Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q2 2024 Earnings Presentation
26 slides from Bridgewater Bancshares's earnings presentation, Jul 25, 2024
Slide 1: Earnings Presentation Second Quarter 2024
: EARNINGS PRESENTATION SECOND QUARTER 2024 i 'BRIDGEWATER BANCSHARES INC.
Slide 2: Disclaimer
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: 2Q24 Earnings Highlights
2Q24 Earnings Highlights Diluted Return on Return on Avg. Tangible Efficiency Nonperforming Assets EPS Average Assets Common Equity1 Ratio1 to Total Assets $0.26 0.70% 7.80% 58.7% 0.01% • Net interest income increased $365K, or 1.5%, from 1Q24, the first QoQ increase since 3Q22 NIM Stability Support
Slide 4: Consistent Tangible Book Value Per Share Outperformance
Consistent Tangible Book Value Per Share Outperformance Tangible Book Value Per Share1 Growth for 30 Consecutive Quarters 199% 66% 1Q17 2Q17 1Q18 2Q18 1Q19 2Q19 1Q20 2Q20 1Q21 2Q21 1Q22 2Q22 1Q23 2Q23 1Q24 2Q24 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 4Q23 3Q17 3Q18 3Q19 3Q20 3Q21 3Q22 3Q23 BWB Peer Bank
Slide 5: Stable NIM Supports Net Interest Income Growth
Stable NIM Supports Net Interest Income Growth Net Interest Income and Margin Trends Net Interest Margin Drivers 2.40% 2.32% 2.27% 2.24% 2.24% $25,872 $25,421 $25,314 $24,631 $24,996 $941 $914 $751 $608 $767 Net Interest Income / Net Interest Margin Commentary $24,931 $24,507 $24,563 $24,229 $24,023
Slide 6: Higher Asset Yields Drive NIM Stabilization
Higher Asset Yields Drive NIM Stabilization Loan Repricing Increased Growth of High-Yielding Securities Portfolio 5.50% 4.80% 4.94% 5.26% 5.33% 5.38% 4.63% 5.19% 4.24% 4.39% 5.42% $670 $673 5.09% 5.25% 5.31% 5.16% $630 $3,717 $3,723 $3,726 $3,729 $3,772 $595 $595 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4
Slide 7: Revenue Growth Drives Profitability Stabilization
Revenue Growth Drives Profitability Stabilization Pre-Provision Net Revenue (PPNR) Stabilization Revenue Growth for the First Time Since 3Q22 1.16% 1.01% 0.96% 0.95% $35,482 0.94% $34,180 $34,631 $1,387 0.88% $1,650 $1,738 0.85% $30,510 0.77% $1,943 $27,287 $27,147 $26,723 $26,759 0.69% 0.70% $26,18
Slide 8: Well-Controlled Expenses
Well-Controlled Expenses Highly Efficient Business Model Well-Controlled Expenses YTD Despite Challenging Revenue Environment Peer median efficiency ratio of 63%1 in 1Q24 Continuing to invest in people and technology $15,740 $15,539 58.8% 58.2% 58.7% $15,237 $15,189 56.1% $14,274 52.3% $2,777 $2,763
Slide 9: Deposit Growth Remains on Track YTD
Deposit Growth Remains on Track YTD Deposit Growth Continues to Track With Loan Growth YTD • YTD deposit balances up 5.3% annualized $3,710 $3,807 $3,808 • YTD core deposit1 balances up 3.0% annualized $3,676 $3,578 • Modest growth in noninterest bearing deposits in 2Q24 28% 26% 27% • Core deposit g
Slide 10: Higher Loan Balances as Demand Continues
Higher Loan Balances as Demand Continues YTD Loan Growth Tracks With Expectations $3,784 $3,800 • 2Q24 loan balances up $16.2M, or 1.7% annualized $3,736 $3,722 $3,724 • YTD loan balances up $76.1M, or 4.1% annualized • 2Q24 loan growth moderated as payoffs increased • Loan-to-deposit ratio of 99.8%
Slide 11: New Loan Originations Remain Strong as Payoffs Increase
New Loan Originations Remain Strong as Payoffs Increase 2Q24 Loan Growth Waterfall New Originations Continue to Exceed Advances $158 $158 $163 $131 $141 $67 $87 $87 $50 $84 $96 $91 $71 $71 $47 2Q23 3Q23 4Q23 1Q24 2Q24 New Originations Advances Loan Payoffs Increase $166 $147 $150 $60 $45 $99 $45 $10
Slide 12: Loan Portfolio to Reprice Higher Even If Interest Rates Decline
Loan Portfolio to Reprice Higher Even If Interest Rates Decline Fixed-Rate Portfolio Variable-Rate Portfolio Adjustable-Rate Portfolio ($2.6B) ($593M) ($597M) Adjustable-Rate Years to Maturity Variable-Rate Loan Floors Repricing/Maturity Schedule Loan Portfolio Mix $190 $576 $581 $118 $152 $341 $377
Slide 13: Managing Multifamily and Office-Related Risk
Managing Multifamily and Office-Related Risk Strong Multifamily Track Record in Stable Twin Cities Market Well-Managed CRE NOO Office Exposure2 Average Weighted NPAs/ NCOs Percent of Total Weighted Average Average Loan Size Loan Size Average LTV Loans (since 2005) Loans LTV $3.3M 67% 0.00% $62K 5.3%
