What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-08-06 compared with 2025-05-07 · 273 added, 189 removed, 1104 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except share data)

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Cash and due from banks $ 313,998 $ 293,552

4 unchanged sentences

Available for sale investment securities, at fair value 103,930 107,428

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)

Held to maturity investment securities, at amortized cost (fair values of $ 37,764 and $ 36,691 at June 30, 2025 and December 31, 2024, respectively)

36,434 36,553

Total investment securities 142,552 146,099

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

Loans receivable (net of ACL-Loans of $ 29,256 at June 30, 2025 and $ 29,007 at December 31, 2024, respectively)

2,635,742 2,672,959

13 unchanged sentences

Advances from the Federal Home Loan Bank 75,000 90,000

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)

Subordinated debentures (face value of $ 70,000 and $ 70,000 at June 30, 2025 and December 31, 2024, respectively, less unamortized debt issuance costs of $ 426 and $ 549 at June 30, 2025 and December 31, 2024, respectively)

69,574 69,451

4 unchanged sentences

Common stock, no par value;

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

10,000,000 shares authorized, 7,873,387 and 7,859,873 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

118,698 119,108

7 unchanged sentences

(In thousands, except share data)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Interest and dividend income

8 unchanged sentences

Net interest income 23,936 21,219 46,002 42,366

Provision for credit losses 463 3,683

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

(Credit) provision for credit losses ( 411 ) 8,183 52 11,866

Net interest income after (credit) provision for credit losses 24,347 13,036 45,950 30,500

Noninterest income

28 unchanged sentences

(In thousands)

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

Net income $ 9,088 $ 1,118 $ 15,976 $ 4,881

Other comprehensive income:

Unrealized gains (losses) on securities:

Unrealized holding gains (losses) on available for sale securities 1,197 ( 218 )

Unrealized gains on securities:

Unrealized holding gains on available for sale securities 660 398 1,857 182

Reclassification adjustment for gains realized in net income — — — —

Net change in unrealized gains (losses) 1,197 ( 218 )

Net change in unrealized gains 660 398 1,857 182

Income tax (expense) benefit ( 156 ) ( 94 ) ( 437 ) 7

Unrealized gains (losses) on securities, net of tax 914 ( 116 )

Unrealized (losses) gains on interest rate swaps:

Unrealized (losses) gains on interest rate swaps ( 1,134 ) 125

Income tax benefit (expense) 268 ( 64 )

Unrealized (losses) gains on interest rate swaps, net of tax ( 866 ) 61

Unrealized gains on securities, net of tax 504 304 1,420 189

Unrealized (losses) on interest rate swaps:

Unrealized (losses) on interest rate swaps ( 277 ) ( 709 ) ( 1,411 ) ( 583 )

Income tax benefit 66 168 332 102

Unrealized (losses) on interest rate swaps, net of tax ( 211 ) ( 541 ) ( 1,079 ) ( 481 )

Total other comprehensive income (loss), net of tax 293 ( 237 ) 341 ( 292 )

5 unchanged sentences

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

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

Net income — — 9,088 — 9,088

5 unchanged sentences

Issuance of restricted stock — — — — —

Stock options exercised — — — — —

Repurchase of common stock ( 14,626 ) ( 422 ) — — ( 422 )

Balance at June 30, 2025 7,873,387 $ 118,698 $ 165,495 $ ( 903 ) $ 283,290

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

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

Net income — — 1,118 — 1,118

Other comprehensive (loss), net of tax — — — ( 237 ) ( 237 )

Cash dividends declared ($ 0.20 per share)

— — ( 1,573 ) — ( 1,573 )

Stock-based compensation expense — 622 — — 622

Forfeitures of restricted stock ( 2,600 ) — — — —

Issuance of restricted stock 1,059 — — — —

Stock options exercised — — — — —

Repurchase of common stock ( 40,140 ) ( 986 ) — — ( 986 )

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

See accompanying notes to consolidated financial statements (unaudited)

Bankwell Financial Group, Inc.

