Third Quarter 2025 Highlights
- Net income of $11.6 million, or $0.38 per diluted common share; adjusted net income of $12.0 million, or $0.39 per diluted common share.(1)
- Net interest income increased $1.6 million, or 5.1%, from the second quarter of 2025.
- Net interest margin (on a fully tax-equivalent basis) of 2.63% for the third quarter of 2025, an increase of one basis point from the second quarter of 2025.
- Gross loans increased by $68.8 million, or 6.6% annualized, from the second quarter of 2025.
- Total deposits increased by $56.0 million, or 5.2% annualized, from the second quarter of 2025; core deposits(2) increased by $92.1 million, or 11.5% annualized, from the second quarter of 2025.
- Efficiency ratio(1) of 54.7%, up from 52.6% for the second quarter of 2025; adjusted efficiency ratio(1) of 53.2%, up from 51.5% for the second quarter of 2025.
- Annualized net loan charge-offs as a percentage of average loans of 0.03%, compared to 0.00% for the second quarter of 2025.
- Nonperforming assets to total assets of 0.19% at September 30, 2025, stable with 0.19% at June 30, 2025.
- Tangible book value per share(1) of $14.93 at September 30, 2025, an increase of 20.0% annualized, from the second quarter of 2025.
- Successfully completed the systems conversion of the First Minnetonka City Bank (“FMCB”) acquisition.
- Planned branch closure in December 2025 of one of the two branches acquired from FMCB in 2024.
(1) Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for further details.
(2) Core deposits are defined as total deposits less brokered deposits and certificates of deposit greater than $250,000.
ST. LOUIS PARK, Minn.–(BUSINESS WIRE)–Bridgewater Bancshares, Inc. (Nasdaq: BWB) (“the Company”), the parent company of Bridgewater Bank (“the Bank”), today announced net income of $11.6 million for the third quarter of 2025, compared to $11.5 million for the second quarter of 2025, and $8.7 million for the third quarter of 2024. Earnings per diluted common share were $0.38 for the third quarter of 2025, compared to $0.38 for the second quarter of 2025, and $0.27 for the third quarter of 2024. Adjusted net income, a non-GAAP financial measure, was $12.0 million for the third quarter of 2025, compared to $11.3 million for the second quarter of 2025, and $8.9 million for the third quarter of 2024. Adjusted earnings per diluted common share, a non-GAAP financial measure, were $0.39 for the third quarter of 2025, compared to $0.37 for the second quarter of 2025, and $0.28 for the third quarter of 2024.
“Bridgewater produced another quarter of strong net interest income growth as we continued to execute on our strategic priority of gaining both loan and deposit market share,” said Chairman and Chief Executive Officer, Jerry Baack. “Robust core deposit growth supported strong loan growth during the quarter as our loan pipelines remained near three-year highs, we continued to gain traction in the affordable housing space, and talent and client opportunities from M&A disruption in the Twin Cities remained plentiful. Meanwhile, our liability-sensitive balance sheet remains well positioned to benefit from the September interest rate cut and a rates-down environment.
“The third quarter was also highlighted by strong asset quality, consistent tangible book value per share growth, the launch of a new retail and small business online banking platform, and the successful systems conversion of our recent acquisition of First Minnetonka City Bank. With a favorable outlook for continued balance sheet growth and net interest margin expansion from here, we are poised for improved profitability trends moving forward.”
