Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q3 2020 Earnings Presentation
43 slides from Bridgewater Bancshares's earnings presentation, Oct 29, 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: Our History
BRIDGEWATER P BANC SHARES, INC | Our History
Slide 4: Why Bridgewater?
4 Why Bridgewater Bank? Why Bridgewater?
Slide 5: Q3 2020 Financial Results
5 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 Q3 2020 Financial Results Q3 2020 Q2 2020 % Change Q3 2019 % Change Income Statement Summary Interest Income 28,493 $ 28,166
Slide 6: Strong Capital and Liquidity
6 Strong Capital and Liquidity Dollars in thousands Strong Capital and Liquidity Consolidated Capital Ratios On & Off-Balance Sheet Liquidity as % of Total Assets 15.8% 14.2% 15.2% 18.3% 16.8% 18.6% 18.9% 14.0% 16.1% 15.5% $768,539 $749,816 $706,323 $948,234 $894,373 Q3 2019 Q4 2019 Q1 2020 Q2 2020
Slide 7: Compound Tangible Book Value
$232,524 $241,307 $244,704 $253,799 $262,088 10.43% 10.65% 10.13% 9.23% 9.46% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Tangible Common Equity ($000)¹ Tangible Common Equity to Tangible Assets¹ $4.05 $4.53 $5.40 $7.22 $8.33 $9.13 2015 2016 2017 2018 2019 Q3 2020 Tangible Book Value Per Share¹ 7 Compou
Slide 8: Core Earnings Capital Generation
8 Dollars in thousands Core Earnings Capital Generation Core Earnings Capital Generation Pre-Provision Net Revenue¹, Net Income, and ROA $11,269 $11,679 $12,157 $13,039 $13,200 $7,805 $8,571 $7,443 $7,598 $7,174 2.08% 2.09% 2.11% 2.00% 1.94% 1.43% 1.53% 1.29% 1.17% 1.05% Q3 2019 Q4 2019 Q1 2020 Q2 2
Slide 9: Efficient Branch Footprint
Twin Cities Minnesota 9 Source: S&P Global Market Intelligence Efficient Branch Footprint Efficient Branch Footprint
Slide 10: Growing Market Share
10 Source: S&P Global Market Intelligence; deposit market share data as of 6/30/2020. Twin Cities Deposit Landscape 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.
Slide 11: Stable Operating Efficiency
11 Stable Operating Efficiency Efficiency Ratio Operating Expense Composition 1.56 1.67 1.68 1.37 1.40 0.10 0.20 0.01 0.27 0.02 42.9 44.3 44.1 40.4 41.7 45.6 49.6 44.4 48.6 42.3 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 NIE / Avg. Assets Historic Tax Credit Amortization Adjusted Efficiency Ratio¹ Effi
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 • 14.5% YoY growth in net interest income • Q3 2020 NIM was 3.33% when excluding PPP loans and corresponding deposits • Q3 2020 marked the
Slide 13: Net Interest Drivers
$1,805,920 $1,872,234 $1,954,959 $2,152,398 $2,206,807 5.32% 5.33% 5.17% 5.01% 4.93% 5.07% 5.00% 4.90% 4.76% 4.69% Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Average Loans Loan Yield Loan Yield Excluding Fees 13 *Yield is adjusted to exclude Paycheck Protection Program loans Dollars in thousands Spot R
Slide 14: Loan Portfolio Repricing
14 Dollars in thousands Loan Portfolio Repricing Loan Portfolio – Repricing Composition 17.0%, Adjustable 24.3%, Variable 58.7%, Fixed Variable/Adjustable Loans Vs. Rate Floors Fixed/Adjustable Years to Maturity/Repricing 88% 82% 67% 58% 79% 86% 12% 18% 33% 42% 21% 14% $223,780 $388,757 $267,496 $22
Slide 15: Deposit Repricing Opportunities
$46,690 $46,690 $37,108 $30,736 $1,955 $39,360 $24,971 $34,478 $10,197 $29,212 $86,051 $71,661 $71,586 $40,933 $31,167 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Retail Time Deposit Maturities Brokered Time Deposit Maturities* 15 *Excludes rolling short term brokered funding balances related to interes
Slide 16: Deposit Growth
