Bridgewater Bancshares, Inc. Announces First Quarter 2026 Financial Results

First Quarter 2026 Highlights

• Net income of $17.4 million, or $0.58 per diluted common share; adjusted net income of $12.6 million, or $0.41 per diluted common share.⁽¹⁾
• Net interest income increased $960,000, or 10.9% annualized, from the fourth quarter of 2025.
• Net interest margin (on a fully tax-equivalent basis) of 2.99%, an increase of 24 basis points from the fourth quarter of 2025.
• Cost of total deposits of 2.79% for the first quarter of 2026, a decrease of 18 basis points from the fourth quarter of 2025.
• Enhanced balance sheet efficiency to improve forward profitability through the sale of $208.5 million of securities, for a pre-tax gain of $7.3 million, and prepayment of $97.5 million of FHLB advances, including a $982,000 prepayment fee.
• Gross loans increased by $58.5 million, or 5.5% annualized, from the fourth quarter of 2025.
• Total deposits decreased by $14.9 million, or 1.4% annualized, from the fourth quarter of 2025; core deposits⁽²⁾ increased by $26.2 million, or 3.2% annualized, from the fourth quarter of 2025.
• Efficiency ratio⁽¹⁾ of 56.3%, up from 51.6% for the fourth quarter of 2025; adjusted efficiency ratio⁽¹⁾ of 53.8%, up from 50.7% for the fourth quarter of 2025.
• Annualized net loan charge-offs as a percentage of average loans of 0.05%, compared to 0.11% for the fourth quarter of 2025.
• Nonperforming assets to total assets of 0.22% at March 31, 2026, down from 0.41% at December 31, 2025.
• Tangible book value per share⁽¹⁾ of $15.93 at March 31, 2026, an increase of 9.9% annualized, from the fourth quarter of 2025.
• Common Equity Tier 1 Risk-Based Capital Ratio of 9.53%, up from 9.17% at December 31, 2025.
• Launched an at-the-market ("ATM") offering for the sale from time-to-time of up to $50 million of common stock. 

Bridgewater Bancshares, Inc. (NASDAQ:BWB) ("the Company"), the parent company of Bridgewater Bank ("the Bank"), today announced net income of $17.4 million for the first quarter of 2026, compared to $13.3 million for the fourth quarter of 2025, and $9.6 million for the first quarter of 2025. Earnings per diluted common share were $0.58 for the first quarter of 2026, compared to $0.43 for the fourth quarter of 2025, and $0.31 for the first quarter of 2025. Adjusted diluted earnings per share, a non-GAAP financial measure, were $0.41 for the first quarter of 2026, compared to $0.44 for the fourth quarter of 2025, and $0.32 for the first quarter of 2025.

"Bridgewater's first quarter of 2026 was highlighted by significant net interest margin expansion, continued loan and core deposit growth, and strong asset quality," said Chairman and Chief Executive Officer, Jerry Baack. "We took opportunistic actions during the quarter to enhance our balance sheet efficiency, uniquely resulting in a substantial gain on the sale of securities during the quarter while also positioning us for improved forward profitability. As a result of the strong start to 2026, we were able to build our capital position and continue generating consistent tangible book value per share growth.

"Our teams continue to work hard to build, strengthen, and service relationships with clients, which has been instrumental in our ongoing success in gaining market share. These dedicated efforts continue to support our growth initiatives and drive meaningful value for our clients and shareholders alike."

Key Financial Measures

Income Statement

Net Interest Margin and Net Interest Income

Net interest margin (on a fully tax-equivalent basis), a non-GAAP financial measure, for the first quarter of 2026 was 2.99%, a 24 basis point increase from 2.75% in the fourth quarter of 2025, and a 48 basis point increase from 2.51% in the first quarter of 2025. 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 First Minnetonka City Bank ("FMCB"), was 2.86% for the first quarter of 2026, a 24 basis point increase from 2.62% in the fourth quarter of 2025, and a 49 basis point increase from 2.37% in the first quarter of 2025.

• Net interest margin expanded to 2.99% in the first quarter of 2026 primarily due to lower rates paid on deposits, growth in the loan portfolio at higher yields, and a decrease in average earning assets due to investment securities sales.
• The year-over-year expansion in net interest margin was primarily due to lower rates paid on deposits and growth in the loan portfolio at higher yields, offset partially by the refinancing of subordinated debt at higher rates late in the second quarter of 2025.

Net interest income was $36.6 million for the first quarter of 2026, an increase of $960,000 from $35.7 million in the fourth quarter of 2025, and an increase of $6.4 million from $30.2 million in the first quarter of 2025.

