What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-06 · 235 added, 302 removed, 1058 unchanged (34% of the section changed)

3 unchanged sentences

(In thousands, except share data)

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Cash and due from banks $ 292,006 $ 293,552

4 unchanged sentences

Available for sale investment securities, at fair value 97,321 107,428

Held to maturity investment securities, at amortized cost (fair values of $ 37,125 and $ 15,903 at September 30, 2024 and December 31, 2023, respectively)

Held to maturity investment securities, at amortized cost (fair values of $ 36,763 and $ 36,691 at March 31, 2025 and December 31, 2024, respectively)

36,478 36,553

Total investment securities 135,963 146,099

Loans receivable (net of ACL-Loans of $ 27,752 at September 30, 2024 and $ 27,946 at December 31, 2023)

Loans receivable (net of ACL-Loans of $ 29,485 at March 31, 2025 and $ 29,007 at December 31, 2024, respectively)

2,611,495 2,672,959

Other real estate owned — 8,299

Accrued interest receivable 15,409 14,535

11 unchanged sentences

Advances from the Federal Home Loan Bank 40,000 90,000

Subordinated debentures (face value of $ 70,000 and $ 70,000 at September 30, 2024 and December 31, 2023, respectively, less unamortized debt issuance costs of $ 611 and $ 795 at September 30, 2024 and December 31, 2023, respectively)

Subordinated debentures (face value of $ 70,000 and $ 70,000 at March 31, 2025 and December 31, 2024, respectively, less unamortized debt issuance costs of $ 487 and $ 549 at March 31, 2025 and December 31, 2024, respectively)

69,513 69,451

4 unchanged sentences

Common stock, no par value;

10,000,000 shares authorized, 7,858,573 and 7,882,616 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

10,000,000 shares authorized, 7,888,013 and 7,859,873 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

118,439 119,108

7 unchanged sentences

(In thousands, except share data)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Interest and dividend income

8 unchanged sentences

Net interest income 22,066 21,147

Provision (credit) for credit losses 6,296 ( 1,579 ) 18,162 1,826

Net interest income after provision (credit) for credit losses 14,421 24,270 44,921 70,397

Provision for credit losses 463 3,683

Net interest income after provision for credit losses 21,603 17,464

Noninterest income

28 unchanged sentences

(In thousands)

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Net income $ 6,888 $ 3,763

17 unchanged sentences

Number of Outstanding Shares Common Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total

Balance at June 30, 2024 7,866,499 $ 118,037 $ 150,895 $ ( 1,956 ) $ 266,976

Net income — — 1,926 — 1,926

Other comprehensive income, net of tax — — — 196 196

Cash dividends declared ($ 0.20 per share)

— — ( 1,564 ) — ( 1,564 )

Stock-based compensation expense — 623 — — 623

Forfeitures of restricted stock ( 1,562 ) — — — —

Issuance of restricted stock 3,306 — — — —

Repurchase of common stock ( 9,670 ) ( 231 ) — — ( 231 )

Balance at September 30, 2024 7,858,573 $ 118,429 $ 151,257 $ ( 1,760 ) $ 267,926

Number of Outstanding Shares Common Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total

Balance at June 30, 2023 7,829,950 $ 116,541 $ 133,988 $ ( 1,716 ) $ 248,813

Net income — — 9,777 — 9,777

Other comprehensive income, net of tax — — — 192 192

Cash dividends declared ($ 0.20 per share)

— — ( 1,560 ) — ( 1,560 )

Stock-based compensation expense — 640 — — 640

Issuance of restricted stock 11,666 — — — —

Repurchase of common stock — — — — —

Balance at September 30, 2023 7,841,616 $ 117,181 $ 142,205 $ ( 1,524 ) $ 257,862

See accompanying notes to consolidated financial statements (unaudited)

Number of Outstanding Shares Common Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total

Balance at December 31, 2024 7,859,873 $ 119,108 $ 152,656 $ ( 1,244 ) $ 270,520

Net income — — 6,888 — 6,888

Other comprehensive (loss), net of tax — — — ( 96 ) ( 96 )

Other comprehensive income, net of tax — — — 48 48

Cash dividends declared ($ 0.20 per share)

3 unchanged sentences

Issuance of restricted stock 72,774 — — — —

Stock options exercised — — — — —

Repurchase of common stock ( 29,924 ) ( 912 ) — — ( 912 )

Balance at September 30, 2024 7,858,573 $ 118,429 $ 151,257 $ ( 1,760 ) $ 267,926

Balance at March 31, 2025 7,888,013 $ 118,439 $ 157,971 $ ( 1,196 ) $ 275,214

Number of Outstanding Shares Common Stock Retained Earnings Accumulated Other Comprehensive (Loss) Income Total

Balance at December 31, 2023 7,882,616 $ 118,247 $ 149,169 $ ( 1,664 ) $ 265,752

Cumulative effect of change in accounting principle (ASU No.

2016-13), net of tax — — ( 4,893 ) — $ ( 4,893 )

Balance as of January 1, 2023 as adjusted

for changes in accounting principle 7,730,699 115,018 118,747 ( 189 ) $ 233,576

Net income — — 3,763 — 3,763

5 unchanged sentences

Issuance of restricted stock 61,844 — — — —

Stock options exercised 8,680 155 — — 155

Repurchase of common stock ( 36,180 ) ( 920 ) — — ( 920 )

Balance at September 30, 2023 7,841,616 $ 117,181 $ 142,205 $ ( 1,524 ) $ 257,862

Balance at March 31, 2024 7,908,180 $ 118,401 $ 151,350 $ ( 1,719 ) $ 268,032

See accompanying notes to consolidated financial statements (unaudited)

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities

3 unchanged sentences

Provision for credit losses 463 3,683

Provision (credit) for deferred income taxes 132 ( 114 )

Credit for deferred income taxes 176 282

Change in fair value of marketable equity securities ( 31 ) 16

4 unchanged sentences

Stock-based compensation 243 1,074

Loss on sale of premises and equipment — 13

Changes in other real estate owned, net 103 —

Net change in:

7 unchanged sentences

Proceeds from principal repayments on held to maturity securities 61 80

Net proceeds from maturities of available for sale securities 10,000 —

Net proceeds from sales of held to maturity securities 28 —

Purchases of marketable equity securities ( 16 ) ( 15 )

Purchases of held to maturity securities ( 19,289 ) ( 50 )

Net decrease (increase) in loans 73,376 ( 118,992 )

Net decrease in loans 57,468 30,931

Proceeds from sales of loans not originated for sale 4,119 3,119

Purchases of premises and equipment, net ( 97 ) ( 83 )

Reduction (purchases) of Federal Home Loan Bank stock 41 ( 480 )

Net cash provided by (used in) investing activities 62,002 ( 93,320 )

Purchases of Federal Home Loan Bank stock 2,072 41

Proceeds from the sale of other real estate owned 8,195 —

Net cash provided by investing activities 83,089 35,178

See accompanying notes to consolidated financial statements (unaudited)

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from financing activities

1 unchanged sentence

Net change in other deposits 38,201 ( 39,613 )

Proceeds from exercise of options — 155

Net change in FHLB advances ( 50,000 ) —

Dividends paid on common stock ( 1,573 ) ( 1,582 )

1 unchanged sentence

Net cash (used in) financing activities ( 89,610 ) ( 65,737 )

Net increase (decrease) in cash and cash equivalents 22,180 ( 97,584 )

Net decrease in cash and cash equivalents ( 2,596 ) ( 21,530 )

Cash and cash equivalents:

8 unchanged sentences

Net change in unrealized gains or losses on interest rate swaps ( 1,134 ) 125

Establishment of right-of-use asset and lease liability — 597

Transfer of loans from held-for-investment to held-for-sale 3,677 2,797

13 unchanged sentences

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet, and revenue and expenses for the period.

In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet and revenue and expenses for the period.

Actual results could differ from those estimates.

Material estimates that are particularly susceptible to significant change in the near term relate to the allowance for credit losses, the valuation of derivative instruments, investment securities valuation, evaluation of investment securities for other than temporary impairment and deferred income taxes valuation.

