📰 What This Document Is

This 8-K filing is an event announcement used to disseminate key financial and operational results for Bridgewater Bancshares Inc. (BWBBP) for the first quarter of 2026. This document provides a deep dive into how the bank performed during the three months ended March 31, 2026. Readers should expect comprehensive details on revenue, asset growth, capital ratios, and strategic financial moves, offering a complete view of the bank's health.

👉 The overall tone is one of strength and proactive management, highlighting strong returns and improving asset efficiency.

🏦 About The Company

Bridgewater Bancshares, Inc., is a financial holding company based in St. Louis Park, Minnesota, and was founded in 2005. Its subsidiary, Bridgewater Bank, serves as a full-service bank, offering a comprehensive range of products and services.

👉 The bank has established itself as one of the largest locally-led banks in Minnesota, providing services that span deposits, lending, and treasury management solutions.

💵 Financial Performance Highlights

The filing immediately outlines the primary financial results for Q1 2026. The bank saw a notable increase in net income, driven by multiple factors, including interest income and operational gains.

• Net Income: For the first quarter of 2026, net income reached $17.4 million. This is an increase compared to the fourth quarter of 2025 ($13.3 million) and substantially higher than the first quarter of 2025 ($9.6 million).
• Earnings Per Share (EPS): Diluted EPS for Q1 2026 was $0.58 per share. This shows improvement over the fourth quarter of 2025 ($0.43) and the first quarter of 2025 ($0.31).
• Adjusted Metrics: Adjusted net income was $12.6 million, or $0.41 per diluted common share. The bank also recorded a non-GAAP adjusted efficiency ratio of 53.8% for the quarter, showing improved cost management year-over-year.

💰 Interest Income and Net Interest Margin

This section details the primary revenue source for a bank: the difference between what the bank earns on loans (interest income) and what it pays out on customer deposits (interest expense).

• Net Interest Income: This metric saw a strong increase of $960,000 (or 10.9% annualized) from the fourth quarter of 2025. This rise was fueled by a combination of factors, including lower rates paid on deposits and growth in the loan portfolio with higher yields.
• Net Interest Margin (NIM): The NIM increased to 2.99% (on a fully tax-equivalent basis) in Q1 2026. This represents a 24 basis point increase from the fourth quarter of 2025, indicating that the bank is effectively managing its cost of funds relative to its lending returns.
• Interest Income: Interest income was $70.0 million in Q1 2026. This figure is based partly on the sale of securities, which increased the yield on interest-earning assets to 5.65% (compared to 5.58% in Q4 2025).

🏦 Loan Portfolio Growth and Quality

The filing provides a detailed look at the assets—specifically the loans—that form the core of the bank's business. The bank continues to grow its lending book, while also demonstrating strong caution regarding potential credit losses.

• Total Loans, Gross: The gross loan portfolio increased to $4.36 billion by March 31, 2026. This represents an increase of $58.5 million, or 5.5% annualized, from the fourth quarter of 2025.
  • Why it matters: The growth was primarily driven by increases in the commercial and CRE nonowner occupied portfolios, suggesting robust activity in corporate real estate and business lending.
• Core Deposits: The most critical funding source, core deposits (excluding brokered and large CDs), increased by $26.2 million, or 3.2% annualized, from the fourth quarter of 2025.
  • Why it matters: Stable growth in core deposits signals that the bank is successfully retaining primary, sticky funds from its key clients, which is a sign of market trust.
• Asset Quality Metrics: Asset quality remains high, as indicated by:
  • Net Loan Charge-Offs: Annualized net loan charge-offs were low at 0.05% of average loans, a significant drop from 0.11% in Q4 2025.
  • Nonperforming Assets (NPAs): NPAs totaled $11.7 million at March 31, 2026. This is a substantial decrease from the $22.0 million at December 31, 2025, indicating the bank is actively managing and recovering from past loan issues.

