2020 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, 2020, 2019 and 2018:

Year Ended December 31, Year Ended December 31, Year Ended December 31, 2020 2019 2018 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 Nonowner Occupied . . . . . . . . . . . . . . 12,334 Consumer and Other . . . . . . . . . . . . . . . . . . — Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,983 165 824 — 624 891

145 $

10 $ 188 $

13 $

— $

— —

—

189

—

212

42 — 29 15

326

9

158 255 976 225

9

—

— 41 12 — —

10 48 13 — — 80

789 240

690

— —

— 64

—

786 1,732

75 1,890

Loans With An Allowance for Loan Losses: Commercial . . . . . . . . . . . . . . . . . . . . . . . . . . Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage. . Multifamily . . . . . . . . . . . . . . . . . . . . . . . . . . CRE Owner Occupied . . . . . . . . . . . . . . . . . Consumer and Other . . . . . . . . . . . . . . . . . . Totals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

122

2

109

1

8

—

— — — 13

— — —

— — — 44

— — —

324

—

65

3 7

158

1 3

2 3

—

— 10 90

135

153

555

Grand Totals . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,118 $ 789 $ 1,885 $

78 $ 2,445 $

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 ratings is ongoing through routine monitoring of the portfolio and annual internal credit reviews for credits meeting certain thresholds.

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