$60,000 $30,000 $1,802,236 $1,823,310 $1,900,127 $2,242,051 $2,273,044 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Total Deposits ($000's) PPP Loan Deposits ($000's) 16 • 37% YoY growth¹ in noninterest bearing deposits • Internal deposit growth plan momentum • The Bridge, a robust treasury management pl
Slide 17: Historical Deposit Composition
22.2% 23.3% 21.9% 23.6% 24.5% 30.2% 17.1% 13.0% 13.2% 11.5% 14.5% 14.2% 20.1% 23.4% 27.6% 25.8% 28.3% 21.9% 25.3% 26.6% 21.8% 20.4% 19.8% 16.0% 15.3% 13.7% 15.5% 18.7% 12.9% 17.7% $761,882 $1,023,508 $1,339,350 $1,560,934 $1,823,310 $2,273,044 2015 2016 2017 2018 2019 Q3 2020 Noninterest Bearing Tra
Slide 18: Loan Growth
$180,228 $181,596 $1,846,218 $1,912,038 $2,002,817 $2,193,778 $2,259,228 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Total Gross Loans ($000's) PPP Loans ($000's) 18 Loan Growth • Continued focus on profitable loan growth and disciplined pricing • Meaningful new and diverse client acquisition opportunit
Slide 19: Historical Loan Composition
14.6% 10.6% 9.7% 12.6% 10.3% 7.8% 17.9% 17.9% 14.5% 13.6% 13.6% 12.7% 0.3% 0.4% 0.3% 0.2% 0.2% 0.3% 21.1% 20.5% 23.6% 24.5% 26.9% 25.9% 6.1% 6.2% 4.9% 3.9% 3.5% 3.4% 27.0% 31.2% 30.8% 29.5% 31.0% 29.2% 13.0% 13.2% 16.2% 15.7% 14.5% 12.7% 8.0% $799,497 $1,000,739 $1,347,113 $1,664,931 $1,91
Slide 20: Loan Modifications
20 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Full Payment Interest Only 16% 7-12 Month 1-3 Month 4-6 Month 4-6 Month 1Excludes PPP Loans *Based on lender and client survey Modifications as of September 30, 2020 Dollars in thousands Loan Type CRE Nonowner Occupied Multifamily Constr
Slide 21: Loan Portfolio Composition
21 *Based on lender and client survey Dollars in thousands Loan Portfolio Composition Loans by Type Loan Portfolio Composition CRE NOO 29.2% Multifamily 25.9% C&D 7.8% 1-4 Family 12.7% CRE OO 3.4% C&I 12.7% PPP 8.0% Consumer & Other 0.3% $2.26 Billion % of Balance Total (dollars in thousands) Invest
Slide 22: Investor Real Estate Secured: CRE Nonowner Occupied
22 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) By Property Type Portfolio Characteristics – CRE NOO Loan Balance Outstanding $660,058 % of Total Loans, Gross 29.2% Number of Loans 346 Average Loan Size $1,908 Loan-to-Value (Weighted Average) 59.6% 5 Year Net Charge-Offs (%) 0.05% Mod
Slide 23: CRE NOO Office
Modification Summary $51,195 $18,489 $3,839 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 6/30/2020 9/30/2020 10/22/2020* First Modification Second Modification 23 By Property Square Footage Portfolio Characteristics – CRE NOO Office Loan Balance Outstanding $186,914 % of Total Loans, G
Slide 24: CRE NOO Retail
Modification Summary $74,300 $53,307 $10,658 $8,551 $9,104 $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 6/30/2020 9/30/2020 10/22/2020* First Modification Second Modification 24 By Property Square Footage Portfolio Characteristics – CRE NOO Retail Loan Balance Outstandi
Slide 25: CRE NOO Industrial
Modification Summary $14,801 $6,684 $3,878 $0 $4,000 $8,000 $12,000 $16,000 $20,000 6/30/2020 9/30/2020 10/22/2020* First Modification Second Modification 25 By Property Square Footage Portfolio Characteristics – CRE NOO Industrial Loan Balance Outstanding $146,363 % of Total Loans, Gross 6.5% Numbe
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 * Portfolio Characteristics – CRE NOO Hotels Loan Balance Outstanding $31,630 % of Total Loans, Gross 1.4% Number of Loans 6 Average Loan
Slide 27: CRE NOO Restaurant
