Bridgewater Bancshares Inc. (BWB) has announced an impressive performance for the third quarter of 2025, marked by substantial growth in core deposits and loans, along with strategic operational enhancements. The bank is actively expanding its market presence and is well-positioned to achieve its ambitious financial objectives in the coming years. The leadership team emphasized their commitment to driving shareholder value through consistent performance and strategic acquisitions.
Bridgewater Bancshares Inc. Reports Strong Q3 2025 Results and Outlines Future Growth Strategy
On Wednesday, October 22, 2025, Bridgewater Bancshares Inc. held its third-quarter earnings call, providing a detailed overview of its financial achievements and future strategic direction. The call featured key executives, including Chairman and CEO Jerry Baack, President and CFO Joseph M. Chybowski, Chief Banking Officer Nicholas L. Place, Chief Credit Officer Katie Morell, and Deputy Chief Credit Officer Jeffrey D. Shellberg. The session highlighted the bank's exceptional ability to capture market share, evidenced by an 11.5% annualized increase in core deposits and a 6.6% annualized growth in loans during the quarter.
Jerry Baack, Chairman and CEO, proudly noted the steady net interest income growth, which saw a $1.6 million increase, and a one basis point expansion in net interest margin to 2.63%. He attributed this success to the dedicated banking teams and their relationship-focused model. Baack also shared significant operational milestones, including the successful launch of a new online banking platform for retail and small business clients in July, and the seamless system conversion following the acquisition of First Minnetonka Citibank in September. These advancements underscore the bank's commitment to enhancing client experience and its capacity for future mergers and acquisitions. Additionally, Baack announced the upcoming retirements of Chief Strategy Officer Mary Jane Crocker and Deputy Chief Credit Officer Jeffrey D. Shellberg in 2026, while highlighting the promotion of Katie Morell to Chief Credit Officer, Jessica Stetskull to Chief Experience Officer, and Laura Aspisov to Chief Administrative Officer, ensuring strong leadership continuity.
Joseph M. Chybowski, President and CFO, delved into the financial specifics, explaining that net interest income growth was fueled by a 16% annualized increase in average earning assets. Despite headwinds from subordinated debt issuance, the bank anticipates more significant net interest margin expansion in the upcoming quarters, with a projected path to reach a 3% margin by early 2027. This optimism is based on the expectation of higher loan yields and declining deposit costs, especially with potential future interest rate cuts. Chybowski also addressed non-interest expenses, noting that while they were elevated due to system conversions and strategic marketing efforts, they are expected to normalize in line with asset growth.
Nicholas L. Place, Chief Banking Officer, elaborated on the robust core deposit momentum, which saw non-interest-bearing deposits increase by approximately $35 million while brokered deposits decreased by a similar amount. He emphasized the strategic importance of core deposits for profitable growth and highlighted the strong loan pipelines, which remain at three-year highs. Place also pointed to opportunities arising from local M&A disruptions in the Twin Cities, enabling the bank to be aggressive in loan generation while maintaining a healthy loan-to-deposit ratio.
Katie Morell, Chief Credit Officer, provided insights into the bank's strong asset quality. Non-performing assets remained low at 0.19% of total assets, and net charge-offs were minimal at 0.03% of average loans. Morell discussed the bank's multifamily and office exposure, noting positive trends in the Twin Cities' multifamily sector with low vacancy rates and strong absorption. She reaffirmed confidence in the affordable housing portfolio, which has grown 27% annualized year-to-date, due to strong developer partnerships and the nationwide demand for affordable housing. While acknowledging a specific multifamily loan that migrated to substandard status, Morell assured that it was an isolated incident and that the overall portfolio remains sound.
The management team concluded by reiterating their ambitious goal of becoming a $10 billion bank by 2030, believing they are well on track. They expressed confidence in their balanced growth approach, strategic hires, and optimized operations to continue driving shareholder value and expanding their market footprint.
This earnings report from Bridgewater Bancshares Inc. paints a picture of a dynamic financial institution that is not only adapting to market changes but actively leveraging them for growth. The detailed discussions around core deposit growth, loan portfolio management, and strategic initiatives underscore a forward-thinking approach. For investors and industry observers, the bank's clear vision to reach a $10 billion valuation by 2030, coupled with its commitment to maintaining robust asset quality and expanding net interest margin, serves as a compelling indicator of its future potential. The emphasis on internal talent development and efficient integration of acquisitions also suggests a well-managed organization poised for sustained success in a competitive banking landscape. It highlights that strategic execution and strong leadership are paramount in achieving ambitious financial goals.