Consolidated Statements of Shareholders' Equity - (unaudited)

(In thousands, except share data)

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

1 unchanged sentence

Net income — — 15,976 — 15,976

Other comprehensive income, net of tax — — — 341 341

Cash dividends declared ($ 0.40 per share)

— — ( 3,137 ) — ( 3,137 )

Stock-based compensation expense — 924 — — 924

Forfeitures of restricted stock ( 14,710 ) — — — —

Issuance of restricted stock 72,774 — — — —

Stock options exercised — — — — —

Repurchase of common stock ( 44,550 ) ( 1,334 ) — — ( 1,334 )

Balance at June 30, 2025 7,873,387 $ 118,698 $ 165,495 $ ( 903 ) $ 283,290

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

Net income — — 4,881 — 4,881

Other comprehensive (loss), net of tax — — — ( 292 ) ( 292 )

4 unchanged sentences

Issuance of restricted stock 62,903 — — — —

Stock options exercised — — — — —

Repurchase of common stock ( 76,320 ) ( 1,906 ) — — ( 1,906 )

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

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

See accompanying notes to consolidated financial statements (unaudited)

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities

10 unchanged sentences

Stock-based compensation 924 1,696

Changes in other real estate owned, net 103 —

Loss on sale of other real estate owned, net 103 —

Change in other real estate owned ( 1,284 ) —

Net change in:

7 unchanged sentences

Proceeds from principal repayments on held to maturity securities 119 81

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

Net proceeds from sales of held to maturity securities 28 —

Net proceeds from sales and calls of available for sale securities 13,000 —

Purchases of marketable equity securities ( 34 ) ( 30 )

Purchases of available for sale securities ( 10,006 ) —

Purchases of held to maturity securities — ( 12,642 )

Net decrease in loans 24,671 52,722

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

Proceeds from sales of loans 13,938 3,480

Purchases of premises and equipment, net ( 475 ) ( 452 )

Purchases of Federal Home Loan Bank stock 2,072 41

Reduction of Federal Home Loan Bank stock 603 41

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

4 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from financing activities

5 unchanged sentences

Net cash used in financing activities ( 47,760 ) ( 79,443 )

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

Net increase (decrease) in cash and cash equivalents 14,940 ( 17,777 )

Cash and cash equivalents:

82 unchanged sentences

These loans are evaluated based

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

upon their collateral, which primarily consists of cash, cash surrender value of 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 March 31, 2025.

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

Of our held to maturity securities portfolio, four securities fair values were less each security's amortized cost as of June 30, 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 ALC-Securities was recorded for this security as of March 31, 2025.

No allowance for ACL-Securities was recorded for this security as of June 30, 2025.

Common Share Repurchases

24 unchanged sentences

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:

26 unchanged sentences

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.

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

Investment Securities

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

The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at June 30, 2025 were as follows:

June 30, 2025

Amortized Cost Gross Unrealized Fair Value

17 unchanged sentences

Due after ten years 26,806 1,604 ( 371 ) 28,039

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

Government-sponsored mortgage backed securities

22 unchanged sentences

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

Total state 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 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.

There was one and no sales of investment securities during the six months ended June 30, 2025 or 2024, respectively.

At June 30, 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 June 30, 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 June 30, 2025 , the Company held marketable 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 March 31, 2025 and December 31, 2024:

Length of Time in Continuous Unrealized Loss Position

5 unchanged sentences

(Dollars in thousands)

March 31, 2025

June 30, 2025

Government and agency obligations $ — $ — — % $ 60,637 $ ( 2,471 ) 3.92 % $ 60,637 $ ( 2,471 ) 3.92 %

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-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.

There were thirty-three and thirty-seven available for sale securities or held to maturity securities as of June 30, 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 March 31, 2025 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 June 30, 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 March 31, 2025 and December 31, 2024:

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

The following table sets forth a summary of the loan portfolio at June 30, 2025 and December 31, 2024:

(In thousands) June 30, 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 income producing properties.

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

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

4 unchanged sentences

Real estate is the primary form of collateral.

Other important forms of collateral are business assets, time deposits and marketable securities.

Other important forms of collateral are business assets, deposits and marketable securities.

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 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.

