Bridgewater Bancshares, Inc. Announces Fourth Quarter 2025 Financial Results

Fourth Quarter 2025 Highlights

• Net income of $13.3 million, or $0.43 per diluted common share; adjusted net income of $13.5 million, or $0.44 per diluted common share.⁽¹⁾
• Net interest income increased $1.6 million, or 4.7%, from the third quarter of 2025.
• Net interest margin (on a fully tax-equivalent basis) of 2.75%, an increase of 12 basis points from the third quarter of 2025.
• Noninterest income increased $1.1 million, or 52.7%, from the third quarter of 2025.
• Total deposits increased by $27.6 million, or 2.6% annualized, from the third quarter of 2025; core deposits⁽²⁾ increased by $72.6 million, or 8.8% annualized, from the third quarter of 2025.
• Gross loans increased by $95.0 million, or 8.9% annualized, from the third quarter of 2025.
• Efficiency ratio⁽¹⁾ of 51.6%, down from 54.7% for the third quarter of 2025; adjusted efficiency ratio⁽¹⁾ of 50.7%, down from 53.2% for the third quarter of 2025.
• Completed the closure of one branch acquired from First Minnetonka City Bank ("FMCB") in 2024.

Full Year 2025 Highlights

• Net income of $46.1 million, or $1.49 per diluted common share; adjusted net income of $46.9 million, or $1.52 per diluted common share.⁽¹⁾
• Pre-provision net revenue⁽¹⁾ increased $19.3 million, or 42.1%, from 2024.
• Tangible book value per share⁽¹⁾ of $15.55 at December 31, 2025, an increase of $2.06, or 15.3%, from December 31, 2024.
• Total deposits increased by $233.6 million, or 5.7%, in 2025; core deposits⁽²⁾ increased by $244.6 million, or 7.9%, in 2025.
• Gross loans increased by $441.0 million, or 11.4%, in 2025.
• Net loan charge-offs as a percentage of average loans of 0.04%, up from 0.03% for the year ended December 31, 2024

Bridgewater Bancshares, Inc. (NASDAQ:BWB) ("the Company"), the parent company of Bridgewater Bank ("the Bank"), today announced net income of $13.3 million for the fourth quarter of 2025, compared to $11.6 million for the third quarter of 2025, and $8.2 million for the fourth quarter of 2024. Earnings per diluted common share were $0.43 for the fourth quarter of 2025, compared to $0.38 for the third quarter of 2025, and $0.26 for the fourth quarter of 2024. Adjusted net income, a non-GAAP financial measure, was $13.5 million for the fourth quarter of 2025, compared to $12.0 million for the third quarter of 2025, and $8.6 million for the fourth quarter of 2024. Adjusted earnings per diluted common share, a non-GAAP financial measure, were $0.44 for the fourth quarter of 2025, compared to $0.39 for the third quarter of 2025, and $0.27 for the fourth quarter of 2024.

"Bridgewater's fourth quarter was highlighted by strong revenue growth, well controlled expenses, and continued core deposit and loan growth momentum," said Chairman and Chief Executive Officer, Jerry Baack. "Our overall efficiency improved as meaningful net interest margin expansion and strong swap fee income drove revenue higher while expense growth returned to more normalized levels following the systems conversion of our recent acquisition. Meanwhile, we continued to capitalize on the M&A disruption in the Twin Cities through opportunities to attract top talent and earn new client relationships.

"As we look ahead to 2026, we are focused on driving profitable growth, gaining market share, and continuing to leverage technology investments to support future growth. We will also look to expand key verticals including affordable housing, which became a key growth driver for us in 2025. With the right team in place, an outlook for continued growth and net interest margin expansion, and a strong credit culture, we believe we are well positioned to continue improving profitability and growing tangible book value in 2026."

Key Financial Measures

Income Statement

Net Interest Margin and Net Interest Income

Net interest margin (on a fully tax-equivalent basis) for the fourth quarter of 2025 was 2.75%, a 12 basis point increase from 2.63% in the third quarter of 2025, and a 43 basis point increase from 2.32% in the fourth 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 2.62% for the fourth quarter of 2025, a 10 basis point increase from 2.52% in the third quarter of 2025, and a 38 basis point increase from 2.24% in the fourth quarter of 2024.

• Net interest margin expanded to 2.75% in the fourth quarter of 2025 primarily due to growth in the loan portfolio at accretive yields and lower rates paid on deposits.
• The year-over-year expansion in margin was primarily due to growth in the securities and loan portfolios at higher yields and lower rates paid on deposit balances, offset by higher average balances and rates paid on FHLB advances, as well as the refinancing of subordinated debt at the end of the second quarter of 2025.

Net interest income was $35.7 million for the fourth quarter of 2025, an increase of $1.6 million from $34.1 million in the third quarter of 2025, and an increase of $8.7 million from $27.0 million in the fourth quarter of 2024.

