What changed in this filing

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Item 1. Financial Statements

2025-11-05 compared with 2025-08-06 · 246 added, 246 removed, 1131 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Cash and due from banks $ 289,628 $ 293,552

4 unchanged sentences

Available for sale investment securities, at fair value 96,473 107,428

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)

Held to maturity investment securities, at amortized cost (fair values of $ 30,793 and $ 36,691 at September 30, 2025 and December 31, 2024, respectively)

29,538 36,553

Total investment securities 128,234 146,099

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

Loans receivable (net of ACL-Loans of $ 29,984 at September 30, 2025 and $ 29,007 at December 31, 2024, respectively)

2,684,016 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 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)

Subordinated debentures (face value of $ 70,000 and $ 70,000 at September 30, 2025 and December 31, 2024, respectively, less unamortized debt issuance costs of $ 364 and $ 549 at September 30, 2025 and December 31, 2024, respectively)

69,636 69,451

4 unchanged sentences

Common stock, no par value;

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

10,000,000 shares authorized, 7,877,443 and 7,859,873 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

119,353 119,108

7 unchanged sentences

(In thousands, except share data)

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

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

2025 2024 2025 2024

9 unchanged sentences

Net interest income 25,987 20,717 71,989 63,083

(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

Provision for credit losses 372 6,296 424 18,162

Net interest income after provision for credit losses 25,615 14,421 71,565 44,921

Noninterest income

28 unchanged sentences

(In thousands)

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

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

2025 2024 2025 2024

1 unchanged sentence

Other comprehensive income:

Unrealized gains on securities:

Unrealized gains (losses) on securities:

Unrealized holding gains on available for sale securities 585 2,684 2,441 2,866

1 unchanged sentence

Net change in unrealized gains 585 2,684 2,441 2,866

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

Income tax expense ( 141 ) ( 634 ) ( 577 ) ( 628 )

Unrealized gains on securities, net of tax 444 2,050 1,864 2,238

10 unchanged sentences

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

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

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

Net income — — 10,078 — 10,078

5 unchanged sentences

Issuance of restricted stock 6,175 — — — —

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

Balance at September 30, 2025 7,877,443 $ 119,353 $ 174,008 $ ( 570 ) $ 292,791

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

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

Net income — — 1,926 — 1,926

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

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

Cash dividends declared ($ 0.20 per share)

3 unchanged sentences

Issuance of restricted stock 3,306 — — — —

Stock options exercised — — — — —

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

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

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

See accompanying notes to consolidated financial statements (unaudited)

11 unchanged sentences

Issuance of restricted stock 78,949 — — — —

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

Balance at September 30, 2025 7,877,443 $ 119,353 $ 174,008 $ ( 570 ) $ 292,791

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

7 unchanged sentences

Issuance of restricted stock 66,209 — — — —

Stock options exercised — — — — —

Repurchase of common stock ( 85,990 ) ( 2,137 ) — — ( 2,137 )

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

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

See accompanying notes to consolidated financial statements (unaudited)

2 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities

3 unchanged sentences

Provision for credit losses 424 18,162

Credit for deferred income taxes ( 48 ) ( 1,853 )

(Credit) provision for deferred income taxes ( 48 ) 132

Change in fair value of marketable equity securities ( 54 ) ( 33 )

7 unchanged sentences

Net change in:

Deferred tax assets 554 —

Deferred loan fees 267 ( 1,458 )

7 unchanged sentences

Net proceeds from sales and calls of available for sale securities 20,000 —

Net proceeds from calls of held to maturity securities 7,500 —

Purchases of marketable equity securities ( 51 ) ( 46 )

1 unchanged sentence

Purchases of held to maturity securities ( 643 ) ( 19,289 )

Net decrease in loans 24,671 52,722

Net (increase) decrease in loans ( 36,507 ) 73,376

Proceeds from sales of loans 26,364 4,662

7 unchanged sentences

(In thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from financing activities

1 unchanged sentence

Net change in other deposits 59,062 ( 124,631 )

Net change in FHLB advances ( 15,000 ) —

Payments on FHLB advances ( 125,000 ) —

Proceeds on FHLB advances 110,000 —

Dividends paid on common stock ( 4,702 ) ( 4,719 )

1 unchanged sentence

Net cash used in financing activities ( 51,191 ) ( 55,443 )

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

Net (decrease) increase in cash and cash equivalents ( 12,164 ) 22,180

Cash and cash equivalents:

6 unchanged sentences

Noncash investing and financing activities:

Loans transferred to other real estate owned $ 1,284 $ —

Net change in unrealized gains or losses on available for sale securities 2,441 2,866

38 unchanged sentences

Declines in property values in these areas could significantly impact the Company.