• The linked-quarter increase in net interest income was primarily due to lower rates paid on deposits, lower FHLB advance balances at lower yields, and growth in the loan portfolio, offset partially by lower cash and investment securities balances. The decrease in securities was due to the Company selling $208.5 million of securities during the quarter to enhance balance sheet efficiency and drive current and future earnings.
• The year-over-year increase in net interest income was primarily due to lower rates paid on deposits and growth in the loan portfolio, offset partially by lower cash and investment securities balances.

Interest income was $70.0 million for the first quarter of 2026, a decrease of $3.3 million from $73.3 million in the fourth quarter of 2025, and an increase of $4.3 million from $65.7 million in the first quarter of 2025.

• The yield on interest earning assets (on a fully tax-equivalent basis) was 5.65% in the first quarter of 2026, compared to 5.58% in the fourth quarter of 2025, and 5.43% in the first quarter of 2025.
• The linked-quarter increase in the yield on interest earning assets was primarily due to the repricing of the loan portfolio and the sale of lower yielding investment securities.
• The year-over-year increase in the yield on interest earning assets was primarily due to growth and repricing of the loan portfolio at accretive yields.
• The aggregate loan yield was 5.81% in the first quarter of 2026, three basis points higher than 5.78% in the fourth quarter of 2025, and 20 basis points higher than 5.61% in the first quarter of 2025.
• Core loan yield, a non-GAAP financial measure, was 5.66% in the first quarter of 2026, three basis points higher than 5.63% in the fourth quarter of 2025, and 16 basis points higher than 5.50% in the first quarter of 2025.

A summary of interest and fees recognized on loans for the periods indicated is as follows:

Interest expense was $33.3 million for the first quarter of 2026, a decrease of $4.3 million from $37.6 million in the fourth quarter of 2025, and a decrease of $2.2 million from $35.5 million in the first quarter of 2025.

• The cost of interest bearing liabilities was 3.53% in the first quarter of 2026, compared to 3.73% in the fourth quarter of 2025, and 3.82% in the first quarter of 2025.
• The linked-quarter decrease in the cost of interest bearing liabilities was primarily due to lower rates paid on interest bearing deposits and lower balances and rates paid on FHLB advances.
• The year-over-year decrease in the cost of interest bearing liabilities was primarily due to lower rates paid on interest bearing deposits, offset partially by higher balances and rates paid on subordinated debentures and higher rates paid on FHLB advances.

Interest expense on deposits was $28.8 million for the first quarter of 2026, a decrease of $3.4 million from $32.2 million in the fourth quarter of 2025, and a decrease of $3.3 million from $32.1 million in the first quarter of 2025.

• The cost of total deposits was 2.79% in the first quarter of 2026, 18 basis points lower than 2.97% in the fourth quarter of 2025, and 39 basis points lower than 3.18% in the first quarter of 2025.
• The linked-quarter decrease in the cost of total deposits was primarily due to lower balances and rates paid on interest bearing deposits following interest rate cuts in the fourth quarter of 2025.
• 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 2025, lower average brokered deposit balances, and an increase in noninterest bearing deposits.

Provision for Credit Losses

The provision for credit losses on loans and leases was $1.4 million for the first quarter of 2026, compared to $1.3 million for the fourth quarter of 2025 and $1.5 million for the first quarter of 2025.

• The provision recorded in the first quarter of 2026 was primarily attributable to growth in the loan portfolio.
• The allowance for credit losses on loans to total loans was 1.31% at March 31, 2026, compared to 1.31% at December 31, 2025, and 1.34% at March 31, 2025.

The provision for credit losses for off-balance sheet credit exposures was a negative provision of $150,000 for the first quarter of 2026, compared to a provision of $200,000 for the fourth quarter of 2025 and a provision of $-0- for the first quarter of 2025.

• A negative provision was recorded during the first quarter of 2026 due to a decrease in the volume of newly originated loans with unfunded commitments.

Noninterest Income

Noninterest income was $9.6 million for the first quarter of 2026, an increase of $6.4 million from $3.1 million for the fourth quarter of 2025, and an increase of $7.5 million from $2.1 million for the first quarter of 2025.

• The linked-quarter increase was primarily due to higher net gain on sale of securities, offset partially by lower letter of credit fees and swap fees.
• The year-over-year increase was primarily due to higher net gain on sale of securities, swap fees and other income, offset partially by lower letter of credit fees and investment advisory fees.
• Noninterest income included net gain on sales of securities of $7.3 million during the first quarter of 2026, compared to $80,000 for the fourth quarter of 2025, and $1,000 for the first quarter of 2025, all of which are considered non-core items.