• The linked-quarter increase in net interest income was primarily due to growth in the loan portfolio and lower rates paid on deposit balances, offset partially by lower cash balances.
• The year-over-year increase in net interest income was primarily due to growth in the loan portfolio, lower rates paid on deposits, and purchase accounting accretion, offset partially by growth in deposit balances as well as higher balances and rates paid on FHLB advances.

Interest income was $73.3 million for the fourth quarter of 2025, a decrease of $324,000 from $73.6 million in the third quarter of 2025, and an increase of $10.0 million from $63.3 million in the fourth quarter of 2024.

• The yield on interest earning assets (on a fully tax-equivalent basis) was 5.58% in the fourth quarter of 2025, compared to 5.63% in the third quarter of 2025, and 5.40% in the fourth quarter of 2024.
• The linked-quarter decrease in the yield on interest earning assets was primarily due to 0.75% of Fed interest rate cuts which occurred in the last four months of the year.
• 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 at accretive yields and purchase accounting accretion.
• The aggregate loan yield was 5.78% in the fourth quarter of 2025, one basis point lower than 5.79% in the third quarter of 2025, and 23 basis points higher than 5.55% in the fourth quarter of 2024.
• Core loan yield, a non-GAAP financial measure, was 5.63% in the fourth quarter of 2025, three basis points lower than 5.66% in the third quarter of 2025, and 16 basis points higher than 5.47% in the fourth quarter of 2024.

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

Interest expense was $37.6 million for the fourth quarter of 2025, a decrease of $1.9 million from $39.5 million in the third quarter of 2025, and an increase of $1.3 million from $36.4 million in the fourth quarter of 2024.

• The cost of interest bearing liabilities was 3.73% in the fourth quarter of 2025, compared to 3.89% in the third quarter of 2025, and 4.06% in the fourth quarter of 2024.
• The linked-quarter decrease in the cost of interest bearing liabilities was primarily due to lower rates paid on interest bearing deposits as the result of recent fed rate cuts, offset partially by higher balances and rates paid on FHLB advances.
• The year-over-year decrease in the cost of interest bearing liabilities was primarily due to lower interest bearing deposit costs, offset partially by growth in deposits and higher balances and rates paid on FHLB advances and subordinated debentures.

Interest expense on deposits was $32.2 million for the fourth quarter of 2025, a decrease of $2.4 million from $34.6 million in the third quarter of 2025, and a decrease of $607,000 from $32.8 million in the fourth quarter of 2024.

• The cost of total deposits was 2.97% in the fourth quarter of 2025, 22 basis points lower than 3.19% in the third quarter of 2025, and 43 basis points lower than 3.40% in the fourth quarter of 2024.
• The linked-quarter decrease in the cost of total deposits was primarily due to lower rates paid on interest bearing deposits following interest rate cuts, lower average balance of brokered deposits, and an increase in noninterest bearing deposits.
• 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, 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 $1.3 million for the fourth quarter of 2025, compared to $900,000 for the third quarter of 2025 and $1.5 million for the fourth quarter of 2024.

• The provision recorded in the fourth quarter of 2025 was primarily attributable to growth in the loan portfolio and an increase in historical loss rates.
• The allowance for credit losses on loans to total loans was 1.31% at December 31, 2025, compared to 1.34% at September 30, 2025, and 1.35% at December 31, 2024.

The provision for credit losses for off-balance sheet credit exposures was $200,000 for the fourth quarter of 2025, stable with the third quarter of 2025, and compared to $725,000 for the fourth quarter of 2024.

• A provision was recorded during the fourth quarter of 2025 due to an increase in the volume of newly originated loans with unfunded commitments.

Noninterest Income

Noninterest income was $3.1 million for the fourth quarter of 2025, an increase of $1.1 million from $2.1 million for the third quarter of 2025, and an increase of $615,000 from $2.5 million for the fourth quarter of 2024.

• The linked-quarter increase was primarily due to higher swap fees and letter of credit fees.
• The year-over-year increase was primarily due to higher investment advisory fees, other income, and swap fees, offset partially by lower letter of credit fees.

Noninterest Expense

Noninterest expense was $20.2 million for the fourth quarter of 2025, an increase of $282,000 from $20.0 million for the third quarter of 2025 and an increase of $3.4 million from $16.8 million for the fourth quarter of 2024.

• Noninterest expense for the fourth quarter of 2025 included $346,000 of merger-related expenses associated with the acquisition of FMCB, compared to $530,000 for the third quarter of 2025, and $488,000 for the fourth quarter of 2024.
• The linked-quarter increase was primarily due to increases in salaries and employee benefits and professional and consulting fees.
• The year-over-year increase was primarily attributable to increases in salaries and employee benefits, professional and consulting fees, marketing and advertising, operating costs related to the FMCB acquisition, and merger-related expenses.
• The efficiency ratio, a non-GAAP financial measure, was 51.6% for the fourth quarter of 2025, compared to 54.7% for the third quarter of 2025, and 56.8% for the fourth quarter of 2024.
• The Company had 322 full-time equivalent employees at December 31, 2025, compared to 325 at September 30, 2025, and 290 at December 31, 2024. The year-over-year increase was largely driven by the hiring of key talent across the organization.

