Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — IPO Roadshow (March 2018)
34 slides from Bridgewater Bancshares's IPO roadshow presentation, Mar 5, 2018
Slide 1: Offering Disclosure
sss Offering Disclosure This presentation contains certain forward-looking statements that reflect the views of Bridgewater Bancshares, Inc. (“BWB”) with respect to, among other things, future events and financial performance. Words such as “outlook,” “believes,” “expects,” “potential,” “continues,”
Slide 2: Offering Summary
- 1 1 Based on midpoint offiling price range, excluding underwriters' purchase option 3 Sandler O'Neill+ Partners, L.P., D.i\. Davidson & Co. Rook Running Managers: Support growth and general corporate purposes Usc of Proceeds: 180 days for directors, executives & certain shareholders Lock-up: 15% (
Slide 3: Founded in 2005 by industry veterans and local business leaders
2005 4 the acguisition of a compl ementary st11all bank in 2016 SUCCESSFULLY COMPLETED FOUNDED IN by a group of industry veterans and local business leaders
Slide 4: Company history and milestones
{;\ 'C:) June: Private offering raises $5.2 million June: Initialoffering raises $10 million in capital November: Bridgewater Bank opens for business in Bloomington, MN December: Issued subordinated debt for $3.5 million 2006 2009 August: Private offering 2008 reaches profitability in its third mont
Slide 5: Management team
JERRY BAACK Chairman, President and Chief Executive Officer MARY JAYNE CROCKER Executive Vice President and Chief Operating Officer JEFF SHELLBERG Executive Vice President and Chief Credit Officer NICK PLACE JOE CHYBOWSKI Senior Vice President and Chief Financial Officer Senior Vice President and Ch
Slide 6: Focused on entrepreneurs
FOCUSED ON ENTREPRENEURS by providing responsive support and simple solutions. IN MULTIFAMILY LENDING TEAM WITH SIGNIFICANT INDUSTRY EXPERIENCE and more than 20 years of regulatory experience. AND RISK MANAGEMENT growth prospects. We believe our strong credit metrics are the result of prudent underw
Slide 7: Differentiators
Differentiators Commercial business expertise Experienced and non-hierarchical leadership Multifamily niche Culture based on accountability Efficient branch footprint Entrepreneurial Strong brand with extensive referral network Highly efficient team Responsive support and simple solutions Robust loa
Slide 8: Financial Highlights
Financial Highlights As of December 31, 2017 $1,617 2013 2014 2015 2016 2017 $16.9 $9.9 2013 2014 2015 2016 2017 *ROA and ROE in 2017, excluding a one-time additional expense of $2.0 million related to the revaluation of our deferred tax asset, would have been 1.30% and 14.75%, respectively 9 $13.2
Slide 9: Branch footprint map
Bla ine Circle Pines Hanover Hugo Corcoran Jlrooklyn Pa rte Mou nds View White Bear Beach White Bear lake Greenfield Brooklyn Center Shoreview New Brighton Vad nais Heights Mahtomedi Columbia Heights Ia no Q Crystal Roseville Falcon Independence Plymouth Bayport Medina Maplewood lake Elmo Golden Val
Slide 10: Deposit Market Share
Deposit Market Share 1 2 3 4 5 6 7 8 9 Wel l s Fa rgo & Co. U.S. Ba ncorp TCF Fi na nci a l Corp. Bremer Fi na nci a l Corp. Ba nk of Montrea l As s oci a ted Ba nc-Corp Ol d Na ti ona l Ba ncorp Kl ei n Fi na nci a l Inc. Ba nk of Ameri ca Corp. CA MN MN MN - WI IN MN NC 98 99 87 25 32 24 17 19 7 $
Slide 11: Market growth comparison
