Bridgewater Bancshares, Inc._2023 Annual Report

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

Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company adopted the policy to value certain financial instruments at fair value. The Company has not elected to measure any existing financial instruments at fair value; however, it may elect to measure newly acquired financial instruments at fair value in the future. Recurring Basis The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. There have been no changes in the methodologies used at December 31, 2023. The following table presents the balances of the assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 and 2022: Fair Value of Financial Assets: Securities Available for Sale: MunicipalBonds............................................ $ — $132,524 $ — $132,524 Mortgage-BackedSecurities................................... — 235,315 — 235,315 Corporate Securities ......................................... — 130,605 — 130,605 SBASecurities.............................................. — 18,674 — 18,674 Asset-Backed Securities ...................................... — 86,986 — 86,986 InterestRateCaps.............................................. — 18,717 — 18,717 Interest Rate Swaps............................................. — 13,872 — 13,872 Total Fair Value of Financial Assets ........................... $ — $ 636,693 $ — $ 636,693 Fair Value of Financial Liabilities: InterestRateSwaps............................................. $ — $ 8,601 $ — $ 8,601 Total Fair Value of Financial Liabilities . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 8,601 $ — $ 8,601 Fair Value of Financial Assets: Securities Available for Sale: U.S.TreasurySecurities ...................................... $2,580 $ — $ — $ 2,580 Municipal Bonds ............................................ — 131,354 — 131,354 Mortgage-BackedSecurities................................... — 237,784 — 237,784 Corporate Securities ......................................... — 109,827 — 109,827 SBASecurities.............................................. — 20,877 — 20,877 Asset-Backed Securities ...................................... — 46,191 — 46,191 InterestRateCaps.............................................. — 19,406 — 19,406 Interest Rate Swaps............................................. — 18,717 — 18,717 Total Fair Value of Financial Assets ........................... $ 2,580 $ 584,156 $ — $ 586,736 Fair Value of Financial Liabilities: InterestRateSwaps............................................. $ — $ 9,542 $ — $ 9,542 Total Fair Value of Financial Liabilities . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 9,542 $ — $ 9,542 Investment Securities When available, the Company uses quoted market prices to determine the fair value of investment securities; such items are classified in Level 1 of the fair value hierarchy. December 31, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Total December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total

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