Bridgewater Bancshares, Inc. Announces Record First Quarter 2021 Net Income of $10.7 Million, $0.37 Diluted Earnings Per Share
Bridgewater Bancshares, Inc. (BWB) announced a net income of $10.7 million for Q1 2021, a 43.4% increase from $7.4 million in Q1 2020. Earnings per diluted share rose 46.1% to $0.37. The bank's total assets surpassed $3.0 billion for the first time, and employee count exceeded 200. Despite challenges from the pandemic, the bank achieved a stable net interest margin of 3.60%. Gross loans grew by 21.1% year-over-year, while deposits increased by 38.9%.
- Net income rose to $10.7 million, a 43.4% increase year-over-year.
- Earnings per share increased 46.1% to $0.37.
- Total assets exceeded $3.0 billion for the first time.
- Gross loans increased by 21.1% from the previous year.
- Deposits grew by 38.9% compared to Q1 2020.
- Cost of interest bearing liabilities decreased, indicating pressure on margins.
- Loan interest income declined by $259,000 from Q4 2020.
Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of
“This team has done a phenomenal job driving record quarterly earnings to start 2021,” commented Chairman, Chief Executive Officer, and President, Jerry Baack. “Our results demonstrate our ability to drive strong organic loan growth and stabilize our net interest margin despite a challenging rate environment and unprecedented levels of liquidity in the system. In addition to our operating results, we have met some exciting new milestones in the first quarter of 2021, surpassing
First Quarter 2021 Financial Results
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Diluted |
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Nonperforming |
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Adjusted |
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ROA |
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PPNR ROA (1) |
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ROE |
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earnings per share |
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assets to total assets |
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efficiency ratio (1) |
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$ |
0.37 |
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- Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
Linked-Quarter Highlights
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Diluted earnings per common share were
$0.37 for the first quarter of 2021, compared to$0.17 per common share for the fourth quarter of 2020, or$0.32 per common share for the fourth quarter of 2020 when excluding tax-adjusted FHLB prepayment fees.
-
Annualized return on average assets (ROA) and annualized return on average common equity (ROE) for the first quarter of 2021 were
1.47% and15.87% compared to ROA and ROE of1.31% and13.86% , respectively, for the fourth quarter of 2020, when excluding the tax-adjusted FHLB prepayment fees incurred in the fourth quarter of 2020.
-
Net interest margin was stable at
3.60% for the first quarter of 2021, compared to3.61% in the fourth quarter of 2020.
-
A loan loss provision of
$1.1 million was recorded in the first quarter of 2021 to support strong organic loan growth. The allowance for loan losses to total loans was1.48% at March 31, 2021, compared to1.50% at December 31, 2020. The allowance for loan losses to total loans, excluding Paycheck Protection Program (PPP) loans, was1.59% at March 31, 2021, compared to1.59% at December 31, 2020.
-
Gross loans, excluding PPP loans, increased
$74.9 million in the first quarter of 2021, or13.9% annualized.
-
Deposits increased
$137.0 million in the first quarter of 2021, which was net of a$96.1 million managed run-off in brokered deposits.
-
Tangible book value per share, a non-GAAP financial measure, increased
5.2% , or$0.49 , to$9.80 at March 31, 2021, compared to$9.31 at December 31, 2020.
-
Annualized net loan charge-offs (recoveries) as a percentage of average loans were (0.01)% for the first quarter of 2021, compared to
0.08% for the fourth quarter of 2020.
-
Loan modification balances as a percent of totals loans, excluding PPP loans, decreased from
3.0% at December 31, 2020 to1.6% at March 31, 2021.
-
Round two PPP loan originations as of March 31, 2021, totaled
$70.1 million , generating net deferred fees of$3.0 million .
Year-Over-Year Highlights
-
Net income was
$10.7 million for the first quarter of 2021, compared to$7.4 million for the first quarter of 2020, an increase of$3.2 million , or43.4% .
-
Diluted earnings per common share for the first quarter of 2021 were
$0.37 , compared to$0.25 for the first quarter of 2020, an increase of46.1% .
