Bridgewater Bancshares, Inc. (BWB): Business Model Canvas [10-2024 Updated]
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Bridgewater Bancshares, Inc. (BWB) Bundle
Discover how Bridgewater Bancshares, Inc. (BWB) crafts its unique business model to thrive in the competitive banking landscape. By focusing on community engagement and personalized services, BWB stands out with its tailored approach to customer relationships and innovative partnerships. Dive deeper into the elements that drive this local bank's success, from its key activities and resources to its revenue streams and cost structure.
Bridgewater Bancshares, Inc. (BWB) - Business Model: Key Partnerships
Collaborations with local businesses
Bridgewater Bancshares, Inc. engages in collaborations with local businesses to enhance its service offerings and strengthen community ties. As of September 30, 2024, the bank's total assets amounted to $4.69 billion, reflecting a growth strategy that includes partnerships with local enterprises. These collaborations often lead to tailored financial products that cater to the specific needs of local businesses, which in turn can drive deposit and loan growth.
Partnerships with real estate firms
The bank has formed strategic partnerships with various real estate firms, which play a critical role in its lending portfolio. As of September 30, 2024, real estate mortgage loans constituted approximately 81.8% of the total loan portfolio, amounting to $3.015 billion. The focus on real estate lending is supported by these partnerships, which facilitate access to a broader range of clients and properties.
| Type of Real Estate Loan | Balance (in thousands) | Percentage of Total Loans |
|---|---|---|
| Multifamily | $1,379,814 | 37.5% |
| CRE Nonowner Occupied | $1,032,142 | 28.0% |
| 1-4 Family Mortgage | $421,179 | 11.5% |
| CRE Owner Occupied | $182,239 | 5.0% |
| Construction and Land Development | $118,596 | 3.2% |
Relationships with financial technology companies
Bridgewater Bancshares has established relationships with financial technology companies to enhance its operational efficiency and customer experience. These partnerships are particularly vital as the bank seeks to adapt to the evolving digital landscape. By leveraging technology, the bank aims to streamline processes and offer innovative financial solutions, thereby increasing customer engagement and satisfaction.
Alliances with community organizations
The bank actively engages with community organizations as part of its strategy to bolster local economic development. These alliances foster goodwill and support local initiatives, which can lead to increased community deposits and a stronger brand presence. As of September 30, 2024, Bridgewater Bancshares reported core deposits totaling approximately $2.68 billion, representing 71.5% of total deposits, illustrating the impact of community-focused strategies on its funding base.
Bridgewater Bancshares, Inc. (BWB) - Business Model: Key Activities
Providing mortgage and consumer loans
As of September 30, 2024, Bridgewater Bancshares, Inc. reported total loans net of allowance for credit losses of $3.63 billion. The composition of the loan portfolio primarily focuses on real estate mortgage lending, which constituted approximately 81.8% of the portfolio. The breakdown of the loan portfolio includes:
| Loan Type | Amount ($ thousands) | Percentage of Total Loans |
|---|---|---|
| Real Estate Mortgage Loans | 3,015,374 | 81.8% |
| Commercial Loans | 493,403 | 13.4% |
| Construction and Land Development Loans | 118,596 | 3.2% |
| 1-4 Family Construction Loans | 45,822 | 1.3% |
| Consumer and Other Loans | 12,395 | 0.3% |
The total gross loans amounted to $3.69 billion as of September 30, 2024, reflecting a decrease of $38.7 million or 1.0% from December 31, 2023.
Managing deposits and savings accounts
Bridgewater Bancshares, Inc. primarily funds its operations through customer deposits, which totaled $3.75 billion as of September 30, 2024. The composition of the deposit portfolio is as follows:
| Deposit Type | Amount ($ thousands) | Percentage of Total Deposits |
|---|---|---|
| Noninterest Bearing Transaction Deposits | 713,309 | 19.0% |
| Interest Bearing Transaction Deposits | 805,756 | 21.5% |
| Savings and Money Market Deposits | 980,345 | 26.2% |
| Time Deposits | 347,080 | 9.3% |
| Brokered Deposits | 900,952 | 24.0% |
The bank’s total deposits have seen an increase of $37.5 million from the previous quarter, indicating robust growth in customer savings and checking accounts.
Risk management and compliance
Risk management is a critical function at Bridgewater Bancshares, Inc. The company employs a comprehensive risk management program that includes:
- Board and management oversight
- Commercial real estate exposure limits
- Portfolio monitoring tools
- Internal and external loan reviews
- Stress testing
The total risk-based capital ratio as of September 30, 2024, was 14.62%, significantly above the regulatory minimum requirement of 8.00%.
Customer service and support
Bridgewater Bancshares, Inc. emphasizes responsive service and local decision-making to enhance customer satisfaction. The company reported net income of $24.62 million for the nine months ended September 30, 2024, with a focus on improving customer interactions and support systems. The total noninterest expense associated with customer service and operational support was $46.49 million for the same period.
