BRIDGEWATER BANC(BWBBP) - 2024 Q1 - Quarterly Report

Financial Performance - Net Income for Q1 2024 was $7,831,000, down 11.8% from$ 8,873,000 in Q4 2023[122] - Basic Earnings Per Share for Q1 2024 was $0.25, compared to$ 0.28 in Q4 2023, reflecting a decrease of 10.7%[122] - Net income for Q1 2024 was $7.8 million, down from$ 11.6 million in Q1 2023, with diluted earnings per share decreasing from $0.37 to$ 0.24[125] - Noninterest income decreased to $1.6 million in Q1 2024, down$ 393,000 from $1.9 million in Q1 2023[148] - Noninterest expense increased to$ 15.2 million in Q1 2024, up $1.1 million from$ 14.1 million in Q1 2023[150] - The efficiency ratio was 58.2% for Q1 2024, compared to 45.9% for Q1 2023[153] - Net income for the three months ended March 31, 2024, was $7.83 million, down from$ 8.87 million in the previous quarter, reflecting a decrease of 11.7%[211] - The efficiency ratio improved to 58.2% for the three months ended March 31, 2024, compared to 58.8% in the previous quarter[212] Interest Income and Expenses - Net Interest Income for Q1 2024 was $24,631,000, a decrease of 2.7% from$ 25,314,000 in Q4 2023[122] - Noninterest Income increased to $1,550,000 in Q1 2024, up from$ 1,409,000 in Q4 2023, representing an increase of 10%[122] - Total interest income was $59.0 million for Q1 2024, an increase of$ 6.7 million from $52.4 million in Q1 2023[137] - Interest income on loans was$ 49.9 million for Q1 2024, compared to $45.3 million in Q1 2023, reflecting a$ 4.6 million increase[139] - Interest expense on interest bearing liabilities rose to $34.0 million in Q1 2024, an increase of$ 10.6 million from $23.4 million in Q1 2023[141] - The net interest margin for Q1 2024 was 2.24%, a decline of 48 basis points from 2.72% in Q1 2023[133] - Core net interest margin, excluding loan fees, was 2.18% for Q1 2024, down 44 basis points from 2.62% in Q1 2023[133] Asset and Loan Growth - Total Assets as of March 31, 2024, were$ 4,723,109,000, an increase from $4,611,990,000 at the end of 2023[122] - Total Loans, Gross reached$ 3,784,205,000, up from $3,724,282,000 in Q4 2023, indicating a growth of 1.6%[122] - Total gross loans increased to$ 3.78 billion as of March 31, 2024, reflecting a growth of $59.9 million, or 1.6%, from$ 3.72 billion at December 31, 2023, and an increase of $99.8 million, or 2.7%, from$ 3.68 billion at March 31, 2023[164] - The loan portfolio's annualized growth rate was 6.5% during the first quarter of 2024, driven by increased loan demand and originations, despite a moderation in loan payoffs[164] - Real estate mortgage lending constituted 79.9% of the total loan portfolio as of March 31, 2024, with no significant changes expected in the composition in the foreseeable future[166] Deposits and Funding - Deposits increased to $3,807,225,000 in Q1 2024, compared to$ 3,709,948,000 in Q4 2023, marking a rise of 2.6%[122] - Total deposits reached $3.81 billion at March 31, 2024, an increase of$ 97.3 million, or 2.6%, compared to $3.71 billion at December 31, 2023[185] - Core deposits increased by$ 90.3 million, or 14.3% annualized, from the fourth quarter of 2023, driven by existing client balances and new client acquisitions[185] - Brokered deposits decreased to $992.8 million at March 31, 2024, down by$ 31.7 million from $1.02 billion at December 31, 2023[187] - Total uninsured deposits were approximately$ 989.1 million, or 26.0% of total deposits, at March 31, 2024, up from $900.0 million, or 24.3%, at December 31, 2023[188] Credit Quality and Risk Management - Provision for Credit Losses was$ 750,000 in Q1 2024, compared to a recovery of $250,000 in Q4 2023[122] - Nonperforming loans decreased to$ 249,000 in Q1 2024 from $919,000 in Q4 2023, with nonperforming loans to total loans remaining at 0.01%[123] - The allowance for credit losses on loans to total loans remained stable at 1.36% across the reporting periods[123] - Total nonperforming assets decreased to$ 269,000 at March 31, 2024, from $919,000 at December 31, 2023, reflecting a significant improvement[175] - The Company employs a risk management program to manage credit exposure, including board oversight and stress testing[163] - The Company emphasizes credit quality in its loan origination and monitoring processes, with a focus on minimizing classified and nonperforming assets[171] Capital and Equity - The Tier 1 Risk-based Capital Ratio stood at 10.83% as of March 31, 2024, slightly up from 10.79% in Q4 2023[122] - Total shareholders' equity increased to$ 433.6 million as of March 31, 2024, reflecting a 1.9% increase from $425.5 million at December 31, 2023[194] - Tangible book value per share rose to$ 13.20, a 2.9% increase from $12.84 as of December 31, 2023[195] - Tangible common equity was$ 364.3 million, up from $356.2 million as of December 31, 2023[212] Interest Rate Risk Management - The Company has a total notional amount of$ 308.0 million in cash flow hedges as of March 31, 2024, and December 31, 2023, aimed at mitigating interest rate exposure[217] - In the event of a 400 basis point increase in interest rates, the Company would experience a 1.74% decrease in net interest income as of March 31, 2024[221] - A 300 basis point decrease in interest rates would result in a 6.47% increase in net interest income[221] - The Company manages interest rate risk by adjusting interest rates and terms associated with investment securities and customer deposits[216] - The Company does not engage in speculative trading activities related to interest rates or foreign exchange rates[215]