Bridgewater Bank Annual Report

As of and for the year ended December 31,

(dollars in thousands, except share data)

2018

2017

2016

2015

2014

Efficiency Ratio Noninterest Expense . . . . . . . . . . . . . . . . . . . $ 31,562 $ 25,496 $ 20,168 $ 14,817 $ 11,983 Less: Amortization of Intangible Assets . . . (191) (191) (104) — — Adjusted Noninterest Expense . . . . . . . . $ 31,371 $ 25,305 $ 20,064 $ 14,817 $ 11,983 Net Interest Income . . . . . . . . . . . . . . . . . . . . 64,738 54,173 42,118 32,695 28,799 Noninterest Income . . . . . . . . . . . . . . . . . . . . 2,543 2,536 2,567 1,872 975 Less: (Gain) Loss on Sales of Securities . . . 125 250 (830) (574) (270) Adjusted Operating Revenue. . . . . . . . . . $ 67,406 $ 56,959 $ 43,855 $ 33,993 $ 29,504 Efficiency Ratio . . . . . . . . . . . . . . . . . . . . 46.5 % 44.4 % 45.8 % 43.6 % 40.6 % Adjusted Efficiency Ratio Noninterest Expense . . . . . . . . . . . . . . . . . . . $ 31,562 $ 25,496 $ 20,168 $ 14,817 $ 11,983 Less: Amortization of Tax Credit Investments . . . . . . . . . . . . . . . . . . . . . . . . . (3,293) (1,916) — — — Less: Amortization of Intangible Assets . . . (191) (191) (104) — — Adjusted Noninterest Expense . . . . . . . . $ 28,078 $ 23,389 $ 20,064 $ 14,817 $ 11,983 Net Interest Income . . . . . . . . . . . . . . . . . . . . 64,738 54,173 42,118 32,695 28,799 Noninterest Income . . . . . . . . . . . . . . . . . . . . 2,543 2,536 2,567 1,872 975 Less: (Gain) Loss on Sales of Securities . . . 125 250 (830) (574) (270) Adjusted Operating Revenue. . . . . . . . . . $ 67,406 $ 56,959 $ 43,855 $ 33,993 $ 29,504 Adjusted Efficiency Ratio . . . . . . . . . . . . . 41.7 % 41.1 % 45.8 43.6 40.6 Tangible Common Equity and Tangible Common Equity/Tangible Assets Common Equity . . . . . . . . . . . . . . . . . . . . . . $ 220,998 $ 137,162 $ 115,366 $ 80,178 $ 53,738 Less: Intangible Assets . . . . . . . . . . . . . . . . . (3,678) (3,869) (4,060) — — Tangible Common Equity . . . . . . . . . . . . 217,320 133,293 111,306 80,178 53,738 Total Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 1,973,741 1,616,612 1,260,394 928,686 702,175 Less: Intangible Assets . . . . . . . . . . . . . . . . . (3,678) (3,869) (4,060) — — Tangible Assets . . . . . . . . . . . . . . . . . . . . . $ 1,970,063 $ 1,612,743 $ 1,256,334 $ 928,686 $ 702,175 Tangible Common Equity/Tangible Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.03 % 8.26 % 8.86 % 8.63 % 7.65 % Tangible Book Value Per Share Book Value Per Common Share . . . . . . . . . $ 7.34 $ 5.56 $ 4.69 $ 4.05 $ 3.36 Less: Effects of Intangible Assets . . . . . . . . (0.12) (0.16) (0.17) — — Tangible Book Value Per Common Share . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7.22 $ 5.40 $ 4.52 $ 4.05 $ 3.36 — — — Average Tangible Common Equity — — — Average Common Equity . . . . . . . . . . . . . . . $ 194,083 $ 128,123 $ 102,588 $ 63,981 $ 48,443 Less: Effects of Average Intangible Assets . (3,772) (3,956) (2,701) — — Average Tangible Common Equity . . . . . $ 190,311 $ 124,167 $ 99,887 $ 63,981 $ 48,443 Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As a financial institution, the Company’s primary market risk is interest rate risk, which is defined as the risk of loss of net interest income or net interest margin because of changes in interest rates. The Company continually seeks to

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