Key Financial Measures
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As of and for the Three Months Ended |
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As of and for the Nine Months Ended |
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September 30, |
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June 30, |
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September 30, |
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September 30, |
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September 30, |
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2025 |
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2025 |
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2024 |
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2025 |
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2024 |
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Per Common Share Data |
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Basic Earnings Per Share |
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$ |
0.38 |
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$ |
0.38 |
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$ |
0.28 |
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$ |
1.08 |
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$ |
0.79 |
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Diluted Earnings Per Share |
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0.38 |
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0.38 |
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0.27 |
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1.06 |
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0.77 |
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Adjusted Diluted Earnings Per Share (1) |
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0.39 |
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0.37 |
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0.28 |
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1.08 |
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0.77 |
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Book Value Per Share |
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15.62 |
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14.92 |
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14.06 |
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15.62 |
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14.06 |
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Tangible Book Value Per Share (1) |
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14.93 |
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14.21 |
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13.96 |
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14.93 |
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13.96 |
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Financial Ratios |
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Return on Average Assets (2) |
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0.86 |
% |
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0.90 |
% |
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0.73 |
% |
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0.84 |
% |
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0.71 |
% |
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Pre-Provision Net Revenue Return on Average Assets (1)(2) |
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1.19 |
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1.27 |
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0.96 |
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1.20 |
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0.95 |
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Return on Average Shareholders’ Equity (2) |
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9.47 |
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9.80 |
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7.79 |
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9.23 |
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7.55 |
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Return on Average Tangible Common Equity (1)(2) |
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10.50 |
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10.93 |
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8.16 |
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10.23 |
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7.87 |
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Net Interest Margin (3) |
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2.63 |
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2.62 |
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2.24 |
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2.59 |
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2.24 |
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Core Net Interest Margin (1)(3) |
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2.52 |
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2.49 |
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2.16 |
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2.46 |
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2.17 |
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Cost of Total Deposits |
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3.19 |
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3.16 |
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3.58 |
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3.18 |
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3.45 |
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Cost of Funds |
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3.25 |
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3.19 |
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3.54 |
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3.20 |
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3.46 |
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Efficiency Ratio (1) |
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54.7 |
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52.6 |
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58.0 |
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54.2 |
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58.3 |
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Noninterest Expense to Average Assets (2) |
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1.47 |
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1.47 |
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1.33 |
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1.46 |
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1.34 |
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Tangible Common Equity to Tangible Assets (1) |
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7.71 |
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7.40 |
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8.17 |
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7.71 |
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8.17 |
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Common Equity Tier 1 Risk-based Capital Ratio (Consolidated) (4) |
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9.08 |
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9.03 |
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9.79 |
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9.08 |
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9.79 |
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Adjusted Financial Ratios (1) |
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Adjusted Return on Average Assets (2) |
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0.88 |
% |
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0.88 |
% |
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0.75 |
% |
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0.86 |
% |
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0.70 |
% |
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Adjusted Pre-Provision Net Revenue Return on Average Assets (2) |
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1.23 |
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1.31 |
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0.98 |
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1.24 |
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0.96 |
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Adjusted Return on Average Shareholders’ Equity (2) |
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9.77 |
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9.64 |
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7.96 |
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9.41 |
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7.51 |
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Adjusted Return on Average Tangible Common Equity (2) |
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10.86 |
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10.74 |
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8.36 |
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10.44 |
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7.82 |
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Adjusted Efficiency Ratio |
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53.2 |
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51.5 |
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57.2 |
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52.8 |
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58.0 |
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Adjusted Noninterest Expense to Average Assets (2) |
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1.43 |
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1.43 |
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1.31 |
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1.42 |
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1.33 |
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Balance Sheet and Asset Quality (dollars in thousands) |
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Total Assets |
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$ |
5,359,994 |
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$ |
5,296,673 |
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$ |
4,691,517 |
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$ |
5,359,994 |
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$ |
4,691,517 |
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Total Loans, Gross |
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4,214,554 |
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4,145,799 |
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3,685,590 |
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4,214,554 |
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3,685,590 |
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Deposits |
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4,292,764 |
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4,236,742 |
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3,747,442 |
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4,292,764 |
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3,747,442 |
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Loan to Deposit Ratio |
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98.2 |
% |
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97.9 |
% |
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98.3 |
% |
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98.2 |
% |
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98.3 |
% |
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Net Loan Charge-Offs to Average Loans (2) |
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0.03 |
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0.00 |
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0.10 |
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0.01 |
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0.03 |
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Nonperforming Assets to Total Assets (5) |
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0.19 |
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0.19 |
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0.19 |
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0.19 |
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0.19 |
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Allowance for Credit Losses to Total Loans |
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1.34 |
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1.35 |
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1.38 |
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1.34 |
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1.38 |
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| ____________________________ | ||
| (1) |
Represents a non-GAAP financial measure. See “Non-GAAP Financial Measures” for further details. |
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| (2) |
Annualized. |
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| (3) |
Amounts calculated on a tax-equivalent basis using the statutory federal tax rate of 21%. |
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| (4) |
Preliminary data. Current period subject to change prior to filings with applicable regulatory agencies. |
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| (5) |
Nonperforming assets are defined as nonaccrual loans plus 90 days past due and still accruing plus foreclosed assets. |
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Income Statement
Net Interest Margin and Net Interest Income
Net interest margin (on a fully tax-equivalent basis) for the third quarter of 2025 was 2.63%, a one basis point increase from 2.62% in the second quarter of 2025, and a 39 basis point increase from 2.24% in the third quarter of 2024. Core net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure which excludes the impact of loan fees and purchase accounting accretion attributable to the acquisition of FMCB, was 2.52% for the third quarter of 2025, a three basis point increase from 2.49% in the second quarter of 2025, and a 36 basis point increase from 2.16% in the third quarter of 2024.