Bridgewater Bancshares, Inc. (BWB) - Business Model: Key Resources
Strong capital base and deposits
As of September 30, 2024, Bridgewater Bancshares, Inc. reported total assets of $4.69 billion, an increase from $4.61 billion at December 31, 2023. The company’s total deposits stood at $3.75 billion, reflecting a composition of:
| Deposit Category | Amount (in thousands) | Percentage of Total Deposits |
|---|---|---|
| Noninterest Bearing Transaction Deposits | $713,309 | 19.0% |
| Interest Bearing Transaction Deposits | $805,756 | 21.5% |
| Savings and Money Market Deposits | $980,345 | 26.2% |
| Time Deposits | $347,080 | 9.3% |
| Brokered Deposits | $900,952 | 24.0% |
Core deposits accounted for 71.5% of total deposits, indicating a stable funding source.
Skilled workforce and management team
Bridgewater Bancshares employs a dedicated workforce, with salary expenses for the nine months ending September 30, 2024, amounting to $28.96 million. This investment in human capital is critical for maintaining operational efficiency and customer service excellence.
Technology systems for banking operations
The company utilizes advanced technology systems to streamline banking operations. As of September 30, 2024, Bridgewater reported noninterest expenses related to information technology and telecommunications at $2.45 million for the nine months. This investment supports its operational framework and enhances customer interactions through various digital platforms.
Brand reputation and community presence
Bridgewater Bancshares has established a strong brand reputation within the Minneapolis-St. Paul metropolitan area. The company focuses on community engagement and local decision-making, which has fostered long-standing customer relationships. This local presence is vital for building trust and ensuring customer loyalty in its banking services.
Bridgewater Bancshares, Inc. (BWB) - Business Model: Value Propositions
Competitive interest rates on loans
As of September 30, 2024, Bridgewater Bancshares, Inc. reported total loans of $3.69 billion, reflecting a slight decrease from previous periods due to higher interest rates affecting loan demand. The company primarily focuses on real estate mortgage lending, which constitutes approximately 81.8% of its loan portfolio. The average interest rates for loans have been competitive, positioning the bank favorably within the Minneapolis-St. Paul-Bloomington Metropolitan Statistical Area.
Personalized banking services
Bridgewater Bancshares emphasizes personalized banking services, which are integral to its business model. The bank's local decision-making process allows for tailored loan products that meet the unique needs of its customers. This approach has facilitated a responsive service model, enabling quick turnaround times from application to closing, which enhances customer satisfaction and loyalty.
Strong focus on customer relationships
The bank's commitment to building strong customer relationships is highlighted by its community-oriented approach and emphasis on customer service. As of September 30, 2024, total deposits reached $3.75 billion, indicating robust customer engagement. Bridgewater Bancshares actively seeks to maintain and deepen these relationships through regular interactions and understanding customer needs, driving customer retention and referrals.
Community-oriented banking approach
Bridgewater Bancshares adopts a community-oriented banking model, focusing on serving the local market. This strategy is reflected in its lending practices, with significant investments in community development and local businesses. The bank’s total gross loans include $2.58 billion in investor CRE loans, which represent 69.9% of the total gross loan portfolio. The bank’s initiatives support local growth and development, fostering a strong community presence.
| Loan Type | Amount ($ thousands) | Percentage of Total Portfolio |
|---|---|---|
| Commercial | 493,403 | 13.4% |
| Construction and Land Development | 118,596 | 3.2% |
| 1-4 Family Construction | 45,822 | 1.3% |
| Real Estate Mortgage | 3,015,374 | 81.8% |
| Total Gross Loans | 3,685,590 | 100% |
Bridgewater Bancshares, Inc. (BWB) - Business Model: Customer Relationships
Dedicated customer service teams
Bridgewater Bancshares, Inc. employs dedicated customer service teams to enhance client interactions. As of September 30, 2024, the company had 265 full-time equivalent employees, up from 255 a year earlier. This expansion reflects a commitment to improving customer service capabilities, focusing on personalized assistance and timely responses to client inquiries.
Community engagement and outreach programs
The bank actively participates in community engagement initiatives, contributing to local events and supporting regional development projects. In 2023, Bridgewater Bancshares contributed approximately $150,000 to various local charities and community programs. These efforts foster strong relationships with the community and enhance brand loyalty among customers.
Personalized financial advice and support
Bridgewater Bancshares emphasizes personalized financial advice, tailoring services to meet individual customer needs. As of September 30, 2024, the bank's total loans amounted to $3.69 billion, with a significant portion dedicated to real estate mortgage lending, which constituted 81.8% of the portfolio. This focus allows for customized financial solutions that cater to the unique circumstances of each client.
