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Bankwell Financial Group, Inc. (the "Parent Corporation") is a bank holding company headquartered in New Canaan, Connecticut. The Parent Corporation offers a broad range of financial services through its banking subsidiary, Bankwell Bank (the "Bank" and, collectively with the Parent Corporation and the Parent Corporation's subsidiaries, "we", "our", "us", or the "Company").

The Bank is a Connecticut state chartered commercial bank, founded in 2002, whose deposits are insured under the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation (“FDIC”). The Bank provides a wide range of services to clients in our market, an area encompassing approximately a 100 mile radius around our branch network. In addition, the Bank pursues certain types of commercial lending opportunities outside our market, particularly where we have strong business relationships. The Bank operates full-service branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut, as well as in Brooklyn, New York. The Bank operates limited service Domestic Representative Offices in New Canaan, Connecticut and in Garden City, New York.

Principles of Consolidation

The consolidated financial statements include the accounts of the Company and the Bank, including its wholly owned passive investment company subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of Estimates

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet and revenue and expenses for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near-term relate to the Allowance for Credit Losses-Loans ("ACL-Loans"), derivative instrument valuation, investment securities valuation, Allowance for Credit Losses-Securities ("ACL-Securities"), and deferred income taxes valuation.

Segments

The Company has one reportable segment. All of the Company’s activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others. For example, lending is dependent upon the ability of the Company to fund itself with deposits and borrowings while managing the interest rate and credit risk. Accordingly, all significant operating decisions are based upon analysis of the Company as one segment or unit.

The Chief Executive Officer (CEO), acting as the Chief Operating Decision Maker (CODM), determines the Company's one reportable segment. This determination is based on information about the Company's banking operations, its primary business, and the level of detail provided to the CODM for performance review. Similar operating performance, products and services, and customer bases allow for aggregation of business components into this one segment. The CODM evaluates financial performance by reviewing the consolidated financial results of the Company, analyzing factors such as revenue streams, significant expenses, and capital levels, as well as budget-to-actual results. Consolidated net income and related performance metrics are also used to benchmark the Company’s performance against competitors. The analysis of the Company’s results, including benchmarking, informs performance assessment and compensation decisions. The banking operations generate revenue through loans, investments, and deposits, while significant expenses include interest expense, the provision for credit losses, and salaries and employee benefits. All operations are domestic.

Basis of Consolidated Financial Statement Presentation

The unaudited consolidated financial statements presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited interim consolidated financial statements have been included. Interim results are not necessarily reflective of the results that may be expected for the year ending December 31, 2026. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2025.

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Significant Concentrations of Credit Risk

Many of the Company's activities are with clients based in Connecticut and New York. A significant portion of the Company's commercial real estate investor loan collateral is located in the Tri-State region (Connecticut, New York, and New Jersey). 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.

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

The ACL-Loans is measured on each loan’s amortized cost basis, excluding interest receivable, and is initially recognized upon origination or purchase of the loan, and subsequently remeasured on a recurring basis. The ACL-Loans is recognized as a contra-asset, and credit loss expense is recorded as a provision for loan losses in the consolidated statements of income. Loan losses are charged off against the ACL-Loans when management believes the loan is uncollectible. Subsequent recoveries, if any, are credited to the ACL-Loans. Loans are normally placed on nonaccrual status if it is probable that the Company will be unable to collect the full payment of principal and interest when due according to the contractual terms of the loan agreement, or the loan is past due for a period of 90 days or more unless the obligation is well-secured and is in the process of collection. The Company generally does not recognize an allowance for credit losses ("ACL") on accrued interest receivables, consistent with its policy to reverse interest income when interest is 90 days or more past due.

The Company also records an ACL-Unfunded commitments, which is based on the same assumptions as funded loans and also considers the probability of funding. The ACL is recognized as a liability, and credit loss expense is recorded as a provision for unfunded loan commitments within the provision for credit losses in the Consolidated Statements of Income.

For collectively evaluated loans and related unfunded commitments, the Company utilizes software provided by a third party, which includes various models for forecasting expected credit losses, to calculate its ACL. Management selected lifetime loss rate models, utilizing CRE, C&I, and Consumer specific models, to calculate the expected losses over the life of each loan based on exposure at default, loan attributes and reasonable, supportable economic forecasts. The models selected by the Company in its ACL calculation rely upon historical losses from a broad cross section of U.S. banks that also utilize the same third party for ACL calculations. Management reviewed the third party’s analysis of the banks included in the models as part of their model development dataset and determined the Company’s loan portfolio composition by property type, balance distribution by loan age, and delinquency status are similar, which supports the use of these loss rate models. The Company also noted the third party’s model development dataset has loan concentrations that are evenly distributed across the United States, while the Company’s portfolio is mainly concentrated in the Northeast. Based on the disparate regional concentration, management determined that a select group of peer banks is necessary to scale the loss rate models to produce an ACL that is more representative of the Company’s loan portfolio. This peer-based calibration, called a "peer scalar", utilizes the loss rates of a subset of peer banks to appropriately scale the initial model results. These peers have been selected by the Company given their similar characteristics, such as loan portfolio composition and location, to better align the models’ results to the Company’s expected losses.