Material estimates that are particularly susceptible to significant change in the near-term relate to the Allowance for Credit Losses-Loans ("ACL-Loans"), derivative instrument valuation, investment securities valuation, Allowance for Credit Losses-Securities, and deferred income taxes valuation.

The Company has one reportable segment.

2 unchanged sentences

Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit.

The Chief Executive Officer (CEO), acting as the Chief Operating Decision Maker (CODM), determines the Company's one reportable segment.

This determination is based on information about the Company's banking operations, its primary business, and the level of detail provided to the CODM for performance review.

Similar operating performance, products and services, and customer bases allow for aggregation of business components into this one segment.

The CODM evaluates financial performance by reviewing the consolidated financial results of the Company, analyzing factors such as revenue streams, significant expenses, and capital levels, as well as budget-to-actual results.

Consolidated net income and related performance metrics are also used to benchmark the Company’s performance against competitors.

The analysis of the Company’s results, including benchmarking, informs performance assessment and compensation decisions.

The banking operations generate revenue through loans, investments, and deposits, while significant expenses include interest expense, the provision for credit losses, and salaries and employee benefits.

All operations are domestic.

Basis of Consolidated Financial Statement Presentation

10 unchanged sentences

The ACL-Loans is recognized as a contra-asset, and credit loss expense is recorded as a provision for loan losses in the consolidated statements of income.

losses are charged off against the ACL-Loans when management believes the loan is uncollectible.

Loan losses are charged off against the ACL-Loans when management believes the loan is uncollectible.

Subsequent recoveries, if any, are credited to the ACL-Loans.

1 unchanged sentence

The Company generally does not recognize an allowance for credit losses ("ACL") on accrued interest receivables, consistent with its policy to reverse interest income when interest is 90 days or more past due.

The Company also records an ACL-Unfunded commitments, which is based on the same assumptions as funded loans and also

considers the probability of funding.

The ACL is recognized as a liability, and credit loss expense is recorded as a provision for

unfunded loan commitments within the provision for credit losses in the Consolidated statements of income.

The Company also records an ACL-Unfunded commitments, which is based on the same assumptions as funded loans and also considers the probability of funding.

The ACL is recognized as a liability, and credit loss expense is recorded as a provision for unfunded loan commitments within the provision for credit losses in the Consolidated statements of income.

For collectively evaluated loans and related unfunded commitments, the Company utilizes software provided by a third party, which includes various models for forecasting expected credit losses, to calculate its ACL.

5 unchanged sentences

Based on the disparate regional concentration, management determined that a select group of peer banks is necessary to scale the loss rate models to produce an ACL that is more representative of the Company’s loan portfolio.

This peer-based calibration, called a "scalar", utilizes the loss rates of a subset of peer banks to appropriately scale the initial model results.

This peer-based calibration, called a "peer scalar", utilizes the loss rates of a subset of peer banks to appropriately scale the initial model results.

These peers have been selected by the Company given their similar characteristics, such as loan portfolio composition and location, to better align the models’ results to the Company’s expected losses.

15 unchanged sentences

To account for the fully secured structure of this type of loan, management determined each loan will be individually evaluated, regardless of the credit quality indicators.

These loans are evaluated based upon their collateral, which primarily consists of cash, cash surrender value life insurance, and in some cases real estate.

These loans are evaluated based

upon their collateral, which primarily consists of cash, cash surrender value life insurance, and in some cases real estate.

In determining the ACL-Loans for individually evaluated loans, the Company generally applies a discounted cash flow method for instruments that are individually assessed.

7 unchanged sentences

Government and as a result, management has a zero loss expectation.

No ACL-Securities was recorded for these securities as of September 30, 2024.

No ACL-Securities was recorded for these securities as of March 31, 2025.

For the corporate bond portfolio, the Company developed a metric that includes each issuer’s current credit ratings and key financial performance metrics to assess the underlying performance of each issuer.

The analysis of the issuers’ performance and the intent of the Company to retain these securities support the determination that there is no expected credit loss, and therefore, no ACL-Securities was recognized on the corporate bond portfolio as of September 30, 2024.

Of our held to maturity securities portfolio, one security’s fair value was less than its amortized cost as of September 30, 2024.

The analysis of the issuers’ performance and the intent of the Company to retain these securities support the determination that there is no expected credit loss, and therefore, no ACL-Securities were recognized on the corporate bond portfolio as of March 31, 2025.

Of our held to maturity securities portfolio, five security’s fair value was less than its amortized cost as of March 31, 2025.

Since this is a highly rated state agency and municipal obligation, the Company's expectation of nonpayment of the amortized cost basis is zero.

No allowance for ACL-Securities was recorded for this security as of September 30, 2024.

No allowance for ALC-Securities was recorded for this security as of March 31, 2025.

Common Share Repurchases

9 unchanged sentences

Recently issued accounting pronouncements not yet adopted

2024-03— Income Statement:

"Reporting Comprehensive Income - Expense Disaggregation Disclosures" :

The amendments in this update is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions.

The amendments in this update are effective for annual periods beginning after December 15, 2026.

2025-01—Income Statement:

"Reporting Comprehensive Income - Expense Disaggregation Disclosures":

Following the issuance of Update 2024-03, this amendment clarifies the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities).

The amendment is effective for public business entities for annual reporting periods beginning after December 15, 2026.

The Company believes this ASU will not have a material impact on existing disclosures and will continue to monitor for SEC action, and plan accordingly for adoption.

2023-09— Income Taxes (Topic 740):

3 unchanged sentences

The Company believes this ASU will not have a material impact on existing disclosures and will continue to monitor for SEC action, and plan accordingly for adoption.

Recently issued accounting pronouncements that have been adopted

2023-07— Segment Reporting:

"Improvements to Reportable Segment Disclosures":

The amendment requires a public entity disclose, on an annual and interim basis, significant segment expenses that are regularly provided to the chief operating decision maker (CODM) and included within each reported measure of segment profit or loss.

For public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2023.

The Company has adopted this ASU in December 2024 and it did not have a material impact on existing disclosures .

2023-06—Disclosure Improvements:

25 unchanged sentences

For all other entities, the amendments will be effective two years later.

The amendments in this Update should be applied prospectively.

For all entities, if by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

The amendments in this update are to be applied prospectively.

For all entities, if

by June 30, 2027, the SEC has not removed the applicable requirement from Regulation S-X or Regulation S-K, the pending content of the related amendment will be removed from the Codification and will not become effective for any entity.

The Company believes this ASU will not have a material impact on existing disclosures and will continue to monitor for SEC action, and plan accordingly for adoption.

Investment Securities

The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at September 30, 2024 were as follows:

September 30, 2024

The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at March 31, 2025 were as follows:

March 31, 2025

Amortized Cost Gross Unrealized Fair Value

14 unchanged sentences

State agency and municipal obligations

Due from one through five years $ 5,383 $ 49 $ — $ 5,432

Less than one year $ 6,831 $ 39 $ — $ 6,870

Due from five through ten years 2,797 — ( 6 ) 2,791

Due after ten years 26,850 1,258 ( 1,006 ) 27,102

Total State agency and municipal obligations 36,478 1,297 ( 1,012 ) 36,763

Government-sponsored mortgage backed securities

19 unchanged sentences

State agency and municipal obligations

Less than one year $ 6,820 $ 37 $ — $ 6,857

Due from one through five years 2,808 — ( 77 ) 2,731

Due after ten years 26,897 1,190 ( 1,013 ) 27,074

Total State agency and municipal obligations 36,525 1,227 ( 1,090 ) 36,662

Government-sponsored mortgage backed securities

1 unchanged sentence

Total held to maturity securities $ 36,553 $ 1,228 $ ( 1,090 ) $ 36,691

There were no sales of investment securities during the nine months ended September 30, 2024 or 2023.

At September 30, 2024 and December 31, 2023, none of the Company's securities were pledged as collateral with the Federal Home Loan Bank ("FHLB") or any other institution.

