Bridgewater Bancshares, Inc. Announces Fourth Quarter 2023 Net Income of $8.9 Million, $0.28 Diluted Earnings Per Common Share

Rhea-AI Summary

Bridgewater Bancshares, Inc. (BWB) reported a deposit growth of $34.4 million, an annualized 3.7% increase, outpacing gross loan growth. Net interest margin decreased to 2.27%. No provision for credit losses on loans was recorded in Q4 2023. Tangible book value per share increased to $12.84. 423,749 shares of common stock were repurchased at a weighted average price of $10.72. For the full year 2023, diluted earnings per common share were $1.27, with asset growth of 6.1% and deposit growth of $293.4 million. Net income for Q4 2023 was $8.9 million, down from $9.6 million in Q3 2023. Earnings per diluted common share were $0.28, compared to $0.30 in Q3 2023. The CEO expressed optimism for 2024.

Positive

• Deposit growth of $34.4 million, an annualized 3.7% increase
• Tangible book value per share increased to $12.84
• Repurchased 423,749 shares of common stock
• Optimism expressed for 2024

Negative

• Net income for Q4 2023 decreased from Q3 2023
• Earnings per diluted common share decreased from Q3 2023

Insights

Financial Analyst

An examination of Bridgewater Bancshares, Inc.'s fourth-quarter financials reveals a nuanced picture of the bank's performance. The deposit growth surpassing loan growth indicates a strengthening liquidity position, which could be seen as a defensive posture in an uncertain economic climate. This is further emphasized by the loan-to-deposit ratio dipping slightly over 100%, a sign that the bank is maintaining a balanced approach to lending and deposit gathering.

The net interest margin (NIM) compression from 2.32% to 2.27% is a concern as it suggests that the profitability of the bank's lending activities is decreasing. However, this marginal decline may also reflect the broader interest rate environment and competitive pressures. The absence of a provision for credit losses suggests confidence in the credit quality of the bank's loan portfolio, which is reinforced by the low level of nonperforming assets.

Share repurchases signal management's belief that the stock is undervalued, which can be an attractive signal to investors. However, it's important to consider that these repurchases reduce the equity base, which in turn increases the tangible book value per share. The early adoption of ASU 2023-02 indicates a proactive approach to accounting standards, although it may introduce some complexity when comparing financials year-over-year.

Market Research Analyst

From a market perspective, the earnings per share (EPS) decline year-over-year from $1.72 to $1.27 raises questions about the bank's growth trajectory and profitability. Investors typically seek consistent or growing earnings as a sign of a company's health and potential for future returns. The EPS drop could reflect market conditions, operational challenges, or both and warrants a closer look at the underlying factors.

The Common Equity Tier 1 Risk-Based Capital Ratio increase from 8.40% to 9.16% is a positive indicator of the bank's capital adequacy and resilience to potential financial shocks. This is particularly relevant as regulatory capital ratios are critical for investor confidence and for meeting regulatory requirements. The growth in tangible book value per share is also a positive indicator of value creation for shareholders.

Economist

From an economic standpoint, the bank's performance can be interpreted within the context of the broader economic environment. The increase in deposits over loans may suggest a cautious consumer behavior, where depositors are saving more than they are borrowing, which could be indicative of broader economic uncertainty. The steady net loan charge-offs rate near zero indicates a stable credit environment, but it's important to monitor this in relation to economic trends such as unemployment rates and GDP growth.

Furthermore, the bank's strategic moves, including share repurchases, need to be evaluated against the backdrop of monetary policy shifts and interest rate changes. The net interest margin will be particularly sensitive to these factors and its future trajectory will be a key determinant of the bank's profitability.

Fourth Quarter 2023 Highlights

• Deposit growth of $34.4 million, or 3.7% annualized, from the third quarter of 2023, exceeded gross loan growth which remained relatively stable from the third quarter of 2023, lowering the loan-to-deposit ratio to 100.4%.
• Net interest margin (on a fully tax-equivalent basis) of 2.27%, compared to 2.32% in the third quarter of 2023.
• No provision for credit losses on loans was recorded in the fourth quarter of 2023. The allowance for credit losses on loans to total loans was 1.36% at December 31, 2023 and September 30, 2023, respectively.
• Nonperforming assets to total assets of 0.02% at December 31, 2023 and September 30, 2023.
• Tangible book value per share⁽¹⁾ of $12.84 at December 31, 2023, an increase of $0.46, or 14.9% annualized, compared to $12.37 at September 30, 2023.
• Repurchased 423,749 shares of common stock at a weighted average price of $10.72, for a total of $4.5 million.
• Early adopted ASU 2023-02 applying the modified retrospective method which reclassified noninterest expense to income tax expense effective January 1, 2023, which may impact comparability to prior 2023 filings.

Annual 2023 Highlights

• Diluted earnings per common share for the year ended December 31, 2023 were $1.27, compared to $1.72 for the year ended December 31, 2022.
• Asset growth of 6.1% compared to December 31, 2022 exceeded 2023 full-year noninterest expense growth of 4.8% compared to the full year of 2022.
• Deposit growth of $293.4 million, or 8.6%, in 2023 exceeded gross loan growth of $154.8 million, or 4.3%.
• Net loan charge-offs (recoveries) as a percentage of average loans were 0.01% for the year ended December 31, 2023, compared to (0.01)% for the year ended December 31, 2022.
• Tangible book value per share⁽¹⁾ increased $1.15, or 9.8%, to $12.84 at December 31, 2023, compared to $11.69 at December 31, 2022.
• Common Equity Tier 1 Risk-Based Capital Ratio was 9.16% at December 31, 2023, compared to 8.40% at December 31, 2022.

⁽¹⁾ Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.

ST. LOUIS PARK, Minn.--(BUSINESS WIRE)-- Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $8.9 million for the fourth quarter of 2023, compared to $9.6 million for the third quarter of 2023, and $13.7 million for the fourth quarter of 2022. Earnings per diluted common share were $0.28 for the fourth quarter of 2023, compared to $0.30 for the third quarter of 2023, and $0.45 for the fourth quarter of 2022.

“Bridgewater finished 2023 strong with the continuation of several positive trends as net interest margin continued to stabilize, deposit growth outpaced loan growth, and asset quality remained superb,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “We also returned capital to shareholders by opportunistically repurchasing shares of common stock during the fourth quarter, while tangible book value per share increased for the 28th consecutive quarter.

“As we enter 2024, we are optimistic about our outlook as our balance sheet is well-positioned to benefit as the yield curve normalizes. In addition, our loan pipeline has begun to grow once again as loan demand has started to increase. By moderating our loan growth and reducing our loan-to-deposit ratio over the past few quarters, we believe we can continue to gain market share by deploying capital into more profitable loan growth as the interest rate environment improves.”