- Net interest margin expanded to 2.63% in the third quarter of 2025 primarily due to higher earning asset yields, offset partially by the subordinated debt refinance in the second quarter of 2025, higher cash balances, and declining purchase accounting accretion income.
Net interest income was $34.1 million for the third quarter of 2025, an increase of $1.6 million from $32.5 million in the second quarter of 2025, and an increase of $8.5 million from $25.6 million in the third quarter of 2024.
- The linked-quarter increase in net interest income was primarily due to growth in the loan and securities portfolios, offset partially by higher deposit balances.
- The year-over-year increase in net interest income was primarily due to growth in the loan portfolio and purchase accounting accretion, offset partially by higher deposit balances.
Interest income was $73.6 million for the third quarter of 2025, an increase of $4.4 million from $69.2 million in the second quarter of 2025, and an increase of $10.6 million from $63.0 million in the third quarter of 2024.
- The yield on interest earning assets (on a fully tax-equivalent basis) was 5.63% in the third quarter of 2025, compared to 5.56% in the second quarter of 2025, and 5.48% in the third quarter of 2024.
- The linked-quarter increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios.
- The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan and securities portfolios and purchase accounting accretion.
- The aggregate loan yield increased to 5.79% in the third quarter of 2025, five basis points higher than 5.74% in the second quarter of 2025, and 22 basis points higher than 5.57% in the third quarter of 2024.
- Core loan yield, a non-GAAP financial measure, increased to 5.66% in the third quarter of 2025, seven basis points higher than 5.59% in the second quarter of 2025, and 19 basis points higher than 5.47% in the third quarter of 2024.
A summary of interest and fees recognized on loans for the periods indicated is as follows:
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Three Months Ended |
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September 30, 2025 |
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June 30, 2025 |
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March 31, 2025 |
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December 31, 2024 |
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September 30, 2024 |
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Interest |
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5.66 |
% |
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5.59 |
% |
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5.50 |
% |
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5.47 |
% |
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5.47 |
% |
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Fees |
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0.09 |
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0.11 |
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0.07 |
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0.08 |
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0.10 |
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Accretion |
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0.04 |
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0.04 |
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0.04 |
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— |
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— |
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Yield on Loans |
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5.79 |
% |
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5.74 |
% |
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5.61 |
% |
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5.55 |
% |
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5.57 |
% |
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Interest expense was $39.5 million for the third quarter of 2025, an increase of $2.8 million from $36.7 million in the second quarter of 2025, and an increase of $2.1 million from $37.4 million in the third quarter of 2024.
- The cost of interest bearing liabilities was 3.89% in the third quarter of 2025, compared to 3.83% in the second quarter of 2025, and 4.27% in the third quarter of 2024.
- The linked-quarter increase in the cost of interest bearing liabilities was primarily due to higher interest bearing deposit balances and higher balances and rates paid on subordinated debentures following the payoff of $50.0 million of outstanding subordinated notes and the issuance of $80.0 million of new subordinated notes at the end of the second quarter.
- The year-over-year decrease in the cost of interest bearing liabilities was primarily due to lower interest bearing deposit costs, offset partially by higher balances and rates paid on FHLB advances and subordinated debentures.