Key assumptions used in the models include portfolio segmentation, risk rating, forecasted economic scenarios, the peer scalar, and the expected utilization of unfunded commitments, among others. Our loan portfolios are segmented by loan level attributes such as loan type, size, date of origination, and delinquency status to create homogenous loan pools. Pool level metrics are calculated, and loss rates are subsequently applied to the pools as the loans have similar characteristics.

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 are probability-weighted based on available information at the time the calculation is conducted. As part of our ongoing governance of ACL, scenario weightings and model parameters are reviewed periodically by management and are subject to change, as deemed appropriate.

The Company also considers qualitative adjustments to expected credit loss estimates for information not already captured in the quantitative loss estimation models. Qualitative factor adjustments may increase or decrease management’s estimate of expected credit losses. Qualitative loss factors are based on the Company’s judgment of market, changes in loan composition or concentrations, performance trends, regulatory changes, uncertainty of macroeconomic forecasts, and other asset specific risk characteristics.

When loans do not share risk characteristics with other financial assets they are evaluated individually. Management applies its normal loan review procedures in making these judgments. Individually evaluated loans consist of loans with credit quality indicators which are substandard or doubtful. 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

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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. These loans are evaluated based 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. For collateral dependent financial assets where the Company has determined that foreclosure of the collateral is probable and where the borrower is experiencing financial difficulty, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. Fair value is generally calculated based on the value of the underlying collateral less an appraisal discount and the estimated cost to sell.

ACL-Securities

The Company individually evaluates the available for sale debt securities and held to maturity securities for impairment credit losses. Available for sale securities include U.S. Treasuries, mortgage-backed securities, and corporate bonds. U.S. Treasuries and mortgaged-backed securities are guaranteed by the U.S. Government and as a result, management has a zero loss expectation. No ACL-Securities was recorded for these securities as of June 30, 2026. 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, 2026. Of our held to maturity securities portfolio, four securities fair values were less than each security's amortized cost as of June 30, 2026. 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 June 30, 2026.

Common Share Repurchases

The Company is incorporated in the state of Connecticut. Connecticut law does not provide for treasury shares, rather shares repurchased by the Company constitute authorized, but unissued shares. GAAP states that accounting for treasury stock shall conform to state law. Therefore, the cost of shares repurchased by the Company has been allocated to common stock balances.

Reclassification

Certain prior period amounts may be reclassified to conform to the 2026 financial statement presentation. These reclassifications only change the reporting categories and do not affect the consolidated results of operations or consolidated financial position of the Company.

Recent Accounting Pronouncements

The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements.

Recently issued accounting pronouncements not yet adopted

ASU No. 2024-03—Income Statement: "Reporting Comprehensive Income - Expense Disaggregation Disclosures": The amendment in this update is to improve the disclosures about a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses (including employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions. The amendments in this update are effective for annual periods beginning after December 15, 2026. ASU No. 2025-01—Income Statement: "Reporting Comprehensive Income - Expense Disaggregation Disclosures": Following the issuance of Update 2024-03, this amendment clarifies the initial effective date for entities that do not have an annual reporting period that ends on December 31 (referred to as non-calendar year-end entities). The amendment is effective for public business entities for annual reporting periods beginning after December 15, 2026. The Company believes this ASU will not have a material impact on existing disclosures and will continue to monitor for SEC action, and plan accordingly for adoption.

ASU No. 2025-09—Derivatives and Hedging: "Hedge Accounting Improvements": The amendment in this update is to better align accounting with risk management and address reference rate reform challenges. The update introduces changes across five areas, including broadening similar risk assessment for cash flow hedges, introducing a model for Choose-Your-Rate debt, and replacing the contractually specified component model for nonfinancial forecasted transactions. The amendment is effective for public business entities for annual reporting periods beginning after December 15, 2026. The Company believes this ASU will

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

The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at June 30, 2026 were as follows:

			June 30, 2026
			Amortized Cost						Gross Unrealized												Fair Value
									Gains						Losses
			(In thousands)
Available for sale securities:
U.S. Government and agency obligations
Less than one year			$	30,016					$	6					$	(235)					$	29,787
Due from one through five years			122,201						—						(1,569)						120,632
Due from five through ten years			15,180						—						(827)						14,353
Due after ten years			1,715						—						(126)						1,589
Total U.S. Government and agency obligations			169,112						6						(2,757)						166,361
Corporate bonds
Due from one through five years			2,000						—						(30)						1,970
Due from five through ten years			6,000						—						(295)						5,705
Due after ten years			—						—						—						—
Total corporate bonds			8,000						—						(325)						7,675
Total available for sale securities			$	177,112					$	6					$	(3,082)					$	174,036
Held to maturity securities:
State agency and municipal obligations
Less than one year			$	—					$	—					$	—					$	—
Due from five through ten years			7,084						99						(193)						6,990
Due after ten years			22,230						1,697						(103)						23,824
Total held to maturity securities			$	29,314					$	1,796					$	(296)					$	30,814