Key Financial Measures

		As of and for the Three Months Ended										As of and for the Year Ended
		December 31,			September 30,			December 31,				December 31,			December 31,
		2023			2023			2022				2023			2022
Per Common Share Data
Basic Earnings Per Share		$	0.28		$	0.31		$	0.46			$	1.29		$	1.78
Diluted Earnings Per Share			0.28			0.30			0.45				1.27			1.72
Book Value Per Share			12.94			12.47			11.80				12.94			11.80
Tangible Book Value Per Share (1)			12.84			12.37			11.69				12.84			11.69
Financial Ratios
Return on Average Assets (2)			0.77	%		0.85	%		1.28	%			0.89	%		1.38	%
Pre-Provision Net Revenue Return on Average Assets (1)(2)			0.96			1.01			1.82				1.15			2.06
Return on Average Shareholders' Equity (2)			8.43			9.23			14.06				9.73			13.90
Return on Average Tangible Common Equity (1)(2)			8.95			9.92			15.86				10.53			15.69
Net Interest Margin (3)			2.27			2.32			3.16				2.42			3.45
Core Net Interest Margin (1)(3)			2.21			2.24			3.05				2.34			3.27
Cost of Total Deposits			3.19			2.99			1.31				2.73			0.75
Cost of Funds			3.23			3.10			1.67				2.92			0.99
Efficiency Ratio (1)			58.8			56.1			43.8				53.0			41.5
Noninterest Expense to Average Assets (2)			1.37			1.34			1.42				1.32			1.46
Tangible Common Equity to Tangible Assets (1)			7.73			7.61			7.48				7.73			7.48
Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4)			9.16			9.07			8.40				9.16			8.40
Balance Sheet and Asset Quality (dollars in thousands)
Total Assets		$	4,611,990		$	4,557,070		$	4,345,662			$	4,611,990		$	4,345,662
Total Loans, Gross			3,724,282			3,722,271			3,569,446				3,724,282			3,569,446
Deposits			3,709,948			3,675,509			3,416,543				3,709,948			3,416,543
Loan to Deposit Ratio			100.4	%		101.3	%		104.5	%			100.4	%		104.5	%
Net Loan Charge-Offs (Recoveries) to Average Loans (2)			0.01			0.01			0.00				0.01			(0.01	)
Nonperforming Assets to Total Assets (5)			0.02			0.02			0.01				0.02			0.01
Allowance for Credit Losses to Total Loans			1.36			1.36			1.34				1.36			1.34

__________________________

(1)		Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)		Annualized.
(3)		Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4)		Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
(5)		Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.

Income Statement

Net Interest Margin and Net Interest Income

Net interest margin (on a fully tax-equivalent basis) for the fourth quarter of 2023 was 2.27%, a five basis point decline from 2.32% in the third quarter of 2023 and an 89 basis point decline from 3.16% in the fourth 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 prior to 2023, PPP balances, interest, and fees, was 2.21% for the fourth quarter of 2023, a three basis point decline from 2.24% in the third quarter of 2023, and an 84 basis point decline from 3.05% in the fourth quarter of 2022.

• The linked-quarter and year-over-year declines in the margin were primarily due to higher funding costs, offset partially by higher earning asset yields.

Net interest income was $25.3 million for the fourth quarter of 2023, a decrease of $107,000 from $25.4 million in the third quarter of 2023, and a decrease of $7.6 million from $32.9 million in the fourth quarter of 2022.

• The linked-quarter and year-over year decreases in net interest income were primarily due to higher rates paid on deposits in the rising interest rate environment.
• Average interest earning assets were $4.48 billion for the fourth quarter of 2023, an increase of $64.0 million, or 1.4%, from $4.42 billion for the third quarter of 2023, and an increase of $302.8 million, or 7.2%, from $4.18 billion for the fourth quarter of 2022. The linked-quarter increase in average interest earning assets was primarily due to an increase in cash and purchases of investment securities. The year-over-year increase in average interest earning assets was primarily due to growth in the loan portfolio, purchases of investment securities, and an increase in cash.

Interest income was $58.6 million for the fourth quarter of 2023, an increase of $1.7 million from $56.8 million in the third quarter of 2023, and an increase of $9.7 million from $48.9 million in the fourth quarter of 2022.

• The yield on interest earning assets (on a fully tax-equivalent basis) was 5.22% in the fourth quarter of 2023, compared to 5.14% in the third quarter of 2023 and 4.67% in the fourth quarter of 2022.
• The linked-quarter increase in the yield on interest earning assets was primarily due to the purchase of higher yielding securities and loans repricing at yields accretive to the existing portfolio.
• 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.
• 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 increased to 5.33% in the fourth quarter of 2023, which was seven basis points higher than 5.26% in the third quarter of 2023, and 46 basis points higher than 4.87% in the fourth quarter of 2022.
• While loan fees have historically maintained a relatively stable contribution to the aggregate loan yield, the recent periods saw fewer loan prepayments, which historically has accelerated the recognition of loan fees. Despite the overall 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 for the periods indicated is as follows:

		Three Months Ended
		December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Interest		5.25	%		5.16	%		5.09	%		4.95	%		4.75	%
Fees		0.08			0.10			0.10			0.11			0.12
Yield on Loans		5.33	%		5.26	%		5.19	%		5.06	%		4.87	%

Interest expense was $33.2 million for the fourth quarter of 2023, an increase of $1.9 million from $31.4 million in the third quarter of 2023, and an increase of $17.3 million from $16.0 million in the fourth quarter of 2022.

• The cost of interest bearing liabilities was 3.97% in the fourth quarter of 2023, compared to 3.81% in the third quarter of 2023 and 2.22% in the fourth quarter of 2022.
• The linked-quarter increase in the cost of interest bearing liabilities was primarily due to higher rates paid on deposits in the rising interest rate environment.
• The year-over-year increase in the cost of interest bearing liabilities was primarily due to the rapid increase in market interest rates that occurred between the periods, which impacted all funding sources.

Interest expense on deposits was $29.4 million for the fourth quarter of 2023, an increase of $2.2 million from $27.2 million in the third quarter of 2023, and an increase of $18.7 million from $10.8 million in the fourth quarter of 2022.

• The cost of total deposits was 3.19% in the fourth quarter of 2023, compared to 2.99% in the third quarter of 2023 and 1.31% in the fourth quarter of 2022.
• The linked-quarter increase in the cost of total deposits was primarily due to client demands for higher interest rates and increased competition for deposits.
• The year-over-year increase in the cost of total deposits was primarily due to upward repricing of the deposit portfolio in the higher interest rate environment.

