UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ________
Commission File Number
(Exact name of registrant as specified in its charter)
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(Registrant’s telephone number, including area code)
. Securities registered pursuant to Section 12(b) of the Act:
Title of each class: |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | ☒ | |
Non-accelerated filer | ☐ | Smaller reporting company | |
Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
The number of shares of the Common Stock outstanding as of October 31, 2023 was
Table of Contents
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 39 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk | 67 |
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2
PART 1 – FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Balance Sheets
(dollars in thousands, except share data)
September 30, | December 31, | |||||
| 2023 |
| 2022 | |||
(Unaudited) | ||||||
ASSETS | ||||||
Cash and Cash Equivalents | $ | $ | | |||
Bank-Owned Certificates of Deposit |
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Securities Available for Sale, at Fair Value |
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Loans, Net of Allowance for Credit Losses of $ |
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Federal Home Loan Bank (FHLB) Stock, at Cost |
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Premises and Equipment, Net |
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Accrued Interest |
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Goodwill |
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Other Intangible Assets, Net |
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Bank-Owned Life Insurance | | |||||
Other Assets |
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Total Assets | $ | | $ | | ||
LIABILITIES AND EQUITY |
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LIABILITIES |
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Deposits: |
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Noninterest Bearing | $ | $ | | |||
Interest Bearing |
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Total Deposits |
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Federal Funds Purchased |
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Notes Payable | | | ||||
FHLB Advances |
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Subordinated Debentures, Net of Issuance Costs |
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Accrued Interest Payable |
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Other Liabilities |
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Total Liabilities |
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SHAREHOLDERS' EQUITY |
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Preferred Stock- $ | ||||||
Preferred Stock - Issued and Outstanding | |
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Common Stock- $ |
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Common Stock - and | |
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Additional Paid-In Capital |
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Retained Earnings |
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Accumulated Other Comprehensive Loss |
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Total Shareholders' Equity |
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Total Liabilities and Equity | $ | | $ | |
See accompanying notes to consolidated financial statements.
3
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Income
(dollars in thousands, except per share data)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | September 30, | September 30, | |||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
INTEREST INCOME |
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Loans, Including Fees | $ | | $ | | $ | | $ | | ||||
Investment Securities |
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Other |
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Total Interest Income |
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INTEREST EXPENSE |
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Deposits |
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Notes Payable |
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FHLB Advances |
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Subordinated Debentures |
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Federal Funds Purchased |
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Total Interest Expense |
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NET INTEREST INCOME |
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Provision for (Recovery of) Credit Losses |
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NET INTEREST INCOME AFTER |
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PROVISION FOR CREDIT LOSSES |
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NONINTEREST INCOME |
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Customer Service Fees |
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Net Gain (Loss) on Sales of Available for Sale Securities |
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Other Income |
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Total Noninterest Income |
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NONINTEREST EXPENSE |
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Salaries and Employee Benefits |
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Occupancy and Equipment |
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Other Expense |
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Total Noninterest Expense |
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INCOME BEFORE INCOME TAXES |
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Provision for Income Taxes |
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NET INCOME | | | | | ||||||||
Preferred Stock Dividends | ( | ( | ( | ( | ||||||||
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ | | $ | | $ | | $ | | ||||
EARNINGS PER SHARE |
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Basic | $ | | $ | | $ | | $ | | ||||
Diluted | | | | |
See accompanying notes to consolidated financial statements.
4
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Comprehensive Income
(dollars in thousands)
(Unaudited)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
| 2023 |
| 2022 |
| 2023 |
| 2022 | |||||
Net Income | $ | | $ | | $ | | $ | | ||||
Other Comprehensive Loss: |
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Unrealized Losses on Available for Sale Securities | ( | ( | ( | ( | ||||||||
Unrealized Gains on Cash Flow Hedges | | | | | ||||||||
Reclassification Adjustment for (Gains) Losses Realized in Income | ( | ( | ( | | ||||||||
Income Tax Impact | | | | | ||||||||
Total Other Comprehensive Loss, Net of Tax | ( | ( | ( | ( | ||||||||
Comprehensive Income | $ | | $ | | $ | | $ | |
See accompanying notes to consolidated financial statements.
