Bridgewater Bancshares, Inc.

Good morning, and welcome to the Bridgewater Bank Shares 2022 Fourth Quarter Earnings Call. My name is Joe, and I will be your conference operator today. All participants have been placed in a listen-only mode during the duration of the call. After Bridgewater's opening remarks, there will be a question and answer session. To ask a question, please press star, then 1 on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. And to withdraw a question, please press star and 2. Please note that today's call is being recorded. Now, at this time, I would like to introduce Justin Horstman, Director of Investor Relations, to begin the conference call. Please go ahead.

Thank you, Joe, and good morning, everyone. Joining me on today's call will be Jerry Bock, Chairman, President, and Chief Executive Officer, Joe Chbosky, Chief Financial Officer, Jeff Shelberg, Chief Credit Officer, and Nick Place, Chief Lending Officer. In just a few moments, we will provide an overview of our 2022 fourth quarter financial results. We will be referencing a slide presentation that is available on the investor relations section of Bridgewater's website, investors.bridgewaterbankmn.com. Following our opening remarks, we will open it up for questions. During today's presentation, we may make projections or other forward-looking statements regarding future events or the future financial performance of the company. We caution that such statements are predictions and that actual results may differ materially. Please see the forward-looking statement disclosure in our 2022 fourth quarter earnings release for more information about risks and uncertainties which may affect us. The information we will provide today is as of December 31st, 2022, and we undertake no duty to update the information. We may also disclose non-GAAP financial measures during the call. We believe certain non-GAAP financial measures, in addition to the related GAAP measures, provide meaningful information to investors to help them understand the company's operating performance and trends. AND TO FACILITATE COMPARISONS WITH THE PERFORMANCE OF OUR PEERS. WE CAUTION THAT THESE DISCLOSURES SHOULD NOT BE VIEWED AS A SUBSTITUTE FOR OPERATING RESULTS DETERMINED IN ACCORDANCE WITH GAP. PLEASE SEE OUR 2022 FOURTH QUARTER EARNINGS RELEASE FOR RECONCILIATIONS OF NON-GAP FINANCIAL OR NON-GAP DISCLOSURES TO THE COMPARABLE GAP MEASURES. I WOULD NOW LIKE TO TURN THE CALL OVER TO BRIDGEWATER'S CHAIRMAN, PRESIDENT, AND CEO, JERRY BACH.

THANK YOU, JUSTIN, AND THANK YOU, EVERYONE, FOR JOINING US TODAY FOR OUR FIRST-EVER EARNINGS CALL. We're excited to begin hosting quarterly earnings calls as we think it will be a good way for us to provide more insight into our financial results and share more about what we're seeing across the business. Starting on slide three, we provide an overview of our strong full-year 2022 earnings. Since our IPO in 2018, our results have consistently been highlighted by robust balance sheet growth, a highly efficient business model, and superb asset quality. This was the case again in 2022, as we saw loan growth of 27% and an efficiency ratio of 41.5%, and non-performing assets to total assets of just one basis point, all of which are among the best in the industry. As a result, we had another record earnings and revenue year in 2022. Our sustained growth throughout the year was due to the hard work of our team members as we continue to build and develop client relationships as well as deepening our brand presence and the ongoing market disruption in the Twin Cities. Finally, one of the most important metrics to us is tangible book value, as it is a good measure of shareholder value we are creating. We're able to grow tangible book value by 6.5% in 2022, despite the market value depreciation of the securities portfolios related to rising interest rates, which puts significant pressure on tangible book value across the industry. Turning to slide four, we reported 2022 fourth quarter earnings per share of 45 cents, which was driven by a continuation of our strong growth, efficiency, and asset quality trends, as well as emerging funding pressures, which impacted the net interest margin as interest rates continued to rise. Loan growth remained strong, with balances increasing 22% annualized during the quarter as we continue to get in front of high-quality deals. Given the level of loan growth we've seen that we've been able to generate during the year and where we are in the interest rate cycle, it's not surprising to us that we've started to run up against funding pressures. While our teams continue to work to bring in core deposits, we have supplemented these with higher cost wholesale funding and borrowings to support our loan growth. Coupled with increased competition on interest rates to retain current deposit clients, we saw our net interest margin decline to 3.16% in the fourth quarter. Joe will provide more color on the margin, how we plan to manage the balance sheet as we head into 2023. We continue to operate very efficiently during the quarter with an efficiency ratio of 44%, even as we invest in our people, technology, and overall scalability of the business. Finally, asset quality was superb once again, as NPA has remained extremely low levels and we saw no net charge-offs in the fourth quarter. In fact, we finished 2022 with net recoveries for the year. As we head into a more uncertain environment in 2023, we're taking steps to proactively assess our portfolio. But at this point, we're really not seeing any early warning signs. With that, I will turn it over to Joe Chbosky.