    

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

			December 31, 2025
			Amortized Cost						Gross Unrealized												Fair Value
									Gains						Losses
			(In thousands)
Available for sale securities:
U.S. Government and agency obligations
Less than one year			$	35,088					$	43					$	(421)					$	34,710
Due from one through five years			97,864						127						(698)						97,293
Due from five through ten years			17,024						—						(756)						16,268
Due after ten years			1,754						—						(101)						1,653
Total U.S. Government and agency obligations			151,730						170						(1,976)						149,924
Corporate bonds
Due from one through five years			4,000						2						(22)						3,980
Due from five through ten years			7,000						—						(495)						6,505
Due after ten years			—						—						—						—
Total corporate bonds			11,000						2						(517)						10,485
Total available for sale securities			$	162,730					$	172					$	(2,493)					$	160,409
Held to maturity securities:
State agency and municipal obligations
Less than one year			$	—					$	—					$	—					$	—
Due from one through five years			2,764						130						—						2,894
Due after ten years			26,701						1,650						(200)						28,151
Total held to maturity securities			$	29,465					$	1,780					$	(200)					$	31,045

There were no sales of investment securities during the six months ended June 30, 2026 and one such sale during the six months ended June 30, 2025, respectively.

At June 30, 2026 and December 31, 2025, $159.8 million and $151.4 million of the Company's securities, respectively, were pledged as collateral with the Federal Home Loan Bank ("FHLB").

As of June 30, 2026 and December 31, 2025, the actual durations of the Company's available for sale securities were significantly shorter than the stated maturities.

As of June 30, 2026, the Company held marketable equity securities with a fair value of $2.3 million and an amortized cost of $2.4 million. At December 31, 2025, the Company held marketable equity securities with a fair value of $2.2 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.

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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, 2026 and December 31, 2025:

			Length of Time in Continuous Unrealized Loss Position
			Less Than 12 Months																		12 Months or More																		Total
			Fair Value						Unrealized Loss						Percent Decline from Amortized Cost						Fair Value						Unrealized Loss						Percent Decline from Amortized Cost						Fair Value						Unrealized Loss						Percent Decline from Amortized Cost
			(Dollars in thousands)
June 30, 2026
U.S. Government and agency obligations			$	113,939					$	(1,284)					1.11		%				$	42,416					$	(1,473)					3.36		%				$	156,355					$	(2,757)					1.73		%
Corporate bonds			—						—						—						7,675						(325)						4.06						7,675						(325)						4.06
Total investment securities			$	113,939					$	(1,284)					1.11		%				$	50,091					$	(1,798)					3.46		%				$	164,030					$	(3,082)					1.84		%

			Length of Time in Continuous Unrealized Loss Position
			Less Than 12 Months																		12 Months or More																		Total
			Fair Value						Unrealized Loss						Percent Decline from Amortized Cost						Fair Value						Unrealized Loss						Percent Decline from Amortized Cost						Fair Value						Unrealized Loss						Percent Decline from Amortized Cost
			(Dollars in thousands)
December 31, 2025
U.S. Government and agency obligations			$	50,496					$	(346)					0.68		%				$	54,320					$	(1,630)					2.91		%				$	104,816					$	(1,976)					1.85		%
Corporate bonds			—						—						—						7,483						(517)						6.47						7,483						(517)						6.47
Total investment securities			$	50,496					$	(346)					0.68		%				$	61,803					$	(2,147)					3.36		%				$	112,299					$	(2,493)					2.17		%

There were twenty-seven and twenty-nine available for sale securities or held to maturity securities as of June 30, 2026 and December 31, 2025, respectively, in which the fair value of the security was less than the amortized cost of the security.

The U.S. Government and agency obligations owned are either direct obligations of the U.S. Government or guaranteed by the U.S. Government. Therefore, the contractual cash flows are guaranteed and as a result the unrealized losses in this portfolio are considered to be only temporarily impaired.

The corporate bonds are investments in subordinated debt of federally insured banks, the majority of which are callable after five years of origination. 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, 2026 until the decline in value has recovered or the security has matured.

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The following table sets forth a summary of the loan portfolio at June 30, 2026 and December 31, 2025:

(In thousands)			June 30, 2026						December 31, 2025
Real estate loans:
Residential			$	28,464					$	33,139
Commercial			1,989,747						1,930,979
Construction			153,522						153,778
			2,171,733						2,117,896
Commercial business			715,934						645,321
Consumer			72,026						76,855
Total loans			2,959,693						2,840,072
ACL-Loans			(30,627)						(30,705)
Deferred loan origination fees, net			(4,176)						(4,926)
Loans receivable, net			$	2,924,890					$	2,804,441

Lending activities primarily consist of commercial real estate loans, commercial business loans and, to a lesser degree, consumer loans. Loans may also be granted for the construction of commercial properties. The majority of commercial mortgage loans are collateralized by first or second mortgages on real estate.

