• Press Release
  • Bridgewater Bancshares, Inc. Announces Record Second Quarter 2021 Net Income of $11.0 Million, $0.38 Diluted Earnings Per Common Share

    Company Release - 7/29/2021

    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 $11.0 million for the second quarter of 2021, a 3.0% increase over net income of $10.7 million for the first quarter of 2021, and a 44.7% increase over net income of $7.6 million for the second quarter of 2020. Net income per diluted common share for the second quarter of 2021 was $0.38, a 2.4% increase compared to $0.37 per diluted common share for the first quarter of 2021, and a 44.9% increase, compared to $0.26 per diluted common share for the same period in 2020.

    “Bridgewater reported another quarter of record net income driven by robust organic loan growth, superb asset quality and a highly efficient business model,” said Chairman, Chief Executive Officer, and President, Jerry Baack. “Our unique ability to generate profitable loan growth in the current market has been the result of client acquisition opportunities from M&A-related market disruption, the expansion of our lending teams through opportunistic hires, and our strong brand and service model in the Twin Cities. This loan growth, along with a stabilizing core net interest margin, has led to continued revenue growth, all while maintaining consistently low levels of net charge-offs and nonperforming assets. With our proven growth engine and an efficiency ratio among the lowest in the industry, we believe we are well-positioned to continue gaining market share in the attractive Twin Cities market.”

    Second Quarter 2021 Financial Results

     

     

     

     

     

     

    Diluted

     

    Nonperforming

     

    Adjusted

    ROA

     

    PPNR ROA (1)

     

    ROE

     

    earnings per share

     

    assets to total assets

     

    efficiency ratio (1)

    1.43%

     

    2.07%

     

    15.40%

     

    $

    0.38

     

    0.02%

     

    41.5%

    _________________________________

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

    Second Quarter 2021 Highlights

    • Diluted earnings per common share were $0.38 for the second quarter of 2021, compared to $0.37 per common share for the first quarter of 2021.
    • Annualized return on average assets (ROA) and annualized return on average common equity (ROE) for the second quarter of 2021 were 1.43% and 15.40%, compared to ROA and ROE of 1.47% and 15.87%, respectively, for the first quarter of 2021.
    • Pre-provision net revenue (PPNR), a non-GAAP financial measure, was $15.9 million for the second quarter of 2021, an increase of 1.6%, compared to $15.6 million from the first quarter of 2021. PPNR ROA, a non-GAAP financial measure, was 2.07% for the second quarter of 2021, compared to 2.15% for the first quarter of 2021.
    • Gross loans increased $168.1 million in the second quarter of 2021, or 27.8% annualized, compared to the first quarter of 2021. Gross loans, excluding Paycheck Protection Program (PPP) loans, increased $232.2 million in the second quarter of 2021, or 41.2% annualized, compared to the first quarter of 2021.
    • Deposits increased $82.3 million in the second quarter of 2021, or 12.5% annualized, compared to the first quarter of 2021.
    • Net interest margin was 3.52% for the second quarter of 2021, compared to 3.60% in the first 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 second quarter of 2021, compared to 40.7% for the first quarter of 2021.
    • A loan loss provision of $1.6 million was recorded in the second quarter of 2021 to support strong organic loan growth. The allowance for loan losses to total loans was 1.45% at June 30, 2021, compared to 1.48% at March 31, 2021. The allowance for loan losses to total loans, excluding PPP loans, was 1.50% at June 30, 2021, compared to 1.59% at March 31, 2021.
    • Annualized net loan charge-offs (recoveries) as a percentage of average loans were 0.00% for the second quarter of 2021, compared to (0.01)% for the first quarter of 2021.
    • Tangible book value per share, a non-GAAP financial measure, increased 4.3%, or $0.42, to $10.22 at June 30, 2021, compared to $9.80 at March 31, 2021.
    • The Company purchased $25.0 million of bank owned life insurance policies on certain officers.

    Recent Developments

    On July 8, 2021, the Company announced the completion of a private placement of $30.0 million in aggregate principal amount of 3.25% fixed-to-floating rate subordinated notes due 2031. The Company intends to use the net proceeds of the private placement for general corporate purposes, including support for organic growth plans, support for bank level capital ratios and possible redemption or repurchase of currently outstanding indebtedness.

    Key Financial Measures

     

    As of and for the Three Months Ended

     

    As of and for the Six Months Ended

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Per Common Share Data

     

     

     

     

     

    Basic Earnings Per Share

    $

    0.39

     

    $

    0.38

     

    $

    0.26

     

    $

    0.77

     

    $

    0.52

     

    Diluted Earnings Per Share

     

    0.38

     

     

    0.37

     

     

    0.26

     

     

    0.75

     

     

    0.51

     

    Book Value Per Share

     

    10.33

     

     

    9.92

     

     

    8.92

     

     

    10.33

     

     

    8.92

     

    Tangible Book Value Per Share (1)

     

    10.22

     

     

    9.80

     

     

    8.80

     

     

    10.22

     

     

    8.80

     

    Basic Weighted Average Shares Outstanding

     

    28,040,762

     

     

    28,017,366

     

     

    28,676,441

     

     

    28,029,129

     

     

    28,733,968

     

    Diluted Weighted Average Shares Outstanding

     

    29,128,181

     

     

    28,945,212

     

     

    29,165,157

     

     

    29,048,424

     

     

    29,350,426

     

    Shares Outstanding at Period End

     

    28,162,777

     

     

    28,132,929

     

     

    28,837,560

     

     

    28,162,777

     

     

    28,837,560

     

     

     

     

     

     

     

    Selected Performance Ratios

     

     

     

     

     

    Return on Average Assets (Annualized)

     

    1.43

    %

     

    1.47

    %

     

    1.17

    %

     

    1.45

    %

     

    1.22

    %

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

     

    2.07

     

     

    2.15

     

     

    2.00

     

     

    2.11

     

     

    2.05

     

    Return on Average Common Equity (Annualized)

     

    15.40

     

     

    15.87

     

     

    11.98

     

     

    15.63

     

     

    11.96

     

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

     

    15.58

     

     

    16.06

     

     

    12.14

     

     

    15.81

     

     

    12.12

     

    Yield on Interest Earning Assets

     

    4.17

     

     

    4.31

     

     

    4.45

     

     

    4.24

     

     

    4.66

     

    Yield on Total Loans, Gross

     

    4.56

     

     

    4.74

     

     

    4.85

     

     

    4.64

     

     

    5.00

     

    Cost of Interest Bearing Liabilities

     

    0.96

     

     

    1.04

     

     

    1.58

     

     

    1.00

     

     

    1.70

     

    Cost of Total Deposits

     

    0.54

     

     

    0.59

     

     

    0.99

     

     

    0.56

     

     

    1.12

     

    Net Interest Margin (2)

     

    3.52

     

     

    3.60

     

     

    3.38

     

     

    3.56

     

     

    3.48

     

    Core Net Interest Margin (1)(2)

     

    3.31

     

     

    3.34

     

     

    3.22

     

     

    3.33

     

     

    3.29

     

    Efficiency Ratio (1)

     

    42.0

     

     

    41.2

     

     

    48.6

     

     

    41.6

     

     

    46.5

     

    Adjusted Efficiency Ratio (1)

     

    41.5

     

     

    40.7

     

     

    40.4

     

     

    41.1

     

     

    42.2

     

    Noninterest Expense to Average Assets (Annualized)

     

    1.50

     

     

    1.51

     

     

    1.64

     

     

    1.50

     

     

    1.67

     

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

     

    1.48

     

     

    1.49

     

     

    1.37

     

     

    1.48

     

     

    1.51

     

    Loan to Deposit Ratio

     

    95.3

     

     

    91.9

     

     

    97.8

     

     

     

    Core Deposits to Total Deposits(3)

     

    81.2

     

     

    83.5

     

     

    75.7

     

     

     

    Tangible Common Equity to Tangible Assets (1)

     

    9.10

     

     

    8.99

     

     

    9.23

     

     

     

     

     

     

     

     

     

    Capital Ratios (Bank Only) (4)

     

     

     

     

     

    Tier 1 Leverage Ratio

     

    10.57

    %

     

    10.65

    %

     

    11.36

    %

     

     

    Tier 1 Risk-based Capital Ratio

     

    11.24

     

     

    12.08

     

     

    12.96

     

     

     

    Total Risk-based Capital Ratio

     

    12.49

     

     

    13.33

     

     

    14.21

     

     

     

     

     

