PART I FINANCIAL INFORMATION Item 1. Consolidated Financial Statements (unaudited) This section presents the unaudited consolidated financial statements for Bridgewater Bancshares, Inc. as of March 31, 2025, and for the three-month period then ended, including balance sheets, income statements, and detailed notes Consolidated Balance Sheets As of March 31, 2025, total assets increased to $5.14 billion from $5.07 billion at year-end 2024, primarily driven by a rise in net loans, while total liabilities grew to $4.67 billion and total shareholders' equity increased to $469.0 million Consolidated Balance Sheet Highlights (unaudited) | Account | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Assets | $5,136,808 | $5,066,242 | | Cash and Cash Equivalents | $166,205 | $229,760 | | Loans, Net | $3,959,092 | $3,809,436 | | Total Liabilities | $4,667,833 | $4,608,307 | | Total Deposits | $4,162,457 | $4,086,767 | | FHLB Advances | $349,500 | $359,500 | | Total Shareholders' Equity | $468,975 | $457,935 | Consolidated Statements of Income For the three months ended March 31, 2025, net income significantly increased to $9.6 million from $7.8 million in the prior-year period, driven by a 22.6% rise in net interest income to $30.2 million, resulting in diluted earnings per share of $0.31 Income Statement Summary (unaudited) | Metric | Three Months Ended Mar 31, 2025 ($ thousands) | Three Months Ended Mar 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Interest Income | $65,708 | $58,669 | | Total Interest Expense | $35,500 | $34,038 | | Net Interest Income | $30,208 | $24,631 | | Provision for Credit Losses | $1,500 | $750 | | Total Noninterest Income | $2,079 | $1,550 | | Total Noninterest Expense | $18,136 | $15,189 | | Net Income | $9,633 | $7,831 | | Diluted EPS | $0.31 | $0.24 | Notes to Consolidated Financial Statements The notes provide detailed disclosures, including the recent acquisition of First Minnetonka City Bank (FMCB), a breakdown of loan and securities portfolios, analysis of the allowance for credit losses (ACL), details on derivative instruments, and regulatory capital adequacy information - On December 13, 2024, the Bank completed its acquisition of First Minnetonka City Bank (FMCB), which added approximately $225.7 million in deposits and $117.1 million in loans as of year-end23 Loan Portfolio Composition (March 31, 2025) | Loan Category | Amount ($ thousands) | % of Total | | :--- | :--- | :--- | | Commercial | $528,801 | 13.2% | | Real Estate Mortgage | $3,265,445 | 81.2% | | - Multifamily | $1,534,747 | 38.2% | | - CRE Nonowner Occupied | $1,055,157 | 26.2% | | Construction and Land Development | $128,073 | 3.2% | | Other | $97,757 | 2.4% | | Total Loans, Gross | $4,020,076 | 100.0% | Allowance for Credit Losses (ACL) Activity - Q1 2025 | Metric | Amount ($ thousands) | | :--- | :--- | | Beginning Balance (Dec 31, 2024) | $52,277 | | Provision for Credit Losses | $1,500 | | Charge-offs | ($12) | | Recoveries | $1 | | Ending Balance (Mar 31, 2025) | $53,766 | - The Company utilizes derivative instruments, including interest rate swaps and caps, for both non-hedge client facilitation and designated cash flow and fair value hedging to manage interest rate risk606467 Regulatory Capital Ratios (March 31, 2025) | Ratio | Company (Consolidated) | Bank | Well-Capitalized Minimum (Bank) | | :--- | :--- | :--- | :--- | | Common Equity Tier 1 Capital | 9.03% | 12.17% | 6.50% | | Tier 1 Risk-based Capital | 10.55% | 12.17% | 8.00% | | Total Risk-based Capital | 13.62% | 13.42% | 10.00% | | Tier 1 Leverage Ratio | 9.10% | 10.49% | 5.00% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's Q1 2025 financial performance, highlighting strong growth in net income and net interest margin, the impact of the FMCB acquisition, loan and deposit growth, stable asset quality, and a robust liquidity and capital position, including non-GAAP financial measures Results of Operations Net income for Q1 2025 was $9.6 million, up from $7.8 million in Q1 2024, driven by a $5.6 million increase in net interest income, with the net interest margin expanding 27 basis points year-over-year to 2.51% due to loan growth and purchase accounting accretion Quarterly Performance Summary | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Income | $9.6 million | $7.8 million | | Diluted EPS | $0.31 | $0.24 | | Net Interest Income | $30.2 million | $24.6 million | | Net Interest Margin (FTE) | 2.51% | 2.24% | - The increase in net interest income was primarily due to growth and higher yields in the loan and securities portfolios, along with purchase accounting accretion, partially offset by deposit growth146 - Noninterest expense increased by $2.9 million YoY to $18.1 million, driven by higher salaries and benefits, costs related to the FMCB acquisition, and merger-related expenses of $565,000134165 Financial Condition Total assets grew to $5.14 billion at March 31, 2025, a 