Bridgewater Bancshares, Inc. · NASDAQ:BWB
Bridgewater Bancshares — Q4 2020 Earnings Presentation
42 slides from Bridgewater Bancshares's earnings presentation, Jan 28, 2021
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: Q4 2020 Highlights
1 Adjusted to exclude tax-adjusted FHLB prepayment fees. 2 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. 3 Why Bridgewater Bank? Q4 2020 Highlights $0.17 Reported $0.32 Adjusted1 • Net income of $5.0 million, which included a non-recurring charge of $5.6 million
Slide 4: Q4 2020 Financial Results
1 Represents a Non-GAAP financial measure. See Appendix for Non-GAAP reconciliation. * Change in basis points for profitability metrics 4 Q4 2020 Financial Results (dollars in thousands) Q4 2020 Q3 2020 % Change Q4 2019 % Change Income Statement Summary Interest Income 30,699 $ 28,493 $ 7.7% 27,419
Slide 5: Strong Core Earnings Generation
5 Dollars in thousands Core Earnings Capital Generation Strong Core Earnings Generation Pre-Provision Net Revenue¹, Net Income, and ROA $11,679 $12,157 $13,039 $13,200 $16,298 $8,571 $7,443 $7,598 $7,174 $4,979 2.09% 2.11% 2.00% 1.94% 2.30% 1.53% 1.29% 1.17% 1.05% 0.70% Q4 2019 Q1 2020 Q2 2020 Q3 20
Slide 6: Solid Capital and Liquidity
6 Dollars in thousands Solid Capital and Liquidity Consolidated Capital Ratios On & Off-Balance Sheet Liquidity as % of Total Assets 14.2% 15.2% 18.3% 16.8% 18.4% 18.9% 14.0% 16.1% 15.5% 19.8% $749,816 $706,323 $948,234 $894,373 $1,121,145 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 On-Balance Sheet Liq
Slide 7: Strong Capital and Liquidity: Compound Tangible Book Value
$241,307 $244,704 $253,799 $262,088 $262,109 10.65% 10.13% 9.23% 9.46% 8.96% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Tangible Common Equity ($000)¹ Tangible Common Equity to Tangible Assets¹ $4.53 $5.40 $7.22 $8.33 $9.31 2016 2017 2018 2019 2020 Tangible Book Value Per Share¹ 7 Compound Tangible Boo
Slide 8: Efficient Branch Footprint
Twin Cities Minnesota 8 Source: S&P Global Market Intelligence Efficient Branch Footprint Efficient Branch Footprint
Slide 9: Twin Cities Deposit Landscape: Growing Market Share
9 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. B
Slide 10: Stable Core Operating Efficiency
10 Stable Core Operating Efficiency Efficiency Ratio Operating Expense Composition 1.67 1.68 1.37 1.40 1.34 0.20 0.01 0.27 0.02 0.82 44.3 44.1 40.4 41.7 36.6 49.6 44.4 48.6 42.3 59.0 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Adjustment Factors¹ / Avg. Assets Adj. NIE / Avg. Assets Adjusted Efficiency
Slide 11: FHLB Prepayment Strategy
$0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 Weekly Average Cash FHLB Term Advances 11 Given the low interest rate environment and extraordinary deposit inflows during the year, the Company took action to remove inefficient, longer term FHLB advances from its balance sheet.