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 ACL-Loans

21 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 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:

The following tables set forth the activity in the Company’s ACL-Loans for the three and six months ended June 30, 2025 and 2024, by portfolio segment:

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Three Months Ended March 31, 2025

Three Months Ended June 30, 2025

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

1 unchanged sentence

Recoveries — — — 112 10 122

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

(Credit) provision for credit losses ( 22 ) ( 1,270 ) 688 185 88 ( 331 )

Ending balance $ 65 $ 19,292 $ 2,904 $ 5,526 $ 1,469 $ 29,256

1 unchanged sentence

(In thousands)

Three Months Ended March 31, 2024

Three Months Ended June 30, 2024

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

1 unchanged sentence

Recoveries 141 113 — — 13 267

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

(Credit) provision for credit losses ( 142 ) 1,216 729 6,569 ( 4 ) 8,368

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

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Six Months Ended June 30, 2025

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

Charge-offs — ( 67 ) — ( 15 ) ( 37 ) ( 119 )

Recoveries — — — 116 46 162

(Credit) provision for credit losses ( 29 ) ( 2,479 ) 845 1,355 514 206

Ending balance $ 65 $ 19,292 $ 2,904 $ 5,526 $ 1,469 $ 29,256

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Six Months Ended June 30, 2024

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

Charge-offs ( 141 ) ( 3,828 ) — ( 197 ) ( 61 ) ( 4,227 )

Recoveries 141 113 — 27 17 298

(Credit) provision for credit losses ( 26 ) 5,238 573 6,255 26 12,066

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

We evaluate whether a modification, extension or renewal of a loan is a current period origination in accordance with GAAP.

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 March 31, 2025 and December 31, 2024 (dollars in thousands):

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

The following tables present loans by origination and risk designation as of June 30, 2025 and December 31, 2024 (dollars in thousands):

Amortized Cost Balances by Origination Year as of June 30, 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 March 31, 2025 and December 31, 2024 were as follows:

Loans evaluated for impairment and the related ACL-Loans as of June 30, 2025 and December 31, 2024 were as follows:

Portfolio ACL-Loans

(In thousands)

March 31, 2025

June 30, 2025

Loans individually evaluated for impairment:

47 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 March 31, 2025 and December 31, 2024:

The following tables present credit risk ratings by loan segment as of June 30, 2025 and December 31, 2024:

Commercial Credit Quality Indicators

March 31, 2025 December 31, 2024

June 30, 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

March 31, 2025 December 31, 2024

June 30, 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 March 31, 2025 and December 31, 2024:

March 31, 2025

The following tables set forth certain information with respect to the Company's loan portfolio delinquencies by portfolio segment as of June 30, 2025 and December 31, 2024:

June 30, 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 w ere no lo ans delinquent greater than 90 days and still accruing interest as of March 31, 2025 or December 31, 2024.

There w ere no lo ans delinquent greater than 90 days and still accruing interest as of June 30, 2025 or December 31, 2024.

Loans on nonaccrual status

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

The following is a summary of nonaccrual loans by portfolio segment as of June 30, 2025 and December 31, 2024:

June 30, 2025 December 31, 2024

(In thousands)

4 unchanged sentences

Total $ 23,875 $ 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 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.

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 six months ended June 30, 2025 and 2024 was $ 1.1 million and $ 1.2 million, respectively.

At June 30, 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 $ 23.9 million and $ 53.3 million at June 30, 2025 and December 31, 2024, respectively, as these loans were deemed to be adequately collateralized.

Individually evaluated loans

1 unchanged sentence

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.

The Company also individually evaluates 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 June 30, 2025 and December 31, 2024.

