Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q4 2022 Earnings Presentation
26 slides from Bridgewater Bancshares's earnings presentation, Jan 25, 2023
Slide 1: Earnings Presentation Fourth Quarter 2022
EARNINGS PRESENTATION FOURTH QUARTER 2022
Slide 2: Forward-Looking Statements
2 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, estimates, c
Slide 3: 2022 Full Year Earnings Highlights
1 Represents a Non - GAAP financial measure. See Appendix for Non - GAAP reconciliation 3 • Gross loan balances up $750.0 million, or 26.6%, from 2021 • Investment securities balances up $109.3 million, or 24.9%, from 2021 • Deposit balances up $470.3 million, or 16.0%, from 2021 Diluted EPS Efficie
Slide 4: 4Q22 Earnings Highlights
1 Represents a Non - GAAP financial measure. See Appendix for Non - GAAP reconciliation 4 • Gross loan balances up $189.4 million, or 22.2% annualized, from 3Q22 • Investment securities balances up $6.6 million, or 4.8% annualized, from 3Q22 • Deposit balances up $111.5 million, or 13.4% annualized,
Slide 5: Net Interest Income Impacted by Margin Pressure
$26,634 $27,874 $30,237 $32,599 $31,745 $1,057 $563 $263 $96 $48 $1,462 $1,743 $2,030 $1,400 $1,100 $29,153 $30,180 $32,530 $34,095 $32,893 3.51% 3.60% 3.58% 3.53% 3.16% 3.25% 3.34% 3.34% 3.38% 3.05% 4Q21 1Q22 2Q22 3Q22 4Q22 Core Net Interest Margin 1,2 Net Interest Margin 1 5 1 Amounts calculated o
Slide 6: Funding Costs Rising Faster Than Loan Yields
$2,008 $2,138 $2,162 $2,253 $2,332 $861 $822 $882 $992 $943 $136 $145 $277 $272 $527 $3,005 $3,105 $3,321 $3,517 $3,802 0.61% 0.59% 0.63% 0.93% 1.67% 4Q21 1Q22 2Q22 3Q22 4Q22 $2,756 $2,900 $3,108 $3,266 $3,482 4.49% 4.45% 4.45% 4.59% 4.87% 4.20% 4.15% 4.17% 4.42% 4.74% 4Q21 1Q22 2Q22 3Q22 4Q22 $2,86
Slide 7: Strong Profitability and Revenue Generation
PPNR ROA 1 7 Strong Profitability and Revenue Generation Highly Profitable Franchise 1 Represents a Non - GAAP financial measure. See Appendix for Non - GAAP reconciliation Dollars in thousands Strong Revenue Growth $29,153 $30,180 $32,530 $34,095 $32,893 $1,288 $1,557 $1,650 $1,387 $1,738 $30,441 $
Slide 8: Efficiency Ratio Consistently in the Low 40% Range
$7,966 $8,694 $8,977 $9,449 $9,821 $939 $1,085 $1,042 $1,086 $1,177 $860 $875 $950 $1,022 $1,044 $2,694 $2,854 $2,783 $2,600 $3,161 $12,459 $13,508 $13,752 $14,157 $15,203 4Q21 1Q22 2Q22 3Q22 4Q22 1.45% 1.56% 1.47% 1.42% 1.42% 40.8% 42.4% 40.2% 39.8% 43.8% 4Q21 1Q22 2Q22 3Q22 4Q22 NIE / Avg. Assets
Slide 9: Continued Robust Loan Growth
$2,819 $2,988 $3,226 $3,380 $3,569 4Q21 1Q22 2Q22 3Q22 4Q22 Dollars in millions 9 • 4Q22 loan growth of $189.4 million, or 22.2% annualized • Overall loan demand has declined as fewer deals are making financial sense due to the higher interest rate environment • Strong brand presence and relationshi
Slide 10: Loan Originations and Payoffs Are Slowing
10 Dollars in millions • Continued strong loan growth impacted by reduced levels of payoffs and paydowns, which were down 37% from 4Q21 • Year - over - year decline in payoffs and paydowns more than offset the decline in loan originations Down 13% compared to 4Q21 Down 37% compared to 4Q21 Decrease
Slide 11: Well-Diversified Loan Portfolio
CRE NOO 26.5% Multifamily 36.6% C&D 10.3% 1 - 4 Family 10.0% CRE OO 4.2% C&I 12.2% Consumer & Other 0.2% 11 Dollars in millions Loan Portfolio Composition Loan Mix by Type $3.6 Billion 4Q22 Loan Growth by Type (vs. 3Q22) Well - Diversified Loan Portfolio • Strong 4Q22 loan growth across the portfoli
Slide 12: Deposit Pressures Increase as Interest Rates Continue to Rise
30% 28% 30% 29% 26% 18% 20% 16% 15% 13% 29% 29% 30% 33% 30% 10% 9% 9% 9% 8% 13% 14% 15% 14% 23% $2,946 $3,036 $3,202 $3,305 $3,417 4Q21 1Q22 2Q22 3Q22 4Q22 12 • 4Q22 deposit growth of $111.5 million, or 13.4% annualized • Loan - to - deposit ratio of 104.5% 1 Calculated as the change in ending depos
Slide 13: Superb Asset Quality Continues
$22,641 $18,611 $26,991 $30,767 $28,049 5.45% 4.32% 5.70% 6.26% 5.52% 4Q21 1Q22 2Q22 3Q22 4Q22 $31 $3 $6 $(280) $(5) 0.00% 0.00% 0.00% (0.03)% 0.00% 4Q21 1Q22 2Q22 3Q22 4Q22 $722 $706 $688 $663 $639 0.02% 0.02% 0.02% 0.02% 0.01% 4Q21 1Q22 2Q22 3Q22 4Q22 13 Asset Quality Classified Assets Nonperformi
Slide 14: Watch and Classified Assets
