Bridgewater Bank Annual Report

Bridgewater Bancshares, Inc. and Subsidiaries Notes to Consolidated Financial Statements (dollars in thousands, except share data)

was 4.75% and 3.76%, respectively. The note contains several financial and reporting covenants. As of December, 31, 2018 and 2017, the Company believes it was in compliance with all covenants. The unpaid principal balance of the note at December, 31, 2018 and 2017, was $15,000 and $17,000, respectively. Note 10: Derivative Instruments and Hedging Activities Cash Flow Hedging Instruments During 2016, the Company entered into an interest rate swap agreement with a third party in order to hedge interest rate risk associated with its variable rate note payable. The following table presents a summary of the outstanding interest rate swap used in a cash flow hedge as of December 31, 2018 and 2017:

2018 2017 Notional Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,000 $ 17,000 Average Notional Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,750 17,750 Weighted Average Pay Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.21 % 1.21 % Weighted Average Receive Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.97 % 1.07 % Weighted Average Maturity (Years) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.16 3.16 Net Unrealized Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 352 $ 344

This agreement provides for the Company to make payments at a fixed rate in exchange for receiving payments at a variable rate determined by 1-month LIBOR. The notional amount is amortized on the same schedule as the note payable and matures on the same date. The swap is determined to be fully effective. The unrealized gain is included in other assets in the consolidated balance sheets. Note 11: Federal Home Loan Bank Advances and Other Borrowings Federal Home Loan Bank Advances. The Company has entered into an Advances, Pledge, and Security Agreement with the FHLB whereby specific mortgage loans of the Bank’s with principal balances of $577,241 and $490,463 at December, 31, 2018 and 2017, respectively, were pledged to the Federal Home Loan Bank as collateral in the event the Company requests any advances on the line. FHLB advances are also secured with FHLB stock owned by the Company. Total remaining available borrowings were $122,120 and $180,942 at December, 31, 2018 and 2017, respectively. The following table presents FHLB advances, by maturity, at December, 31, 2018 and 2017:

2018

2017

Weighted Average

Weighted Average

Total

Total

Rate

Outstanding

Rate

Outstanding

2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2021 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2023 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2024 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2025 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

N/A

$

—

1.49 % 14,000 1.47 20,000 1.99 15,000 2.10 14,000 1.65 5,000

1.47 % 20,000

1.65

5,000

1.99 15,000 2.50 29,000 3.03 40,000

N/A N/A N/A

— — —

3.17

5,000

3.29 10,000

$ 124,000

$ 68,000

103