Carrying Amount Unpaid Principal Balance Associated ACL-Loans

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

June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024 June 30, 2025 December 31, 2024

(In thousands)

14 unchanged sentences

Total individually evaluated loans $ 63,857 $ 113,901 $ 75,892 $ 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 months ended March 31, 2025 and 2024:

The following tables summarize the average carrying amount of individually evaluated loans and interest income recognized on individually evaluated loans by portfolio segment for the three and six months ended June 30, 2025 and 2024:

Average Carrying Amount Interest Income Recognized

Three Months Ended March 31, Three Months Ended March

Three Months Ended June 30, Three Months Ended June 30,

2025 2024 2025 2024

15 unchanged sentences

Total individually evaluated loans $ 67,839 $ 115,408 $ 564 $ 2,083

Average Carrying Amount Interest Income Recognized

Six Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands)

Individually evaluated loans without a valuation allowance:

Residential real estate $ 3,025 $ 3,656 $ 103 $ 85

Commercial real estate 17,766 57,247 129 1,094

Commercial business 7,322 12,745 70 618

Construction — — — —

Consumer 47,369 25,840 775 736

Total individually evaluated loans without a valuation allowance 75,482 99,488 1,077 2,533

Individually evaluated loans with a valuation allowance:

Residential real estate $ — $ — $ — $ —

Commercial real estate — — — —

Commercial business — 8,607 — 1,039

Construction — 9,382 — —

Consumer — — — —

Total individually evaluated loans with a valuation allowance — 17,989 — 1,039

Total individually evaluated loans $ 75,482 $ 117,477 $ 1,077 $ 3,572

Loan Modifications

A loan will be considered modified as defined by ASU 326 when both of the following conditions are met:

A loan will be considered modified as defined by ASC 326 when both of the following conditions are met:

1) the borrower is experiencing financial difficulties and 2) the modification constitutes a direct change in contractual cash flows for a significant period of time.

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

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.

There were no new loan modifications reportable under ASC 326 at June 30, 2025.

There was one new loan modification reportable under ASC 326 for $ 4.0 million at December 31, 2024.

There were no nonaccrual modified loans at June 30, 2025.

There was one nonaccrual modified loan at December 31, 2024.

There were no loans modified that re-defaulted at June 30, 2025 and December 31, 2024.

Allowance for credit losses (ACL)-Unfunded Commitments

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

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,

The following table presents a roll forward of the ACL-Unfunded Commitments for the three and six months ended June 30, 2025 and June 30, 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands)

2 unchanged sentences

Balance at end of period $ 602 $ 726 $ 602 $ 726

Components of Provision for Credit Losses

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,

Components of (Credit) Provision for Credit Losses

The following table summarizes the Provision for credit losses for the three and six months ended June 30, 2025 and June 30, 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands)

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

(Credit) provision for credit losses (loans) $ ( 331 ) $ 8,368 $ 206 $ 12,066

(Credit) for credit losses (unfunded commitments) ( 80 ) ( 185 ) ( 154 ) ( 200 )

Provision for credit losses $ 463 $ 3,683

(Credit) provision for credit losses $ ( 411 ) $ 8,183 $ 52 $ 11,866

Shareholders' Equity

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 has 10,000,000 shares authoriz ed and 7,873,387 shares issued and outstanding at June 30, 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.

4 unchanged sentences

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.

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

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

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

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

1 unchanged sentence

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

During the year ended December 31, 2024, the Company purchased no shares under the New Plan.

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.

1 unchanged sentence

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.

During the six months ended June 30, 2025, the Company purchased 44,550 shares of its Common Stock at a weighted average price of $ 29.93 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 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:

The Company’s total compreh ensive income or loss for the three and six months ended June 30, 2025 and June 30, 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 and six months ended June 30, 2025 and June 30, 2024:

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

(In thousands)

Balance at December 31, 2024 $ ( 3,832 ) $ 2,588 $ ( 1,244 )

Balance at March 31, 2025 $ ( 2,916 ) $ 1,720 $ ( 1,196 )

Other comprehensive income (loss) before reclassifications, net of tax 504 ( 68 ) 436

Amounts reclassified from accumulated other comprehensive income, net of tax — ( 467 ) ( 467 )

Amounts reclassified from accumulated other comprehensive (loss), net of tax — ( 143 ) ( 143 )

Net other comprehensive income (loss) 504 ( 211 ) 293

Balance at June 30, 2025 $ ( 2,412 ) $ 1,509 $ ( 903 )

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

(In thousands)

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

Other comprehensive income before reclassifications, net of tax 304 420 724

Amounts reclassified from accumulated other comprehensive (loss), net of tax — ( 961 ) ( 961 )

