Bridgewater Bancshares (BWB) Q4 2024 earnings summary

Executive summary

• Finished 2024 with strong balance sheet growth, net interest margin expansion, and excellent asset quality, supported by the acquisition of First Minnetonka City Bank (FMCB) in December.

• Adjusted EPS for Q4 2024 was $0.27, with reported EPS at $0.26; full-year adjusted EPS was $1.05.

• Core deposit growth was robust, up $211 million (31% annualized, excluding acquired deposits) in Q4, and 22% for FY24.

• Loan balances increased 7.1% annualized in Q4 (excluding acquired loans), with full-year loan growth of 3.9%.

• Tangible book value per share declined in Q4 due to the acquisition but grew 5% for the year.

Financial highlights

• Net interest income grew for the third consecutive quarter, up $1.4 million (5.3%) from Q3; net interest margin expanded by 8 basis points to 2.32% in Q4.

• Total revenue grew nearly 9% in Q4; non-interest income rose $1 million (66%), driven by higher letter of credit and swap fees.

• Loan-to-deposit ratio improved to 94.7% at year-end 2024, down from 100.4% at year-end 2023.

• Cost of total deposits decreased 18 bps sequentially to 3.40%.

• Adjusted efficiency ratio improved to 55.2% in Q4 2024.

Outlook and guidance

• Expect mid-to-high single-digit loan growth in 2025, with loan-to-deposit ratio targeted between 95 and 105.

• Modest net interest margin expansion anticipated in 2025, with 1-2 basis points per quarter from purchase accounting accretion.

• Non-interest expense growth (excluding merger costs) projected in the high teens for 2025, supporting asset growth and investments.

• Net interest income expected to grow in the low double-digit range, in line with asset growth.

• Ongoing evaluation of share repurchases and modest capital ratio expansion over time.