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Bridgewater Bancshares, Inc. Announces Record Third Quarter 2022 Net Income of $14.5 Million, $0.47 Diluted Earnings Per Common Share

Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced record net income of $14.5 million for the third quarter of 2022, a 12.7% increase over net income of $12.9 million for the second quarter of 2022, and a 26.1% increase over net income of $11.5 million for the third quarter of 2021. Earnings per diluted common share for the third quarter of 2022 were $0.47, a 14.6% increase compared to $0.41 per diluted common share for the second quarter of 2022, and a 19.4% increase compared to $0.40 per diluted common share for the same period in 2021.

“Bridgewater’s ability to produce consistent financial results remained evident in the third quarter with record pre-provision net revenue and continued growth of tangible book value per share,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “Our impressive profitability was driven by robust loan growth, well controlled expenses and the hard work of our team members to expand and deepen our client relationships.

“While the current economic environment creates an elevated level of uncertainty, we remain confident in our business model. As the rise in interest rates drives deposit costs higher and creates near-term net interest margin pressure, we believe our proven ability to grow the balance sheet can support our continued focus on overall revenue growth. Couple this with our superb credit quality and an efficiency ratio among the best in the industry and we have a story that is poised to continue driving sustained shareholder value.”

Third Quarter 2022 Financial Results

 

 

 

 

 

 

 

 

 

Diluted

 

 

Adjusted

 

 

Nonperforming

 

ROA

 

 

PPNR ROA (1)

 

 

ROE

 

 

earnings per share

 

 

efficiency ratio (1)

 

 

assets to total assets

 

1.46

%

 

2.15

%

 

14.99

%

 

$

0.47

 

 

39.4

%

 

0.02

%

________________________________

(1)

Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

Third Quarter 2022 Highlights

  • Diluted earnings per common share were $0.47, compared to $0.41 per common share for the second quarter of 2022.
  • Tangible book value per share, a non-GAAP financial measure, increased $0.30, or 10.8% annualized, to $11.33, compared to $11.03 at June 30, 2022, despite the market value depreciation of the securities portfolio due to rapidly rising interest rates, which continues to negatively impact accumulated other comprehensive income.
  • Record pre-provision net revenue (PPNR), a non-GAAP financial measure, of $21.4 million, compared to $20.4 million for the second quarter of 2022, an increase of $1.0 million, or 4.9%. PPNR ROA, a non-GAAP financial measure, was 2.15%, compared to 2.19% for the second quarter of 2022.
  • Annualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the third quarter of 2022 were 1.46% and 14.99%, compared to ROA and ROE of 1.38% and 13.55%, respectively, for the second quarter of 2022. Annualized return on average tangible common equity, a non-GAAP financial measure, was 17.03% for the third quarter of 2022, compared to 15.26% for the second quarter of 2022.
  • Gross loans increased $154.2 million, or 19.0% annualized, from the end of the second quarter of 2022.
  • Deposits increased $103.1 million, or 12.8% annualized, from the end of the second quarter of 2022.
  • Net interest margin (on a fully tax-equivalent basis) was 3.53%, compared to 3.58% in the second quarter of 2022. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, was 3.38%, compared to 3.34% in the second quarter of 2022.
  • Adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 39.4%, compared to 40.0% for the second quarter of 2022.
  • A loan loss provision of $1.5 million was recorded to support strong organic loan growth. The allowance for loan losses to total loans was 1.38% at September 30, 2022, compared to 1.39% at June 30, 2022.
  • Annualized net loan charge-offs (recoveries) as a percentage of average loans were (0.03)% for the third quarter of 2022, compared to 0.00% for the second quarter of 2022.

Year-Over-Year Highlights

  • Net income was $14.5 million for the third quarter of 2022, compared to $11.5 million for the third quarter of 2021, an increase of $3.0 million, or 26.1%.
  • Diluted earnings per common share for the third quarter of 2022 were $0.47, compared to $0.40 for the third quarter of 2021, an increase of 19.4%.
  • Net interest margin (on a fully tax-equivalent basis) was 3.53% for the third quarter of 2022 compared to 3.54% for the third quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, was 3.38% for the third quarter of 2022, compared to 3.22% for the third quarter of 2021.
  • Gross loans increased $668.1 million at September 30, 2022, or 24.6%, compared to September 30, 2021.
  • Deposits increased $450.9 million at September 30, 2022, or 15.8%, compared to September 30, 2021.

 

Key Financial Measures

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

As of and for the Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

 

September 30,

 

September 30,

 

 

 

2022

 

2022

 

2021

 

 

2022

 

2021

 

Per Common Share Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.49

 

$

0.43

 

$

0.41

 

 

$

1.32

 

$

1.18

 

Diluted Earnings Per Share

 

 

0.47

 

 

0.41

 

 

0.40

 

 

 

1.27

 

 

1.14

 

Book Value Per Share

 

 

11.44

 

 

11.14

 

 

10.73

 

 

 

11.44

 

 

10.73

 

Tangible Book Value Per Share (1)

 

 

11.33

 

 

11.03

 

 

10.62

 

 

 

11.33

 

 

10.62

 

Basic Weighted Average Shares Outstanding

 

 

27,520,117

 

 

27,839,260

 

 

28,047,280

 

 

 

27,825,517

 

 

28,035,246

 

Diluted Weighted Average Shares Outstanding

 

 

28,592,854

 

 

28,803,842

 

 

29,110,547

 

 

 

28,882,701

 

 

29,077,850

 

Shares Outstanding at Period End

 

 

27,587,978

 

 

27,677,372

 

 

28,066,822

 

 

 

27,587,978

 

 

28,066,822

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Assets (Annualized)

 

 

1.46

%

 

1.38

%

 

1.37

%

 

 

1.42

%

 

1.42

%

Pre-Provision Net Revenue Return on Average Assets (Annualized) (1)

 

 

2.15

 

 

2.19

 

 

2.09

 

 

 

2.15

 

 

2.10

 

Return on Average Shareholders' Equity (Annualized)

 

 

14.99

 

 

13.55

 

 

13.81

 

 

 

13.85

 

 

14.95

 

Return on Average Tangible Common Equity (Annualized) (1)

 

 

17.03

 

 

15.26

 

 

15.47

 

 

 

15.63

 

 

15.69

 

Yield on Interest Earning Assets(2)

 

 

4.37

 

 

4.16

 

 

4.14

 

 

 

4.23

 

 

4.20

 

Yield on Total Loans, Gross(2)

 

 

4.59

 

 

4.45

 

 

4.65

 

 

 

4.50

 

 

4.65

 

Cost of Total Deposits

 

 

0.73

 

 

0.46

 

 

0.48

 

 

 

0.55

 

 

0.53

 

Cost of Funds

 

 

0.93

 

 

0.63

 

 

0.65

 

 

 

0.73

 

 

0.70

 

Net Interest Margin (2)

 

 

3.53

 

 

3.58

 

 

3.54

 

 

 

3.57

 

 

3.55

 

Core Net Interest Margin (1)(2)

 

 

3.38

 

 

3.34

 

 

3.22

 

 

 

3.36

 

 

3.29

 

Efficiency Ratio (1)

 

 

39.8

 

 

40.2

 

 

43.9

 

 

 

40.7

 

 

42.4

 

Adjusted Efficiency Ratio (1)

 

 

39.4

 

 

40.0

 

 

41.5

 

 

 

40.4

 

 

41.3

 

Noninterest Expense to Average Assets (Annualized)

 

 

1.42

 

 

1.47

 

 

1.58

 

 

 

1.48

 

 

1.53

 

Adjusted Noninterest Expense to Average Assets (Annualized) (1)