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 • 24.7% YoY growth in net interest income • Q4 2020 net interest income includes the accelerated recognition of $1.1 million of PPP loan o
Slide 13: Net Interest Drivers
$1,872,234 $1,954,959 $2,152,398 $2,206,807 $2,301,328 5.33% 5.17% 5.01% 4.93% 4.87% 5.00% 4.90% 4.76% 4.69% 4.59% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Average Loans Loan Yield Loan Yield Excluding Fees 13 *Yield is adjusted to exclude PPP loans Dollars in thousands Spot Rate 2.58% Spot Rate 4.45
Slide 14: Loan Portfolio Repricing
14 Dollars in thousands Loan Portfolio Repricing Loan Portfolio – Repricing Composition 18.2%, Adjustable 24.6%, Variable 57.1%, Fixed Variable/Adjustable Loans vs. Rate Floors Fixed/Adjustable Years to Maturity/Repricing 88% 77% 63% 61% 80% 80% 12% 23% 37% 39% 20% 20% $250,439 $341,938 $272,698 $19
Slide 15: Deposit Repricing Opportunities
$47,666 $37,678 $31,661 $22,447 $5,266 $24,984 $34,464 $10,171 $29,189 $11,469 $72,650 $72,142 $41,832 $51,636 $16,735 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Retail Time Deposit Maturities Wholesale Time Deposit Maturities* 15 *Excludes rolling short term brokered funding balances related to intere
Slide 16: Deposit Growth
$60,000 $30,000 $18,500 $1,823,310 $1,900,127 $2,242,051 $2,273,044 $2,501,636 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total Deposits ($000's) PPP Loan Deposits ($000's) 16 • 46% YoY growth¹ in noninterest bearing deposits • Internal deposit growth plan momentum • Capitalizing on unique opportunity
Slide 17: Historical Deposit Composition
23.3% 21.9% 23.6% 24.5% 26.9% 13.0% 13.2% 11.5% 14.5% 14.6% 23.4% 27.6% 25.8% 28.3% 26.3% 26.6% 21.8% 20.4% 19.8% 14.1% 13.7% 15.5% 18.7% 12.9% 18.1% $1,023,508 $1,339,350 $1,560,934 $1,823,310 $2,501,636 2016 2017 2018 2019 2020 Noninterest Bearing Transaction Deposits Interest Bearing Transaction
Slide 18: Loan Growth
$180,228 $181,596 $138,454 $1,912,038 $2,002,817 $2,193,778 $2,259,228 $2,326,428 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total Gross Loans ($000's) PPP Loans ($000's) 18 Loan Growth • 14.4% YoY loan growth, excluding PPP loans • Q4 2020 gross loans grew $110.3 million, or 21.2% annualized, excludin
Slide 19: Historical Loan Composition
10.6% 9.7% 12.6% 10.3% 7.3% 17.9% 14.5% 13.6% 13.6% 12.7% 0.4% 0.3% 0.2% 0.2% 0.3% 20.5% 23.6% 24.5% 26.9% 26.9% 6.2% 4.9% 3.9% 3.5% 3.2% 31.2% 30.8% 29.5% 31.0% 30.5% 13.2% 16.2% 15.7% 14.5% 13.1% 6.0% $1,000,739 $1,347,113 $1,664,931 $1,912,038 $2,326,428 2016 2017 2018 2019 2020 Construction & De
Slide 20: Loan Modifications Summary
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 Modifications as of December 31, 2020 Dollars in thousands Expiration of Modifications as of December 31, 2020 Loan Type CRE Nonowner Occupied Mu
Slide 21: Loan Portfolio Composition
21 Dollars in thousands Loan Portfolio Composition Loans by Type Loan Portfolio Composition CRE NOO 30.5% Multifamily 26.9% C&D 7.3% 1-4 Family 12.7% CRE OO 3.2% C&I 13.1% PPP 6.0% Consumer & Other 0.3% $2.33 Billion $191,381 $66,552 $0 $50,000 $100,000 $150,000 $200,000 $250,000 9/30/20 12/31/20 Mo
Slide 22: Investor Real Estate Secured: CRE Nonowner Occupied
Dollars in thousands 22 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) By Property Type Portfolio Characteristics – CRE NOO Loan Balance Outstanding $709,300 % of Total Loans, Gross 30.5% Number of Loans 364 Average Loan Size $1,949 Loan-to-Value (Weighted Average) 58.8% 5 Year Net Char
Slide 23: CRE NOO Office
Dollars in thousands Modification Summary $18,489 $3,839 $0 $10,000 $20,000 $30,000 9/30/20 12/31/20 Modifications 23 By Property Square Footage Portfolio Characteristics – CRE NOO Office Loan Balance Outstanding $191,142 % of Total Loans, Gross 8.2% Number of Loans 100 Average Loan Size $1,911 Loan
Slide 24: CRE NOO Retail
Dollars in thousands Modification Summary $61,858 $6,199 $0 $15,000 $30,000 $45,000 $60,000 $75,000 9/30/20 12/31/20 Modifications 24 By Property Square Footage Portfolio Characteristics – CRE NOO Retail Loan Balance Outstanding $164,840 % of Total Loans, Gross 7.1% Number of Loans 105 Average Loan
