Bridgewater Bank Annual Report

as adjustments become necessary, they are recognized in the periods in which they become known. Although management strives to maintain an allowance it deems adequate, future economic changes, deterioration of borrowers’ creditworthiness, and the impact of examinations by regulatory agencies all could cause changes to the allowance for loan losses. At December 31, 2018, the allowance for loan losses was $20.0 million, an increase of $3.5 million from $16.5 million at December 31, 2017. Net charge-offs totaled $46,000 during the year ended December 31, 2018 and $6,000 during the year ended December 31, 2017. The allowance for loan losses as a percentage of total loans was 1.20% at December 31, 2018 and 1.22% at December 31, 2017. The following is a summary of the activity in the allowance for loan loss reserve for the periods indicated: 2014 Balance, Beginning of Period. . . . . . . . . . . . $ 16,502 $ 12,333 $ 10,052 $ 9,489 $ 8,361 Charge-offs: Commercial . . . . . . . . . . . . . . . . . . . . . . . . . 10 1 107 34 42 Construction and Land Development . . . . 358 — 248 348 249 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . . . . . 21 — 1 662 190 CRE Owner Occupied . . . . . . . . . . . . . . . — — 123 — 5 CRE Nonowner Occupied . . . . . . . . . . . . — 111 613 — 113 Total Real Estate Mortgage Loans . . . . . . 21 111 737 662 308 Consumer and Other. . . . . . . . . . . . . . . . . . 32 65 22 — — Total Charge-offs . . . . . . . . . . . . . . . . . . . . . 421 177 1,114 1,044 599 Recoveries: Commercial . . . . . . . . . . . . . . . . . . . . . . . . . 25 5 101 1 68 Construction and Land Development . . . . 285 24 8 29 29 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . . . . . 59 138 32 29 24 Multifamily . . . . . . . . . . . . . . . . . . . . . . . . — — — 5 — CRE Owner Occupied . . . . . . . . . . . . . . . — — — 28 91 Total Real Estate Mortgage Loans . . . . . . 59 138 32 62 115 Consumer and Other. . . . . . . . . . . . . . . . . . 6 4 4 15 15 Total Recoveries . . . . . . . . . . . . . . . . . . . . . . 375 171 145 107 227 Net Charge-offs . . . . . . . . . . . . . . . . . . . . . . . 46 6 969 937 372 Provision for Loan Losses . . . . . . . . . . . . . . 3,575 4,175 3,250 1,500 1,500 Balance at End of Period . . . . . . . . . . . . . . . $ 20,031 $ 16,502 $ 12,333 $ 10,052 $ 9,489 Gross Loans, End of Period . . . . . . . . . . . . . 1,664,931 1,347,113 1,000,739 799,497 598,547 Average Loans. . . . . . . . . . . . . . . . . . . . . . . . 1,491,166 1,177,491 896,915 684,498 540,894 Net Charge-offs (Recoveries) to Average Loans . . . . . . . . . . . . . . . . . . . . . . 0.00 % 0.00 % 0.11 % 0.14 % 0.07 % Allowance to Total Gross Loans . . . . . . . . . 1.20 % 1.22 % 1.23 % 1.26 % 1.59 % As of and for the year ended December 31, (dollars in thousands) 2018 2017 2016 2015

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