Bridgewater Bank Annual Report

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

maturities will differ from expected maturities for mortgage-backed and SBA securities because borrowers may have the right to call or prepay obligations without penalties.

December 31, 2018 Amortized Cost Fair Value 13,244 $ 13,248 31,176 31,364 73,041 73,336 Due in One Year or Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ Due After One Year Through Five Years . . . . . . . . . . . . . . . . . . . . . . Due After Five Years Through 10 Years. . . . . . . . . . . . . . . . . . . . . . . Due After 10 Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,562 39,200 Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157,023 157,148 Mortgage-Backed Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,816 47,176 SBA Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49,876 49,054 Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 255,715 $ 253,378

As of December 31, 2018, the securities portfolio was completely unencumbered. To increase on-balance sheet liquidity, all securities previously pledged to secure public deposits had the designation removed and an alternative means of permissible collateralization was utilized, primarily Federal Home Loan Bank letters of credit. As of December 31, 2017, the amortized cost and fair value of securities pledged to secure public deposits and for other purposes required or permitted by law were $79,400 and $81,639, respectively. The following is a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the years ended December 31, 2018, 2017 and 2016:

2018 2016 Proceeds From Sales of Securities . . . . . . . . . . . . . . . . . . . . . . . $ 24,684 $ 36,209 $ 34,250 Gross Gains on Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290 405 1,044 Gross Losses on Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (415) (655) (214) 2017

Note 5: Loans

The following table presents the components of loans at December 31, 2018 and 2017:

December 31, December 31, 2018 2017

Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 260,833 $ 217,753 Construction and Land Development . . . . . . . . . . . . . . . . . . . . . . . . 210,041 130,586 Real Estate Mortgage: 1-4 Family Mortgage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 226,773 195,707 Multifamily. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 407,934 317,872 CRE Owner Occupied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64,458 65,909 CRE Non-owner Occupied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490,632 415,034 Total Real Estate Mortgage Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . 1,189,797 994,522 Consumer and Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,260 4,252 Total Loans, Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,664,931 1,347,113 Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,031) (16,502) Net Deferred Loan Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,515) (4,104) Total Loans, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,640,385 $ 1,326,507

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