As of September 30, 2024 and December 31, 2023, the actual durations of the Company's available for sale securities were significantly shorter than the stated maturities.

As of September 30, 2024, the Company held marketable equity securities with a fair value of $ 2.1 million and an amortized cost of $ 2.2 million.

There was one sale of investment securities during the three months ended March 31, 2025.

There were no sales of investment securities during the three months March 31, 2024.

At March 31, 2025 and December 31, 2024, none of the Company's securities were pledged as collateral with the Federal Home Loan Bank ("FHLB") or any other institution.

As of March 31, 2025 and December 31, 2024, the actual durations of the Company's available for sale securities were significantly shorter than the stated maturities.

As of March 31, 2025, the Company held marketab le equity securities with a fair value of $ 2.2 million and an amortized cost of $ 2.3 million.

At December 31, 2024, the Company held marketable equity securities with a fair value of $ 2.1 million and an amortized cost of $ 2.3 million.

These securities represent an investment in mutual funds that have an objective to make investments for Community Reinvestment Act ("CRA") purposes.

The following tables provide information regarding available for sale securities and held to maturity securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2024 and December 31, 2023:

Length of Time in Continuous Unrealized Loss Position

5 unchanged sentences

(Dollars in thousands)

September 30, 2024

March 31, 2025

Government and agency obligations $ — $ — — % $ 61,214 $ ( 2,968 ) 4.62 % $ 61,214 $ ( 2,968 ) 4.62 %

14 unchanged sentences

Total investment securities $ 7,361 $ ( 254 ) 3.33 % $ 101,227 $ ( 5,917 ) 5.52 % $ 108,588 $ ( 6,171 ) 5.38 %

There were thirty-five and thirty-four available for sale securities or held to maturity securities as of September 30, 2024 and December 31, 2023, respectively, in which the fair value of the security was less than the amortized cost of the security.

There were thirty-four and thirty-seven available for sale securities or held to maturity securities as of March 31, 2025 and December 31, 2024, respectively, in which the fair value of the security was less than the amortized cost of the security.

Government and agency obligations owned are either direct obligations of the U.S.

3 unchanged sentences

The Company monitors its corporate bond, state agency and municipal bond portfolios and considers them to have minimal default risk.

The Company has the intent and ability to retain its investment securities in an unrealized loss position at September 30, 2024 until the decline in value has recovered or the security has matured.

The Company has the intent and ability to retain its investment securities in an unrealized loss position at March 31, 2025 until the decline in value has recovered or the security has matured.

Loans Receivable and ACL-Loans

The following table sets forth a summary of the loan portfolio at September 30, 2024 and December 31, 2023:

(In thousands) September 30, 2024 December 31, 2023

The following table sets forth a summary of the loan portfolio at March 31, 2025 and December 31, 2024:

(In thousands) March 31, 2025 December 31, 2024

Real estate loans:

10 unchanged sentences

Lending activities primarily consist of commercial real estate loans, commercial business loans and, to a lesser degree, consumer loans.

Loans may also be granted for the construction of commercial properties.

Loans may also be granted for the construction of income producing properties.

The majority of commercial mortgage loans are collateralized by first or second mortgages on real estate.

6 unchanged sentences

While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment for commercial loans to be based on the client’s ability to generate continuing cash flows.

The Company does not provide first or second lien residential mortgage loans secured by residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Credit quality of loans and the Allowance for Credit Losses - Loans (ACL-Loans)

The Company does not provide first or second lien consumer mortgage loans secured by residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Credit quality of loans and the ACL-Loans

Management segregates the loan portfolio into defined segments, which are used to develop and document a systematic method for determining the Company's ACL-Loans.

20 unchanged sentences

Commercial business loans generally have higher interest rates and shorter terms than other loans, and their repayment generally depends on the successful operation of the client’s business.

This portfolio segment includes loans secured by savings or certificate accounts, as well as unsecured personal loans and overdraft lines of credit.

In addition, there are loans to finance insurance premiums, secured primarily by the cash surrender value of life insurance and marketable securities.

The following tables set forth the activity in the Company’s ACL-Loans for the three and nine months ended September 30, 2024 and 2023, by portfolio segment:

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Three Months Ended September 30, 2024

Beginning balance $ 123 $ 22,473 $ 2,272 $ 10,647 $ 568 $ 36,083

Charge-offs — ( 8,184 ) ( 616 ) ( 7,010 ) ( 17 ) ( 15,827 )

Recoveries — 1,013 — ( 34 ) 1 980

(Credit) provision for credit losses ( 21 ) 6,676 ( 51 ) ( 83 ) ( 5 ) 6,516

Ending balance $ 102 $ 21,978 $ 1,605 $ 3,520 $ 547 $ 27,752

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Three Months Ended September 30, 2023

Beginning balance $ 190 $ 19,948 $ 1,798 $ 6,788 $ 1,970 $ 30,694

Charge-offs — — — — ( 32 ) ( 32 )

Recoveries — — — 35 20 55

(Credit) provision for credit losses ( 29 ) 788 ( 183 ) ( 639 ) ( 1,370 ) ( 1,433 )

Ending balance $ 161 $ 20,736 $ 1,615 $ 6,184 $ 588 $ 29,284

This portfolio segment includes loans to finance insurance premiums secured by the cash surrender value of life insurance and marketable securities, overdraft lines of credit, and personal loans to high net worth individuals.

The following tables set forth the activity in the Company’s ACL-Loans for the three months ended March 31, 2025 and 2024, by portfolio segment:

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Beginning balance $ 94 $ 21,838 $ 2,059 $ 4,070 $ 946 $ 29,007

1 unchanged sentence

Recoveries — — — 4 36 40

(Credit) provision for credit losses ( 47 ) 11,914 522 6,172 21 18,582

Provision (credit) for credit losses ( 7 ) ( 1,209 ) 157 1,170 427 538

Ending balance $ 87 $ 20,562 $ 2,216 $ 5,244 $ 1,376 $ 29,485

1 unchanged sentence

(In thousands)

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Beginning Balance $ 149 $ 20,950 $ 1,699 $ 4,562 $ 586 $ 27,946

Day1 effect of CECL 80 4,987 611 ( 1,125 ) 526 5,079

Balance as of January 1, 2023 as

adjusted for changes in accounting

principle 243 20,584 922 5,089 672 27,510

Charge-offs ( 132 ) ( 3,306 ) — ( 197 ) ( 49 ) ( 3,684 )

Recoveries — — — 27 4 31

(Credit) provision for credit losses ( 82 ) 152 693 1,466 ( 50 ) 2,179

Provision (credit) for credit losses 116 4,022 ( 156 ) ( 314 ) 30 3,698

Ending balance $ 133 $ 21,666 $ 1,543 $ 4,078 $ 571 $ 27,991

1 unchanged sentence

Generally, loans up for renewal are subject to a full credit evaluation before the renewal is granted and such loans are considered current period originations for purpose of the tables below.

The following tables present loans by origination and risk designation as of September 30, 2024 and December 31, 2023 (dollars in thousands):

Amortized Cost Balances by Origination Year as of September 30, 2024

The following tables present loans by origination and risk designation as of March 31, 2025 and December 31, 2024 (dollars in thousands):

Amortized Cost Balances by Origination Year as of March 31, 2025

2025 2024 2023 2022 2021 Prior Total

95 unchanged sentences

Current period charge-offs $ 28 $ — $ 7,664 $ 823 $ 8,184 $ 6,317 $ 23,016

Loans evaluated for impairment and the related ACL-Loans as of September 30, 2024 and December 31, 2023 were as follows:

Loans evaluated for impairment and the related ACL-Loans as of March 31, 2025 and December 31, 2024 were as follows:

Portfolio ACL-Loans

(In thousands)

September 30, 2024

March 31, 2025

Loans individually evaluated for impairment:

42 unchanged sentences

This classification does not mean that the loan has absolutely no recovery or salvage value;

rather, it is not practical or desirable to defer writing-off this asset even though partial recovery may be made in the future.

rather, it is not practical or desirable to defer charging off this asset even though partial recovery may be made in the future.