     

     

     

     

    Capital Ratios (Consolidated) (4)

     

     

     

     

     

    Tier 1 Leverage Ratio

     

    9.08

    %

     

    9.11

    %

     

    9.94

    %

     

     

    Tier 1 Risk-based Capital Ratio

     

    9.67

     

     

    10.34

     

     

    11.39

     

     

     

    Total Risk-based Capital Ratio

     

    13.49

     

     

    14.46

     

     

    15.99

     

     

    _________________________________

    (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

     

    June 30,

     

    March 31,

     

    December 31,

     

    September 30,

     

    June 30,

    (dollars in thousands)

    2021

     

    2021

     

    2020

     

    2020

     

    2020

    Selected Balance Sheet Data

     

     

     

     

     

    Total Assets

    $

    3,162,612

    $

    3,072,359

    $

    2,927,345

    $

    2,774,564

    $

    2,754,463

    Total Loans, Gross

     

    2,594,186

     

    2,426,123

     

    2,326,428

     

    2,259,228

     

    2,193,778

    Allowance for Loan Losses

     

    37,591

     

    35,987

     

    34,841

     

    31,381

     

    27,633

    Goodwill and Other Intangibles

     

    3,200

     

    3,248

     

    3,296

     

    3,344

     

    3,391

     

     

     

     

     

     

    Deposits

     

    2,720,906

     

    2,638,654

     

    2,501,636

     

    2,273,044

     

    2,242,051

    Tangible Common Equity (1)

     

    287,630

     

    275,923

     

    262,109

     

    262,088

     

    253,799

    Total Shareholders' Equity

     

    290,830

     

    279,171

     

    265,405

     

    265,432

     

    257,190

    Average Total Assets - Quarter-to-Date

     

    3,076,712

     

    2,940,262

     

    2,816,032

     

    2,711,755

     

    2,622,272

    Average Common Equity - Quarter-to-Date

     

    286,311

     

    272,729

     

    265,716

     

    263,195

     

    255,109

    _________________________________

    (1)

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

     

     

    For the Three Months Ended

     

    For the Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

    (dollars in thousands)

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Selected Income Statement Data

     

     

     

     

     

     

     

     

     

     

    Interest Income

     

    $

    31,147

     

    $

    30,440

     

    $

    28,166

     

    $

    61,587

     

    $

    55,634

    Interest Expense

     

     

    4,859

     

     

    5,045

     

     

    6,824

     

     

    9,904

     

     

    14,190

    Net Interest Income

     

     

    26,288

     

     

    25,395

     

     

    21,342

     

     

    51,683

     

     

    41,444

    Provision for Loan Losses

     

     

    1,600

     

     

    1,100

     

     

    3,000

     

     

    2,700

     

     

    5,100

    Net Interest Income after Provision for Loan Losses

     

     

    24,688

     

     

    24,295

     

     

    18,342

     

     

    48,983

     

     

    36,344

    Noninterest Income

     

     

    1,603

     

     

    1,008

     

     

    1,977

     

     

    2,611

     

     

    3,696

    Noninterest Expense

     

     

    11,477

     

     

    10,923

     

     

    10,711

     

     

    22,400

     

     

    20,457

    Income Before Income Taxes

     

     

    14,814

     

     

    14,380

     

     

    9,608

     

     

    29,194

     

     

    19,583

    Provision for Income Taxes

     

     

    3,821

     

     

    3,709

     

     

    2,010

     

     

    7,530

     

     

    4,542

    Net Income

     

    $

    10,993

     

    $

    10,671

     

    $

    7,598

     

    $

    21,664

     

    $

    15,041

    Income Statement

    Net Interest Income

    Net interest income was $26.3 million for the second quarter of 2021, an increase of $893,000, or 3.5%, from $25.4 million in the first quarter of 2021, and an increase of $4.9 million, or 23.2%, from $21.3 million in the second quarter of 2020. The linked-quarter and year-over-year increases in net interest income were primarily due to growth in average interest earning assets, lower rates paid on deposits, and the recognition of PPP loan origination fees, offset partially by declining yields on loans. Average interest earning assets were $3.02 billion for the second quarter of 2021, an increase of $136.4 million, or 4.7%, from $2.88 billion for the first quarter of 2021, and an increase of $452.1 million, or 17.6%, from $2.57 billion for the second quarter of 2020. The linked-quarter increase in average interest earning assets was primarily due to robust organic growth in the loan portfolio. The year-over-year increase in average interest earning assets was primarily due to strong organic growth in the loan portfolio, as well as continued purchases of investment securities.

    Net interest margin (on a fully tax-equivalent basis) for the second quarter of 2021 was 3.52%, an 8 basis point decline from 3.60% in the first quarter of 2021, and a 14 basis point increase from 3.38% in the second quarter of 2020. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and PPP balances, interest, and fees, for the second quarter of 2021 was 3.31%, a 3 basis point decline from 3.34% in the first quarter of 2021, and a 9 basis point increase from 3.22% in the second quarter of 2020.

    While the origination volume of PPP loans earning 1.00% negatively impacted net interest margin, the recognition of fees associated with the originations has benefited net interest margin for each of the past three quarters. The SBA began forgiving PPP loans, which has accelerated the recognition of PPP fees starting in the fourth quarter of 2020 and continuing into the second quarter of 2021. The Company recognized $1.4 million of PPP origination fees during the second quarter of 2021, compared to $1.5 million during the first quarter of 2021. The elevated fee recognition is illustrated in the 4.75% PPP loan yield for the second quarter of 2021.

    The following table summarizes PPP loan originations and net origination fees as of June 30, 2021:

     

    Originated

     

    Outstanding

     

    Program Lifetime

     

    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

    225

    $

    27,184

    $

    5,706

    $

    5,330

    Round Two PPP Loans

    651

     

    78,386

    606

     

    71,888

     

    3,544

     

    498

    Totals

    1,851

    $

    259,986

    831

    $

    99,072

    $

    9,250

    $

    5,828

    Interest income was $31.1 million for the second quarter of 2021, an increase of $707,000, or 2.3%, from $30.4 million in the first quarter of 2021, and an increase of $3.0 million, or 10.6%, from $28.2 million in the second quarter of 2020. The yield on interest earning assets (on a fully tax-equivalent basis) was 4.17% in the second quarter of 2021, compared to 4.31% in the first quarter of 2021, and 4.45% in the second quarter of 2020. The linked-quarter decrease in the yield on interest earning assets was primarily due to the historically low interest rate environment resulting in a lower loan yield and lower loan fees recognized, offset partially by $1.4 million of PPP loan origination fees. The year-over-year decline in the yield on interest earning assets was primarily due to the historically low interest rate environment resulting in lower loan and security yields.

    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 4.54% in the second quarter of 2021, which was 18 basis points lower than 4.72% in the first quarter of 2021, and 47 basis points lower than 5.01% in the second quarter of 2020. While loan fees have maintained a relatively stable contribution to the aggregate loan yield, the historically low yield curve has resulted in a declining core yield on loans in comparison to both prior periods.

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

     

    Three Months Ended

     

    June 30, 2021

     

    March 31, 2021

     

    December 31, 2020

     

    September 30, 2020

     

    June 30, 2020

    Interest

    4.37

    %

    4.50

    %

    4.59

    %

    4.69

    %

    4.76

    %

    Fees

    0.17

     

    0.22

     

    0.28

     

    0.24

     

    0.25

     

    Yield on Loans, Excluding PPP Loans

    4.54

    %

    4.72

    %

    4.87

    %

    4.93

    %

    5.01

    %

    Interest expense was $4.9 million for the second quarter of 2021, a decrease of $186,000, or 3.7%, from $5.0 million in the first quarter of 2021, and a decrease of $2.0 million, or 28.8%, from $6.8 million in the second quarter of 2020. The cost of interest bearing liabilities declined 8 basis points on a linked-quarter basis from 1.04% in the first quarter of 2021 to 0.96% in the second quarter of 2021, primarily due to lower rates paid on deposits. On a year-over-year basis, the cost of interest bearing liabilities decreased 62 basis points from 1.58% in the second quarter of 2020 to 0.96% in the second quarter of 2021, primarily due to lower rates paid on deposits, the payoff of the Company’s notes payable, and the early extinguishment of $94.0 million of longer term FHLB advances, offset partially by strong growth of interest bearing deposits and additional subordinated debentures.

