Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q3 2022 Earnings Presentation
25 slides from Bridgewater Bancshares's earnings presentation, Oct 27, 2022
Slide 1: Earnings Presentation Third Quarter 2022
EARNINGS PRESENTATION THIRD 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: 3Q22 Earnings Highlights
1 Represents a Non - GAAP financial measure. See Appendix for Non - GAAP reconciliation 3 • Gross loan balances up $154.2 million, or 19.0% annualized, from 2Q22 • Investment securities balances up $59.4 million, or 48.9% annualized, from 2Q22 • Deposit balances up $103.1 million, or 12.8% annualize
Slide 4: Strong Profitability and Revenue Generation
PPNR ROA 1 4 Strong Profitability and Revenue Generation Steady PPNR Trends 1 Represents a Non - GAAP financial measure. See Appendix for Non - GAAP reconciliation Dollars in thousands Consistent Revenue Growth $28,673 $29,153 $30,180 $32,530 $34,095 $1,410 $1,288 $1,557 $1,650 $1,387 $30,083 $30,44
Slide 5: Net Interest Income Momentum Supported by Robust Loan Growth
$25,433 $26,634 $27,874 $30,237 $32,599 $1,753 $1,057 $563 $263 $96 $1,487 $1,462 $1,743 $2,030 $1,400 $28,673 $29,153 $30,180 $32,530 $34,095 3.54% 3.51% 3.60% 3.58% 3.53% 3.22% 3.25% 3.34% 3.34% 3.38% 3Q21 4Q21 1Q22 2Q22 3Q22 Core Net Interest Margin 1,2 Net Interest Margin 1 5 1 Amounts calculate
Slide 6: Net Interest Income Drivers Impacted by Rising Rate Environment
$2,039 $2,008 $2,138 $2,162 $2,253 $784 $861 $822 $882 $992 $145 $136 $145 $277 $272 $2,968 $3,005 $3,105 $3,321 $3,517 0.65% 0.61% 0.59% 0.63% 0.93% 3Q21 4Q21 1Q22 2Q22 3Q22 $2,655 $2,756 $2,900 $3,108 $3,266 4.65% 4.49% 4.45% 4.45% 4.59% 4.28% 4.20% 4.15% 4.17% 4.42% 3Q21 4Q21 1Q22 2Q22 3Q22 Spot
Slide 7: Estimated Change in NII From Immediate Interest Rate Shocks
7 Estimated Change in NII From Immediate Interest Rate Shocks +200 bps +100 bps - 100 bps (3.6)% (1.7)% +3.1% • 3Q22 interest rate sensitivity position impacted by increased balances of overnight borrowings and higher beta deposits to help support continued robust loan growth • Actively managing the
Slide 8: Loan Portfolio Repricing
12% 13% 7% 25% 20% 23% $66 $74 $43 $142 $113 $129 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% $522 $522 $522 $522 $522 At or Above Floor (9/30/22) Up 25 bps Up 50 bps Up 75 bps Up 100+ bps Fixed , 64.9% Variable , 18.3% Adjustable , 16.8% 8
Slide 9: Adjusted Efficiency Ratio Consistently in the Low 40% Range
$8,309 $7,966 $8,694 $8,977 $9,449 $942 $939 $1,085 $1,042 $1,086 $923 $860 $875 $950 $1,022 $2,480 $2,694 $2,854 $2,783 $2,600 $582 $13,236 $12,459 $13,508 $13,752 $14,157 3Q21 4Q21 1Q22 2Q22 3Q22 1.49% 1.43% 1.55% 1.47% 1.41% 0.09% 0.02% 0.01% 0.00% 0.01% 1.58% 1.45% 1.56% 1.47% 1.42% 43.9% 40.8%
Slide 10: Robust Loan Growth Continues
$2,712 $2,819 $2,988 $3,226 $3,380 3Q21 4Q21 1Q22 2Q22 3Q22 Dollars in millions 10 • Moderated loan growth in 3Q22 of $154.2 million, or 19.0% annualized • 26.6% annualized YTD loan growth • Expect continued loan growth moderation to the mid - teens range: • Loan pipelines and overall demand remain
Slide 11: A Proven Loan Growth Engine
11 Dollars in millions • As expected, levels of new originations and payoffs/paydowns slowed • Gross loan portfolio grew $154 million from 2Q22 despite a 22% quarter - over - quarter decline in new originations and advances • Loan pipeline remains strong and diversified among various asset classes A
Slide 12: Well-Diversified Loan Portfolio
CRE NOO 26.7% Multifamily 36.4% C&D 9.9% 1 - 4 Family 10.1% CRE OO 4.5% C&I 12.2% Consumer & Other 0.2% PPP 0.0% 12 Dollars in millions Loan Portfolio Composition Loan Mix by Type $3.4 Billion 3Q22 Loan Growth by Type (vs. 2Q22) Well - Diversified Loan Portfolio • 3Q22 loan growth driven by multifam
Slide 13: Multifamily Expertise Driving Consistent Growth and Performance
13 Dollars in millions Loan Portfolio Composition Multifamily Expertise Driving Consistent Growth and Performance Go - to - Market Strategy $865 $910 $1,013 $1,088 $1,231 3Q21 4Q21 1Q22 2Q22 3Q22 Multifamily Loans Competitors Growth Outlook Key Stats Risk Profile Portfolio Diversification JPMorgan C