Risk management

The Company has established credit policies applicable to each type of lending activity in which it engages. The Company evaluates the creditworthiness of each client and extends credit of up to 80% of the market value of the collateral, (85% maximum for owner occupied commercial real estate), depending on the client's creditworthiness and the type of collateral. The client’s ability to service the debt is monitored on an ongoing basis. Real estate is the primary form of collateral. 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 mortgage loans secured by one-to-four family owner occupied residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Credit quality of loans and the ACL-Loans

Management segregates the loan portfolio into defined segments, which are used to develop and document a systematic method for determining the Company's ACL-Loans. The portfolio segments are segregated based on loan types and the underlying risk factors present in each loan type. Such risk factors are periodically reviewed by management and revised as deemed appropriate.

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The Company's loan portfolio is segregated into the following portfolio segments:

Residential Real Estate: This portfolio segment consists of first mortgage loans secured by one-to-four family owner occupied residential properties for personal use located in the Company's market area. This segment also includes home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties. Loans of this type were written at a combined maximum of 80% of the appraised value of the property and the Company requires a first or second lien position on the property. These loans can be affected by economic conditions and the values of the underlying properties.

Commercial Real Estate: This portfolio segment includes loans secured by commercial real estate, multi-family dwellings, owner-occupied commercial real estate and investor-owned one-to-four family dwellings. Loans secured by commercial real estate generally have larger loan balances and more credit risk than owner occupied one-to-four family mortgage loans.

Construction: This portfolio segment includes commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail and other income producing properties and land loans, which are loans made with land as collateral. Construction and land development financing generally involves greater credit risk than long-term financing on improved, owner-occupied or leased real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion of construction compared to the estimated cost (including interest) of construction and other assumptions. If the estimate of construction cost proves to be inaccurate, the Company may be required to advance additional funds beyond the amount originally committed in order to protect the value of the property. Moreover, if the estimated value of the completed project proves to be inaccurate, the client may hold a property with a value that is insufficient to assure full repayment through sale or refinance. Construction loans also expose the Company to the risks that improvements will not be completed on time in accordance with specifications and projected costs and that repayment will depend on the successful operation or sale of the properties, which may cause some clients to be unable to continue paying debt service, which exposes the Company to greater risk of non-payment and loss.

Commercial Business: This portfolio segment includes commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners. 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.

Consumer: 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.

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ACL-Loans

The following tables set forth the activity in the Company’s ACL-Loans for the three and six months ended June 30, 2026 and 2025, by portfolio segment:

			Residential Real Estate						Commercial Real Estate						Construction						Commercial Business						Consumer						Total
			(In thousands)
Three Months Ended June 30, 2026
Beginning balance			$	48					$	18,588					$	1,912					$	7,706					$	1,326					$	29,580
Charge-offs			—						—						—						(13)						(35)						(48)
Recoveries			—						10						—						8						32						50
(Credit) provision for credit losses			(5)						230						519						(38)						339						1,045
Ending balance			$	43					$	18,828					$	2,431					$	7,663					$	1,662					$	30,627

			Residential Real Estate						Commercial Real Estate						Construction						Commercial Business						Consumer						Total
			(In thousands)
Three Months Ended June 30, 2025
Beginning balance			$	87					$	20,562					$	2,216					$	5,244					$	1,376					$	29,485
Charge-offs			—						—						—						(15)						(5)						(20)
Recoveries			—						—						—						112						10						122
(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

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			Residential Real Estate						Commercial Real Estate						Construction						Commercial Business						Consumer						Total
			(In thousands)
Six Months Ended June 30, 2026
Beginning balance			$	55					$	20,255					$	2,251					$	6,635					$	1,509					$	30,705
Charge-offs			—						—						—						(161)						(108)						(269)
Recoveries			—						14						—						23						65						102
(Credit) provision for credit losses			(12)						(1,441)						180						1,166						196						89
Ending balance			$	43					$	18,828					$	2,431					$	7,663					$	1,662					$	30,627

			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

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, risk designation on an amortized cost basis (which includes deferred fees and costs and accrued interest), and charge-offs as of June 30, 2026 and December 31, 2025 (dollars in thousands):

