Bridgewater Bancshares, Inc. Annual Report

yield curve of 100 and 200 basis points and immediate, parallel shifts upward of the yield curve of 100, 200, 300 and 400 basis points. In the current interest rate environment, a downward shift of the yield curve of 300 and 400 basis points does not provide the Company with meaningful results and thus is not presented.

Change (basis points) in Interest Rates Forecasted Net Percentage Change (12-Month Projection) Interest Income from Base +400 $ 80,558 13.47 % +300 78,064 9.95 +200 75,591 6.47 +100 73,113 2.98 0 70,996 — −100 68,685 (3.26) −200 67,127 (5.45)

The table above indicates that as of December 31, 2019, in the event of an immediate and sustained 400 basis point increase in interest rates, we would experience a 13.47% increase in net interest income. In the event of an immediate 200 basis point decrease in interest rates, we would experience a 5.45% decrease in net interest income. The results of this simulation analysis are hypothetical, and a variety of factors might cause actual results to differ substantially from what is depicted. For example, if the timing and magnitude of interest rate changes differ from those projected, our net interest income might vary significantly. Non-parallel yield curve shifts such as a flattening or steepening of the yield curve or changes in interest rate spreads would also cause our net interest income to be different from that depicted. An increasing interest rate environment could reduce projected net interest income if deposits and other short-term liabilities re-price faster than expected or re-price faster than our assets. Actual results could differ from those projected if we grow assets and liabilities faster or slower than estimated, if we experience a net outflow of deposit liabilities or if our mix of assets and liabilities otherwise changes. Actual results could also differ from those projected if we experience substantially different repayment speeds in our loan portfolio than those assumed in the simulation model. Finally, these simulation results do not contemplate all the actions that we may undertake in response to potential or actual changes in interest rates, such as changes to our loan, investment, deposit, or funding strategies.

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