    Interest expense on deposits was $3.5 million for the second quarter of 2021, a decrease of $159,000, or 4.3%, from $3.7 million in the first quarter of 2021, and a decrease of $1.7 million, or 32.1%, from $5.2 million in the second quarter of 2020. The cost of total deposits declined 5 basis points on a linked-quarter basis from 0.59% in the first quarter of 2021, and declined 45 basis points on a year-over-year basis from 0.99% in the second quarter of 2020, to 0.54% in the second quarter of 2021, primarily due to deposit rate cuts consistent with a lower rate environment and the downward repricing of time deposits. The Company anticipates more opportunities to lower the cost of total deposits due to continued deposit repricing as time deposits mature and the recent success of adding efficient, low-cost brokered deposits.

    A summary of the Company’s average balances, interest yields and rates, and net interest margin for the three months ended June 30, 2021, March 31, 2021, and June 30, 2020 is as follows:

     

    For the Three Months Ended

     

    June 30, 2021

     

    March 31, 2021

     

    June 30, 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

    $

    88,067

    $

    33

     

    0.15

    %

    $

    105,477

    $

    34

     

    0.13

    %

    $

    109,073

    $

    37

     

    0.14

    %

    Investment Securities:

     

     

     

     

     

     

     

     

     

    Taxable Investment Securities

     

    314,049

     

    1,647

     

    2.10

     

     

    301,680

     

    1,723

     

    2.32

     

     

    203,559

     

    1,304

     

    2.58

     

    Tax-Exempt Investment Securities (1)

     

    77,029

     

    842

     

    4.38

     

     

    80,963

     

    881

     

    4.41

     

     

    91,793

     

    996

     

    4.37

     

    Total Investment Securities

     

    391,078

     

    2,489

     

    2.55

     

     

    382,643

     

    2,604

     

    2.76

     

     

    295,352

     

    2,300

     

    3.13

     

    Paycheck Protection Program Loans (2)

     

    149,312

     

    1,767

     

    4.75

     

     

    148,881

     

    1,864

     

    5.08

     

     

    139,235

     

    873

     

    2.52

     

    Loans (1)(2)

     

    2,384,759

     

    27,011

     

    4.54

     

     

    2,241,038

     

    26,074

     

    4.72

     

     

    2,013,163

     

    25,070

     

    5.01

     

    Total Loans

     

    2,534,071

     

    28,778

     

    4.56

     

     

    2,389,919

     

    27,938

     

    4.74

     

     

    2,152,398

     

    25,943

     

    4.85

     

    Federal Home Loan Bank Stock

     

    6,221

     

    54

     

    3.51

     

     

    5,045

     

    78

     

    6.28

     

     

    10,469

     

    125

     

    4.81

     

    Total Interest Earning Assets

     

    3,019,437

     

    31,354

     

    4.17

    %

     

    2,883,084

     

    30,654

     

    4.31

    %

     

    2,567,292

     

    28,405

     

    4.45

    %

    Noninterest Earning Assets

     

    57,275

     

     

     

    57,178

     

     

     

    54,980

     

     

    Total Assets

    $

    3,076,712

     

     

    $

    2,940,262

     

     

    $

    2,622,272

     

     

    Interest Bearing Liabilities:

     

     

     

     

     

     

     

     

     

    Deposits:

     

     

     

     

     

     

     

     

     

    Interest Bearing Transaction Deposits

    $

    421,132

    $

    520

     

    0.50

    %

    $

    364,017

    $

    422

     

    0.47

    %

    $

    272,565

    $

    377

     

    0.56

    %

    Savings and Money Market Deposits

     

    764,632

     

    940

     

    0.49

     

     

    724,104

     

    1,008

     

    0.56

     

     

    521,313

     

    1,327

     

    1.02

     

    Time Deposits

     

    332,346

     

    1,075

     

    1.30

     

     

    344,715

     

    1,267

     

    1.49

     

     

    388,357

     

    2,122

     

    2.20

     

    Brokered Deposits

     

    379,768

     

    978

     

    1.03

     

     

    402,694

     

    974

     

    0.98

     

     

    319,711

     

    1,344

     

    1.69

     

    Total Interest Bearing Deposits

     

    1,897,878

     

    3,513

     

    0.74

     

     

    1,835,530

     

    3,671

     

    0.81

     

     

    1,501,946

     

    5,170

     

    1.38

     

    Federal Funds Purchased

     

    9,932

     

    6

     

    0.24

     

     

     

     

     

     

    9

     

     

    0.72

     

    Notes Payable

     

     

     

     

     

    6,722

     

    61

     

    3.66

     

     

    12,000

     

    111

     

    3.72

     

    FHLB Advances

     

    57,500

     

    228

     

    1.59

     

     

    57,500

     

    228

     

    1.61

     

     

    193,819

     

    1,064

     

    2.21

     

    Subordinated Debentures

     

    73,862

     

    1,112

     

    6.04

     

     

    73,776

     

    1,085

     

    5.96

     

     

    31,228

     

    479

     

    6.17

     

    Total Interest Bearing Liabilities

     

    2,039,172

     

    4,859

     

    0.96

    %

     

    1,973,528

     

    5,045

     

    1.04

    %

     

    1,739,002

     

    6,824

     

    1.58

    %

    Noninterest Bearing Liabilities:

     

     

     

     

     

     

     

     

     

    Noninterest Bearing Transaction Deposits

     

    732,299

     

     

     

    676,173

     

     

     

    603,456

     

     

    Other Noninterest Bearing Liabilities

     

    18,930

     

     

     

    17,832

     

     

     

    24,705

     

     

    Total Noninterest Bearing Liabilities

     

    751,229

     

     

     

    694,005

     

     

     

    628,161

     

     

    Shareholders' Equity

     

    286,311

     

     

     

    272,729

     

     

     

    255,109

     

     

    Total Liabilities and Shareholders' Equity

    $

    3,076,712

     

     

    $

    2,940,262

     

     

    $

    2,622,272

     

     

    Net Interest Income / Interest Rate Spread

     

     

    26,495

     

    3.21

    %

     

     

    25,609

     

    3.27

    %

     

     

    21,581

     

    2.87

    %

    Net Interest Margin (3)

     

     

    3.52

    %

     

     

    3.60

    %

     

     

    3.38

    %

    Taxable Equivalent Adjustment:

     

     

     

     

     

     

     

     

     

    Tax-Exempt Investment Securities and Loans

     

     

    (207

    )

     

     

     

    (214

    )

     

     

     

    (239

    )

     

    Net Interest Income

     

    $

    26,288

     

     

     

    $

    25,395

     

     

     

    $

    21,342

     

     

    _________________________________

    (1)

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

    (2)

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

    (3)

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

    Provision for Loan Losses

    The provision for loan losses was $1.6 million for the second quarter of 2021, an increase of $500,000 from $1.1 million for the first quarter of 2021, and a decrease of $1.4 million from $3.0 million for the second quarter of 2020. The provision recorded in the second quarter of 2021 was primarily attributable to growth of the loan portfolio. The allowance for loan losses to total loans was 1.45% at June 30, 2021, compared to 1.48% at March 31, 2021, and 1.26% at June 30, 2020. The allowance for loan losses to total loans, excluding PPP loans, was 1.50% at June 30, 2021, compared to 1.59% at March 31, 2021, and 1.37% at June 30, 2020.

    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

     

    Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

    (dollars in thousands)

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Balance at Beginning of Period

     

    $

    35,987

     

     

    $

    34,841

     

     

    $

    24,585

     

     

    $

    34,841

     

     

    $

    22,526

     

    Provision for Loan Losses

     

     

    1,600

     

     

     

    1,100

     

     

     

    3,000

     

     

     

    2,700

     

     

     

    5,100

     

    Charge-offs

     

     

    (3

    )

     

     

    (14

    )

     

     

    (1

    )

     

     

    (17

    )

     

     

    (48

    )

    Recoveries

     

     

    7

     

     

     

    60

     

     

     

    49

     

     

     

    67

     

     

     

    55

     

    Balance at End of Period

     

    $

    37,591

     

     

    $

    35,987

     

     

    $

    27,633

     

     

    $

    37,591

     

     

    $

    27,633

     

    Noninterest Income

    Noninterest income was $1.6 million for the second quarter of 2021, an increase of $595,000 from $1.0 million for the first quarter of 2021, and a decrease of $374,000 from $2.0 million for the second quarter of 2020. The linked-quarter increase was primarily due to increased gains on sales of securities, offset partially by a decrease in letter of credit fees. The year-over-year decrease was primarily due to lower gains on sales of securities, offset partially by increased customer service fees and other income.