 

 

1.41

 

 

1.47

 

 

1.49

 

 

 

1.47

 

 

1.49

 

Loan to Deposit Ratio

 

 

102.3

 

 

100.7

 

 

95.0

 

 

 

 

 

 

 

 

Core Deposits to Total Deposits (3)

 

 

83.0

 

 

82.9

 

 

83.3

 

 

 

 

 

 

 

 

Tangible Common Equity to Tangible Assets (1)

 

 

7.57

 

 

7.87

 

 

8.81

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Bank Only) (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

11.24

%

 

11.43

%

 

10.96

%

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-based Capital Ratio

 

 

11.46

 

 

11.53

 

 

11.88

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

11.46

 

 

11.53

 

 

11.88

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

12.67

 

 

12.74

 

 

13.13

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital Ratios (Consolidated) (4)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 Leverage Ratio

 

 

9.98

%

 

10.33

%

 

10.70

%

 

 

 

 

 

 

 

Common Equity Tier 1 Risk-based Capital Ratio

 

 

8.47

 

 

8.50

 

 

9.47

 

 

 

 

 

 

 

 

Tier 1 Risk-based Capital Ratio

 

 

10.19

 

 

10.29

 

 

11.65

 

 

 

 

 

 

 

 

Total Risk-based Capital Ratio

 

 

13.78

 

 

13.98

 

 

15.93

 

 

 

 

 

 

 

 

________________________________

(1)

Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

(2)

Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.

(3)

Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.

(4)

Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.

 

Selected Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

(dollars in thousands)

 

2022

 

2022

 

2022

 

2021

 

2021

Selected Balance Sheet Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,128,987

 

$

3,883,264

 

$

3,607,920

 

$

3,477,659

 

$

3,389,125

Total Loans, Gross

 

 

3,380,082

 

 

3,225,885

 

 

2,987,967

 

 

2,819,472

 

 

2,712,012

Allowance for Loan Losses

 

 

46,491

 

 

44,711

 

 

41,692

 

 

40,020

 

 

38,901

Goodwill and Other Intangibles

 

 

2,962

 

 

3,009

 

 

3,057

 

 

3,105

 

 

3,153

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

3,305,074

 

 

3,201,953

 

 

3,035,611

 

 

2,946,237

 

 

2,854,157

Tangible Common Equity (1)

 

 

312,531

 

 

305,360

 

 

309,870

 

 

309,653

 

 

298,135

Total Shareholders' Equity

 

 

382,007

 

 

374,883

 

 

379,441

 

 

379,272

 

 

367,803

Average Total Assets - Quarter-to-Date

 

 

3,948,201

 

 

3,743,575

 

 

3,513,798

 

 

3,403,270

 

 

3,332,301

Average Shareholders' Equity - Quarter-to-Date

 

 

384,020

 

 

381,448

 

 

383,024

 

 

374,035

 

 

330,604

________________________________

(1)

Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Selected Income Statement Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Income

 

$

42,359

 

$

37,782

 

$

33,517

 

$

114,835

 

$

95,104

Interest Expense

 

 

8,264

 

 

5,252

 

 

4,844

 

 

18,030

 

 

14,748

Net Interest Income

 

 

34,095

 

 

32,530

 

 

28,673

 

 

96,805

 

 

80,356

Provision for Loan Losses

 

 

1,500

 

 

3,025

 

 

1,300

 

 

6,200

 

 

4,000

Net Interest Income after Provision for Loan Losses

 

 

32,595

 

 

29,505

 

 

27,373

 

 

90,605

 

 

76,356

Noninterest Income

 

 

1,387

 

 

1,650

 

 

1,410

 

 

4,594

 

 

4,021

Noninterest Expense

 

 

14,157

 

 

13,752

 

 

13,236

 

 

41,417

 

 

35,636

Income Before Income Taxes

 

 

19,825

 

 

17,403

 

 

15,547

 

 

53,782

 

 

44,741

Provision for Income Taxes

 

 

5,312

 

 

4,521

 

 

4,038

 

 

14,125

 

 

11,568

Net Income

 

 

14,513

 

 

12,882

 

 

11,509

 

 

39,657

 

 

33,173

Preferred Stock Dividends

 

 

(1,013)

 

 

(1,014)

 

 

 

 

(3,040)

 

 

Net Income Available to Common Shareholders

 

$

13,500

 

$

11,868

 

$

11,509

 

$

36,617

 

$

33,173

Income Statement

Net Interest Income

Net interest income was $34.1 million for the third quarter of 2022, an increase of $1.6 million, or 4.8%, from $32.5 million in the second quarter of 2022, and an increase of $5.4 million, or 18.9%, from $28.7 million in the third quarter of 2021. The linked-quarter increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and loans, offset partially by higher rates paid on deposits. The year-over-year increase in net interest income was primarily due to growth in average interest earning assets and higher yields on investment securities and core loans, offset partially by higher rates paid on deposits and lower PPP fee recognition. Average interest earning assets were $3.87 billion for the third quarter of 2022, an increase of $200.1 million, or 5.5%, from $3.67 billion for the second quarter of 2022, and an increase of $637.6 million, or 19.7%, from $3.23 billion for the third quarter of 2021. The linked-quarter and year-over-year increases in average interest earning assets were primarily due to strong organic growth in the loan portfolio and continued purchases of investment securities, offset partially by the forgiveness of PPP loans and the reduction of cash balances.

Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2022 was 3.53%, a five basis point decrease from 3.58% in the second quarter of 2022, and a modest one basis point decline from 3.54% in the third quarter of 2021. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, for the third quarter of 2022 was 3.38%, a four basis point increase from 3.34% in the second quarter of 2022, and a 16 basis point increase from 3.22% in the third quarter of 2021. The Company remains focused on managing the impact of continued interest rate hikes and the evolving shape of the yield curve during this unique interest rate environment.

As the PPP loan portfolio has almost fully paid off, the recognition of fees associated with the originations has decreased significantly, which impacts comparability between periods. The Company recognized $90,000 of PPP origination fees during the third quarter of 2022, compared to $244,000 during the second quarter of 2022, and $1.6 million during the third quarter of 2021. Remaining PPP origination fees to be recognized as of September 30, 2022 were $45,000.

Interest income was $42.4 million for the third quarter of 2022, an increase of $4.6 million, or 12.1%, from $37.8 million in the second quarter of 2022, and an increase of $8.8 million, or 26.4%, from $33.5 million in the third quarter of 2021. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.37% in the third quarter of 2022, compared to 4.16% in the second quarter of 2022, and 4.14% in the third quarter of 2021. The linked-quarter expansion in the yield on interest earning assets was primarily due to the rapid increase in market interest rates resulting in new loan originations and investment purchases at yields accretive to the existing portfolios. The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios in the rising interest rate environment, offset partially by the lower recognition of PPP origination fees.

Loan interest income and loan fees remain the primary contributing factors to the changes in the yield on interest earning assets. The aggregate loan yield, excluding PPP loans, increased to 4.59% in the third quarter of 2022, which was 16 basis points higher than 4.43% in the second quarter of 2022, and eight basis points higher than 4.51% in the third quarter of 2021. While loan fees have maintained a relatively stable contribution to the aggregate loan yield, the current period was impacted by fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the decrease in fee recognition, the Company is encouraged that the core loan yield continues to rise as new loan originations and the existing portfolio reprice in the higher rate environment.