Interest expense on deposits was $34.6 million for the third quarter of 2025, an increase of $2.1 million from $32.5 million in the second quarter of 2025, and an increase of $428,000 from $34.2 million in the third quarter of 2024.
- The cost of total deposits was 3.19% in the third quarter of 2025, three basis points higher than 3.16% in the second quarter of 2025, and 39 basis points lower than 3.58% in the third quarter of 2024.
- The linked-quarter increase in the cost of total deposits was primarily due to time and brokered deposits repricing in the higher rate environment.
- The year-over-year decrease in the cost of total deposits was primarily due to lower rates paid on deposits following interest rate cuts in 2024 and 2025 and decreases in average brokered deposit balances.
Provision for Credit Losses
The provision for credit losses on loans and leases was $900,000 for the third quarter of 2025, compared to $2.0 million for the second quarter of 2025 and $-0- for the third quarter of 2024.
- The provision for credit losses on loans recorded in the third quarter of 2025 was primarily attributable to growth in the loan portfolio and an increase in specific reserves for loans individually evaluated.
- The allowance for credit losses on loans to total loans was 1.34% at September 30, 2025, compared to 1.35% at June 30, 2025, and 1.38% at September 30, 2024.
The provision for credit losses for off-balance sheet credit exposures was $200,000 for the third quarter of 2025, and $-0- for each of the second quarter of 2025 and the third quarter of 2024.
- A provision was recorded during the third quarter of 2025 due to an increase in the volume of newly originated loans with unfunded commitments in the commercial and construction and land development segments.
Noninterest Income
Noninterest income was $2.1 million for the third quarter of 2025, a decrease of $1.6 million from $3.6 million for the second quarter of 2025, and an increase of $539,000 from $1.5 million for the third quarter of 2024.
- The linked-quarter decrease was primarily due to lower swap fees, gains on sales of securities, and FHLB prepayment income.
- The year-over-year increase was primarily due to higher investment advisory fees and customer service fees.
Noninterest Expense
Noninterest expense was $20.0 million for the third quarter of 2025, an increase of $1.0 million from $18.9 million for the second quarter of 2025 and an increase of $4.2 million from $15.8 million for the third quarter of 2024.
- Noninterest expense for the third quarter of 2025 included $530,000 of merger-related expenses associated with the acquisition of FMCB, compared to $540,000 for the second quarter of 2025.
- The linked-quarter increase was primarily due to increases in salaries and employee benefits, marketing and advertising, and professional and consulting fees.
- The year-over-year increase was primarily attributable to increases in salaries and employee benefits, marketing and advertising, operating costs related to the FMCB acquisition, and merger-related expenses.
- The efficiency ratio, a non-GAAP financial measure, was 54.7% for the third quarter of 2025, compared to 52.6% for the second quarter of 2025, and 58.0% for the third quarter of 2024.
- The Company had 325 full-time equivalent employees at September 30, 2025, compared to 308 at June 30, 2025, and 265 at September 30, 2024. The year-over-year increase was largely driven by the addition of employees from the acquisition of FMCB and the hiring of key talent across the organization.
Income Taxes
The effective combined federal and state income tax rate was 23.2% for the third quarter of 2025, compared to 23.9% for the second quarter of 2025, and 23.6% for the third quarter of 2024.