Risk ratings are assigned as necessary to differentiate risk within the portfolio.

2 unchanged sentences

In addition to internal review at multiple points, outsourced loan review opines on risk ratings with regard to the sample of loans their review covers.

The following tables present credit risk ratings by loan segment as of September 30, 2024 and December 31, 2023:

The following tables present credit risk ratings by loan segment as of March 31, 2025 and December 31, 2024:

Commercial Credit Quality Indicators

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Commercial Real Estate Construction Commercial Business Total Commercial Real Estate Construction Commercial Business Total

7 unchanged sentences

Residential and Consumer Credit Quality Indicators

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Residential Real Estate Consumer Total Residential Real Estate Consumer Total

15 unchanged sentences

A loan is considered to be no longer delinquent when timely payments are made for a period of at least six months (one year for loans providing for quarterly or semi-annual payments) by the borrower in accordance with the contractual terms.

The following tables set forth certain information with respect to the Company's loan portfolio delinquencies by portfolio segment as of September 30, 2024 and December 31, 2023:

September 30, 2024

The following tables set forth certain information with respect to the Company's loan portfolio delinquencies by portfolio segment as of March 31, 2025 and December 31, 2024:

March 31, 2025

30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans

17 unchanged sentences

Total loans $ 493 $ 237 $ 43,380 $ 44,110 $ 2,661,778 $ 2,705,888

There was one loan greater than 90 days delinquent and still accruing interest as of September 30, 2024.

This loan has a balance of $ 2.0 million and is related to a maturity administrative extension.

There were no loans delinquent greater than 90 days and still accruing interest as of December 31, 2023.

There w ere no lo ans delinquent greater than 90 days and still accruing interest as of March 31, 2025 or December 31, 2024.

Loans on nonaccrual status

The following is a summary of nonaccrual loans by portfolio segment as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023

The following is a summary of nonaccrual loans by portfolio segment as of March 31, 2025 and December 31, 2024:

March 31, 2025 December 31, 2024

(In thousands)

4 unchanged sentences

Total $ 26,383 $ 53,277

Interest income on loans that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the nine months ended September 30, 2024 and 2023 was $ 3.0 million and $ 5.1 million, respectively.

There was no i nterest income recognized on these loans for the nine months ended September 30, 2024 and 2023.

At September 30, 2024 and December 31, 2023, there were no commitments to lend additional funds to any borrower on nonaccrual status.

Nonaccrual loans with no specific reserve totaled $ 64.9 million and $ 48.3 million at September 30, 2024 and December 31, 2023, respectively, as these loans were deemed to be adequately collateralized.

Interest income on loans that would have been recognized if loans on nonaccrual status had been current in accordance with their original terms for the three months ended March 31, 2025 and 2024 was $ 0.6 million and $ 0.9 million, respectively.

At March 31, 2025 and December 31, 2024, there were no commitments to lend additional funds to any borrower on nonaccrual status.

Nonaccrual loans with no specific reserve totaled $ 26.4 million and $ 53.3 million at March 31, 2025 and December 31, 2024, respectively, as these loans were deemed to be adequately collateralized.

Individually evaluated loans

An individually evaluated loan is generally one for which it is probable, based on current information, that the Company will not collect all the amounts due in accordance with the contractual terms of the loan.

Individually evaluated loans are individually evaluated for impairment.

When the Company classifies a problem loan as impaired, it evaluates whether a specific valuation allowance is required for that portion of the asset that is estimated to be impaired.

The Company also individually evaluated all insurance premium loans within the Consumer portfolio segment, irrespective of credit risk ratings.

The following table summarizes individually evaluated loans by portfolio segment as of September 30, 2024 and December 31, 2023.

Individually evaluated loans are individually evaluated for credit losses.

Within the Consumer portfolio segment, the Company individually evaluated all insurance premium loans as well as a cash-secured loan to an individual, regardless of credit risk rating.

The following table summarizes individually evaluated loans by portfolio segment as of March 31, 2025 and December 31, 2024.

Carrying Amount Unpaid Principal Balance Associated ACL-Loans

September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024

(In thousands)

14 unchanged sentences

Total individually evaluated loans $ 74,588 $ 113,901 $ 87,285 $ 126,413 $ — $ —

The following table summarizes the average carrying amount of individually evaluated loans and interest income recognized on individually evaluated loans by portfolio segment for the three and nine months ended September 30, 2024 and 2023:

Average Carrying Amount Interest Income Recognized

Three Months Ended September 30, Three Months Ended September 30,

2024 2023 2024 2023

(In thousands)

Individually evaluated loans without a valuation allowance:

Residential real estate $ 3,606 $ 3,760 $ 52 $ 28

Commercial real estate 52,072 1,900 287 —

Commercial business 13,703 6,387 128 48

Construction 9,176 9,382 — —

Consumer 26,477 8,981 363 —

Total individually evaluated loans without a valuation allowance 105,034 30,410 830 76

Individually evaluated loans with a valuation allowance:

Residential real estate $ — $ — $ — $ —

Commercial real estate — 21,934 — 87

Construction — — — —

Commercial business 629 3,092 11 —

Consumer — — — —

Total individually evaluated loans with a valuation allowance 629 25,026 11 87

Total individually evaluated loans $ 105,663 $ 55,436 $ 841 $ 163

Average Carrying Amount Interest Income Recognized

Nine Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31, Three Months Ended March

2025 2024 2025 2024

19 unchanged sentences

Modified terms are dependent upon the financial position and needs of the individual borrower.

There were no new loan modifications reportable under ASU 2022-02 at September 30, 2024 and December 31, 2023.

There were no new loan modifications reportable under ASU 326 at March 31, 2025 and December 31, 2024.

There were no nonaccrual modified loans at March 31, 2025 and December 31, 2024.

There were no loans modified that re-defaulted during at March 31, 2025 and December 31, 2024.

Allowance for credit losses (ACL)-Unfunded Commitments

The Company has recorded ACL-Unfunded Commitments in A ccrued expenses and other liabilities, with t he provision recorded within the Provision for credit losses on the Company’s Consolidated Statements of Income.

The following table presents a roll forward of the ACL-Unfunded Commitments for the three and nine months ended September 30, 2024 and September 30, 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

As part of CECL, the Company has recorded ACL-Unfunded Commitments in A ccrued expenses and other liabilities .

The provision is recorded within the Provision for credit losses on the Company’s Consolidated Statements of Income.

The following table presents a roll forward of the ACL-Unfunded Commitments for the three months ended March 31, 2025 and March 31, 2024:

Three Months Ended March 31,

(In thousands)

Balance at beginning of period $ 756 $ 926

Reversal of prior unfunded reserve — — — ( 80 )

Day 1 effect of CECL — — — 1,273

(Credit) for credit losses (unfunded commitments) ( 75 ) ( 15 )

1 unchanged sentence

Components of Provision for Credit Losses

The following table summarizes the Provision for credit losses for the three and nine months ended September 30, 2024 and September 30, 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

The following table summarizes the Provision for credit losses for the three months ended March 31, 2025 and March 31, 2024:

Three Months Ended March 31,

(In thousands)

Provision (credit) for credit losses (loans) $ 6,516 $ ( 1,433 ) $ 18,582 $ 2,179

Provision for credit losses (loans) $ 538 $ 3,698

(Credit) for credit losses (unfunded commitments) ( 75 ) ( 15 )

Provision (credit) provision for credit losses $ 6,296 $ ( 1,579 ) $ 18,162 $ 1,826

Provision for credit losses $ 463 $ 3,683

Shareholders' Equity

The Company has 10,000,000 shares authorized and 7,858,573 shares issued and outstanding at September 30, 2024 and 10,000,000 shares authorized and 7,882,616 shares issued and outstanding at December 31, 2023.

The Company has 10,000,000 shares authoriz ed and 7,888,013 shares issued and outstanding at March 31, 2025 and 10,000,000 shares authorized and 7,859,873 shares issued and outstanding at December 31, 2024.

The Company's stock is traded on the Nasdaq Global Market under the ticker symbol BWFG.