A summary of interest and fees recognized on loans, excluding PPP loans, for the periods indicated is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

September 30, 2022

 

 

June 30, 2022

 

 

March 31, 2022

 

 

December 31, 2021

 

 

September 30, 2021

 

Interest

 

4.42

%

 

4.17

%

 

4.15

%

 

4.20

%

 

4.28

%

Fees

 

0.17

 

 

0.26

 

 

0.25

 

 

0.21

 

 

0.23

 

Yield on Loans, Excluding PPP Loans

 

4.59

%

 

4.43

%

 

4.40

%

 

4.41

%

 

4.51

%

Interest expense was $8.3 million for the third quarter of 2022, an increase of $3.0 million, or 57.3%, from $5.3 million in the second quarter of 2022, and an increase of $3.4 million, or 70.6%, from $4.8 million in the third quarter of 2021. The cost of interest bearing liabilities increased 44 basis points on a linked-quarter basis from 0.86% in the second quarter of 2022 to 1.30% in the third quarter of 2022, primarily due to the rapid increase in market interest rates that occurred during the quarter. On a year-over-year basis, the cost of interest bearing liabilities increased 42 basis points from 0.88% in the third quarter of 2021 to 1.30% in the third quarter of 2022, primarily due to higher rates paid on deposits and the increased utilization of federal funds purchased and FHLB advances in the rising interest rate environment.

Interest expense on deposits was $6.0 million for the third quarter of 2022, an increase of $2.5 million, or 73.1%, from $3.5 million in the second quarter of 2022, and an increase of $2.6 million, or 75.1%, from $3.4 million in the third quarter of 2021. The cost of total deposits increased 27 basis points on a linked-quarter basis from 0.46% in the second quarter of 2022, to 0.73% in the third quarter of 2022, primarily due to the rapid increase in rates in 2022. On a year-over-year basis, the cost of total deposits increased 25 basis points from 0.48% in the third quarter of 2021, to 0.73% in the third quarter of 2022, primarily due to the upward repricing of the deposit portfolio in the higher interest rate environment.

A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021 is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

 

September 30, 2022

 

June 30, 2022

 

September 30, 2021

 

 

 

Average

 

Interest

 

Yield/

 

Average

 

Interest

 

Yield/

 

Average

 

Interest

 

Yield/

 

 

 

Balance

 

& Fees

 

Rate

 

Balance

 

& Fees

 

Rate

 

Balance

 

& Fees

 

Rate

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Investments

 

$

57,613

 

$

165

 

1.13

%

$

61,046

 

$

40

 

0.26

%

$

187,405

 

$

67

 

0.14

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

461,255

 

 

3,741

 

3.22

 

 

417,142

 

 

2,696

 

2.59

 

 

314,367

 

 

1,751

 

2.21

 

Tax-Exempt Investment Securities (1)

 

 

75,801

 

 

799

 

4.18

 

 

74,261

 

 

795

 

4.30

 

 

71,801

 

 

737

 

4.07

 

Total Investment Securities

 

 

537,056

 

 

4,540

 

3.35

 

 

491,403

 

 

3,491

 

2.85

 

 

386,168

 

 

2,488

 

2.56

 

Paycheck Protection Program Loans (2)

 

 

2,424

 

 

96

 

15.75

 

 

8,335

 

 

263

 

12.67

 

 

76,006

 

 

1,753

 

9.15

 

Loans (1)(2)

 

 

3,263,390

 

 

37,724

 

4.59

 

 

3,099,344

 

 

34,205

 

4.43

 

 

2,579,021

 

 

29,348

 

4.51

 

Total Loans

 

 

3,265,814

 

 

37,820

 

4.59

 

 

3,107,679

 

 

34,468

 

4.45

 

 

2,655,027

 

 

31,101

 

4.65

 

Federal Home Loan Bank Stock

 

 

11,413

 

 

156

 

5.42

 

 

11,620

 

 

59

 

2.04

 

 

5,701

 

 

68

 

4.65

 

Total Interest Earning Assets

 

 

3,871,896

 

 

42,681

 

4.37

%

 

3,671,748

 

 

38,058

 

4.16

%

 

3,234,301

 

 

33,724

 

4.14

%

Noninterest Earning Assets

 

 

76,305

 

 

 

 

 

 

 

71,827

 

 

 

 

 

 

 

98,000

 

 

 

 

 

 

Total Assets

 

$

3,948,201

 

 

 

 

 

 

$

3,743,575

 

 

 

 

 

 

$

3,332,301

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

517,658

 

$

1,032

 

0.79

%

$

552,502

 

$

694

 

0.50

%

$

479,580

 

$

562

 

0.47

%

Savings and Money Market Deposits

 

 

999,932

 

 

2,494

 

0.99

 

 

925,354

 

 

1,185

 

0.51

 

 

801,354

 

 

904

 

0.45

 

Time Deposits

 

 

288,621

 

 

847

 

1.16

 

 

280,645

 

 

665

 

0.95

 

 

318,222

 

 

928

 

1.16

 

Brokered Deposits

 

 

447,034

 

 

1,612

 

1.43

 

 

403,931

 

 

912

 

0.91

 

 

440,167

 

 

1,023

 

0.92

 

Total Interest Bearing Deposits

 

 

2,253,245

 

 

5,985

 

1.05

 

 

2,162,432

 

 

3,456

 

0.64

 

 

2,039,323

 

 

3,417

 

0.66

 

Federal Funds Purchased

 

 

106,826

 

 

709

 

2.63

 

 

137,379

 

 

410

 

1.20

 

 

 

 

 

 

FHLB Advances

 

 

72,343

 

 

328

 

1.80

 

 

47,511

 

 

167

 

1.41

 

 

54,130

 

 

213

 

1.56

 

Subordinated Debentures

 

 

92,503

 

 

1,242

 

5.33

 

 

92,396

 

 

1,219

 

5.29

 

 

91,337

 

 

1,214

 

5.27

 

Total Interest Bearing Liabilities

 

 

2,524,917

 

 

8,264

 

1.30

%

 

2,439,718

 

 

5,252

 

0.86

%

 

2,184,790

 

 

4,844

 

0.88

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

991,545

 

 

 

 

 

 

 

882,477

 

 

 

 

 

 

 

784,148

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

47,719

 

 

 

 

 

 

 

39,932

 

 

 

 

 

 

 

32,759

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

1,039,264

 

 

 

 

 

 

 

922,409

 

 

 

 

 

 

 

816,907

 

 

 

 

 

 

Shareholders' Equity

 

 

384,020

 

 

 

 

 

 

 

381,448

 

 

 

 

 

 

 

330,604

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

3,948,201

 

 

 

 

 

 

$

3,743,575

 

 

 

 

 

 

$

3,332,301

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

34,417

 

3.07

%

 

 

 

 

32,806

 

3.30

%

 

 

 

 

28,880

 

3.26

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.53

%

 

 

 

 

 

 

3.58

%

 

 

 

 

 

 

3.54

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(322)

 

 

 

 

 

 

 

(276)

 

 

 

 

 

 

 

(207)

 

 

 

Net Interest Income

 

 

 

 

$

34,095

 

 

 

 

 

 

$

32,530

 

 

 

 

 

 

$

28,673

 

 

 

________________________________

(1)

Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%.

(2)

Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

(3)

Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

Provision for Loan Losses

The provision for loan losses was $1.5 million for the third quarter of 2022, a decrease of $1.5 million from $3.0 million for the second quarter of 2022, and an increase of $200,000 from $1.3 million for the third quarter of 2021. The provision recorded in the third quarter of 2022 was primarily attributable to the strong growth of the loan portfolio. The allowance for loan losses to total loans was 1.38% at September 30, 2022, compared to 1.39% at June 30, 2022, and 1.43% at September 30, 2021.

As an emerging growth company, the Company is not subject to Accounting Standards Update No. 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,“ or CECL, until January 1, 2023.