Balance Sheet
Loans
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(dollars in thousands) |
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September 30, 2025 |
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June 30, 2025 |
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March 31, 2025 |
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December 31, 2024 |
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September 30, 2024 |
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Commercial |
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$ |
533,476 |
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$ |
549,259 |
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$ |
528,801 |
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$ |
497,662 |
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$ |
493,403 |
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Leases |
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43,186 |
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44,817 |
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43,958 |
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44,291 |
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— |
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Construction and Land Development |
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159,991 |
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136,438 |
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128,073 |
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97,255 |
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118,596 |
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1-4 Family Construction |
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41,739 |
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39,095 |
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39,438 |
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41,961 |
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45,822 |
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Real Estate Mortgage: |
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1 – 4 Family Mortgage |
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487,297 |
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474,269 |
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479,461 |
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474,383 |
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421,179 |
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Multifamily |
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1,578,223 |
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1,555,731 |
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1,534,747 |
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1,425,610 |
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1,379,814 |
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CRE Owner Occupied |
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192,966 |
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192,837 |
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196,080 |
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|
191,248 |
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|
182,239 |
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CRE Nonowner Occupied |
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1,158,622 |
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1,137,007 |
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1,055,157 |
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1,083,108 |
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1,032,142 |
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Total Real Estate Mortgage Loans |
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3,417,108 |
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3,359,844 |
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|
|
3,265,445 |
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3,174,349 |
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|
3,015,374 |
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Consumer and Other |
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|
19,054 |
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|
|
16,346 |
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|
|
14,361 |
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|
|
12,996 |
|
|
|
12,395 |
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|
Total Loans, Gross |
|
|
4,214,554 |
|
|
|
4,145,799 |
|
|
|
4,020,076 |
|
|
|
3,868,514 |
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3,685,590 |
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Allowance for Credit Losses on Loans |
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|
(56,390 |
) |
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|
(55,765 |
) |
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|
(53,766 |
) |
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|
(52,277 |
) |
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|
(51,018 |
) |
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Net Deferred Loan Fees |
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|
(8,282 |
) |
|
|
(7,629 |
) |
|
|
(7,218 |
) |
|
|
(6,801 |
) |
|
|
(5,705 |
) |
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Total Loans, Net |
|
$ |
4,149,882 |
|
|
$ |
4,082,405 |
|
|
$ |
3,959,092 |
|
|
$ |
3,809,436 |
|
|
$ |
3,628,867 |
|
|
Total gross loans at September 30, 2025 were $4.21 billion, an increase of $68.8 million, or 6.6% annualized, over total gross loans of $4.15 billion at June 30, 2025, and an increase of $529.0 million, or 14.4%, over total gross loans of $3.69 billion at September 30, 2024.
- The increase in the loan portfolio during the third quarter of 2025 was due to strong loan originations and lower loan payoffs and paydowns.
Deposits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
|
September 30, 2025 |
|
June 30, 2025 |
|
March 31, 2025 |
|
December 31, 2024 |
|
September 30, 2024 |
|
|||||
|
Noninterest Bearing Transaction Deposits |
|
$ |
822,632 |
|
$ |
787,868 |
|
$ |
791,528 |
|
$ |
800,763 |
|
$ |
713,309 |
|
|
Interest Bearing Transaction Deposits |
|
|
860,774 |
|
|
791,748 |
|
|
840,378 |
|
|
862,242 |
|
|
805,756 |
|
|
Savings and Money Market Deposits |
|
|
1,428,726 |
|
|
1,441,694 |
|
|
1,372,191 |
|
|
1,259,503 |
|
|
980,345 |
|
|
Time Deposits |
|
|
346,214 |
|
|
344,882 |
|
|
326,821 |
|
|
338,506 |
|
|
347,080 |
|
|
Brokered Deposits |
|
|
834,418 |
|
|
870,550 |
|
|
831,539 |
|
|
825,753 |
|
|
900,952 |
|
|
Total Deposits |
|
$ |
4,292,764 |
|
$ |
4,236,742 |
|
$ |
4,162,457 |
|
$ |
4,086,767 |
|
$ |
3,747,442 |
|
Total deposits at September 30, 2025 were $4.29 billion, an increase of $56.0 million, or 5.2% annualized, over total deposits of $4.24 billion at June 30, 2025, and an increase of $545.3 million, or 14.6%, over total deposits of $3.75 billion at September 30, 2024.
- Core deposits, defined as total deposits excluding brokered deposits and certificates of deposits greater than $250,000, increased $92.1 million, or 11.5% annualized, from the second quarter of 2025, and increased $600.2 million, or 22.4%, from the third quarter of 2024.
Asset Quality
Overall asset quality remained strong due to the Company’s measured risk selection, consistent underwriting standards, active credit oversight, and experienced lending and credit teams.
- Annualized net charge-offs as a percentage of average loans were 0.03%, compared to 0.00% for the second quarter of 2025, and 0.10% for the third quarter of 2024.
- At September 30, 2025, the Company’s nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $10.0 million, or 0.19% of total assets, compared to $10.3 million, or 0.19% of total assets, at June 30, 2025, and $8.8 million, or 0.19% of total assets, at September 30, 2024.