Income Taxes

The effective combined federal and state income tax rate was 22.2% for the fourth quarter of 2025, compared to 23.2% for the third quarter of 2025, and 22.0% for the fourth quarter of 2024.

Balance Sheet

Loans

Total gross loans at December 31, 2025 were $4.31 billion, an increase of $95.0 million, or 8.9% annualized, over total gross loans of $4.21 billion at September 30, 2025, and an increase of $441.0 million, or 11.4%, over total gross loans of $3.87 billion at December 31, 2024.

• The increase in the loan portfolio during the fourth quarter of 2025 was due to strong loan originations and advances outpacing the increase in payoffs and paydowns.

Deposits

Total deposits at December 31, 2025 were $4.32 billion, an increase of $27.6 million, or 2.6% annualized, over total deposits of $4.29 billion at September 30, 2025, and an increase of $233.6 million, or 5.7%, over total deposits of $4.09 billion at December 31, 2024.

• Core deposits, defined as total deposits excluding brokered deposits and certificates of deposits greater than $250,000, increased $72.6 million, or 8.8% annualized, from September 30, 2025, and increased $244.6 million, or 7.9%, from December 31, 2024.
• Noninterest bearing deposits increased $100.4 million, or 48.4% annualized, from September 30, 2025, and increased $122.3 million, or 15.3%, from December 31, 2024. Based on the nature of the Company's client base, noninterest bearing deposit balances can fluctuate from quarter to quarter, as deposit growth is not always linear.
• Brokered deposits decreased $23.9 million, or 11.4% annualized, from September 30, 2025, and decreased $15.3 million, or 1.8%, from December 31, 2024. While balances are down, 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 0.11% for the fourth quarter of 2025, compared to 0.03% for both the third quarter of 2025 and the fourth quarter of 2024.
• Net charge-offs as a percentage of average loans for the year ended December 31, 2025 were 0.04%, compared to 0.03% for the year ended December 31, 2024.
• At December 31, 2025, the Company's nonperforming assets, which include nonaccrual loans, loans past due 90 days and still accruing, and foreclosed assets, were $22.0 million, or 0.41% of total assets, compared to $10.0 million, or 0.19% of total assets, at September 30, 2025, and $301,000, or 0.01% of total assets, at December 31, 2024.
• Loans with potential weaknesses that warranted a watch/special mention risk rating at December 31, 2025 totaled $47.8 million, compared to $40.6 million at September 30, 2025, and $46.6 million at December 31, 2024.
• Loans that warranted a substandard risk rating at December 31, 2025 totaled $53.0 million, compared to $58.1 million at September 30, 2025, and $21.8 million at December 31, 2024.

Capital

Total shareholders' equity at December 31, 2025 was $517.1 million, an increase of $19.6 million, or 15.7% annualized, compared to $497.5 million at September 30, 2025, and an increase of $59.2 million, or 12.9%, over $457.9 million at December 31, 2024.

• The linked-quarter increase was primarily due to net income retained, a decrease in unrealized losses in the securities portfolio, and an increase in unrealized gains in the derivatives portfolio, 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 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 9.17% at December 31, 2025, compared to 9.08% at both September 30, 2025 and December 31, 2024.
• Tangible common equity as a percentage of tangible assets, a non-GAAP financial measure, was 8.01% at December 31, 2025, compared to 7.71% at September 30, 2025, and 7.36% at December 31, 2024.

Tangible book value per share, a non-GAAP financial measure, was $15.55 as of December 31, 2025, an increase of 16.5% annualized from $14.93 as of September 30, 2025, and an increase of 15.3% from $13.49 as of December 31, 2024.

The Company did not repurchase any shares of its common stock during the fourth quarter of 2025.

• The Company had $13.1 million remaining under its current share repurchase authorization at December 31, 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 March 2, 2026 to shareholders of record of the Series A Preferred Stock at the close of business on February 13, 2026.

Conference Call and Webcast

The Company will host a conference call to discuss its fourth quarter 2025 financial results on Wednesday, January 28, 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 9545199. The replay will be available through February 4, 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 also received numerous awards for its banking services and esteemed corporate culture. With total assets of $5.4 billion as of December 31, 2025 and eight 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 meaning of the safe harbor provisions of the U.S. 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 uncertainties, risks and changes in circumstances 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 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, wide spread disease or pandemics, acts of war, military conflicts, or terrorism, changes in foreign relations, or other adverse external events, including ongoing conflicts in the Middle East, the Russian invasion of Ukraine and recent military activities in Venezuela; potential impairment to the goodwill the Company recorded in connection with acquisitions; risks associated with our integration of FMCB, including the possibility that the merger may be more difficult or expensive to integrate than anticipated, 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

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Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Balance Sheets

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Bridgewater Bancshares, Inc. and Subsidiaries

Consolidated Statements of Income

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