Provision for Credit Losses

The provision for credit losses on loans was $0 for both the fourth quarter of 2023 and the third quarter of 2023, compared to $1.5 million for the fourth quarter of 2022.

• No provision for credit losses on loans was recorded in the fourth quarter of 2023 due to a more managed pace of loan growth.
• The allowance for credit losses on loans to total loans was 1.36% at both December 31, 2023 and September 30, 2023, compared to 1.34% at December 31, 2022.

The provision for credit losses for off-balance sheet credit exposures was a negative provision of $250,000 for the fourth quarter of 2023, compared to a negative provision of $600,000 for the third quarter of 2023 and zero for the fourth quarter of 2022.

• The negative provision during the quarter was due to a reduction in outstanding unfunded commitments primarily attributable to the migration to funded loans, as well as a moderation in volume of newly originated projects with unfunded commitments.

Noninterest Income

Noninterest income was $1.4 million for the fourth quarter of 2023, a decrease of $317,000 from $1.7 million for the third quarter of 2023 and a decrease of $329,000 from $1.7 million for the fourth quarter of 2022.

• The linked-quarter decrease was primarily due to $493,000 of FHLB prepayment income recognized in the previous quarter which did not reoccur, offset partially by higher letter of credit fees and other income.
• The year-over-year decrease was primarily due to lower other income.

Noninterest Expense

Noninterest expense was $15.7 million for the fourth quarter of 2023, an increase of $503,000 from $15.2 million for the third quarter of 2023 and an increase of $537,000 from $15.2 million for the fourth quarter of 2022.

• The linked-quarter increase was primarily due to increases in salaries and employee benefits, information technology and telecommunications, and marketing and advertising.
• The year-over-year increase was primarily attributable to industry-wide increases in the FDIC insurance assessment, higher professional and consulting fees and information technology and telecommunications, offset partially by decreases in salaries and employee benefits and occupancy and equipment.
• The efficiency ratio, a non-GAAP financial measure, was 58.8% for the fourth quarter of 2023, compared to 56.1% for the third quarter of 2023, and 43.8% for the fourth quarter of 2022.
• The Company had 255 full-time equivalent employees at both December 31, 2023 and September 30, 2023, compared to 246 employees at December 31, 2022.

Income Taxes

The effective combined federal and state income tax rate for the fourth quarter of 2023 was 21.0%, a decrease from 23.0% for the third quarter of 2023 and 23.4% for the fourth quarter of 2022. The effective combined federal and state rate for the years ended December 31, 2023 and 2022 was 23.9% and 25.5%, respectively.

• The linked-quarter decrease in the effective tax rate was primarily due to the delivery of two tax credits that occurred within the fourth quarter.
• The Company early adopted ASU 2023-02 applying the modified retrospective method which reclassified noninterest expense to income tax expense effective January 1, 2023.

Balance Sheet

Loans

(dollars in thousands)		December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022
Commercial		$	464,061			$	459,854			$	460,061			$	455,156			$	436,393
Construction and Land Development			232,804				294,818				351,069				312,277				295,554
1 - 4 Family Construction			65,087				64,463				69,648				85,797				70,242
Real Estate Mortgage:
1 - 4 Family Mortgage			402,396				404,716				400,708				380,210				355,474
Multifamily			1,388,541				1,378,669				1,314,524				1,320,081				1,306,738
CRE Owner Occupied			175,783				159,485				159,088				158,650				149,905
CRE Nonowner Occupied			987,306				951,263				971,532				962,671				947,008
Total Real Estate Mortgage Loans			2,954,026				2,894,133				2,845,852				2,821,612				2,759,125
Consumer and Other			8,304				9,003				9,581				9,518				8,132
Total Loans, Gross			3,724,282				3,722,271				3,736,211				3,684,360				3,569,446
Allowance for Credit Losses on Loans			(50,494	)			(50,585	)			(50,701	)			(50,148	)			(47,996	)
Net Deferred Loan Fees			(6,573	)			(7,222	)			(7,718	)			(8,735	)			(9,293	)
Total Loans, Net		$	3,667,215			$	3,664,464			$	3,677,792			$	3,625,477			$	3,512,157

Total gross loans at December 31, 2023 were $3.72 billion, a slight increase of $2.0 million, or 0.2% annualized, over total gross loans of $3.72 billion at September 30, 2023, and an increase of $154.8 million, or 4.3%, over total gross loans of $3.57 billion at December 31, 2022.

• The slower loan growth in the loan portfolio during the fourth quarter of 2023 was primarily due to moderating loan originations and decreased demand in the higher interest rate environment.

Deposits

(dollars in thousands)		December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022
Noninterest Bearing Transaction Deposits		$	756,964		$	754,297		$	751,217		$	742,198		$	884,272
Interest Bearing Transaction Deposits			692,801			780,863			719,488			630,037			451,992
Savings and Money Market Deposits			935,091			872,534			860,613			913,013			1,031,873
Time Deposits			300,651			265,737			271,783			266,213			272,253
Brokered Deposits			1,024,441			1,002,078			974,831			859,662			776,153
Total Deposits		$	3,709,948		$	3,675,509		$	3,577,932		$	3,411,123		$	3,416,543

Total deposits at December 31, 2023 were $3.71 billion, an increase of $34.4 million, or 3.7% annualized, over total deposits of $3.68 billion at September 30, 2023, and an increase of $293.4 million, or 8.6%, over total deposits of $3.42 billion at December 31, 2022.

• Core deposits, defined as total deposits excluding brokered deposits and time deposits greater than $250,000, remained stable year over year, despite industry and market turmoil.
• Brokered deposits continue to be used as a supplemental funding source, as needed.
• Uninsured deposits were 24% of total deposits as of December 31, 2023 and 22% of total deposits as of September 30, 2023.

Liquidity

Total on- and off-balance sheet liquidity was $2.23 billion as of December 31, 2023, compared to $2.18 billion at September 30, 2023 and $1.38 billion at December 31, 2022. The Company did not utilize the Bank Term Funding Program (BTFP) or Federal Reserve Discount Window during the fourth quarter of 2023.

