Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q4 2024 Earnings Presentation
27 slides from Bridgewater Bancshares's earnings presentation, Jan 30, 2025
Slide 1: Earnings Presentation Fourth Quarter 2024
EARNINGS PRESENTATION FOURTH QUARTER 2024 i 'BRIDGEWATER BANCSHARES INC.
Slide 2: Disclaimer
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 concerning plans, estimates,
Slide 3: 4Q24 Earnings Highlights
4Q24 Earnings Highlights Diluted Return on Return on Avg. Tangible Efficiency Nonperforming Assets EPS Average Assets Common Equity1 Ratio1 to Total Assets Reported $0.26 0.68% 7.43% 56.8% 0.01% Adjusted1 $0.27 0.71% 7.82% 55.2% • Core deposit2 balances increased $211M from 3Q24, or 31.3% annualized
Slide 4: Consistent Tangible Book Value Per Share Outperformance
Consistent Tangible Book Value Per Share Outperformance 4Q24 Tangible Book Value Per Share1 Impacted by FMCB Acquisition Following 31 Consecutive Quarters of Growth 198% 77% 1Q17 2Q17 1Q18 2Q18 1Q19 2Q19 1Q20 2Q20 1Q21 2Q21 1Q22 2Q22 1Q23 2Q23 1Q24 2Q24 4Q16 4Q17 4Q18 4Q19 4Q20 4Q21 4Q22 4Q23 4Q24 3
Slide 5: NIM Expansion and Net Interest Income Growth
NIM Expansion and Net Interest Income Growth Net Interest Income and Margin Trends Net Interest Margin Drivers 0.02% 0.01% 0.13% (0.02)% (0.02)% 2.32% 2.32% (0.02)% (0.01)% (0.01)% 2.24% 2.27% 2.24% 2.24% 2.24% $26,967 FMCB Impact $25,314 $24,996 $25,599 $24,631 $747 $751 $968 $608 $767 NIM Deposits
Slide 6: Lower Funding Costs Drive NIM Expansion
Lower Funding Costs Drive NIM Expansion Loan Yields Stable in 4Q24 Growth of High-Yielding Securities Portfolio 5.57% 5.55% 4.94% 5.01% 4.86% 5.38% 5.50% 4.63% 4.80% 5.33% 5.47% 5.47% $752 5.25% 5.31% 5.42% $700 $3,772 $670 $673 $3,726 $3,729 $3,722 $3,731 $630 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q2
Slide 7: Positive Revenue Growth Trends Continue
Positive Revenue Growth Trends Continue Pre-Provision Net Revenue (PPNR)1 Growth Strong Net Interest Income and Noninterest Income Growth 1.09% 4Q24 noninterest income growth driven by higher swap fees and letter of credit fees; no material stub period impact from FMCB 0.98% 1.05% 0.96% 0.95% 0.94%
Slide 8: Well-Controlled Expenses
Well-Controlled Expenses Highly Efficient Business Model Well-Controlled Expenses in 2024 4Q24 included $199K of stub period noninterest expense from FMCB Peer median efficiency ratio of 61%1 in 3Q24 incurred after deal closed on December 13, 2024 $16,812 58.8% 58.7% $15,740 $15,539 $15,760 $488 58.
Slide 9: Strong Core Deposit Momentum Continues
Strong Core Deposit Momentum Continues Improving Deposit Mix Strong Deposit Growth Trends Drive Improved Liquidity Position Deposit Growth Rates 4Q24 $4,087 Ann. FY24 $3,807 $3,808 $3,747 Total Deposits 36% 10% $3,710 20% Total Deposits (ex. FMCB) 12% 4% Core Deposits1 64% 22% 26% 27% 24% 28% 8% Cor
Slide 10: Loan Growth Returns as Demand Continues
Loan Growth Returns as Demand Continues $3,869 FMCB Acquisition Aided Already Strong 4Q24 Loan Growth $3,800 $3,784 $117 • Acquired $117M of loans and leases, at amortized cost, from FMCB $3,724 • 4Q24 loan balances increased 19.7% annualized (7.1% ex. FMCB) $3,686 • FY24 loan balances increased 3.9
Slide 11: New Originations Outpace Payoffs
New Originations Outpace Payoffs 4Q24 Loan Growth Waterfall Increased Demand Drove New Origination Growth $257 $68 $117 $158 $163 $141 $68 $2 $67 $106 $87 $50 $189 $3,869 $189 $(155) $46 $(38) $96 $91 $71 $60 $3,686 4Q23 1Q24 2Q24 3Q24 4Q24 New Originations Advances Loan Payoffs Remain Elevated $217
Slide 12: Well-Diversified Loan Portfolio with Multifamily Expertise
Well-Diversified Loan Portfolio with Multifamily Expertise Consumer Leases & Other 1.1% 0.3% 4Q24 Loan Growth by Type (vs. 3Q24) Includes $43M from 1-4 Family Mortgage acquired FMCB portfolio $53 CRE OO C&I 4.9% 12.9% CRE Nonowner Occupied $51 CRE NOO 28.0% Multifamily $46 Loan Mix 1-4 Family $3.9 L
Slide 13: Managing Multifamily and Office-Related Risk
Managing Multifamily and Office-Related Risk Strong Multifamily Track Record in Stable Twin Cities Market Well-Managed CRE NOO Office Portfolio2 With Limited CBD Exposure Average Weighted NPAs/ NCOs Percent of Total Weighted Average Average Loan Size Loan Size Average LTV Loans (since 2005) Loans LT
Slide 14: Asset Quality Remains Strong
