Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q2 2021 Earnings Presentation
40 slides from Bridgewater Bancshares's earnings presentation, Jul 29, 2021
Slide 1: Investor Presentation Fourth Quarter 2019
Investor Presentation Fourth Quarter 2019
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 Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculat
Slide 3: The Finest Entrepreneurial Bank in the Twin Cities
3 The Finest Entrepreneurial Bank in the Twin Cities Company Highlights Company Overview Franchise Footprint Name: Bridgewater Bancshares, Inc. Headquarters: St. Louis Park, MN Ticker: NASDAQ: BWB Assets: $3.2 Billion Loans: $2.6 Billion Deposits: $2.7 Billion Equity: $290.8 Million • Founded in 200
Slide 4: Second Quarter 2021 Highlights
1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. 4 $0.38 • Gross loan balances up $168.1 million, or 27.8% annualized from 1Q21 (up 41.2% ex. PPP) • Deposit balances up $82.3 million, or 12.5% annualized from 1Q21 Diluted EPS Efficiency Ratio1 Return on Average Co
Slide 5: Strong Profitability and Revenue Generation
PPNR ROA1 5 Strong Profitability and Revenue Generation Strong PPNR 1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation Dollars in thousands Consistent Revenue Growth $21,342 $21,679 $24,841 $25,395 $26,288 $1,977 $1,157 $986 $1,008 $1,603 $23,319 $22,836 $25,827 $26,
Slide 6: Net Interest Income and Net Interest Margin
$21,342 $21,679 $24,841 $25,935 $26,288 3.38% 3.28% 3.61% 3.60% 3.52% 3.22% 3.14% 3.29% 3.34% 3.31% 2Q20 3Q20 4Q20 1Q21 2Q21 Core Net Interest Margin1,2 Net Interest Margin1 6 1 Amounts calculated on a tax-equivalent basis using statutory federal tax rate of 21% 2 Excludes loan fees and PPP loan bal
Slide 7: Net Interest Drivers
Loan Yield (ex. Loan Fees and PPP)2 7 1 Excludes loan fees and PPP 2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation Dollars in millions Spot Rate 2.66% Spot Rate 4.25%1 Spot Rate 0.59% Spot Rate 0.58% Deploying Excess Liquidity into Investments Market-Related Loan
Slide 8: Efficiency Ratio Consistently in the Low 40% Range
1.37% 1.40% 1.34% 1.49% 1.48% 0.27% 0.02% 0.82% 0.02% 0.02% 1.64% 1.42% 2.16% 1.51% 1.50% 48.6% 42.3% 59.0% 41.2% 42.0% 40.4% 41.7% 36.6% 40.7% 41.5% 2Q20 3Q20 4Q20 1Q21 2Q21 Adjusted NIE / Avg. Assets2 Adjusted Efficiency Ratio2 Adjustment Factors / Avg. Assets2 Efficiency Ratio2 8 Adjusted Efficie
Slide 9: Robust Loan Growth Continues
9 • 23.9% YoY loan growth, excluding PPP loans • 2Q21 gross loans grew $232.2 million, or 41.2% annualized, excluding PPP loans • Expect near-term annualized loan growth (ex. PPP) in the high teen percent range Dollars in millions • Strong brand and service model in the Twin Cities market • M&A-rela
Slide 10: A Proven Loan Growth Engine
10 Dollars in millions • Despite payoffs and paydowns of $125 million and a net PPP balance reduction of $64 million in 2Q21, gross loan portfolio grew $168 million from 1Q21 • Loan pipeline remains strong and diversified among various asset classes A Proven Loan Growth Engine Up 22% compared to 1Q2
Slide 11: Well-Diversified Loan Portfolio
CRE NOO 29.2% Multifamily 30.5% C&D 9.7% 1-4 Family 10.7% CRE OO 3.4% C&I 12.4% PPP 3.8% Consumer & Other 0.3% 11 Dollars in millions Loan Portfolio Composition Loan Mix by Type $2.59 Billion 2Q21 Loan Growth by Type (vs. 1Q21) Well-Diversified Loan Portfolio • 2Q21 loan growth across all commercial
Slide 12: Deposit Growth with Improving Mix
$649 $686 $672 $713 $758 $285 $322 $366 $433 $432 $517 $498 $658 $792 $761 $382 $364 $354 $345 $322 $409 $403 $452 $356 $447 $2,242 $2,273 $2,502 $2,639 $2,721 2Q20 3Q20 4Q20 1Q21 2Q21 12 • 16.8% YoY growth in noninterest- bearing deposits • Robust deposit inflows reflect both successful new client
Slide 13: Superb Asset Quality Despite COVID Impact
$27,633 $31,381 $34,841 $35,987 $37,591 1.37% 1.51% 1.59% 1.59% 1.50% 1.26% 1.39% 1.50% 1.48% 1.45% 2Q20 3Q20 4Q20 1Q21 2Q21 $3,740 $16,074 $15,164 $6,739 $7,195 1.20% 4.95% 4.54% 1.94% 1.99% 2Q20 3Q20 4Q20 1Q21 2Q21 13 Asset Quality Classified Assets Nonperforming Assets1 Allowance for Loan Losses
Slide 14: Classified Assets Remain at Modest Levels
C&I 46.9% CRE NOO Retail 16.0% CRE NOO Hotels 27.7% 1-4 Family 1.2% CRE Other 8.2% CRE NOO Retail 50.2% 1-4 Family 18.8% Owner Occupied 12.0% C&I 16.9% C&D 1.9% Consumer & Other 0.2% $7 Million 14 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Watch List By Loan Type Classified List By