Primary Liquidity—On-Balance Sheet		December 31, 2023				September 30, 2023				June 30, 2023				March 31, 2023				December 31, 2022
(dollars in thousands)
Cash and Cash Equivalents		$	96,594			$	77,617			$	138,618			$	177,116			$	48,090
Securities Available for Sale			604,104				553,076				538,220				559,430				548,613
Less: Pledged Securities			(170,727	)			(164,277	)			(236,206	)			(234,452	)			—
Total Primary Liquidity		$	529,971			$	466,416			$	440,632			$	502,094			$	596,703
Ratio of Primary Liquidity to Total Deposits			14.3	%			12.7	%			12.3	%			14.7	%			17.5	%
Secondary Liquidity—Off-Balance Sheet Borrowing Capacity
Net Secured Borrowing Capacity with the FHLB		$	498,736			$	516,501			$	400,792			$	246,795			$	390,898
Net Secured Borrowing Capacity with the Federal Reserve Bank			979,448				1,022,128				986,644				990,685				157,827
Unsecured Borrowing Capacity with Correspondent Lenders			200,000				150,000				108,000				158,000				208,000
Secured Borrowing Capacity with Correspondent Lender			26,250				26,250				26,250				26,250				26,250
Total Secondary Liquidity		$	1,704,434			$	1,714,879			$	1,521,686			$	1,421,730			$	782,975
Total Primary and Secondary Liquidity		$	2,234,405			$	2,181,295			$	1,962,318			$	1,923,824			$	1,379,678
Ratio of Primary and Secondary Liquidity to Total Deposits			60.2	%			59.3	%			54.8	%			56.4	%			40.4	%

Asset Quality

Overall asset quality remained superb due to the Company’s measured risk selection, consistent underwriting standards, active credit oversight, and experienced lending and credit teams.

• Annualized net charge-offs as a percentage of average loans were 0.01% for both the fourth quarter of 2023 and the third quarter of 2023, and 0.00% for the fourth quarter of 2022.
• At December 31, 2023, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $919,000, or 0.02% of total assets, as compared to $749,000, or 0.02%, of total assets at September 30, 2023, and $639,000, or 0.01% of total assets at December 31, 2022.
• Loans with potential weaknesses that warrant a watchlist risk rating at December 31, 2023 totaled $26.5 million, compared to $26.9 million at September 30, 2023, and $32.3 million at December 31, 2022.
• Loans that warranted a substandard risk rating at December 31, 2023 totaled $35.9 million, compared to $35.6 million at September 30, 2023, and $28.0 million at December 31, 2022.
• Loans past due 30-89 days increased quarter over quarter due to the timing of closing on one matured loan. The closing occurred subsequent to year-end and the loan continues to perform as a pass-rated credit.

Capital

Total shareholders’ equity at December 31, 2023 was $425.5 million, an increase of $9.6 million, or 2.3%, compared to total shareholders’ equity of $416.0 million at September 30, 2023, and an increase of $31.5 million, or 8.0%, over total shareholders’ equity of $394.1 million at December 31, 2022.

• The linked-quarter increase was due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio, preferred stock dividends, and stock repurchases.
• The year-over-year increase was due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio, the adoption of the Current Expected Credit Losses (CECL) accounting methodology, preferred stock dividends, and stock repurchases.
• The Common Equity Tier 1 Risk-Based Capital Ratio was 9.16% at December 31, 2023, compared to 9.07% at September 30, 2023 and 8.40% at December 31, 2022.
• Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.73% at December 31, 2023, compared to 7.61% at September 30, 2023, and 7.48% at December 31, 2022.

Tangible book value per share, a non-GAAP financial measure, was $12.84 as of December 31, 2023, an increase of 3.7% from $12.37 as of September 30, 2023, and an increase of 9.8% from $11.69 as of December 31, 2022.

• The Company has increased tangible book value per share each of the past 28 quarters.

During the fourth quarter of 2023, the company repurchased 423,749 shares of its common stock. Shares were repurchased at a weighted average price of $10.72 per share for a total of $4.5 million.

• The Company has $20.5 million remaining under its current share repurchase authorization.

Today, the Company also announced that its Board of Directors has 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 March 1, 2024 to shareholders of record of the Series A Preferred Stock at the close of business on February 15, 2024.

Conference Call and Webcast

The Company will host a conference call to discuss its fourth quarter 2023 financial results on Thursday, January 25, 2024 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 844-481-2913 and requesting to join the Bridgewater Bancshares earnings call. To listen to a replay of the conference call via phone, please dial 877-344-7529 and enter access code 4855149. The replay will be available through February 1, 2024. The conference call will also be available via a live webcast on the Investor Relations section of the Company’s website, investors.bridgewaterbankmn.com, and archived for replay.

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 $4.6 billion and seven branches as of December 31, 2023, 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 potential additional rate increases by the Federal Reserve; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including rising rates of inflation and possible recession; the effects of developments and events in the financial services industry, including the large-scale deposit withdrawals over a short period of time at Silicon Valley Bank, Signature Bank and First Republic Bank that resulted in the failure of those institutions; 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 credit losses on loans; new or revised accounting standards; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients, who have balances above current FDIC insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact 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; 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 or our third-party vendors’ information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools; 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 in response to the failures of Silicon Valley Bank, Signature Bank and First Republic Bank in 2023; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics, acts of war or terrorism or other adverse external events, including the Israeli-Palestinian conflict and the Russian invasion of Ukraine; potential impairment to the goodwill the Company 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; potential changes in federal policy and at regulatory agencies as a result of the upcoming 2024 presidential election; 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. The Company undertakes 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 Financial Highlights (dollars in thousands, except share data)
		As of and for the Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)		2023			2023			2023			2023			2022
Income Statement
Net Interest Income		$	25,314		$	25,421		$	25,872		$	28,567		$	32,893
Provision for (Recovery of) Credit Losses			(250	)		(600	)		50			625			1,500
Noninterest Income			1,409			1,726			1,415			1,943			1,738
Noninterest Expense			15,740			15,237			14,274			14,069			15,203
Net Income			8,873			9,629			9,816			11,642			13,735
Net Income Available to Common Shareholders			7,859			8,616			8,802			10,629			12,721
Per Common Share Data
Basic Earnings Per Share		$	0.28		$	0.31		$	0.32		$	0.38		$	0.46
Diluted Earnings Per Share			0.28			0.30			0.31			0.37			0.45
Book Value Per Share			12.94			12.47			12.25			12.05			11.80
Tangible Book Value Per Share (1)			12.84			12.37			12.15			11.95			11.69
Basic Weighted Average Shares Outstanding			27,870,430			27,943,409			27,886,425			27,726,894			27,558,983
Diluted Weighted Average Shares Outstanding			28,238,056			28,311,778			28,198,739			28,490,046			28,527,306
Shares Outstanding at Period End			27,748,965			28,015,505			27,973,995			27,845,244			27,751,950
Financial Ratios
Return on Average Assets (2)			0.77	%		0.85	%		0.88	%		1.07	%		1.28	%
Pre-Provision Net Revenue Return on Average Assets (1)(2)			0.96			1.01			1.16			1.49			1.82
Return on Average Shareholders' Equity (2)			8.43			9.23			9.69			11.70			14.06
Return on Average Tangible Common Equity (1)(2)			8.95			9.92			10.48			12.90			15.86
Net Interest Margin (3)			2.27			2.32			2.40			2.72			3.16
Core Net Interest Margin (1)(3)			2.21			2.24			2.31			2.62			3.05
Cost of Total Deposits			3.19			2.99			2.66			2.01			1.31
Cost of Funds			3.23			3.10			2.91			2.41			1.67
Efficiency Ratio (1)			58.8			56.1			52.3			45.9			43.8
Noninterest Expense to Average Assets (2)			1.37			1.34			1.28			1.30			1.42
Balance Sheet
Total Assets		$	4,611,990		$	4,557,070		$	4,603,185		$	4,602,899		$	4,345,662
Total Loans, Gross			3,724,282			3,722,271			3,736,211			3,684,360			3,569,446
Deposits			3,709,948			3,675,509			3,577,932			3,411,123			3,416,543
Total Shareholders' Equity			425,515			415,960			409,126			402,006			394,064
Loan to Deposit Ratio			100.4	%		101.3	%		104.4	%		108.0	%		104.5	%
Core Deposits to Total Deposits (4)			68.7			70.3			70.3			72.4			74.6
Uninsured Deposits to Total Deposits			24.3			22.2			22.1			24.0			38.5
Asset Quality
Net Loan Charge-Offs to Average Loans (2)			0.01	%		0.01	%		0.00	%		0.00	%		0.00	%
Nonperforming Assets to Total Assets (5)			0.02			0.02			0.02			0.02			0.01
Allowance for Credit Losses to Total Loans			1.36			1.36			1.36			1.36			1.34
Capital Ratios (Consolidated) (6)
Tier 1 Leverage Ratio			9.57	%		9.62	%		9.47	%		9.41	%		9.55	%
Common Equity Tier 1 Risk-based Capital Ratio			9.16			9.07			8.72			8.48			8.40
Tier 1 Risk-based Capital Ratio			10.79			10.69			10.33			10.08			10.03
Total Risk-based Capital Ratio			13.97			13.88			13.50			13.25			13.15
Tangible Common Equity to Tangible Assets (1)			7.73			7.61			7.39			7.23			7.48