Slide 14: Superb Asset Quality Continues
Superb Asset Quality Continues Allowance for Credit Losses Nonperforming Assets2 Net Charge-Offs Well-reserved compared to peer median Consistently low NPA levels Cumulative NCOs of $532K since 2019 ACL/Loans of 1.13%1 $51,949 $51,347 $50,701 $50,585 $50,494 $919 $778 $749 $678 1.36% 1.36% 1.36% 1.3
Slide 15: Watch and Substandard Loans Remain at Low Levels
Watch and Substandard Loans Remain at Low Levels Watch List Loans Substandard Loans $33,821 $35,621 $35,858 $33,829 $33,908 $30,436 $27,215 $26,877 $26,485 $21,624 2Q23 3Q23 4Q23 1Q24 2Q24 2Q23 3Q23 4Q23 1Q24 2Q24 C&I CRE OO 1.6% C&D 1-4 2.9% 0.2% Family CRE NOO 1.9% Other CRE OO 7.1% 5.7% Substanda
Slide 16: Strong Capital Ratios
Strong Capital Ratios Building Capital in the Current Environment Capital Priorities 13.50% 13.88% 13.97% 14.00% 14.16% 1 Organic Growth Drive profitability by supporting a proven organic loan growth engine 9.62% 9.66% 9.66% 9.47% 9.57% 2 Share Repurchases 9.07% 9.16% 9.21% 9.41% Opportunistically r
Slide 17: Near-Term Expectations
Near-Term Expectations • Low-to-mid-single digit loan growth for full-year 2024 Balance Sheet • Focus on aligning loan growth with core deposit growth Growth • Target loan-to-deposit ratio between 95% and 105% • Continued NIM stabilization in the current interest rate environment Net Interest • Posi
Slide 18: 2024 Strategic Priorities
2024 Strategic Priorities Generate Incremental Optimize Balance Sheet for Continue to Gain Loan and Scale ERM Function and Operational Efficiencies While Longer Term Profitable Growth Deposit Market Share Monitor Asset Quality Risks Investing in the Business • Opportunistically gather core • Expand
Slide 19: Appendix
——™ BRIDGEWATER BANCSHARES, INC. APPENDIX
Slide 20: Interest Rate Sensitivity
Interest Rate Sensitivity Estimated Change in NII From Loan Portfolio Considerations Immediate Interest Rate Shocks Liability-sensitive balance sheet well positioned for potential rate cuts and a • Loan portfolio most sensitive to changes in the 3- to 5-year portion of the normalizing yield curve yi
Slide 21: Well-Diversified Loan Portfolio with Multifamily Expertise
Well-Diversified Loan Portfolio with Multifamily Expertise Consumer & Other 0.2% 2Q24 Loan Growth by Type (vs. 1Q24) C&I $36 CRE OO C&I 4.9% 13.6% CRE Nonowner Occupied $34 CRE NOO 28.2% Multifamily $15 Loan Mix 1-4 Family Mortgage $3.8 by Type 11.0% CRE Owner Occupied $3 Billion C&D Consumer & Othe
Slide 22: High Quality Securities Portfolio
High Quality Securities Portfolio Securities Available for Sale Portfolio (dollars in millions) Derivatives Portfolio Offsetting AOCI Impact (dollars in thousands) $28,203 $26,708 $633 $604 $601 $538 $553 18% 20% 21% 14% 18% 22% 21% 21% 22% 23% $(15,320) 22% 21% $(20,908) 24% 22% 22% 41% 38% 38% 38%
Slide 23: Ample Liquidity and Borrowing Capacity
Ample Liquidity and Borrowing Capacity Liquidity Position with 2.6x Coverage of Uninsured Deposits Significantly Enhanced Liquidity Position Since 2022 $2,249 Available Balance $2,234 $2,222 $2,181 Funding Source 6/30/2024 12/31/2022 Change Cash and Cash Equivalents $ 97 $ 48 $ 49 $1,962 Unpledged S
Slide 24: Reconciliation of Non-GAAP Financial Measures – Efficiency, TCE, Core Loan Yield, and ROATCE
Reconciliation of Non-GAAP Financial Measures – Efficiency, TCE, Core Loan Yield, and ROATCE As of and for the quarter ended, As of and for the quarter ended, June 30, September 30, December 31, March 31, June 30, June 30, Efficiency Ratio 2023 2023 2023 2024 2024 ROATCE 2024 Noninterest Expense $ 1
Slide 25: Reconciliation of Non-GAAP Financial Measures – PPNR
Reconciliation of Non-GAAP Financial Measures – PPNR As of and for the quarter ended, June 30, September 30, December 31, March 31, June 30, Pre-Provision Net Revenue 2023 2023 2023 2024 2024 Noninterest Income $ 1,415 $ 1,726 $ 1,409 $ 1,550 $ 1,763 Less: (Gain) Loss on Sales on Securities (50) - 2
Slide 26: Reconciliation of Non-GAAP Financial Measures – Tangible Book Value
Reconciliation of Non-GAAP Financial Measures – Tangible Book Value As of and for the quarter ended, December 31, March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, Tangible Book Value Per Share 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 Book
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