Slide 15: Solid Capital and Liquidity Position
18.3% 16.8% 18.4% 19.2% 15.4% 16.1% 15.5% 19.8% 22.3% 25.9% $948 $894 $1,121 $1,273 $1,305 2Q20 3Q20 4Q20 1Q21 2Q21 9.94% 9.83% 9.28% 9.11% 9.08% 11.39% 11.03% 10.35% 10.34% 9.67% 15.99% 15.45% 14.58% 14.46% 13.49% 2Q20 3Q20 4Q20 1Q21 2Q21 15 Dollars in millions Consolidated Capital Ratios On & Off-
Slide 16: Strong Capital and Liquidity
$254 $262 $262 $276 $288 9.23% 9.46% 8.96% 8.99% 9.10% 2Q20 3Q20 4Q20 1Q21 2Q21 Tangible Common Equity to Tangible Assets1 $4.53 $5.40 $7.22 $8.33 $9.31 $10.22 2016 2017 2018 2019 2020 2Q21 16 Strong Capital and Liquidity Tangible Book Value Per Share1 Tangible Common Equity 1 Represents a Non-GAAP
Slide 17: Investor Highlights
Investor Highlights Investor Highlights Pre-eminent real estate bank in the Twin Cities market with a focus on multifamily lending Operational strategy focused on generating consistently profitable organic growth Superior profitability driven by a highly efficient business model Very experienced and
Slide 18: Appendix
| APPENDIX BRIDGEWATER BANCSHARES, INC.
Slide 19: Historical Loan Composition
12.6% 10.3% 7.3% 9.7% 13.6% 13.6% 12.7% 10.7% 24.5% 26.9% 26.9% 30.5% 3.9% 3.5% 3.2% 3.4% 29.5% 31.0% 30.5% 29.2% 15.7% 14.4% 13.1% 12.4% 6.0% 3.8% $1,665 $1,912 $2,326 $2,594 2018 2019 2020 2Q21 19 Dollars in millions Historical Loan Composition • Robust organic growth • Well diversified portfolio
Slide 20: CRE Nonowner Occupied Portfolio
Dollars in thousands 20 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Portfolio Characteristics – CRE NOO Loan Balance Outstanding $758,101 % of Total Loans, Gross 29.2% Number of Loans 357 Average Loan Size $2,124 Loan-to-Value (Weighted Average) 60.1% 5 Year Net Charge-Offs (%) 0.01%
Slide 21: CRE NOO Office
Dollars in thousands 21 Portfolio Characteristics – CRE NOO Office Loan Balance Outstanding $213,713 % of Total Loans, Gross 8.2% Number of Loans 98 Average Loan Size $2,181 Loan-to-Value (Weighted Average) 62.0% Investor Real Estate Secured: CRE NOO Retail 0-50k Sq Ft, 43.8% 50k - 125k Sq Ft, 20.1%
Slide 22: CRE NOO Retail
Dollars in thousands 22 Portfolio Characteristics – CRE NOO Retail Loan Balance Outstanding $158,330 % of Total Loans, Gross 6.1% Number of Loans 101 Average Loan Size $1,568 Loan-to-Value (Weighted Average) 60.3% Investor Real Estate Secured: CRE NOO Retail 0-25k Sq Ft, 46.6% 25k - 75k Sq Ft, 31.4%
Slide 23: CRE NOO Industrial
Dollars in thousands 23 Portfolio Characteristics – CRE NOO Industrial Loan Balance Outstanding $186,605 % of Total Loans, Gross 7.2% Number of Loans 76 Average Loan Size $2,455 Loan-to-Value (Weighted Average) 57.43% Investor Real Estate Secured: CRE NOO Retail 0-50k Sq Ft, 23.1% 50k - 125k Sq Ft,
Slide 24: CRE NOO Hotels
24 1 Based on state of primary real property collateral if available, otherwise borrower address is used Dollars in thousands Investor Real Estate Secured: CRE NOO Hotels Portfolio Characteristics – CRE NOO Hotels Loan Balance Outstanding $19,366 % of Total Loans, Gross 0.7% Number of Loans 5 Averag
Slide 25: CRE NOO Restaurants
25 Portfolio Characteristics – CRE NOO Restaurants Loan Balance Outstanding $26,385 % of Total Loans, Gross 1.0% Number of Loans 19 Average Loan Size $1,389 Loan-to-Value (Weighted Average) 62.1% Investor Real Estate Secured: CRE NOO Restaurant Full-Service 51.5% Quick-Service 28.9% Tap Rooms 8.9% C
Slide 26: Multifamily Portfolio
5-19 Units 15.2% 20-49 Units 26.9% 50-99 Units 26.0% 100+ Units 31.9% $790 Million 26 Portfolio Characteristics – Multifamily Loan Balance Outstanding $790,275 % of Total Loans, Gross 30.5% Number of Loans 334 Average Loan Size $2,366 Loan-to-Value (Weighted Average) 63.6% 5 Year Net Charge-Offs (%)
Slide 27: Construction and Development Portfolio
Twin Cities MSA 96.2% MN 0.5% Other States 3.3% Residential 25.7% Multifamily 44.3% CRE Other 11.5% Land 18.5% $252 Million 27 By Property Type By Geography1 Land Portfolio Composition Investor Real Estate Secured: CRE NOO Restaurant Portfolio Characteristics – C&D Loan Balance Outstanding $251,573
Slide 28: CRE Owner Occupied Portfolio
28 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Portfolio Characteristics – CRE OO Loan Balance Outstanding $87,507 % of Total Loans, Gross 3.4% Number of Loans 144 Average Loan Size $608 Loan-to-Value (Weighted Average) 58.1% 5 Year Net Charge-Offs (%) (0.01)% Office 30.1% Retail 11.
