Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Investor Presentation (November 2022)
33 slides from Bridgewater Bancshares's investor presentation, Nov 1, 2022
Slide 1: Investor Presentation Third Quarter 2022
w BRIDGEWATER ™ BANCSHARES, INC. Be INVESTOR PRESENTATION THIRD QUARTER 2022
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: Company Overview: The Finest Entrepreneurial Bank in the Twin Cities
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: $4.1 Billion Loans: $3.4 Billion Deposits: $3.3 Billion Sha
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 “In today’s environment, it is more important than ever to be able to recruit, retain and develop top talent. At Bridgewater, we have demonstrated an ability to do this through our unconventional culture and employee experience, extensive team member referral net
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 The “Proven Process” for Our Clients • #1 BEST Business Bank • #1 BEST S
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 9 $219M Community Developme
Slide 10: Environmental, Social and Governance (ESG)
Environmental, Social and Governance (ESG) 10 We are committed to establishing and advancing impactful initiatives that support our corporate responsibility as a growing local bank in the Twin Cities, while regularly sharing our progress with our stakeholders Our ESG Commitment Our ESG Priorities Te
Slide 11: Attractive Twin Cities Market Built for Business
Attractive Twin Cities Market Built for Business 11 #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 12: History of Organic Asset Growth Generation
History of Organic Asset Growth Generation 12 $1,184 $76 $929 $1,260 $1,617 $1,974 $2,269 $2,927 $3,478 $4,129 2015 2016 2017 2018 2019 2020 2021 3Q22 Acquired Assets Organic Proven ability to consistently generate 20%+ annual asset growth primarily in the Twin Cities market Asset growth has almost
Slide 13: 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 13 $2,188 $2,793 $3,379 $138 $26 $1 $799 $1,001 $1,347 $1,665 $1,912 $2,326 $2,819 $3,380 2015 2016 2017 2018 2019 2020 2021 3Q22 PPP Loans (ex. PPP) Dollars in millions Current BWB Loan Growth Catalysts Strong brand and service model in the T
Slide 14: Well-Diversified Loan Portfolio With a Commercial Focus
354% 333% 318% 304% 313% 266% 264% 250% 180% 164% 185% 177% 204% 190% 219% 252% 534% 497% 503% 480% 517% 456% 483% 502% 2015 2016 2017 2018 2019 2020 2021 3Q22 Well - Diversified Loan Portfolio With a Commercial Focus 14 CRE NOO 27% Multifamily 21% C&D 15% 1 - 4 Family 18% CRE OO 6% C&I 13% Consumer
Slide 15: Well-Positioned for Continued Growth Opportunities Across Key Portfolios
Well - Positioned for Continued Growth Opportunities Across Key Portfolios 15 5 - 19 Units 14% 20 - 49 Units 27% 50 - 99 Units 28% 100+ Units 31% Size YoY Growth Go - to - Market Strategy Competitors Growth Outlook Key Stats Portfolio Diversification Multifamily CRE Nonowner Occupied C&I Constructio
Slide 16: Deposit Market Share Momentum in the Twin Cities Continues
Deposit Market Share Momentum in the Twin Cities Continues 16 Total Deposits – Minneapolis/St. Paul MSA 1 2012 2022 Market Ripe for Continued Market Share Gains • Top - heavy deposit market (top 2 market share = 62%) • Top 2 have lost market share each of the last eight years (2014: 84% / 2022: 62%)
Slide 17: Deposit Growth With Improved Mix Provides Funding for Loan Growth
Deposit Growth With Improved Mix Provides Funding for Loan Growth 17 22% 23% 22% 24% 25% 27% 30% 29% 17% 13% 13% 11% 14% 15% 18% 15% 20% 23% 28% 26% 28% 26% 29% 33% 25% 27% 22% 20% 20% 14% 10% 9% 16% 14% 15% 19% 13% 18% 13% 14% $762 $1,024 $1,339 $1,561 $1,823 $2,502 $2,946 $3,305 2015 2016 2017 201
Slide 18: Scaling Enterprise Risk Management Across a Growing Organization
Scaling Enterprise Risk Management Across a Growing Organization 18 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 19: Credit Risk Management Supports Strong Loan Growth Momentum
Credit Risk Management Supports Strong Loan Growth Momentum 19 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 0.16% 0.03% BWB Peer Bank Median 1 0.56% 1 Includes publicly - traded banks on major exchanges with total
Slide 20: Credit Risk Management and Oversight Driving Superb Asset Quality