-
Pre-provision net revenue (PPNR), a non-GAAP financial measure, was
$15.6 million for the first quarter of 2021, an increase of28.3% , compared to$12.2 million for the first quarter of 2020. PPNR ROA, a non-GAAP financial measure, was2.15% for the first quarter of 2021, compared to2.11% for the first quarter of 2020.
-
Net interest margin was stable at
3.60% for the first quarter of 2021, compared to3.59% for the first quarter of 2020, despite extraordinary volatility in interest rates over the past year.
-
The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was
40.7% for the first quarter of 2021, compared to44.1% for the first quarter of 2020.
-
Gross loans increased
$423.3 million at March 31, 2021, or21.1% , compared to March 31, 2020. Excluding$163.3 million of PPP loans, gross loans increased13.0% , at March 31, 2021, compared to March 31, 2020.
-
Deposits increased
$738.5 million at March 31, 2021, or38.9% , compared to March 31, 2020. Excluding brokered deposits and remaining PPP loan funds, deposits increased32.1% at March 31, 2021, compared to March 31, 2020.
-
Tangible book value per share, a non-GAAP financial measure, increased
15.3% , or$1.31 , to$9.80 at March 31, 2021, compared to$8.49 at March 31, 2020.
Recent Developments
The novel coronavirus (COVID-19) pandemic has continued to create uncertainty and extraordinary change for the Company, its clients, its communities and the country as a whole. Vaccines have been rolled out nationwide in the first quarter of 2021, however the situation remains fluid and management cannot estimate the duration and full impact of the COVID-19 pandemic on the economy, financial markets and the Company’s financial condition and results of operations.
The Company participated in both the first and second rounds of the Small Business Administration’s (SBA) PPP, which stemmed from the Coronavirus Aid, Relief and Economic Security, or CARES, Act that was signed into law on March 27, 2020, and reopened as authorized by the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, which was signed into law on December 27, 2020, or Economic Aid Act. As of March 31, 2021,
The Company has developed programs for clients who are experiencing business and personal disruptions due to the COVID-19 pandemic 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 will not be considered troubled debt restructurings. There was no new modification activity in the first quarter of 2021. The Company had 19 modified loans totaling
The following table presents a rollforward of loan modification activity, by modification type, from December 31, 2020 to March 31, 2021:
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(dollars in thousands) |
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Interest-Only |
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Payment Deferral |
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Extended Amortization |
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Total |
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Principal Balance - December 31, 2020 |
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$ |
61,105 |
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$ |
613 |
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$ |
4,834 |
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$ |
66,552 |
Modification Expired |
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(29,396) |
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— |
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— |
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(29,396) |
Net Principal Advances (Payments) |
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(46) |
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5 |
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(32) |
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(73) |
Principal Balance - March 31, 2021 |
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$ |
31,663 |
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$ |
618 |
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$ |
4,802 |
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$ |
37,083 |
Key Financial Measures
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As of and for the Three Months Ended |
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March 31, |
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December 31, |
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March 31, |
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2021 |
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2020 |
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2020 |
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Per Common Share Data |
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Basic Earnings Per Share |
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$ |
0.38 |
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$ |
0.18 |
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$ |
0.26 |
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Diluted Earnings Per Share |
|
|
0.37 |
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|
0.17 |
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|
0.25 |
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Book Value Per Share |
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|
9.92 |
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|
9.43 |
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|
8.61 |
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Tangible Book Value Per Share (1) |
|
|
9.80 |
|
|
9.31 |
|
|
8.49 |
|
Basic Weighted Average Shares Outstanding |
|
|
28,017,366 |
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|
28,179,768 |
|
|
28,791,494 |
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Diluted Weighted Average Shares Outstanding |
|
|
28,945,212 |
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|
28,823,384 |
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|
29,502,245 |
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Shares Outstanding at Period End |
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28,132,929 |
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28,143,493 |
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28,807,375 |
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Selected Performance Ratios |