__________________________

(1)		Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
(2)		Annualized.
(3)		Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%.
(4)		Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
(5)		Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets.
(6)		Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Balance Sheets (dollars in thousands, except share data)
		December 31,				September 30,				June 30,				March 31,				December 31,
		2023				2023				2023				2023				2022
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Assets
Cash and Cash Equivalents		$	128,562			$	124,358			$	177,101			$	209,192			$	87,043
Bank-Owned Certificates of Deposit			—				1,225				1,225				1,225				1,181
Securities Available for Sale, at Fair Value			604,104				553,076				538,220				559,430				548,613
Loans, Net of Allowance for Credit Losses			3,667,215				3,664,464				3,677,792				3,625,477				3,512,157
Federal Home Loan Bank (FHLB) Stock, at Cost			17,097				17,056				21,557				28,632				19,606
Premises and Equipment, Net			48,886				49,331				49,710				47,801				48,445
Foreclosed Assets			—				—				116				116				—
Accrued Interest			16,697				15,182				13,822				13,377				13,479
Goodwill			2,626				2,626				2,626				2,626				2,626
Other Intangible Assets, Net			188				197				206				240				288
Bank-Owned Life Insurance			34,477				34,209				33,958				33,719				33,485
Other Assets			92,138				95,346				86,852				81,064				78,739
Total Assets		$	4,611,990			$	4,557,070			$	4,603,185			$	4,602,899			$	4,345,662
Liabilities and Equity
Liabilities
Deposits:
Noninterest Bearing		$	756,964			$	754,297			$	751,217			$	742,198			$	884,272
Interest Bearing			2,952,984				2,921,212				2,826,715				2,668,925				2,532,271
Total Deposits			3,709,948				3,675,509				3,577,932				3,411,123				3,416,543
Federal Funds Purchased			—				—				195,000				437,000				287,000
Notes Payable			13,750				13,750				13,750				13,750				13,750
FHLB Advances			319,500				294,500				262,000				197,000				97,000
Subordinated Debentures, Net of Issuance Costs			79,288				79,192				79,096				79,001				78,905
Accrued Interest Payable			5,282				3,816				2,974				3,257				2,831
Other Liabilities			58,707				74,343				63,307				59,762				55,569
Total Liabilities			4,186,475				4,141,110				4,194,059				4,200,893				3,951,598
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 December 31, 2023 (unaudited), September 30, 2023 (unaudited), June 30, 2023 (unaudited), March 31, 2023 (unaudited), and December 31, 2022			66,514				66,514				66,514				66,514				66,514
Common Stock- $0.01 par value; Authorized 75,000,000
Common Stock - Issued and Outstanding 27,748,965 at December 31, 2023 (unaudited), 28,015,505 at September 30, 2023 (unaudited), 27,973,995 at June 30, 2023 (unaudited), 27,845,244 at March 31, 2023 (unaudited), and 27,751,950 at December 31, 2022			277				280				280				278				278
Additional Paid-In Capital			96,320				100,120				99,044				97,716				96,529
Retained Earnings			280,650				272,812				264,196				255,394				248,685
Accumulated Other Comprehensive Loss			(18,246	)			(23,766	)			(20,908	)			(17,896	)			(17,942	)
Total Shareholders' Equity			425,515				415,960				409,126				402,006				394,064
Total Liabilities and Equity		$	4,611,990			$	4,557,070			$	4,603,185			$	4,602,899			$	4,345,662

