Bridgewater Bancshares, Inc. Announces Record Third Quarter 2021 Net Income of $11.5 Million, $0.40 Diluted Earnings Per Common Share

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ST. LOUIS PARK, Minn., October 28, 2021--(BUSINESS WIRE)--Bridgewater Bancshares, Inc. (Nasdaq: BWB) (the Company), the parent company of Bridgewater Bank (the Bank), today announced net income of $11.5 million for the third quarter of 2021, a 4.7% increase over net income of $11.0 million for the second quarter of 2021, and a 60.4% increase over net income of $7.2 million for the third quarter of 2020. Net income per diluted common share for the third quarter of 2021 was $0.40, a 4.8% increase compared to $0.38 per diluted common share for the second quarter of 2021, and a 60.8% increase, compared to $0.25 per diluted common share for the same period in 2020.

"Bridgewater’s third consecutive quarter of record net income was highlighted by a continuation of our robust organic loan growth, as well as two capital raising transactions to support our ongoing growth plans," said Chairman, Chief Executive Officer, and President, Jerry Baack. "Driven by expanded lending teams, strong brand penetration and M&A-related market disruption, we are generating consistent loan growth by providing our clients with our signature high-touch and responsive level of service. As a result, we have been able to drive continued revenue growth and maintain an adjusted efficiency ratio in the low 40% range, even as we make incremental investments in the business to support our broader growth strategy. With superb asset quality trends and successful subordinated debt and preferred stock issuances during the third quarter, we are well positioned to continue our unique growth story and drive shareholder value going forward."

Third Quarter 2021 Financial Results

Diluted

Nonperforming

Adjusted

ROA

PPNR ROA (1)

ROE

earnings per share

assets to total assets

efficiency ratio (1)

1.37

%

2.09

%

13.81

%

$

0.40

0.02

%

41.5

%

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

Third Quarter 2021 Highlights

  • Diluted earnings per common share were $0.40 for the third quarter of 2021, compared to $0.38 per common share for the second quarter of 2021. Adjusted diluted earnings per common share, a non-GAAP financial measure, were $0.41 for the third quarter of 2021, excluding a $582,000 loss, or $0.01 per common share, on the extinguishment of subordinated debt from the partial early redemption of $11.3 million of subordinated debentures issued in July 2017.

  • Annualized return on average assets (ROA) and annualized return on average shareholders’ equity (ROE) for the third quarter of 2021 were 1.37% and 13.81%, compared to ROA and ROE of 1.43% and 15.40%, respectively, for the second quarter of 2021. Annualized return on average tangible common equity, a non-GAAP financial measure, was 15.47% for the third quarter of 2021, compared to 15.58% for the second quarter of 2021.

  • Pre-provision net revenue (PPNR), a non-GAAP financial measure, was $17.5 million for the third quarter of 2021, an increase of 10.3%, compared to $15.9 million for the second quarter of 2021. PPNR ROA, a non-GAAP financial measure, was 2.09% for the third quarter of 2021, compared to 2.07% for the second quarter of 2021.

  • Gross loans increased $117.8 million in the third quarter of 2021, or 18.0% annualized, compared to the second quarter of 2021. Gross loans, excluding Paycheck Protection Program (PPP) loans, increased $162.7 million in the third quarter of 2021, or 25.9% annualized, compared to the second quarter of 2021.

  • Deposits increased $133.3 million in the third quarter of 2021, or 19.4% annualized, compared to the second quarter of 2021.

  • Net interest margin (on a fully tax-equivalent basis) was 3.54% for the third quarter of 2021, compared to 3.52% in the second quarter of 2021.

  • The adjusted efficiency ratio, a non-GAAP financial measure which excludes the impact of certain non-routine income and expenses from noninterest expense, was 41.5% for the third quarter of 2021, compared to 41.5% for the second quarter of 2021.

  • A loan loss provision of $1.3 million was recorded in the third quarter of 2021 to support strong organic loan growth. The allowance for loan losses to total loans was 1.43% at September 30, 2021, compared to 1.45% at June 30, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.46% at September 30, 2021, compared to 1.50% at June 30, 2021.

  • Annualized net loan charge-offs (recoveries) as a percentage of average loans were 0.00% for the third quarter of 2021, compared to 0.00% for the second quarter of 2021.

