Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q2 2020 Earnings Presentation
43 slides from Bridgewater Bancshares's earnings presentation, Jul 30, 2020
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation Fourth Quarter 2019
Slide 2: Disclaimer: Forward-Looking Statements
2 Why Bridgewater Bank? 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 conc
Slide 3: NCS
i NCS 2006 @) == Avot Pasting aloes ‘a0 mon 2017 wn a May Fret national Ba of () eran Assets vps 62.5000
Slide 4: Why Bridgewater?
4 Why Bridgewater Bank? Why Bridgewater?
Slide 5: 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 6: Second Quarter 2020 Financial Results
6 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. * Change in basis points for profitability metrics Second Quarter 2020 Financial Results Q2 2020 Financial Results Q2 2020 Q1 2020 % Change Q2 2019 % Change Income Statement Summary Interest Income 28,166 $ 27,468
Slide 7: Strong Capital and Liquidity
7 Strong Capital and Liquidity • $504.7 million in on-balance sheet liquidity (includes unpledged marketable securities) • On-balance sheet liquidity equals 18.3% of total assets • Additional $180.2 million borrowing capacity available through PPPLF • $50 million subordinated debt raise during Q2 20
Slide 8: Compound Tangible Book Value
8 * Tangible common equity to tangible assets is a Non-GAAP financial measure. See appendix for Non-GAAP reconciliation. Compound Tangible Book Value Strong Capital and Liquidity Compound Tangible Book Value $225,555 $232,524 $241,307 $244,704 $253,799 10.64% 10.43% 10.65% 10.13% 9.23% Q2 2019 Q3 20
Slide 9: Core Earnings Capital Generation
9 *Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. Dollars in thousands Core Earnings Capital Generation Core Earnings Capital Generation Pre-Provision Net Revenue*, Net Income, and ROA $10,725 $11,269 $11,679 $12,157 $13,039 $8,009 $7,805 $8,571 $7,443 $7,598 2.08
Slide 10: Efficient Branch Footprint
Twin Cities Minnesota 10 Source: S&P Global Market Intelligence Efficient Branch Footprint Efficient Branch Footprint
Slide 11: Stable Operating Efficiency
11 *Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. Dollars in thousands Stable Operating Efficiency Efficiency Ratio Operating Expense Composition 1.57 1.56 1.67 1.68 1.37 0.27 0.1 0.2 0.01 0.27 50.1 45.6 49.6 44.4 48.6 42.7 42.9 44.3 44.1 40.4 Q2 2019 Q3 2019 Q4
Slide 12: Net Interest Margin
12 ¹Excludes PPP Loan Yield impact *Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21% Dollars in thousands Net Interest Margin • 17.7% YoY growth in net interest income • Historically low and flat yield curve coupled with deliberate growth in on- balance sheet liqu
Slide 13: Net Interest Drivers
13 *Yield is adjusted to exclude Paycheck Protection Program loans Dollars in thousands Spot Rate 2.81% Spot Rate 4.64%* Spot Rate 1.13% Spot Rate 1.03% Net Interest Drivers *
Slide 14: Loan Portfolio Repricing
14 Dollars in thousands Index Rate At Floor 0 to -25 bps -26 to 50 bps -51 to -75 bps -76 to -100 bps > -100 bps Total PRIME 323,991 16,102 1,912 540 115 604 343,264 Libor 125,200 7,466 -- 13,801 - 146,468 1 Yr CMT 9,577 ---- 0 9,577 2 Yr CMT 6,085 ---- 1,753 7,838 3 Yr CMT 53,470 3,734 2,358 7,443
Slide 15: Deposit Repricing Opportunities
15 Dollars in thousands • $420 million in time deposits maturing in the next 5 quarters at a blended cost of 1.69% • $193 million, or 12%, of non-maturity deposit portfolio still earning a rate >1.00% as of 6/30/20 Deposit Repricing Opportunities Time Deposit Maturities Nonmaturity Deposit Compositi
Slide 16: Deposit Growth
$1,699,265 $1,802,236 $1,823,310 $1,900,127 $2,242,051 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Total Deposits ($000's) 16 Deposit Growth • 43.9% YoY growth¹ in noninterest bearing deposits • Internal Deposit Growth Plan momentum • The Bridge, a robust treasury management platform, continues to get t
Slide 17: Historical Deposit Composition
17 Dollars in thousands Historical Deposit Composition Historical Deposit Composition 22.2% 23.3% 21.9% 23.6% 24.5% 29.0% 17.1% 13.0% 13.2% 11.5% 14.5% 12.7% 20.1% 23.4% 27.6% 25.8% 28.3% 23.0% 25.3% 26.6% 21.8% 20.4% 19.8% 17.0% 15.3% 13.7% 15.5% 18.7% 12.9% 18.3% $761,882 $1,023,508 $1,339,350 $1,
Slide 18: Loan Growth
$1,784,903 $1,846,218 $1,912,038 $2,002,817 $2,193,778 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Total Gross Loans ($000's) 18 Loan Growth • Continued focus on profitable loan growth and disciplined pricing • Meaningful new and diverse client acquisition opportunities generated through PPP • Addition
Slide 19: Historical Loan Composition
19 Dollars in thousands Historical Loan Composition 14.6% 10.6% 9.7% 12.6% 10.3% 8.7% 17.9% 17.9% 14.5% 13.6% 13.6% 13.2% 0.3% 0.4% 0.3% 0.2% 0.2% 0.3% 21.1% 20.5% 23.6% 24.5% 26.9% 23.8% 6.1% 6.2% 4.9% 3.9% 3.5% 3.4% 27.0% 31.2% 30.8% 29.5% 31.0% 28.6% 13.0% 13.2% 16.2% 15.7% 14.5% 13.8% 8.2% $799,
Slide 20: Total Modification Summary
20 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Total Modification Summary Loan Type Balance # Of Modifications % of Portfolio % on Watch List % Interest-Only % Full Payment CRE Nonowner Occupied $ 186,980 59 29.8% 7.4% 53.9% 46.1% Multifamily 57,571 9 11.0% - 71.8% 28.2% Construction
Slide 21: Loan Portfolio Composition