The Company has a significant concentration in commercial real estate loans, with a growing percentage being owner-occupied, which present a lower risk profile.

The Company maintains a significant portfolio of commercial real estate loans, with an increasing share being owner-occupied properties, which typically carry a lower risk profile.

ACL-Loans and Allowance for Credit Losses-Unfunded Commitments ("ACL-Unfunded Commitments")

20 unchanged sentences

To account for economic uncertainty, the Company incorporates multiple economic scenarios in determining the ACL.

The scenarios include various projections based on variables such as Gross Domestic Product, interest rates, property price indices, and employment measures, among others.

The scenarios include variables such as Gross Domestic Product, interest rates, property price indices, and employment measures, among others.

The scenarios are probability-weighted based on available information at the time the calculation is conducted.

7 unchanged sentences

The Company also individually evaluates all insurance premium loans.

While insurance premium loans are considered consumer loans, the third-party Consumer ACL model is designed for unsecured lending, whereas these loans are secured.

While insurance premium loans are technically consumer loans, the third-party Consumer ACL model is designed for unsecured lending, whereas these loans are secured.

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.

10 unchanged sentences

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

No ACL-Securities was recorded for these securities as of June 30, 2025.

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

Of our held to maturity securities portfolio, four securities fair values were less than each such security's amortized cost as of September 30, 2025.

Since these are highly rated state agency and municipal obligations, the Company's expectation of nonpayment of the amortized cost basis is zero.

No allowance for ACL-Securities was recorded for these securities as of September 30, 2025.

Common Share Repurchases

55 unchanged sentences

Investment Securities

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

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

September 30, 2025

Amortized Cost Gross Unrealized Fair Value

8 unchanged sentences

Corporate bonds

Due from one through five years 2,000 — ( 21 ) 1,979

Due from five through ten years 10,000 — ( 643 ) 9,357

35 unchanged sentences

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

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.

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

At September 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 September 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 September 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 June 30, 2025 and December 31, 2024:

Length of Time in Continuous Unrealized Loss Position

5 unchanged sentences

(Dollars in thousands)

June 30, 2025

September 30, 2025

Government and agency obligations $ — $ — — % $ 55,029 $ ( 2,015 ) 3.53 % $ 55,029 $ ( 2,015 ) 3.53 %

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-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.

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

(In thousands) June 30, 2025 December 31, 2024

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

(In thousands) September 30, 2025 December 31, 2024

Real estate loans:

44 unchanged sentences

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 unsecured personal loans to high net worth individuals.

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:

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

Residential Real Estate Commercial Real Estate Construction Commercial Business Consumer Total

(In thousands)

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

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

5 unchanged sentences

(In thousands)

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

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

5 unchanged sentences

(In thousands)

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

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

5 unchanged sentences

(In thousands)

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

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

5 unchanged sentences

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 June 30, 2025 and December 31, 2024 (dollars in thousands):

Amortized Cost Balances by Origination Year as of June 30, 2025

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

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

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

Portfolio ACL-Loans

(In thousands)

June 30, 2025

September 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 June 30, 2025 and December 31, 2024:

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

Commercial Credit Quality Indicators

June 30, 2025 December 31, 2024

September 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

June 30, 2025 December 31, 2024

September 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 June 30, 2025 and December 31, 2024:

June 30, 2025

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

September 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 June 30, 2025 or December 31, 2024.

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

Loans on nonaccrual status

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

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

September 30, 2025 December 31, 2024

(In thousands)

4 unchanged sentences

Total $ 16,966 $ 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 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.

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, 2025 and 2024 was $ 1.3 million and $ 3.0 million, respectively.

