Bridgewater Bancshares (BWB) Q3 2024 earnings summary

Executive summary

• Q3 2024 diluted EPS was $0.27, with net income of $8.7 million, stable net interest margin at 2.24%, and tangible book value per share rising to $13.96.

• Core deposit growth remained strong, with balances up $93–94 million, improving deposit mix and reducing reliance on brokered and time deposits.

• Asset quality stayed robust, with nonperforming assets at 0.19% and allowance for credit losses at 1.38% of loans, despite a $935,000 charge-off from a single office loan.

• Announced and received regulatory approval for the acquisition of First Minnetonka City Bank, expected to close in Q4 2024, expanding assets, deposits, and branch network.

• Leadership structure and capital allocation strategies enhanced to support growth and efficiency.

Financial highlights

• Net interest income increased by $603,000 (2.4%) from Q2 2024 to $25.6 million, aided by higher asset yields and accelerated loan fees.

• Net interest margin held steady at 2.24% for the third straight quarter.

• Core deposit balances grew $93–94 million (14.4% annualized) in Q3; brokered and time deposits declined by $131–158 million.

• Loan balances declined by $114.8 million from Q2 2024 due to elevated payoffs; loan-to-deposit ratio improved to 98.3%.

• Tangible book value per share grew for the 31st consecutive quarter, reaching $13.96 at Q3 2024.

Outlook and guidance

• Expect modest margin expansion starting in Q4, driven by lower deposit costs and the First Minnetonka City Bank acquisition.

• Loan growth in Q4 to be primarily from the acquisition; organic loan balances expected to remain flat.

• Mid-single-digit loan growth targeted for 2025 as pipelines strengthen.

• Expense growth to track asset growth, with mid-single-digit increases anticipated post-acquisition.

• Management expects continued focus on core deposit growth and prudent balance sheet management amid a challenging interest rate environment.