21 *Based on state of primary real property collateral if available, otherwise borrower address is used. Loan Portfolio Composition Loans by Type Loans by Geography * • Diversified loan portfolio with $2.2 billion loans outstanding • 78% of loan portfolio is real estate secured • 90% of loan portfol
Slide 22: Investor Real Estate Secured: CRE Nonowner Occupied
22 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) By Property Type Modification Summary Portfolio Characteristics – CRE NOO Loan Balance Outstanding $627,651 % of Total Loans, Gross 28.6% Number of Loans 304 Average Loan Size $2,065 Loan-to-Value (Weighted Average) 59.7% 5 Year Net Char
Slide 23: CRE NOO Office & Industrial
23 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Modification Summary Modification Summary Portfolio Characteristics – CRE NOO Office Loan Balance Outstanding $174,407 % of Total Loans, Gross 8.0% Number of Loans 84 Average Loan Size $2,076 Loan-to-Value (Weighted Average) 62.1% Invest
Slide 24: CRE NOO Retail
24 *Distribution by North American Industry Classification System (NAICS). Any industries included in Other category are individually < 2% of total portfolio. By Property Square Footage Modification Summary Portfolio Characteristics – CRE NOO Retail Loan Balance Outstanding $152,050 % of Total Loans
Slide 25: CRE NOO Restaurant
25 By Restaurant Type Modification Summary Portfolio Characteristics – CRE NOO Restaurant Loan Balance Outstanding $19,838 % of Total Loans, Gross 0.9% Number of Loans 17 Average Loan Size $1,167 Loan-to-Value (Weighted Average) 55.9% Portfolio Fundamentals • 74% of restaurant tenants are national,
Slide 26: CRE NOO Hotels
26 *Based on state of primary real property collateral if available, otherwise borrower address is used. Investor Real Estate Secured: CRE NOO Hotels By Geography * Modification Summary Portfolio Characteristics – CRE NOO Hotels Loan Balance Outstanding $31,710 % of Total Loans, Gross 1.4% Number of
Slide 27: Multifamily
27 By Unit Type Modification Summary Portfolio Characteristics – Multifamily Loan Balance Outstanding $522,491 % of Total Loans, Gross 23.8% Number of Loans 266 Average Loan Size $1,964 Loan-to-Value (Weighted Average) 62.1% 5 Year Net Charge-Offs (%) 0.00% Portfolio Fundamentals • Prominent multifa
Slide 28: Construction and Development
28 By Property Type By Geography* Land Portfolio Composition Investor Real Estate Secured: CRE NOO Restaurant Investor Real Estate Secured: Construction and Development Residential 40.3% Multifamily 31.9% CRE Other 8.9% Land 18.8% $192 Million Portfolio Characteristics – C&D Loan Balance Outstanding
Slide 29: CRE Owner Occupied
29 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) By Property Type Modification Summary Portfolio Characteristics – CRE OO Loan Balance Outstanding $73,539 % of Total Loans, Gross 3.4% Number of Loans 124 Average Loan Size $593 Loan-to-Value (Weighted Average) 55.9% 5 Year Net Charge-Of
Slide 30: Commercial and Industrial
$302 Million Real Estate and Rental and Leasing 31.9% Construction 19.9% Finance & Insurance 12.1% Manufacturing 11.4% Professional Services 4.7% Other Services 3.6% Accomodation & Food Services 3.1% Other 13.3% 30 *Distribution by North American Industry Classification System (NAICS). Any industrie
Slide 31: SBA Paycheck Protection Program
Real Estate and Rental and Leasing 22.5% Professional Services 15.8% Health Care and Social Assistance 12.1% Manufacturing 10.4% Construction 8.8% Accomodation & Food 6.4% Finance and Insurance 4.7% Other Services 4.5% Other 14.7% $180 Million 31 *Distribution by North American Industry Classificati
Slide 32: Watch List and Asset Quality
32 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Watch List By Loan Type Watch List Modification Summary Risk Rating Migration C&I 47.1% CRE NOO Retail 13.0% CRE NOO Hotels 34.5% 1-4 Family 3.3% CRE OO 1.8% C&D 0.3% $46 Million $39 Million Full Payment Interest Only 23% 77% 1-3 Month 4
Slide 33: Asset Quality
33 Asset Quality Asset Quality
Slide 34: Investor Highlights
34 Investor Highlights Investor Highlights
Slide 35: Appendix
APPENDIX BRIDGEWATER BANCSHARES, INC.
Slide 36: Deposit Market Share
36 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 37: Recent Minnesota M&A Transactions
37 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 38: Potential Acquisition Targets
38 Source: S&P Global Market Intelligence *Dollars in thousands 265 •Commercial Banks located in Minnesota 234 •Commercial Banks located in Minnesota, and with less than $500 million in assets 50 •Commercial Banks located in the Twin Cities MSA, and with less than $500 million in assets 28 •Commerci
Slide 39: Historical Financial Summary
39 1 Non-GAAP financial measures; for further information, see page 40 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 1,024 1,339 1,561 1,823 Gross Loan/Deposits 104.9% 97.8
Slide 40: Non-GAAP Reconciliation: Efficiency Ratio
40 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 41: Non-GAAP Reconciliation: Efficiency Ratio Quarterly
41 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 42: Non-GAAP Reconciliation: Pre-Provision Net Revenue
42 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 43: Thank You
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