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Issuer Purchases of Equity Securities

On December 19, 2018, the Company's Board of Directors authorized a share repurchase program ("Prior Plan") of up to 400,000 shares of the Company's common Stock and, on October 27, 2021, the Company’ Board of Directors authorized the repurchase of an additional 200,000 shares under the Prior Plan.

During the nine months ended September 30, 2024, the Company purchased 85,990 shares of its common stock at a weighted average price of $ 24.82 .

During the year ended December 31, 2023, the Company had no purchases of common stock.

On December 19, 2018, the Company's Board of Directors authorized a share repurchase program ("Prior Plan") of up to 400,000 shares of the Company's Common Stock.

On October 27, 2021, the Company's Board of Directors authorized the repurchase of an additional 200,000 shares under the Prior Plan.

During the year ended December 31, 2024, the Company purchased 85,990 shares of its Common Stock at a weighted average of $ 24.82 per share.

To date, the Company has purchased 535,802 shares of the Company's common stock pursuant to the Prior Plan.

2 unchanged sentences

In connection with the authorization of the New Plan, the Company terminated the Prior Plan.

The Company intends to accomplish the share repurchases under the New Plan through open market transactions, although the Company could accomplish repurchases through other means, such as privately negotiated transactions.

The timing, price and volume of repurchases will be based on market conditions, relevant securities laws (such as 10b-18 and 10b5-1 rules under the Securities Exchange Act of 1934) and other factors.

The New Plan does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company's discretion.

The Company expects to fund any repurchases from cash on hand.

The Company intends to accomplish the share repurchases through open market transactions, though the Company could accomplish repurchases through other means, such as privately negotiated transactions.

The timing, price and volume of repurchases will be based on market conditions, relevant securities laws, and other factors.

The share repurchase plan does not obligate the Company to acquire any particular amount of Common Stock, and it may be modified or suspended at any time at the Company's discretion.

During the three months ended March 31, 2025, the Company purchased 29,924 shares of its Common Stock at a weighted average of $ 30.46 per share.

Comprehensive Income

2 unchanged sentences

Changes in fair value of the Company's cash flow swap derivatives are primarily driven by changes in interest rates and recognized in other comprehensive income.

The Company’s total compreh ensive income or loss for the three and nine months ended September 30, 2024 and September 30, 2023 is reported in the Consolidated Statements of Comprehensive Income.

The following tables present the changes in accumulated other comprehensive (loss) income by component, net of tax for the three and nine months ended September 30, 2024 and September 30, 2023:

Net Unrealized Gain (Loss) on Available for Sale Securities Net Unrealized Gain (Loss) on Interest Rate Swaps Total

(In thousands)

Balance at June 30, 2024 $ ( 5,622 ) $ 3,666 $ ( 1,956 )

Other comprehensive income (loss) before reclassifications, net of tax 2,050 ( 1,338 ) 712

Amounts reclassified from accumulated other comprehensive income, net of tax — ( 516 ) ( 516 )

Net other comprehensive income (loss) 2,050 ( 1,854 ) 196

Balance at September 30, 2024 $ ( 3,572 ) $ 1,812 $ ( 1,760 )

Net Unrealized Gain (Loss) on Available for Sale Securities Net Unrealized Gain (Loss) on Interest Rate Swaps Total

(In thousands)

Balance at June 30, 2023 $ ( 7,611 ) $ 5,895 $ ( 1,716 )

Other comprehensive (loss) income before reclassifications, net of tax ( 579 ) 1,718 1,139

Amounts reclassified from accumulated other comprehensive income, net of tax — ( 947 ) ( 947 )

Net other comprehensive (loss) income ( 579 ) 771 192

Balance at September 30, 2023 $ ( 8,190 ) $ 6,666 $ ( 1,524 )

The Company’s total compreh ensive income or loss for the three March 31, 2025 and March 31, 2024 is reported in the Consolidated Statements of Comprehensive Income.

The following tables present the changes in accumulated other comprehensive (loss) income by component, net of tax for the three months ended March 31, 2025 and March 31, 2024:

Net Unrealized Gain (Loss) on Available for Sale Securities Net Unrealized Gain (Loss) on Interest Rate Swaps Total

4 unchanged sentences

Net other comprehensive income (loss) 914 ( 866 ) 48

Balance at September 30, 2024 $ ( 3,572 ) $ 1,812 $ ( 1,760 )

Balance at March 31, 2025 $ ( 2,918 ) $ 1,722 $ ( 1,196 )

Net Unrealized Gain (Loss) on Available for Sale Securities Net Unrealized Gain (Loss) on Interest Rate Swaps Total

4 unchanged sentences

Net other comprehensive (loss) income ( 116 ) 61 ( 55 )

Balance at September 30, 2023 $ ( 8,190 ) $ 6,666 $ ( 1,524 )

Balance at March 31, 2024 $ ( 5,926 ) $ 4,207 $ ( 1,719 )

The following table provides information for the items reclassified from accumulated other comprehensive income or loss:

Accumulated Other Comprehensive Income Components Three Months Ended September 30, Nine Months Ended September 30, Associated Line Item in the Consolidated Statements of Income

2024 2023 2024 2023

Accumulated Other Comprehensive Income Components Three Months Ended March 31, Associated Line Item in the Consolidated Statements of Income

(In thousands)

10 unchanged sentences

The following table is a reconciliation of earnings available to common shareholders and basic weighted average common shares outstanding to diluted weighted average common shares outstanding, reflecting the application of the two-class method:

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

Three Months Ended March 31,

(In thousands, except per share data)

7 unchanged sentences

Effect of dilutive equity-based awards (2)

70,297 24,158

Weighted average shares outstanding, diluted 7,740,521 7,687,679

5 unchanged sentences

Regulatory Matters

The Federal Reserve, the FDIC and the other federal and state bank regulatory agencies establish regulatory capital guidelines for U.S.

The Federal Reserve, the FDIC and other federal and state bank regulatory agencies establish regulatory capital guidelines for U.S.

banking organizations.

2 unchanged sentences

As of June 30, 2023, the Company no longer met the definition of a Small Bank Holding Company as the Company's assets exceeded $3 billion.

Effective March 31, 2024, the Company is subject to the larger company capital requirements as set forth in the Economic Growth Act.

Effective March 31, 2024, the Company became subject to the larger company capital requirements as set forth in the Economic Growth Act.

Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

As of September 30, 2024, the Bank and Company met all capital adequacy requirements to which they are subject.

As of March 31, 2025, the Bank and Company met all capital adequacy requirements to which they are subject.

There are no conditions or events since then that management believes have changed this conclusion.

The capital amounts and ratios for the Bank and the Company at September 30, 2024 and December 31, 2023 were as follows:

The capital amounts and ratios for the Bank and the Company at March 31, 2025 and December 31, 2024 were as follows:

Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions

2 unchanged sentences

Bankwell Bank

September 30, 2024

March 31, 2025

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 328,924 12.10 % $ 190,241 7.00 % $ 176,653 6.50 %

Total Capital to Risk-Weighted Assets 351,815 12.83 % 288,029 10.50 % 274,313 10.00 %

Tier I Capital to Risk-Weighted Assets 328,924 12.10 % 231,007 8.50 % 217,419 8.00 %

Total Capital to Risk-Weighted Assets 359,089 13.21 % 285,362 10.50 % 271,773 10.00 %

Tier I Capital to Average Assets 328,924 10.14 % 129,695 4.00 % 162,119 5.00 %

3 unchanged sentences

Bankwell Financial Group, Inc.