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Return on Average Assets (Annualized) |
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1.47 |
% |
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0.70 |
% |
|
1.29 |
% |
Pre-Provision Net Revenue Return on Average Assets (Annualized) (1) |
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2.15 |
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|
2.30 |
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|
2.11 |
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Return on Average Common Equity (Annualized) |
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|
15.87 |
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|
7.45 |
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|
11.94 |
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Return on Average Tangible Common Equity (Annualized) (1) |
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16.06 |
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7.55 |
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12.10 |
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Yield on Interest Earning Assets |
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4.31 |
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|
4.46 |
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|
4.90 |
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Yield on Total Loans, Gross |
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4.74 |
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|
4.89 |
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5.17 |
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Cost of Interest Bearing Liabilities |
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1.04 |
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1.24 |
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1.84 |
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Cost of Total Deposits |
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0.59 |
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|
0.69 |
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|
1.27 |
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Net Interest Margin (2) |
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3.60 |
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3.61 |
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|
3.59 |
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Efficiency Ratio (1) |
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41.2 |
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59.0 |
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|
44.4 |
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Adjusted Efficiency Ratio (1) |
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40.7 |
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|
36.6 |
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|
44.1 |
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Noninterest Expense to Average Assets (Annualized) |
|
|
1.51 |
|
|
2.16 |
|
|
1.69 |
|
Adjusted Noninterest Expense to Average Assets (Annualized) (1) |
|
|
1.49 |
|
|
1.34 |
|
|
1.68 |
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Loan to Deposit Ratio |
|
|
91.9 |
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|
93.0 |
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|
105.4 |
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Core Deposits to Total Deposits |
|
|
83.5 |
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|
78.1 |
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|
78.6 |
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Tangible Common Equity to Tangible Assets (1) |
|
|
8.99 |
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|
8.96 |
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|
10.13 |
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Capital Ratios (Bank Only) (3) |
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Tier 1 Leverage Ratio |
|
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10.65 |
% |
|
10.89 |
% |
|
10.93 |
% |
Tier 1 Risk-based Capital Ratio |
|
|
12.08 |
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|
12.12 |
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|
11.53 |
|
Total Risk-based Capital Ratio |
|
|
13.33 |
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|
13.37 |
|
|
12.67 |
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Capital Ratios (Consolidated) (3) |
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Tier 1 Leverage Ratio |
|
|
9.11 |
% |
|
9.28 |
% |
|
10.51 |
% |
Tier 1 Risk-based Capital Ratio |
|
|
10.34 |
|
|
10.35 |
|
|
11.10 |
|
Total Risk-based Capital Ratio |
|
|
14.46 |
|
|
14.58 |
|
|
13.38 |
|
- Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
-
Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of
21% . - Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies.
Selected Financial Data
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March 31, |
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December 31, |
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September 30, |
|
June 30, |
|
March 31, |
|||||
(dollars in thousands) |
|
2021 |
|
2020 |
|
2020 |
|
2020 |
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2020 |
|||||
Selected Balance Sheet Data |
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Total Assets |
|
$ |
3,072,359 |
|
$ |
2,927,345 |
|
$ |
2,774,564 |
|
$ |
2,754,463 |
|
$ |
2,418,730 |
Total Loans, Gross |
|
|
2,426,123 |
|
|
2,326,428 |
|
|
2,259,228 |
|
|
2,193,778 |
|
|
2,002,817 |
Allowance for Loan Losses |
|
|
35,987 |
|
|
34,841 |
|
|
31,381 |
|
|
27,633 |
|
|
24,585 |
Goodwill and Other Intangibles |
|
|
3,248 |
|
|
3,296 |
|
|
3,344 |
|
|
3,391 |
|
|
3,439 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
2,638,654 |
|
|
2,501,636 |
|
|
2,273,044 |
|
|
2,242,051 |
|
|
1,900,127 |
Tangible Common Equity (1) |
|
|
275,923 |
|
|
262,109 |
|
|
262,088 |
|
|
253,799 |
|
|
244,704 |
Total Shareholders' Equity |
|
|
279,171 |
|
|
265,405 |
|
|
265,432 |
|
|
257,190 |
|
|
248,143 |
Average Total Assets - Quarter-to-Date |
|
|
2,940,262 |
|
|
2,816,032 |
|
|
2,711,755 |
|
|
2,622,272 |
|
|
2,317,040 |
Average Common Equity - Quarter-to-Date |
|
|
272,729 |
|
|
265,716 |
|
|
263,195 |
|
|
255,109 |
|
|
250,800 |
- Represents a non-GAAP financial measure. See "Non-GAAP Financial Measures" for further details.
