Bridgewater Bancshares, Inc.

Good morning and welcome to the Bridgewater BankShares 2025 second quarter earnings call. My name is Chad 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 one on your touchtone phone. If you're using a speaker phone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. 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.

Thank you, Chad, and good morning, everyone. Joining me on today's call are Jerry Bach, Chairman and Chief Executive Officer, Joe Chabowski, President and Chief Financial Officer, Nick Place, Chief Banking Officer, and Jeff Schellberg, Chief Credit Officer. In just a few moments, we will provide an overview of our 2025 second quarter financial results. We will be referencing a slide presentation that is available on the investor relations section of Bridgewater's website, .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 2025 second 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 June 30th, 2025, and we undertake no duty to update the information. We may also disclose non-GAP financial measures during this call. We believe certain non-GAP financial measures, in addition to the related GAP 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 slide presentation and 2025 second quarter earnings release for reconciliations of non-GAP disclosures to the comparable GAP 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. Bridgewater reported another strong quarter highlighted by impressive revenue and balance sheet growth trends, well-controlled expenses, and strong asset quality, all driving the consistent tangible book value growth that we are known for. We have been very pleased with the revenue growth trends we have seen over the past several quarters and especially here in the second quarter. As expected, our loan portfolio continues to reprice higher in the current rate environment, which helped net interest margin expand by 11 basis points. Meanwhile, the momentum we have seen in core deposit growth over the past year has allowed us to ramp up loan growth to more normalized levels, including a .5% annualized rate in the second quarter. We continue to see opportunities across CRE, multifamily, CNI, and construction. As a result, net interest income grew 2.2 million during the quarter. But it wasn't just net interest income that drove total revenue growth. In fact, we generated record fee income, even when excluding gain on sale securities and flood prepayment income, both of which were one time in nature. We brought in nearly a million dollars of swap fee income during the quarter and saw over $200,000 of investment advisory fees related to the platform we acquired from First Minnetonka Citibank. This growth in fee income has allowed us to enhance our overall revenue diversification. As the quality remains strong, as we saw another quarter with no net charge-offs, while non-performing assets remain steady at 0.19%, about half of peer levels. We didn't see a modest uptick in classified loans, which Jeff will talk more about in a few minutes. But we remain very pleased with the overall quality of our loan portfolio, which has a long track record of being among the best in the industry. When we pull all of these results together, we produce another quarter of tangible book value per share growth, as you can see on slide four. After a rare quarterly decline in the fourth quarter of 24, due to our acquisition of First Minnetonka Citibank, tangible book value per share has resumed its consistent growth trend in 2025, up nearly 11% annualized year to date. In addition, we opportunistically repurchased $1.6 million of common stock early in the second quarter. Before I turn it over to Joel, I want to take a moment to talk about a few other initiatives we have going on. First, market disruption in the Twin Cities has returned following Old National's recent acquisition of Bremer Bank. Historically, this type of M&A disruption has been a significant contributor to Bridgewater's growth, both through talent and client acquisition. We don't expect this wave to be any different. We are actively having conversations and marketing the bank to ensure we are viewed as a bank of choice for those looking to continue banking local. We have already seen solid traction in this area. We have two other long-term initiatives that we expect to complete in the third quarter. The first is the rollout of our enhanced retail and small business online banking platform. The second is the systems conversion of our First Minnetonka Citibank acquisition, which is right on track. It's also worth mentioning the strong deposit retention we have seen as part of the acquisition, as current balances remain within 3% of acquired balances. I'm so appreciative of the various teams across the bank that have been working diligently to get these projects to the finish line. Lastly, one of our biggest differentiators for Bridgewater is our unconventional culture. While I often don't feel like our culture gets enough credit for the impact that has on the overall success of our business, we were pleased to be, again, recognized as a 2025 top workplace by the Star Tribune. With that, I'll turn it over to Joe.