Bridgewater Bancshares, Inc. reported third-quarter 2026 net income of $15.0 million, up from $14.0 million in the second quarter of 2026 and $11.6 million in the third quarter of 2025. The St. Louis Park, Minnesota-based parent company of Bridgewater Bank attributed the earnings growth to rising pre-provision net revenue and a significant improvement in its efficiency ratio, which fell below 50% for the first time since the first quarter of 2023.
The company’s pre-provision net revenue, a non-GAAP measure, increased by $2.9 million, or 60.4% annualized, compared to the second quarter of 2026. This revenue expansion drove the efficiency ratio down to 48.8% from 53.0% in the prior quarter. Net interest income rose by $2.1 million, or 21.5% annualized, over the same period. Chairman and Chief Executive Officer Jerry Baack stated that the quarter highlighted strong profitability and balance sheet growth as the company executed on its profitable growth strategy.
Balance sheet expansion remained a central theme of the results. Gross loans increased by $80.4 million, or 7.2% annualized, from the second quarter of 2026, while total deposits grew by $126.8 million, or 11.6% annualized. Core deposits, defined as total deposits less brokered deposits and certificates of deposit greater than $250,000, saw a more substantial increase of $165.3 million, or 19.6% annualized. This deposit growth supported organic loan expansion and improved the overall deposit mix, according to Baack.
The net interest margin on a fully tax-equivalent basis stood at 3.09% for the third quarter of 2026, representing a two-basis point increase from the second quarter of 2026 and a 46-basis point increase from the third quarter of 2025. The core net interest margin, which excludes loan fees and purchase accounting accretion from the acquisition of First Minnetonka City Bank, was 2.98%, up four basis points from the previous quarter.
Asset quality metrics showed mixed trends during the period. Annualized net loan charge-offs as a percentage of average loans rose to 0.21% in the third quarter of 2026 from 0.04% in the second quarter of 2026. However, nonperforming assets to total assets decreased to 0.37% at September 30, 2026, down from 0.40% at June 30, 2026.
Capital ratios remained stable with slight improvements in some metrics. The Common Equity Tier 1 Risk-Based Capital Ratio was 9.63% at September 30, 2026, up from 9.61% at June 30, 2026, though this figure is based on preliminary data subject to change prior to regulatory filings. Tangible book value per share decreased to $16.33 at September 30, 2026, a decline of 6.7% annualized from the second quarter of 2026.
Baack noted that the balance sheet is better positioned for a higher interest rate environment due to an intentional mix shift toward variable-rate loans over recent years. He added that the company’s teams continue to deliver service that deepens client relationships and creates new ones, reinforcing the ability to sustain profitable growth.