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|
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For the Three Months Ended |
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
(dollars in thousands) |
|
2021 |
|
2020 |
|
2020 |
|||
Selected Income Statement Data |
|
|
|
|
|
|
|
|
|
Interest Income |
|
$ |
30,440 |
|
$ |
30,699 |
|
$ |
27,468 |
Interest Expense |
|
|
5,045 |
|
|
5,858 |
|
|
7,366 |
Net Interest Income |
|
|
25,395 |
|
|
24,841 |
|
|
20,102 |
Provision for Loan Losses |
|
|
1,100 |
|
|
3,900 |
|
|
2,100 |
Net Interest Income after Provision for Loan Losses |
|
|
24,295 |
|
|
20,941 |
|
|
18,002 |
Noninterest Income |
|
|
1,008 |
|
|
986 |
|
|
1,719 |
Noninterest Expense |
|
|
10,923 |
|
|
15,258 |
|
|
9,746 |
Income Before Income Taxes |
|
|
14,380 |
|
|
6,669 |
|
|
9,975 |
Provision for Income Taxes |
|
|
3,709 |
|
|
1,690 |
|
|
2,532 |
Net Income |
|
$ |
10,671 |
|
$ |
4,979 |
|
$ |
7,443 |
Income Statement
Net Interest Income
Net interest income was
Net interest margin (on a fully tax-equivalent basis) for the first quarter of 2021 was
While the origination volume of PPP loans earning
The following table summarizes PPP loan originations and net origination fees as of March 31, 2021:
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Originated |
|
Outstanding |
|
Program Lifetime |
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Number |
|
Principal |
|
Number |
|
Principal |
|
Net Origination |
|
Net Origination |
||||||
(dollars in thousands) |
|
of Loans |
|
Balance |
|
of Loans |
|
Balance |
|
Fees Generated |
|
Fees Earned |
||||||
Round One PPP Loans |
|
|
1,200 |
|
$ |
181,600 |
|
|
412 |
|
$ |
93,114 |
|
$ |
5,706 |
|
$ |
4,359 |
Round Two PPP Loans |
|
|
517 |
|
|
70,144 |
|
|
517 |
|
|
70,144 |
|
|
3,041 |
|
|
68 |
Totals |
|
|
1,717 |
|
$ |
251,744 |
|
|
929 |
|
$ |
163,258 |
|
$ |
8,747 |
|
$ |
4,427 |
Nevertheless, earning asset yields continue to be negatively impacted by the low interest rate environment, however given the volatility of the past year and competing dynamics on both sides of the balance sheet, the Company was encouraged by another quarter of meaningful deposit repricing that supported continued net interest margin stabilization.
