[Management View]
Bridgewater Bancshares reported strong core deposit growth at an annualized rate of 11.5% and loan growth at 6.6% for Q3 2025. The company emphasized its strategic focus on expanding its affordable housing portfolio and leveraging M&A disruptions in the Twin Cities to capture market share. Leadership transitions were announced, with internal promotions ensuring continuity.

[Outlook]
The company aims for a 3% net interest margin by early 2027, driven by rate cuts and loan repricing. Plans include closing a branch and opening a new one in East Metro in 2026. The goal is to grow into a $10 billion bank by 2030, with a focus on core deposit and loan growth.

[Financial Performance]
Net interest margin increased by one basis point to 2.63%, with net interest income growing by $1.6 million. Tangible book value per share rose 20% annualized in Q3 2025. Nonperforming assets remained low at 0.19% of total assets.

[Q&A Highlights]
Question 1: On the path to a 3% margin, is the improvement expected to be steady or ramp later?
Answer: The improvement is expected to be steady, with two to three basis points a month, assuming rate cuts in October and December. The asset side will see steady repricing throughout 2026.

Question 2: Have you analyzed the impact of rate cuts on borrower relief?
Answer: No specific quantification was shared, but proactive measures are in place for loans with repricing risk. Rate cuts will benefit loans currently at a fixed rate.

Question 3: Can you clarify the merger costs and future expense expectations?
Answer: Merger costs were highlighted separately, with future expenses expected to normalize and grow in line with assets.

Question 4: On the margin outlook, what are the assumptions for the yield curve and margin improvement?
Answer: The yield curve is expected to remain stable, with margin improvement driven by both loan repricing and deposit cost reductions.

Question 5: What is the comfort level in growing the national affordable housing portfolio?
Answer: The company has a deep history in this space and feels confident in its ability to grow both loans and deposits, focusing on top-tier borrowers.

Question 6: Can we expect a step change in growth trajectory with recent hires?
Answer: The company is aligning loan growth with core deposit growth for profitability, with potential for faster growth through strategic hires.

Question 7: What are the expectations for cash levels and securities yields?
Answer: Cash levels are managed to support loan growth, with securities yields benefiting from longer-duration paper opportunities.

Question 8: Are there any expected charge-offs on specific loans?
Answer: No charge-offs are planned for the office loan with a specific reserve, and the multifamily loan moved to substandard has no specific reserve.

[Sentiment Analysis]
Analysts showed interest in the company's strategic growth plans and margin expansion. Management conveyed confidence in achieving financial targets and navigating market conditions.

[Quarterly Comparison]
| Metric | Q3 2025 | Q2 2025 |
|-------------------------------|---------|---------|
| Core Deposit Growth (Annualized) | 11.5% | 10.0% |
| Loan Growth (Annualized) | 6.6% | 7.0% |
| Net Interest Margin | 2.63% | 2.62% |
| Tangible Book Value Growth (Annualized) | 20% | 18% |

[Risks and Concerns]
Potential risks include reliance on rate cuts for margin expansion and the impact of economic conditions on loan growth. The company is monitoring credit risks, particularly in the multifamily and office loan sectors.

[Final Takeaway]
Bridgewater Bancshares is strategically positioned for growth, leveraging core deposit expansion and market opportunities in the Twin Cities. The company's focus on affordable housing and internal leadership transitions supports its long-term vision. While challenges remain, particularly in achieving margin targets, the company's proactive measures and strategic hires position it well for future success.