The following table presents the activity in the Company’s allowance for loan losses for the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Balance at Beginning of Period

 

$

44,711

 

$

41,692

 

$

37,591

 

$

40,020

 

$

34,841

Provision for Loan Losses

 

 

1,500

 

 

3,025

 

 

1,300

 

 

6,200

 

 

4,000

Charge-offs

 

 

(5)

 

 

(14)

 

 

(20)

 

 

(34)

 

 

(37)

Recoveries

 

 

285

 

 

8

 

 

30

 

 

305

 

 

97

Balance at End of Period

 

$

46,491

 

$

44,711

 

$

38,901

 

$

46,491

 

$

38,901

Noninterest Income

Noninterest income was $1.4 million for the third quarter of 2022, a decrease of $263,000 from $1.7 million for the second quarter of 2022, and a decrease of $23,000 from $1.4 million for the third quarter of 2021. The linked-quarter decrease was primarily due to a decrease in letter of credit fees and other income, offset partially by an increase in bank-owned life insurance income. The year-over-year decrease was primarily due to decreased letter of credit fees and gains on sales of securities, offset partially by an increase in bank-owned life insurance income.

The following table presents the major components of noninterest income for the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Noninterest Income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

$

313

 

$

298

 

$

268

 

$

892

 

$

733

Net Gain on Sales of Securities

 

 

 

 

52

 

 

48

 

 

52

 

 

750

Letter of Credit Fees

 

 

428

 

 

564

 

 

577

 

 

1,234

 

 

1,135

Debit Card Interchange Fees

 

 

153

 

 

152

 

 

143

 

 

438

 

 

414

Swap Fees

 

 

 

 

 

 

 

 

557

 

 

Bank-Owned Life Insurance

 

 

227

 

 

149

 

 

166

 

 

524

 

 

166

Other Income

 

 

266

 

 

435

 

 

208

 

 

897

 

 

823

Totals

 

$

1,387

 

$

1,650

 

$

1,410

 

$

4,594

 

$

4,021

Noninterest Expense

Noninterest expense was $14.2 million for the third quarter of 2022, an increase of $405,000 from $13.8 million for the second quarter of 2022, and an increase of $921,000 from $13.2 million for the third quarter of 2021. The linked-quarter increase was primarily due to an increase in salaries and employee benefits and technology expenses, offset partially by a decrease in professional and consulting fees, marketing and advertising expenses, and other expenses. The year-over-year increase was primarily attributable to increases in salaries and employee benefits, occupancy and equipment, and other expenses, offset partially by a decrease in debt prepayment fees.

The following table presents the major components of noninterest expense for the periods indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

(dollars in thousands)

 

2022

 

2022

 

2021

 

2022

 

2021

Noninterest Expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

$

9,449

 

$

8,977

 

$

8,309

 

$

27,120

 

$

22,923

Occupancy and Equipment

 

 

1,086

 

 

1,042

 

 

942

 

 

3,213

 

 

2,977

FDIC Insurance Assessment

 

 

315

 

 

330

 

 

355

 

 

1,005

 

 

960

Data Processing

 

 

372

 

 

356

 

 

325

 

 

1,025

 

 

916

Professional and Consulting Fees

 

 

716

 

 

769

 

 

708

 

 

2,181

 

 

1,804

Information Technology and Telecommunications

 

 

650

 

 

594

 

 

598

 

 

1,822

 

 

1,609

Marketing and Advertising

 

 

479

 

 

524

 

 

418

 

 

1,629

 

 

1,018

Intangible Asset Amortization

 

 

48

 

 

47

 

 

48

 

 

143

 

 

143

Amortization of Tax Credit Investments

 

 

114

 

 

63

 

 

152

 

 

294

 

 

410

Debt Prepayment Fees

 

 

 

 

 

 

582

 

 

 

 

582

Other Expense

 

 

928

 

 

1,050

 

 

799

 

 

2,985

 

 

2,294

Totals

 

$

14,157

 

$

13,752

 

$

13,236

 

$

41,417

 

$

35,636

The Company continues to add key talent across the organization, reaching 246 full-time equivalent employees at September 30, 2022, compared to 236 employees at June 30, 2022, and 219 employees at September 30, 2021.

The efficiency ratio, a non-GAAP financial measure, was 39.8% for the third quarter of 2022, compared to 40.2% for the second quarter of 2022, and 43.9% for the third quarter of 2021. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 39.4% for the third quarter of 2022, 40.0% for the second quarter of 2022 and 41.5% for the third quarter of 2021.

Income Taxes

The effective combined federal and state income tax rate for the third quarter of 2022 was 26.8%, a slight increase from 26.0% for the second quarter of 2022 and 26.0% for the third quarter of 2021.

Balance Sheet

Total assets at September 30, 2022 were $4.13 billion, a 6.3% increase from $3.88 billion at June 30, 2022, and a 21.8% increase from $3.39 billion at September 30, 2021. The linked-quarter increase in total assets was primarily due to strong organic loan growth and continued purchases of investment securities. The year-over-year increase in total assets was primarily due to robust organic loan growth and purchases of investment securities, offset partially by a decrease in cash and cash equivalents.

Total gross loans at September 30, 2022 were $3.38 billion, an increase of $154.2 million, or 4.8%, over total gross loans of $3.23 billion at June 30, 2022, and an increase of $668.1 million, or 24.6%, over total gross loans of $2.71 billion at September 30, 2021. The increase in the loan portfolio during the third quarter of 2022 was primarily due to growth in the commercial and multifamily segments, offset partially by a decrease in the construction and land development segment which was the result of completed construction projects migrating to permanent financing. While the Company’s loan growth in the third quarter of 2022 remained strong, the pace began to moderate slightly, compared to the first half of 2022 due to active balance sheet management to align loan growth with the funding outlook, sales of participations on larger originations to manage growth, and the impact of the higher interest rate environment on the number of deals that made financial sense.

The following table presents the dollar composition of the Company’s loan portfolio, by category, at the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

$

412,448

 

$

403,569

 

$

363,290

 

$

360,169

 

$

350,081

 

Paycheck Protection Program

 

 

1,192

 

 

4,860

 

 

12,309

 

 

26,162

 

 

54,190

 

Construction and Land Development

 

 

335,557

 

 

359,191

 

 

321,131

 

 

281,474

 

 

257,167

 

Real Estate Mortgage:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1 - 4 Family Mortgage

 

 

341,102

 

 

334,815

 

 

312,201

 

 

305,317

 

 

290,535

 

Multifamily

 

 

1,230,509

 

 

1,087,865

 

 

1,012,623

 

 

910,243

 

 

865,172

 

CRE Owner Occupied

 

 

151,088

 

 

142,214

 

 

117,969

 

 

111,096

 

 

101,834

 

CRE Nonowner Occupied

 

 

900,691

 

 

886,432

 

 

840,463

 

 

818,569

 

 

786,271

 

Total Real Estate Mortgage Loans

 

 

2,623,390

 

 

2,451,326

 

 

2,283,256

 

 

2,145,225

 

 

2,043,812

 

Consumer and Other

 

 

7,495

 

 

6,939

 

 

7,981

 

 

6,442

 

 

6,762

 

Total Loans, Gross

 

 

3,380,082

 

 

3,225,885

 

 

2,987,967

 

 

2,819,472

 

 

2,712,012

 

Allowance for Loan Losses

 

 

(46,491)

 

 

(44,711)

 

 

(41,692)

 

 

(40,020)

 

 

(38,901)

 

Net Deferred Loan Fees

 

 

(9,088)

 

 

(9,536)

 

 

(9,065)

 

 

(9,535)

 

 

(10,199)

 

Total Loans, Net

 

$

3,324,503

 

$

3,171,638

 

$

2,937,210

 

$

2,769,917

 

$

2,662,912

 

Total deposits at September 30, 2022 were $3.31 billion, an increase of $103.1 million, or 3.2%, over total deposits of $3.20 billion at June 30, 2022, and an increase of $450.9 million, or 15.8%, over total deposits of $2.85 billion at September 30, 2021. Deposit growth in the third quarter of 2022 was primarily due to an increase in savings and money market deposits and time deposits, offset partially by a decline in interest bearing transaction deposits and brokered deposits. In addition to the continued growth of core deposits, brokered deposits are also being used as a supplemental funding source, as needed, for the robust loan portfolio growth. Given the rapid rise in interest rates in 2022 and the prospect for more, management believes deposits could experience fluctuations in future periods.