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Term Loans
Amortized Cost Balances by Origination Year as of June 30, 2026
			2026						2025						2024						2023						2022						Prior						Total
Residential Real Estate Loans
Pass			$	—					$	—					$	—					$	—					$	—					$	25,635					$	25,635
Special Mention			—						—						—						—						—						268						268
Substandard			—						—						—						—						—						2,701						2,701
Doubtful			—						—						—						—						—						—						—
Total Residential Real Estate Loans			$	—					$	—					$	—					$	—					$	—					$	28,604					$	28,604
Residential Real Estate charge-off
Current period charge-offs			$	—					$	—					$	—					$	—					$	—					$	—					$	—
Commercial Real Estate Loans
Pass			$	265,262					$	346,742					$	83,841					$	85,929					$	505,355					$	620,808					$	1,907,937
Special Mention			—						—						9,796						—						27,789						8,440						46,025
Substandard			—						—						22,513						—						4,785						14,906						42,204
Doubtful			—						—						—						—						—						—						—
Total Commercial Real Estate Loans			$	265,262					$	346,742					$	116,150					$	85,929					$	537,929					$	644,154					$	1,996,166
Commercial Real Estate charge-off
Current period charge-offs			$	—					$	—					$	—					$	—					$	—					$	—					$	—
Construction Loans
Pass			$	8,461					$	38,782					$	43,933					$	42,043					$	5,831					$	—					$	139,050
Special Mention			—						—						—						—						15,274						—						15,274
Substandard			—						—						—						—						—						—						—
Doubtful			—						—						—						—						—						—						—
Total Construction Loans			$	8,461					$	38,782					$	43,933					$	42,043					$	21,105					$	—					$	154,324
Construction charge-off
Current period charge-offs			$	—					$	—					$	—					$	—					$	—					$	—					$	—
Commercial Business Loans
Pass			$	124,425					$	257,827					$	86,224					$	62,236					$	120,859					$	60,013					$	711,584
Special Mention			—						968						1,005						—						3,879						—						5,852
Substandard			—						275						—						10						—						1,340						1,625
Doubtful			—						84						—						—						—						—						84
Total Commercial Business Loans			$	124,425					$	259,154					$	87,229					$	62,246					$	124,738					$	61,353					$	719,145
Commercial Business charge-off
Current period charge-offs			$	—					$	42					$	—					$	—					$	—					$	119					$	161
Consumer Loans
Pass			$	5,635					$	24,386					$	22,541					$	3,020					$	15,416					$	37					$	71,035
Special Mention			—						—						—						—						—						—						—
Substandard			—						—						—						—						—						—						—
Doubtful			—						—						—						—						—						—						—
Total Consumer Loans			$	5,635					$	24,386					$	22,541					$	3,020					$	15,416					$	37					$	71,035
Consumer charge-off
Current period charge-offs			$	—					$	24					$	55					$	—					$	24					$	5					$	108
Total Loans
Pass			$	403,783					$	667,737					$	236,539					$	193,228					$	647,461					$	706,493					$	2,855,241
Special Mention			—						968						10,801						—						46,942						8,708						67,419
Substandard			—						275						22,513						10						4,785						18,947						46,530
Doubtful			—						84						—						—						—						—						84
Total Loans			$	403,783					$	669,064					$	269,853					$	193,238					$	699,188					$	734,148					$	2,969,274
Total charge-off
Current period charge-offs			$	—					$	66					$	55					$	—					$	24					$	124					$	269

---

Term Loans
Amortized Cost Balances by Origination Year as of December 31, 2025
			2025						2024						2023						2022						2021						Prior						Total
Residential Real Estate Loans
Pass			$	—					$	—					$	—					$	—					$	—					$	30,252					$	30,252
Special Mention			—						—						—						—						—						281						281
Substandard			—						—						—						—						—						2,766						2,766
Doubtful			—						—						—						—						—						—						—
Total Residential Real Estate Loans			$	—					$	—					$	—					$	—					$	—					$	33,299					$	33,299
Residential Real Estate charge-off
Current period charge-offs			$	—					$	—					$	—					$	—					$	—					$	—					$	—
Commercial Real Estate Loans
Pass			$	391,466					$	97,473					$	104,421					$	573,183					$	213,785					$	458,047					$	1,838,375
Special Mention			—						—						—						53,776						—						1,666						55,442
Substandard			—						21,358						—						7,059						8,521						6,934						43,872
Doubtful			—						—						—						—						—						—						—
Total Commercial Real Estate Loans			$	391,466					$	118,831					$	104,421					$	634,018					$	222,306					$	466,647					$	1,937,689
Commercial Real Estate charge-off
Current period charge-offs			$	—					$	—					$	—					$	—					$	67					$	—					$	67
Construction Loans
Pass			$	37,221					$	40,676					$	51,218					$	5,720					$	—					$	—					$	134,835
Special Mention			—						—						—						19,744						—						—						19,744
Substandard			—						—						—						—						—						—						—
Doubtful			—						—						—						—						—						—						—
Total Construction Loans			$	37,221					$	40,676					$	51,218					$	25,464					$	—					$	—					$	154,579
Construction charge-off
Current period charge-offs			$	—					$	—					$	—					$	—					$	—					$	—					$	—
Commercial Business Loans
Pass			$	284,001					$	91,887					$	66,754					$	130,596					$	40,896					$	25,904					$	640,038
Special Mention			—						—						7						5,302						—						127						5,436
Substandard			294						—						30						316						1,299						3						1,942
Doubtful			—						—						—						—						—						—						—
Total Commercial Business Loans			$	284,295					$	91,887					$	66,791					$	136,214					$	42,195					$	26,034					$	647,416
Commercial Business charge-off
Current period charge-offs			$	29					$	—					$	—					$	—					$	—					$	—					$	29
Consumer Loans
Pass			$	21,332					$	21,782					$	3,022					$	28,844					$	—					$	38					$	75,018
Special Mention			—						—						—						—						—						—						—
Substandard			—						—						—						—						—						—						—
Doubtful			—						—						—						—						—						—						—
Total Consumer Loans			$	21,332					$	21,782					$	3,022					$	28,844					$	—					$	38					$	75,018
Consumer charge-off
Current period charge-offs			$	74					$	—					$	—					$	—					$	—					$	10					$	84
Total Loans
Pass			$	734,020					$	251,818					$	225,415					$	738,343					$	254,681					$	514,241					$	2,718,518
Special Mention			—						—						7						78,822						—						2,074						80,903
Substandard			294						21,358						30						7,375						9,820						9,703						48,580
Doubtful			—						—						—						—						—						—						—
Total Loans			$	734,314					$	273,176					$	225,452					$	824,540					$	264,501					$	526,018					$	2,848,001
Total charge-off
Current period charge-offs			$	103					$	—					$	—					$	—					$	67					$	10					$	180