At September 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 $ 17.0 million and $ 53.3 million at September 30, 2025 and December 31, 2024, respectively, as these loans were deemed to be adequately collateralized.

Individually evaluated loans

2 unchanged sentences

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.

The following table summarizes individually evaluated loans by portfolio segment as of September 30, 2025 and December 31, 2024.

Carrying Amount Unpaid Principal Balance Associated ACL-Loans

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

September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024 September 30, 2025 December 31, 2024

(In thousands)

14 unchanged sentences

Total individually evaluated loans $ 48,147 $ 113,901 $ 58,842 $ 126,413 $ — $ —

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 June 30, Three Months Ended June 30,

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

2025 2024 2025 2024

16 unchanged sentences

Average Carrying Amount Interest Income Recognized

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

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

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 ASC 326 at June 30, 2025.

There were two new loan modifications reportable under ASC 326 for $ 0.2 million at September 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 were no nonaccrual modified loans at September 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.

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

Allowance for credit losses (ACL)-Unfunded Commitments

1 unchanged sentence

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

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

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

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

2025 2024 2025 2024

3 unchanged sentences

Balance at end of period $ 554 $ 506 $ 554 $ 506

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,

Components of Provision for Credit Losses

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

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

2025 2024 2025 2024

2 unchanged sentences

(Credit) for credit losses (unfunded commitments) ( 48 ) ( 220 ) ( 202 ) ( 420 )

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

Provision for credit losses $ 372 $ 6,296 $ 424 $ 18,162

Shareholders' Equity

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 has 10,000,000 shares authoriz ed and 7,877,443 shares issued and outstanding at September 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.

14 unchanged sentences

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 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.

During the nine months ended September 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 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:

The Company’s total compreh ensive income or loss for the three and nine months ended September 30, 2025 and September 30, 2024 is reported in the Consolidated Statements of Comprehensive Income.

The following tables present the changes in accumulated other comprehensive income (loss) by component, net of tax for the three and nine months ended September 30, 2025 and September 30, 2024:

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

(In thousands)

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

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

Other comprehensive income (loss) before reclassifications, net of tax 444 ( 33 ) 411

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

Amounts reclassified from accumulated other comprehensive (loss) income, net of tax — ( 78 ) ( 78 )

Net other comprehensive income (loss) 444 ( 111 ) 333

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

Balance at September 30, 2025 $ ( 1,968 ) $ 1,398 $ ( 570 )

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 )

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

Amounts reclassified from accumulated other comprehensive (loss) 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

2 unchanged sentences

Other comprehensive income (loss) before reclassifications, net of tax 1,864 ( 501 ) 1,363

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

Amounts reclassified from accumulated other comprehensive (loss) income, net of tax — ( 689 ) ( 689 )

Net other comprehensive income (loss) 1,864 ( 1,190 ) 674

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

Balance at September 30, 2025 $ ( 1,968 ) $ 1,398 $ ( 570 )

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, 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 )

Other comprehensive income (loss) before reclassifications, net of tax 2,238 357 2,595

Amounts reclassified from accumulated other comprehensive (loss) income, net of tax — ( 2,691 ) ( 2,691 )

Net other comprehensive income (loss) 2,238 ( 2,334 ) ( 96 )

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

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

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

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

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

2025 2024 2025 2024

12 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

23 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 June 30, 2025, the Bank and Company met all capital adequacy requirements to which they are subject.

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

The capital amounts and ratios for the Bank and the Company at September 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

June 30, 2025

September 30, 2025

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 344,557 12.39 % $ 194,736 7.00 % $ 180,826 6.50 %

6 unchanged sentences

Bankwell Financial Group, Inc.

June 30, 2025

September 30, 2025

Common Equity Tier 1 Capital to Risk-Weighted Assets $ 289,955 10.39 % $ 125,580 4.50 % $ 181,394 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 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

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

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

September 30, 2025 December 31, 2024

(In thousands)

7 unchanged sentences

Total deposits $ 2,757,415 $ 2,787,570

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

June 30, 2025 December 31, 2024

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

September 30, 2025 December 31, 2024

(In thousands)

5 unchanged sentences

Total $ 1,282,642 $ 1,370,972

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.