September 30, 2024

March 31, 2025

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 273,322 10.04 % $ 122,516 4.50 % $ 176,968 6.50 %

Total Capital to Risk-Weighted Assets 364,287 13.26 % 219,804 8.00 % 274,755 10.00 %

Tier I Capital to Risk-Weighted Assets 273,322 10.04 % 163,355 6.00 % 217,807 8.00 %

Total Capital to Risk-Weighted Assets 373,000 13.70 % 217,807 8.00 % 272,259 10.00 %

Tier I Capital to Average Assets 273,322 8.41 % 129,988 4.00 % 162,485 5.00 %

5 unchanged sentences

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 325,296 11.64 % $ 195,690 7.00 % $ 181,712 6.50 %

Total Capital to Risk-Weighted Assets 350,303 12.32 % 298,571 10.50 % 284,353 10.00 %

Tier I Capital to Risk-Weighted Assets 325,296 11.64 % 237,623 8.50 % 223,645 8.00 %

Total Capital to Risk-Weighted Assets 355,058 12.70 % 296,535 10.50 % 279,557 10.00 %

Tier I Capital to Average Assets 325,296 10.09 % 128,998 4.00 % 161,248 5.00 %

4 unchanged sentences

December 31, 2024

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 264,209 9.28 % $ 128,121 4.50 % N/A N/A

Total Capital to Risk-Weighted Assets 362,285 12.72 % 227,770 8.00 % N/A N/A

Tier I Capital to Risk-Weighted Assets 264,209 9.28 % 170,828 6.00 % N/A N/A

Tier I Capital to Average Assets 264,209 8.05 % 131,232 4.00 % N/A N/A

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 268,733 9.60 % $ 126,030 4.50 % $ 182,043 6.50 %

Tier I Capital to Risk-Weighted Assets 268,733 9.60 % 168,040 6.00 % 224,053 8.00 %

Total Capital to Risk-Weighted Assets 367,946 13.14 % 224,053 8.00 % 280,066 10.00 %

Tier I Capital to Average Assets 268,733 8.34 % 128,943 4.00 % 161,179 5.00 %

Regulatory Restrictions on Dividends

3 unchanged sentences

Reserve Requirements on Cash

The Bank was not required to maintain a minimum reserve balance in the Federal Reserve Bank (FRB) at September 30, 2024 or December 31, 2023.

At September 30, 2024 and December 31, 2023, deposits consisted of the following:

September 30, 2024 December 31, 2023

The Bank was not required to maintain a minimum reserve balance in the Federal Reserve Bank (FRB) at March 31, 2025 or December 31, 2024.

At March 31, 2025 and December 31, 2024, deposits consisted of the following:

March 31, 2025 December 31, 2024

(In thousands)

7 unchanged sentences

Total deposits $ 2,750,445 $ 2,787,570

Maturities of time certificates of deposit as of September 30, 2024 and December 31, 2023 are summarized below:

September 30, 2024 December 31, 2023

Maturities of time certificates of deposit as of March 31, 2025 and December 31, 2024 are summarized below:

March 31, 2025 December 31, 2024

(In thousands)

2 unchanged sentences

2026 245,764 1,030

2028 and thereafter 16,248 16,213

Total $ 1,388,760 $ 1,315,073

The aggregate amount of individual certificate accounts, with balances of $250,000 or more, was approximately $ 216.3 million at September 30, 2024 and $ 151.6 million at December 31, 2023.

Brokered deposits include Brokered certificates of deposits, brokered money market accounts, one-way buy Certificate of Deposit Account Registry Service ("CDARS"), and one-way buy Insured Cash Sweep Service ("ICS").

Brokered certificates of deposits totaled $ 730.6 million at September 30, 2024 and $ 860.5 million at December 31, 2023.

Brokered money market accounts totaled $ 52.9 million at September 30, 2024 and $ 91.4 million at December 31, 2023.

There were no certificates of deposits from national listing services, one-way buy CDARS or one-way buy ICS at September 30, 2024 or December 31, 2023.

The following table summarizes interest expense on deposits by account type for the three and nine months ended September 30, 2024 and 2023:

Three Months Ended September 30, Nine Months Ended September 30,

2027 1,109 6,222

After 2028 576 10,025

Total $ 1,296,495 $ 1,370,972

The aggregate amount of individual certificate accounts, with balances of $250,000 or more, was approximately $ 228.0 million at March 31, 2025 and $ 232.6 million at December 31, 2024.

Brokered certificates of deposits totaled $ 570.3 million at March 31, 2025 and $ 651.5 million at December 31, 2024, respectively.

Brokered money market accounts totaled $ 54.1 million at March 31, 2025 and $ 53.5 million at December 31, 2024, respectively.

Certificate of deposits from national listing services were $ 109.5 million and $ 109.1 million as of March 31, 2025 and December 31, 2024, respectively.

There were no one-way buy Certificate of Deposit Account Registry Service ("CDARS") or one-way buy Insured Cash Sweep Service ("ICS") at March 31, 2025 or December 31, 2024.

Brokered deposits are comprised of Brokered CDs, brokered money market accounts, one-way buy CDARS, and one-way buy ICS.

The following table summarizes interest expense on deposits by account type for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

(In thousands)

6 unchanged sentences

Equity award plans

The Company has unvested restricted stock outstanding under three equity award plans, which are collectively referred to as the “Stock Plans”.

The Company has unvested restricted stock outstanding under two equity award plans, which are collectively referred to as the “Stock Plans”.

The current plan under which any future issuances of equity awards will be made is the 2022 Bankwell Financial Group, Inc.

1 unchanged sentence

All equity awards made under the 2022 Plan are made by means of an award agreement, which contains the specific terms and conditions of the grant.

To date, all equity awards have been in the form of restricted stock.

At September 30, 2024, there were 275,588 shares reserved for future issuance under the 2022 Plan.

To date, all equity awards have been in the form of stock options or restricted stock.

At March 31, 2025, there were 300,856 shares reserved for future issuance under the 2022 Plan.

Restricted Stock :

2 unchanged sentences

Restricted stock awards generally vest over one to five years .

The following table presents the activity for restricted stock for the nine months ended September 30, 2024:

Nine Months Ended September 30, 2024

The following table presents the activity for restricted stock for the three months ended March 31, 2025:

Three Months Ended March 31, 2025

Number of Shares Weighted Average Grant Date Fair Value

4 unchanged sentences

Unvested at end of period 185,225

(1) Includes 33,115 shares of performance based restricted stock.

( 2) Includes 18,598 shares of performance based restricted stock.

(1) Inclu des 35,186 shares of performan ce based restricted stock.

(2) Includes 34,271 shares of p erformance based restricted stock.

(3) Includes 4,136 shares of performance based restricted stock.

The total fair value of restricted stock awards vested during the nine months ended September 30, 2024 was $ 2.3 million.

The Company's restricted stock expense for the nine months ended September 30, 2024 and September 30, 2023 was $ 2.3 million and $ 2.0 million, respectively.

At September 30, 2024, there was $ 6.5 million of unrecognized stock compensation expense for restricted stock, expected to be recognized over a weighted average period of 0.9 years.

The total fair value of restricted stock awards vested during the three months ended March 31, 2025 was $ 3.1 million .

The Company's restricted stock expense for the three months ended March 31, 2025 and March 31, 2024 was $ 0.2 million and $ 1.1 million, respectively.

At March 31, 2025, there was $ 4.9 million of unrecognized stock compensation expe nse for restricted stock, expected to be recognized over a weighted average period of 1.5 years .

Performance Based Restricted Stock :

The Company has 35,186 shares of performance based restricted stock outstanding as of September 30, 2024 pursuant to the Company’s Stock Plans.

The awards vest over a three year service period, provided certain performance metrics are met.

The share quantity that ultimately vests can range between 0 % and 200 %, of the number of performance shares initially granted and is dependent on the degree to which the performance metrics are met.

The Company records an expense over the vesting period based on (a) the probability that the performance metric will be met and (b) the fair market value of the Company’s stock at the date of the grant.

The Company has 53,255 shares of performance based restricted stock outstanding as of March 31, 2025 pursuant to the Company’s Stock Plans.

The awards generally vest over a three year service period, provided certain performance metrics are met.

The share quantity that ultimately vests can range between 0 % and 200 %, which is dependent on the degree to which the performance metrics are met.

The Company records an expense over the vesting period based on (a) the probability that the performance metrics will be met and (b) the fair market value of the Company’s stock at the date of the grant.

Derivative Instruments

1 unchanged sentence

The Company does not use derivatives for speculative purposes.