Interest income was
Loan interest income and loan fees remain the primary contributing factors to the changes in yield on interest earning assets. The aggregate loan yield, excluding PPP loans, decreased to
A summary of interest and fees recognized on loans, excluding PPP loans, for the periods indicated is as follows:
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Three Months Ended |
|
||||||||||||
|
|
March 31, 2021 |
|
|
December 31, 2020 |
|
|
September 30, 2020 |
|
|
June 30, 2020 |
|
|
March 31, 2020 |
|
Interest |
|
4.50 |
% |
|
4.59 |
% |
|
4.69 |
% |
|
4.76 |
% |
|
4.90 |
% |
Fees |
|
0.22 |
|
|
0.28 |
|
|
0.24 |
|
|
0.25 |
|
|
0.27 |
|
Yield on Loans, Excluding PPP Loans |
|
4.72 |
% |
|
4.87 |
% |
|
4.93 |
% |
|
5.01 |
% |
|
5.17 |
% |
Interest expense was
Interest expense on deposits was
A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended March 31, 2021, December 31, 2020, and March 31, 2020 is as follows:
|
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|
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
||||||||||||||||||||||
|
|
March 31, 2021 |
|
December 31, 2020 |
|
March 31, 2020 |
|
||||||||||||||||||
|
|
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 |
|
$ |
105,477 |
|
$ |
34 |
|
0.13 |
% |
$ |
79,896 |
|
$ |
32 |
|
0.16 |
% |
$ |
29,462 |
|
$ |
59 |
|
0.81 |
% |
Investment Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable Investment Securities |
|
|
301,680 |
|
|
1,723 |
|
2.32 |
|
|
290,093 |
|
|
1,632 |
|
2.24 |
|
|
188,186 |
|
|
1,387 |
|
2.96 |
|
Tax-Exempt Investment Securities (1) |
|
|
80,963 |
|
|
881 |
|
4.41 |
|
|
81,370 |
|
|
888 |
|
4.34 |
|
|
94,728 |
|
|
1,024 |
|
4.35 |
|
Total Investment Securities |
|
|
382,643 |
|
|
2,604 |
|
2.76 |
|
|
371,463 |
|
|
2,520 |
|
2.70 |
|
|
282,914 |
|
|
2,411 |
|
3.43 |
|
Paycheck Protection Program Loans (2) |
|
|
148,881 |
|
|
1,864 |
|
5.08 |
|
|
165,099 |
|
|
2,097 |
|
5.05 |
|
|
— |
|
|
— |
|
— |
|
Loans (1)(2) |
|
|
2,241,038 |
|
|
26,074 |
|
4.72 |
|
|
2,136,229 |
|
|
26,168 |
|
4.87 |
|
|
1,954,959 |
|
|
25,150 |
|
5.17 |
|
Total Loans |
|
|
2,389,919 |
|
|
27,938 |
|
4.74 |
|
|
2,301,328 |
|
|
28,265 |
|
4.89 |
|
|
1,954,959 |
|
|
25,150 |
|
5.17 |
|
Federal Home Loan Bank Stock |
|
|
5,045 |
|
|
78 |
|
6.28 |
|
|
6,856 |
|
|
92 |
|
5.35 |
|
|
10,270 |
|
|
100 |
|
3.93 |
|
Total Interest Earning Assets |
|
|
2,883,084 |
|
|
30,654 |
|
4.31 |
% |
|
2,759,543 |
|
|
30,909 |
|
4.46 |
% |
|
2,277,605 |
|
|
27,720 |
|
4.90 |
% |
Noninterest Earning Assets |
|
|
57,178 |
|
|
|
|
|
|
|
56,489 |
|
|
|
|
|
|
|
39,435 |
|
|
|
|
|
|
Total Assets |
|
$ |
2,940,262 |
|
|
|
|
|
|
$ |
2,816,032 |
|
|
|
|
|
|
$ |
2,317,040 |
|
|
|
|
|
|