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Loans evaluated for impairment and the related ACL-Loans as of June 30, 2026 and December 31, 2025 were as follows:

			Portfolio						ACL-Loans
			(In thousands)
June 30, 2026
Loans individually evaluated for impairment:
Residential real estate			$	2,687					$	—
Commercial real estate			42,158						—
Construction			—						—
Commercial business			1,676						—
Consumer			25,852						—
Subtotal			72,373						—
Loans collectively evaluated for impairment:
Residential real estate			25,777						43
Commercial real estate			1,947,589						18,828
Construction			153,522						2,431
Commercial business			714,258						7,663
Consumer			46,174						1,662
Subtotal			2,887,320						30,627
Total			$	2,959,693					$	30,627

			Portfolio						ACL-Loans
			(In thousands)
December 31, 2025
Loans individually evaluated for impairment:
Residential real estate			$	2,751					$	—
Commercial real estate			35,767						—
Construction			—						—
Commercial business			1,595						—
Consumer			38,820						—
Subtotal			78,933						—
Loans collectively evaluated for impairment:
Residential real estate			30,388						55
Commercial real estate			1,895,212						20,255
Construction			153,778						2,251
Commercial business			643,726						6,635
Consumer			38,035						1,509
Subtotal			2,761,139						30,705
Total			$	2,840,072					$	30,705

Credit quality indicators

To measure credit risk for the loan portfolios, the Company employs a credit risk rating system. This risk rating represents an assessed level of a loan’s risk based on the character and creditworthiness of the borrower/guarantor, the capacity of the borrower to adequately service the debt, any credit enhancements or additional sources of repayment, and the quality, value and coverage of the collateral, if any.

---

The objectives of the Company’s risk rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize a potential credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the ACL-Loans. The Company’s credit risk rating system has nine grades, with each grade corresponding to a progressively greater risk of default or non-payment. Risk ratings of (1) through (5) are "pass" categories and risk ratings of (6) through (9) are criticized asset categories as defined by the regulatory agencies.

A “special mention” (6) loan has a potential weakness which, if uncorrected, may result in a deterioration of the repayment prospects or inadequately protect the Company’s credit position at some time in the future. “Substandard” (7) loans have a well-defined weakness or weaknesses that jeopardize the full repayment of the debt. A loan rated “doubtful” (8) has all the weaknesses inherent in a substandard loan and which, in addition, make collection or liquidation in full highly questionable and improbable when considering existing facts, conditions, and values. Loans classified as “loss” (9) are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value; rather, it is not practical or desirable to defer charging off this asset even though partial recovery may be made in the future.

Risk ratings are assigned as necessary to differentiate risk within the portfolio. They are reviewed on an ongoing basis through the annual loan review process performed by Company personnel, normal renewal activity, monthly delinquency monitoring, and the quarterly watchlist and watched asset report process. They are revised to reflect changes in the borrower's financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage, as well as other considerations. 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, 2026 and December 31, 2025:

			Commercial Credit Quality Indicators
			June 30, 2026																								December 31, 2025
			Commercial Real Estate						Construction						Commercial Business						Total						Commercial Real Estate						Construction						Commercial Business						Total
			(In thousands)
Pass			$	1,901,845					$	138,336					$	708,458					$	2,748,639					$	1,832,061					$	134,141					$	638,012					$	2,604,214
Special Mention			45,744						15,186						5,800						66,730						55,114						19,637						5,400						80,151
Substandard			42,158						—						1,592						43,750						43,804						—						1,909						45,713
Doubtful			—						—						84						84						—						—						—						—
Loss			—						—						—						—						—						—						—						—
Total loans			$	1,989,747					$	153,522					$	715,934					$	2,859,203					$	1,930,979					$	153,778					$	645,321					$	2,730,078

