BRIDGEWATER BANC(BWBBP) - 2023 Q3 - Quarterly Report

Financial Performance - The Company reported financial results for the three and nine months ended September 30, 2023, with annualized results not indicative of future performance [160]. - Net income for Q3 2023 was $9.6 million, down from$14.5 million in Q3 2022, with diluted earnings per share of $0.30 compared to$0.47 in the prior year [183]. - Net interest income for Q3 2023 was $25,421, a decrease from$34,095 in Q3 2022 [182]. - The efficiency ratio for Q3 2023 was 56.5%, compared to 39.8% in Q3 2022, indicating increased operational costs relative to income [181]. - Net interest income for the nine months ended September 30, 2023, was $79.9 million, a decrease of$16.9 million, or 17.5%, compared to $96.8 million for the same period in 2022 [208]. - The company's net income for the nine months ended September 30, 2023, was$31.09 million, compared to $39.66 million for the same period in 2022, indicating a decrease of approximately 21.5$4,557,070, an increase from $4,128,987 as of September 30, 2022 [181]. - Total loans, gross, were$3,722,271 as of September 30, 2023, compared to $3,380,082 as of September 30, 2022 [181]. - Total gross loans increased by$152.8 million, or 4.3%, to $3.72 billion at September 30, 2023, compared to$3.57 billion at December 31, 2022 [233]. - The total loans, net, amounted to $3.66 billion as of September 30, 2023 [244]. - The annualized loan growth for the nine months ended September 30, 2023, was 5.7$142.7 million, compared to $104.1 million for the same period in 2022, reflecting a$38.5 million increase [214]. - Interest expense on interest bearing liabilities increased by $65.9 million to$83.9 million for the nine months ended September 30, 2023, compared to $18.0 million for the same period in 2022 [215]. - The average rate paid on interest bearing liabilities was 3.49$50,585 as of September 30, 2023, compared to $46,491 as of September 30, 2022 [181]. - The provision for credit losses on loans was$2.1 million for the nine months ended September 30, 2023, compared to $6.2 million for the same period in 2022 [218]. - The allowance for credit losses on loans to total loans was 1.36$749,000 at September 30, 2023, an increase of $110,000 from$639,000 at December 31, 2022 [251]. Deposits and Liquidity - Deposits increased to $3,675,509 as of September 30, 2023, from$3,305,074 as of September 30, 2022 [181]. - Total deposits reached $3.68 billion, an increase of$259 million, or 7.6%, compared to $3.42 billion at December 31, 2022 [259]. - Brokered deposits amounted to$1.0 billion, reflecting an increase of $225.9 million from$776.2 million at December 31, 2022 [261]. - Total on- and off-balance sheet liquidity was $2.18 billion as of September 30, 2023, compared to$1.38 billion at December 31, 2022 [282]. Operational Efficiency - The average return on assets for the nine months ended September 30, 2023, was 1.22%, down from 2.15% for the same period in 2022 [287]. - Noninterest expense increased by $1.2 million to$15.4 million for the third quarter of 2023, and increased by $2.5 million, or 6.0$43.9 million for the nine months ended September 30, 2023, mainly due to higher FDIC insurance assessments [224][225]. - The efficiency ratio increased to 56.5% for the three months ended September 30, 2023, up from 52.7% in the previous quarter [289]. Capital and Shareholders' Equity - Total shareholders' equity increased to $416.0 million as of September 30, 2023, up by$21.9 million from $394.1 million at December 31, 2022 [270]. - Tangible book value per share rose to$12.37, reflecting a 5.8% increase from $11.69 as of December 31, 2022 [271]. - The Company's total risk-based capital was$567.2 million with a ratio of 13.88% as of September 30, 2023, exceeding the minimum required for capital adequacy [274]. Risk Factors - The Company faces risks including interest rate fluctuations, economic conditions, and competition from nonbank entities [162]. - Future performance is subject to uncertainties, including potential economic downturns and regulatory changes impacting the financial services industry [161].