The aggregate amount of individual certificate accounts with balances of $250,000 or more was approximately $ 243.2 million at September 30, 2025 and $ 232.6 million at December 31, 2024.

Brokered certificates of deposits totaled $ 555.0 million at September 30, 2025 and $ 651.5 million at December 31, 2024, respectively.

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

Certificates of deposits from national listing services were $ 54.6 million and $ 109.1 million as of September 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 September 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 and six months ended June 30, 2025 and 2024:

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

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

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

2025 2024 2025 2024

11 unchanged sentences

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 stock options or restricted stock.

At June 30, 2025, there were 300,856 shares reserved for future issuance under the 2022 Plan.

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

At September 30, 2025, there were 296,800 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 six months ended June 30, 2025:

Six Months Ended June 30, 2025

The following table presents the activity for restricted stock for the nine months ended September 30, 2025:

Nine Months Ended September 30, 2025

Number of Shares Weighted Average Grant Date Fair Value

4 unchanged sentences

Unvested at end of period 184,322

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

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

(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.

(2) Includes 34,271 shares of performance 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, 2025 was $ 3.3 million.

The Company's restricted stock expense for the nine months ended September 30, 2025 and September 30, 2024 was $ 1.6 million and $ 2.3 million, respectively.

At September 30, 2025, there was $ 3.8 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 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 Compa ny has 52,421 shares of performance based restricted stock outstanding as of September 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 %, ( 150 % for 2024 and subsequent grants), 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 %, 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 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.

As of September 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 either 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.

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 June 30, 2025 and December 31, 2024:

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

September 30, 2025 December 31, 2024 September 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 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.

As of September 30, 2025 and December 31, 2024, the amortized cost basis of the closed portfolio used in this hedging relationship was $ 479.2 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 September 30, 2025 and December 31, 2024, t he amount of the designated hedged item was $ 150.0 million, respectively.

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

As of June 30, 2025

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

As of September 30, 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.

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.

Accru ed in terest receivables related to interest rate swaps as of September 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 $ 1.6 million as of September 30, 2025.

As of December 31, 2024

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

Three Months Ended June 30, Six Months Ended June 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 and nine months ended September 30, 2025 and September 30, 2024:

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

(In thousands) 2025 2024 2025 2024

Interest rate swaps designated as cash flow hedges:

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

Unrealized gain (loss) recognized in accumulated other comprehensive income before reclassifications $ ( 45 ) $ ( 1,342 ) $ ( 659 ) $ 589

Amounts reclassified from accumulated other comprehensive income ( 103 ) ( 1,087 ) ( 900 ) ( 3,601 )

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

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

Income tax (expense) benefit on items recognized in accumulated other comprehensive income 37 575 369 678

Other comprehensive income $ ( 111 ) $ ( 1,854 ) $ ( 1,190 ) $ ( 2,334 )

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

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

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, 2025 and September 30, 2024:

Three Months Ended

September 30, Nine Months Ended September 30,

(In thousands) 2025 2024 2025 2024

(Loss) gain on fair value hedging relationship:

Gain (loss) on fair value hedging relationship:

Hedged asset $ 9 $ 2,359 $ ( 11 ) $ 499

1 unchanged sentence

Total gain (loss) recognized in the consolidated statements of income within interest and fees on loans $ 43 $ 417 $ 127 $ 1,246

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

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

September 30, 2025

(In thousands)

4 unchanged sentences

(1) Includes accru ed interest receivable totaling $ 85 thousand .

June 30, 2025

September 30, 2025

(In thousands)

18 unchanged sentences

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

Fair Value Measurements

The Company is required to account for certain assets at fair value on a recurring or non-recurring basis.

The Company determines fair value in accordance with GAAP, which defines fair value and establishes a framework for measuring fair value.

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair values:

Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Valuation techniques based on unobservable inputs are highly subjective and require judgments regarding significant matters such as the amount and timing of future cash flows and the selection of discount rates that may appropriately reflect market and credit risks.

Changes in these judgments often have a material impact on the fair value estimates.

In addition, since these estimates are as of a specific point in time they are susceptible to material near-term changes.

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, 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 nine months ended September 30, 2025 and for the year ended December 31, 2024.

