Bridgewater Bancshares (BWB) Q1 2026 earnings summary

Executive summary

• Net interest margin expanded to 2.99% in Q1 2026, nearly reaching the year-end target, with strong profitability reflected in diluted EPS of $0.58 ($0.41 adjusted) and ROA of 1.35%.

• Strategic securities sales generated a $7.3 million pre-tax gain, improving balance sheet efficiency and supporting future profitability.

• Loan balances increased $59 million (5.5% annualized), led by affordable housing and C&I, while core deposits rose $26 million (3.2% annualized).

• Asset quality remained robust, with nonperforming assets at 0.22% and annualized net charge-offs at 0.05%.

• Tangible book value per share grew to $15.93, up 9.9% annualized.

Financial highlights

• Net interest income grew 3% quarter-over-quarter (10.9% annualized), despite a $185 million decline in average interest-earning assets.

• Securities sales resulted in a $7.3 million pre-tax gain in Q1.

• Noninterest income exceeded $2 million for the fifth consecutive quarter, driven by new fee sources and securities gains.

• Efficiency ratio improved to 56.3% (53.8% adjusted), outperforming peer median.

• Return on average assets was 1.35%; return on average tangible common equity was 15.13%.

Outlook and guidance

• Expect slow, continued NIM expansion for the remainder of 2026, assuming no further rate cuts.

• Loan portfolio growth targeted at high single digits for the year, dependent on core deposit growth and maintaining a loan-to-deposit ratio of 95%-105%.

• Expense growth expected to align with asset growth, with ongoing investments in people and technology.

• Capital levels expected to remain stable, with flexibility for share repurchases or ATM offering based on market conditions.

• Management expects improved forward profitability due to balance sheet actions and focus on core deposit and loan growth.