Bridgewater Bancshares, Inc. (BWB, Financial) reported a net interest margin of 2.51% for the first quarter of 2025. This reflects an increase of 19 basis points compared to the previous quarter. The company attributes this improvement to ongoing growth and profitability momentum that started in late 2024.
A key factor in this positive trend has been the consistent growth in core deposits, which has allowed the bank to focus more on expanding its loan portfolio. With a strong demand for loans, Bridgewater experienced its second straight quarter of significant organic loan growth. Additionally, revenue growth has picked up pace as declining deposit costs contributed to the expansion of net interest margins.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 3 analysts, the average target price for Bridgewater Bancshares Inc (BWB, Financial) is $16.67 with a high estimate of $17.00 and a low estimate of $16.00. The average target implies an upside of 23.37% from the current price of $13.51. More detailed estimate data can be found on the Bridgewater Bancshares Inc (BWB) Forecast page.
Based on the consensus recommendation from 3 brokerage firms, Bridgewater Bancshares Inc's (BWB, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Bridgewater Bancshares Inc (BWB, Financial) in one year is $16.96, suggesting a upside of 25.54% from the current price of $13.51. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Bridgewater Bancshares Inc (BWB) Summary page.
BWB Key Business Developments
Release Date: January 30, 2025
- Adjusted Earnings Per Share: $0.27, excluding merger-related expenses.
- Core Deposit Growth: Increased $211 million or 31% annualized in Q4, excluding deposits from First Minnetonka City Bank.
- Loan Growth: 7% annualized increase in Q4, excluding loans from First Minnetonka City Bank.
- Net Interest Margin: Expanded 8 basis points in Q4 to 232%.
- Total Revenue Growth: Nearly 9% increase in Q4.
- Non-Interest Income: Increased by $1 million or 66% in Q4.
- Non-Interest Expense: $16.8 million in Q4, including $488,000 of merger-related expenses.
- Loan-to-Deposit Ratio: Reduced to 95%.
- Net Charge-Offs: 3 basis points in Q4.
- Non-Performing Assets: 1 basis point in Q4.
- Provision for Credit Losses: $1.5 million in Q4.
- Tangible Book Value Growth: 5% for the year, despite a 3% decline in Q4 due to acquisition.
- Capital Ratios: CET1 remained above 9% target.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bridgewater Bancshares Inc (BWB, Financial) reported strong balance sheet growth and a return to net interest margin expansion in the fourth quarter of 2024.
- The acquisition of First Minnetonka City Bank was completed efficiently, enhancing liquidity and positioning the company for future growth.
- Core deposit growth was robust, increasing by $211 million or 31% annualized, excluding acquired deposits.
- Asset quality remained superb, with net charge-offs and non-performing assets decreasing in the fourth quarter.
- The company anticipates continued net interest income and revenue growth in 2025, supported by favorable market conditions and strategic acquisitions.
Negative Points
- There was a modest decline of 3% in tangible book value in the fourth quarter due to the acquisition.
- The company faces stiff competition, which is resulting in tighter spreads and could impact future loan demand.
- Non-interest expense growth is expected to be in the high teens for 2025, driven by the acquisition and investments in people and technology.
- The potential for higher-for-longer interest rates and an uncertain yield curve could mute some of the upside in net interest margin expansion.
- The company recorded a $1.5 million provision in the fourth quarter, including $950,000 for non-PCD loans acquired from First Minnetonka City Bank.
