Bridgewater Bank Annual Report

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

December 31, 2017 Gross Gross Amortized Unrealized Unrealized Cost

Gains Losses Fair Value

Securities Available for Sale: Municipal Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 115,784 $ 3,005 $ (469) $ 118,320 Mortgage-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61,945 11 (1,275) 60,681 Corporate Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,052 80 (25) 5,107 SBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,368 242 (227) 45,383 Total Securities Available for Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 228,149 $ 3,338 $ (1,996) $ 229,491 The following table shows the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

Less Than 12 Months

12 Months or Greater

Total

Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Unrealized

December 31, 2018 U.S. Treasury Securities. . . . . . . . . . . . . . . . . . $ 14,866 — $ 14,866 $ (19) Municipal Bonds. . . . . . . . . . . . . . . . . . . . . . . . 15,405 (199) 34,172 (916) 49,577 (1,115) Mortgage-Backed Securities . . . . . . . . . . . . . . 1,751 (21) 41,776 (1,671) 43,527 (1,692) Corporate Securities . . . . . . . . . . . . . . . . . . . . . 9,063 (74) 1,996 (50) 11,059 (124) SBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . 28,186 (366) 15,878 (469) 44,064 (835) Total Securities Available for Sale . . . . . . . . $ 69,271 $ (679) $ 93,822 $ (3,106) $ 163,093 $ (3,785) (19) —

Less Than 12 Months

12 Months or Greater

Total

Unrealized Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Unrealized

December 31, 2017 Municipal Bonds. . . . . . . . . . . . . . . . . . . . . . . . . $ 15,043 $ (89) $ 21,111 $ (380) $ 36,154 $ (469) Mortgage-Backed Securities . . . . . . . . . . . . . . . 16,046 (105) 41,800 (1,170) 57,846 (1,275) Corporate Securities . . . . . . . . . . . . . . . . . . . . . . — — 2,028 (25) 2,028 (25) SBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 15,634 (189) 3,775 (38) 19,409 (227) Total Securities Available for Sale . . . . . . . . . $ 46,723 $ (383) $ 68,714 $ (1,613) $ 115,437 $ (1,996) At December 31, 2018, 195 debt securities had unrealized losses with aggregate depreciation of approximately 2.3% from the Company’s amortized cost basis. At December 31, 2017, 133 debt securities had unrealized losses with aggregate depreciation of approximately 1.7% from the Company’s amortized cost basis. These unrealized losses relate principally to changes in interest rates and are not due to changes in the financial condition of the issuer, the quality of any underlying assets, or applicable credit enhancements. In analyzing whether unrealized losses on debt securities are other than temporary, management considers whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, industry analysts’ reports, the financial condition and performance of the issuer, and the quality of any underlying assets or credit enhancements. Since management has the ability and intent to hold debt securities for the foreseeable future, no declines were deemed to be other than temporary as of December 31, 2018 and 2017. The following is a summary of amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of December 31, 2018. Call date is used when a call of the debt security is expected, determined by the Company when the security has a market value above its amortized cost. Contractual

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