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BWB

Bridgewater Bancshares NasdaqCM:BWB Stock Report

Last Price

US$16.41

Market Cap

US$459.1m

7D

2.8%

1Y

4.1%

Updated

06 Jul, 2022

Data

Company Financials +
BWB fundamental analysis
Snowflake Score
Valuation6/6
Future Growth2/6
Past Performance5/6
Financial Health6/6
Dividends0/6

BWB Stock Overview

Bridgewater Bancshares, Inc. operates as the bank holding company for Bridgewater Bank that provides banking products and services to commercial real estate investors, small business entrepreneurs, and high net worth individuals in the United States.

Bridgewater Bancshares Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Bridgewater Bancshares
Historical stock prices
Current Share PriceUS$16.41
52 Week HighUS$20.05
52 Week LowUS$14.97
Beta0.71
1 Month Change0.92%
3 Month Change0.92%
1 Year Change4.12%
3 Year Change41.22%
5 Year Changen/a
Change since IPO30.03%

Recent News & Updates

Jun 30

Bridgewater Bancshares: Loan Portfolio's Surge To Translate Into Earnings Growth

The management’s expansionary efforts and Minnesota's strong economy are likely to keep loan growth strong in the near term. The net interest margin is barely sensitive to interest rate hikes. The December 2022 target price suggests a high upside from the current market price. BWB does not currently pay a dividend. Earnings of Bridgewater Bancshares, Inc. (BWB) will most probably continue to surge this year on the back of robust balance sheet growth. The company's loan portfolio has grown at a phenomenal rate since its IPO, and the growth momentum is likely to continue through the middle of 2022. However, headwinds are likely to slow down loan growth in the last quarter of the year. Meanwhile, the net interest margin is likely to somewhat benefit from a rising interest-rate environment. Overall, I'm expecting Bridgewater Bancshares to report earnings of $1.70 per share for 2022, up 11% year-over-year. The year-end target price suggests a high upside from the current market price. Therefore, I'm adopting a buy rating on Bridgewater Bancshares. Several Catalysts for Loan Growth Ahead Bridgewater Bancshares reported remarkable loan growth of 6% in the first quarter of 2022. Loan growth has been phenomenal since the IPO of the company in 2018. The loan portfolio has in fact grown at a compounded annual growth rate of 20% from 2017 to 2021. For full-year 2022, loan growth is likely to be in at least the mid-teen percentage range thanks to the following catalysts. The recent expansion of lending teams. As mentioned in the earnings presentation, merger and acquisition-related disruption in Bridgewater's markets has resulted in client and banker acquisition opportunities. The company has recently hired some lenders and intends to continue to hire in the near future. New loan origination system. Bridgewater Bancshares launched a new commercial loan origination system in March 2022, as mentioned in the latest investor presentation. The impact of this digital platform will be visible in the coming quarters. Strength in the regional economy. Bridgewater Bancshares operates in Minnesota, which currently has a strong job market. The state had an unemployment rate of only 2.0% in May 2022, which is one of the lowest unemployment rates in the country. M&A activity. Management mentioned in the earnings presentation that some M&A discussions with potential targets are ongoing. However, the company is yet to announce any merger agreement so far this year. Robust loan pipeline. Management mentioned in the earnings presentation that its loan pipeline was quite strong and diversified among various asset classes at the end of March 2022. Due to the above factors, loan growth will most probably remain strong in the next two quarters. However, loan growth will most probably slow down by the end of the year due to the rising rate environment. The Federal Reserve projects the fed funds rate to almost double from the current level of 1.75% to around 3.50% later this year. Further, the fed funds rate is likely to start declining late next year. Therefore, it's reasonable to expect borrowers to either pre-empt the rate hike and borrow now or wait for rates to fall again next year before borrowing. It would not be wise to borrow at the apparent peak of the rate cycle later this year unless it was absolutely necessary. Management mentioned in the earnings presentation that it expects