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    Bridgewater Bancshares (BWB)

    Q2 2024 Earnings Summary

    Reported on Apr 28, 2025 (After Market Close)
    Pre-Earnings Price$14.48Last close (Jul 25, 2024)
    Post-Earnings Price$14.68Open (Jul 26, 2024)
    Price Change
    $0.20(+1.38%)
    • Stable Net Interest Margin & Revenue Growth: The Q&A highlighted margin stabilization with a net interest margin of 2.24% and a 1.5% increase in net interest income driven by higher loan yields and fees, suggesting profitability is stabilizing even amid deposit cost pressures.
    • Strong Asset Quality & Disciplined Credit Management: Executives emphasized very strong credit performance—zero net charge-offs and non-performing assets at only 0.01%—underscoring the bank’s prudent underwriting and robust asset quality.
    • Effective Capital Allocation via Share Repurchases: Active share repurchase activity, including buying back nearly 253,000 shares at a weighted average price of $11.48, signals management’s confidence in the company’s value and solid financial position.
    • Rising Deposit Costs: Executives noted that deposit costs increased by 14 basis points in Q2 and that elevated competition and deposit mix changes are putting pressure on funding, which could squeeze margins further.
    • Headwinds from Elevated Loan Payoffs: The discussion highlighted that higher loan payoffs in Q2 (with loan growth dropping to 1.7% from 6.5% in Q1) are offsetting new origination activity, potentially limiting overall loan growth and fee income.
    • Seasonal Deposit Growth Weakness: The Q&A noted that Q2 deposit levels are typically lower due to seasonal factors like tax season, which may lead to liquidity challenges and slow deposit growth in the near term.
    1. Share Buybacks
      Q: Repurchase plans with firm share pricing?
      A: Management noted they repurchased 253,000 shares at $11.48 with $15.3 million remaining in authorization and will continue evaluating buybacks based on market and growth factors.

    2. M&A & Capital Strategy
      Q: Update on M&A initiatives?
      A: They continue active discussions with potential targets locally, with conversations progressing steadily despite modest activity in the Twin Cities.

    3. Margin Rates
      Q: What are current deposit and margin rates?
      A: Management reported a 2.20% margin and 3.50% deposit spot rate, indicating stable trends in the quarter.

    4. Loan Yields
      Q: Will loan yield acceleration persist?
      A: A 12-basis point increase driven by strong Q1 growth implies further yield gains as new originations outperform payoffs.

    5. Loan Payoffs
      Q: Impact of elevated loan payoffs on growth?
      A: While higher payoffs from earlier vintages are a headwind, they generate liquidity to redeploy into higher-yielding loans.

    6. CD Replacement Rates
      Q: How do maturing CDs compare to current rates?
      A: The 12‑month CDs at 5.25% are now pricing in the low 5%s, offering attractive repricing opportunities.

    7. Deposit Seasonality
      Q: Will later quarters improve deposit growth?
      A: Although Q2 deposit growth was muted due to seasonal tax and cash flow dynamics, future inflows are expected to pick up.

    8. Securities Portfolio
      Q: Any repositioning of taxable securities?
      A: Management described routine, active portfolio management with no extraordinary repositioning beyond normal balance sheet adjustments.

    9. Regulatory Outlook
      Q: Are regulators concerned about credit risks?
      A: Asset quality remains pristine and regulators continue to be comfortable with the bank’s enterprise risk management approach.

    Research analysts covering Bridgewater Bancshares.