Interest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Bearing Transaction Deposits |
|
|
364,017 |
|
|
422 |
|
0.47 |
% |
|
353,806 |
|
|
420 |
|
0.47 |
% |
|
246,843 |
|
|
431 |
|
0.70 |
% |
Savings and Money Market Deposits |
|
|
724,104 |
|
|
1,008 |
|
0.56 |
|
|
538,030 |
|
|
1,003 |
|
0.74 |
|
|
533,578 |
|
|
1,905 |
|
1.44 |
|
Time Deposits |
|
|
344,715 |
|
|
1,267 |
|
1.49 |
|
|
362,469 |
|
|
1,607 |
|
1.76 |
|
|
376,154 |
|
|
2,177 |
|
2.33 |
|
Brokered Deposits |
|
|
402,694 |
|
|
974 |
|
0.98 |
|
|
433,037 |
|
|
1,049 |
|
0.96 |
|
|
218,289 |
|
|
1,211 |
|
2.23 |
|
Total Interest Bearing Deposits |
|
|
1,835,530 |
|
|
3,671 |
|
0.81 |
|
|
1,687,342 |
|
|
4,079 |
|
0.96 |
|
|
1,374,864 |
|
|
5,724 |
|
1.67 |
|
Federal Funds Purchased |
|
|
— |
|
|
— |
|
— |
|
|
4,072 |
|
|
4 |
|
0.33 |
|
|
24,835 |
|
|
107 |
|
1.74 |
|
Notes Payable |
|
|
6,722 |
|
|
61 |
|
3.66 |
|
|
11,000 |
|
|
105 |
|
3.77 |
|
|
12,505 |
|
|
115 |
|
3.70 |
|
FHLB Advances |
|
|
57,500 |
|
|
228 |
|
1.61 |
|
|
99,196 |
|
|
551 |
|
2.21 |
|
|
172,379 |
|
|
1,027 |
|
2.40 |
|
Subordinated Debentures |
|
|
73,776 |
|
|
1,085 |
|
5.96 |
|
|
73,696 |
|
|
1,119 |
|
6.04 |
|
|
24,744 |
|
|
393 |
|
6.39 |
|
Total Interest Bearing Liabilities |
|
|
1,973,528 |
|
|
5,045 |
|
1.04 |
% |
|
1,875,306 |
|
|
5,858 |
|
1.24 |
% |
|
1,609,327 |
|
|
7,366 |
|
1.84 |
% |
Noninterest Bearing Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Bearing Transaction Deposits |
|
|
676,173 |
|
|
|
|
|
|
|
654,299 |
|
|
|
|
|
|
|
444,201 |
|
|
|
|
|
|
Other Noninterest Bearing Liabilities |
|
|
17,832 |
|
|
|
|
|
|
|
20,711 |
|
|
|
|
|
|
|
12,712 |
|
|
|
|
|
|
Total Noninterest Bearing Liabilities |
|
|
694,005 |
|
|
|
|
|
|
|
675,010 |
|
|
|
|
|
|
|
456,913 |
|
|
|
|
|
|
Shareholders' Equity |
|
|
272,729 |
|
|
|
|
|
|
|
265,716 |
|
|
|
|
|
|
|
250,800 |
|
|
|
|
|
|
Total Liabilities and Shareholders' Equity |
|
$ |
2,940,262 |
|
|
|
|
|
|
$ |
2,816,032 |
|
|
|
|
|
|
$ |
2,317,040 |
|
|
|
|
|
|
Net Interest Income / Interest Rate Spread |
|
|
|
|
|
25,609 |
|
3.27 |
% |
|
|
|
|
25,051 |
|
3.22 |
% |
|
|
|
|
20,354 |
|
3.06 |
% |
Net Interest Margin (3) |
|
|
|
|
|
|
|
3.60 |
% |
|
|
|
|
|
|
3.61 |
% |
|
|
|
|
|
|
3.59 |
% |
Taxable Equivalent Adjustment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax-Exempt Investment Securities and Loans |
|
|
|
|
|
(214) |
|
|
|
|
|
|
|
(210) |
|
|
|
|
|
|
|
(252) |
|
|
|
Net Interest Income |
|
|
|
|
$ |
25,395 |
|
|
|
|
|
|
$ |
24,841 |
|
|
|
|
|
|
$ |
20,102 |
|
|
|
-
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% . - Average loan balances include nonaccrual loans. Interest income on loans includes amortization of deferred loan fees, net of deferred loan costs.