annualized loan growth (ex-Paycheck Protection Program loans) to be in the mid-to-high teen-percentage range for 2022. Given my expectation of a slowdown in loan growth later this year, I'm anticipating the loan growth to be at the lower end of management's guidance. I'm expecting the loan portfolio to increase by 15.9% by the end of December 2022 from the end of 2021. Meanwhile, I'm expecting deposits to grow mostly in line with loans for the remainder of the year. The following table shows my balance sheet estimates. FY18 FY19 FY20 FY21 FY22E Financial Position Net Loans 1,640 1,884 2,282 2,770 3,210 Growth of Net Loans 23.7% 14.9% 21.1% 21.4% 15.9% Other Earning Assets 257 293 393 441 488 Deposits 1,561 1,823 2,502 2,946 3,317 Borrowings and Sub-Debt 182 174 142 135 168 Common equity 221 245 265 313 351 Book Value Per Share ($) 7.5 8.2 9.1 10.8 12.1 Tangible BVPS ($) 7.4 8.0 9.0 10.7 11.9 Source: SEC Filings, Author's Estimates (In USD million unless otherwise specified) Margin is Barely Sensitive to Interest Rate Hikes Due to the loan portfolio's concentration in real estate loans, the portfolio is largely fixed rate based. Moreover, the loan portfolio is most sensitive to changes in the five-to-ten-year portion of the yield curve, as mentioned in the earnings presentation. This suggests that only a small part of the loan portfolio will re-price this year. 1Q 2022 Earnings Presentation To top it off, the deposit book is quite rate-sensitive. Only 27.5% of the deposit book is non-interest bearing and therefore will not re-price after rate hikes. Due to the combination of the loan and deposit mixes, the net interest income is barely sensitive to interest rate changes. Management's interest-rate sensitivity analysis given in the 10-Q filing shows that a 200 basis points rise in interest rates could boost the net interest income by only 2.12% over twelve months. However, the margin will receive some benefit from the upcoming time deposit maturity. As mentioned in the earnings presentation, $123 million of time deposits will mature over the next five quarters at a blended cost of 1.47%. Currently, the average certificate of deposit cost in the country is just 0.48%, according to FDIC. Therefore, I believe it's safe to assume that Bridgewater Bancshares can replace the outgoing time deposits with new deposits carrying rates that are at least 50 to 75 basis points lower. Such replacement can reduce the average deposit cost by around two to three basis points, according to my calculations. Considering these factors, I'm expecting the margin to increase by ten basis points in the last nine months of 2022 from 3.60% in the first quarter of the year. Provision Normalization on the Cards The sharp rise in interest rates this year is likely to take a toll on borrowers' ability to service their debt. However, I'm not too concerned about the upcoming deterioration of the asset quality because the allowance level is currently quite high relative to the portfolio's credit risk. Allowances made up 1.4% of total loans at the end of March 2022. In comparison, non-performing assets were just 0.02% of total assets at the end of March 2022, as mentioned in the earnings presentation. Overall, I'm expecting the provision expense to remain at a normal level this year. I'm expecting the net provision expense to make up 0.24% of total loans in 2022. In comparison, the provision expense averaged 0.23% of total loans from 2017 to 2019. Expecting Earnings to Grow by 11% Year-Over-Year The anticipated loan growth will likely be the chief driver of earnings this year. Further, the slight margin expansion will likely lift the bottom line. On the other hand, provision normalization will restrict earnings growth on a year-over-year basis. Overall, I'm expecting Bridgewater Bancshares to report earnings of $1.70 per share for 2022, up 11% year-over-year. The following table shows my income statement estimates.

Mar 21

Bridgewater Bancshares: Market Disruption Beneficiary

Bridgewater is one of the few banks you’ll find with sustained 20%+ organic asset, loan, and earnings growth. Yet, it trades at a PE ratio of under 12 similar to the average bank growing at 5% a year or less. Bridgewater has benefitted from merger disruption in its local market (Twin Cities) leaving it one of the last community banks. I believe the growth is sustainable for the foreseeable future and Bridgewater should be treated like a growth stock.

