Bridgewater Bancshares concluded the fourth quarter of 2025 with a performance that surpassed market forecasts for both profit and revenue. The regional banking institution, operating in a sector still grappling with a shifting interest rate environment, benefited from a notable expansion in its net interest margin and a reinforced base of core deposits.
Financial Performance Exceeds Estimates
The company reported earnings per share (EPS) of $0.44, topping the consensus expectation of $0.42. Revenue for the quarter reached $38.84 million. A key driver was the net interest margin, which widened to 2.75%. Management has set a new target, aiming to achieve a 3.00% margin by the end of 2026—a goal accelerated from earlier projections that anticipated reaching this level in early 2027.
Efficiency Gains from Lower Funding Costs
A 12-basis-point increase in the net interest margin to 2.75% was central to the improved profitability. This expansion is largely attributed to reduced deposit costs following interest rate adjustments made by the U.S. Federal Reserve in late 2025. The company’s refined funding mix played a critical role.
Core deposits grew at an annualized rate of 8.8% during the quarter. Notably, non-interest-bearing deposits increased by approximately $100 million. This influx allowed the bank to decrease its reliance on more expensive brokered deposits, creating a more cost-efficient funding structure and providing the foundation for the upgraded margin target.
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Insider Transactions Amid Analyst Optimism
Despite the strong operational results and a positive stock trend post-earnings, several company executives filed notices of share sales this week. Director Jeffrey Shellberg disposed of 9,838 shares at an average price of $18.89. The previous day, Director James S. Johnson sold 4,712 shares at around $19.71 each.
Executive Vice President Mary Jayne Crocker also sold a total of 2,227 shares earlier in the week. These transactions occurred as equity researchers revised their price targets upward. Analysts at Piper Sandler raised their target to $23.00, while DA Davidson sees potential for the stock to reach $24.00.
Strategic Focus for 2026
Looking ahead to the 2026 fiscal year, Bridgewater Bancshares remains focused on its lending activities in affordable housing and commercial relationship banking. The company anticipates loan growth to remain stable in the high single-digit percentage range, which is expected to support the achievement of its new margin objectives.
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