Bridgewater Bancshares, Inc.

Bridgewater did not provide full GAAP income statement figures in the transcript, but management said second quarter ROA topped 1%, net interest margin was 3.07%, and net interest income grew at a 21% annualized pace. Tangible book value increased 17% annualized to $16.61, CET1 rose to 9.61% from 9.53%, and net charge-offs were four basis points. Non-performing assets moved modestly higher to 40 basis points, while the reserve for a central business district office loan was increased to a total of $4 million. Looking ahead, management expects mid- to high-single-digit loan growth in the back half of 2026, margin expansion to continue but at a slower pace, and expenses in the third and fourth quarters to be relatively stable with second-quarter levels.

Jerry Baack struck an upbeat tone, calling the quarter “another strong quarter” and emphasizing market share gains, improved profitability, and tangible book value growth. He highlighted that Bridgewater surpassed a 1% ROA, exceeded its 3% margin goal, and continued to add talent through opportunistic hiring amid Twin Cities banking disruption. He also stressed that the bank is growing deliberately and profitably, with asset quality remaining a strength.

Joe Chybowski framed the quarter as a mix of strong revenue momentum and disciplined expense management. He said net interest income grew at a 21% annualized pace, margin expanded eight basis points to 3.07%, and revenue grew at a 20% annualized pace versus 13% expense growth, producing positive operating leverage. He also said margin expansion should continue in the second half, though more slowly, that expenses should be relatively flat from second-quarter levels for the rest of 2026, and that loan repricing remains a key support for earnings. On capital, he noted CET1 increased to 9.61% and the company repurchased about $700,000 of stock at a weighted average price of $18.12.

Analysts focused on payoffs, margin drivers, deposit competition, loan pricing, and the impact of recent hiring. Management said payoffs largely reflect the natural life cycle of client projects and refinancing/sales activity, not a credit concern, and that the recent pace looks like the level they are modeling for the back half of the year. On margins, they said further expansion will increasingly come from earning assets rather than deposit-cost relief, while deposit competition remains strong and loan pricing is aggressive, with some deals at 150 basis points over SOFR seen as too tight to pursue. Management also said the expanded team still has room to increase loan production, and that loan growth will remain disciplined and tied to core deposit growth.