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

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

    (dollars in thousands)

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Noninterest Income:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Customer Service Fees

     

    $

    231

     

    $

    234

     

    $

    135

     

    $

    465

     

    $

    375

    Net Gain on Sales of Securities

     

     

    702

     

     

     

     

    1,361

     

     

    702

     

     

    1,364

    Letter of Credit Fees

     

     

    231

     

     

    327

     

     

    265

     

     

    558

     

     

    539

    Debit Card Interchange Fees

     

     

    141

     

     

    130

     

     

    99

     

     

    271

     

     

    191

    Swap Fees

     

     

     

     

     

     

     

     

     

     

    907

    Other Income

     

     

    298

     

     

    317

     

     

    117

     

     

    615

     

     

    320

    Totals

     

    $

    1,603

     

    $

    1,008

     

    $

    1,977

     

    $

    2,611

     

    $

    3,696

    Noninterest Expense

    Noninterest expense was $11.5 million for the second quarter of 2021, an increase of $554,000 from $10.9 million for the first quarter of 2021, and an increase of $766,000 from $10.7 million for the second quarter of 2020. The linked-quarter increase was primarily due to an increase in salaries and employee benefits and technology expenses. The year-over-year increase was primarily attributable to increased salaries and employee benefits, occupancy and equipment, technology, and marketing and advertising expenses, offset partially by a $1.4 million decrease in FHLB advance prepayment fees incurred in the second quarter of 2020, as well as lower amortization of tax credit investments.

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

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

    (dollars in thousands)

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Noninterest Expense:

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Salaries and Employee Benefits

     

    $

    7,512

     

    $

    7,102

     

    $

    6,348

     

    $

    14,614

     

    $

    12,802

    Occupancy and Equipment

     

     

    980

     

     

    1,055

     

     

    672

     

     

    2,035

     

     

    1,385

    FDIC Insurance Assessment

     

     

    290

     

     

    315

     

     

    168

     

     

    605

     

     

    358

    Data Processing

     

     

    300

     

     

    291

     

     

    238

     

     

    591

     

     

    467

    Professional and Consulting Fees

     

     

    552

     

     

    544

     

     

    423

     

     

    1,096

     

     

    908

    Information Technology and Telecommunications

     

     

    549

     

     

    462

     

     

    326

     

     

    1,011

     

     

    592

    Marketing and Advertising

     

     

    314

     

     

    286

     

     

    85

     

     

    600

     

     

    551

    Intangible Asset Amortization

     

     

    47

     

     

    48

     

     

    47

     

     

    95

     

     

    95

    Amortization of Tax Credit Investments

     

     

    140

     

     

    118

     

     

    362

     

     

    258

     

     

    447

    FHLB Advance Prepayment Fees

     

     

     

     

     

     

    1,430

     

     

     

     

    1,430

    Other Expense

     

     

    793

     

     

    702

     

     

    612

     

     

    1,495

     

     

    1,422

    Totals

     

    $

    11,477

     

    $

    10,923

     

    $

    10,711

     

    $

    22,400

     

    $

    20,457

    In the second quarter of 2021, the Company attracted 18 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 214 full-time equivalent employees at June 30, 2021, compared to 200 employees at March 31, 2021, and 173 employees at June 30, 2020.

    The efficiency ratio, a non-GAAP financial measure, was 42.0% for the second quarter of 2021, compared to 41.2% for the first quarter of 2021, and 48.6% for the second quarter of 2020. Excluding the impact of certain non-routine income and expenses, the adjusted efficiency ratio, a non-GAAP financial measure, was 41.5% for the second quarter of 2021, 40.7% for the first quarter of 2021 and 40.4% for the second quarter of 2020. The efficiencies of the Company’s “branch-light” model have positioned the Company well for when the pandemic ends, and going forward, providing more flexibility for the Company to make significant investments in technology as the industry adapts to evolving client behavior.

    Income Taxes

    The effective combined federal and state income tax rate for the first and second quarters of 2021 was 25.8%, an increase from 20.9% for the second quarter of 2020.

    Balance Sheet

    Total assets at June 30, 2021 were $3.16 billion, a 2.9% increase from $3.07 billion at March 31, 2021, and a 14.8% increase from $2.75 billion at June 30, 2020. The linked-quarter increase in total assets was primarily due to robust organic loan growth, offset partially by a corresponding decrease in cash and cash equivalents. The year-over-year increase in total assets was primarily due to robust organic loan growth, as well as deploying excess liquidity into investment securities.

    Total gross loans at June 30, 2021 were $2.59 billion, an increase of $168.1 million, or 6.9%, over total gross loans of $2.43 billion at March 31, 2021, and an increase of $400.4 million, or 18.3%, over total gross loans of $2.19 billion at June 30, 2020. The increase in the loan portfolio during the second quarter of 2021 was primarily due to growth in the multifamily and construction and land development segments, offset partially by declining PPP loan balances. When excluding the PPP loans altogether, gross loans grew $232.2 million during the second quarter of 2021, or 41.2% on an annualized basis. The Company's continued strong loan growth has been driven by M&A-related market disruption in the Twin Cities resulting in client and banker acquisition opportunities, PPP-related client acquisition opportunities, the expansion of the talented lending teams, and the strong and growing brand in the Twin Cities market.

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

     

    June 30, 2021

    March 31, 2021

    December 31, 2020

    September 30, 2020

    June 30, 2020

    (dollars in thousands)

     

     

     

     

     

    Commercial

    $

    321,474

     

    $

    301,023

     

    $

    304,220

     

    $

    287,254

     

    $

    302,536

     

    Paycheck Protection Program

     

    99,072

     

     

    163,258

     

     

    138,454

     

     

    181,596

     

     

    180,228

     

    Construction and Land Development

     

    251,573

     

     

    193,372

     

     

    170,217

     

     

    175,882

     

     

    191,768

     

    Real Estate Mortgage:

     

     

     

     

     

    1 - 4 Family Mortgage

     

    277,943

     

     

    294,964

     

     

    294,479

     

     

    286,089

     

     

    289,456

     

    Multifamily

     

    790,275

     

     

    665,415

     

     

    626,465

     

     

    585,814

     

     

    522,491

     

    CRE Owner Occupied

     

    87,507

     

     

    79,665

     

     

    75,604

     

     

    75,963

     

     

    73,539

     

    CRE Nonowner Occupied

     

    758,101

     

     

    720,396

     

     

    709,300

     

     

    660,058

     

     

    627,651

     

    Total Real Estate Mortgage Loans

     

    1,913,826

     

     

    1,760,440

     

     

    1,705,848

     

     

    1,607,924

     

     

    1,513,137

     

    Consumer and Other

     

    8,241

     

     

    8,030

     

     

    7,689

     

     

    6,572

     

     

    6,109

     

    Total Loans, Gross

     

    2,594,186

     

     

    2,426,123

     

     

    2,326,428

     

     

    2,259,228

     

     

    2,193,778

     

    Allowance for Loan Losses

     

    (37,591

    )

     

    (35,987

    )

     

    (34,841

    )

     

    (31,381

    )

     

    (27,633

    )

    Net Deferred Loan Fees

     

    (11,450

    )

     

    (11,273

    )

     

    (9,151

    )

     

    (10,367

    )

     

    (10,287

    )

    Total Loans, Net

    $

    2,545,145

     

    $

    2,378,863

     

    $

    2,282,436

     

    $

    2,217,480

     

    $

    2,155,858

     

    Total deposits at June 30, 2021 were $2.72 billion, an increase of $82.3 million, or 3.1%, over total deposits of $2.64 billion at March 31, 2021, and an increase of $478.9 million, or 21.4%, over total deposits of $2.24 billion at June 30, 2020. Deposit growth in the second quarter of 2021 was primarily due to an increase in noninterest bearing transaction deposits and brokered deposits, offset partially by a decline in savings and money market deposits and time deposits. Similar to the loan portfolio, the growth in core deposits has been a result of successful new client and banker acquisition initiatives and the strong, growing brand in the Twin Cities market. Brokered deposits increased back to levels last seen in the fourth quarter of 2020 due to the opportunity to obtain $75.0 million in funding at 1 basis point at various short-term maturities ranging from 3-12 months. As illustrated, the brokered deposit market provides flexibility in structure, optionality and efficiency not provided in traditional, retail deposit channels. Given the fluid environment, management believes deposits could experience fluctuations in future periods.