1.4% increase from year-end 2024, driven by a $151.6 million (3.9%) rise in gross loans, while total deposits increased by $75.7 million to $4.16 billion - Total assets increased by $70.6 million since year-end 2024, reaching $5.14 billion172 - Gross loans increased by $151.6 million (3.9%) during the quarter to $4.02 billion, primarily from increased loan originations180 - Total deposits grew by $75.7 million (1.9%) to $4.16 billion, supported by growth in core deposits200 Asset Quality Asset quality remains sound, although nonperforming loans increased to $10.3 million, or 0.26% of total loans, at March 31, 2025, from $0.3 million at year-end 2024, with the allowance for credit losses (ACL) at $53.8 million Asset Quality Indicators | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Nonaccrual Loans | $10,290 thousand | $301 thousand | | Nonperforming Loans to Total Loans | 0.26% | 0.01% | | ACL to Total Loans | 1.34% | 1.35% | - Loans rated 'substandard' increased to $31.6 million from $21.8 million at year-end, while 'watch/special mention' loans decreased to $38.3 million from $46.6 million189 Liquidity and Capital The company maintained a strong liquidity position with total on- and off-balance sheet liquidity of $2.36 billion, while shareholders' equity grew by $11.0 million to $469.0 million, and all regulatory capital ratios significantly exceeded 'well-capitalized' thresholds Liquidity Position Summary | Liquidity Source | March 31, 2025 ($ thousands) | December 31, 2024 ($ thousands) | | :--- | :--- | :--- | | Total Primary Liquidity (On-Balance Sheet) | $609,434 | $667,228 | | Total Secondary Liquidity (Off-Balance Sheet) | $1,747,781 | $1,628,898 | | Total Liquidity | $2,357,215 | $2,296,126 | - During Q1 2025, the company repurchased 45,005 shares of common stock at a weighted average price of $13.81 per share211 - As of March 31, 2025, the Company and the Bank met all capital adequacy requirements, with all ratios well above the minimums required to be considered 'well capitalized'214 Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk, managed by the ALM Committee using net interest income simulation modeling, which projects that an immediate +400 basis point rate increase would decrease net interest income by 10.67% over 12 months, while a -400 basis point decrease would increase it by 18.74% - The primary market risk is interest rate risk, which is managed through an ALM Committee using net interest income simulation and hedging strategies229230 Net Interest Income Sensitivity Analysis (12-Month Projection) | Rate Shock (bps) | Forecasted NII Change (%) | | :--- | :--- | | +400 | (10.67)% | | +200 | (5.33)% | | +100 | (2.68)% | | -100 | +3.98% | | -200 | +8.79% | | -400 | +18.74% | Item 4. Controls and Procedures Based on an evaluation as of March 31, 2025, the Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures are effective, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that disclosure controls and procedures were effective as of the end of the quarter238 - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting239 PART II OTHER INFORMATION Item 1. Legal Proceedings The company reports that it is not a party to any material pending legal proceedings, apart from ordinary routine litigation incidental to its business - The Company and its subsidiaries are not subject to any material pending legal proceedings outside of ordinary routine litigation240 Item 1A. Risk Factors There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K filed on March 6, 2025 - No material changes to the risk factors disclosed in the Company's most recent Form 10-K have occurred241 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the first quarter of 2025, the company repurchased a total of 53,981 shares, with 45,005 shares part of the publicly announced stock repurchase program, and approximately $14.7 million remaining available for future repurchases as of March 31, 2025 Issuer Repurchases of Equity Securities (Q1 2025) | Period | Total Shares Purchased | Avg. Price Paid Per Share | Shares Purchased Under Program | | :--- | :--- | :--- | :--- | | Jan 2025 | 225 | $13.43 | 0 | | Feb 2025 | 8,571 | $13.78 | 0 | | Mar 2025 | 45,185 | $13.81 | 45,005 | | Total | 53,981 | $13.00 | 45,005 | - As of March 31, 2025, $14.7 million remained available for repurchase under the company's stock repurchase program, which was extended to August 20, 2025242243 Items 3, 4, 5 & 6. Other Information This section confirms there were no defaults upon senior securities, mine safety disclosures are not applicable, and no directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the quarter, concluding with a list of exhibits filed with the report - There were no defaults upon senior securities during the period246 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the quarter ended March 31, 2025248
BRIDGEWATER BANC(BWBBP) - 2025 Q1 - Quarterly Report