Asset Quality Remains Strong Allowance for Credit Losses Nonperforming Assets2 Net Charge-Offs Well-reserved compared to peer median One CBD office loan moved to nonaccrual FY24 annualized NCOs of 0.03%; ACL/Loans of 1.11%1 in 3Q24; property sold in 4Q24 2024 NCOs related to one CBD office loan $51,
Slide 15: Watch/Special Mention and Substandard Loans Remain at Low Levels
Watch/Special Mention and Substandard Loans Remain at Low Levels Watch/Special Mention List Loans Substandard Loans $46,581 $35,858 $33,829 $33,908 $31,637 $30,436 $31,991 $26,485 $21,791 $21,624 4Q23 1Q24 2Q24 3Q24 4Q24 4Q23 1Q24 2Q24 3Q24 4Q24 1-4 Other Other C&I 5.7% CRE OO Family 0.6% 4.1% 4.4%
Slide 16: Capital Ratios Impacted by Acquisition
Capital Ratios Impacted by Acquisition Capital Ratios Impacted by FMCB Acquisition in 4Q24 Capital Allocation Priorities 14.62% 13.97% 14.00% 14.16% 13.76% 1 Organic Growth Drive profitability by supporting a proven organic loan growth engine 9.79% 9.57% 9.66% 9.66% 9.45% 2 M&A 9.75% 9.16% 9.21% 9.4
Slide 17: 2025 Expectations
2025 Expectations • Mid-to-high single digit loan growth over the course of the year Balance Sheet • Focus on profitable growth while aligning loan growth with core deposit growth over time Growth • Target loan-to-deposit ratio between 95% and 105% • Modest NIM expansion in the current interest rate
Slide 18: 2025 Strategic Priorities
2025 Strategic Priorities Return to More Normalized Continue to Gain Loan and Leverage Technology to Execute on M&A Integration Levels of Profitable Growth Deposit Market Share Support Business Growth and Readiness Initiatives • Well positioned given efforts to • Utilize the expanded branch • Implem
Slide 19: Appendix
——™ BRIDGEWATER BANCSHARES, INC. APPENDIX
Slide 20: 2024 Strategic Priorities
2024 Strategic Priorities Generate Incremental Optimize Balance Sheet for Continue to Gain Loan and Scale ERM Function and Operational Efficiencies While Longer Term Profitable Growth Deposit Market Share Monitor Asset Quality Risks Investing in the Business • Opportunistically gather core • Expand
Slide 21: Interest Rate Sensitivity
Interest Rate Sensitivity Estimated Change in NII From Immediate Interest Rate Shocks Funding Considerations Liability-sensitive balance sheet well positioned for lower interest rates and • Deposit base is more sensitive to changing interest rates a steepening yield curve • Strong momentum in core d
Slide 22: Loan Portfolio Repricing
Loan Portfolio Repricing Fixed-Rate Portfolio Variable-Rate Portfolio Adjustable-Rate Portfolio ($2.7B) ($545M) ($603M) Adjustable-Rate Years to Maturity Variable-Rate Loan Floors Repricing/Maturity Schedule Loan Portfolio Mix $205 $584 $484 $507 $172 $406 $428 $313 $127 $73 53% $96 21% $56 $76 $80
Slide 23: High Quality Securities Portfolio
High Quality Securities Portfolio Securities Available for Sale Portfolio (dollars in millions) Derivatives Portfolio Offsetting AOCI Impact (dollars in thousands) $768 $23,988 $24,458 $665 $604 $633 $601 27% 15% 17% 20% 21% 16% 22% 22% 21% 23% 21% 17% $(13,364) 22% 21% $(18,246) 22% 17% 16% 39% 38%
Slide 24: Ample Liquidity and Borrowing Capacity
Ample Liquidity and Borrowing Capacity Liquidity Position with 1.9x Coverage of Uninsured Deposits Significantly Enhanced Liquidity Position Since 2022 $2,249 $2,290 $2,296 Available Balance $2,234 $2,222 Funding Source 12/31/2024 12/31/2022 Change Cash and Cash Equivalents $ 189 $ 48 $ 141 Unpledge
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures As of and for the quarter ended, As of and for the quarter ended, December 31, March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, 2023 2024 2024 2024 2024 2023 2024 2024 2024 2024 Adjusted Diluted Ear
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures As of and for the quarter ended, As of and for the quarter ended, December 31, March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, 2023 2024 2024 2024 2024 2023 2024 2024 2024 2024 Efficiency Ratio: Ad
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures As of and for the quarter ended, December 31, March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31, Tangible Book Value Per Share 2016 2017 2017 2017 2017 2018 2018 2018 2018 2019 Book Value Per Common Shar
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