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

     

    June 30, 2021

    March 31, 2021

    December 31, 2020

    September 30, 2020

    June 30, 2020

    (dollars in thousands)

     

     

     

     

     

    Noninterest Bearing Transaction Deposits

    $

    758,023

    $

    712,999

    $

    671,903

    $

    685,773

    $

    648,869

    Interest Bearing Transaction Deposits

     

    432,123

     

    433,344

     

    366,290

     

    322,253

     

    285,386

    Savings and Money Market Deposits

     

    761,485

     

    791,583

     

    657,617

     

    498,397

     

    516,543

    Time Deposits

     

    321,857

     

    344,581

     

    353,543

     

    363,897

     

    382,187

    Brokered Deposits

     

    447,418

     

    356,147

     

    452,283

     

    402,724

     

    409,066

    Total Deposits

    $

    2,720,906

    $

    2,638,654

    $

    2,501,636

    $

    2,273,044

    $

    2,242,051

    Total shareholders’ equity at June 30, 2021 was $290.8 million, an increase of $11.7 million, or 4.2%, over total shareholders’ equity of $279.2 million at March 31, 2021, and an increase of $33.6 million, or 13.1%, over total shareholders’ equity of $257.2 million at June 30, 2020. The linked-quarter increase was due to net income retained. The year-over-year increase was due to net income retained and an increase in unrealized gains in the securities and derivatives portfolios, offset partially by stock repurchases made under the Company’s stock repurchase program. The Company did not repurchase any shares of its common stock during the second quarter of 2021.

    Tangible book value per share, a non-GAAP financial measure, was $10.22 as of June 30, 2021, an increase of 4.3% from $9.80 as of March 31, 2021, and an increase of 16.2% from $8.80 as of June 30, 2020.

    Subsequent to the end of the quarter, on July 8, 2021 the Company issued $30.0 million of 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 in a private placement transaction. These notes are callable starting on July 15, 2026 and qualify for tier 2 capital treatment at the holding company level. The Company intends to use the net proceeds of the private placement for general corporate purposes, including support for organic growth plans, support for bank level capital ratios and possible redemption or repurchase of currently outstanding indebtedness.

    Asset Quality

    Annualized net charge-offs (recoveries) as a percent of average loans for the second quarter of 2021 were 0.00%, compared to (0.01)% for the first quarter of 2021, and (0.01)% for the second quarter of 2020. At June 30, 2021, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $761,000, or 0.02% of total assets, as compared to $770,000, or 0.03% of total assets at March 31, 2021, and $602,000 or 0.02% of total assets at June 30, 2020.

    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 June 30, 2021 totaled $56.7 million, compared to $58.3 million at March 31, 2021. As the COVID-19 pandemic continues to evolve, the length and extent of the economic uncertainty may result in further watchlist or adverse classifications in the loan portfolio. Loans that warranted a substandard risk rating at June 30, 2021 totaled $7.2 million, compared to $6.7 million at March 31, 2021.

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

     

    As of and for the Three Months Ended

     

    June 30,

     

    March 31

     

    December 31,

     

    September 30,

     

    June 30,

    (dollars in thousands)

    2021

     

    2021

     

    2020

     

    2020

     

    2020

    Selected Asset Quality Data

     

     

     

     

     

    Loans 30-89 Days Past Due

    $

     

    $

     

    $

    13

     

    $

    458

     

    $

    153

     

    Loans 30-89 Days Past Due to Total Loans

     

    0.00

    %

     

    0.00

    %

     

    0.00

    %

     

    0.02

    %

     

    0.01

    %

    Nonperforming Loans

    $

    761

     

    $

    770

     

    $

    775

     

    $

    433

     

    $

    602

     

    Nonperforming Loans to Total Loans

     

    0.03

    %

     

    0.03

    %

     

    0.03

    %

     

    0.02

    %

     

    0.03

    %

    Foreclosed Assets

    $

     

    $

     

    $

     

    $

     

    $

     

    Nonaccrual Loans to Total Loans

     

    0.03

    %

     

    0.03

    %

     

    0.03

    %

     

    0.02

    %

     

    0.03

    %

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

     

    0.03

     

     

    0.03

     

     

    0.03

     

     

    0.02

     

     

    0.03

     

    Nonperforming Assets (1)

    $

    761

     

    $

    770

     

    $

    775

     

    $

    433

     

    $

    602

     

    Nonperforming Assets to Total Assets (1)

     

    0.02

    %

     

    0.03

    %

     

    0.03

    %

     

    0.02

    %

     

    0.02

    %

    Allowance for Loan Losses to Total Loans

     

    1.45

     

     

    1.48

     

     

    1.50

     

     

    1.39

     

     

    1.26

     

    Allowance for Loan Losses to Total Loans, Excluding PPP Loans

     

    1.51

     

     

    1.59

     

     

    1.59

     

     

    1.51

     

     

    1.37

     

    Allowance for Loans Losses to Nonperforming Loans

     

    4,939.68

     

     

    4,673.64

     

     

    4,495.61

     

     

    7,247.34

     

     

    4,590.20

     

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

     

    0.00

     

     

    (0.01

    )

     

    0.08

     

     

    0.00

     

     

    (0.01

    )

    _________________________________

    (1)

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

    The Company developed programs for clients who experienced 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 are not considered troubled debt restructurings. The Company had 19 modified loans totaling $33.9 million outstanding as of June 30, 2021, representing 1.4% of the total loan portfolio, excluding PPP loans.

    The following table presents a rollforward of loan modification activity, by modification type, from March 31, 2021 to June 30, 2021:

     

     

     

     

     

    (dollars in thousands)

    Interest-Only

    Payment Deferral

    Extended Amortization

    Total

    Principal Balance - March 31, 2021

    $

    31,663

     

    $

    618

     

    $

    4,802

     

    $

    37,083

     

    Modification Expired

     

    (4,139

    )

     

    (618

    )

     

     

     

    (4,757

    )

    Additional Modification Granted

     

    1,173

     

     

     

     

     

     

    1,173

     

    New Modifications

     

    468

     

     

     

     

     

     

    468

     

    Net Principal Advances (Payments)

     

    (6

    )

     

     

     

    (24

    )

     

    (30

    )

    Principal Balance - June 30, 2021

    $

    29,159

     

    $

     

    $

    4,778

     

    $

    33,937

     

    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 high-net-worth 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 $3.2 billion and seven branches as of June 30, 2021, 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: the negative effects of the COVID-19 pandemic, including its effects on the economic environment, our clients and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with the pandemic; loan concentrations in our portfolio; the overall health of the local and national real estate market; our ability to successfully manage credit risk; business and economic conditions generally and in the financial services industry, nationally and within our market area; our ability to maintain an adequate level of allowance for loan losses; new or revised accounting standards, including as a result of the future implementation of the Current Expected Credit Loss standard; the concentration of large loans to certain borrowers; the concentration of large deposits from certain clients; our ability to successfully manage liquidity risk; our dependence on non-core funding sources and our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; developments and uncertainty related to the future use and availability of some reference rates, such as the London Interbank Offered Rate, as well as other alternative reference rates; the composition of our senior leadership team and our ability to attract and retain key personnel; the occurrence of fraudulent activity, breaches or failures of our information security controls or cybersecurity-related incidents; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry; 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; interest rate risk; fluctuations in the values of the securities held in our securities portfolio; the imposition of tariffs or other governmental policies impacting the value of products produced by our commercial borrowers; severe weather, natural disasters, wide spread disease or pandemics (including the COVID-19 pandemic), acts of war or terrorism or other adverse external events; potential impairment to the goodwill we recorded in connection with our past acquisition; changes to U.S. tax laws, regulations and guidance; and any other risks described in the “Risk Factors” sections of reports filed by the Company with the Securities and Exchange Commission.

