2020 Annual Report

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

The following tables present the carrying amounts and estimated fair values of financial instruments at December 31, 2020 and 2019:

December 31, 2020 Fair Value Hierarchy

Carrying

Estimated

Amount Level 1

Level 2

Level 3 Fair Value

Financial Assets: Cash and Due From Banks. . . . . . . . . . . . . . . . . . . . . $ 160,675 $ 160,675 $

— $ — $ 160,675

Bank-Owned Certificates of Deposit. . . . . . . . . . . . .

2,860

—

2,908

—

2,908

Securities Available for Sale . . . . . . . . . . . . . . . . . . . 390,629

— 390,629

— 390,629

FHLB Stock, at Cost. . . . . . . . . . . . . . . . . . . . . . . . . .

5,027

—

5,027

—

5,027

Loans, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,282,436

— 2,309,421

— 2,309,421

Accrued Interest Receivable . . . . . . . . . . . . . . . . . . . Interest Rate Caps . . . . . . . . . . . . . . . . . . . . . . . . . . . . Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . .

9,172 2,834 2,757

— — —

9,172 2,834 2,757

— — —

9,172 2,834 2,757

Financial Liabilities: Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,501,636 $ — $ 2,509,148 $ — $ 2,509,148 Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,000 — 11,001 — 11,001 FHLB Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57,500 — 58,830 — 58,830 Subordinated Debentures . . . . . . . . . . . . . . . . . . . . . . 73,739 — 74,769 — 74,769 Accrued Interest Payable . . . . . . . . . . . . . . . . . . . . . . 1,615 — 1,615 — 1,615 Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . . 6,167 — 6,167 — 6,167

December 31, 2019 Fair Value Hierarchy

Carrying

Estimated

Amount Level 1

Level 2

Level 3 Fair Value

Financial Assets: Cash and Due From Banks. . . . . . . . . . . . . . . . . . . . . $ 31,935 $ 31,935 $

— $

— $ 31,935

Bank-Owned Certificates of Deposit. . . . . . . . . . . . .

2,654

—

2,677

—

2,677

Securities Available for Sale . . . . . . . . . . . . . . . . . . . 289,877 4,998 284,879

— 289,877

FHLB Stock, at Cost. . . . . . . . . . . . . . . . . . . . . . . . . .

7,824

—

7,824

—

7,824

Loans, Net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,884,000

— 1,891,987

— 1,891,987

Accrued Interest Receivable . . . . . . . . . . . . . . . . . . . Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . .

6,775

— —

6,775

— —

6,775

284

284

284

Financial Liabilities: Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,823,310 $ — $ 1,821,915 $

— $ 1,821,915

Notes Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

13,000

—

13,022

—

13,022

FHLB Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136,500

— 141,152

— 141,152

Subordinated Debentures . . . . . . . . . . . . . . . . . . . . . . Accrued Interest Payable . . . . . . . . . . . . . . . . . . . . . . Interest Rate Swaps. . . . . . . . . . . . . . . . . . . . . . . . . . .

24,733

— — —

25,309

— — —

25,309

1,982

1,982

1,982

902

902

902

The following methods and assumptions were used by the Company to estimate fair value of consolidated financial statements not previously discussed.

Cash and due from banks – The carrying amount of cash and cash equivalents approximates their fair value.

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