- Loans with potential weaknesses that warranted a watch/special mention risk rating at September 30, 2025 totaled $40.6 million, compared to $53.3 million at June 30, 2025, and $32.0 million at September 30, 2024.
- Loans that warranted a substandard risk rating at September 30, 2025 totaled $58.1 million, compared to $45.0 million at June 30, 2025, and $31.6 million at September 30, 2024.
- The linked-quarter increase in loans that warranted a substandard risk rating was primarily due to one loan that migrated from special mention to substandard.
Capital
Total shareholders’ equity at September 30, 2025 was $497.5 million, an increase of $21.2 million, or 17.6% annualized, compared to total shareholders’ equity of $476.3 million at June 30, 2025, and an increase of $45.3 million, or 10.0%, over total shareholders’ equity of $452.2 million at September 30, 2024.
- The linked-quarter increase was primarily due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio and preferred stock dividends.
- The year-over-year increase was primarily due to net income retained and a decrease in unrealized losses in the securities portfolio, offset partially by a decrease in unrealized gains in the derivatives portfolio, preferred stock dividends, and stock repurchases.
- The Consolidated Common Equity Tier 1 Risk-Based Capital Ratio was 9.08% at September 30, 2025, compared to 9.03% at June 30, 2025, and 9.79% at September 30, 2024.
- Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 7.71% at September 30, 2025, compared to 7.40% at June 30, 2025, and 8.17% at September 30, 2024.
Tangible book value per share, a non-GAAP financial measure, was $14.93 as of September 30, 2025, an increase of 20.0% annualized from $14.21 as of June 30, 2025, and an increase of 6.9% from $13.96 as of September 30, 2024.
The Company did not repurchase any shares of its common stock during the third quarter of 2025.
- The Company had $13.1 million remaining under its current share repurchase authorization at September 30, 2025.
Today, the Company also announced that its Board of Directors has declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”). The quarterly cash dividend of $36.72 per share, equivalent to $0.3672 per depositary share, each representing a 1/100th interest in a share of the Series A Preferred Stock (Nasdaq: BWBBP), is payable on December 1, 2025 to shareholders of record of the Series A Preferred Stock at the close of business on November 14, 2025.
Conference Call and Webcast
The Company will host a conference call to discuss its third quarter 2025 financial results on Wednesday, October 22, 2025 at 8:00 a.m. Central Time. The conference call can be accessed by dialing 844-481-2913 and requesting to join the Bridgewater Bancshares earnings call. To listen to a replay of the conference call via phone, please dial 877-344-7529 and enter access code 1563263. The replay will be available through October 29, 2025. The conference call will also be available via a live webcast on the Investor Relations section of the Company’s website, investors.bridgewaterbankmn.com, and archived for replay.
About the Company
Bridgewater Bancshares, Inc. (Nasdaq: BWB) is a St. Louis Park, Minnesota-based financial holding company founded in 2005. Its banking subsidiary, Bridgewater Bank, is a premier, full-service bank dedicated to providing responsive support and simple solutions to businesses, entrepreneurs, and successful individuals across the Twin Cities. Bridgewater offers a comprehensive suite of products and services spanning deposits, lending, and treasury management solutions. Bridgewater has also received numerous awards for its banking services and esteemed corporate culture. With total assets of $5.4 billion and nine strategically located branches as of September 30, 2025, Bridgewater is one of the largest locally-led banks in Minnesota and is committed to being the finest entrepreneurial bank. For more information, please visit www.bridgewaterbankmn.com.
Use of Non-GAAP Financial Measures
In addition to the results presented in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”), the Company routinely supplements its evaluation with an analysis of certain non-GAAP financial measures. The Company believes these non-GAAP financial measures, in addition to the related GAAP 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 peers. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies. Reconciliations of non-GAAP disclosures used in this earnings release to the comparable GAAP measures are provided in the accompanying tables.
Forward-Looking Statements
This earnings release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.
Contacts
Media Contact:
Emily Karpenske | Senior Communication Specialist
[email protected] | 952.653.0624
Investor Contact:
Justin Horstman | VP Investor Relations
[email protected] | 952.542.5169