  • Tangible book value per share, a non-GAAP financial measure, increased 3.9%, or $0.40, to $10.62 at September 30, 2021, compared to $10.22 at June 30, 2021.

Key Financial Measures

As of and for the Three Months Ended

As of and for the Nine Months Ended

September 30,

June 30,

September 30,

September 30,

September 30,

2021

2021

2020

2021

2020

Per Common Share Data

Basic Earnings Per Share

$

0.41

$

0.39

$

0.25

$

1.18

$

0.77

Diluted Earnings Per Share

0.40

0.38

0.25

1.14

0.76

Adjusted Diluted Earnings Per Share (1)

0.41

0.38

0.25

1.16

0.80

Book Value Per Share

10.73

10.33

9.25

10.73

9.25

Tangible Book Value Per Share (1)

10.62

10.22

9.13

10.62

9.13

Basic Weighted Average Shares Outstanding

28,047,280

28,040,762

28,683,855

28,035,246

28,717,142

Diluted Weighted Average Shares Outstanding

29,110,547

29,128,181

29,174,601

29,077,850

29,300,763

Shares Outstanding at Period End

28,066,822

28,162,777

28,710,775

28,066,822

28,710,775

Selected Performance Ratios

Return on Average Assets (Annualized)

1.37

%

1.43

%

1.05

%

1.42

%

1.16

%

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

2.09

2.07

1.94

2.10

2.01

Return on Average Shareholders' Equity (Annualized)

13.81

15.40

10.84

14.95

11.57

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

15.47

15.58

10.98

15.69

11.73

Yield on Interest Earning Assets

4.14

4.17

4.30

4.20

4.53

Yield on Total Loans, Gross

4.65

4.56

4.73

4.65

4.91

Cost of Interest Bearing Liabilities

0.88

0.96

1.50

0.95

1.63

Cost of Total Deposits

0.48

0.54

0.87

0.53

1.03

Net Interest Margin (2)

3.54

3.52

3.28

3.55

3.41

Core Net Interest Margin (1)(2)

3.22

3.31

3.14

3.29

3.24

Efficiency Ratio (1)

43.9

42.0

42.3

42.4

45.1

Adjusted Efficiency Ratio (1)

41.5

41.5

41.7

41.3

42.0

Noninterest Expense to Average Assets (Annualized)

1.58

1.50

1.42

1.53

1.58

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

1.49

1.48

1.40

1.49

1.47

Loan to Deposit Ratio

95.0

95.3

99.4

Core Deposits to Total Deposits (3)

83.3

81.2

77.1

Tangible Common Equity to Tangible Assets (1)

8.81

9.10

9.46

Capital Ratios (Bank Only) (4)

Tier 1 Leverage Ratio

10.96

%

10.57

%

11.24

%

Common Equity Tier 1 Risk-based Capital Ratio

11.88

11.24

12.60

Tier 1 Risk-based Capital Ratio

11.88

11.24

12.60

Total Risk-based Capital Ratio

13.13

12.49

13.85

Capital Ratios (Consolidated) (4)

Tier 1 Leverage Ratio

10.70

%

9.08

%

9.83

%

Common Equity Tier 1 Risk-based Capital Ratio

9.47

9.67

11.03

Tier 1 Risk-based Capital Ratio

11.65

9.67

11.03

Total Risk-based Capital Ratio

15.93

13.49

15.45

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

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

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

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

Selected Financial Data

September 30,

June 30,

March 31,

December 31,

September 30,

(dollars in thousands)

2021

2021

2021

2020

2020

Selected Balance Sheet Data

Total Assets

$

3,389,125

$

3,162,612

$

3,072,359

$

2,927,345

$

2,774,564

Total Loans, Gross

2,712,012

2,594,186

2,426,123

2,326,428

2,259,228

Allowance for Loan Losses

38,901

37,591

35,987

34,841

31,381

Goodwill and Other Intangibles

3,153

3,200

3,248

3,296

3,344

Deposits

2,854,157

2,720,906

2,638,654

2,501,636

2,273,044

Tangible Common Equity (1)

298,135

287,630

275,923

262,109

262,088

Total Shareholders' Equity

367,803

290,830

279,171

265,405

265,432

Average Total Assets - Quarter-to-Date

3,076,712

2,940,262

2,816,032

2,711,755

Average Shareholders' Equity - Quarter-to-Date

330,604

286,311

272,729

265,716

263,195

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