- 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
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 |
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
(dollars in thousands) |
|
2021 |
|
2020 |
|
2020 |
|||
Balance at Beginning of Period |
|
$ |
34,841 |
|
$ |
31,381 |
|
$ |
22,526 |
Provision for Loan Losses |
|
|
1,100 |
|
|
3,900 |
|
|
2,100 |
Charge-offs |
|
|
(14) |
|
|
(463) |
|
|
(47) |
Recoveries |
|
|
60 |
|
|
23 |
|
|
6 |
Balance at End of Period |
|
$ |
35,987 |
|
$ |
34,841 |
|
$ |
24,585 |
Noninterest Income
Noninterest income was
The following table presents the major components of noninterest income for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
(dollars in thousands) |
|
2021 |
|
2020 |
|
2020 |
|||
Noninterest Income: |
|
|
|
|
|
|
|
|
|
Customer Service Fees |
|
$ |
234 |
|
$ |
251 |
|
$ |
240 |
Net Gain on Sales of Securities |
|
|
— |
|
|
30 |
|
|
3 |
Letter of Credit Fees |
|
|
327 |
|
|
477 |
|
|
274 |
Debit Card Interchange Fees |
|
|
130 |
|
|
118 |
|
|
92 |
Swap Fees |
|
|
— |
|
|
— |
|
|
907 |
Other Income |
|
|
317 |
|
|
110 |
|
|
203 |
Totals |
|
$ |
1,008 |
|
$ |
986 |
|
$ |
1,719 |
Noninterest Expense
Noninterest expense was
The following table presents the major components of noninterest expense for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|||||||
|
|
March 31, |
|
December 31, |
|
March 31, |
|||
(dollars in thousands) |
|
2021 |
|
2020 |
|
2020 |
|||
Noninterest Expense: |
|
|
|
|
|
|
|
|
|
Salaries and Employee Benefits |
|
$ |
7,102 |
|
$ |
6,216 |
|
$ |
6,454 |
Occupancy and Equipment |
|
|
1,055 |
|
|
979 |
|
|
713 |
FDIC Insurance Assessment |
|
|
315 |
|
|
270 |
|
|
190 |
Data Processing |
|
|
291 |
|
|
293 |
|
|
229 |
Professional and Consulting Fees |
|
|
544 |
|
|
566 |
|
|
485 |
Information Technology and Telecommunications |
|
|
462 |
|
|
397 |
|
|
266 |
Marketing and Advertising |
|
|
286 |
|
|
143 |
|
|
466 |
Intangible Asset Amortization |
|
|
48 |
|
|
48 |
|
|
48 |
Amortization of Tax Credit Investments |
|
|
118 |
|
|
146 |
|
|
85 |
FHLB Advance Prepayment Fees |
|
|
— |
|
|
5,613 |
|
|
— |
Other Expense |
|
|
702 |
|
|
587 |
|
|
810 |
Totals |
|
$ |
10,923 |
|
$ |
15,258 |
|
$ |
9,746 |
In the first quarter of 2021, the Company attracted 21 new hires in lending, deposit gathering, technology, risk management, and other supportive roles, which continued to demonstrate the Company’s status as a preferred employer amidst ongoing market disruption. The Company reached 200 full-time equivalent employees at March 31, 2021, compared to 183 employees at December 31, 2020, and 170 employees at March 31, 2020. The efficiency ratio, a non-GAAP financial measure, was
Income Taxes
The effective combined federal and state income tax rate for the first quarter of 2021 was
Balance Sheet
Total assets at March 31, 2021 were
Total gross loans at March 31, 2021 were
The following table presents the dollar composition of the Company’s loan portfolio, by category, at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
|||||
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial |
|
$ |
301,023 |
|
$ |
304,220 |
|
$ |
287,254 |
|
$ |
302,536 |
|
$ |
299,425 |
|
Paycheck Protection Program |
|
|
163,258 |
|
|
138,454 |
|
|
181,596 |
|
|
180,228 |
|
|
— |
|
Construction and Land Development |
|
|
193,372 |
|
|
170,217 |
|
|
175,882 |
|
|
191,768 |
|
|
183,350 |
|
Real Estate Mortgage: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 - 4 Family Mortgage |
|
|
294,964 |
|
|
294,479 |
|
|
286,089 |
|
|
289,456 |
|
|
272,590 |
|
Multifamily |
|
|
665,415 |
|
|
626,465 |
|
|
585,814 |
|
|
522,491 |
|
|
536,380 |
|
CRE Owner Occupied |
|
|
79,665 |
|
|
75,604 |
|
|
75,963 |
|
|
73,539 |
|
|
75,207 |
|
CRE Nonowner Occupied |
|
|
720,396 |
|
|
709,300 |
|
