Bridgewater Bancshares, Inc.

What they do

Bridgewater Bancshares, through its wholly-owned subsidiary Bridgewater Bank, provides commercial banking services, primarily commercial real estate lending, to businesses, entrepreneurs, and successful individuals in the Minneapolis-St. Paul metropolitan area. The bank generates revenue from interest and fees on loans, interest and dividends on investment securities, and noninterest income from service charges, letter of credit fees, and swap fees. As of June 30, 2026, the company had $5.39 billion in total assets, $4.31 billion in gross loans, and $4.32 billion in deposits at year-end 2025, operating nine full-service offices in Minnesota.

Revenue drivers

• Commercial real estate (CRE) lending — CRE loans are the primary driver of organic growth and the largest component of the loan portfolio, contributing to a yield on total loans of 5.91% in Q2 2026.
• Net interest income — Net interest income was $132.4 million in 2025, up from $102.2 million in 2024, supported by net interest margin expansion to 2.63% in 2025 and 3.07% (FTE) in Q2 2026.
• Noninterest income — Noninterest income, including service charges, letter of credit fees, and swap fees, totaled $10.9 million in 2025, up from $7.4 million in 2024, partly aided by an investment advisory function from the FMCB acquisition.

Recent performance

For Q2 2026, Bridgewater reported net income of $14.0 million, or $0.45 per diluted share, down from $17.4 million in Q1 2026 but up from $11.5 million in Q2 2025. Net interest income rose 21.0% annualized from the prior quarter, and net interest margin (FTE) improved to 3.07%. Gross loans grew 5.4% annualized, while total deposits grew 3.8% annualized, though core deposits declined 3.5% annualized. Nonperforming assets rose to 0.40% of total assets at June 30, 2026, from 0.22% at March 31, 2026, but annualized net charge-offs remained low at 0.04%.

Strategy

Management emphasizes relationship-based growth, focusing on organic expansion in the Twin Cities MSA, with a stated commitment to adding top talent across production and support teams. The company completed the acquisition of First Minnetonka City Bank in December 2024, adding assets, deposits, loans, and two branches (one later closed), plus an investment advisory function. In Q2 2026, the company repurchased 38,659 shares at a weighted average price of $18.12, and it continues to manage disciplined credit underwriting and balance sheet positioning.

Risks

• Credit concentration in CRE — The company's loan portfolio is heavily concentrated in commercial real estate, exposing it to downturns in the local and national real estate markets.
• Large deposit concentration — A concentration of large deposits from certain clients, including balances above FDIC insurance limits, could pose liquidity risk if withdrawals occur.
• Interest rate risk — Fluctuations in interest rates could compress net interest margin, as the bank's loan yields and funding costs are sensitive to rate movements.
• Competitive pressure — The Twin Cities market is dominated by large national banks—Wells Fargo and U.S. Bank control nearly 59% of deposits—and the company faces competition from other financial institutions.

Outlook

Management expects continued progress on key profitability drivers, with net interest margin expansion and loan growth supporting earnings. The company plans to continue investing in talent and infrastructure to capitalize on growth opportunities in its markets. The recent rise in nonperforming assets will be monitored, but management maintains a disciplined credit approach.