The following table presents the dollar composition of the Company’s deposit portfolio, by category, at the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2022

 

June 30, 2022

 

March 31, 2022

 

December 31, 2021

 

September 30, 2021

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

$

961,084

 

$

961,998

 

$

835,482

 

$

875,084

 

$

846,490

Interest Bearing Transaction Deposits

 

 

510,396

 

 

522,151

 

 

598,402

 

 

544,789

 

 

488,785

Savings and Money Market Deposits

 

 

1,077,333

 

 

952,138

 

 

890,926

 

 

863,567

 

 

791,861

Time Deposits

 

 

293,052

 

 

272,424

 

 

286,674

 

 

293,474

 

 

309,824

Brokered Deposits

 

 

463,209

 

 

493,242

 

 

424,127

 

 

369,323

 

 

417,197

Total Deposits

 

$

3,305,074

 

$

3,201,953

 

$

3,035,611

 

$

2,946,237

 

$

2,854,157

Capital

Total shareholders’ equity at September 30, 2022 was $382.0 million, an increase of $7.1 million compared to total shareholders’ equity of $374.9 million at June 30, 2022, and an increase of $14.2 million, or 3.9%, over total shareholders’ equity of $367.8 million at September 30, 2021. The linked-quarter increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by unrealized losses in the securities portfolio. The year-over-year increase was due to net income retained and unrealized gains in the derivatives portfolio, offset partially by an increase in stock repurchases made under the Company’s stock repurchase program and an increase in unrealized losses in the securities portfolio.

During the third quarter of 2022, the Company repurchased 99,310 shares of its common stock. Shares were repurchased at a weighted average price of $16.27 per share, for a total of $1.6 million. On August 18, 2022, the Company announced that its board of directors approved a new stock repurchase program which authorizes the Company to repurchase up to $25.0 million of its common stock, subject to certain limitations and conditions. The new stock repurchase program replaced and superseded the $40.0 million stock repurchase program, under which approximately $1.6 million remained. As of September 30, 2022, no shares have been repurchased under the new plan. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program based on various factors including valuation, capital levels and other uses of capital.

Tangible book value per share, a non-GAAP financial measure, was $11.33 as of September 30, 2022, an increase of 2.7% from $11.03 as of June 30, 2022, and an increase of 6.6% from $10.62 as of September 30, 2021. The linked-quarter and year-over-year increase occurred despite the market value depreciation of the securities portfolio driven by the rapidly rising interest rate environment, which continues to negatively impact accumulated other comprehensive income. Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.57% at September 30, 2022, compared to 7.87% at June 30, 2022, and 8.81% at September 30, 2021.

Today the Company also announced that its Board of Directors declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A ("Series A Preferred Stock"). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2022 to shareholders of record of the Series A Preferred Stock at the close of business on November 15, 2022.

Asset Quality

Annualized net charge-offs (recoveries) as a percent of average loans were (0.03)% for the third quarter of 2022, compared to 0.00% for each of the previous four quarters. At September 30, 2022, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $663,000, or 0.02% of total assets, as compared to $688,000, or 0.02% of total assets at June 30, 2022, and $734,000, or 0.02% of total assets at September 30, 2021.

Loans that have potential weaknesses that warrant a watchlist risk rating at September 30, 2022 totaled $22.8 million, compared to $34.7 million at June 30, 2022, and $67.4 million at September 30, 2021. The linked-quarter decrease was primarily due to the migration of one relationship to substandard and the payoff of one other relationship. Loans that warranted a substandard risk rating at September 30, 2022 totaled $30.8 million, compared to $27.0 million at June 30, 2022, and $7.7 million at September 30, 2021.

The following table presents a summary of asset quality measurements at the dates indicated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

(dollars in thousands)

 

2022

 

 

2022

 

 

2022

 

 

2021

 

 

2021

 

Selected Asset Quality Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans 30-89 Days Past Due

 

$

38

 

$

225

 

$

13

 

$

49

 

$

18

 

Loans 30-89 Days Past Due to Total Loans

 

 

0.00

%

 

0.01

%

 

0.00

%

 

0.00

%

 

0.00

%

Nonperforming Loans

 

$

663

 

$

688

 

$

706

 

$

722

 

$

734

 

Nonperforming Loans to Total Loans

 

 

0.02

%

 

0.02

%

 

0.02

%

 

0.03

%

 

0.03

%

Foreclosed Assets

 

$

 

$

 

$

 

$

 

$

 

Nonaccrual Loans to Total Loans

 

 

0.02

%

 

0.02

%

 

0.02

%

 

0.03

%

 

0.03

%

Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans

 

 

0.02

 

 

0.02

 

 

0.02

 

 

0.03

 

 

0.03

 

Nonperforming Assets (1)

 

$

663

 

$

688

 

$

706

 

$

722

 

$

734

 

Nonperforming Assets to Total Assets (1)

 

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

 

0.02

%

Allowance for Loan Losses to Total Loans

 

 

1.38

 

 

1.39

 

 

1.40

 

 

1.42

 

 

1.43

 

Allowance for Loan Losses to Total Loans, Excluding PPP Loans

 

 

1.38

 

 

1.39

 

 

1.40

 

 

1.43

 

 

1.46

 

Allowance for Loans Losses to Nonaccrual Loans

 

 

7,012.22

 

 

6,498.69

 

 

5,905.38

 

 

5,542.94

 

 

5,299.86

 

Net Loan Charge-Offs (Recoveries) (Annualized) to Average Loans

 

 

(0.03)

 

 

0.00

 

 

0.00

 

 

0.00

 

 

0.00

 

________________________________

(1)

Nonperforming assets are defined as nonaccrual loans plus loans 90 days past due and still accruing plus foreclosed assets.

During the COVID-19 pandemic, the Company developed programs for clients who experienced business and personal disruptions by providing interest-only modifications, loan payment deferrals, and extended amortization modifications. In accordance with interagency regulatory guidance and the CARES Act, qualifying loans modified in response to the COVID-19 pandemic are not considered troubled debt restructurings. The Company had one modified loan totaling $10.6 million outstanding as of September 30, 2022, representing 0.3% of the total loan portfolio, excluding PPP loans, which is down from $29.8 million at June 30, 2022.

About the Company

Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding company. Bridgewater's banking subsidiary, Bridgewater Bank, is a premier, full-service Twin Cities bank dedicated to serving the diverse needs of commercial real estate investors, entrepreneurs, business clients and successful individuals. By pairing a range of deposit, lending and business services solutions with a responsive service model, Bridgewater has seen continuous growth and profitability. With total assets of $4.1 billion and seven branches as of September 30, 2022, Bridgewater is considered one of the largest locally led banks in the State of Minnesota, and has received numerous awards for its growth, banking services and esteemed corporate culture.

