Bridgewater Bancshares, Inc.

Good morning, and welcome to the Bridgewater Bank Share's 2024 Fourth Quarter Earnings Call. My name is Rocco, and I will be your conference operator today. All participants have been placed in listen-only mode. After Bridgewater's opening remarks, there will be a question and answer session. To ask a question, please press star then 1 on your touch-tone phone. If you are using the speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2. Please note that today's call is being recorded. At this time, I would like to introduce Justin Horstman, Vice President of Investor Relations, to begin the conference call. Please go ahead, sir.

Thank you, Rocco, and good morning, everyone. Joining me on today's call are Jerry Bach, Chairman and Chief Executive Officer, Joe Schabowski, President and Chief Financial Officer, Nick Place, Chief Banking Officer, and Jeff Shelberg, Chief Credit Officer. In just a few moments, we will provide an overview of our 2024 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 the call 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 the slide presentation and our 2024 fourth quarter earnings release for more information about risks and uncertainties which may affect us. The information we will provide today is as of and for the quarter ended December 31, 2024, and we undertake no duty to update the information. We may also disclose non-GAAP financial measures during this 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 these disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP. Please see our slide presentation and 2024 fourth quarter earnings release for reconciliations of non-GAAP disclosures to the comparable GAAP measures. I would now like to turn the call over to Bridgewater's Chairman and CEO, Jerry Bach.

Thank you, Justin, and thank you everyone for joining us this morning. We were pleased to finish 2024 with a strong quarter. We saw a robust balance sheet growth, a return to net interest margin expansion, and superb asset quality. In addition, we were excited to close our acquisition of First Minnetonka Citibank, which was completed in mid-December. A quick turnaround, thanks for the efforts of our incredibly talented team. We reported adjusted earnings of 27 cents per share which excludes merger-related expenses. Core deposit growth momentum continued in the fourth quarter as balances increased $211 million or 31% annualized, excluding the deposits acquired from First Minnetonka Citibank. A renewed focus on core deposit growth over the past two years has paid off as our teams continue to expand relationships and onboard new ones. On the loan side, the pickup in demand we saw in the back half of 2024 translated into a rebound in loan growth as balances increased 7% annualized in the fourth quarter. Again, this is excluding the loans acquired from First Minnetonka City Bank. We always aim to align core deposit growth with loan growth over time. In 2024, including the acquisition, we generated total core deposit growth of 22%. which exceeded loan growth of 4%, ultimately reducing our loan-reposit ratio to 95%, the lower end of our range. This is important as we look ahead to 2025. After being more defensive-minded from a growth perspective over the past couple of years due to challenging market conditions and reduced demand, our strong core deposit growth combined with the acquisition of First Minnetonka City Bank have improved our liquidity profile, putting us in a position to be more offensive-minded moving forward, exactly where we wanted to be. As the interest rate environment improved, we were pleased to see net interest margin expand eight basis points in the fourth quarter after remaining steady throughout much of 2024. This contributed to total revenue growth of nearly 9% in the fourth quarter. Asset quality also remained superb. After net charge-offs and non-performing assets briefly ticked higher in the third quarter due to one central business district office loan, both metrics came back down in the fourth quarter when the office property was sold in December. We continue to feel good about the quality of our loan portfolio and the strength of our credit team. Perhaps the most impactful thing that happened this quarter was welcoming the new team members and clients following the closing of First Minnetonka Citibank. The onboarding process was very smooth and overall response from clients and team members has been positive. The lessons we learned and the processes we developed through this transaction position us well as we think about executing on future acquisitions. It is worth noting that we received regulatory approval in just 55 days and closed the transaction in just 107 days following the announcement. A testament to our relationship with our regulators and the efforts taken, to prepare for the deal in advance. Turning to slide four, over the past few years, we've highlighted our ability to consistently grow tangible book value as a key value driver of our strategy. After 31 consecutive quarters of tangible book value growth, we saw a modest decline of 3% in the fourth quarter due to the acquisition, but still saw 5% growth for the year. Our focus on consistently building tangible book value continues to be an important part of our story, and we expect to resume growth in 2025. With that, I'll turn it over to Joe.