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

    Bridgewater Bancshares, Inc. and Subsidiaries

    Consolidated Balance Sheets

    (dollars in thousands, except share data)

     

     

     

     

     

     

     

     

     

     

     

     

    June 30,

     

    December 31,

     

    June 30,

     

     

    2021

     

    2020

     

    2020

     

     

    (Unaudited)

     

     

     

     

    (Unaudited)

    ASSETS

     

     

     

     

     

     

     

     

     

    Cash and Cash Equivalents

     

    $

    92,197

     

    $

    160,675

     

    $

    178,428

    Bank-Owned Certificates of Deposit

     

     

    2,368

     

     

    2,860

     

     

    2,895

    Securities Available for Sale, at Fair Value

     

     

    402,786

     

     

    390,629

     

     

    326,295

    Loans, Net of Allowance for Loan Losses of $37,591 at June 30, 2021 (unaudited), $34,841 at December 31, 2020 and $27,633 at June 30, 2020 (unaudited)

     

     

    2,545,145

     

     

    2,282,436

     

     

    2,155,858

    Federal Home Loan Bank (FHLB) Stock, at Cost

     

     

    5,832

     

     

    5,027

     

     

    8,617

    Premises and Equipment, Net

     

     

    50,177

     

     

    50,987

     

     

    43,062

    Accrued Interest

     

     

    8,728

     

     

    9,172

     

     

    8,267

    Goodwill

     

     

    2,626

     

     

    2,626

     

     

    2,626

    Other Intangible Assets, Net

     

     

    574

     

     

    670

     

     

    765

    Other Assets

     

     

    52,179

     

     

    22,263

     

     

    27,650

    Total Assets

     

    $

    3,162,612

     

    $

    2,927,345

     

    $

    2,754,463

     

     

     

     

     

     

     

     

     

     

    LIABILITIES AND EQUITY

     

     

     

     

     

     

     

     

     

    LIABILITIES

     

     

     

     

     

     

     

     

     

    Deposits:

     

     

     

     

     

     

     

     

     

    Noninterest Bearing

     

    $

    758,023

     

    $

    671,903

     

    $

    648,869

    Interest Bearing

     

     

    1,962,883

     

     

    1,829,733

     

     

    1,593,182

    Total Deposits

     

     

    2,720,906

     

     

    2,501,636

     

     

    2,242,051

    Notes Payable

     

     

     

     

    11,000

     

     

    12,000

    FHLB Advances

     

     

    57,500

     

     

    57,500

     

     

    147,500

    Subordinated Debentures, Net of Issuance Costs

     

     

    73,913

     

     

    73,739

     

     

    73,658

    Accrued Interest Payable

     

     

    2,654

     

     

    1,615

     

     

    1,953

    Other Liabilities

     

     

    16,809

     

     

    16,450

     

     

    20,111

    Total Liabilities

     

     

    2,871,782

     

     

    2,661,940

     

     

    2,497,273

     

     

     

     

     

     

     

     

     

     

    SHAREHOLDERS' EQUITY

     

     

     

     

     

     

     

     

     

    Preferred Stock- $0.01 par value

     

     

     

     

     

     

     

     

     

    Authorized 10,000,000; None Issued and Outstanding at June 30, 2021 (unaudited), December 31, 2020 and June 30, 2020 (unaudited)

     

     

     

     

     

     

    Common Stock- $0.01 par value

     

     

     

     

     

     

     

     

     

    Common Stock - Authorized 75,000,000; Issued and Outstanding 28,162,777 at June 30, 2021 (unaudited), 28,143,493 at December 31, 2020 and 28,837,560 at June 30, 2020 (unaudited)

     

     

    282

     

     

    281

     

     

    288

    Additional Paid-In Capital

     

     

    104,811

     

     

    103,714

     

     

    110,906

    Retained Earnings

     

     

    176,495

     

     

    154,831

     

     

    142,678

    Accumulated Other Comprehensive Income

     

     

    9,242

     

     

    6,579

     

     

    3,318

    Total Shareholders' Equity

     

     

    290,830

     

     

    265,405

     

     

    257,190

    Total Liabilities and Equity

     

    $

    3,162,612

     

    $

    2,927,345

     

    $

    2,754,463

    Bridgewater Bancshares, Inc. and Subsidiaries

    Consolidated Statements of Income

    (dollars in thousands, except per share data)

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Three Months Ended

     

    Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

     

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

     

     

    (Unaudited)

     

    (Unaudited)

     

    (Unaudited)

     

    (Unaudited)

     

    (Unaudited)

    INTEREST INCOME

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Loans, Including Fees

     

    $

    28,748

     

    $

    27,908

     

    $

    25,913

     

    $

    56,656

     

    $

    51,026

    Investment Securities

     

     

    2,312

     

     

    2,420

     

     

    2,091

     

     

    4,732

     

     

    4,287

    Other

     

     

    87

     

     

    112

     

     

    162

     

     

    199

     

     

    321

    Total Interest Income

     

     

    31,147

     

     

    30,440

     

     

    28,166

     

     

    61,587

     

     

    55,634

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    INTEREST EXPENSE

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Deposits

     

     

    3,513

     

     

    3,671

     

     

    5,170

     

     

    7,184

     

     

    10,894

    Notes Payable

     

     

     

     

    61

     

     

    111

     

     

    61

     

     

    226

    FHLB Advances

     

     

    228

     

     

    228

     

     

    1,064

     

     

    456

     

     

    2,091

    Subordinated Debentures

     

     

    1,112

     

     

    1,085

     

     

    479

     

     

    2,197

     

     

    872

    Federal Funds Purchased

     

     

    6

     

     

     

     

     

     

    6

     

     

    107

    Total Interest Expense

     

     

    4,859

     

     

    5,045

     

     

    6,824

     

     

    9,904

     

     

    14,190

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    NET INTEREST INCOME

     

     

    26,288

     

     

    25,395

     

     

    21,342

     

     

    51,683

     

     

    41,444

    Provision for Loan Losses

     

     

    1,600

     

     

    1,100

     

     

    3,000

     

     

    2,700

     

     

    5,100

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

     

     

    24,688

     

     

    24,295

     

     

    18,342

     

     

    48,983

     

     

    36,344

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    NONINTEREST INCOME

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Customer Service Fees

     

     

    231

     

     

    234

     

     

    135

     

     

    465

     

     

    375

    Net Gain on Sales of Available for Sale Securities

     

     

    702

     

     

     

     

    1,361

     

     

    702

     

     

    1,364

    Other Income

     

     

    670

     

     

    774

     

     

    481

     

     

    1,444

     

     

    1,957

    Total Noninterest Income

     

     

    1,603

     

     

    1,008

     

     

    1,977

     

     

    2,611

     

     

    3,696

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    NONINTEREST EXPENSE

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Salaries and Employee Benefits

     

     

    7,512

     

     

    7,102

     

     

    6,348

     

     

    14,614

     

     

    12,802

    Occupancy and Equipment

     

     

    980

     

     

    1,055

     

     

    672

     

     

    2,035

     

     

    1,385

    Other Expense

     

     

    2,985

     

     

    2,766

     

     

    3,691

     

     

    5,751

     

     

    6,270

    Total Noninterest Expense

     

     

    11,477

     

     

    10,923

     

     

    10,711

     

     

    22,400

     

     

    20,457

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    INCOME BEFORE INCOME TAXES

     

     

    14,814

     

     

    14,380

     

     

    9,608

     

     

    29,194

     

     

    19,583

    Provision for Income Taxes

     

     

    3,821

     

     

    3,709

     

     

    2,010

     

     

    7,530

     

     

    4,542

    NET INCOME

     

    $

    10,993

     

    $

    10,671

     

    $

    7,598

     

    $

    21,664

     

    $

    15,041

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    EARNINGS PER SHARE

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Basic

     

    $

    0.39

     

    $

    0.38

     

    $

    0.26

     

    $

    0.77

     

    $

    0.52

    Diluted

     

     

    0.38

     

     

    0.37

     

     

    0.26

     

     

    0.75

     

     

    0.51

    Dividends Paid Per Share

     

     

     

     

     

     

     

     

     

     

    Bridgewater Bancshares, Inc. and Subsidiaries

    Analysis of Average Balances, Yields and Rates (year-to-date)

    (dollars in thousands, except per share data) (Unaudited)

       

     

     

    For the Six Months Ended

     

     

    June 30, 2021

     

    June 30, 2020

     

     

    Average

     

    Interest

     

    Yield/

     

    Average

     

    Interest

     

    Yield/

     

     

    Balance

     

    & Fees

     

    Rate

     

    Balance

     

    & Fees

     

    Rate

    (dollars in thousands)

     

     

     

     

     

     

     

     

     

     

     

     

    Interest Earning Assets:

     

     

     

     

     

     

     

     

     

     

     

     

    Cash Investments

     

    $

    96,724

     

    $

    67

     

     

    0.14

    %

     

    $

    69,267

     

    $

    96

     

     

    0.28

    %

    Investment Securities:

     

     

     

     

     

     

     

     

     

     

     

     

    Taxable Investment Securities

     

     

    307,898

     

     

    3,371

     

     

    2.21

     

     

     

    195,873

     

     