Net other comprehensive income (loss) 304 ( 541 ) ( 237 )

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

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

1 unchanged sentence

Balance at December 31, 2024 $ ( 3,832 ) $ 2,588 $ ( 1,244 )

Other comprehensive (loss) income before reclassifications, net of tax ( 116 ) 664 548

Amounts reclassified from accumulated other comprehensive income, net of tax — ( 603 ) ( 603 )

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

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

Other comprehensive income (loss) before reclassifications, net of tax 1,420 ( 469 ) 951

Amounts reclassified from accumulated other comprehensive (loss), net of tax — ( 610 ) ( 610 )

Net other comprehensive income (loss) 1,420 ( 1,079 ) 341

Balance at June 30, 2025 $ ( 2,412 ) $ 1,509 $ ( 903 )

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

(In thousands)

Balance at December 31, 2023 $ ( 5,810 ) $ 4,146 $ ( 1,664 )

Other comprehensive income before reclassifications, net of tax 188 1,695 1,883

Amounts reclassified from accumulated other comprehensive (loss), net of tax — ( 2,175 ) ( 2,175 )

Net other comprehensive income (loss) 188 ( 480 ) ( 292 )

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

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

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

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

2025 2024 2025 2024

(In thousands)

Unrealized gains (losses) on derivatives $ 612 $ 1,257 Interest expense on borrowings

Tax (expense) benefit ( 145 ) ( 654 ) Income tax expense

Unrealized gains on derivatives $ 187 $ 1,257 $ 799 $ 2,514 Interest expense on borrowings

Tax expense ( 44 ) ( 296 ) ( 189 ) ( 339 ) Income tax expense

Net of tax $ 143 $ 961 $ 610 $ 2,175

7 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 March 31,

Three Months Ended

June 30, Six Months Ended

2025 2024 2025 2024

(In thousands, except per share data)

22 unchanged sentences

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

As of June 30, 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 March 31, 2025 and December 31, 2024 were as follows:

The capital amounts and ratios for the Bank and the Company at June 30, 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

March 31, 2025

June 30, 2025

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 336,061 12.20 % $ 192,868 7.00 % $ 179,091 6.50 %

6 unchanged sentences

Bankwell Financial Group, Inc.

March 31, 2025

June 30, 2025

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 281,024 10.18 % $ 124,256 4.50 % $ 179,481 6.50 %

25 unchanged sentences

Reserve Requirements on Cash

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

The Bank was not required to maintain a minimum reserve balance in the Federal Reserve Bank (FRB) at June 30, 2025 or December 31, 2024.

At June 30, 2025 and December 31, 2024, deposits consisted of the following:

June 30, 2025 December 31, 2024

(In thousands)

7 unchanged sentences

Total deposits $ 2,759,281 $ 2,787,570

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

March 31, 2025 December 31, 2024

Maturities of time certificates of deposit as of June 30, 2025 and December 31, 2024 are summarized below:

June 30, 2025 December 31, 2024

(In thousands)

3 unchanged sentences

2028 756 6,222

After 2028 576 10,025

2029 and thereafter 58 10,025

Total $ 1,276,998 $ 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.

The aggregate amount of individual certificate accounts, with balances of $250,000 or more, was approximately $ 229.2 million at June 30, 2025 and $ 232.6 million at December 31, 2024.

Brokered certificates of deposits totaled $ 570.2 million at June 30, 2025 and $ 651.5 million at December 31, 2024, respectively.

Brokered money market accounts totaled $ 53.7 million at June 30, 2025 a nd $ 53.5 million at December 31, 2024, respectively.

Certificates of deposits from national listing services were $ 68.4 million and $ 109.1 million as of June 30, 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 June 30, 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,

The following table summarizes interest expense on deposits by account type for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30, Six Months Ended June 30,

2025 2024 2025 2024

(In thousands)

11 unchanged sentences

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.

At June 30, 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 three months ended March 31, 2025:

Three Months Ended March 31, 2025

The following table presents the activity for restricted stock for the six months ended June 30, 2025:

Six Months Ended June 30, 2025

Number of Shares Weighted Average Grant Date Fair Value

4 unchanged sentences

Unvested at end of period 185,101

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

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

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

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

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 .

