award - Winning Workplace Culture “I envisioned a bank where clients would notice a difference, where people would be challenged to grow both professionally and personally and where team members would be appreciated for sharing their skills and rewarded for a job well done.” Jerry Baack Chairman,
Slide 8: A Responsive Service Model
A Responsive Service Model Our clients can expect… • Responsive support and simple solutions • A local bank of choice in a market where many local banks have left • Flexibility, market expertise and strong network connections 8 “Bridgewater’s ability to adapt, keep pace and deliver unconventional re
Slide 9: A Commitment to Our Communities
A Commitment to Our Communities 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, 2020 Impacting the greater good
Slide 10: Attractive Twin Cities Market Built for Business
Attractive Twin Cities Market Built for Business 10 #1 Fortune 500 companies per capita (16) 1 Large Corporate Presence #1 State with highest average credit score (726) 2 Credit Worthy Population #1 Best place for women entrepreneurs 3 Women Entrepreneurs #5 State with educational achievement beyond
Slide 11: History of Organic Asset Growth Generation
History of Organic Asset Growth Generation 11 $1,184 $76 $929 $1,260 $1,617 $1,974 $2,269 $2,927 $3,478 2015 2016 2017 2018 2019 2020 2021 Acquired Assets Organic Proven ability to consistently generate 20%+ annual asset growth primarily in the Twin Cities market Asset growth has almost exclusively
Slide 12: Robust Loan Growth Isn't Unusual at BWB, It's Who We Are
Robust Loan Growth Isn’t Unusual at BWB, It’s Who We Are 12 $2,188 $2,793 $138 $26 $799 $1,001 $1,347 $1,665 $1,912 $2,326 $2,819 2015 2016 2017 2018 2019 2020 2021 PPP Loans (ex. PPP) Current BWB Loan Growth Catalysts Strong brand and service model in the Twin Cities market Expanding referral base
Slide 13: Well-Diversified Loan Portfolio With a Commercial Focus
Well - Diversified Loan Portfolio With a Commercial Focus 13 CRE NOO 29% Multifamily 32% C&D 10% 1 - 4 Family 11% CRE OO 4% C&I 13% PPP 1% Consumer & Other 0% $2.8B CRE NOO 27% Multifamily 21% C&D 15% 1 - 4 Family 18% CRE OO 6% C&I 13% Consumer & Other 0% $0.8B Evolution of Loan Mix by Type 2015 202
Slide 14: Well-Positioned for Continued Growth Opportunities Across Key Portfolios
Well - Positioned for Continued Growth Opportunities Across Key Portfolios 14 5 - 19 Units 15% 20 - 49 Units 27% 50 - 99 Units 32% 100+ Units 26% Size YoY Growth Go - to - Market Strategy Competitors Growth Outlook Key Stats Portfolio Diversification Multifamily CRE Nonowner Occupied C&I Constructio
Slide 15: Deposit Market Share Momentum in the Twin Cities Continues
Deposit Market Share Momentum in the Twin Cities Continues 15 Total Deposits – Minneapolis/St. Paul MSA 2012 2021 Rank Bank HQ Branches Deposits ($M) Market Share 1 Wells Fargo & Co. CA 100 79,407 $ 49.80% 2 U.S. Bancorp MN 100 43,088 $ 27.02% 3 Ameriprise Financial Inc. MN 1 5,107 $ 3.20% 4 TCF Fin
Slide 16: Deposit Growth With Improving Mix Provides Funding for Loan Growth
Deposit Growth With Improving Mix Provides Funding for Loan Growth 16 22% 23% 22% 24% 25% 27% 30% 17% 13% 13% 11% 14% 15% 18% 20% 23% 28% 26% 28% 26% 29% 25% 27% 22% 20% 20% 14% 10% 16% 14% 15% 19% 13% 18% 13% $762 $1,024 $1,339 $1,561 $1,823 $2,502 $2,946 2015 2016 2017 2018 2019 2020 2021 Interest
Slide 17: Scaling Enterprise Risk Management Across a Growing Organization
Scaling Enterprise Risk Management Across a Growing Organization 17 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 18: Credit Risk Management Supports Strong Loan Growth Momentum
Credit Risk Management Supports Strong Loan Growth Momentum 18 5 - Year Peak Net Charge - off Ratio vs. Peers 5 - Year Peak Nonperforming Assets 2 / Assets vs. Peers 0.02% BWB Peer Bank Median 1 0.15% 0.11% BWB Peer Bank Median 1 0.60% 1 Includes publicly - traded banks with total assets between $2
Slide 19: Credit Management Driving Superb Asset Quality Despite COVID Impact
Credit Management Driving Superb Asset Quality Despite COVID Impact 19 $5,888 $4,184 $2,695 $15,164 $22,641 3.43% 1.82% 1.01% 4.54% 5.45% 2017 2018 2019 2020 2021 Classified Assets 2021 increase primarily due to pandemic - related migration of two relationships from Watch to Classified in 4Q21 Class