(In thousands) Level 1 Level 2 Level 3

September 30, 2025:

Marketable equity securities $ 2,223 $ — $ —

Available for sale investment securities:

Government and agency obligations 59,482 25,656 —

Corporate bonds — 11,335 —

Derivative asset — 4,679 —

Derivative liability — 3,223 —

December 31, 2024:

Marketable equity securities $ 2,118 $ — $ —

Available for sale investment securities:

Government and agency obligations 63,557 28,025 —

Corporate bonds — 15,846 —

Derivative asset — 7,472 —

Derivative liability — 4,472 —

Marketable equity securities and available for sale investment securities:

The fair value of the Company’s investment securities is estimated by using pricing models or quoted prices of securities with similar characteristics (i.e., matrix pricing) and is classified within Level 1 or Level 2 of the valuation hierarchy.

The pricing is primarily sourced from third-party pricing services overseen by management.

Derivative assets and liabilities:

The Company’s derivative assets and liabilities consist of transactions as part of management’s strategy to manage interest rate risk.

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 Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy.

Financial instruments measured at fair value on a nonrecurring basis

Certain assets and liabilities are measured at fair value on a non-recurring basis in accordance with GAAP.

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, 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, 2025:

Individually evaluated loans $ — $ — $ 48,147

Servicing asset, net — — 853

December 31, 2024:

Individually evaluated loans $ — $ — $ 113,901

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, 2025 and December 31, 2024:

Fair Value Valuation Methodology Unobservable Input Range

(Dollars in thousands)

September 30, 2025:

Individually evaluated loans $ 16,354 Appraisals Discount to appraised value 5.00 % - 8.00 %

28,788 Appraisals, cash surrender value life insurance, securities, cash held as collateral Discounts to appraised value and securities value — % - 8.00 %

3,005 Discounted cash flows Discount rate 3.38 % - 7.91 %

Other real estate owned $ 1,284 Purchase offer Not Applicable

Servicing asset, net $ 853 Discounted cash flows Discount rate 10.00 %

Prepayment rate 3.00 % - 18.00 %

December 31, 2024:

Individually evaluated loans $ 45,203 Appraisals Discount to appraised value 8.00 %

58,363 Appraisals, cash surrender value life insurance, securities, cash held as collateral Discounts to appraised value and securities value — % - 8.00 %

10,335 Discounted cash flows Discount rate 3.38 % - 10.25 %

Other real estate owned $ 8,299 Purchase offer Not applicable

Servicing asset, net $ 558 Discounted cash flows Discount rate 10.00 %

Prepayment rate 3.00 % - 18.00 %

Individually evaluated loans :

Loans are generally not recorded at fair value on a recurring basis.

Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans.

Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans calculated in accordance with ASC 310-10 when establishing the ACL-Loans.

Such amounts are generally based on the fair value of the underlying collateral supporting the loan.

Collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or other assumptions.

Estimates of fair value based on collateral are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3.

For those loans where the primary source of repayment is cash flow from operations, adjustments include impairment amounts calculated based on the perceived collectability of interest payments on the basis of a discounted cash flow analysis utilizing a discount rate equivalent to the original note rate.

Servicing assets and liabilities:

When loans are sold, on a servicing retained basis, servicing rights are initially recorded at fair value.

All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized.

The fair value of servicing assets and liabilities are not measured on an ongoing basis but are subject to fair value adjustments when and if the assets or liabilities are deemed to be impaired.

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

June 30, 2025

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

September 30, 2025

Carrying Value Fair Value Level 1 Level 2 Level 3

50 unchanged sentences

The carrying amount is a reasonable estimate of fair value.

Marketable equity securities and available for sale securities:

Marketable equity securities, available for sale securities, and held to maturities:

Fair values are based on quoted market prices or dealer quotes, if available.

4 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 .

The fair value of these securities is estimated using a discounted cash flow model, using discount rates ranging from 4.4 % to 6.7 % as of September 30, 2025 and 5.3 % to 7.2 % as of December 31, 2024.

These securities are CRA eligible investments.

19 unchanged sentences

Off-balance-sheet instruments:

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 .