5
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Shareholders’ Equity
Three and Nine Months Ended September 30, 2023 and 2022
(dollars in thousands, except share data)
(Unaudited)
Accumulated | ||||||||||||||||||||
Additional | Other | |||||||||||||||||||
Preferred | Common Stock | Paid-In | Retained | Comprehensive | ||||||||||||||||
Three Months Ended | Stock |
| Shares |
| Amount |
| Capital |
| Earnings |
| Loss |
| Total | |||||||
BALANCE June 30, 2022 |
| $ | | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Stock-based Compensation |
| — | | — | | — | — |
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Comprehensive Income (Loss) |
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Stock Options Exercised | — | | — | | — | — | | |||||||||||||
Stock Repurchases | — | ( | ( | ( | — | — | ( | |||||||||||||
Vested Restricted Stock Units | — | | — | — | — | — | — | |||||||||||||
Restricted Shares Withheld for Taxes | — | ( | — | ( | — | — | ( | |||||||||||||
Preferred Stock Dividend | — | — | — | — | ( | — | ( | |||||||||||||
BALANCE September 30, 2022 |
| $ | | | $ | | $ | | $ | | $ | ( | $ | | ||||||
BALANCE June 30, 2023 |
| $ | | | $ | | $ | | $ | | $ | ( | $ | | ||||||
Stock-based Compensation |
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Comprehensive Income (Loss) |
| — | — | — | — | | ( |
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Stock Options Exercised | — | | — | | — | — | | |||||||||||||
Vested Restricted Stock Units | — | | — | — | — | — | — | |||||||||||||
Restricted Shares Withheld for Taxes | — | ( | — | ( | — | — | ( | |||||||||||||
Preferred Stock Dividend | — | — | — | — | ( | — | ( | |||||||||||||
BALANCE September 30, 2023 |
| $ | | | $ | | $ | | $ | | $ | ( | $ | |
See accompanying notes to consolidated financial statements.
6
Accumulated | ||||||||||||||||||||
Additional | Other | |||||||||||||||||||
Preferred | Common Stock | Paid-In | Retained | Comprehensive | ||||||||||||||||
Nine Months Ended |
| Stock |
| Shares |
| Amount |
| Capital |
| Earnings |
| Income (Loss) |
| Total | ||||||
BALANCE December 31, 2021 |
| $ | | | $ | | $ | | $ | | $ | | $ | | ||||||
Stock-based Compensation |
| — | | — | | — | — |
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Comprehensive Income (Loss) |
| — | — | — | — | | ( |
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Stock Options Exercised | — | | — | | — | — | | |||||||||||||
Stock Repurchases | — | ( | ( | ( | — | — | ( | |||||||||||||
Forfeiture of Restricted Stock Awards | — | ( | — | ( | — | — | ( | |||||||||||||
Vested Restricted Stock Units | — | | — | — | — | — | — | |||||||||||||
Restricted Shares Withheld for Taxes | — | ( | — | ( | — | — | ( | |||||||||||||
Preferred Stock Dividend | — | — | — | — | ( | — | ( | |||||||||||||
BALANCE September 30, 2022 |
| $ | | | $ | | $ | | $ | | $ | ( | $ | | ||||||
BALANCE December 31, 2022 | $ | | | $ | | $ | | $ | | $ | ( | $ | | |||||||
Cumulative Effect of Change in Accounting Principle, Net of Tax | — | — | — | — | ( | — | ( | |||||||||||||
Balance as of January 1, 2023, as Adjusted for Change in Accounting Principle | | | | | | ( | | |||||||||||||
Stock-based Compensation |
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Comprehensive Income (Loss) |
| — | — | — | — | | ( |
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Stock Options Exercised | — | | | | — | — | | |||||||||||||
Forfeiture of Restricted Stock Awards | — | ( | — | — | — | — | — | |||||||||||||
Vested Restricted Stock Units | — | | — | — | — | — | — | |||||||||||||
Restricted Shares Withheld for Taxes | — | ( | — | ( | — | — | ( | |||||||||||||
Preferred Stock Dividend | — | — | — | — | ( | — | ( | |||||||||||||
BALANCE September 30, 2023 |
| $ | | | $ | | $ | | $ | | $ | ( | $ | |
See accompanying notes to consolidated financial statements.
7
Bridgewater Bancshares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(dollars in thousands)
(Unaudited)
Nine Months Ended | ||||||
September 30, | ||||||
2023 | 2022 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||
Net Income | $ | | $ | | ||
Adjustments to Reconcile Net Income to Net Cash |
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Provided by Operating Activities: |
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Net Amortization on Securities Available for Sale |
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Net (Gain) Loss on Sales of Securities Available for Sale |
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Provision for Credit Losses on Loans |
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Credit for Off-Balance Sheet Exposures | ( | — | ||||
Depreciation of Premises and Equipment |
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Amortization of Other Intangible Assets |
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Amortization of Right-of Use Asset | | — | ||||
Amortization of Subordinated Debt Issuance Costs | | | ||||
Stock-based Compensation |
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Changes in Operating Assets and Liabilities: |
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Accrued Interest Receivable and Other Assets |
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Accrued Interest Payable and Other Liabilities |
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Net Cash Provided by Operating Activities |
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