Bridgewater Bancshares, Inc. Annual Report

As of and for the year ended December 31,

(dollars in thousands)

2019

2018

2017

Outstanding at Period-End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 18,000 $ 23,000 Average Amount Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,433 29,671 15,247 Maximum Amount Outstanding at any Month-End . . . . . . . . . . . . . . . . . . . . . . 87,000 90,000 39,000 Weighted Average Interest Rate: During Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.50 % 2.15 % 1.11 % End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.73 % 2.63 % 1.63 % Other Borrowings At December 31, 2019, other borrowings outstanding consisted of FHLB advances of $136.5 million and notes payable of $13.0 million. The Company’s borrowing capacity at the FHLB is determined based on collateral pledged, generally consisting of loans. The Company had additional borrowing capacity under this credit facility of $209.8 million and $122.1 million at December 31, 2019 and 2018, respectively. Additionally, the Company has borrowing capacity from other sources. As of December 31, 2019, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets pledged as collateral as of the applicable date, the Bank’s borrowing availability was approximately $113.2 million and $114.1 million at December 31, 2019 and 2018, respectively. As of December 31, 2019 and 2018, the Company had no outstanding advances. The Company has entered into a swap agreement with an unaffiliated third party in order to hedge interest rate risk associated with the notes payable. This agreement provides for the Company to make payments at a fixed rate in exchange for receiving payments at a variable rate determined by one-month LIBOR. Subordinated Debentures On July 12, 2017, the Company issued $25.0 million of subordinated debentures at an initial fixed interest rate of 5.875% which is payable semi-annually. Beginning July 15, 2022, the interest rate converts to a variable interest rate equal to the three-month LIBOR plus 3.88%. The subordinated debentures mature on July 15, 2027. The subordinated debentures, net of issuance costs, were $24.7 million at December 31, 2019, compared to $24.6 million at December 31, 2018. The subordinated debentures qualify for Tier 2 regulatory capital treatment for the first five years, under applicable regulatory guidelines. Contractual Obligations The following table presents supplemental information regarding total contractual obligations at December 31, 2019: Total Deposits Without a Stated Maturity. . . . . . . . . . . . . . . . $ 1,231,364 $ — $ — $ — $ 1,231,364 Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 336,684 177,030 78,232 — 591,946 Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 11,000 — — 13,000 FHLB Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 44,000 72,500 10,000 136,500 Subordinated Debentures . . . . . . . . . . . . . . . . . . . . . . . . — — — 25,000 25,000 Commitment to Fund Tax Credit Investments . . . . . . . 3,395 — — — 3,395 Operating Lease Obligations . . . . . . . . . . . . . . . . . . . . . 940 774 643 1,130 3,487 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,584,383 $ 232,804 $ 151,375 $ 36,130 $ 2,004,692 On August 27, 2018, the Bank and Reuter Walton Commercial, LLC (the “Contractor”) entered into a Standard Form of Agreement Between Owner and Contractor and the corresponding General Conditions of the Contract for Construction (collectively, the “Construction Contract”). Under the Construction Contract, the Contractor will construct Within One to Three to After (dollars in thousands) One Year Three Years Five Years Five Years

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