C&I 29.4% C&D 2.2% Multifamily 10.1% CRE NOO Senior Housing 32.9% CRE NOO Retail 18.5% CRE NOO Office 4.8% 1 - 4 Family 2.1% C&I 70.1% CRE NOO Hotels 12.0% CRE NOO Retail 10.3% CRE OO 5.8% C&D 0.4% 1 - 4 Family 1.4% $ 28 Million 14 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Watch Li
Slide 15: Capital and Liquidity Positions Remain Strong
16.4% 14.1% 13.5% 14.0% 13.7% 26.2% 25.9% 25.0% 20.1% 18.3% $1,480 $1,444 $1,498 $1,409 $1,393 4Q21 1Q22 2Q22 3Q22 4Q22 10.82% 10.78% 10.33% 9.98% 9.55% 9.36% 9.13% 8.50% 8.47% 8.40% 15.55% 15.02% 13.98% 13.78% 13.15% 8.91% 8.60% 7.87% 7.57% 7.48% 4Q21 1Q22 2Q22 3Q22 4Q22 15 Dollars in millions On &
Slide 16: 2023 Near-Term Expectations
16 • Balance sheet growth to slow from 2022 levels • High single - digit to low double - digit loan growth in 2023 – focus on aligning loan growth more closely with core deposit growth over the course of the year • Target loan - to - deposit ratio between 95% and 105% Balance Sheet Growth Near - Ter
Slide 17: 2022 Strategic Priorities – Building on Our Momentum
2022 Strategic Priorities – Building on Our Momentum Continue Balance Sheet Growth Trajectory 1 2 3 4 17 Invest in Business Scalability to Support Growth Maintain Highly Efficient Operating Model Recruit, Develop and Retain Top Industry Talent • Generate mid - to high - teens loan growth in 2022 • T
Slide 18: 2023 Strategic Priorities – Positioning for Long-Term Success
2023 Strategic Priorities – Positioning for Long - Term Success Manage High Quality Balance Sheet Growth 1 2 3 4 18 Maintain High Efficiency While Investing in the Business Proactively Assess and Monitor Asset Quality Risks Implement Longer Term Strategic Readiness Initiatives • Slower pace of balan
Slide 19: Appendix
APPENDIX 1S BRIDGEWATER BANCSHARES INC.
Slide 20: Estimated Change in NII From Interest Rate Shocks
20 Estimated Change in NII From Immediate Interest Rate Shocks +200 bps +100 bps - 100 bps (3.6)% (1.7)% +3.1% • Actively managing the balance sheet to drive sustained profitability over time, regardless of the rate environment Loan Portfolio Considerations • Loan portfolio most sensitive to changes
Slide 21: Loan Portfolio Repricing
13% 10% 11% 20% 25% 21% $78 $61 $63 $121 $149 $125 Less Than 1 Year 1 to 2 Years 2 to 3 Years 3 to 4 Years 4 to 5 Years 5+ Years 100% 100% 100% 100% 100% $526 $526 $526 $526 $526 At or Above Floor (12/31/22) Up 25 bps Up 50 bps Up 75 bps Up 100+ bps Fixed , 65.7% Variable , 17.5% Adjustable , 16.8%
Slide 22: Track Record of Tangible Book Value Growth
$310 $310 $305 $313 $325 8.91% 8.60% 7.87% 7.57% 7.48% 4Q21 1Q22 2Q22 3Q22 4Q22 Tangible Common Equity to Tangible Assets 1 $4.52 $5.40 $7.22 $8.33 $9.31 $10.98 $11.69 2016 2017 2018 2019 2020 2021 2022 22 Strong Capital and Liquidity Tangible Book Value Per Share 1 Growth Tangible Common Equity 1 R
Slide 23: Reconciliation of Financial Measures – Annual TCE
23 Dollars in thousands Reconciliation of Non - GAAP Financial Measures – Annual Tangible Common Equity & Tangible Common Equity/Tangible Assets 2016 2017 2018 2019 2020 2021 2022 Common Equity 115,366 $ 137,162 $ 220,998 $ 244,794 $ 265,405 $ 379,272 $ 394,064 $ Less: Preferred Stock - - - - - (66,
Slide 24: Reconciliation of Financial Measures – Profitability, TCE and TBV
24 * Efficiency Ratio is adjusted to exclude the historic tax credit amortization Dollars in thousands Reconciliation of Non - GAAP Financial Measures – Profitability, TCE and TBV Efficiency Ratio December 31, 2021 December 31, 2021* March 31, 2022 March 31, 2022* June 30, 2022 June 30, 2022* Septem
Slide 25: Reconciliation of Financial Measures – PPNR
25 Dollars in thousands Reconciliation of Non - GAAP Financial Measures – PPNR Pre-Provision Net Revenue December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Noninterest Income 1,288 $ 1,557 $ 1,650 $ 1,387 $ 1,738 $ Less: Gain on Sales on Securities - - (52) - (30) To
Slide 26: Reconciliation of Financial Measures – Core NIM
26 Dollars in thousands Reconciliation of Non - GAAP Financial Measures – Core NIM Core Net Interest Margin December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Net Interest Income (Tax-Equivalent Basis) 29,388 $ 30,438 $ 32,806 $ 34,418 $ 33,260 $ Less: Loan Fees (1,4
Bridgewater Bancshares — Q4 2022 Earnings Presentation on 6ix