Bridgewater Bancshares Inc [BWB] Filings

10-Q 1 bwb-20240930x10q.htm 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

☐	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 001-38412

BRIDGEWATER BANCSHARES, INC.

(Exact name of registrant as specified in its charter)


Minnesota (State or other jurisdiction of incorporation or organization)		26-0113412 (I.R.S. Employer Identification No.)

4450 Excelsior Boulevard, Suite 100 St. Louis Park, Minnesota (Address of principal executive offices)		55416 (Zip Code)

(952) 893-6868

(Registrant’s telephone number, including area code)

. Securities registered pursuant to Section 12(b) of the Act:


Title of each class:	Trading Symbol	Name of each exchange on which registered:
Common Stock, $0.01 Par Value	BWB	The Nasdaq Stock Market LLC
Depositary Shares, each representing a 1/100^th interest in a share of 5.875% Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share	BWBBP	The Nasdaq Stock Market LLC

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. Yes ☒ No ☐

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). Yes ☒ No ☐

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	☐	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 ☐ No ☒

The number of shares of the Common Stock outstanding as of October 29, 2024 was 27,425,690.

Table of Contents

Table of Contents


PART I FINANCIAL INFORMATION	3

Item 1. Consolidated Financial Statements (unaudited)	3
Consolidated Balance Sheets	3
Consolidated Statements of Income	4
Consolidated Statements of Comprehensive Income	5
Consolidated Statements of Shareholders’ Equity	6
Consolidated Statements of Cash Flows	8
Notes to Consolidated Financial Statements	9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
Item 3. Quantitative and Qualitative Disclosures About Market Risk	65
Item 4. Controls and Procedures	67

PART II OTHER INFORMATION	68

Item 1. Legal Proceedings	68
Item 1A. Risk Factors	68
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	69
Item 3. Defaults Upon Senior Securities	69
Item 4. Mine Safety Disclosures	69
Item 5. Other Information	69
Item 6. Exhibits	70

SIGNATURES	71

Table of Contents

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,
	2024		2023
	(Unaudited)
ASSETS
Cash and Cash Equivalents	$	191,859	$	128,562
Securities Available for Sale, at Fair Value		664,715		604,104
Loans, Net of Allowance for Credit Losses of $51,018 at September 30, 2024 (unaudited) and $50,494 at December 31, 2023		3,628,867		3,667,215
Federal Home Loan Bank (FHLB) Stock, at Cost		18,626		17,097
Premises and Equipment, Net		47,777		48,886
Foreclosed Assets		434		—
Accrued Interest		16,750		16,697
Goodwill		2,626		2,626
Other Intangible Assets, Net		163		188
Bank-Owned Life Insurance		38,219		34,477
Other Assets		81,481		92,138
Total Assets	$	4,691,517	$	4,611,990

LIABILITIES AND EQUITY
LIABILITIES
Deposits:
Noninterest Bearing	$	713,309	$	756,964
Interest Bearing		3,034,133		2,952,984
Total Deposits		3,747,442		3,709,948
Notes Payable		13,750		13,750
FHLB Advances		349,500		319,500
Subordinated Debentures, Net of Issuance Costs		79,574		79,288
Accrued Interest Payable		3,458		5,282
Other Liabilities		45,593		58,707
Total Liabilities		4,239,317		4,186,475

SHAREHOLDERS' EQUITY
Preferred Stock- $0.01 par value; Authorized 10,000,000
Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at September 30, 2024 (unaudited) and December 31, 2023		66,514		66,514
Common Stock- $0.01 par value; Authorized 75,000,000
Common Stock - Issued and Outstanding 27,425,690 at September 30, 2024 (unaudited) and 27,748,965 at December 31, 2023		274		277
Additional Paid-In Capital		94,597		96,320
Retained Earnings		302,231		280,650
Accumulated Other Comprehensive Loss		(11,416)		(18,246)
Total Shareholders' Equity		452,200		425,515
Total Liabilities and Equity	$	4,691,517	$	4,611,990

See accompanying notes to consolidated financial statements.

