Bridgewater Bank Annual Report

of an extensive branch network. The Company’s strategy is to offset the higher cost of funding with a lower level of operating expense and firm pricing discipline for loan products. When appropriate, the Company utilizes alternative funding sources such as brokered deposits. At December 31, 2018, total brokered deposits were $291.2 million or 18.7% of total deposits. The following table presents the average balance and average rate paid on each of the following deposit categories for the years ended December 31, 2018, 2017, and 2016:

As of and for the

As of and for the

As of and for the

Year Ended

Year Ended

Year Ended

December 31, 2018 Average Average Balance Rate

December 31, 2017 Average Average Balance Rate

December 31, 2016 Average Average Balance Rate

(dollars in thousands)

Noninterest Bearing Transaction Deposits . . . $ 330,898 — % Interest Bearing Transaction Deposits . . . . . . . 177,335 0.36 161,454 0.24 133,130 0.30 Savings and Money Market Deposits . . . . . . . 381,318 1.23 284,641 0.78 199,525 0.71 Time Deposits < $250,000 . . . . . . . . . . . . . . . . 196,235 1.93 181,871 1.62 60,667 1.61 Time Deposits > $250,000 . . . . . . . . . . . . . . . . 103,786 1.87 104,969 1.35 175,974 1.43 Brokered Deposits . . . . . . . . . . . . . . . . . . . . . . . 232,022 2.12 185,144 1.49 125,414 1.31 Total Deposits . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,421,594 1.12 % $ 1,217,311 0.80 %$ 909,200 0.76 % — % $ 299,232 — %$ 214,490

The following table shows time deposits, including brokered time deposits, of $100,000 or more, by time remaining until maturity.

December 31,

(dollars in thousands) 2018 Three Months or Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 30,522 Over Three Months through Six Months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,480 Over Six Months through 12 Months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52,675 Over 12 Months. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408,402 Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 511,079

Borrowed Funds Federal Funds Purchased

In addition to deposits, the Company utilizes overnight borrowings to meet the daily liquidity needs of clients and fund loan growth. The following table summarizes overnight borrowings, which consist of federal funds purchased from correspondent banks on an overnight basis at the prevailing overnight market rates and the weighted average interest rates paid for the periods presented: 2016 Outstanding at Period-End . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18,000 $ 23,000 $ 44,000 Average Amount Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,671 15,247 8,852 Maximum Amount Outstanding at any Month-End . . . . . . . . . . . . . . . . . . . . . . 90,000 39,000 44,000 Weighted Average Interest Rate: During Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.15 % 1.11 % 0.63 % End of Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.63 % 1.63 % 0.81 % As of and for the year ended December 31, (dollars in thousands) 2018 2017

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