Shareholder Returns

BWBUS MortgageUS Market
7D2.8%2.6%0.3%
1Y4.1%-32.2%-18.4%

Return vs Industry: BWB exceeded the US Mortgage industry which returned -32.2% over the past year.

Return vs Market: BWB exceeded the US Market which returned -18.4% over the past year.

Price Volatility

Is BWB's price volatile compared to industry and market?
BWB volatility
BWB Average Weekly Movement3.5%
Mortgage Industry Average Movement3.8%
Market Average Movement8.1%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.3%

Stable Share Price: BWB is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: BWB's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
2005229Jerry Baackhttps://www.bridgewaterbankmn.com

Bridgewater Bancshares, Inc. operates as the bank holding company for Bridgewater Bank that provides banking products and services to commercial real estate investors, small business entrepreneurs, and high net worth individuals in the United States. The company offers savings and money market accounts, demand deposits, time and brokered deposits, and interest and noninterest bearing transaction, as well as certificates of deposit. It also provides commercial loans to sole proprietorships, partnerships, corporations, and other business enterprises to finance accounts receivable or inventory, capital assets, or other business-related purposes; paycheck protection program loans; construction and land development loans; 1-4 family mortgage loans; multifamily lending products; owner and non-owner occupied commercial real estate loans; and consumer and other loans.

Bridgewater Bancshares Fundamentals Summary

How do Bridgewater Bancshares's earnings and revenue compare to its market cap?
BWB fundamental statistics
Market CapUS$459.08m
Earnings (TTM)US$45.09m
Revenue (TTM)US$113.87m

10.2x

P/E Ratio

1.5x

P/B Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
BWB income statement (TTM)
RevenueUS$113.87m
Cost of RevenueUS$0
Gross ProfitUS$113.87m
Other ExpensesUS$68.77m
EarningsUS$45.09m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)1.61
Gross Margin100.00%
Net Profit Margin39.60%
Debt/Equity Ratio42.2%

How did BWB perform over the long term?

See historical performance and comparison
We’ve recently updated our valuation analysis.

Valuation

Is BWB undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for BWB?

Other financial metrics that can be useful for relative valuation.

BWB key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio0.9x

Price to Earnings Ratio vs Peers

How does BWB's PE Ratio compare to its peers?

BWB PE Ratio vs Peers
The above table shows the PE ratio for BWB vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average10.6x
NASB NASB Financial
11.3xn/aUS$434.0m
WSBF Waterstone Financial
7.4x-42.6%US$407.3m
SMBC Southern Missouri Bancorp
8.9x9.2%US$426.0m
GCBC Greene County Bancorp
14.6xn/aUS$415.5m
BWB Bridgewater Bancshares
10.2x11.6%US$459.1m

Price-To-Earnings vs Peers: BWB is good value based on its Price-To-Earnings Ratio (10.2x) compared to the peer average (10.6x).


Price to Earnings Ratio vs Industry

How does BWB's PE Ratio compare vs other companies in the US Mortgage Industry?

Price-To-Earnings vs Industry: BWB is good value based on its Price-To-Earnings Ratio (10.2x) compared to the US Mortgage industry average (11.4x)


Price to Earnings Ratio vs Fair Ratio

What is BWB's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

BWB PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio10.2x
Fair PE Ratio13.1x

Price-To-Earnings vs Fair Ratio: BWB is good value based on its Price-To-Earnings Ratio (10.2x) compared to the estimated Fair Price-To-Earnings Ratio (13.1x).


Share Price vs Fair Value

What is the Fair Price of BWB when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: BWB ($16.41) is trading below our estimate of fair value ($36.87)

Significantly Below Fair Value: BWB is trading below fair value by more than 20%.