As of September 30, 2024, the Company was a party to three cash flow swaps, designated as hedging instruments, to add stability to interest expense and to manage its exposure to the variability of the future cash fl ows attributable to the contractually specified interest rates.

The notional amount for each swap is $ 25 million and in each case, the Company has entered into pay-fixed cash flow swaps to convert rolling 90 - day brokered deposits.

As of March 31, 2025, the Company was a party to three cash flow swaps, designated as hedging instruments, to add stability to interest expense and to manage its exposure to the variability of the future cash fl ows attributable to the contractually specified interest rates.

The notional amount for each swap is $ 25 million and in each case, the Company has entered into pay-fixed cash flow swaps to convert rolling 90 - day Federal Home Loan Bank advances or brokered deposits.

Cash flow swaps with a positive fair value are recorded as other assets and cash flow swaps with a negative fair value are recorded as other liabilities on the Consolidated Balance Sheets.

1 unchanged sentence

The underlying debt associated with the terminated swaps was kept in place.

The fair value of the terminated swaps totaled $ 131.0 thousand as of September 30, 2024.

The fair value of the terminated swaps totaled $ 124.2 thousand as of March 31, 2025.

The fair value of the terminated swaps will be reclassified from other comprehensive income to interest expense on a straight-line basis over the original term of the hedging relationship.

4 unchanged sentences

The carrying value of the fair value swap on the Consolidated Balance Sheets will also be adjusted through interest income, based on changes in fair value attributable to changes in the hedged risk.

The following table represents the carrying value of the portfolio layer method hedged asset and the cumulative fair value hedging adjustment included in the carrying value of the hedged asset as of September 30, 2024 and December 31, 2023:

September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024 March 31, 2025 December 31, 2024

Carrying Value of Hedged Asset Hedged Items

3 unchanged sentences

(1) These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period.

As of September 30, 2024 , the amortized cost basis of the closed portfolio used in this hedging relationship was $ 548.9 million, the cumulative basis adjustments associated with this hedging relationships was $ 0.7 million, and the amount of the designated hedged item was $ 150.0 million.

As of September 30, 2024, the Company has interest rate swaps not designated as hedging instruments, to minimize interest rate risk exposure with loans to clients.

As of March 31, 2025 and December 31, 2024, the amortized cost basis of the closed portfolio used in this hedging relationship was $ 514.7 million and $ 529.6 million , the cumulative basis adjustments associated with this hedging relationships was $ 0.1 million and $ 2.1 million, respectively.

As of March 31, 2025 and December 31, 2024, t he amount of the designated hedged item was $ 150.0 million, respectively.

As of March 31, 2025, the Company has interest rate swaps not designated as hedging instruments, to minimize interest rate risk exposure with loans to clients.

The Company accounts for all non-client related interest rate swaps as either effective cash flow or fair value swaps.

5 unchanged sentences

As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the client derivatives and the offsetting derivatives are recognized directly in earnings.

Information about derivative instruments at September 30, 2024 and December 31, 2023 is as follows:

As of September 30, 2024

Information about derivative instruments at March 31, 2025 and December 31, 2024 is as follows:

As of March 31, 2025

Derivative Assets Derivative Liabilities

8 unchanged sentences

(1) Represents interest rate swaps with commercial banking clients, which are offset by derivatives with a third party.

Accrued interest receivables related to interest rate swaps as of September 30, 2024 totaled $ 0.7 million and is excluded from the fair value p resented in the table above.

The fair value of interest rate swaps in a net asset position, including accrued interest, totaled $ 1.6 million as of September 30, 2024.

Accru ed interest receivables related to interest rate swaps as of March 31, 2025 totaled $ 0.5 million and is excluded from the fair value presented in the table above.

The fair value of interest rate swaps in a net asset position, including accrued interest, totaled $ 2.3 million as of March 31, 2025.

As of December 31, 2024

14 unchanged sentences

The Company expects to reclassify $ 0.4 million to reduce interest expense during the next 12 months.

The Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged item or transaction.

The Company assesses the cash flow swaps hedge effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged item or transaction.

The Company does not offset derivative assets and derivative liabilities for financial statement presentation purposes.

2 unchanged sentences

The Company does not offset derivative assets and derivative liabilities for financial statement presentation purposes.

Changes in the consolidated statements of comprehensive income (loss) related to interest rate derivatives designated as hedges of cash flows were as follows for the three and nine months ended September 30, 2024 and September 30, 2023:

Three Months Ended September 30, Nine Months Ended September 30,

Changes in the consolidated statements of comprehensive income (loss) related to interest rate derivatives designated as hedges of cash flows were as follows for the three months ended March 31, 2025 and March 31, 2024:

Three Months Ended March 31,

(In thousands) 2025 2024

1 unchanged sentence

Unrealized (loss) gain recognized in accumulated other comprehensive income before reclassifications $ ( 522 ) $ 1,382

Amounts reclassified from accumulated other comprehensive income ( 1,087 ) ( 1,229 ) ( 3,601 ) ( 3,323 )

Amounts reclassified from accumulated other comprehensive (loss) income ( 612 ) ( 1,257 )

Income tax benefit (expense) on items recognized in accumulated other comprehensive income 268 ( 64 )

2 unchanged sentences

Generally, a lower interest rate environment will result in a negative impact to comprehensive income whereas a higher interest rate environment will result in a positive impact to comprehensive income.

The following table summarizes the effect of the fair value hedging relationship recognized in the consolidated statements of income for the three and nine months ended September 30, 2024 and September 30, 2023:

Three Months Ended

September 30, Nine Months Ended September 30,

The following table summarizes the effect of the fair value hedging relationship recognized in the consolidated statements of income for the three months ended March 31, 2025 and March 31, 2024:

Three Months Ended March 31,

(In thousands) 2025 2024

2 unchanged sentences

Fair value derivative designated as hedging instrument ( 98 ) 840

Total gain recognized in the consolidated statements of income within interest and fees on loans $ 417 $ 387 $ 1,246 $ 711

The following tables summarize gross and net information about derivative instruments that are offset in the Consolidated Balance Sheets at September 30, 2024 and December 31, 2023:

September 30, 2024

Total gain (loss) recognized in the consolidated statements of income within interest and fees on loans $ 44 $ ( 828 )

The following tables summarize gross and net information about derivative instruments that are offset in the Consolidated Balance Sheets at March 31, 2025 and December 31, 2024:

March 31, 2025

(In thousands)

3 unchanged sentences

Derivative assets $ 6,136 $ — $ 6,136 $ 392 $ 5,744 $ —

(1) Includes accrued interest receivable totaling $ 654 thousand.

September 30, 2024

(1) Includes accru ed interest receivable totaling $ 517 thousand .

March 31, 2025

(In thousands)

3 unchanged sentences

Derivative liabilities $ 3,934 $ — $ 3,934 $ 392 $ — $ 3,542

(1) Includes net accrued interest receivable totaling $ 9 thousand.

(1) Includes net ac crued interest payable totaling $ 41 thousand .

December 31, 2024

11 unchanged sentences

Derivative liabilities $ 4,502 $ — $ 4,502 $ 233 $ — $ 4,269

(1) Includes net interest receivable totaling $ 23 thousand.

(1) Includes net interest payable totaling $ 30 thousand.

Fair Value of Financial Instruments

14 unchanged sentences

Management monitors rates and maturities of assets and liabilities and attempts to minimize interest rate risk.

The carrying values, fair values and placement in the fair value hierarchy of the Company's financial instruments at September 30, 2024 and December 31, 2023 were as follows:

September 30, 2024

The carrying values, fair values and placement in the fair value hierarchy of the Company's financial instruments at March 31, 2025 and December 31, 2024 were as follows:

March 31, 2025

Carrying Value Fair Value Level 1 Level 2 Level 3

11 unchanged sentences

Derivative asset 5,618 5,618 — 5,618 —

Other real estate owned — — — — —

Financial Liabilities:

6 unchanged sentences

Subordinated debentures 69,513 65,849 — — 65,849

Servicing liability — — — — —

Derivative liability 3,892 3,892 — 3,892 —

13 unchanged sentences

Derivative asset 7,472 7,472 — 7,472 —

Other real estate owned 8,299 8,299 — — 8,299

Financial Liabilities:

9 unchanged sentences

The following methods and assumptions were used by management in estimating the fair value of its financial instruments:

Cash and due from banks, federal funds sold, accrued interest receivable and accrued interest payable:

The carrying amount is a reasonable estimate of fair value.