    2,691

     

     

    2.76

     

    Tax-Exempt Investment Securities (1)

     

     

    78,985

     

     

    1,723

     

     

    4.40

     

     

     

    93,260

     

     

    2,020

     

     

    4.36

     

    Total Investment Securities

     

     

    386,883

     

     

    5,094

     

     

    2.66

     

     

     

    289,133

     

     

    4,711

     

     

    3.28

     

    Paycheck Protection Program Loans (2)

     

     

    149,098

     

     

    3,631

     

     

    4.91

     

     

     

    70,037

     

     

    873

     

     

    2.51

     

    Loans (1)(2)

     

     

    2,313,295

     

     

    53,085

     

     

    4.63

     

     

     

    1,983,641

     

     

    50,220

     

     

    5.09

     

    Total Loans

     

     

    2,462,393

     

     

    56,716

     

     

    4.64

     

     

     

    2,053,678

     

     

    51,093

     

     

    5.00

     

    Federal Home Loan Bank Stock

     

     

    5,636

     

     

    132

     

     

    4.74

     

     

     

    10,370

     

     

    225

     

     

    4.37

     

    Total Interest Earning Assets

     

     

    2,951,636

     

     

    62,009

     

     

    4.24

    %

     

     

    2,422,448

     

     

    56,125

     

     

    4.66

    %

    Noninterest Earning Assets

     

     

    57,228

     

     

     

     

     

     

    47,208

     

     

     

     

    Total Assets

     

    $

    3,008,864

     

     

     

     

     

    $

    2,469,656

     

     

     

     

    Interest Bearing Liabilities:

     

     

     

     

     

     

     

     

     

     

     

     

    Deposits:

     

     

     

     

     

     

     

     

     

     

     

     

    Interest Bearing Transaction Deposits

     

    $

    392,732

     

    $

    942

     

     

    0.48

    %

     

    $

    259,704

     

    $

    808

     

     

    0.63

    %

    Savings and Money Market Deposits

     

     

    744,480

     

     

    1,949

     

     

    0.53

     

     

     

    527,445

     

     

    3,232

     

     

    1.23

     

    Time Deposits

     

     

    338,497

     

     

    2,341

     

     

    1.39

     

     

     

    382,256

     

     

    4,299

     

     

    2.26

     

    Brokered Deposits

     

     

    391,167

     

     

    1,952

     

     

    1.01

     

     

     

    269,000

     

     

    2,555

     

     

    1.91

     

    Total Interest Bearing Deposits

     

     

    1,866,876

     

     

    7,184

     

     

    0.78

     

     

     

    1,438,405

     

     

    10,894

     

     

    1.52

     

    Federal Funds Purchased

     

     

    4,993

     

     

    6

     

     

    0.24

     

     

     

    12,422

     

     

    107

     

     

    1.74

     

    Notes Payable

     

     

    3,343

     

     

    61

     

     

    3.66

     

     

     

    12,253

     

     

    226

     

     

    3.71

     

    FHLB Advances

     

     

    57,500

     

     

    456

     

     

    1.60

     

     

     

    183,099

     

     

    2,091

     

     

    2.30

     

    Subordinated Debentures

     

     

    73,819

     

     

    2,197

     

     

    6.00

     

     

     

    27,986

     

     

    872

     

     

    6.27

     

    Total Interest Bearing Liabilities

     

     

    2,006,531

     

     

    9,904

     

     

    1.00

    %

     

     

    1,674,165

     

     

    14,190

     

     

    1.70

    %

    Noninterest Bearing Liabilities:

     

     

     

     

     

     

     

     

     

     

     

     

    Noninterest Bearing Transaction Deposits

     

     

    704,391

     

     

     

     

     

     

    523,828

     

     

     

     

    Other Noninterest Bearing Liabilities

     

     

    18,384

     

     

     

     

     

     

    18,708

     

     

     

     

    Total Noninterest Bearing Liabilities

     

     

    722,775

     

     

     

     

     

     

    542,536

     

     

     

     

    Shareholders' Equity

     

     

    279,558

     

     

     

     

     

     

    252,955

     

     

     

     

    Total Liabilities and Shareholders' Equity

     

    $

    3,008,864

     

     

     

     

     

    $

    2,469,656

     

     

     

     

    Net Interest Income / Interest Rate Spread

     

     

     

     

    52,105

     

     

    3.24

    %

     

     

     

     

    41,935

     

     

    2.96

    %

    Net Interest Margin (3)

     

     

     

     

     

    3.56

    %

     

     

     

     

     

    3.48

    %

    Taxable Equivalent Adjustment:

     

     

     

     

     

     

     

     

     

     

     

     

    Tax-Exempt Investment Securities and Loans

     

     

     

     

    (422

    )

     

     

     

     

     

     

    (491

    )

     

     

    Net Interest Income

     

     

     

    $

    51,683

     

     

     

     

     

     

    $

    41,444

     

     

     

    _________________________________

    (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.

    Non-GAAP Financial Measures

    (dollars in thousands) (unaudited)

     

     

     

     

     

     

     

     

     

     

     

     

     

    For the Three Months Ended

     

    For the Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

     

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Pre-Provision Net Revenue

     

     

     

     

     

     

     

     

     

     

    Noninterest Income

     

    $

    1,603

     

     

    $

    1,008

     

     

    $

    1,977

     

     

    $

    2,611

     

     

    $

    3,696

     

    Less: Gain on sales of Securities

     

     

    (702

    )

     

     

     

     

     

    (1,361

    )

     

     

    (702

    )

     

     

    (1,364

    )

    Total Operating Noninterest Income

     

     

    901

     

     

     

    1,008

     

     

     

    616

     

     

     

    1,909

     

     

     

    2,332

     

    Plus: Net Interest income

     

     

    26,288

     

     

     

    25,395

     

     

     

    21,342

     

     

     

    51,683

     

     

     

    41,444

     

    Net Operating Revenue

     

    $

    27,189

     

     

    $

    26,403

     

     

    $

    21,958

     

     

    $

    53,592

     

     

    $

    43,776

     

     

     

     

     

     

     

     

     

     

     

     

    Noninterest Expense

     

    $

    11,477

     

     

    $

    10,923

     

     

    $

    10,711

     

     

    $

    22,400

     

     

    $

    20,457

     

    Less: Amortization of Tax Credit Investments

     

     

    (140

    )

     

     

    (118

    )

     

     

    (362

    )

     

     

    (258

    )

     

     

    (447

    )

    Less: FHLB Advance Prepayment Fees

     

     

     

     

     

     

     

     

    (1,430

    )

     

     

     

     

     

    (1,430

    )

    Total Operating Noninterest Expense

     

    $

    11,337

     

     

    $

    10,805

     

     

    $

    8,919

     

     

    $

    22,142

     

     

    $

    18,580

     

     

     

     

     

     

     

     

     

     

     

     

    Pre-Provision Net Revenue

     

    $

    15,852

     

     

    $

    15,598

     

     

    $

    13,039

     

     

    $

    31,450

     

     

    $

    25,196

     

     

     

     

     

     

     

     

     

     

     

     

    Plus:

     

     

     

     

     

     

     

     

     

     

    Non-Operating Revenue Adjustments

     

     

    702

     

     

     

     

     

     

    1,361

     

     

     

    702

     

     

     

    1,364

     

    Less:

     

     

     

     

     

     

     

     

     

     

    Provision for Loan Losses

     

     

    1,600

     

     

     

    1,100

     

     

     

    3,000

     

     

     

    2,700

     

     

     

    5,100

     

    Non-Operating Expense Adjustments

     

     

    140

     

     

     

    118

     

     

     

    1,792

     

     

     

    258

     

     

     

    1,877

     

    Provision for Income Taxes

     

     

    3,821

     

     

     

    3,709

     

     

     

    2,010

     

     

     

    7,530

     

     

     

    4,542

     

    Net Income

     

    $

    10,993

     

     

    $

    10,671

     

     

    $

    7,598

     

     

    $

    21,664

     

     

    $

    15,041

     

     

     

     

     

     

     

     

     

     

     

     

    Average Assets

     

    $

    3,076,712

     

     

    $

    2,940,262

     

     

    $

    2,622,272

     

     

    $

    3,008,864

     

     

    $

    2,469,656

     

    Pre-Provision Net Revenue Return on Average Assets

     

     

    2.07

    %

     

     

    2.15

    %

     

     

    2.00

    %

     

     

    2.11

    %

     

     

    2.05

    %

     

     

