Bridgewater Bancshares (BWB)·Q4 2025 Earnings Summary
Bridgewater Bancshares Beats Q4 Estimates, Pulls Forward 3% NIM Target to 2026
January 28, 2026 · by Fintool AI Agent
Bridgewater Bancshares (NASDAQ: BWB) delivered a strong Q4 2025, beating both revenue and EPS estimates while pulling forward its 3% net interest margin target from early 2027 to the end of 2026. The Twin Cities-based bank continues to capitalize on M&A disruption in its market, with CEO Jerry Baack noting Bridgewater is now "the second-largest locally led bank in the Twin Cities."
Did Bridgewater Bancshares Beat Earnings?
Yes — Bridgewater delivered a double beat in Q4 2025:
Values retrieved from S&P Global
Management highlighted several key drivers: net interest margin expanded 12 basis points to 2.75%, core deposits grew 8.8% annualized, and loans grew 8.9% annualized. Full year 2025 loan growth of 11.4% exceeded the mid-to-high single digit guidance issued at the start of the year.
Ask Fintool AI AgentWhat Did Management Guide?
NIM guidance materially improved. CFO Joe Chybowski pulled forward the 3% NIM target: "We are actually pulling forward and believe we can get to 3% NIM by the end of 2026" — ahead of the prior early 2027 timeline. Critically, this forecast does not assume any additional Fed rate cuts.
The bullish margin outlook is supported by asset repricing opportunities:
- $637M of fixed-rate loans maturing over the next 12 months at 5.55% weighted average yield
- $106M of adjustable-rate loans repricing at 3.84%
- New originations going on books in the "low to mid-6s"
How Did the Stock React?
BWB shares rose +1.7% on the earnings release, trading at $18.77 intraday. The stock is approaching its 52-week high of $19.40, up significantly from the 52-week low of $11.93.
The stock's YTD momentum reflects the bank's improving profitability trajectory. Tangible book value per share grew 16.5% annualized in Q4 and 15.3% year-over-year — "a unique part of the Bridgewater story," according to management.
What Changed From Last Quarter?
Several positive inflections emerged in Q4:
Credit quality saw modest uptick but remains manageable:
- NPAs rose to 0.41% of assets, driven by one multifamily loan where "the client's original purchase agreement fell through" — now under new contract
- Net charge-offs of $1.2M related to a "fully reserved C&I loan"
- Full year net charge-offs remained low at 0.04% of average loans
Key Management Quotes
On market opportunity:
"Old National's acquisition of Bremer has been the main one, but the pending acquisitions of MidWestOne and American National have created additional opportunities. Bridgewater is now the second-largest locally led bank in the Twin Cities, so we feel well positioned to be the bank of choice for those looking to work or bank local."
On NIM trajectory:
"Given the expansion we saw in the fourth quarter, and as we look ahead to repricing opportunities in 2026, we are actually pulling forward and believe we can get to 3% NIM by the end of 2026, and this does not assume any additional rate cuts."
On affordable housing vertical:
"We continue to see great traction in the affordable housing space, as balances overall increased $41 million in the fourth quarter, or 27% annualized."
Ask Fintool AI AgentSegment Performance: Affordable Housing Leading Growth
The affordable housing vertical continues to outperform, representing approximately 15% of the loan book.
Chief Banking Officer Nick Place noted the bank has "not set any specific parameters around how big we want that to get" but expects the affordable housing portfolio growth rate to "outpace the overall portfolio growth" near-term.
2026 Strategic Priorities
Management outlined four strategic priorities for 2026:
- Optimize profitable growth — Align loan growth with core deposits while expanding NIM
- Gain Twin Cities market share — Leverage M&A disruption, expand nonprofit and SBA verticals
- Expand affordable housing nationally — Enhance permanent loan product offerings
- Technology investments — Modernize core banking, develop AI strategy
Q&A Highlights
On deposit seasonality (Nathan Race, Piper Sandler): Nick Place cautioned that "Q4 does tend to be a seasonally high watermark" and "Q1 and Q2 of the year do tend to be more modest." The bank will supplement with brokered deposits if needed.
On CBD office exposure (Brendan Nosal, Hovde): Chief Credit Officer Katie Morrell noted the CBD office loan that moved to non-accrual earlier in 2025 "still has a specific reserve" and is expected "to be a longer-term workout."
On M&A appetite (Brendan Nosal, Hovde): CEO Jerry Baack: "We always say, and we mean it, if we wake up every day and we look at the business organically and what we can do organically and take market share, and the M&A strategy is really second place to that. But, we continue to be optimistic that over the next few years, a couple more deals might come our way."
On competition (Brandon Rud, Stephens): Nick Place acknowledged "increased competition, particularly on the loan front throughout 2025" as banks returned to the market, but noted the pipeline remains at "75%-80% of where we were at the peak."
Historical Performance
Values retrieved from S&P Global
BWB has beaten EPS estimates in 7 of the last 8 quarters, with only Q1 2024 recording a miss.
Ask Fintool AI AgentRisks and Concerns
- Deposit seasonality: Q1/Q2 typically see outflows; may require brokered deposit use
- CBD office exposure: One loan in longer-term workout with specific reserve
- Swap fee volatility: Q4 swap fees of $651K may slow in 2026 due to normalized swap spreads
- Competition: Increased loan competition throughout 2025
- Local events: Management monitoring impact of recent Twin Cities events on team and clients
Forward Catalysts
- February 2026: New Lake Elmo branch opening
- Throughout 2026: Asset repricing opportunities ($743M in loans repricing higher)
- Year-end 2026: 3% NIM target
- Ongoing: Talent and client acquisition from Twin Cities M&A disruption
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