Noninterest Expense

Noninterest expense was $22.2 million for the first quarter of 2026, an increase of $1.9 million from $20.2 million for the fourth quarter of 2025, and an increase of $4.0 million from $18.1 million for the first quarter of 2025.

• The linked-quarter increase was primarily due to increases in salaries and employee benefits and an FHLB advance prepayment penalty.
• The year-over-year increase was primarily attributable to increases in salaries and employee benefits, an FHLB advance prepayment penalty, and marketing and advertising expense.
• Noninterest expense for the first quarter of 2026 had no merger-related expenses associated with the acquisition of FMCB, compared to merger-related expenses of $346,000 for the fourth quarter of 2025, and $565,000 for the first quarter of 2025, all of which are considered non-core items.
• Noninterest expense included FHLB prepayment penalty expense of $982,000 for the first quarter of 2026, which is considered a non-core item.
• The efficiency ratio (on a fully tax-equivalent basis), a non-GAAP financial measure, was 56.3% for the first quarter of 2026, compared to 51.6% for the fourth quarter of 2025, and 55.5% for the first quarter of 2025.
• The Company had 337 full-time equivalent employees at March 31, 2026, compared to 322 at December 31, 2025, and 292 at March 31, 2025. The linked-quarter and year-over-year increases were largely driven by the hiring of key talent across the organization.

Income Taxes

The effective combined federal and state income tax rate was 23.8% for the first quarter of 2026, compared to 22.2% for the fourth quarter of 2025, and 23.9% for the first quarter of 2025.

Balance Sheet

Loans

Total gross loans at March 31, 2026 were $4.37 billion, an increase of $58.5 million, or 5.5% annualized, compared to total gross loans of $4.31 billion at December 31, 2025, and an increase of $348.0 million, or 8.7%, compared to total gross loans of $4.02 billion at March 31, 2025.

• The increase in the loan portfolio during the first quarter of 2026 was due to growth in the commercial and CRE nonowner occupied portfolios.

Deposits

Total deposits at March 31, 2026 were $4.31 billion, a decrease of $14.9 million, or 1.4% annualized, compared to total deposits of $4.32 billion at December 31, 2025, and an increase of $143.1 million, or 3.4%, compared to total deposits of $4.16 billion at March 31, 2025.

• Core deposits, defined as total deposits excluding brokered deposits and certificates of deposit greater than $250,000, increased $26.2 million, or 3.2% annualized, from December 31, 2025, and increased $207.2 million, or 6.5%, from March 31, 2025.
• Noninterest bearing deposits decreased $94.2 million, or 41.4% annualized, from December 31, 2025, and increased $37.3 million, or 4.7%, from March 31, 2025.
• Brokered deposits increased $35.8 million, or 17.9% annualized, from December 31, 2025, and increased $14.7 million, or 1.8%, from March 31, 2025. Brokered deposits continue to be used as a supplemental funding source, as needed.

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 0.05% for the first quarter of 2026, compared to 0.11% for the fourth quarter of 2025, and 0.00% for the first quarter of 2025.
• At March 31, 2026, the Company's nonperforming assets, which included nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $11.7 million, or 0.22% of total assets, compared to $22.0 million, or 0.41% of total assets, at December 31, 2025, and $10.3 million, or 0.20% of total assets, at March 31, 2025.
• Loans with potential weaknesses that warranted a watch/special mention risk rating at March 31, 2026 totaled $47.7 million, compared to $47.8 million at December 31, 2025, and $38.3 million at March 31, 2025.
• Loans that warranted a substandard risk rating at March 31, 2026 totaled $43.1 million, compared to $53.0 million at December 31, 2025, and $31.6 million at March 31, 2025.

Capital

Total shareholders' equity at March 31, 2026 was $528.4 million, an increase of $11.3 million, or 8.9% annualized, compared to $517.1 million at December 31, 2025, and an increase of $59.4 million, or 12.7%, over $469.0 million at March 31, 2025.

• The linked-quarter increase was primarily due to net income retained, offset partially by 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 preferred stock dividends and stock repurchases.
• The Consolidated Common Equity Tier 1 Risk-Based Capital Ratio was 9.53% at March 31, 2026, compared to 9.17% at December 31, 2025, and 9.03% March 31, 2025.
• Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 8.34% at March 31, 2026, compared to 8.01% at December 31, 2025, and 7.48% at March 31, 2025.

Tangible book value per share, a non-GAAP financial measure, was $15.93 as of March 31, 2026, an increase of 9.9% annualized from $15.55 as of December 31, 2025, and an increase of 14.7% from $13.89 as of March 31, 2025.

