Bridgewater Bancshares, Inc._2023 Annual Report

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

The following tables present the balance in the allowance for credit losses and the recorded investment in loans, by segment, based on impairment method as of December 31, 2023 and 2022:

Construction and Land

CRE Owner

CRE

1- - 4 Family 1- - 4 Family

Non - owner Consumer

(dollars in thousands)

Commercial Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total

ACL at December 31, 2023 Individually Evaluated for Impairment . . $ Collectively Evaluated for Impairment . .

8 $

— $

— $

— $

— $

— $

95 $

— $

— $

103

5,390

2,156

558

2,651

22,217

1,184

16,130

105

—

50,391

Totals......................... $ 5,398 $ 2,156 $

558 $ 2,651 $ 22,217 $ 1,184 $ 16,225 $ 105 $

— $ 50,494

ALL at December 31, 2022 Individually Evaluated for Impairment . . $ Collectively Evaluated for Impairment . .

71 $

— $

— $

— $

— $

— $

— $

— $

— $

71

6,430

3,911

845

4,325

17,459

1,965

12,576

151

263

47,925

Totals......................... $ 6,501 $ 3,911 $

845 $ 4,325 $ 17,459 $ 1,965 $ 12,576 $ 151 $

263 $ 47,996

Construction and Land

CRE Owner

CRE

1- - 4 Family 1- - 4 Family

Non - owner Consumer

(dollars in thousands)

Commercial Development Construction

Mortgage

Multifamily

Occupied

Occupied

and Other

Total

Loans at December 31, 2023 Individually Evaluated for Impairment . . . Collectively Evaluated for Impairment . . . Totals.......................... Loans at December 31, 2022 Individually Evaluated for Impairment . . . Collectively Evaluated for Impairment . . . Totals..........................

$ 16,143 $

80 $

249 $ 689 $

— $ 1,559 $ 17,138 $

— $

35,858

447,918

232,724

64,838

401,707

1,388,541

174,224

970,168

8,304

3,688,424

$ 464,061 $ 232,804 $ 65,087 $ 402,396 $ 1,388,541 $ 175,783 $ 987,306 $ 8,304 $ 3,724,282

$ 19,675 $

106 $

— $ 392 $

— $ 1,637 $ 6,239 $

— $

28,049

416,718

295,448

70,242

355,082

1,306,738

148,268

940,769

8,132

3,541,397

$ 436,393 $ 295,554 $ 70,242 $ 355,474 $ 1,306,738 $ 149,905 $ 947,008 $ 8,132 $ 3,569,446

The following table presents the amortized cost basis of collateral dependent loans by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of December 31, 2023: Primary Type of Collateral Business ACL (dollars in thousands) Real Estate Assets Other Total Allocation December 31, 2023 Commercial .......................................... $ — $ 5,782 $ 10,361 $ 16,143 $ 8 Construction and Land Development .................... 80 — — 80 — 1-4 Family Construction ................................ 249 — — 249 — Real Estate Mortgage: 1-4 Family Mortgage .................................. 689 — — 689 — CRE Owner Occupied ................................. 1,559 — — 1,559 — CRE Nonowner Occupied .............................. 17,138 — — 17,138 95 Totals.............................................. $ 19,715 $5,782 $10,361 $35,858 $ 103 Accrued interest receivable on loans, which is recorded within accrued interest on the balance sheet, totaled $11.8 million at December 31, 2023, and was excluded from the estimate of credit losses. Effective January 1, 2023, the Company adopted the provision of ASU 2022-02, which eliminated the accounting for troubled debt restructurings, while expanding loan modification and vintage disclosure requirements. For the twelve months ended December 31, 2023, the Company modified one CRE nonowner occupied loan, with an outstanding balance of $9.6 million, for a borrower experiencing financial difficulty by granting a 12-month extension at a below market rate. There was no forgiveness of principal and this loan was current with its modified terms as of December 31, 2023. Prior to the adoption of ASU 2022-02, at December 31, 2022, there were two loans classified as TDRs with total aggregate outstanding balances of $188,000.

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