Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q1 2020 Earnings Presentation
35 slides from Bridgewater Bancshares's earnings presentation, Apr 30, 2020
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation Fourth Quarter 2019
Slide 2: Disclaimer: Forward-Looking Statements
2 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, estimate
Slide 3: Response to COVID-19
3 Response to COVID-19 • Pandemic team meeting regularly to ensure Business Continuity Plan in place • 85% of team working from home with enhanced technology and security • Hygiene and distancing actions taken in branches to ensure team’s safety • All COVID-19 related medical treatment covered under
Slide 4: Response to COVID-19: PPP loans and modifications
4 Response to COVID-19 • Secured SBA approval for over 900 loans • Average Loan size of $189k and average fee of 3.25% • Originated 314 new client loans totaling approximately $49MM • $267MM (137 loans) including: • Interest-Only Modifications • $125MM (95 loans) with I/O period from 1 to 6 months •
Slide 5: COVID-19 Impacted Industries
5 Dollars in thousands COVID-19 Impacted Industries Industry Type Total Principal Balance Unfunded Commitments # of Loans % of Gross Loans Investor CRE - Retail $135,998 $1,349 83 6.8% Hospitality $41,350 $759 13 2.1% Restaurant $28,851 $621 52 1.5% • Primarily secured by real estate or all business
Slide 6: Our History
-_—™s BRIDGEWATER Our History BANCSHARES, INC. 2008 ott Aor: iomingon ote ‘arbeiness Boring, en 2014 2016 r i 200 2a ty Ase srpae $800 maton aeecanies nent: rate often aes
Slide 7: Why Bridgewater Bank?
PIScE en Why Bridgewater Bank? BANCSHARES, INC. FOUNDED BY, FUNDED BY e FOCUSED ON sulienie Eke EXPERTISE IN COMMERCIAL REAL ESTATE WITH A NICHE IN MULTI FAMILY LENDING EXPERIENCED & TALENTED STRATEGIC LEADERSHIP TEAM WITH eee INDUSTRY EXPERIENCE ORGANIZATIONAL FOCUS ON PRODUCTIVITY AND RISK I AMRSE
Slide 8: Differentiators
Commercial business expertise Multifamily niche Efficient branch footprint Strong brand with extensive referral network Responsive support and simple solutions Experienced and non-hierarchical leadership Culture based on accountability Entrepreneurial Highly efficient team Very low nonperforming ass
Slide 9: First Quarter 2020 Financial Results
9 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. * Change in basis points for profitability metrics First Quarter 2020 Financial Results Q1 2020 Q4 2019 % Change Q1 2019 % Change Income Statement Summary Interest Income 27,468 $ 27,419 $ 0.2% 24,267 $ 13.2% Inte
Slide 10: Strong Capital and Liquidity
10 1 Strong Capital and Liquidity Borrowing Capacity Total Principal Balance FHLB Remaining Capacity $121,302 FRB Discount Window 111,178 Unsecured Lines with Other Banks 105,000 Total Borrowing Capacity $337,480 • $368.8 million in on-balance sheet liquidity (includes unpledged marketable securitie
Slide 11: Compound Tangible Book Value
11 * Tangible common equity to tangible assets is a Non-GAAP financial measure. See appendix for Non-GAAP reconciliation. Compound Tangible Book Value
Slide 12: Core Earnings Capital Generation
12 *Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. Dollars in thousands Core Earnings Capital Generation
Slide 13: Stable Operating Efficiency
13 *Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. Dollars in thousands Stable Operating Efficiency
Slide 14: Net Interest Margin
14 *Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21% Dollars in thousands Net Interest Margin • 17.3% YoY growth in Net Interest Income • Earning Asset Yields declined 11 bps over the linked-quarter driven by historically low and flat yield curve • Cost of interes
Slide 15: Net Interest Drivers
15 Dollars in thousands Net Interest Drivers Spot Rate 3.26% Spot Rate 4.71% Spot Rate 1.37% Spot Rate 1.21%
Slide 16: Loan Portfolio – Interest Rate Impact
16 *Data as of 3/31/2020 Dollars in thousands Loan Portfolio – Interest Rate Impact Index Rate At Floor 0 to -25 bps -26 to 50 bps -51 to -75 bps -76 to -100 bps > -100 bps Total PRIME 315,934 15,631 1,825 644 - 614 334,650 Libor 122,957 193 - 12,957 18,273 - 154,380 1 Yr CMT 9,611 ---- 0 9,611 2 Yr
Slide 17: Deposit Repricing Opportunities
17 Dollars in thousands Deposit Repricing Opportunities $406 million in time deposits maturing in the next 5 quarters at a blended cost of 1.94% $300 million, or 23%, of non-maturity deposit portfolio still earning a rate >1.00% as of 3/31/20
Slide 18: Deposit Growth