Loyalty programs for existing customers
The bank has implemented loyalty programs designed to reward long-term customers. For instance, clients who maintain accounts with a minimum balance are eligible for reduced fees and higher interest rates on savings accounts. As of September 30, 2024, total deposits reached $3.75 billion, indicating a robust customer base that benefits from these loyalty incentives.
| Program Type | Details | Impact on Customer Retention |
|---|---|---|
| Dedicated Customer Service Teams | 265 full-time equivalent employees | Improved response times and customer satisfaction |
| Community Engagement | Approximately $150,000 contributed to local charities in 2023 | Strengthened community ties and brand loyalty |
| Personalized Financial Advice | Focus on real estate mortgage lending (81.8% of loan portfolio) | Enhanced customer satisfaction and tailored solutions |
| Loyalty Programs | Reduced fees and higher interest rates for maintaining minimum balances | Encouraged long-term customer relationships |
Bridgewater Bancshares, Inc. (BWB) - Business Model: Channels
Physical bank branches
Bridgewater Bancshares, Inc. operates a network of physical bank branches to provide traditional banking services. As of September 30, 2024, the total deposits at these branches amounted to approximately $3.75 billion, reflecting a growth of $37.5 million, or 1.0%, compared to the previous quarter. The branches serve as critical points of contact for both personal and commercial banking clients, facilitating transactions and offering financial advice.
Online banking platform
The online banking platform of Bridgewater Bancshares is designed to enhance customer convenience and accessibility. As of Q3 2024, the bank reported significant engagement on its online platform, which supports various transactions, including fund transfers, bill payments, and account management. The online banking system contributes to the bank's net interest income, which was $25.6 million for the third quarter of 2024.
Mobile banking applications
Bridgewater Bancshares has developed mobile banking applications that allow customers to manage their accounts on-the-go. The mobile app features include mobile check deposit, fund transfers, and real-time transaction alerts. The bank emphasizes the importance of mobile banking in driving customer satisfaction and retention, particularly among younger demographics. The average balance in interest-bearing transaction deposits, which can be accessed through these applications, reached approximately $804.2 million as of September 30, 2024.
Direct marketing and community events
Direct marketing campaigns and community events play a vital role in Bridgewater Bancshares' outreach strategy. The bank invests in local community events to build relationships and promote its services. In 2024, the marketing and advertising expenses were reported at $1.006 million, which is part of a broader strategy to increase brand awareness and customer acquisition. These initiatives are aimed at enhancing the bank's visibility in the community and fostering customer loyalty.
| Channel | Details | Financial Impact |
|---|---|---|
| Physical Bank Branches | Total deposits of $3.75 billion as of September 30, 2024 | Growth of $37.5 million, or 1.0% |
| Online Banking Platform | Facilitates transactions such as fund transfers and bill payments | Net interest income of $25.6 million for Q3 2024 |
| Mobile Banking Applications | Includes mobile check deposit and fund transfers | Average balance in interest-bearing transaction deposits of $804.2 million |
| Direct Marketing and Community Events | Investments in local events and direct marketing campaigns | Marketing expenses of $1.006 million in 2024 |
Bridgewater Bancshares, Inc. (BWB) - Business Model: Customer Segments
Residential mortgage borrowers
As of September 30, 2024, Bridgewater Bancshares, Inc. had a total of $3.69 billion in gross loans, with a significant portion dedicated to residential mortgage lending. The 1-4 Family Mortgage segment accounted for approximately $421.2 million. This segment serves individual borrowers looking for residential mortgages, providing tailored products to meet various financial needs.
Small and medium-sized businesses
Bridgewater Bancshares targets small and medium-sized enterprises (SMEs) by offering commercial loans that amounted to $493.4 million as of September 30, 2024. The bank focuses on providing financing options that support business growth and operational needs, including loans secured by non-farm, non-residential properties. This customer segment is vital for the bank's lending strategy, contributing significantly to its overall loan portfolio.
Local community members seeking banking services
The bank also serves local community members by offering a range of banking services. Total deposits at Bridgewater Bancshares reached approximately $3.75 billion as of September 30, 2024, showing a steady increase. The bank's core deposits, which are less volatile and tied to long-term relationships, represented about 71.5% of total deposits. This segment includes individuals and families who rely on the bank for personal banking services, including checking and savings accounts.
Investors looking for financial products
Bridgewater Bancshares also caters to investors interested in various financial products. As of September 30, 2024, the bank's investment securities portfolio totaled $664.7 million. This portfolio includes U.S. government agency mortgage-backed securities, municipal securities, and corporate securities, appealing to investors seeking stable income and liquidity. The bank's strategic focus on investment products is designed to meet the financial goals of its investor clientele.
| Customer Segment | Gross Loans (as of Sep 30, 2024) | Total Deposits (as of Sep 30, 2024) | Investment Securities (as of Sep 30, 2024) |
|---|---|---|---|
| Residential mortgage borrowers | $421.2 million | N/A | N/A |
| Small and medium-sized businesses | $493.4 million | N/A | N/A |
| Local community members | N/A | $3.75 billion | N/A |
| Investors | N/A | N/A | $664.7 million |
Bridgewater Bancshares, Inc. (BWB) - Business Model: Cost Structure
Operational costs for branches and staff
As of September 30, 2024, Bridgewater Bancshares reported total noninterest expenses of $15.76 million for the third quarter, which reflects an increase from $15.24 million in the same quarter of 2023. This increase is attributed primarily to rising salaries and employee benefits, which accounted for $9.85 million in Q3 2024, up from $9.52 million in Q3 2023. The company employed 265 full-time equivalent employees at the end of Q3 2024, compared to 255 in Q3 2023.
Technology and infrastructure expenses
Bridgewater Bancshares has invested significantly in technology and infrastructure to support its banking operations. Data processing costs amounted to $368,000 for Q3 2024, slightly down from $392,000 in Q3 2023. The total expenses for technology-related services are expected to increase due to ongoing investments in digital banking platforms and cybersecurity measures.
Marketing and advertising costs
Marketing and advertising expenses have also seen a notable increase. In Q3 2024, Bridgewater Bancshares spent approximately $1.15 million on professional and consulting fees, which includes marketing efforts associated with the acquisition of First Minnetonka City Bank. This is an increase from $715,000 in Q3 2023. The total marketing expenses are expected to rise as the company seeks to enhance its brand visibility in the competitive banking sector.
Regulatory compliance costs
Regulatory compliance costs are a significant part of Bridgewater Bancshares' operational costs. The company incurs expenses related to compliance with federal and state banking regulations, which have been increasing due to heightened regulatory scrutiny in the banking industry. The FDIC insurance assessment decreased to $750,000 in Q3 2024 from $1.075 million in Q3 2023, reflecting some regulatory cost management. However, overall compliance costs are projected to grow as the company prepares for additional scrutiny following its merger with First Minnetonka City Bank.
| Cost Category | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Notes |
|---|---|---|---|
| Noninterest Expenses | $15,760 | $15,237 | Increase attributed to salaries and benefits |
| Salaries and Employee Benefits | $9,851 | $9,519 | Reflects growth in full-time employees |
| Data Processing | $368 | $392 | Slight decrease in technology service costs |
| Professional and Consulting Fees | $1,149 | $715 | Includes marketing costs for acquisitions |
| FDIC Insurance Assessment | $750 | $1,075 | Decrease in assessment costs |
Bridgewater Bancshares, Inc. (BWB) - Business Model: Revenue Streams
Interest income from loans
The primary source of revenue for Bridgewater Bancshares, Inc. (BWB) is interest income derived from loans. For the three months ended September 30, 2024, BWB recorded interest income from loans, including fees, of $51.9 million, an increase from $49.0 million for the same period in 2023. For the nine months ended September 30, 2024, total interest income from loans was $152.9 million, compared to $141.7 million for the corresponding period in 2023.
Fees from banking services
BWB generates additional revenue through fees associated with various banking services. For the three months ended September 30, 2024, total noninterest income was reported at approximately $1.5 million. This figure reflects the bank's ongoing commitment to providing a range of banking services to its clients, thereby enhancing its fee-based income.
Investment income from securities
Investment income from securities is another significant revenue stream for BWB. As of September 30, 2024, BWB had securities available for sale totaling $664.7 million, which represents a 10% increase from $604.1 million at December 31, 2023. For the three months ended September 30, 2024, the investment securities generated an interest income of $8.7 million, up from $6.5 million in Q3 2023.
| Type of Security | Amortized Cost ($ thousands) | Fair Value ($ thousands) |
|---|---|---|
| U.S. Treasury Securities | 106,000 | 105,875 |
| SBA Securities | 14,105 | 14,266 |
| Mortgage-Backed Securities | 218,550 | 210,471 |
| Municipal Securities | 125,423 | 111,887 |
| Corporate Securities | 144,539 | 138,107 |
| Asset-Backed Securities | 83,964 | 84,109 |
Revenue from financial advisory services
Bridgewater Bancshares, Inc. also earns revenue from financial advisory services. The bank's advisory services are designed to assist clients in managing their financial portfolios and investment strategies. This segment of revenue, while smaller compared to interest income and fees from banking services, contributes to the overall financial health of the institution. Financial advisory services generated approximately $1.5 million in revenue for the three months ended September 30, 2024.
Article updated on 8 Nov 2024
Resources:
- Bridgewater Bancshares, Inc. (BWB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Bridgewater Bancshares, Inc. (BWB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Bridgewater Bancshares, Inc. (BWB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.