Use of Non-GAAP financial measures

In addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (GAAP), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the Company’s operating performance and trends, and to facilitate comparisons with the performance of peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.

Forward-Looking Statements

This earnings release 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, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as “may”, “might”, “should”, “could”, “predict”, “potential”, “believe”, “expect”, “continue”, “will”, “anticipate”, “seek”, “estimate”, “intend”, “plan”, “projection”, “would”, “annualized”, “target” and “outlook”, or the negative version of those words or other comparable words of a future or forward-looking nature.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of recent and anticipated rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of rising interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation; the negative effects of the ongoing COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, including due to supply chain disruptions, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk, especially in light of recent excess liquidity at the Bank; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and high rates of employee turnover; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions and “fintech” companies; the effectiveness of our risk management framework; the commencement and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, including changes to federal and state corporate tax rates; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events including the Russian invasion of Ukraine; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. or state tax laws, regulations and guidance, including the new 1% excise tax on stock buybacks by publicly traded companies; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except share data)

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

September 30,

 

 

2022

 

2021

 

2021

 

 

(Unaudited)

 

 

 

 

(Unaudited)

ASSETS

 

 

 

 

 

 

 

 

 

Cash and Cash Equivalents

 

$

75,496

 

$

143,473

 

$

189,502

Bank-Owned Certificates of Deposit

 

 

1,182

 

 

1,876

 

 

1,877

Securities Available for Sale, at Fair Value

 

 

542,007

 

 

439,362

 

 

413,149

Loans, Net of Allowance for Loan Losses of $46,491 at September 30, 2022 (unaudited), $40,020 at December 31, 2021 and $38,901 at September 30, 2021 (unaudited)

 

 

3,324,503

 

 

2,769,917

 

 

2,662,912

Federal Home Loan Bank (FHLB) Stock, at Cost

 

 

15,603

 

 

5,242

 

 

5,442

Premises and Equipment, Net

 

 

48,941

 

 

49,395

 

 

49,803

Accrued Interest

 

 

11,198

 

 

9,186

 

 

8,550

Goodwill

 

 

2,626

 

 

2,626

 

 

2,626

Other Intangible Assets, Net

 

 

336

 

 

479

 

 

527

Other Assets

 

 

107,095

 

 

56,103

 

 

54,737

Total Assets

 

$

4,128,987

 

$

3,477,659

 

$

3,389,125

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Noninterest Bearing

 

$

961,084

 

$

875,084

 

$

846,490

Interest Bearing

 

 

2,343,990

 

 

2,071,153

 

 

2,007,667

Total Deposits

 

 

3,305,074

 

 

2,946,237

 

 

2,854,157

Federal Funds Purchased

 

 

212,000

 

 

 

 

FHLB Advances

 

 

71,500

 

 

42,500

 

 

47,500

Subordinated Debentures, Net of Issuance Costs

 

 

92,559

 

 

92,239

 

 

92,153

Accrued Interest Payable

 

 

2,214

 

 

1,409

 

 

1,656

Other Liabilities

 

 

63,633

 

 

16,002

 

 

25,856

Total Liabilities

 

 

3,746,980

 

 

3,098,387

 

 

3,021,322

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Preferred Stock- $0.01 par value; Authorized 10,000,000

 

 

 

 

 

 

 

 

 

Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at September 30, 2022 (unaudited), December 31, 2021, and September 30, 2021 (unaudited)

 

 

66,514

 

 

66,514

 

 

66,515

Common Stock- $0.01 par value; Authorized 75,000,000

 

 

 

 

 

 

 

 

 

Common Stock - Issued and Outstanding 27,587,978 at September 30, 2022 (unaudited), 28,206,566 at December 31, 2021 and 28,066,822 at September 30, 2021 (unaudited)

 

 

276

 

 

282

 

 

281

Additional Paid-In Capital

 

 

95,973

 

 

104,123

 

 

103,471

Retained Earnings

 

 

235,964

 

 

199,347

 

 

188,004

Accumulated Other Comprehensive Income (Loss)

 

 

(16,720)

 

 

9,006

 

 

9,532

Total Shareholders' Equity

 

 

382,007

 

 

379,272

 

 

367,803

Total Liabilities and Equity

 

$

4,128,987

 

$

3,477,659

 

$

3,389,125

 

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

September 30,

 

June 30

 

September 30,

 

September 30,

 

September 30,

 

 

2022

 

2022

 

2021

 

2022

 

2021

INTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, Including Fees

 

$

37,666

 

$

34,358

 

$

31,049

 

$

103,768

 

$

87,705

Investment Securities

 

 

4,372

 

 

3,325

 

 

2,333

 

 

10,567

 

 

7,065

Other

 

 

321

 

 

99

 

 

135

 

 

500

 

 

334

Total Interest Income

 

 

42,359

 

 

37,782

 

 

33,517

 

 

114,835

 

 

95,104

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 

5,984

 

 

3,456

 

 

3,417

 

 

12,598

 

 

10,601

Notes Payable

 

 

 

 

 

 

 

 

 

 

61

FHLB Advances

 

 

329

 

 

167

 

 

213

 

 

646

 

 

669

Subordinated Debentures

 

 

1,242

 

 

1,219

 

 

1,214

 

 

3,658

 

 

3,411

Federal Funds Purchased

 

 

709

 

 

410

 

 

 

 

1,128

 

 

6

Total Interest Expense

 

 

8,264

 

 

5,252

 

 

4,844

 

 

18,030

 

 

14,748

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME

 

 

34,095

 

 

32,530

 

 

28,673

 

 

96,805

 

 

80,356

Provision for Loan Losses

 

 

1,500

 

 

3,025

 

 

1,300

 

 

6,200

 

 

4,000

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES

 

 

32,595

 

 

29,505

 

 

27,373

 

 

90,605

 

 

76,356

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST INCOME

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer Service Fees

 

 

313

 

 

298

 

 

268

 

 

892

 

 

733

Net Gain on Sales of Available for Sale Securities

 

 

 

 

52

 

 

48

 

 

52

 

 

750

Other Income

 

 

1,074

 

 

1,300

 

 

1,094

 

 

3,650

 

 

2,538

Total Noninterest Income

 

 

1,387

 

 

1,650

 

 

1,410

 

 

4,594

 

 

4,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NONINTEREST EXPENSE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and Employee Benefits

 

 

9,449

 

 

8,977

 

 

8,309

 

 

27,120

 

 

22,923

Occupancy and Equipment

 

 

1,086

 

 

1,042

 

 

942

 

 

3,213

 

 

2,977

Other Expense

 

 

3,622

 

 

3,733

 

 

3,985

 

 

11,084

 

 

9,736

Total Noninterest Expense

 

 

14,157

 

 

13,752

 

 

13,236

 

 

41,417

 

 

35,636

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

 

19,825

 

 

17,403

 

 

15,547

 

 

53,782

 

 

44,741

Provision for Income Taxes

 

 

5,312

 

 

4,521

 

 

4,038

 

 

14,125

 

 

11,568

NET INCOME

 

 

14,513

 

 

12,882

 

 

11,509

 

 

39,657

 

 

33,173

Preferred Stock Dividends

 

 

(1,013)

 

 

(1,014)

 

 

 

 

(3,040)

 

 

NET INCOME AVAILABLE TO COMMON SHAREHOLDERS

 

$

13,500

 

$

11,868

 

$

11,509

 

$

36,617

 

$

33,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.49

 

$

0.43

 

$

0.41

 

$

1.32

 

$

1.18

Diluted

 

 

0.47

 

 

0.41

 

 

