Bridgewater Bancshares Inc. Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Bridgewater Bancshares Inc. on August 17, 2021. The filing reports the completion of a firm commitment underwritten public offering of preferred stock and the establishment of a new series of preferred stock.
Key Financial Metrics and Capital Structure
- Offering Size: 2,400,000 Depositary Shares, each representing a 1/100th interest in a share of 5.875% Non-Cumulative Perpetual Preferred Stock, Series A.
- Liquidation Preference: $2,500 per share of Series A Preferred Stock (equivalent to $25.00 per Depositary Share).
- Net Proceeds: Approximately $57.8 million after deducting underwriting discounts and estimated offering expenses.
- Over-Allotment Option: Underwriters hold a 30-day option to purchase up to 360,000 additional Depositary Shares, which would increase total net proceeds to approximately $66.5 million if fully exercised.
- Use of Proceeds: General corporate purposes, including support for organic growth plans, support for bank-level capital ratios, and possible redemption or repurchase of currently outstanding indebtedness.
Note: This filing does not provide specific values for revenue, profit, cash flow, operating margins, or total debt levels as it focuses on a capital raising event rather than periodic financial results.
Material Changes and Corporate Actions
- Entry into Material Definitive Agreement: On August 11, 2021, the Company entered into an Underwriting Agreement with D.A. Davidson & Co. as representative of the underwriters.
- Creation of New Security: The Company established the "5.875% Non-Cumulative Perpetual Preferred Stock, Series A." This stock ranks senior to common stock and other junior stock regarding dividend and liquidation rights.
- Dividend Restrictions: The Company is restricted from declaring or paying dividends on, or redeeming/purchasing, common stock or other junior stock if full dividends on the Series A Preferred Stock have not been declared and paid or set aside for the most recently completed dividend period.
- Amendments to Articles: A Statement of Designation was filed with the Minnesota Secretary of State on August 16, 2021, creating the Series A Preferred Stock with a designated number of 27,600 shares.
- Closing: The Offering closed on August 17, 2021, with 24,000 shares of Series A Preferred Stock issued and deposited with Computershare Inc. and Computershare Trust Company, N.A.
Outlook, Risks, and Management Commentary
Management intends to utilize the net proceeds to bolster capital ratios and fund organic growth. The filing notes that the underwriters and their affiliates are full-service financial institutions that may engage in various activities with the Company, including securities trading and investment banking, for which they may receive customary fees. The filing incorporates by reference the full text of the Underwriting Agreement, Statement of Designation, and Deposit Agreement for detailed terms and risks.
Key Facts for Investor Verification
- Verify the final exercise of the 30-day over-allotment option to confirm if total proceeds reached $66.5 million.
- Review the Statement of Designation (Exhibit 3.1) for specific redemption rights and call features of the Series A Preferred Stock.
- Confirm the impact of the $57.8 million+ capital raise on the Company's regulatory capital ratios in subsequent quarterly filings.
- Monitor future dividend declarations to ensure compliance with the restrictions on common stock dividends imposed by the new preferred stock terms.