    As of and for the Three Months Ended

     

    As of and for the Six Months Ended

     

     

    June 30,

     

    March 31

     

    June 30,

     

    June 30,

     

    June 30,

     

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Core Net Interest Margin

     

     

     

     

     

     

     

     

     

     

    Net Interest Income (Tax-Equivalent Basis)

     

    $

    26,495

     

     

    $

    25,609

     

     

    $

    21,581

     

     

    $

    52,105

     

     

    $

    41,935

     

    Less: Loan Fees

     

     

    (1,023

    )

     

     

    (1,202

    )

     

     

    (1,264

    )

     

     

    (2,225

    )

     

     

    (2,571

    )

    Less: PPP Interest and Fees

     

     

    (1,767

    )

     

     

    (1,864

    )

     

     

    (873

    )

     

     

    (3,631

    )

     

     

    (873

    )

    Core Net Interest Income

     

    $

    23,705

     

     

    $

    22,543

     

     

    $

    19,444

     

     

    $

    46,249

     

     

    $

    38,491

     

     

     

     

     

     

     

     

     

     

     

     

    Average Interest Earning Assets

     

     

    3,019,437

     

     

     

    2,883,084

     

     

     

    2,567,292

     

     

     

    2,951,636

     

     

     

    2,422,448

     

    Less: Average PPP Loans

     

     

    (149,312

    )

     

     

    (148,881

    )

     

     

    (139,235

    )

     

     

    (149,098

    )

     

     

    (70,037

    )

    Core Average Interest Earning Assets

     

    $

    2,870,125

     

     

    $

    2,734,203

     

     

    $

    2,428,057

     

     

    $

    2,802,538

     

     

    $

    2,352,411

     

    Core Net Interest Margin

     

     

    3.31

    %

     

     

    3.34

    %

     

     

    3.22

    %

     

     

    3.33

    %

     

     

    3.29

    %

    Non-GAAP Financial Measures

    (dollars in thousands) (unaudited)

     

     

     

     

     

     

     

     

     

     

     

     

     

    For the Three Months Ended

     

    For the Six Months Ended

     

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

     

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Efficiency Ratio

     

     

     

     

     

     

     

     

     

     

    Noninterest Expense

     

    $

    11,477

     

     

    $

    10,923

     

     

    $

    10,711

     

     

    $

    22,400

     

     

    $

    20,457

     

    Less: Amortization of Intangible Assets

     

     

    (47

    )

     

     

    (48

    )

     

     

    (47

    )

     

     

    (95

    )

     

     

    (95

    )

    Adjusted Noninterest Expense

     

    $

    11,430

     

     

    $

    10,875

     

     

    $

    10,664

     

     

    $

    22,305

     

     

    $

    20,362

     

    Net Interest Income

     

     

    26,288

     

     

     

    25,395

     

     

     

    21,342

     

     

     

    51,683

     

     

     

    41,444

     

    Noninterest Income

     

     

    1,603

     

     

     

    1,008

     

     

     

    1,977

     

     

     

    2,611

     

     

     

    3,696

     

    Less: Gain on Sales of Securities

     

     

    (702

    )

     

     

     

     

     

    (1,361

    )

     

     

    (702

    )

     

     

    (1,364

    )

    Adjusted Operating Revenue

     

    $

    27,189

     

     

    $

    26,403

     

     

    $

    21,958

     

     

    $

    53,592

     

     

    $

    43,776

     

    Efficiency Ratio

     

     

    42.0

    %

     

     

    41.2

    %

     

     

    48.6

    %

     

     

    41.6

    %

     

     

    46.5

    %

     

     

     

     

     

     

     

     

     

     

     

    Adjusted Efficiency Ratio

     

     

     

     

     

     

     

     

     

     

    Noninterest Expense

     

    $

    11,477

     

     

    $

    10,923

     

     

    $

    10,711

     

     

    $

    22,400

     

     

    $

    20,457

     

    Less: Amortization of Tax Credit Investments

     

     

    (140

    )

     

     

    (118

    )

     

     

    (362

    )

     

     

    (258

    )

     

     

    (447

    )

    Less: FHLB Advance Prepayment Fees

     

     

     

     

     

     

     

     

    (1,430

    )

     

     

     

     

     

    (1,430

    )

    Less: Amortization of Intangible Assets

     

     

    (47

    )

     

     

    (48

    )

     

     

    (47

    )

     

     

    (95

    )

     

     

    (95

    )

    Adjusted Noninterest Expense

     

    $

    11,290

     

     

    $

    10,757

     

     

    $

    8,872

     

     

    $

    22,047

     

     

    $

    18,485

     

    Net Interest Income

     

     

    26,288

     

     

     

    25,395

     

     

     

    21,342

     

     

     

    51,683

     

     

     

    41,444

     

    Noninterest Income

     

     

    1,603

     

     

     

    1,008

     

     

     

    1,977

     

     

     

    2,611

     

     

     

    3,696

     

    Less: Gain on Sales of Securities

     

     

    (702

    )

     

     

     

     

     

    (1,361

    )

     

     

    (702

    )

     

     

    (1,364

    )

    Adjusted Operating Revenue

     

    $

    27,189

     

     

    $

    26,403

     

     

    $

    21,958

     

     

    $

    53,592

     

     

    $

    43,776

     

    Adjusted Efficiency Ratio

     

     

    41.5

    %

     

     

    40.7

    %

     

     

    40.4

    %

     

     

    41.1

    %

     

     

    42.2

    %

     

     

    For the Three Months Ended

     

    For the Six Months Ended

     

     

    June 30,

     

    March 31

     

    June 30,

     

    June 30,

     

    June 30,

     

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Adjusted Noninterest Expense to Average Assets

     

     

     

     

     

     

     

     

     

     

    Noninterest Expense

     

    $

    11,477

     

     

    $

    10,923

     

     

    $

    10,711

     

     

    $

    22,400

     

     

    $

    20,457

     

    Less: Amortization of Tax Credit Investments

     

     

    (140

    )

     

     

    (118

    )

     

     

    (362

    )

     

     

    (258

    )

     

     

    (447

    )

    Less: FHLB Advance Prepayment Fees

     

     

     

     

     

     

     

     

    (1,430

    )

     

     

     

     

     

    (1,430

    )

    Adjusted Noninterest Expense

     

    $

    11,337

     

     

    $

    10,805

     

     

    $

    8,919

     

     

    $

    22,142

     

     

    $

    18,580

     

     

     

     

     

     

     

     

     

     

     

     

    Average Assets

     

    $

    3,076,712

     

     

    $

    2,940,262

     

     

    $

    2,622,272

     

     

    $

    3,008,864

     

     

    $

    2,469,656

     

    Adjusted Noninterest Expense to Average Assets

     

     

    1.48

    %

     

     

    1.49

    %

     

     

    1.37

    %

     

     

    1.48

    %

     

     

    1.51

    %

    Non-GAAP Financial Measures

    (dollars in thousands) (unaudited)

     

     

     

     

     

     

     

    As of and for the Three Months Ended

     

    As of and for the Six Months Ended

     

    June 30,

     

    March 31,

     

    June 30,

     

    June 30,

     

    June 30,

     

    2021

     

    2021

     

    2020

     

    2021

     

    2020

    Tangible Common Equity and Tangible Common Equity/Tangible Assets

     

     

     

     

     

    Common Equity

    $

    290,830

     

    $

    279,171

     

    $

    257,190

     

     

     

    Less: Intangible Assets

     

    (3,200

    )

     

    (3,248

    )

     

    (3,391

    )

     

     

    Tangible Common Equity

    $

    287,630

     

    $

    275,923

     

    $

    253,799

     

     

     

     

     

     

     

     

     

    Total Assets

    $

    3,162,612

     

    $

    3,072,359

     

    $

    2,754,463

     

     

     

    Less: Intangible Assets

     

    (3,200

    )

     

    (3,248

    )

     

    (3,391

    )

     

     

    Tangible Assets

    $

    3,159,412

     

    $

    3,069,111

     

    $

    2,751,072

     

     

     

    Tangible Common Equity/Tangible Assets

     

    9.10

    %

     

    8.99

    %

     

    9.23

    %

     

     

     

     

     

     

     

     

    Tangible Book Value Per Share

     

     

     

     

     

    Book Value Per Common Share

    $

    10.33

     

    $

    9.92

     

    $

    8.92

     

     

     

    Less: Effects of Intangible Assets

     

    (0.11

    )

     

    (0.12

    )