Loan commitments on which the committed interest rate is less than the current market rate are insignificant at September 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 June 30, 2025 and December 31, 2024 , the fair value of OREO was $ 1.3 million and $ 8.3 million, respectively.

Fair Value Measurements

The Company is required to account for certain assets at fair value on a recurring or non-recurring basis.

The Company determines fair value in accordance with GAAP, which defines fair value and establishes a framework for measuring fair value.

GAAP establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The standard describes three levels of inputs that may be used to measure fair values:

Level 1 — Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 — Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

Changes in these judgments often have a material impact on the fair value estimates.

In addition, since these estimates are as of a specific point in time they are susceptible to material near-term changes.

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 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

June 30, 2025:

Marketable equity securities $ 2,188 $ — $ —

Available for sale investment securities:

Government and agency obligations 64,223 26,486 —

Corporate bonds — 13,221 —

Derivative asset — 5,024 —

Derivative liability — 3,411 —

December 31, 2024:

Marketable equity securities $ 2,118 $ — $ —

Available for sale investment securities:

Government and agency obligations 63,557 28,025 —

Corporate bonds — 15,846 —

Derivative asset — 7,472 —

Derivative liability — 4,472 —

Marketable equity securities and available for sale investment securities:

The pricing is primarily sourced from third-party pricing services overseen by management.

Derivative assets and liabilities:

The Company’s derivative assets and liabilities consist of transactions as part of management’s strategy to manage interest rate risk.

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 has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy.

Financial instruments measured at fair value on a nonrecurring basis

Certain assets and liabilities are measured at fair value on a non-recurring basis in accordance with GAAP.

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

June 30, 2025:

Individually evaluated loans $ — $ — $ 63,857

Servicing asset, net — — 671

December 31, 2024:

Individually evaluated loans $ — $ — $ 113,901

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 June 30, 2025 and December 31, 2024:

Fair Value Valuation Methodology Unobservable Input Range

(Dollars in thousands)

June 30, 2025:

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

37,753 Appraisals, cash surrender value life insurance, securities, cash held as collateral Discounts to appraised value and securities value — % - 8.00 %

3,010 Discounted cash flows Discount rate 3.38 % - 7.91 %

Servicing asset, net $ 671 Discounted cash flows Discount rate 10.00 %

Prepayment rate 3.00 % - 18.00 %

December 31, 2024:

Individually evaluated loans $ 45,203 Appraisals Discount to appraised value 8.00 %

58,363 Appraisals, cash surrender value life insurance, securities, cash held as collateral Discounts to appraised value and securities value — % - 8.00 %

10,335 Discounted cash flows Discount rate 3.38 % - 10.25 %

Servicing asset, net $ 558 Discounted cash flows Discount rate 10.00 %

Prepayment rate 3.00 % - 18.00 %

Individually evaluated loans :

Loans are generally not recorded at fair value on a recurring basis.

Periodically, the Company records nonrecurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans.

Nonrecurring adjustments also include certain impairment amounts for collateral-dependent loans calculated in accordance with ASC 310-10 when establishing the ACL-Loans.

Such amounts are generally based on the fair value of the underlying collateral supporting the loan.

Collateral is typically valued using appraisals or other

indications of value based on recent comparable sales of similar properties or other assumptions.

Estimates of fair value based on collateral are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3.

Servicing assets and liabilities:

When loans are sold, on a servicing retained basis, servicing rights are initially recorded at fair value.

All classes of servicing assets are subsequently measured using the amortization method which requires servicing rights to be amortized.

The fair value of servicing assets and liabilities are not measured on an ongoing basis but are subject to fair value adjustments when and if the assets or liabilities are deemed to be impaired.

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

Subordinated debentures

17 unchanged sentences

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

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.

At September 30, 2025 and December 31, 2024, unamortized debt issuance costs were $ 0.4 million and $ 0.5 million, respectively.

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

For the three months ended September 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 nine months ended September 30, 2025 and 2024 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, 2025 and 2024, 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, 2025 and 2024, respectively.

Subsequent Events

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.

On October 22, 2025, the Company’s Board of Directors declared a $ 0.20 per share cash dividend, payable on November 21, 2025, to shareholders of record on November 10, 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