0.40

 

 

1.27

 

 

1.14

 

Bridgewater Bancshares, Inc. and Subsidiaries

Analysis of Average Balances, Yields and Rates

(dollars in thousands, except per share data)

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Nine Months Ended

 

 

 

September 30, 2022

 

September 30, 2021

 

 

 

Average

 

Interest

 

Yield/

 

Average

 

Interest

 

Yield/

 

 

 

Balance

 

& Fees

 

Rate

 

Balance

 

& Fees

 

Rate

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Earning Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash Investments

 

$

66,301

 

$

231

 

0.47

%

$

127,283

 

$

134

 

0.14

%

Investment Securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable Investment Securities

 

 

417,462

 

 

8,692

 

2.78

 

 

310,078

 

 

5,122

 

2.21

 

Tax-Exempt Investment Securities (1)

 

 

73,900

 

 

2,373

 

4.29

 

 

76,564

 

 

2,460

 

4.30

 

Total Investment Securities

 

 

491,362

 

 

11,065

 

3.01

 

 

386,642

 

 

7,582

 

2.62

 

Paycheck Protection Program Loans (2)

 

 

9,575

 

 

922

 

12.88

 

 

124,466

 

 

5,384

 

5.78

 

Loans (1)(2)

 

 

3,082,924

 

 

103,204

 

4.48

 

 

2,402,844

 

 

82,433

 

4.59

 

Total Loans

 

 

3,092,499

 

 

104,126

 

4.50

 

 

2,527,310

 

 

87,817

 

4.65

 

Federal Home Loan Bank Stock

 

 

9,593

 

 

269

 

3.75

 

 

5,658

 

 

200

 

4.71

 

Total Interest Earning Assets

 

 

3,659,755

 

 

115,691

 

4.23

%

 

3,046,893

 

 

95,733

 

4.20

%

Noninterest Earning Assets

 

 

77,028

 

 

 

 

 

 

 

70,968

 

 

 

 

 

 

Total Assets

 

$

3,736,783

 

 

 

 

 

 

$

3,117,861

 

 

 

 

 

 

Interest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest Bearing Transaction Deposits

 

$

545,301

 

$

2,322

 

0.57

%

$

422,000

 

$

1,504

 

0.48

%

Savings and Money Market Deposits

 

 

934,408

 

 

4,597

 

0.66

 

 

763,646

 

 

2,853

 

0.50

 

Time Deposits

 

 

286,059

 

 

2,257

 

1.05

 

 

331,664

 

 

3,269

 

1.32

 

Brokered Deposits

 

 

419,352

 

 

3,422

 

1.09

 

 

407,680

 

 

2,975

 

0.98

 

Total Interest Bearing Deposits

 

 

2,185,120

 

 

12,598

 

0.77

 

 

1,924,990

 

 

10,601

 

0.74

 

Federal Funds Purchased

 

 

85,287

 

 

1,128

 

1.77

 

 

3,311

 

 

6

 

0.24

 

Notes Payable

 

 

 

 

 

 

 

2,216

 

 

61

 

3.66

 

FHLB Advances

 

 

54,227

 

 

646

 

1.59

 

 

56,364

 

 

669

 

1.59

 

Subordinated Debentures

 

 

92,396

 

 

3,658

 

5.29

 

 

79,723

 

 

3,411

 

5.72

 

Total Interest Bearing Liabilities

 

 

2,417,030

 

 

18,030

 

1.00

%

 

2,066,604

 

 

14,748

 

0.95

%

Noninterest Bearing Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Bearing Transaction Deposits

 

 

899,456

 

 

 

 

 

 

 

731,269

 

 

 

 

 

 

Other Noninterest Bearing Liabilities

 

 

37,463

 

 

 

 

 

 

 

23,228

 

 

 

 

 

 

Total Noninterest Bearing Liabilities

 

 

936,919

 

 

 

 

 

 

 

754,497

 

 

 

 

 

 

Shareholders' Equity

 

 

382,834

 

 

 

 

 

 

 

296,760

 

 

 

 

 

 

Total Liabilities and Shareholders' Equity

 

$

3,736,783

 

 

 

 

 

 

$

3,117,861

 

 

 

 

 

 

Net Interest Income / Interest Rate Spread

 

 

 

 

 

97,661

 

3.23

%

 

 

 

 

80,985

 

3.25

%

Net Interest Margin (3)

 

 

 

 

 

 

 

3.57

%

 

 

 

 

 

 

3.55

%

Taxable Equivalent Adjustment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax-Exempt Investment Securities and Loans

 

 

 

 

 

(856)

 

 

 

 

 

 

 

(629)

 

 

 

Net Interest Income

 

 

 

 

$

96,805

 

 

 

 

 

 

$

80,356

 

 

 

________________________________

(1)

Interest income and average rates for tax-exempt investment securities and loans are presented on a tax-equivalent basis, assuming a statutory federal income tax rate of 21%

(2)

Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.

(3)

Net interest margin includes the tax equivalent adjustment and represents the annualized results of: (i) the difference between interest income on interest earning assets and the interest expense on interest bearing liabilities, divided by (ii) average interest earning assets for the period.

 

Bridgewater Bancshares, Inc. and Subsidiaries

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

For the Nine Months Ended

 

 

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

 

 

2022

 

2022

 

2021

 

2022

 

2021

 

Pre-Provision Net Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Income

 

$

1,387

 

$

1,650

 

$

1,410

 

$

4,594

 

$

4,021

 

Less: Gain on Sales of Securities

 

 

 

 

(52)

 

 

(48)

 

 

(52)

 

 

(750)

 

Total Operating Noninterest Income

 

 

1,387

 

 

1,598

 

 

1,362

 

 

4,542

 

 

3,271

 

Plus: Net Interest Income

 

 

34,095

 

 

32,530

 

 

28,673

 

 

96,805

 

 

80,356

 

Net Operating Revenue

 

$

35,482

 

$

34,128

 

$

30,035

 

$

101,347

 

$

83,627

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

14,157

 

$

13,752

 

$

13,236

 

$

41,417

 

$

35,636

 

Less: Amortization of Tax Credit Investments

 

 

(114)

 

 

(63)

 

 

(152)

 

 

(294)

 

 

(410)

 

Total Operating Noninterest Expense

 

$

14,043

 

$

13,689

 

$

12,502

 

$

41,123

 

$

34,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pre-Provision Net Revenue

 

$

21,439

 

$

20,439

 

$

17,533

 

$

60,224

 

$

48,983

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Plus:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-Operating Revenue Adjustments

 

 

 

 

52

 

 

48

 

 

52

 

 

750

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Provision for Loan Losses

 

 

1,500

 

 

3,025

 

 

1,300

 

 

6,200

 

 

4,000

 

Non-Operating Expense Adjustments

 

 

114

 

 

63

 

 

734

 

 

294

 

 

992

 

Provision for Income Taxes

 

 

5,312

 

 

4,521

 

 

4,038

 

 

14,125

 

 

11,568

 

Net Income

 

$

14,513

 

$

12,882

 

$

11,509

 

$

39,657

 

$

33,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

3,948,201

 

$

3,743,575

 

$

3,332,301

 

$

3,736,783

 

$

3,117,861

 

Pre-Provision Net Revenue Return on Average Assets

 

 

2.15

%

 

2.19

%

 

2.09

%

 

2.15

%

 

2.10

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

As of and for the Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Core Net Interest Margin

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Income (Tax-Equivalent Basis)

 

$

34,417

 

$

32,806

 

$

28,880

 

 

$

97,662

 

$

80,985

 

Less: Loan Fees

 

 

(1,400)

 

 