Slide 29: Commercial and Industrial By Industry
Real Estate and Rental and Leasing, 35.9% Construction, 12.4% Manufacturing, 15.8% Finance & Insurance, 9.9% Other, 9.0% Professional Services, 7.0% Wholesale/Retail Trade, 5.9% Accomodation & Food Services, 4.2% $321 Million 29 1 Distribution by North American Industry Classification System (NAICS)
Slide 30: PPP Loans
Existing Client 57.7% New Client 42.3% 30 New vs. Existing Client PPP Origination Summary as of 6/30/2021 Number of Loans Principal Balance Origination Fees Round 1 1,200 $ 181,600 $ 5,706 Round 2 651 78,386 3,544 Total 1,851 $ 259,986 $ 9,250 Dollars in thousands PPP Outstanding Summary As of and f
Slide 31: Historical Deposit Composition
23.6% 24.5% 26.9% 27.9% 11.5% 14.5% 14.6% 15.9% 25.8% 28.3% 26.3% 28.0% 20.4% 19.8% 14.1% 11.8% 18.7% 12.9% 18.1% 16.4% $1,561 $1,823 $2,502 $2,721 2018 2019 2020 2Q21 31 1 Total deposits less brokered deposits and certificates of deposit greater than $250,000 Dollars in millions • Continue to attra
Slide 32: Loan Portfolio Repricing Composition
32 Dollars in thousands Loan Portfolio – Repricing Composition Variable/Adjustable Loans vs. Rate Floors Fixed/Adjustable Years to Maturity/Repricing Loan Portfolio Repricing Fixed, 59.1% Variable, 22.9% Adjustable, 18.0% 85% 74% 62% 73% 71% 85% 15% 26% 38% 27% 29% 15% $299,712 $202,731 $285,398 $25
Slide 33: Deposit Repricing Opportunities
33 1 Rate indicated assumes renewal into like term at market rates as of July 26, 2021 Dollars in thousands Time Deposit Maturities Time Deposit Repricing Deposit Repricing Opportunities $169 million in time deposits maturing over the next five quarters at a blended cost of 1.55% $33,166 $23,176 $17
Slide 34: Twin Cities Market Highlights
4.00% 1.08% 2.91% Minneapolis Midwest US $86,382 $64,386 $67,761 Minneapolis Midwest US #1 Fortune 500 companies per capita (16)1 Large Corporate Presence #1 State with highest average credit score (720)2 Credit Worthy Population #1 Best place for women entrepreneurs3 Women Entrepreneurs #5 State wi
Slide 35: Growing Market Share
35 Source: S&P Global Market Intelligence; deposit market share data as of June 30, 2020 Growing Market Share 2006 Total Market 2020 Total Market Top 10 Institutions Deposits ($000) Share Top 10 Institutions Deposits ($000) Share Wells Fargo & Co. 16,308,234 $ 27.59% U.S. Bancorp 83,341,943 $ 38.23%
Slide 36: Non-GAAP Reconciliation: Efficiency Ratio
36 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. The Company believes these non-GAAP financial measures provide useful information to both m
Slide 37: Reconciliation of Quarterly Non-GAAP Measures
37 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. The Company believes these non-GAAP financial measures provide useful information to both m
Slide 38: Reconciliation: PPNR
38 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. The Company believes these non-GAAP financial measures provide useful information to both m
Slide 39: Reconciliation: Core NIM
39 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. The Company believes these non-GAAP financial measures provide useful information to both m
Slide 40: Bridgewater Bancshares, Inc.
BRIDGEWATER BANCSHARES, INC.
Bridgewater Bancshares — Q2 2021 Earnings Presentation on 6ix