📑 Balance Sheet and Capital Strength

This section details the bank's overall financial health, including capital reserves and efficiency ratios. Maintaining strong capital ratios is crucial for the bank's stability.

• Capital Position: Total shareholders’ equity at March 31, 2026, was $528.4 million. This marks an 8.9% annualized increase from the fourth quarter of 2025 ($517.1 million).
• Capital Ratios: The bank's financial resilience is strong. The Common Equity Tier 1 Risk-Based Capital Ratio was 9.53% at March 31, 2026, up from 9.17% at December 31, 2025.
  • Why it matters: Regulatory capital ratios must meet minimum standards. The increase signals that the bank is building up capital reserves and remains well-capitalized.
• Operational Efficiency: The efficiency ratio was 56.3% in Q1 2026. While this ratio increased from 51.6% in Q4 2025, this increase was strategic, stemming from the significant gain on the sale of securities, which improved the balance sheet.

📈 Enhanced Balance Sheet Efficiency and Non-Core Gains

A key part of the Q1 2026 story was the bank's ability to proactively enhance its balance sheet. This allowed for substantial one-time gains that boosted earnings.

• Securities Sale: The bank sold $208.5 million of securities. This opportunistic move generated a pre-tax gain of $7.3 million and helped improve balance sheet efficiency.
• FHLB Prepayment: The bank also executed the prepayment of $97.5 million of FHLB advances, incurring a prepayment fee of $982,000.
  • Why it matters: Taking these proactive steps shows management's focus on optimizing the balance sheet, positioning the bank for "improved forward profitability."
• Noninterest Income: Noninterest income reached $9.6 million in Q1 2026. A large portion of this—the $7.3 million gain on securities sale—was classified as a non-core item.

💼 Strategic Initiatives and Governance

The company used this filing to announce several important strategic actions regarding its capital structure and relationship with shareholders.

• ATM Offering: Bridgewater launched an at-the-market (“ATM”) offering for the sale of common stock, up to $50 million at any time.
  • Why it matters: This provides the bank with an established, flexible way to raise capital as needed without needing to issue a large, formal offering.
• Preferred Stock Dividend: The Board of Directors declared a quarterly cash dividend on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A. The quarterly dividend of $36.72 per share is payable on June 1, 2026, to shareholders of record as of May 15, 2026.

🎤 Management Commentary and Outlook

Chairman and CEO Jerry Baack provided positive commentary, highlighting the factors behind the quarter’s success.

• Jerry Baack stated that the first quarter was "highlighted by significant net interest margin expansion, continued loan and core deposit growth, and strong asset quality."
• He specifically noted that the proactive actions taken, such as the sale of securities, enhanced efficiency, allowing the bank to "build our capital position and continue generating consistent tangible book value per share growth."

🗓️ Key Dates and Contacts

For those seeking more information, the filing provides specific dates for follow-up communications.

• Earnings Call: A conference call was held to discuss Q1 2026 results on Wednesday, April 22, 2026, at 8:00 a.m. Central Time.
• Webcast/Replay: The webcast was available on the Investor Relations section of the company's website. The replay would be available through April 29, 2026.
• Media Contact: Emily Karpenske (Senior Communication Specialist) can be reached at [email protected] or 952.653.0624.
• Investor Relations Contact: Justin Horstman (VP Investor Relations) can be reached at [email protected] or 952.542.5169.

🧠 The Analogy

Think of the bank's balance sheet like a well-maintained house. The $208.5 million securities sale was like selling an old, underperforming section of the property to fund a major roof repair (improving efficiency). Simultaneously, growing core deposits are like making your permanent residents happier and more dedicated, ensuring a stable stream of funds, while the decline in nonperforming assets shows the bank is successfully fixing leaky pipes (risky loans) before they cause costly structural damage.

🧩 Final Takeaway

Bridgewater Bancshares showed strong operational resilience and proactive management in Q1 2026, highlighted by increasing its NIM and executing profitable balance sheet optimizations. The bank is signaling strong client trust through core deposit growth and improving capital strength.