Marketable equity securities and available for sale securities:

5 unchanged sentences

Level 3 held to maturity securities represent private placement municipal housing authority bonds for which no quoted market price is available.

The fair value for these securities is estimated using a discounted cash flow model, using discount rates ranging from 4.8 % to 6.4 % as of September 30, 2024 and 4.5 % to 6.9 % as of December 31, 2023.

These securities are CRA eligible investments.

The carrying value of FHLB stock approximates fair value based on the most recent redemption provisions of the FHLB.

5 unchanged sentences

Derivative asset (liability):

The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative.

The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and

interest rate curves.

The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounte d cash flow analysis on the expected cash flows of each derivative.

The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves.

The Company also considers the creditworthiness of each counterparty for assets and the creditworthiness of the Company for liabilities.

Assets held for sale:

Assets held for sale (excluding loans) consist of real estate properties that are expected to sell within a year.

The assets are reported at the lower of the carrying amount or fair value less costs to sell.

The fair value represents the price that would be received to sell the asset (the exit price).

The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date.

8 unchanged sentences

Off-balance-sheet instruments:

Loan commitments on which the committed interest rate is less than the current market rate are insignificant at September 30, 2024 and December 31, 2023.

Loan commitments on which the committed interest rate is less than the current market rate are insignificant at March 31, 2025 and December 31, 2024 .

Other Real Estate Owned ("OREO"):

OREO is held at the lower of cost or fair value and is measured at fair value when recorded below cost.

The fair value of OREO is calculated using independent appraisals or internal valuation methods, less estimated selling costs, and may consider available pricing guides, auction results, price opinions, and other factors that are not observable in an active market when determining fair value.

Accordingly, OREO are classified within Level 3 of the fair value hierarchy.

At March 31, 2025, there was no fair value of OREO.

At December 31, 2024, the fair value of OREO was $ 8.3 million.

Fair Value Measurements

13 unchanged sentences

Financial instruments measured at fair value on a recurring basis

The following table details the financial instruments carried at fair value on a recurring basis at September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value.

The Company had no transfers into or out of Levels 1, 2 or 3 during the nine months ended September 30, 2024 and for the year ended December 31, 2023.

The following table details the financial instruments carried at fair value on a recurring basis at March 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value.

The Company had no transfers into or out of Levels 1, 2 or 3 during the three months ended March 31, 2025 and for the year ended December 31, 2024.

(In thousands) Level 1 Level 2 Level 3

September 30, 2024:

March 31, 2025:

Marketable equity securities $ 2,164 $ — $ —

22 unchanged sentences

These include assets that are measured at the lower-of-cost-or-market that were recognized at fair value below cost at the end of the period as well as assets that are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment.

The following table details the financial instruments measured at fair value on a nonrecurring basis at September 30, 2024 and December 31, 2023, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

The following table details the financial instruments measured at fair value on a nonrecurring basis at March 31, 2025 and December 31, 2024, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

(In thousands) Level 1 Level 2 Level 3

September 30, 2024:

March 31, 2025:

Individually evaluated loans $ — $ — $ 74,588

3 unchanged sentences

Servicing asset, net — — 558

The following table presents information about quantitative inputs and assumptions for Level 3 financial instruments carried at fair value on a nonrecurring basis at September 30, 2024 and December 31, 2023:

The following table presents information about quantitative inputs and assumptions for Level 3 financial instruments carried at fair value on a nonrecurring basis at March 31, 2025 and December 31, 2024:

Fair Value Valuation Methodology Unobservable Input Range

(Dollars in thousands)

September 30, 2024:

March 31, 2025:

Individually evaluated loans $ 18,393 Appraisals Discount to appraised value 2.00 - 8.00 %

24 unchanged sentences

On October 14, 2021, the Company completed a private placement of a $ 35.0 million fixed-to-floating rate subordinated note (the “2021 Note”) to an institutional accredited investor.

The Company used the net proceeds to repay the $ 15.5 million principal balance of subordinated notes issued in 2015.

The Company used the net proceeds to repay the outstanding balance of subordinated debt issued in 2015 and for general corporate purposes.

The 2021 Note bears interest at a fixed rate of 3.25 % per year until October 14, 2026.

14 unchanged sentences

The Company capitalized these costs and they have been presented within subordinated debentures on the consolidated balance sheets.

At September 30, 2024 and December 31, 2023, unamortized debt issuance costs were $ 0.6 million and $ 0.8 million, respectively.

At March 31, 2025 and December 31, 2024, unamortized debt issuance costs were $ 0.5 million and $ 0.5 million, resp ectively.

Debt issuance costs amortize over the expected life of the related debt.

For the three months ended September 30, 2024 and 2023 the amortization expense for debt issuance costs were $ 62 thousand and $ 62 thousand, respectively, and were recognized as an increase to interest expense on borrowings within the Consolidated Statements of Income.

For the nine months ended September 30, 2024 and 2023, the amortization expense for debt issuance costs were $ 185 thousand and $ 185 thousand, respectively.

The Company recognized $ 0.8 million and $ 0.8 million in interest expense related to its subordinated debt for the three-month periods ended September 30, 2024 and 2023, respectively.

The Company recognized $ 2.4 million and $ 2.4 million in interest expense related to its subordinated debt for the nine-month periods ended September 30, 2024 and 2023, respectively.

For the three months ended March 31, 2025 and 2024 the amortization expense for debt issuance costs were $ 62 thousand and $ 62 thousand, respectively, and were recognized as an increase to interest expense on borrowings within the Consolidated Statements of Income.

The Co mpany recognized $ 0.8 million and $ 0.8 million in interest expense related to its subordinated debt for the three-month periods ended March 31, 2025 and 2024, respectively.

Subsequent Events

On October 23, 2024, the Company’s Board of Directors declared a $ 0.20 per share cash dividend, payable on November 22, 2024 to shareholders of record on November 11, 2024.

On October 28, 2024, the Company announced that on October 23, 2024, its Board of Directors authorized a share repurchase plan.

Under the terms of the share repurchase plan, the Company is authorized to buy back up to 250,000 shares of its outstanding common stock.

The timing, price and volume of repurchases will be based on market conditions, relevant securities laws (such as 10b-18 and 10b5-1 rules under the Securities Exchange Act of 1934) and other factors.

The share repurchase plan does not obligate the Company to acquire any particular amount of common stock, and it may be modified or suspended at any time at the Company's discretion.

The Company expects to fund any repurchases from cash on hand.

In connection with the authorization of the new plan, the Company terminated the existing plan (the "Prior Plan"), which was originally approved on December 19, 2018 and authorized the repurchase of 400,000 shares of the Company’s common stock.

On October 27, 2021, the Company's Board of Directors voted to increase the number of shares authorized for repurchase under the Prior Plan by 200,000 shares (for a total of 600,000 shares of the Company's common stock).

To date, the Company has purchased 535,802 shares of the Company’s common stock pursuant to the Prior Plan.

A $ 27.1 million multifamily commercial real estate loan was placed on non-performing status as of September 30, 2024.

As of November 6, 2024, the Company has a signed agreement for the sale of this loan at par value.

As of September 30, 2024, this loan comprises 1.03 % of the 2.50 % nonperforming loans as a percentage of total loans.

On April 23, 2025, the Company’s Board of Directors declared a $ 0.20 per share cash dividend, payable on May 20, 2025, to shareholders of record on May 9, 2025.

Subsequent to March 31, 2025, the C ompany purchased 14,626 shares at a weighted average price of $ 28.86 per sh are.

On May 1, 2025, the Bank signed a lease for a property located at 557 and 559 86th Street, Brooklyn, New York.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements