Bridgewater Bancshares, Inc. Annual Report

The following table presents a summary of the allocation of the allowance for loan losses by loan portfolio segment for the periods indicated:

December 31,

December 31,

December 31,

December 31,

December 31,

2019

2018

2017

2016

2015

(dollars in thousands)

Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

Commercial . . . . . . . . . . . . . $ 3,058 Construction and Land Development . . . . . . . . . . 2,202 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . 2,839 Multifamily . . . . . . . . . . . . 5,824 CRE Nonowner Occupied. . 6,972 Total Real Estate Mortgage Loans . . . . . . . . . . . . . . . . 16,427 Consumer and Other. . . . . . . 85 Unallocated . . . . . . . . . . . . . 754 CRE Owner Occupied . . . . 792

13.6 % $ 2,898

14.5 % $ 2,435

14.7 % $ 1,315

10.7 % $ 1,349

13.4 %

9.8 2,451

12.2 1,892

11.5 1,379

11.2 1,708

17.0

12.6 2,597 25.9 4,644

13.0 2,317 23.2 3,170

14.0 2,410 19.2 1,568 5.8 1,160 30.8 3,323

19.5 1,765

17.6 8.7 10.1 24.4 60.8 0.3

12.7

871

3.5

808

4.0

956

9.4 1,019 27.0 2,452

30.9 5,872

29.3 5,087

72.9 13,921

69.5 11,530

69.8 8,461

68.6 6,107

0.4 3.3

65

0.3 3.5

60

0.4

78

0.6 8.9

36

696

585

3.6 1,100

852

8.5

Total Allowance for Loan Losses . . . . . . . . . . . . . . . . . $ 22,526 100.0 % $ 20,031 100.0 % $ 16,502 100.0 % $ 12,333 100.0 % $ 10,052 100.0 %

Goodwill and Other Intangible Assets Goodwill was $2.6 million at December 31, 2019 and 2018. Goodwill represents the excess of the consideration paid over the fair value of the net assets acquired, which originated from the acquisition of First National Bank of the Lakes in May of 2016. Goodwill is not amortized but is subject to, at a minimum, an annual test for impairment. Other intangible assets consist of core deposit relationships and favorable lease term intangibles. Total other intangible assets at December 31, 2019 and 2018 were $861,000 and $1.0 million, respectively. Other intangible assets are amortized over their estimated useful life. Deposits The principal sources of funds for the Company are core deposits, consisting of demand deposits, money market accounts, savings accounts, and certificates of deposit. The following table presents the dollar and percentage composition of the deposit portfolio by category, at the dates indicated: 2015 (dollars in thousands) Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Noninterest Bearing Transaction Deposits . $ 447,509 24.5 % $ 369,203 23.6 % $ 292,539 21.9 % $ 238,062 23.3 % $ 169,403 22.2 % Interest Bearing Transaction Deposits . 264,627 14.5 179,567 11.5 177,292 13.2 132,800 13.0 130,496 17.1 Savings and Money Market Deposits. . . . . 516,785 28.3 402,639 25.8 369,942 27.6 239,084 23.4 152,848 20.1 Time Deposits. . . . . . . . 360,027 19.8 318,356 20.4 292,096 21.8 273,229 26.6 192,620 25.3 Brokered Deposits. . . . . 234,362 12.9 291,169 18.7 207,481 15.5 140,333 13.7 116,515 15.3 Total Deposits . . . . . $ 1,823,310 100.0 % $ 1,560,934 100.0 % $ 1,339,350 100.0 % $ 1,023,508 100.0 % $ 761,882 100.0 % Total deposits at December 31, 2019 were $1.82 billion, an increase of $262.4 million, or 16.8%, compared to total deposits of $1.56 billion at December 31, 2018. Noninterest bearing deposits were $447.5 million at December 31, 2019, an increase of $78.3 million, or 21.2%, compared to $369.2 million at December 31, 2018. Noninterest bearing deposits comprised 24.5% of total deposits at December 31, 2019, compared to 23.6% at December 31, 2018. December 31, December 31, December 31, December 31, December 31, 2019 2018 2017 2016

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