Slide 20: Consistent Spread-Based Revenue Growth Model
Consistent Spread - Based Revenue Growth Model 20 $32,695 $42,118 $54,173 $64,738 $74,132 $87,964 $109,509 $1,872 $2,567 $2,536 $2,543 $3,826 $5,839 $5,309 $34,567 $44,685 $56,709 $67,281 $77,958 $93,803 $114,818 2015 2016 2017 2018 2019 2020 2021 Noninterest Income Net Interest Income 1 Amounts cal
Slide 21: Among the Most Efficient Banks in the Industry
44.4% 46.5% 47.4% 49.0% 42.0% 41.1% 41.7% 43.3% 40.5% 41.0% 60.5% 60.1% 59.8% 57.8% 57.4% 2017 2018 2019 2020 2021 Among the Most Efficient Banks in the Industry 21 BWB Adjusted 1 BWB Reported 1 An Efficiency Ratio Consistently Well Below Peers Peer Bank Median 2 1 Represents a Non - GAAP financial
Slide 22: Leveraging Technology to Support Growth
Leveraging Technology to Support Growth 22 Client - Facing Enhancements • Modern platforms and payment options for business and personal clients: • Commercial Center • P2P • A2A • E signature • Real - time alerts 10% YoY increase in digital users Infrastructure Improvements • Collaborative technolog
Slide 23: Investments in Technology Continue
Investments in Technology Continue 23 What’s Next? Enhanced Commercial Loan Origination Platform • Launching an industry - leading Commercial loan origination system in early 2022 • Focusing on the core strength in Commercial lending and customer responsiveness • Digitizing the end - to - end lendin
Slide 24: Proactive Capital Management
Proactive Capital Management 24 12.46% 14.55% 12.98% 14.58% 15.55% 9.49% 12.07% 11.39% 10.35% 9.36% 8.38% 11.23% 10.69% 9.28% 10.82% 8.26% 11.03% 10.65% 8.96% 8.91% 2017 2018 2019 2020 2021 Total Risk - Based Capital Common Equity Tier 1 Capital Capital Ratios Supported by Profitability and Capital
Slide 25: Putting Excess Liquidity to Work
Funding Source Available Balance Cash 131 $ Unpledged Securities 439 FHLB Advances 551 FRB Discount Window 126 Unsecured Lines of Credit 208 Secured Line of Credit 25 Total 1,480 $ Putting Excess Liquidity to Work 25 14.3% 14.2% 18.4% 16.4% 16.5% 18.9% 19.8% 26.2% $608 $750 $1,121 $1,480 2018 2019 2
Slide 26: 2022 Strategic Priorities – Building on Our Momentum
2022 Strategic Priorities – Building on Our Momentum 26 Continue Balance Sheet Growth Trajectory 1 2 3 4 Invest in Business Scalability to Support Growth Maintain Highly Efficient Operating Model Develop, Retain and Recruit Top Industry Talent • Generate mid - to high - teens loan growth, excluding
Slide 27: Corporate Strategy Driving Above-Peer Returns and Value Creation
Corporate Strategy Driving Above - Peer Returns and Value Creation 27 Truly Unconventional Culture Highly Efficient Business Model Robust Balance Sheet Growth Proactive Risk Management Our Culture Driven Organic Growth Story Return on Average Assets 1.16% 1.51% 1.49% 1.24% 1.45% 0.86% 1.18% 1.18% 0.
Slide 28: Appendix
Appendix BRIDGEWATER BANCSHARES, INC. =>
Slide 29: 4Q21 Earnings Highlights
4Q21 Earnings Highlights 29 1 Includes a $0.04 negative impact related to the payment of BWB’s first preferred stock quarterly dividend in 4Q21 2 Represents a Non - GAAP financial measure. See Appendix for Non - GAAP reconciliation • Gross loan balances up $107.5 million, or 15.7% annualized from 3Q
Slide 30: Efficiency Ratio Reconciliation
December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, December 31, Efficiency Ratio 2017 2017* 2018 2018* 2019 2019* 2020 2020* 2021 2021* 4Q21 4Q21* Noninterest Expense 25,496 $ 25,496 $ 31,562 $ 31,562 $ 36,932 $ 36,932 $ 45,387 $ 45,3
Slide 31: Reconciliation of Non-GAAP Financial Measures – PPNR
Reconciliation of Non - GAAP Financial Measures – PPNR 31 This presentation includes certain non - GAAP financial measures intended to supplement, not substitute for, comparable GAAP measu res. Reconciliations of these non - GAAP financial measures are provided below. The Company believes these non
Slide 32: Reconciliation of Non-GAAP Financial Measures – Diluted EPS, ROA, ROATCE
Reconciliation of Non - GAAP Financial Measures – Diluted EPS, ROA, ROATCE 32 This presentation includes certain non - GAAP financial measures intended to supplement, not substitute for, comparable GAAP measu res. Reconciliations of these non - GAAP financial measures are provided below. The Company
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