Source: S&P Global Market Intelligence; Nielsen; U.S. Bureau of Labor Statistics, U.S. Bureau of Economic Analysis Midwest is based on 20 largest Midwest MSAs National is based on 20 largest National MSAs MSA is defined as metropolitan statistical area. BWB's MSA is the Minneapolis-St. Paul-Blooming
Slide 12: Market Demographics
Market Demographics 2017 Unemployment Rate 4.70% 5.00% 4.50% 4.00% 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 3.90% Midwest 1 National 2 Twin Cities Chicago Detroit 2017 Median Household Income ($000s ) $72,729 2012 - 2017 Population Change 6.00% $75,000 $70,000 $65,000 $60,000 $55,000 $50,000
Slide 13: Loan Portfolio
Loan Portfolio 0.3% As of December 31, 2017 • • Strong organic growth Commercial real estate (CRE) and multifamily niches Prominent multifamily lender in Twin Cities 5-year CAGR of gross loans outperforms both peer groups at 17.7%1 and 10.5%2 9.7% 16.2% Construction & Development 1-4 Family Multifam
Slide 14: CRE Risk Management and Portfolio Diversification
CRE Risk Management and Portfolio Diversification As of December 31, 2017 Hospitality, • • • Total Construction & Development 15.1% Robust CRE risk management system Well diversified CRE portfolio Assisted Living & Other 9.5% Industrial 12.7% Reduced exposure to construction and development lending
Slide 15: Asset Quality
Asset Quality Non-Performing Assets • • • Sound asset quality Prudent risk selection Proactive risk management $10, 000 2.50% $8,000 2.00% $6,000 1.50% $4,000 1.00% $2,000 0.50% $-0.00% 2013 2014 2015 2016 2017 Net Charge-Offs Allowance for Loan Losses NCOs ($000s) $2,500 2.00% $25, 000 2.00% $2,000
Slide 16: Deposit Portfolio
Deposit Portfolio As of December 31, 2017 Noninterest Bearing Deposits ($292.5 M illion) Interest B ea ring Deposits ($1,046.8 M illion) • Organic growth driven by expanding relationships with borrowers Core deposits total 76.7% of the deposit portfolio 5-year CAGR of total deposits outperforms both
Slide 17: Deposit Mix
Deposit Mix • Balanced growth among all deposit products As of December 31, 2017 ($000s) $207,481 Noninterest Bearing Tra nsaction Deposits Interest B ea ring Transa ction Deposits Sa vings & M oney M arket Deposits Time Deposits • Consistent incremental growth in noninterest bearing deposits $292,5
Slide 18: Profitability Metrics
Profitability Metrics Historical Profitability Metrics • Sustained profitability despite compressed margins in historic low-rate environment 25.00% ROE 3.00% 2.50% 20.00% 2.00% 15.00% 1.50% • Net interest margin (NIM) consistently outperforms peers 10.00% 1.00% 5.00% 0.50% 0.00% 0.00% * 2013 2014 20
Slide 19: Noninterest Expense
Noninterest Expense Total Assets Per Employee Vs. Peer Groups • Commercial real estate lending reduces overhead costs $15, 000 $12, 500 $10, 000 $7,500 • Proficient delivery channels $5,000 $2,500 $0 • Efficiency drives profitability 2013 2014 2015 2016 2017 BWB ($000s ) Peer Group - Hig h Loa n Gro
Slide 20: Focus on Efficiency
Focus on Efficiency Efficiency Ratio Vs. Peer Groups 64.2% 65.6% 61.7% 2013 2014 2015 2016 2017 BWB Peer Group - Hig h Loa n Growth Peer Group - Hig h Performa nce Source: S&P Global Market Intelligence 21 40.7% 53.9% 50.9% 57.4% 57.9% 52.4% 53.4% 51.3% 40.6% 44.4% 45.8% 43.6%
Slide 21: Tangible Book Value Growth
Tangible Book Value Growth 5-year tangible book value per share1 CAGR of 19.2% outperforms both peer groups at 7.3%2 and 7.8%3 $175,000 $6.00 $5.50 $5.00 $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 $150,000 $125,000 $100,000 $75,000 $50,000 $25,000 $0 2013 2014 2015 2016 2017 Tangibl