Slide 14: Deposit Growth and Stable Mix Continue to Support Loan Portfolio
30% 30% 28% 30% 29% 17% 18% 20% 16% 15% 28% 29% 29% 30% 33% 11% 10% 9% 9% 9% 14% 13% 14% 15% 14% $2,854 $2,946 $3,036 $3,202 $3,305 3Q21 4Q21 1Q22 2Q22 3Q22 14 • Core deposit growth trend reflects successful new client and banker acquisition initiatives • 19.8% YoY growth in core, non - maturity dep
Slide 15: Superb Asset Quality Continues
$7,742 $22,641 $18,611 $26,991 $30,767 1.93% 5.45% 4.32% 5.70% 6.26% 3Q21 4Q21 1Q22 2Q22 3Q22 $(10) $31 $3 $6 $(280) 0.00% 0.00% 0.00% 0.00% (0.03)% 3Q21 4Q21 1Q22 2Q22 3Q22 $734 $722 $706 $688 $663 0.02% 0.02% 0.02% 0.02% 0.02% 3Q21 4Q21 1Q22 2Q22 3Q22 $38,901 $40,020 $41,692 $44,711 $46,491 1.43%
Slide 16: Watch and Classified Assets Remain Primarily Pandemic-Related
C&I , 23.9% CRE NOO - Senior Housing , 46.7% CRE NOO Retail , 26.4% 1 - 4 Family , 3.0% C&I 33.4% CRE NOO Hotels 50.4% CRE NOO Retail 9.5% CRE OO 5.4% C&D 0.4% 1 - 4 Family 0.9% $ 31 Million 16 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Watch List By Loan Type Classified List By Loa
Slide 17: Capital and Liquidity Positions Remain Strong
17.5% 16.4% 14.1% 13.5% 14.0% 24.4% 26.2% 25.9% 25.0% 20.1% $1,418 $1,480 $1,444 $1,498 $1,409 3Q21 4Q21 1Q22 2Q22 3Q22 10.70% 10.82% 10.78% 10.33% 9.98% 9.47% 9.36% 9.13% 8.50% 8.47% 15.93% 15.55% 15.02% 13.98% 13.78% 3Q21 4Q21 1Q22 2Q22 3Q22 17 Dollars in millions On & Off - Balance Sheet Liquidit
Slide 18: Track Record of Tangible Book Value Growth
$298 $310 $310 $305 $313 8.81% 8.91% 8.60% 7.87% 7.57% 3Q21 4Q21 1Q22 2Q22 3Q22 Tangible Common Equity to Tangible Assets 1 $4.52 $5.40 $7.22 $8.33 $9.31 $10.98 $11.33 2016 2017 2018 2019 2020 2021 3Q22 18 Strong Capital and Liquidity Tangible Book Value Per Share 1 Growth Tangible Common Equity 1 R
Slide 19: An Award-Winning Workplace Culture
19 An Award - Winning Workplace Culture New Corporate Headquarters Progressive Pay and Benefits Health and Wellness Committee Diversity, Equity and Inclusion Committee Volunteer Paid Time Off Modern, open design with an entrepreneurial spirit tailor - made for team building and collaboration Increas
Slide 20: 2022 Strategic Priorities – Building on Our Momentum
2022 Strategic Priorities – Building on Our Momentum Continue Balance Sheet Growth Trajectory 1 2 3 4 20 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 21: Appendix
APPENDIX 1S BRIDGEWATER BANCSHARES INC.
Slide 22: Reconciliation of Non-GAAP Measures – Annual Tangible Common Equity
22 Dollars in thousands Reconciliation of Non - GAAP Financial Measures – Annual Tangible Common Equity & Tangible Common Equity/Tangible Assets 2016 2017 2018 2019 2020 2021 Common Equity 115,366 $ 137,162 $ 220,998 $ 244,794 $ 265,405 $ 379,272 $ Less: Preferred Stock - - - - - (66,514) Less: Inta
Slide 23: Reconciliation of Non-GAAP Measures – Profitability, TCE and TBV
23 * Efficiency Ratio is adjusted to exclude the historic tax credit amortization and debt prepayment fees Dollars in thousands Reconciliation of Non - GAAP Financial Measures – Profitability, TCE and TBV Efficiency Ratio September 30, 2021 September 30, 2021* December 31, 2021 December 31, 2021* Ma
Slide 24: Reconciliation of Non-GAAP Measures – PPNR
24 Dollars in thousands Reconciliation of Non - GAAP Financial Measures – PPNR Pre-Provision Net Revenue September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 Noninterest Income 1,410 $ 1,288 $ 1,557 $ 1,650 $ 1,387 $ Less: Gain on sales on Securities (48) - - (52) - T
Slide 25: Reconciliation of Non-GAAP Measures – Core NIM
25 Dollars in thousands Reconciliation of Non - GAAP Financial Measures – Core NIM Core Net Interest Margin September 30, 2021 December 31, 2021 March 31, 2022 June 30, 2022 September 30, 2022 Net Interest Income (Tax-Equivalent Basis) 28,880 $ 29,388 $ 30,438 $ 32,806 $ 34,418 $ Less: Loan Fees (1,
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