Bridgewater Bancshares, Inc._2023 Annual Report

at December 31, 2023 and 2022 were $188,000 and $288,000, respectively. Other intangible assets are amortized over their estimated useful life. Deposits The principal sources of funds for the Company are deposits, consisting of demand deposits, money market accounts, savings accounts, and certificates of deposit. The following table presents the dollar and percentage composition of the deposit portfolio, by category, at the dates indicated:

December 31, 2023

December 31, 2022

December 31, 2021

December 31, 2020

December 31, 2019

(dollars in thousands)

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Noninterest Bearing Transaction Deposits . $ 756,964

20.4 % $ 884,272

25.9 % $ 875,084

29.7 % $ 671,903

26.9 % $ 447,509

24.5 %

Interest Bearing Transaction Deposits . Savings and Money Market Deposits . . . . Time Deposits. . . . . . Brokered Deposits. . .

692,801

18.7

451,992

13.2

544,789

18.5

366,290

14.6

264,627

14.5

935,091 300,651 1,024,441

25.2 8.1 27.6

1,031,873 272,253 776,153

30.2 8.0 22.7

863,567 293,474 369,323

29.3 10.0 12.5

657,617 353,543 452,283

26.3 14.1 18.1

516,785 360,027 234,362

28.3 19.8 12.9

Total Deposits . . . $ 3,709,948 100.0 % $ 3,416,543 100.0 % $ 2,946,237 100.0 % $ 2,501,636

100.0 % $ 1,823,310

100.0 %

Total deposits at December 31, 2023 were $3.71 billion, an increase of $293.4 million, or 8.6%, compared to total deposits of $3.42 billion at December 31, 2022. The growth in deposits was primarily due to an increase in interest bearing transaction deposits and brokered deposits. Brokered deposits continue to be used as a supplemental funding source, as needed, to support loan portfolio growth. The Company relies on increasing the deposit base to fund loans and other asset growth. The Company is in a highly competitive market and competes for local deposits by offering attractive products with competitive rates. The Company expects to have a higher average cost of funds for local deposits compared to competitor banks due to the lack of an extensive branch network. The Company’s strategy is to offset the higher cost of funding with a lower level of operating expense. When appropriate, the Company utilizes alternative funding sources such as brokered deposits. The brokered deposit market provides flexibility in structure, optionality and efficiency not afforded in traditional retail deposit channels. At December 31, 2023, total brokered deposits were $1.02 billion, an increase of $248.3 million, compared to total brokered deposits of $776.2 million at December 31, 2022. The following table presents the average balance and average rate paid on each of the following deposit categories for the years ended December 31, 2023, 2022, and 2021:

As of and for the Year Ended December 31, 2023

As of and for the Year Ended December 31, 2022

As of and for the Year Ended December 31, 2021

Average Balance

Average

Average Balance

Average

Average Balance

Average

(dollars in thousands)

Rate

Rate

Rate

Noninterest Bearing Transaction Deposits ... $ 768,428 Interest Bearing Transaction Deposits . . . . . . . 650,028 Savings and Money Market Deposits ....... 922,799 Time Deposits < $250,000 ................ 179,242 Time Deposits > $250,000 ................ 83,919 BrokeredDeposits....................... 909,662 TotalDeposits......................... $3,514,078

— % $ 910,490

— %$ 764,087

— %

3.60 3.32 2.33 3.45 3.84

524,968 963,096 215,419 69,449 449,095

0.83 0.95 1.00 1.61 1.48

441,528 773,779 255,808 67,830 406,863

0.46 0.48 1.24 1.37 0.97

2.73 % $ 3,132,517

0.75 %$ 2,709,895

0.51 %

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