18 Deposit Growth • 17.6% YoY growth in noninterest bearing deposits • Internal Deposit Growth Plan traction • Rolled out The Bridge, a robust treasury management platform aimed at enhancing our current user experience and servicing more sophisticated clientele • Capitalizing on unique opportunity t
Slide 19: Historical Deposit Composition
19 Dollars in thousands Historical Deposit Composition • Decrease in composition of wholesale funding • Actively onboarding new clients displaced from continued M&A disruption • Average Core Deposits per branch surpassed $200 million
Slide 20: Loan Growth
20 Loan Growth • Continued focus on profitable loan growth and disciplined pricing • Meaningful new and diverse client acquisition opportunities generated through PPP • Average Commercial line utilization at 57% in Q1 2020 is consistent with Q4 2019
Slide 21: Historical Loan Composition
21 Dollars in thousands Historical Loan Composition • Strong organic growth • Prominent multifamily lender in Twin Cities • Addition of C&I lending expertise as a result of M&A disruption
Slide 22: CRE Portfolio Diversification
22 Dollars in thousands CRE Portfolio Diversification • Robust CRE risk management system • Well diversified CRE portfolio • 88% of CRE portfolio loans located within Twin Cities MSA Total Construction & Development 13.6% Total Multifamily39.7% Office 12.3% Retail 10.1% Industrial 11.6% Assisted Liv
Slide 23: Multifamily Portfolio Diversification
23 Dollars in thousands Multifamily Portfolio Diversification Unit Type Total Principal Balance Unfunded Commitments # of Loans % of Gross Loans WAVG LTV 5-19 Units $88,799 $6,078 148 4.4% 64.3% 20-49 Units $132,334 $3,775 67 6.6% 64.1% 50-99 Units $159,571 $5,477 40 8.0% 68.1% 100+ Units $155,676 $
Slide 24: Asset Quality
-—™' BRIDGEW TER BANCSHARES, INC. $200 Asset Quality Classified Assets Oop ons 42019 - Nonperforming Assets Allowance for Loan Losses
Slide 25: Investor Highlights
BRIDGEWATER Investor Highlights BANCSHARES, INC. COMMERCIAL BANKING EXPERTISE WITH MULTIFAMILY NICHE EXPERIENCED MANAGEMENT TEAM PROFITABLE & EFFICIENT BUSINESS MODEL FAVORABLE MARKET DEMOGRAPHICS CULTURE BASED ON ACCOUNTABILITY STRONG CREDIT QUALITY PROACTIVE RISK MANAGEMENT
Slide 26: Appendix
APPENDIX BRIDGEWATER BANCSHARES, INC.
Slide 27: Minnesota Twin Cities Branch Footprint
Minnesota Twin Cities 27 Source: S&P Global Market Intelligence Branch Footprint
Slide 28: Twin Cities Deposit Market Share
28 Source: S&P Global Market Intelligence; deposit market share data as of 6/30/2019. Top 10 Institutions 2006 Total Deposits ($000) Market Share Top 10 Institutions 2019 Total Deposits ($000) Market Share Wells Fargo & Co. 16,308,234 $ 27.59% U.S. Bancorp 73,464,421 $ 38.80% U.S. Bancorp 15,535,660
Slide 29: Recent Minnesota M&A Transactions
29 Note: data set includes selected Minnesota bank and thrift M&A transactions in recent years Source: S&P Global Market Intelligence; public filings Core Target Deal Deposit Announcement Total Assets Value Premium In Market / Buyer State Seller State Date ($mm) ($mm) (%) Market Entry MN MN 6/28/201
Slide 30: Potential Acquisition Targets
30 Source: S&P Global Market Intelligence *Dollars in thousands Potential Acquisition Targets 268 •Commercial Banks located in Minnesota 238 •Commercial Banks located in Minnesota, and with less than $500 million in assets 52 •Commercial Banks located in the Twin Cities MSA, and with less than $500
Slide 31: Consolidated Summary Financial Information - Historical
31 1 Non-GAAP financial measures; for further information, see page 32 Consolidated Summary Financial Information - Historical Dollar Values in Millions 2015Y 2016Y 2017Y 2018Y 2019Y Balance Sheet Total Assets 929 $ 1,260 $ 1,617 $ 1,974 $ 2,269 $ Gross Loans 799 1,001 1,347 1,665 1,912 Deposits 762
Slide 32: Reconciliation of Annual Non-GAAP Measures
32 This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both managemen
Slide 33: Reconciliation of Quarterly Non-GAAP Measures
33 This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these non-GAAP financial measures are provided below. BWB believes these non-GAAP financial measures provide useful information to both managemen
Slide 34: Reconciliation of Quarterly Non-GAAP Measures – Pre-Provision
34 Reconciliation of Quarterly Non-GAAP Measures – Pre-Provision This presentation includes certain non-GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of these non-GAAP financial measures are provided below. BWB believes these non-GAAP f
Slide 35: Thank You
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