Bridgewater Bancshares' Q3 2024: Core Deposit Growth and Strategic Acquisition

Bridgewater Bancshares, Inc. (BWB) reported its third-quarter 2024 earnings, highlighting robust core deposit growth and a strategic acquisition that positions the company for future expansion. The quarter was marked by an improving interest rate backdrop following the Federal Reserve's rate cut in September, which led to improved net interest income and pre-provision net revenue growth.

Core deposits, defined as total deposits less brokered deposits and certificates of deposit greater than $250,000, increased by $93.6 million, or 14.4% annualized, from the second quarter of 2024. This growth was primarily driven by a decrease in brokered deposits of $131.3 million. The loan-to-deposit ratio stood at 98.3%, compared to 99.8% at June 30, 2024.

The bank's strategic acquisition of First Minnetonka City Bank, announced in August 2024, is expected to close during the fourth quarter of 2024. This acquisition brings several strategic benefits, including a low-cost, core deposit base and balance sheet optionality. When combined with the strong core deposit growth Bridgewater Bancshares has generated year-to-date, the company believes it will have an enhanced funding and liquidity profile that positions it well for future opportunities.

The acquisition of First Minnetonka City Bank complements Bridgewater Bancshares' existing funding sources by providing a low-cost, core deposit base. This acquisition will improve the bank's liquidity management by offering balance sheet optionality, allowing it to better navigate changing interest rate environments and market conditions.

In conclusion, Bridgewater Bancshares' Q3 2024 earnings call highlighted the company's strong core deposit growth and strategic acquisition of First Minnetonka City Bank. These developments position the company for future expansion and opportunities, enhancing its funding and liquidity profile. As the bank continues to grow and adapt to changing market conditions, investors can expect to see further progress in its core deposit growth strategy and future prospects.