1 Nonaccrual loans plus loans 90 days past due and still accruing and foreclosed assets Dollars in thousands Credit Risk Management and Oversight Driving Superb Asset Quality 20 $581 $461 $775 $722 $663 0.03% 0.02% 0.03% 0.02% 0.02% 2018 2019 2020 2021 3Q22 Nonperforming Assets 1 Consistently low NP
Slide 21: Consistent Spread-Based Revenue Growth Model
Consistent Spread - Based Revenue Growth Model 21 Noninterest Income Net Interest Income 1 Amounts calculated on a tax - equivalent basis using statutory federal tax rate of 21% 2 Excludes loan fees and PPP loan balances, interest and fees; represents a Non - GAAP financial measure, see Appendix for
Slide 22: Among the Most Efficient Banks in the Industry
46.5% 47.4% 49.0% 42.0% 40.7% 41.7% 43.3% 40.5% 41.0% 40.4% 59.3% 58.8% 57.0% 55.8% 56.2% 2018 2019 2020 2021 3Q22 YTD Among the Most Efficient Banks in the Industry 22 BWB Adjusted 1 BWB Reported 1 An Efficiency Ratio Consistently Well Below Peers Peer Bank Median 2 1 Represents a Non - GAAP financ
Slide 23: Leveraging Technology to Support Growth
Leveraging Technology to Support Growth 23 Client - Facing Enhancements • Modern platforms and payment options for business and personal clients: • Digital banking • P2P • A2A • E signature • Real - time alerts 8% YoY increase in digital users 14% YoY increase in number of mobile deposits Scalable c
Slide 24: Investments in Technology Continue
Investments in Technology Continue 24 What’s Next? Core Banking Enhancements • Expand cloud technology adoption to accelerate time to value for the business • Leverage partnerships to monitor emerging technology trends Cloud Adoption and Fintech Technology Spend Becoming a Larger Portion of Total Ex
Slide 25: Proactive Capital Management
Proactive Capital Management 25 14.55% 12.98% 14.58% 15.55% 13.78% 12.07% 11.39% 10.35% 9.36% 8.47% 11.23% 10.69% 9.28% 10.82% 9.98% 11.03% 10.65% 8.96% 8.91% 7.57% 2018 2019 2020 2021 3Q22 Total Risk - Based Capital Common Equity Tier 1 Capital Capital Ratios Supported by Profitability and Capital
Slide 26: Diverse Liquidity Position
Funding Source Available Balance Cash 36 $ Unpledged Securities 542 FHLB Advances 427 FRB Discount Window 156 Unsecured Lines of Credit 208 Secured Line of Credit 40 Total 1,409 $ Diverse Liquidity Position 26 14.3% 14.2% 18.4% 16.4% 14.0% 16.5% 18.9% 19.8% 26.2% 20.1% $608 $750 $1,121 $1,480 $1,409
Slide 27: 2022 Strategic Priorities – Building on Our Momentum
2022 Strategic Priorities – Building on Our Momentum 27 Continue Balance Sheet Growth Trajectory 1 2 3 4 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 28: Corporate Strategy Driving Above-Peer Returns and Value Creation
Corporate Strategy Driving Above - Peer Returns and Value Creation 28 Truly Unconventional Culture Highly Efficient Business Model Robust Balance Sheet Growth Proactive Risk Management Our Culture Driven Organic Growth Story Return on Average Assets 1.51% 1.49% 1.24% 1.45% 1.42% 1.19% 1.22% 1.01% 1.
Slide 29: Appendix
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Slide 30: 3Q22 Earnings Highlights
3Q22 Earnings Highlights 30 • 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% annualized, from 2Q22 • Record pre - provision net revenue (PPNR) of $2
Slide 31: Reconciliation of Non-GAAP Financial Measures – Efficiency, TCE, TBV, NIM
Reconciliation of Non - GAAP Financial Measures – Efficiency, TCE, TBV, NIM 31 * Efficiency Ratio is adjusted to exclude the historic tax credit amortization and debt prepayment fees. Dollars in thousands Core Net Interest Margin September 30, 2022 Net Interest Income (Tax-Equivalent Basis) 34,417 $
Slide 32: Reconciliation of Non-GAAP Financial Measures – PPNR
Reconciliation of Non - GAAP Financial Measures – PPNR 32 Dollars in thousands Pre-Provision Net Revenue December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 3Q22 3Q22 YTD Noninterest Income 2,543 $ 3,826 $ 5,839 $ 5,309 $ 1,387 $ 4,594 $ Less: Gain on sales of Securities 125 (516
Slide 33: Reconciliation of Non-GAAP Financial Measures – Diluted EPS, ROA, ROATCE
Reconciliation of Non - GAAP Financial Measures – Diluted EPS, ROA, ROATCE 33 Dollars in thousands 2018 2019 2020 2021 3Q22 3Q22 YTD Net Income 26,920 $ 31,403 $ 27,194 $ 45,687 $ 14,513 $ 39,657 $ Less: Preferred Stock Dividends - - - (1,171) (1,013) (3,040) Net Income Available to Common Sharehold
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