Price to Earnings Growth Ratio

PEG Ratio: BWB is good value based on its PEG Ratio (0.9x)


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Future Growth

How is Bridgewater Bancshares forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


11.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BWB's forecast earnings growth (11.6% per year) is above the savings rate (1.9%).

Earnings vs Market: BWB's earnings (11.6% per year) are forecast to grow slower than the US market (13% per year).

High Growth Earnings: BWB's earnings are forecast to grow, but not significantly.

Revenue vs Market: BWB's revenue (14.4% per year) is forecast to grow faster than the US market (7.9% per year).

High Growth Revenue: BWB's revenue (14.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BWB's Return on Equity is forecast to be low in 3 years time (13.6%).


Discover growth companies

Past Performance

How has Bridgewater Bancshares performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


17.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: BWB has high quality earnings.

Growing Profit Margin: BWB's current net profit margins (39.6%) are higher than last year (35.4%).


Past Earnings Growth Analysis

Earnings Trend: BWB's earnings have grown by 17.9% per year over the past 5 years.

Accelerating Growth: BWB's earnings growth over the past year (48.2%) exceeds its 5-year average (17.9% per year).

Earnings vs Industry: BWB earnings growth over the past year (48.2%) exceeded the Mortgage industry 5.8%.


Return on Equity

High ROE: BWB's Return on Equity (12.5%) is considered low.


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Financial Health

How is Bridgewater Bancshares's financial position? (This company is analysed differently as a bank or financial institution)

Financial Health Score

6/6

Financial Health Score 6/6

  • Asset Level

  • Allowance for Bad Loans

  • Low Risk Liabilities

  • Loan Level

  • Low Risk Deposits

  • Level of Bad Loans

Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet


Financial Institutions Analysis

Asset Level: BWB's Assets to Equity ratio (9.5x) is low.

Allowance for Bad Loans: BWB has a sufficient allowance for bad loans (5905%).

Low Risk Liabilities: 94% of BWB's liabilities are made up of primarily low risk sources of funding.

Loan Level: BWB has an appropriate level of Loans to Assets ratio (81%).

Low Risk Deposits: BWB's Loans to Deposits ratio (97%) is appropriate.

Level of Bad Loans: BWB has an appropriate level of bad loans (0%).


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Dividend

What is Bridgewater Bancshares's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate BWB's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate BWB's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if BWB's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if BWB's dividend payments have been increasing.


Current Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of BWB's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

8.0yrs

Average management tenure


CEO

Jerry Baack (54 yo)

17.5yrs

Tenure

US$1,524,384

Compensation

Mr. Gerald John Baack, also known as Jerry, Co-Founded Bridgewater Bancshares, Inc. and Bridgewater Bank (“Bank”) and has been its Chairman of the Board, Chief Executive Officer and President since 2005. M...


CEO Compensation Analysis

Compensation vs Market: Jerry's total compensation ($USD1.52M) is below average for companies of similar size in the US market ($USD2.91M).

Compensation vs Earnings: Jerry's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: BWB's management team is seasoned and experienced (8 years average tenure).


Board Members

Experienced Board: BWB's board of directors are seasoned and experienced ( 15 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Bridgewater Bancshares, Inc.'s employee growth, exchange listings and data sources


Key Information

  • Name: Bridgewater Bancshares, Inc.
  • Ticker: BWB
  • Exchange: NasdaqCM
  • Founded: 2005
  • Industry: Thrifts and Mortgage Finance
  • Sector: Banks
  • Implied Market Cap: US$459.077m
  • Shares outstanding: 27.98m
  • Website: https://www.bridgewaterbankmn.com

Number of Employees


Location

  • Bridgewater Bancshares, Inc.
  • 4450 Excelsior Boulevard
  • Suite 100
  • Saint Louis Park
  • Minnesota
  • 55416
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/07/06 00:00
End of Day Share Price2022/07/06 00:00
Earnings2022/03/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.