Bridgewater Bank(US:BWB)2025-04-24 19:05Financial Data and Key Metrics Changes - The company reported adjusted earnings per share of $0.32, excluding merger-related expenses, indicating strong performance in Q1 2025 [10] - Net interest margin expanded by 19 basis points to 2.51%, driven by lower deposit pricing and higher loan yields [12][20] - First-quarter loan balances increased by 16% on an annualized basis, reflecting strong loan growth [11][31] Business Line Data and Key Metrics Changes - Core deposit growth was 8% annualized in Q1 2025, contributing to the company's ability to pursue loan growth [11][29] - Non-interest income remained elevated at $2.1 million, including $325,000 from investment advisory fees related to the recent acquisition [26] - The multifamily loan portfolio, particularly in affordable housing, grew by 13% over the past year, now totaling nearly $600 million [37] Market Data and Key Metrics Changes - The loan pipeline is at its highest level since 2022, indicating increased demand in the market [33] - The company noted favorable market trends in the Twin Cities, with improved absorption levels and rent growth in the multifamily sector [39] Company Strategy and Development Direction - The company aims to gain market share amid ongoing market disruptions in the Twin Cities, focusing on affordable housing and commercial & industrial (C&I) spaces [56] - Two significant technology initiatives are planned for 2025, including an upgraded online banking platform and systems conversion from the recent acquisition [56] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about loan growth, projecting mid to high single-digit growth for the full year 2025, despite potential economic uncertainties [50] - The company is actively monitoring the impact of tariffs and market volatility on client behavior and loan demand [17][33] Other Important Information - The company repurchased approximately $600,000 of common stock during the quarter, with $14.7 million remaining under the current share repurchase authorization [48] - Non-performing assets increased to 0.2% of loans, primarily due to one office loan moved to non-accrual status, but overall asset quality remains strong [14][44] Q&A Session Summary Question: Changes in competition in the CRE market - Management noted increased activity from previously sidelined players, tightening spreads slightly, but remains confident in their competitive position [60][62] Question: Details on margin and deposit costs - The March average margin was reported at 2.53%, with deposit costs at 3.18% for the quarter, indicating ongoing efforts to lower costs while maintaining loan yields [64][66] Question: Loan growth distribution throughout the quarter - Loan growth was relatively steady across the quarter, with a slight bias towards the back half [68] Question: Timeline for the workout of a non-accrual loan - The workout process for the non-accrual loan is expected to be longer-term, dependent on economic conditions, with the borrower engaged in a workout plan [71] Question: Outlook on M&A activity - The company is in discussions with owners of smaller franchises in the Twin Cities but has no imminent deals [91] Question: Share repurchase decision-making process - The company evaluates share repurchases based on valuations, growth prospects, and capital needs, maintaining flexibility in decision-making [97]