Bridgewater Bank Annual Report

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

The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the years ended December 31, 2018, 2017 and 2016:

Year Ended December 31, Year Ended December 31, Year Ended December 31, 2018 2017 2016 Average Interest Average Interest Average Interest Investment Recognized Investment Recognized Investment Recognized

Loans With No Related Allowance for Loan Losses: Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . $ Construction and Land Development . . . . Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage. . 1st REM - 1-4 Family. . . . . . . . . . . . . . . . . . 1st REM - Rentals. . . . . . . . . . . . . . . . . . . . . CRE Owner Occupied . . . . . . . . . . . . . . . . . CRE Non-owner Occupied . . . . . . . . . . . . . Consumer and Other . . . . . . . . . . . . . . . . . . Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,890 — 212 158 255 976 225 — 64

— —

—

— $ 2,051

102

594

—

759

5

9

537 130 739

20 —

271 960

16 — 50 66 57 —

10 48 — —

34 1,025 97 1,325 — 1,115

13 2,042

— 97

—

9

80 4,139

151 7,515

296

Loans With An Allowance for Loan Losses: Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . Construction and Land Development . . . . Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage. . LOCs and 2nd REM - Rentals . . . . . . . . . . . 1st REM - Rentals. . . . . . . . . . . . . . . . . . . . . Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . CRE Owner Occupied . . . . . . . . . . . . . . . . . Consumer and Other . . . . . . . . . . . . . . . . . . Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

8

— — — — —

14 — — 65

— —

— 19 — 69

—

—

1

324

—

—

— — 65

3

3

276

14

274

14

3 7

66

3 7

68

3 7

158

161

165

—

— 10

—

— 27

97

— 28

555

582

692

Grand Totals . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,445 $

90 $ 4,721 $

178 $ 8,207 $

324

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The process of analyzing loans for changes in risk rating is ongoing through routine monitoring of the portfolio and annual internal credit reviews for credits meeting certain thresholds.

98