BRIDGEWATER BANC(BWBBP) - 2024 Q3 - Quarterly Report

Financial Performance - Net income for Q3 2024 was $8.7 million, a decrease from$9.6 million in Q3 2023, with diluted earnings per share of $0.27 compared to$0.30 in the prior year[143]. - Net interest income increased to $25.6 million in Q3 2024 from$25.3 million in Q2 2024, while noninterest income was $1.5 million, down from$1.8 million in the previous quarter[140]. - Basic earnings per share for the nine months ended September 30, 2024, were $0.77, down from$0.99 for the same period in 2023[143]. - Net income for the nine months ended September 30, 2024, was $24.6 million, down from$31.1 million for the same period in 2023, indicating a 20.0% decrease[247]. - The company reported a pre-provision net revenue of $11.4 million for the three months ended September 30, 2024, compared to$11.0 million in the previous quarter, marking a 3.5% increase[247]. Asset and Liability Management - The Company reported total assets of approximately $4.9 billion, with$4.0 billion in deposits and $3.9 billion in loans and leases expected post-acquisition of First Minnetonka City Bank[138]. - Total assets as of September 30, 2024, were$4.69 billion, slightly up from $4.69 billion as of June 30, 2024[140]. - Total assets increased to$4,703,804 thousand as of September 30, 2024, compared to $4,504,937 thousand as of September 30, 2023, indicating a growth of 4.41$3.747 billion as of September 30, 2024, an increase of $37.5 million, or 1.0$3,491,118 thousand for the three months ended September 30, 2024, compared to $3,264,556 thousand for the same period in 2023, marking an increase of 6.93$8.4 million, representing 0.23% of total loans, compared to $0.68 million or 0.02$51,018,000 as of September 30, 2024, reflecting a slight decrease from $51,949,000 on June 30, 2024[204]. - The provision for credit losses on loans was$1.5 million for the nine months ended September 30, 2024, compared to $2.1 million for the same period in 2023[178]. - The company continues to emphasize credit quality, with no assets classified as "doubtful" or "loss" as of September 30, 2024[211]. Acquisition and Expansion - The acquisition of First Minnetonka City Bank is an all-cash transaction, with the merger expected to close in the fourth quarter of 2024[137]. - The Company has received all necessary regulatory approvals for the acquisition, indicating a positive outlook for future expansion[138]. - The merger with First Minnetonka City Bank will enhance the Company's market presence with nine full-service branches across the Twin Cities[138]. - The Company emphasizes the importance of attracting and retaining key personnel to implement its growth strategy effectively[135]. Income and Expense Analysis - Noninterest income for Q3 2024 was$1.5 million, a decrease of $204,000 from$1.7 million in Q3 2023, primarily due to the absence of prior year FHLB prepayment income[182]. - Noninterest expense for Q3 2024 was $15.8 million, an increase of$523,000 from $15.2 million in Q3 2023, driven by higher salaries and consulting fees related to the acquisition of First Minnetonka City Bank[185]. - The efficiency ratio improved to 58.0$452.2 million, a rise of $26.7 million or 6.3$425.5 million at December 31, 2023[230]. - The Company maintained a commitment to strong capital levels while executing its stock repurchase program, with $15.3 million remaining for future repurchases[233]. - Total risk-based capital for the Company was$589.1 million with a ratio of 14.62% as of September 30, 2024, exceeding the minimum required[235]. - Total on- and off-balance sheet liquidity was $2.29 billion as of September 30, 2024, compared to$2.23 billion at December 31, 2023[242]. Interest Rate Exposure - The company has a total notional amount of $308.0 million in cash flow hedges as of September 30, 2024, to manage interest rate exposure[253]. - In a hypothetical scenario of a 400 basis point increase in interest rates, the company would experience a 6.58% decrease in net interest income[257]. - The average rate paid on interest-bearing transaction deposits increased to 4.63% for the three months ended September 30, 2024, compared to 3.88% for the same period in 2023[224].