The Company did not repurchase any shares of its common stock during the first quarter of 2026.

• The Company had $13.1 million remaining under its current share repurchase authorization at March 31, 2026.

The Company launched an ATM offering during the first quarter of 2026 for the sale from time-to-time of up to $50 million of company stock.

• The Company did not sell any shares as part of the ATM during the first quarter of 2026.

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 June 1, 2026 to shareholders of record of the Series A Preferred Stock at the close of business on May 15, 2026.

Conference Call and Webcast

The Company will host a conference call to discuss its first quarter 2026 financial results on Wednesday, April 22, 2026 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 855-669-9658 and enter access code 2037632. The replay will be available through April 29, 2026. 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 received numerous awards for its banking services and esteemed corporate culture. With total assets of $5.3 billion as of March 31, 2026 and nine strategically located branches, 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 meanings of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, statements concerning plans, estimates, calculations, forecasts and projections with respect to the anticipated future performance of the Company. These statements are often, but not always, identified by words such as "may", "might", "should", "could", "predict", "potential", "believe", "expect", "continue", "will", "anticipate", "seek", "estimate", "intend", "plan", "projection", "would", "annualized", "target" and "outlook", or the negative version of those words or other comparable words of a future or forward-looking nature.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent known and unknown uncertainties, risks, changes in circumstances and other factors that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: interest rate risk, including the effects of changes in interest rates; effects on the U.S. economy resulting from actions taken by the federal government, including the threat or implementation of tariffs, immigration enforcement, executive orders, and changes in foreign policy; fluctuations in the values of the securities held in our securities portfolio, including as the result of changes in interest rates; business and economic conditions generally and in the financial services industry, nationally and within our market area, including the level and impact of inflation, and future monetary policies of the Federal Reserve and executive orders in response thereto, and possible recession; credit risk and risks from concentrations (including by type of borrower, geographic area, collateral and industry) within the Company's loan portfolio or large loans to certain borrowers (including CRE loans); the overall health of the local and national real estate market; our ability to successfully manage credit risk; our ability to maintain an adequate level of allowance for credit losses on loans; new or revised accounting standards as may be adopted by state and federal regulatory agencies, the Financial Accounting Standards Board, Securities and Exchange Commission or Public Company Accounting Oversight Board; the concentration of large deposits from certain clients, including those who have balances above current Federal Deposit Insurance Corporation insurance limits; our ability to successfully manage liquidity risk, which may increase our dependence on non-core funding sources such as brokered deposits, and negatively impact our cost of funds; our ability to raise additional capital to implement our business plan; our ability to implement our growth strategy and manage costs effectively; the composition of our senior leadership team and our ability to attract and retain key personnel; talent and labor shortages and employee turnover; the occurrence of fraudulent activity, breaches or failures of our or our third-party vendors' information security controls or cybersecurity-related incidents, including as a result of sophisticated attacks using artificial intelligence and similar tools or as a result of insider fraud; interruptions involving our information technology and telecommunications systems or third-party servicers; competition in the financial services industry, including from nonbank competitors such as credit unions, "fintech" companies and digital asset service providers; the effectiveness of our risk management framework; rapid technological changes implemented by us and other parties in the financial services industry, including third-party vendors, which may be more difficult to implement or more expensive than anticipated or which may have unforeseen consequence to us and our customers, including the development and implementation of tools incorporating artificial intelligence; the commencement, cost and outcome of litigation and other legal proceedings and regulatory actions against us; the impact of recent and future legislative and regulatory changes, domestic or foreign; risks related to climate change and the negative impact it may have on our customers and their businesses; the imposition of tariffs or other governmental policies impacting the global supply chain and the value of products produced by our commercial borrowers; severe weather, natural disasters, widespread disease or pandemics, acts of war, military conflicts, or terrorism, changes in foreign relations, or other adverse external events, including the wars in Iran and Ukraine, and other international conflicts; potential impairment to the goodwill the Company recorded in connection with acquisitions; risks associated with our integration of FMCB, and the effect of the merger on the Company's customer and employee relationships and operating results; changes to U.S. or state tax laws, regulations and governmental policies concerning the Company's general business, including changes in interpretation or prioritization of such rules and regulations; the impact of bank failures or adverse developments at other banks and related negative publicity about the banking industry in general on investor and depositor sentiment regarding the stability and liquidity of banks; and any other risks described in the "Risk Factors" sections of reports filed by the Company with the Securities and Exchange Commission.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. The Company undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Bridgewater Bancshares, Inc. and Subsidiaries

Financial Highlights

(dollars in thousands, except share data)

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

(dollars in thousands, except share data)

Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

(dollars in thousands, except per share data)