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    Bridgewater Bancshares (BWB)

    Q1 2024 Earnings Summary

    Reported on Apr 28, 2025
    Pre-Earnings PriceN/ADate unavailable
    Post-Earnings PriceN/ADate unavailable
    Price ChangeN/A
    • Attractive Loan Repricing: Q&A responses highlighted that over $500 million of loans are set to reprice at new money yields in the mid- to high-7% range, offering significant net interest income tailwinds.
    • Robust Core Deposit Growth: The team emphasized ongoing, strong core deposit wins and the strategic hiring to bolster deposit gathering, supporting a low-cost funding base and improving balance sheet stability.
    • Moderated Margin Compression and NII Upside: Management noted a slowing pace of margin compression and a focus on growing net interest income, which together suggest potential for enhanced earnings despite a challenging rate environment.
    • Margin Pressure Risk: Sustained net interest margin compression is a concern, as the bank is experiencing modest yet persistent margin declines due to the impact of rising funding costs and mix shifts from noninterest-bearing to interest-bearing deposits.
    • Rising Deposit Costs: The deposit cost increases—illustrated by the reported level of 337 basis points in March—could further pressure margins if the trend does not moderate, affecting overall profitability.
    • Credit Normalization Concerns: With continued economic pressures from a higher interest rate environment, there is a risk of credit quality deterioration and normalization, which could impact asset quality and future loan performance.
    1. Margin Outlook
      Q: Is there a NIM inflection path without Fed cuts?
      A: Management sees a slowing pace of margin compression with modest near-term pressure driven by shifts from noninterest-bearing to interest-bearing deposits, while focusing on growing net interest income through robust loan growth.

    2. Net Interest Margin
      Q: What was March's net interest margin?
      A: Management noted that the March net interest margin was about 223 basis points lower than the quarter’s overall level.

    3. Loan Repricing
      Q: What loan maturities and repricing are upcoming?
      A: They reported that north of $500 million in fixed-rate loans, with a blended rate of 5%, is set to roll off as new money comes in at yields in the mid-to-high 7% range.

    4. Deposit Costs
      Q: What are March's deposit cost levels?
      A: The deposit cost coming out of March was reported at 337 basis points, with the pace of cost increases showing signs of moderation.

    5. Rate Risk Positioning
      Q: Can the bank adjust its rate risk profile?
      A: Management is balancing fixed versus variable rate funding and maintaining flexibility across the balance sheet, while also considering strategic M&A to boost noninterest income without altering liability sensitivity dramatically.

    6. Loan Pipeline Composition
      Q: Is the pipeline more weighted towards C&I?
      A: The bank’s pipeline remains well diversified and consistent with its overall portfolio mix, with some growth in the C&I segment from line utilization.

    7. Deposit Growth Initiatives
      Q: Will new hires boost deposit gathering?
      A: New hires are expected to bolster long-term core deposit growth, although seasonal factors may cause a slight slowdown in Q2.

    8. Multifamily Maturities
      Q: What percent of multifamily loans mature post-2024?
      A: Management did not provide an exact figure during the call, mentioning that further details will be shared after the call.

    Research analysts covering Bridgewater Bancshares.