(2,030)

 

 

(1,487)

 

 

 

(5,173)

 

 

(3,712)

 

Less: PPP Interest and Fees

 

 

(96)

 

 

(263)

 

 

(1,753)

 

 

 

(922)

 

 

(5,384)

 

Core Net Interest Income

 

$

32,921

 

$

30,513

 

$

25,640

 

 

$

91,567

 

$

71,889

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Interest Earning Assets

 

$

3,871,896

 

$

3,671,748

 

$

3,234,301

 

 

$

3,659,755

 

$

3,046,893

 

Less: Average PPP Loans

 

 

(2,424)

 

 

(8,335)

 

 

(76,006)

 

 

 

(9,575)

 

 

(124,466)

 

Core Average Interest Earning Assets

 

$

3,869,472

 

$

3,663,413

 

$

3,158,295

 

 

$

3,650,180

 

$

2,922,427

 

Core Net Interest Margin

 

 

3.38

%

 

3.34

%

 

3.22

%

 

 

3.35

%

 

3.29

%

 

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

14,157

 

$

13,752

 

$

13,236

 

 

$

41,417

 

$

35,636

 

Less: Amortization of Intangible Assets

 

 

(48)

 

 

(47)

 

 

(48)

 

 

 

(143)

 

 

(143)

 

Adjusted Noninterest Expense

 

$

14,109

 

$

13,705

 

$

13,188

 

 

$

41,274

 

$

35,493

 

Net Interest Income

 

 

34,095

 

 

32,530

 

 

28,673

 

 

 

96,805

 

 

80,356

 

Noninterest Income

 

 

1,387

 

 

1,650

 

 

1,410

 

 

 

4,594

 

 

4,021

 

Less: Gain on Sales of Securities

 

 

 

 

(52)

 

 

(48)

 

 

 

(52)

 

 

(750)

 

Adjusted Operating Revenue

 

$

35,482

 

$

34,128

 

$

30,035

 

 

$

101,347

 

$

83,627

 

Efficiency Ratio

 

 

39.8

%

 

40.2

%

 

43.9

%

 

 

40.7

%

 

42.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Efficiency Ratio

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

14,157

 

$

13,752

 

$

13,236

 

 

$

41,417

 

$

35,636

 

Less: Amortization of Tax Credit Investments

 

 

(114)

 

 

(63)

 

 

(152)

 

 

 

(294)

 

 

(410)

 

Less: Debt Prepayment Fees

 

 

 

 

 

 

(582)

 

 

 

 

 

(582)

 

Less: Amortization of Intangible Assets

 

 

(48)

 

 

(47)

 

 

(48)

 

 

 

(143)

 

 

(143)

 

Adjusted Noninterest Expense

 

$

13,995

 

$

13,642

 

$

12,454

 

 

$

40,980

 

$

34,501

 

Net Interest Income

 

 

34,095

 

 

32,530

 

 

28,673

 

 

 

96,805

 

 

80,356

 

Noninterest Income

 

 

1,387

 

 

1,650

 

 

1,410

 

 

 

4,594

 

 

4,021

 

Less: Gain on Sales of Securities

 

 

 

 

(52)

 

 

(48)

 

 

 

(52)

 

 

(750)

 

Adjusted Operating Revenue

 

$

35,482

 

$

34,128

 

$

30,035

 

 

$

101,347

 

$

83,627

 

Adjusted Efficiency Ratio

 

 

39.4

%

 

40.0

%

 

41.5

%

 

 

40.4

%

 

41.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

For the Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Adjusted Noninterest Expense to Average Assets (Annualized)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest Expense

 

$

14,157

 

$

13,752

 

$

13,236

 

 

$

41,417

 

$

35,636

 

Less: Amortization of Tax Credit Investments

 

 

(114)

 

 

(63)

 

 

(152)

 

 

 

(294)

 

 

(410)

 

Less: Debt Prepayment Fees

 

 

 

 

 

 

(582)

 

 

 

 

 

(582)

 

Adjusted Noninterest Expense

 

$

14,043

 

$

13,689

 

$

12,502

 

 

$

41,123

 

$

34,644

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Assets

 

$

3,948,201

 

$

3,743,575

 

$

3,332,301

 

 

$

3,736,783

 

$

3,117,861

 

Adjusted Noninterest Expense to Average Assets (Annualized)

 

 

1.41

%

 

1.47

%

 

1.49

%

 

 

1.47

%

 

1.49

%

 

Non-GAAP Financial Measures

(dollars in thousands) (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of and for the Three Months Ended

 

 

As of and for the Nine Months Ended

 

 

 

September 30,

 

 

June 30,

 

 

September 30,

 

 

September 30,

 

 

September 30,

 

 

 

2022

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Tangible Common Equity and Tangible Common Equity/Tangible Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

382,007

 

$

374,883

 

$

367,803

 

 

 

 

 

 

 

 

Less: Preferred Stock

 

 

(66,514)

 

 

(66,514)

 

 

(66,515)

 

 

 

 

 

 

 

 

Total Common Shareholders' Equity

 

 

315,493

 

 

308,369

 

 

301,288

 

 

 

 

 

 

 

 

Less: Intangible Assets

 

 

(2,962)

 

 

(3,009)

 

 

(3,153)

 

 

 

 

 

 

 

 

Tangible Common Equity

 

$

312,531

 

$

305,360

 

$

298,135

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

4,128,987

 

$

3,883,264

 

$

3,389,125

 

 

 

 

 

 

 

 

Less: Intangible Assets

 

 

(2,962)

 

 

(3,009)

 

 

(3,153)

 

 

 

 

 

 

 

 

Tangible Assets

 

$

4,126,025

 

$

3,880,255

 

$

3,385,972

 

 

 

 

 

 

 

 

Tangible Common Equity/Tangible Assets

 

 

7.57

%

 

7.87

%

 

8.81

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tangible Book Value Per Share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Book Value Per Common Share

 

$

11.44

 

$

11.14

 

$

10.73

 

 

 

 

 

 

 

 

Less: Effects of Intangible Assets

 

 

(0.11)

 

 

(0.11)

 

 

(0.11)

 

 

 

 

 

 

 

 

Tangible Book Value Per Common Share

 

$

11.33

 

$

11.03

 

$

10.62

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on Average Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income Available to Common Shareholders

 

$

13,500

 

$

11,868

 

$

11,509

 

 

$

36,617

 

$

33,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Shareholders' Equity

 

$

384,020

 

$

381,448

 

$

330,604

 

 

$

382,834

 

$

296,760

 

Less: Average Preferred Stock

 

 

(66,514)

 

 

(66,514)

 

 

(32,332)

 

 

 

(66,514)

 

 

(10,896)

 

Average Common Equity

 

 

317,506

 

 

314,934

 

 

298,272

 

 

 

316,320

 

 

285,864

 

Less: Effects of Average Intangible Assets

 

 

(2,989)

 

 

(3,037)

 

 

(3,180)

 

 

 

(3,036)

 

 

(3,227)

 

Average Tangible Common Equity

 

$

314,517

 

$

311,897

 

$

295,092

 

 

$

313,284

 

$

282,637

 

Return on Average Tangible Common Equity

 

 

17.03

%

 

15.26

%

 

15.47

%

 

 

15.63

%

 

15.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

September 30,

 

June 30,

 

March 31,

 

December 31,

 

September 30,

 

 

2022

 

2022

 

2022

 

2021

 

2021

Tangible Common Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Shareholders' Equity

 

$

382,007

 

$

374,883

 

$

379,441

 

$

379,272

 

$

367,803

Less: Preferred Stock

 

 

(66,514)

 

 

(66,514)