Table of Contents

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,
	2024		2023		2024		2023
INTEREST INCOME
Loans, Including Fees	$	51,895	$	48,999	$	152,861	$	141,675
Investment Securities		8,725		6,507		24,818		18,962
Other		2,407		1,303		4,895		3,165
Total Interest Income		63,027		56,809		182,574		163,802

INTEREST EXPENSE
Deposits		34,187		27,225		95,995		66,597
Federal Funds Purchased		2		548		1,159		8,253
Notes Payable		296		296		887		844
FHLB Advances		1,942		2,316		6,325		5,269
Subordinated Debentures		1,001		1,003		2,982		2,979
Total Interest Expense		37,428		31,388		107,348		83,942

NET INTEREST INCOME		25,599		25,421		75,226		79,860
Provision for (Recovery of) Credit Losses		—		(600)		1,350		75

NET INTEREST INCOME AFTER
PROVISION FOR (RECOVERY OF) CREDIT LOSSES		25,599		26,021		73,876		79,785

NONINTEREST INCOME
Customer Service Fees		373		379		1,081		1,096
Net Gain (Loss) on Sales of Available for Sale Securities		(28)		—		385		(6)
Letter of Credit Fees		424		315		1,127		1,328
Debit Card Interchange Fees		152		150		448		443
Bank-Owned Life Insurance		352		252		965		724
FHLB Prepayment Income		—		493		—		792
Other Income		249		137		829		707
Total Noninterest Income		1,522		1,726		4,835		5,084

NONINTEREST EXPENSE
Salaries and Employee Benefits		9,851		9,519		28,959		26,923
Occupancy and Equipment		1,069		1,101		3,218		3,385
FDIC Insurance Assessment		750		1,075		2,350		2,640
Data Processing		368		392		1,252		1,150
Professional and Consulting Fees		1,149		715		2,890		2,299
Derivative Collateral Fees		381		543		1,395		1,327
Information Technology and Telecommunications		840		683		2,448		2,077
Marketing and Advertising		367		222		1,006		805
Intangible Asset Amortization		9		9		26		91
Other Expense		976		978		2,944		2,883
Total Noninterest Expense		15,760		15,237		46,488		43,580

INCOME BEFORE INCOME TAXES		11,361		12,510		32,223		41,289
Provision for Income Taxes		2,686		2,881		7,602		10,202
NET INCOME		8,675		9,629		24,621		31,087
Preferred Stock Dividends		(1,013)		(1,013)		(3,040)		(3,040)
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS	$	7,662	$	8,616	$	21,581	$	28,047

EARNINGS PER SHARE
Basic	$	0.28	$	0.31	$	0.79	$	1.01
Diluted		0.27		0.30		0.77		0.99

See accompanying notes to consolidated financial statements.

Table of Contents

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income

(dollars in thousands)

(Unaudited)


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2024		2023		2024		2023
Net Income	$	8,675	$	9,629	$	24,621	$	31,087
Other Comprehensive Income (Loss):
Unrealized Gains (Losses) on Available for Sale Securities		14,738		(10,151)		16,141		(14,338)
Unrealized Gains (Losses) on Cash Flow Hedges		(6,761)		7,763		987		10,167
Reclassification Adjustment for Gains Realized in Income		(2,498)		(1,623)		(7,543)		(4,004)
Income Tax Impact		(1,575)		1,153		(2,755)		2,351
Total Other Comprehensive Income (Loss), Net of Tax		3,904		(2,858)		6,830		(5,824)
Comprehensive Income	$	12,579	$	6,771	$	31,451	$	25,263

See accompanying notes to consolidated financial statements.

Table of Contents

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Shareholders’ Equity

Three and Nine Months Ended September 30, 2024 and 2023

(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		Income (Loss)		Total

BALANCE June 30, 2023	$	66,514	27,973,995	$	280	$	99,044	$	264,196	$	(20,908)	$	409,126
Stock-based Compensation		—	12,588		—		997		—		—		997
Comprehensive Income (Loss)		—	—		—		—		9,629		(2,858)		6,771
Stock Options Exercised		—	27,000		—		90		—		—		90
Vested Restricted Stock Units		—	3,000		—		—		—		—		—
Restricted Shares Withheld for Taxes		—	(1,078)		—		(11)		—		—		(11)
Preferred Stock Dividend		—	—		—		—		(1,013)		—		(1,013)
BALANCE September 30, 2023	$	66,514	28,015,505	$	280	$	100,120	$	272,812	$	(23,766)	$	415,960