|
660,058 |
|
|
627,651 |
|
|
631,541 |
|
Total Real Estate Mortgage Loans |
|
|
1,760,440 |
|
|
1,705,848 |
|
|
1,607,924 |
|
|
1,513,137 |
|
|
1,515,718 |
|
Consumer and Other |
|
|
8,030 |
|
|
7,689 |
|
|
6,572 |
|
|
6,109 |
|
|
4,324 |
|
Total Loans, Gross |
|
|
2,426,123 |
|
|
2,326,428 |
|
|
2,259,228 |
|
|
2,193,778 |
|
|
2,002,817 |
|
Allowance for Loan Losses |
|
|
(35,987) |
|
|
(34,841) |
|
|
(31,381) |
|
|
(27,633) |
|
|
(24,585) |
|
Net Deferred Loan Fees |
|
|
(11,273) |
|
|
(9,151) |
|
|
(10,367) |
|
|
(10,287) |
|
|
(5,336) |
|
Total Loans, Net |
|
$ |
2,378,863 |
|
$ |
2,282,436 |
|
$ |
2,217,480 |
|
$ |
2,155,858 |
|
$ |
1,972,896 |
|
Total deposits at March 31, 2021 were
The following table presents the dollar composition of the Company’s deposit portfolio, by category, at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2021 |
|
December 31, 2020 |
|
September 30, 2020 |
|
June 30, 2020 |
|
March 31, 2020 |
|
|||||
(dollars in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest Bearing Transaction Deposits |
|
$ |
712,999 |
|
$ |
671,903 |
|
$ |
685,773 |
|
$ |
648,869 |
|
$ |
476,217 |
|
Interest Bearing Transaction Deposits |
|
|
433,344 |
|
|
366,290 |
|
|
322,253 |
|
|
285,386 |
|
|
255,483 |
|
Savings and Money Market Deposits |
|
|
791,583 |
|
|
657,617 |
|
|
498,397 |
|
|
516,543 |
|
|
514,113 |
|
Time Deposits |
|
|
344,581 |
|
|
353,543 |
|
|
363,897 |
|
|
382,187 |
|
|
393,340 |
|
Brokered Deposits |
|
|
356,147 |
|
|
452,283 |
|
|
402,724 |
|
|
409,066 |
|
|
260,974 |
|
Total Deposits |
|
$ |
2,638,654 |
|
$ |
2,501,636 |
|
$ |
2,273,044 |
|
$ |
2,242,051 |
|
$ |
1,900,127 |
|
Total shareholders’ equity at March 31, 2021 was
Strong earnings and capital growth coupled with better asset quality visibility as loan modifications expired supported management’s decision to resume repurchases under the Company’s stock repurchase program. The Company remains committed to maintaining strong capital levels while enhancing shareholder value as it strategically executes its stock repurchase program in this fluid economic environment. During the first quarter of 2021, the Company repurchased 16,618 shares of its common stock at a weighted average price of
Tangible book value per share, a non-GAAP financial measure, was
Asset Quality
Annualized net charge-offs (recoveries) as a percent of average loans for the first quarter of 2021 were (0.01)%, compared to
The Company has increased oversight and analysis of all segments of the loan portfolio in response to the COVID-19 pandemic, especially in vulnerable industries such as hospitality and restaurants, to proactively monitor evolving credit risk. Loans that have potential weaknesses that warrant a watchlist risk rating at March 31, 2021, totaled
The following table presents a summary of asset quality measurements at the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Three Months Ended |
|
|||||||||||||
|
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|
March 31, |
|
|||||
(dollars in thousands) |
|
2021 |
|
2020 |
|
2020 |
|
2020 |
|
2020 |
|
|||||
Selected Asset Quality Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans 30-89 Days Past Due |
|
$ |
— |
|
$ |
13 |
|
$ |
458 |
|
$ |
153 |
|
$ |
21 |
|
Loans 30-89 Days Past Due to Total Loans |
|
|
0.00 |
% |
|
0.00 |
% |
|
0.02 |
% |
|
0.01 |
% |
|
0.00 |
% |
Nonperforming Loans |
|
$ |
770 |
|
$ |
775 |
|
$ |
433 |
|
$ |
602 |
|
$ |
606 |
|
Nonperforming Loans to Total Loans |
||||||||||||||||
FAQ
What was Bridgewater Bancshares' net income for Q1 2021?
What is the earnings per share for BWB in Q1 2021?
How much did total assets grow for Bridgewater Bancshares?
What was the loan growth percentage for BWB year-over-year?
What is the trend in deposits for Bridgewater Bancshares?