Slide 25: CRE NOO Industrial
Dollars in thousands Modification Summary $6,684 $1,565 $0 $2,000 $4,000 $6,000 $8,000 $10,000 9/30/20 12/31/20 Modifications 25 By Property Square Footage Portfolio Characteristics – CRE NOO Industrial Loan Balance Outstanding $156,151 % of Total Loans, Gross 6.7% Number of Loans 67 Average Loan Si
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 $31,528 % 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 $21,291 % of Total Loans, Gross 0.9% Number of Loans 17 Average Loan Size $1,252 Loan-to-Value (Weighted Average) 58.7% 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 24.2% 50-99 Units 27.8% 100+ Units 32.9% $626 Million 28 By Unit Type Portfolio Characteristics – Multifamily Loan Balance Outstanding $626,465 % of Total Loans, Gross 26.9% Number of Loans 316 Average Loan Size $1,982 Loan-to-Value (Weighted Average) 62.3% 5 Year Net Ch
Slide 29: Construction and Development
Residential 34.9% Multifamily 37.9% CRE Other 7.8% Land 19.4% $170 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 Outstanding
Slide 30: Real Estate Secured: CRE Owner Occupied
30 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) By Property Type Portfolio Characteristics – CRE OO Loan Balance Outstanding $75,604 % of Total Loans, Gross 3.2% Number of Loans 123 Average Loan Size $615 Loan-to-Value (Weighted Average) 58.4% 5 Year Net Charge-Offs (%) 0.04% Office 2
Slide 31: Commercial and Industrial
Dollars in thousands Real Estate and Rental and Leasing, 34.7% Construction, 20.4% Manufacturing, 11.4% Finance & Insurance, 10.3% Other, 9.3% Professional Services, 5.4% Wholesale/Retai l Trade, 4.9% Accomodation & Food Services, 3.6% $304 Million 31 *Distribution by North American Industry Classif
Slide 32: Asset Quality: Watch and Substandard Lists
32 Investor Real Estate Secured: CRE Nonowner Occupied (“NOO”) Watch List By Loan Type Substandard List By Loan Type C&I 32.3% CRE NOO Retail 20.6% CRE NOO Hotels 35.1% 1-4 Family 1.6% CRE Other 10.4% $45 Million Asset Quality Dollars in thousands Watch List Characteristics Loan Balance Outstanding
Slide 33: Asset Quality
Dollars in thousands 33 Asset Quality Asset Quality $6,506 $1,720 $581 $461 $775 0.52% 0.11% 0.03% 0.02% 0.03% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 2016 2017 2018 2019 2020 NPAs ($000s) % of Assets $12,333 $16,502 $20,031 $22,526 $34,841 1.23
Slide 34: Investor Highlights
34 Investor Highlights Investor Highlights
Slide 35: Appendix
| APPENDIX BRIDGEWATER BANCSHARES, INC.
Slide 36: Recent Minnesota M&A Transactions
36 Note: data set includes selected Minnesota bank and thrift M&A transactions in recent years Source: S&P Global Market Intelligence; public filings Core Target Deal Deposit Announcement Total Assets Value Premium In Market / Buyer State Seller State Date ($mm) ($mm) (%) Market Entry MN MN 6/28/201
Slide 37: Potential Acquisition Targets
37 Source: S&P Global Market Intelligence; most recent quarter data *Dollars in thousands 267 •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 mill
Slide 38: Consolidated Summary Financial Information - Historical
38 1 Non-GAAP financial measures; for further information, see page 39 Consolidated Summary Financial Information - Historical Dollar Values in Millions 2016Y 2017Y 2018Y 2019Y 2020Y Balance Sheet Total Assets 1,260 $ 1,617 $ 1,974 $ 2,269 $ 2,927 $ Gross Loans 1,001 1,347 1,665 1,912 2,326 Deposits
Slide 39: Reconciliation of Annual Non-GAAP Measures
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: Reconciliation of Quarterly 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. The Company believes these non-GAAP financial measures provide useful information to both m
Slide 41: Reconciliation of Quarterly Non-GAAP Measures – Pre-Provision
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. The Company believes these non-GAAP financial measures provide useful information to both m
Slide 42: Bridgewater Bancshares, Inc.
BRIDGEWATER BANCSHARES, INC.
Bridgewater Bancshares — Q4 2020 Earnings Presentation on 6ix