Bridgewater Bancshares, Inc. and Subsidiaries Consolidated Statements of Income (dollars in thousands, except per share data) (Unaudited)
		Three Months Ended																				Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(dollars in thousands)		2023				2023				2023				2023				2022				2023				2022
Interest Income
Loans, Including Fees		$	49,727			$	48,999			$	47,721			$	44,955			$	42,488			$	191,402			$	146,256
Investment Securities			7,283				6,507				6,237				6,218				5,843				26,245				16,410
Other			1,543				1,303				1,043				819				529				4,708				1,029
Total Interest Income			58,553				56,809				55,001				51,992				48,860				222,355				163,695
Interest Expense
Deposits			29,448				27,225				22,998				16,374				10,781				96,045				23,379
Federal Funds Purchased			268				548				2,761				4,944				3,379				8,521				4,507
Notes Payable			299				296				285				263				202				1,143				202
FHLB Advances			2,220				2,316				2,092				861				575				7,489				1,221
Subordinated Debentures			1,004				1,003				993				983				1,030				3,983				4,688
Total Interest Expense			33,239				31,388				29,129				23,425				15,967				117,181				33,997
Net Interest Income			25,314				25,421				25,872				28,567				32,893				105,174				129,698
Provision for (Recovery of) Credit Losses			(250	)			(600	)			50				625				1,500				(175	)			7,700
Net Interest Income After Provision for Credit Losses			25,564				26,021				25,822				27,942				31,393				105,349				121,998
Noninterest Income
Customer Service Fees			359				379				368				349				344				1,455				1,236
Net Gain (Loss) on Sales of Securities			(27	)			—				50				(56	)			30				(33	)			82
Letter of Credit Fees			418				315				379				634				358				1,746				1,592
Debit Card Interchange Fees			152				150				155				138				148				595				586
Swap Fees			—				—				—				—				—				—				557
Bank-Owned Life Insurance			268				252				238				234				238				992				762
FHLB Prepayment Income			—				493				—				299				—				792				—
Other Income			239				137				225				345				620				946				1,517
Total Noninterest Income			1,409				1,726				1,415				1,943				1,738				6,493				6,332
Noninterest Expense
Salaries and Employee Benefits			9,615				9,519				8,589				8,815				9,821				36,538				36,941
Occupancy and Equipment			1,062				1,101				1,075				1,209				1,177				4,447				4,390
FDIC Insurance Assessment			1,050				1,075				900				665				360				3,690				1,365
Data Processing			424				392				401				357				371				1,574				1,396
Professional and Consulting Fees			782				715				829				755				635				3,081				2,664
Derivative Collateral Fees			573				543				404				380				535				1,900				687
Information Technology and Telecommunications			812				683				711				683				673				2,889				2,495
Marketing and Advertising			324				222				321				262				403				1,129				2,032
Intangible Asset Amortization			9				9				34				48				48				100				191
Amortization of Tax Credit Investments			—				—				—				—				114				—				408
Other Expense			1,089				978				1,010				895				1,066				3,972				4,051
Total Noninterest Expense			15,740				15,237				14,274				14,069				15,203				59,320				56,620
Income Before Income Taxes			11,233				12,510				12,963				15,816				17,928				52,522				71,710
Provision for Income Taxes			2,360				2,881				3,147				4,174				4,193				12,562				18,318
Net Income			8,873				9,629				9,816				11,642				13,735				39,960				53,392
Preferred Stock Dividends			(1,014	)			(1,013	)			(1,014	)			(1,013	)			(1,014	)			(4,054	)			(4,054	)
Net Income Available to Common Shareholders		$	7,859			$	8,616			$	8,802			$	10,629			$	12,721			$	35,906			$	49,338
Earnings Per Share
Basic		$	0.28			$	0.31			$	0.32			$	0.38			$	0.46			$	1.29			$	1.78
Diluted			0.28				0.30				0.31				0.37				0.45				1.27				1.72

Bridgewater Bancshares, Inc. and Subsidiaries Analysis of Average Balances, Yields and Rates (dollars in thousands, except per share data) (Unaudited)
		For the Three Months Ended
		December 31, 2023								September 30, 2023								December 31, 2022
		Average			Interest			Yield/		Average			Interest			Yield/		Average			Interest			Yield/
(dollars in thousands)		Balance			& Fees			Rate		Balance			& Fees			Rate		Balance			& Fees			Rate
Interest Earning Assets:
Cash Investments		$	106,275		$	1,233		4.60	%	$	81,038		$	903		4.42	%	$	65,393		$	366		2.22	%
Investment Securities:
Taxable Investment Securities			600,856			7,007		4.63			565,008			6,234		4.38			540,601			5,268		3.87
Tax-Exempt Investment Securities (1)			29,172			350		4.75			29,955			346		4.58			67,867			728		4.26
Total Investment Securities			630,028			7,357		4.63			594,963			6,580		4.39			608,468			5,996		3.91
Loans (1)(2)			3,726,126			50,022		5.33			3,722,594			49,326		5.26			3,482,150			42,702		4.87
Federal Home Loan Bank Stock			17,999			310		6.85			17,829			400		8.89			21,633			163		2.99
Total Interest Earning Assets			4,480,428			58,922		5.22	%		4,416,424			57,209		5.14	%		4,177,644			49,227		4.67	%
Noninterest Earning Assets			87,018								88,513								73,701
Total Assets		$	4,567,446							$	4,504,937							$	4,251,345
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	719,630		$	7,546		4.16	%	$	730,244		$	7,136		3.88	%	$	464,631		$	2,013		1.72	%
Savings and Money Market Deposits			911,835			9,003		3.92			874,612			8,089		3.67			1,048,227			4,533		1.72
Time Deposits			268,140			2,330		3.45			266,635			1,962		2.92			281,334			1,007		1.42
Brokered Deposits			1,009,166			10,569		4.16			985,276			10,038		4.04			537,351			3,228		2.38
Total Interest Bearing Deposits			2,908,771			29,448		4.02			2,856,767			27,225		3.78			2,331,543			10,781		1.83
Federal Funds Purchased			18,932			268		5.62			39,641			548		5.48			340,471			3,379		3.94
Notes Payable			13,750			299		8.62			13,750			296		8.58			11,359			202		7.04
FHLB Advances			303,467			2,220		2.90			275,261			2,316		3.34			94,103			575		2.42
Subordinated Debentures			79,233			1,004		5.02			79,137			1,003		5.03			81,242			1,030		5.03
Total Interest Bearing Liabilities			3,324,153			33,239		3.97	%		3,264,556			31,388		3.81	%		2,858,718			15,967		2.22	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			753,430								754,567								943,232
Other Noninterest Bearing Liabilities			72,074								71,767								61,806
Total Noninterest Bearing Liabilities			825,504								826,334								1,005,038
Shareholders' Equity			417,789								414,047								387,589
Total Liabilities and Shareholders' Equity		$	4,567,446							$	4,504,937							$	4,251,345
Net Interest Income / Interest Rate Spread						25,683		1.25	%					25,821		1.33	%					33,260		2.45	%
Net Interest Margin (3)								2.27	%							2.32	%							3.16	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(369)								(400)								(367)
Net Interest Income					$	25,314							$	25,421							$	32,893