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

The total fair value of restricted stock awards vested during the six months ended June 30, 2025 was $ 3.1 million.

The Company's restricted stock expense for the six months ended June 30, 2025 and June 30, 2024 was $ 0.9 million and $ 1.7 million, respectively.

At June 30, 2025, there was $ 4.2 million of unrecognized stock compensation expense for restricted stock, expected to be recognized over a weighted average period of 1.4 years.

Performance Based Restricted Stock :

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 Compa ny has 53,255 s hares of performance based restricted stock outstanding as of June 30, 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 share quantity that ultimately vests can range between 0 % and 200 %, ( 150 % for 2024 and subsequent grants), 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.

2 unchanged sentences

The Company does not use derivatives for speculative purposes.

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.

As of June 30, 2025, the Company was a party to one cash flow swap, designated as a hedging instrument, to add stability to interest expense and to manage its exposure to the variability of the future cash flows attributable to the contractually specified interest rate.

The notional amount for the swap i s $ 25 million and the Company has entered into a pay-fixed cash flow swap 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.

The Company terminated two cash flow swaps with a total notional amount of $ 50 million during the year ended December 31, 2022.

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

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.

The Company entered into one pay-fixed portfolio layer method fair value swap, designated as a hedging instrument, with a total notional amount of $ 150 million in the first quarter of 2023.

The Company has one pay-fixed portfolio layer method fair value swap, designated as a hedging instrument, with a total notional amount of $ 150 million.

The Company designated the fair value swap under the portfolio layer method (“PLM”).

2 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 March 31, 2025 and December 31, 2024:

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

June 30, 2025 December 31, 2024 June 30, 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 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.

As of June 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolio used in this hedging relationship was $ 504.1 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 June 30, 2025 and December 31, 2024, t he amount of the designated hedged item was $ 150.0 million, respectively.

As of June 30, 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 March 31, 2025 and December 31, 2024 is as follows:

As of March 31, 2025

Information about derivative instruments at June 30, 2025 and December 31, 2024 is as follows:

As of June 30, 2025

Derivative Assets Derivative Liabilities

2 unchanged sentences

Derivatives designated as hedging instruments:

Interest rate swaps $ 75,000 Other assets $ 2,128 $ — Accrued expenses and other liabilities $ —

Interest rate swap $ 25,000 Other assets $ 1,854 $ — Accrued expenses and other liabilities $ —

Fair value swap $ — Other assets $ — $ 150,000 Accrued expenses and other liabilities $ 242

3 unchanged sentences

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

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.

Accru ed in terest receivables related to interest rate swaps as of June 30, 2025 totaled $ 0.1 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 $ 1.8 million as of June 30, 2025.

As of December 31, 2024

3 unchanged sentences

Derivatives designated as hedging instruments:

Interest rate swaps $ 75,000 Other assets $ 3,259 $ — Accrued expenses and other liabilities $ —

Interest rate swap $ 75,000 Other assets $ 3,259 $ — Accrued expenses and other liabilities $ —

Fair value swap $ — Other assets $ — $ 150,000 Accrued expenses and other liabilities $ 259

13 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 months ended March 31, 2025 and March 31, 2024:

Three Months Ended March 31,

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 six months ended June 30, 2025 and June 30, 2024:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

1 unchanged sentence

Unrealized (loss) gain recognized in accumulated other comprehensive income before reclassifications $ ( 92 ) $ 548 $ ( 614 ) $ 1,931

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 )

Other comprehensive (loss) income $ ( 866 ) $ 61

Amounts reclassified from accumulated other comprehensive income ( 185 ) ( 1,257 ) ( 797 ) ( 2,514 )

Income tax benefit on items recognized in accumulated other comprehensive income 66 168 332 102

Other comprehensive (loss) $ ( 211 ) $ ( 541 ) $ ( 1,079 ) $ ( 481 )

The above unrealized gains and losses are reflective of market interest rates as of the respective balance sheet dates.