BALANCE June 30, 2024	$	66,514	27,348,049	$	273	$	93,205	$	294,569	$	(15,320)	$	439,241
Stock-based Compensation		—	8,496		—		923		—		—		923
Comprehensive Income		—	—		—		—		8,675		3,904		12,579
Stock Options Exercised		—	69,856		1		517		—		—		518
Vested Restricted Stock Units		—	3,000		—		—		—		—		—
Restricted Shares Withheld for Taxes		—	(3,711)		—		(48)		—		—		(48)
Preferred Stock Dividend		—	—		—		—		(1,013)		—		(1,013)
BALANCE September 30, 2024	$	66,514	27,425,690	$	274	$	94,597	$	302,231	$	(11,416)	$	452,200

Table of Contents


										Accumulated
						Additional				Other
	Preferred		Common Stock			Paid-In		Retained		Comprehensive
Nine Months Ended	Stock		Shares	Amount		Capital		Earnings		Income (Loss)		Total

BALANCE December 31, 2022	$	66,514	27,751,950	$	278	$	96,529	$	248,685	$	(17,942)	$	394,064
Cumulative Effect of Change in Accounting Principle, Net of Tax		—	—		—		—		(3,920)		—		(3,920)
Balance as of January 1, 2023, as Adjusted for Change in Accounting Principle		66,514	27,751,950		278		96,529		244,765		(17,942)		390,144
Stock-based Compensation		—	35,460		—		2,910		—		—		2,910
Comprehensive Income (Loss)		—	—		—		—		31,087		(5,824)		25,263
Stock Options Exercised		—	226,000		2		715		—		—		717
Forfeiture of Restricted Stock Awards		—	(250)		—		—		—		—		—
Vested Restricted Stock Units		—	5,225		—		—		—		—		—
Restricted Shares Withheld for Taxes		—	(2,880)		—		(34)		—		—		(34)
Preferred Stock Dividend		—	—		—		—		(3,040)		—		(3,040)
BALANCE September 30, 2023	$	66,514	28,015,505	$	280	$	100,120	$	272,812	$	(23,766)	$	415,960

BALANCE December 31, 2023	$	66,514	27,748,965	$	277	$	96,320	$	280,650	$	(18,246)	$	425,515
Stock-based Compensation		—	29,832		—		2,994		—		—		2,994
Comprehensive Income		—	—		—		—		24,621		6,830		31,451
Stock Options Exercised		—	78,356		1		586		—		—		587
Stock Repurchases		—	(446,509)		(4)		(5,173)		—		—		(5,177)
Vested Restricted Stock Units		—	25,665		—		—		—		—		—
Restricted Shares Withheld for Taxes		—	(10,619)		—		(130)		—		—		(130)
Preferred Stock Dividend		—	—		—		—		(3,040)		—		(3,040)
BALANCE September 30, 2024	$	66,514	27,425,690	$	274	$	94,597

Bridgewater Bancshares Inc [BWB] Filings
Bridgewater Bancshares Inc [BWBBP] Filings
10-Q	[2024-10-31]
10-Q	[2024-08-01]
10-Q	[2024-05-02]
10-K	[2024-03-07]
10-Q	[2023-11-02]
10-Q	[2023-08-03]
10-Q	[2023-05-04]
10-K	[2023-03-07]
10-Q	[2022-11-03]
10-Q	[2022-08-04]
10-Q	[2022-05-05]
10-K	[2022-03-08]
10-Q	[2021-11-04]
10-Q	[2021-07-30]
10-Q	[2021-05-06]
10-K	[2021-03-11]
10-Q	[2020-11-05]
10-Q	[2020-08-06]
10-Q	[2020-05-07]
10-K	[2020-03-12]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2019-03-14]
10-Q	[2018-11-08]
10-Q	[2018-08-09]
10-Q	[2018-05-10]
S-1	[2018-02-16]

Bridgewater Bancshares Inc [BWB] Filings

Bridgewater Bancshares Inc [BWBBP] Filings