Slide 22: Capitalization
Capitalization As of December 31, 2017 As Adjusted1 Actual (dolla rs in thous a nds , except s ha re da ta ) Long-Term Debt: Notes Payable Subordinated Debentures, Net of Issuance Costs Total Long-Term Debt Shareholders' Equity: Common Stock - $0.01 Par Value Voting Common Stock - Authorized 75,000,
Slide 23: Investment highlights
NICHE • • MODEL • • • • 24 PROACTIVE RISK MANAGEMENT STRONG CREDIT QUALITY CULTURE BASED ON ACCOUNTABILITY FAVORABLE MARKET DEMOGRAPHICS PROFITABLE & EFFICIENT BUSINESS EXPERIENCED MANAGEMENT TEAM COMMERCIAL BANKING EXPERTISE WITH MULTIFAMILY
Slide 24: Bridgewater Bancshares, Inc. Investor Highlights
——™ BRIDGEWATER BANCSHARES, INC. Investor Highlights
Slide 25: Consolidated Summary Financial Information
Consolidated Summary Financial Information Dollar Values in Millions Total Assets Net Loans Deposits Gross Loan/Deposits $ 576 468 522 91% $ 702 587 601 99% $ 929 787 762 105% $ 1,260 985 1,024 98% $ 1,617 1,327 1,339 101% Total Equity Tangible Common Equity1 Tangible Common Equity/Tangible Assets1
Slide 26: Comparison: High Loan Growth Peers
Comparison: High Loan Growth Peers Selected Nationwide Major Exchange Banks with Total Assets Between $1.0 Billion and $7.5 Billion, and: • • 5-Year Average ROAA > 0.75% 5-Year Net Loans CAGR > 15.0% Eagle Bancorp, Inc. HomeStreet, Inc. Hanmi Financial Corporation Preferred Bank Guaranty Bancshares,
Slide 27: Comparison: High Performance Peers
Comparison: High Performance Peers Selected Nationwide Major Exchange Banks with Total Assets Between $1.0 Billion and $7.5 Billion, and: • • 5-Year Average ROAA > 1.15% 5-Year Average Efficiency Ratio < 60.0% Eagle Bancorp, Inc. First Financial Bankshares, Inc. Westamerica Bancorporation Hanmi Fina
Slide 28: Consolidated Capital Ratios
Consolidated Capital Ratios 15.00% 12.50% 10.00% 7.50% 5.00% 2.50% 0.00% 2013 2014 2015 2016 2017 •Tangible Common Equity I Tangible Assets 1 •Tier 1Leverage Ratio •Tier 1Capital Ratio •Total Risk-Based Capital Ratio 1Tangible common equity to tangible assets is a non-GAAP financial measure;for furt
Slide 29: Prudent Capital Deployment
Prudent Capital Deployment Effective Capital Allocation 14.00 13.00 12.00 11.00 10.00 9.00 8.00 7.00 6.00 5.00 2013 Capital Net Asset 2014 Capital Net Asset 2015 Capital Net Asset 2016 Capital Net Asset 2017 Income Growth TCE / TA TCE / TA Raise Income Growth TCE / TA Raise Income Growth TCE / TA Ra
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures 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 use
Slide 31: Deferred Tax Asset Revaluation
Deferred Tax Asset Revaluation Net Income Deferred Tax Asset Revaluation Charged to Provision for Income Tax Net Income Before Deferred Tax Asset Revaluation $ 16,889 2,005 $ 18,894 ROA Before Deferred Tax Asset Revaluation ROE Before Deferred Tax Asset Revaluation Earnings Per Common Share, Basic B
Slide 32: Board of Directors and management
J E RRY BAACK Chairman, President and Chief Executive Officer DAVID J URAN Executive Vice President, Dougherty & Company LLC JAMES JO H NSON Franchise Owner, Express Employment Professionals , , J EFF S HEL LB E RG Executive Vice President and Chief Credit Officer TOM T R UTNA Founder, Big Ink DAVID
Slide 33: Bridgewater Bancshares, Inc.
BRIDGEWATER BANCSHARES, INC.
Slide 34: ALA
ALA BRIDGEWATER BANCSHARES, INC.