Bridgewater Bank Annual Report

Other Borrowings At December 31, 2018, other borrowings outstanding consisted of FHLB advances of $124.0 million and notes payable of $15.0 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 $122.1 million and $180.9 million at December 31, 2018 and December 31, 2017, respectively. Additionally, the Company has borrowing capacity from other sources. As of December 31, 2018, the Bank was eligible to use the Federal Reserve discount window for borrowings. Based on assets available for collateral as of the applicable date, the Bank’s borrowing availability was approximately $114.1 million and $37.5 million at December 31, 2018 and December 31, 2017, respectively. As of December 31, 2018 and December 31, 2017, 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 $24.6 million at December 31, 2018, compared to $24.5 million at December 31, 2017. The subordinated debentures qualify as Tier 2 regulatory capital treatment for the first five years, under applicable regulatory guidelines. Contractual Obligations The following table contains supplemental information regarding total contractual obligations at December 31, 2018: Total Deposits Without a Stated Maturity. . . . . . . . . . . . . . . . $ 978,399 $ — $ — $ — $ 978,399 Time Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126,480 309,647 146,408 — 582,535 Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 13,000 — — 15,000 FHLB Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000 20,000 69,000 15,000 124,000 Subordinated Debentures . . . . . . . . . . . . . . . . . . . . . . . . — — — 25,000 25,000 Commitment to Fund Tax Credit Investments . . . . . . . 3,226 — — — 3,226 Operating Lease Obligations . . . . . . . . . . . . . . . . . . . . . 1,037 1,387 646 1,454 4,524 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,131,142 $ 344,034 $ 216,054 $ 41,454 $ 1,732,684 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 the core and shell of a new headquarters building for the Bank in St. Louis Park, Minnesota, and the Bank will pay the Contractor a contract price consisting of the cost of work plus a fee equal to 3.75% of the cost of work, subject to a guaranteed maximum price of $23.0 million, with anticipated construction to be completed in 2020. As of December 31, 2018, $2.0 million has been paid under this Construction Contract. Operating lease obligations are in place for facilities and land on which banking branches are located. See Note 6 of the Company’s Consolidated Financial Statements included as part of this report for additional information. Within One to Three to After (dollars in thousands) One Year Three Years Five Years Five Years

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