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 months ended March 31, 2025 and March 31, 2024:

Three Months Ended March 31,

The following table summarizes the effect of the fair value hedging relationship recognized in the consolidated statements of income for the three and six months ended June 30, 2025 and June 30, 2024:

Three Months Ended June 30, Six Months Ended June 30,

(In thousands) 2025 2024 2025 2024

Gain (loss) on fair value hedging relationship:

(Loss) gain on fair value hedging relationship:

Hedged asset $ ( 162 ) $ ( 192 ) $ ( 20 ) $ ( 1,860 )

1 unchanged sentence

Total gain (loss) recognized in the consolidated statements of income within interest and fees on loans $ 40 $ 418 $ 84 $ ( 88 )

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

The following tables summarize gross and net information about derivative instruments that are offset in the Consolidated Balance Sheets at June 30, 2025 and December 31, 2024:

June 30, 2025

(In thousands)

4 unchanged sentences

(1) Includes accru ed interest receivable totaling $ 86 thousand .

March 31, 2025

June 30, 2025

(In thousands)

3 unchanged sentences

Derivative liabilities $ 3,450 $ — $ 3,450 $ 232 $ — $ 3,218

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

(1) Includes ac crued interest payable totaling $ 39 thousand .

December 31, 2024

28 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 March 31, 2025 and December 31, 2024 were as follows:

March 31, 2025

The carrying values, fair values and placement in the fair value hierarchy of the Company's financial instruments at June 30, 2025 and December 31, 2024 were as follows:

June 30, 2025

Carrying Value Fair Value Level 1 Level 2 Level 3

57 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 4.2 % to 6.6 % as of June 30, 2025 and 5.3 % to 7.2 % as of December 31, 2024 .

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.

18 unchanged sentences

Off-balance-sheet instruments:

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 .

Loan commitments on which the committed interest rate is less than the current market rate are insignificant at June 30, 2025 and December 31, 2024 .

Other Real Estate Owned ("OREO"):

2 unchanged sentences

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.

At June 30, 2025 and December 31, 2024 , the fair value of OREO was $ 1.3 million and $ 8.3 million, respectively.

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 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.

The following table details the financial instruments carried at fair value on a recurring basis at June 30, 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 six months ended June 30, 2025 and for the year ended December 31, 2024.

(In thousands) Level 1 Level 2 Level 3

March 31, 2025:

June 30, 2025:

Marketable equity securities $ 2,188 $ — $ —

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 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 following table details the financial instruments measured at fair value on a nonrecurring basis at June 30, 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

March 31, 2025:

June 30, 2025:

Individually evaluated loans $ — $ — $ 63,857

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 March 31, 2025 and December 31, 2024:

The following table presents information about quantitative inputs and assumptions for Level 3 financial instruments carried at fair value on a nonrecurring basis at June 30, 2025 and December 31, 2024:

Fair Value Valuation Methodology Unobservable Input Range

(Dollars in thousands)

March 31, 2025:

June 30, 2025:

Individually evaluated loans $ 23,094 Appraisals Discount to appraised value — % - 8.00 %

41 unchanged sentences

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

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 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.

At June 30, 2025 and December 31, 2024, unamortize d debt issuance costs were $ 0.4 million and $ 0.5 million, respectively.

Debt issuance costs amortize over the exp ected life of the related debt.

For the three months ended June 30, 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.

For the six months ended June 30, 2025 and 2024 the amortization expense for debt issuance costs were $ 123 thousand and $ 123 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 June 30, 2025 and 2024, respectively.

The Company recognized $ 1.6 million and $ 1.6 million in interest expense related to its subordinated debt for the six-month periods ended June 30, 2025 and 2024, respectively.

Subsequent Events

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.

On July 4, 2025, President Trump signed H.R.

1, the “One Big Beautiful Bill Act,” into law.

The legislation includes several changes to federal tax law that generally allow for more favorable deductibility of certain business expenses beginning in 2025, including the reinstatement of 100% bonus depreciation and more favorable rules for determining the limitation on business interest expense.

The Company is currently evaluating the impact on future periods.

On July 28, 2025, the Company’s Board of Directors declared a $ 0.20 per share cash dividend, payable on August 22, 2025, to shareholders of record on August 11, 2025.

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