__________________________

(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 Analysis of Average Balances, Yields and Rates (dollars in thousands, except per share data) (Unaudited)
		For the Year Ended
		December 31, 2023								December 31, 2022
		Average			Interest			Yield/		Average			Interest			Yield/
(dollars in thousands)		Balance			& Fees			Rate		Balance			& Fees			Rate
Interest Earning Assets:
Cash Investments		$	77,759		$	3,170		4.08	%	$	66,072		$	597		0.90	%
Investment Securities:
Taxable Investment Securities			577,102			25,199		4.37			448,500			13,960		3.11
Tax-Exempt Investment Securities (1)			29,004			1,325		4.57			72,379			3,101		4.29
Total Investment Securities			606,106			26,524		4.38			520,879			17,061		3.28
Loans (1)(2)			3,699,252			192,679		5.21			3,190,712			146,827		4.60
Federal Home Loan Bank Stock			21,249			1,538		7.24			12,628			432		3.42
Total Interest Earning Assets			4,404,366			223,911		5.08	%		3,790,291			164,917		4.35	%
Noninterest Earning Assets			86,438								76,189
Total Assets		$	4,490,804							$	3,866,480
Interest Bearing Liabilities:
Deposits:
Interest Bearing Transaction Deposits		$	650,028		$	23,379		3.60	%	$	524,968		$	4,336		0.83	%
Savings and Money Market Deposits			922,799			30,639		3.32			963,096			9,129		0.95
Time Deposits			263,161			7,064		2.68			284,868			3,264		1.15
Brokered Deposits			909,662			34,963		3.84			449,095			6,650		1.48
Total Interest Bearing Deposits			2,745,650			96,045		3.50			2,222,027			23,379		1.05
Federal Funds Purchased			169,645			8,521		5.02			149,608			4,507		3.01
Notes Payable			13,750			1,143		8.31			2,863			202		7.04
FHLB Advances			238,000			7,489		3.15			64,278			1,221		1.90
Subordinated Debentures			79,090			3,983		5.04			89,584			4,688		5.23
Total Interest Bearing Liabilities			3,246,135			117,181		3.61	%		2,528,360			33,997		1.34	%
Noninterest Bearing Liabilities:
Noninterest Bearing Transaction Deposits			768,428								910,490
Other Noninterest Bearing Liabilities			65,763								43,597
Total Noninterest Bearing Liabilities			834,191								954,087
Shareholders' Equity			410,478								384,033
Total Liabilities and Shareholders' Equity		$	4,490,804							$	3,866,480
Net Interest Income / Interest Rate Spread						106,730		1.47	%					130,920		3.01	%
Net Interest Margin (3)								2.42	%							3.45	%
Taxable Equivalent Adjustment:
Tax-Exempt Investment Securities and Loans						(1,556)								(1,222)
Net Interest Income					$	105,174							$	129,698

__________________________

(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 Asset Quality Summary (dollars in thousands) (unaudited)
		As of and for the Three Months Ended																				As of and for the Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(dollars in thousands)		2023				2023				2023				2023				2022				2023				2022
Allowance for Credit Losses
Balance at Beginning of Period		$	50,585			$	50,701			$	50,148			$	47,996			$	46,491			$	47,996			$	40,020
Impact of Adopting CECL			—				—				—				650				—				650				—
Provision for Credit Losses			—				—				550				1,500				1,500				2,050				7,700
Charge-offs			(95	)			(122	)			(3	)			(4	)			(3	)			(224	)			(37	)
Recoveries			4				6				6				6				8				22				313
Net Charge-offs		$	(91	)		$	(116	)		$	3			$	2			$	5			$	(202	)		$	276
Balance at End of Period			50,494				50,585				50,701				50,148				47,996				50,494				47,996
Allowance for Credit Losses to Total Loans			1.36		%		1.36		%		1.36		%		1.36		%		1.34		%		1.36		%		1.34		%
		As of and for the Three Months Ended																				As of and for the Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(dollars in thousands)		2023				2023				2023				2023				2022				2023				2022
Provision for Credit Losses on Loans		$	—			$	—			$	550			$	1,500			$	1,500			$	2,050			$	7,700
Recovery of Credit Losses for Off-Balance Sheet Credit Exposures			(250	)			(600	)			(500	)			(875	)			—				(2,225	)			—
Provision for (Recovery of) Credit Losses		$	(250	)		$	(600	)		$	50			$	625			$	1,500			$	(175	)		$	7,700

		As of and for the Three Months Ended
		December 31,			September 30,			June 30,			March 31,			December 31,
(dollars in thousands)		2023			2023			2023			2023			2022
Selected Asset Quality Data
Loans 30-89 Days Past Due		$	15,110		$	11		$	—		$	21		$	186
Loans 30-89 Days Past Due to Total Loans			0.41	%		0.00	%		0.00	%		0.00	%		0.01	%
Nonperforming Loans		$	919		$	749		$	662		$	693		$	639
Nonperforming Loans to Total Loans			0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Foreclosed Assets		$	—		$	—		$	116		$	116		$	—
Nonaccrual Loans to Total Loans			0.02	%		0.02	%		0.02	%		0.02	%		0.02	%
Nonaccrual Loans and Loans Past Due 90 Days and Still Accruing to Total Loans			0.02			0.02			0.02			0.02			0.02
Nonperforming Assets (1)		$	919		$	749		$	778		$	809		$	639
Nonperforming Assets to Total Assets (1)			0.02	%		0.02	%		0.02	%		0.02	%		0.01	%
Net Loan Charge-Offs (Annualized) to Average Loans			0.01			0.01			0.00			0.00			0.00
Watchlist Risk Rating Loans		$	26,485		$	26,877		$	27,215		$	27,574		$	32,252
Substandard Risk Rating Loans			35,858			35,621			33,821			36,258			28,049

__________________________

(1)

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

Bridgewater Bancshares, Inc. and Subsidiaries Non-GAAP Financial Measures (dollars in thousands) (unaudited)
		For the Three Months Ended																				For the Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,				December 31,				December 31,
(dollars in thousands)		2023				2023				2023				2023				2022				2023				2022
Pre-Provision Net Revenue
Noninterest Income		$	1,409			$	1,726			$	1,415			$	1,943			$	1,738			$	6,493			$	6,332
Less: (Gain) Loss on Sales of Securities			27				—				(50	)			56				(30	)			33				(82	)
Less: FHLB Advance Prepayment Income			—				(493	)			—				(299	)			—				(792	)			—
Total Operating Noninterest Income			1,436				1,233				1,365				1,700				1,708				5,734				6,250
Plus: Net Interest Income			25,314				25,421				25,872				28,567				32,893				105,174				129,698
Net Operating Revenue		$	26,750			$	26,654			$	27,237			$	30,267			$	34,601			$	110,908			$	135,948
Noninterest Expense		$	15,740			$	15,237			$	14,274			$	14,069			$	15,203			$	59,320			$	56,620
Less: Amortization of Tax Credit Investments			—				—				—				—				(114	)			—				(408	)
Total Operating Noninterest Expense		$	15,740			$	15,237			$	14,274			$	14,069			$	15,089			$	59,320			$	56,212
Pre-Provision Net Revenue		$	11,010			$	11,417			$	12,963			$	16,198			$	19,512			$	51,588			$	79,736
Plus:
Non-Operating Revenue Adjustments			(27	)			493				50				243				30				759				82
Less:
Provision (Recovery of) for Credit Losses			(250	)			(600	)			50				625				1,500				(175	)			7,700
Non-Operating Expense Adjustments			—				—				—				—				114				—				408
Provision for Income Taxes			2,360				2,881				3,147				4,174				4,193				12,562				18,318
Net Income		$	8,873			$	9,629			$	9,816			$	11,642			$	13,735			$	39,960			$	53,392
Average Assets		$	4,567,446			$	4,504,937			$	4,483,662			$	4,405,234			$	4,251,345			$	4,490,804			$	3,866,480
Pre-Provision Net Revenue Return on Average Assets			0.96		%		1.01		%		1.16		%		1.49		%		1.82		%		1.15		%		2.06		%
Core Net Interest Margin
Net Interest Income (Tax-equivalent Basis)		$	25,683			$	25,822			$	26,280			$	28,947			$	33,260			$	106,730			$	130,920
Less: Loan Fees			(751	)			(914	)			(941	)			(998	)			(1,100	)			(3,604	)			(6,273	)
Less: PPP Interest and Fees			NM				NM				NM				NM				NM				NM				(970	)
Core Net Interest Income		$	24,932			$	24,908			$	25,339			$	27,949			$	32,160			$	103,126			$	123,677
Average Interest Earning Assets		$	4,480,428			$	4,416,424			$	4,395,050			$	4,323,706			$	4,177,644			$	4,404,366			$	3,790,291
Less: Average PPP Loans			NM				NM				NM				NM				NM				NM				(7,441	)
Core Average Interest Earning Assets		$	4,480,428			$	4,416,424			$	4,395,050			$	4,323,706			$	4,177,644			$	4,404,366			$	3,782,850
Core Net Interest Margin			2.21		%		2.24		%		2.31		%		2.62		%		3.05		%		2.34		%		3.27		%
Efficiency Ratio
Noninterest Expense		$	15,740			$	15,237			$	14,274			$	14,069			$	15,203			$	59,320			$	56,620
Less: Amortization of Intangible Assets			(9	)			(9	)			(34	)			(48	)			(48	)			(100	)			(191	)
Adjusted Noninterest Expense		$	15,731			$	15,228			$	14,240			$	14,021			$	15,155			$	59,220			$	56,429
Net Interest Income		$	25,314			$	25,421			$	25,872			$	28,567			$	32,893			$	105,174			$	129,698
Noninterest Income			1,409				1,726				1,415				1,943				1,738				6,493				6,332
Less: Gain (Loss) on Sales of Securities			27				—				(50	)			56				(30	)			33				(82	)
Adjusted Operating Revenue		$	26,750			$	27,147			$	27,237			$	30,566			$	34,601			$	111,700			$	135,948
Efficiency Ratio			58.8		%		56.1		%		52.3		%		45.9		%		43.8		%		53.0		%		41.5		%

Bridgewater Bancshares, Inc. and Subsidiaries Non-GAAP Financial Measures (dollars in thousands) (unaudited)
		For the Three Months Ended																					For the Year Ended
		December 31,				September 30,				June 30,				March 31,				December 31,					December 31,				December 31,
(dollars in thousands)		2023				2023				2023				2023				2022					2023				2022
Tangible Common Equity and Tangible Common Equity/Tangible Assets
Total Shareholders' Equity		$	425,515			$	415,960			$	409,126			$	402,006			$	394,064
Less: Preferred Stock			(66,514	)			(66,514	)			(66,514	)			(66,514	)			(66,514	)
Total Common Shareholders' Equity			359,001				349,446				342,612				335,492				327,550
Less: Intangible Assets			(2,814	)			(2,823	)			(2,832	)			(2,866	)			(2,914	)
Tangible Common Equity		$	356,187			$	346,623			$	339,780			$	332,626			$	324,636
Total Assets		$	4,611,990			$	4,557,070			$	4,603,185			$	4,602,899			$	4,345,662
Less: Intangible Assets			(2,814	)			(2,823	)			(2,832	)			(2,866	)			(2,914	)
Tangible Assets		$	4,609,176			$	4,554,247			$	4,600,353			$	4,600,033			$	4,342,748
Tangible Common Equity/Tangible Assets			7.73		%		7.61		%		7.39		%		7.23		%		7.48		%
Tangible Book Value Per Share
Book Value Per Common Share		$	12.94			$	12.47			$	12.25			$	12.05			$	11.80
Less: Effects of Intangible Assets			(0.10	)			(0.10	)			(0.10	)			(0.10	)			(0.11	)
Tangible Book Value Per Common Share		$	12.84			$	12.37			$	12.15			$	11.95			$	11.69
Return on Average Tangible Common Equity
Net Income Available to Common Shareholders		$	7,859			$	8,616			$	8,802			$	10,629			$	12,721			$	35,906			$	49,338
Average Shareholders' Equity		$	417,789			$	414,047			$	406,347			$	403,533			$	387,589			$	410,478			$	384,033
Less: Average Preferred Stock			(66,514	)			(66,514	)			(66,514	)			(66,514	)			(66,514	)			(66,514	)			(66,514	)
Average Common Equity			351,275				347,533				339,833				337,019				321,075				343,964				317,519
Less: Effects of Average Intangible Assets			(2,819	)			(2,828	)			(2,846	)			(2,894	)			(2,941	)			(2,847	)			(3,012	)
Average Tangible Common Equity		$	348,456			$	344,705			$	336,987			$	334,125			$	318,134			$	341,117			$	314,507
Return on Average Tangible Common Equity			8.95		%		9.92		%		10.48		%		12.90		%		15.86		%		10.53		%		15.69		%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240123324643/en/

Investor Contact:

Justin Horstman | Vice President, Investor Relations

Justin.Horstman@bwbmn.com | 952.542.5169

Source: Bridgewater Bancshares, Inc.

FAQ

What was the deposit growth in Q4 2023?

The deposit growth in Q4 2023 was $34.4 million, an annualized 3.7% increase.

What was the tangible book value per share at the end of 2023?

The tangible book value per share at the end of 2023 was $12.84.

How many shares of common stock were repurchased in Q4 2023?

423,749 shares of common stock were repurchased at a weighted average price of $10.72.

What were the diluted earnings per common share for the full year 2023?

The diluted earnings per common share for the full year 2023 were $1.27.

What was the net income for the fourth quarter of 2023?

The net income for the fourth quarter of 2023 was $8.9 million.

Who is the CEO of Bridgewater Bancshares, Inc.?

Jerry Baack is the Chairman, Chief Executive Officer, and President of Bridgewater Bancshares, Inc.