27 By Restaurant Type Portfolio Characteristics – CRE NOO Restaurant Loan Balance Outstanding $19,763 % of Total Loans, Gross 0.9% Number of Loans 17 Average Loan Size $1,163 Loan-to-Value (Weighted Average) 56.1% Investor Real Estate Secured: CRE NOO Restaurant Investor Real Estate Secured: CRE NOO
Slide 28: Investor Real Estate Secured: Multifamily
5-19 Units 15.2% 20-49 Units 25.0% 50-99 Units 31.8% 100+ Units 27.9% $586 Million 28 By Unit Type Portfolio Characteristics – Multifamily Loan Balance Outstanding $585,814 % of Total Loans, Gross 25.9% Number of Loans 309 Average Loan Size $1,896 Loan-to-Value (Weighted Average) 61.7% 5 Year Net Ch
Slide 29: Construction and Development
Residential 34.0% Multifamily 34.2% CRE Other 10.9% Land 21.0% $176 Million 29 By Property Type By Geography* Land Portfolio Composition Investor Real Estate Secured: CRE NOO Restaurant Investor Real Estate Secured: Construction and Development Portfolio Characteristics – C&D Loan Balance Outstandin
Slide 30: CRE Owner Occupied
30 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) By Property Type Portfolio Characteristics – CRE OO Loan Balance Outstanding $75,963 % of Total Loans, Gross 3.4% Number of Loans 124 Average Loan Size $613 Loan-to-Value (Weighted Average) 57.0% 5 Year Net Charge-Offs (%) 0.03% Office 2
Slide 31: Commercial and Industrial
$287 Million Real Estate and Rental and Leasing, 35.8% Construction, 22.4% Finance & Insurance, 13.3% Manufacturing, 13.2% Professional Services, 5.5% Other Services, 3.0% Accomodation & Food Services, 3.7% Other, 3.0% 31 *Distribution by North American Industry Classification System (NAICS). Any in
Slide 32: PPP Loans
$182 Million 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% 32 *Distribution by North American Industry Classificati
Slide 33: Watch List and Substandard List
33 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Watch List By Loan Type Substandard List By Loan Type C&I 39.8% CRE NOO Retail 17.1% CRE NOO Hotels 30.9% 1-4 Family 2.9% CRE Other 9.1% C&D 0.3% $51 Million Asset Quality Dollars in thousands Watch List Characteristics Loan Balance Outs
Slide 34: Asset Quality
34 Asset Quality Asset Quality $12,194 $5,888 $4,184 $2,695 $16,074 9.73% 3.43% 1.82% 1.01% 5.00% 0.00% 5.00% 10.00% 15.00% 20.00% 25.00% $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 2016 2017 2018 2019 Q3 2020 Classified Assets ($000s) % of Bank Tier 1 Capital + AL
Slide 35: Investor Highlights
35 Investor Highlights Investor Highlights
Slide 36: Appendix
APPENDIX BRIDGEWATER BANCSHARES, INC.
Slide 37: Recent Minnesota M&A Transactions
37 Note: data set includes selected Minnesota bank and thrift M&A transactions in recent years Source: S&P Global Market Intelligence; public filings Core Target Deal Deposit Announcement Total Assets Value Premium In Market / Buyer State Seller State Date ($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 233 •Commercial Banks located in Minnesota, and with less than $500 million in assets 49 •Commercial Banks located in the Twin Cities MSA, and with less than $500 million in assets 30 •Commerci
Slide 39: Consolidated Summary Financial Information - Historical
39 1 Non-GAAP financial measures; for further information, see page 40 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 40: Reconciliation of Annual Non-GAAP Measures
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: Reconciliation of Quarterly Non-GAAP Measures
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: Reconciliation of Quarterly Non-GAAP Measures - Pre-Provision
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
Bridgewater Bancshares — Q3 2020 Earnings Presentation on 6ix