Bridgewater Bank(BWB)2024-03-06 16:00Financial Performance - Net Interest Income decreased to 129.7 million in 2022, a decline of 18.9%[253] - Net Income Available to Common Shareholders dropped to 53.39 million in 2022, a decrease of 25.2%[253] - Return on Average Assets (ROA) decreased to 0.89% in 2023 from 1.38% in 2022[253] - Efficiency Ratio worsened to 53.0% in 2023 from 41.5% in 2022[253] Asset and Loan Growth - Total Assets grew by 6.1% to 4.35 billion in 2022[253] - Total Loans, Gross increased by 4.3% to 3.57 billion in 2022[253] - Total interest-bearing deposits increased to 2.22 billion in 2022, with an average interest rate of 3.50%[268] Credit Quality - Nonperforming Loans to Total Loans ratio remained stable at 0.02% in 2023, consistent with 2022[254] - Allowance for Credit Losses on Loans to Total Loans ratio was 1.36% in 2023, slightly up from 1.34% in 2022[254] - Net Loan Charge-Offs to Average Loans ratio was 0.01% in 2023, compared to -0.01% in 2022[254] - The allowance for credit losses on loans is adjusted based on provisions or recoveries reported in the income statement, impacting the allowance for credit losses on off-balance sheet exposures[258] Interest Rate and Net Interest Margin - Net interest income is calculated on a tax-equivalent basis, with a 21% federal tax rate assumption, and is influenced by the FOMC's rate increases of 100 basis points in 2023 and 425 basis points in 2022[266] - The net interest margin for 2023 was 2.42%, compared to 3.45% in 2022 and 3.54% in 2021[269] - The company's net interest income would decrease by 2.39% in the event of an immediate and sustained 400 basis point increase in interest rates[796] - The company's net interest income would increase by 8.86% in the event of an immediate 300 basis point decrease in interest rates[796] - Forecasted net interest income for a +400 basis point change is 118,983, representing a 2.08% decrease from the base[797] - Forecasted net interest income for a +200 basis point change is 119,916, representing a 1.31% decrease from the base[797] - Forecasted net interest income for a -100 basis point change is 128,643, representing a 5.87% increase from the base[797] - Forecasted net interest income for a -300 basis point change is 308.0 million at December 31, 2023, up from $288.0 million in 2022, aimed at managing interest rate exposure[794] Fair Value Measurement - The fair value of investment securities is determined using pricing models, broker quotes, and net present value of future cash flows, with adjustments made if a more appropriate fair value is identified[260] - The Company uses a three-level hierarchy to measure the fair value of financial instruments, considering observable market data and matrix pricing for non-traded instruments[261][263]