BRIDGEWATER BANC(BWBBP) - 2025 Q4 - Annual Report

Financial Performance - Net interest income for 2025 was $132,438,000, an increase of 29.6% from $102,193,000 in 2024[280] - Noninterest income rose to $10,915,000 in 2025, up 48.5% from $7,368,000 in 2024[280] - Net income increased by 40.4% to $46,088,000 in 2025, compared to $32,825,000 in 2024[280] - Basic earnings per share (EPS) for 2025 was $1.53, a 45.7% increase from $1.05 in 2024[280] - Adjusted net income for 2025 was $46.9 million, compared to $33.1 million in 2024, with adjusted earnings per diluted share increasing to $1.52 from $1.04[292] - Net income for the year ended December 31, 2025, was $46.1 million, an increase of 40.5% from $32.8 million in 2024, with diluted earnings per share rising to $1.49 from $1.03[292] Asset and Loan Growth - Total assets grew by 6.7% to $5,407,002,000 in 2025, up from $5,066,242,000 in 2024[281] - Total loans increased by 11.4% to $4,309,517,000 in 2025, compared to $3,868,514,000 in 2024[281] - Total deposits rose by 5.7% to $4,320,369,000 in 2025, up from $4,086,767,000 in 2024[281] - Total gross loans reached $4.31 billion at December 31, 2025, an increase of $441.0 million, or 11.4%, compared to $3.87 billion in 2024[324] - The multifamily loans increased by $161.7 million, or 11.3%, while construction and land development loans surged by $118.9 million, or 122.3% compared to the previous year[330] Efficiency and Cost Management - The efficiency ratio improved to 53.5% in 2025 from 57.9% in 2024, indicating better cost management[280] - Noninterest expense totaled $77.3 million for the year ended December 31, 2025, a $14.0 million, or 22.1%, increase from $63.3 million in 2024[315] - The efficiency ratio improved to 53.5% for the year ended December 31, 2025, down from 57.9% in 2024[318] Interest Income and Margin - The net interest margin for 2025 was 2.63%, a 37 basis point increase from 2.26% in 2024, while the core net interest margin was 2.50%, up 31 basis points from 2.19%[300] - Total interest income on a tax-equivalent basis rose to $283.7 million for the year ended December 31, 2025, a $36.6 million, or 14.8%, increase compared to $247.1 million in 2024[304] - Interest income on loans increased to $234.2 million for the year ended December 31, 2025, up $28.5 million, or 13.9%, from $205.6 million in 2024[306] - Core Net Interest Income (Tax-Equivalent Basis) for 2025 is $127,885,000, up from $100,259,000 in 2024, representing a 27.6% increase[384] - Core Net Interest Margin improved to 2.50% in 2025 compared to 2.19% in 2024, indicating a 14.2% increase[384] Capital and Equity - Total shareholders' equity rose to $517.1 million, a 12.9% increase from $457.9 million in 2024[361] - Tangible book value per share increased to $15.55, reflecting a 15.3% rise from $13.49 in 2024[362] - Total risk-based capital for the Company was $667.8 million, with a ratio of 14.12%, exceeding the minimum required[367] - The Company maintained a Tier 1 leverage ratio of 9.20% as of December 31, 2025, above the required 4.00%[367] Liquidity Management - The Company had no outstanding federal funds purchased as of December 31, 2025, indicating strong liquidity management[352] - As of December 31, 2025, total on- and off-balance sheet liquidity was $2.51 billion, an increase from $2.30 billion at December 31, 2024[376] - The Company maintained compliance with all established liquidity guidelines as of December 31, 2025[380] Credit Quality - Nonperforming loans totaled $22.0 million at December 31, 2025, a significant increase from $301,000 at December 31, 2024[339] - The allowance for credit losses on loans and leases was $56.4 million at December 31, 2025, up $4.2 million from $52.3 million at December 31, 2024[344] - Loans classified as "substandard" increased to $53.0 million at December 31, 2025, from $21.8 million at December 31, 2024[338] Market Expansion - A new branch was opened in Lake Elmo, Minnesota, to expand the company's market presence in February 2026[286] - The Bank's loan growth was attributed to strong brand recognition in the Twin Cities market and favorable market conditions[330] Interest Rate Sensitivity - As of December 31, 2025, a 400 basis point increase in interest rates would lead to a 6.09% decrease in net interest income, amounting to $156,625 thousand[393] - Conversely, a 400 basis point decrease in interest rates would result in a 19.53% increase in net interest income, reaching $199,357 thousand[393] - The projected net interest income is sensitive to the timing and magnitude of interest rate changes, which could lead to significant variances from the estimates[394]