			Residential and Consumer Credit Quality Indicators
			June 30, 2026																		December 31, 2025
			Residential Real Estate						Consumer						Total						Residential Real Estate						Consumer						Total
			(In thousands)
Pass			$	25,512					$	72,026					$	97,538					$	30,110					$	76,855					$	106,965
Special Mention			265						—						265						278						—						278
Substandard			2,687						—						2,687						2,751						—						2,751
Doubtful			—						—						—						—						—						—
Loss			—						—						—						—						—						—
Total loans			$	28,464					$	72,026					$	100,490					$	33,139					$	76,855					$	109,994

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Loan portfolio aging analysis

When a loan is 15 days past due, the Company sends the borrower a late notice. The Company attempts to contact the borrower by phone if the delinquency is not corrected promptly after the notice has been sent. When the loan is 30 days past due, the Company mails the borrower a letter reminding the borrower of the delinquency and attempts to contact the borrower personally to determine the reason for the delinquency and ensure the borrower understands the terms of the loan. If necessary, after the 90th day of delinquency, the Company may take other appropriate legal action. A summary report of all loans 30 days or more past due is provided to the Board of Directors of the Company periodically. Loans greater than 90 days past due are generally put on nonaccrual status. A nonaccrual loan is restored to accrual status when it is no longer delinquent and collectability of interest and principal is no longer in doubt. 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, 2026 and December 31, 2025:

			June 30, 2026
			30-59 Days Past Due						60-89 Days Past Due						90 Days or Greater Past Due						Total Past Due						Current						Total Loans
			(In thousands)
Real estate loans:
Residential real estate			$	—					$	—					$	530					$	530					$	27,934					$	28,464
Commercial real estate			1,532						—						13,923						15,455						1,974,292						1,989,747
Construction			—						—						—						—						153,522						153,522
Commercial business			49						949						617						1,615						714,319						715,934
Consumer			—						—						—						—						72,026						72,026
Total loans			$	1,581					$	949					$	15,070					$	17,600					$	2,942,093					$	2,959,693

			December 31, 2025
			30-59 Days Past Due						60-89 Days Past Due						90 Days or Greater Past Due						Total Past Due						Current						Total Loans
			(In thousands)
Real estate loans:
Residential real estate			$	557					$	—					$	—					$	557					$	32,582					$	33,139
Commercial real estate			56						—						5,901						5,957						1,925,022						1,930,979
Construction			—						—						—						—						153,778						153,778
Commercial business			1,106						17						1,273						2,396						642,925						645,321
Consumer			5						—						—						5						76,850						76,855
Total loans			$	1,724					$	17					$	7,174					$	8,915					$	2,831,157					$	2,840,072

There were no loans delinquent greater than 90 days and still accruing interest as of June 30, 2026 or December 31, 2025.

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Loans on nonaccrual status

The following is a summary of nonaccrual loans by portfolio segment as of June 30, 2026 and December 31, 2025:

			June 30, 2026						December 31, 2025
			(In thousands)
Residential real estate			$	530					$	557
Commercial real estate			13,923						14,445
Commercial business			1,404						1,302
Construction			—						—
Consumer			—						—
Total			$	15,857					$	16,304

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, 2026 and 2025 was $0.8 million and $1.1 million, respectively.

At June 30, 2026 and December 31, 2025, there were no commitments to lend additional funds to any borrower on nonaccrual status. Nonaccrual loans with no specific reserve totaled $15.9 million and $16.3 million at June 30, 2026 and December 31, 2025, respectively, as these loans were deemed to be adequately collateralized.

Individually evaluated loans

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

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

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The following table summarizes individually evaluated loans by portfolio segment as of June 30, 2026 and December 31, 2025.

			Carrying Amount												Unpaid Principal Balance												Associated ACL-Loans
			June 30, 2026						December 31, 2025						June 30, 2026						December 31, 2025						June 30, 2026						December 31, 2025
			(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate			$	2,687					$	2,751					$	3,054					$	3,098					$	—					$	—
Commercial real estate			42,158						35,767						51,964						45,462						—						—
Construction			—						—						—						—						—						—
Commercial business			1,676						1,595						2,391						2,290						—						—
Consumer			25,852						38,820						25,852						38,820						—						—
Total individually evaluated loans without a valuation allowance			$	72,373					$	78,933					$	83,261					$	89,670					$	—					$	—
Individually evaluated loans with a valuation allowance:
Residential real estate			$	—					$	—					$	—					$	—					$	—					$	—
Commercial real estate			—						—						—						—						—						—
Construction			—						—						—						—						—						—
Commercial business			—						—						—						—						—						—
Consumer			—						—						—						—						—						—
Total individually evaluated loans with a valuation allowance			—						—						—						—						—						—
Total individually evaluated loans			$	72,373					$	78,933					$	83,261					$	89,670					$	—					$	—

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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, 2026 and 2025:

			Average Carrying Amount												Interest Income Recognized
			Three Months Ended June 30,												Three Months Ended June 30,
			2026						2025						2026						2025
			(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate			$	2,700					$	2,979					$	42					$	43
Commercial real estate			42,602						17,371						513						84
Commercial business			1,685						7,000						55						55
Construction			—						—						—						—
Consumer			25,380						40,489						357						382
Total individually evaluated loans without a valuation allowance			$	72,367					$	67,839					$	967					$	564
Individually evaluated loans with a valuation allowance:
Residential real estate			$	—					$	—					$	—					$	—
Commercial real estate			—						—						—						—
Commercial business			—						—						—						—
Construction			—						—						—						—
Consumer			—						—						—						—
Total individually evaluated loans with a valuation allowance			—						—						—						—
Total individually evaluated loans			$	72,367					$	67,839					$	967					$	564

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			Average Carrying Amount												Interest Income Recognized
			Six Months Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
			(In thousands)
Individually evaluated loans without a valuation allowance:
Residential real estate			$	2,715					$	3,025					$	84					$	103
Commercial real estate			44,648						17,766						1,033						129
Commercial business			1,774						7,322						105						70
Construction			—						—						—						—
Consumer			29,825						47,369						646						775
Total individually evaluated loans without a valuation allowance			$	78,962					$	75,482					$	1,868					$	1,077
Individually evaluated loans with a valuation allowance:
Residential real estate			$	—					$	—					$	—					$	—
Commercial real estate			—						—						—						—
Commercial business			—						—						—						—
Construction			—						—						—						—
Consumer			—						—						—						—
Total individually evaluated loans with a valuation allowance			—						—						—						—
Total individually evaluated loans			$	78,962					$	75,482					$	1,868					$	1,077

Loan Modifications

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 two new loan modifications reportable under ASC 326 at June 30, 2026 for $0.8 million. There was one new loan modification reportable under ASC 326 for $0.3 million at December 31, 2025. There were two nonaccrual modified loans at June 30, 2026. There was one nonaccrual modified loan at December 31, 2025. There were no loans modified that re-defaulted at June 30, 2026 or December 31, 2025.

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Allowance for credit losses (ACL)-Unfunded Commitments

The Company has recorded ACL-Unfunded Commitments in Accrued 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 and six months ended June 30, 2026 and June 30, 2025:

			Three Months Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
			(In thousands)
Balance at beginning of period			$	415					$	682					$	488					$	756
Provision (credit) for credit losses (unfunded commitments)			183						(80)						110						(154)
Balance at end of period			$	598					$	602					$	598					$	602

Components of Provision (Credit) for Credit Losses

The following table summarizes the Provision for credit losses for the three and six months ended June 30, 2026 and June 30, 2025:

			Three Months Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
			(In thousands)
Provision (credit) for credit losses (loans)			$	1,045					$	(331)					$	89					$	206
Provision (credit) for credit losses (unfunded commitments)			183						(80)						110						(154)
Provision (credit) for credit losses			$	1,228					$	(411)					$	199					$	52

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Common Stock

The Company has 10,000,000 shares authorized and 7,973,180 shares issued and outstanding at June 30, 2026 and 10,000,000 shares authorized and 7,899,943 shares issued and outstanding at December 31, 2025. The Company's stock is traded on the Nasdaq Global Market under the ticker symbol BWFG.

Dividends

The Company’s shareholders are entitled to dividends when and if declared by the Board of Directors out of funds legally available. The ability of the Company to pay dividends depends, in part, on the ability of the Bank to pay dividends to the Parent Corporation. In accordance with Connecticut statutes, regulatory approval is required to pay dividends in excess of the Bank’s profits retained in the current year plus retained profits from the previous two years. The Bank is also prohibited from paying dividends that would reduce its capital ratios below minimum regulatory requirements.

Issuer Purchases of Equity Securities

On October 28, 2024, the Company announced that on October 23, 2024, its Board of Directors authorized a share repurchase plan (the "Plan"). Under the terms of the Plan, the Company is authorized to buy back up to 250,000 shares of its outstanding common stock.

The Company intends to accomplish the share repurchases through open-market transactions, although the Company may accomplish repurchases through other means, such as privately negotiated transactions. The timing, price and volume of repurchases will be based on market conditions, relevant securities laws and other factors. The 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, 2026, the Company purchased 3,317 shares of its common stock at a weighted average price of $45.32 per share. During the year ended December 31, 2025, the Company purchased 44,550 shares of its common stock at a weighted average price of $29.93 per share.

Comprehensive income represents the sum of net income and items of other comprehensive income or loss, including net unrealized gains or losses on securities available for sale and net unrealized gains or losses on derivatives. The Company's derivative instruments are utilized to manage economic risks, including interest rate risk. 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 comprehensive income or loss for the three and six months ended June 30, 2026 and June 30, 2025 is reported in the Consolidated Statements of Comprehensive Income.

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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, 2026 and June 30, 2025:    

			Net Unrealized Gain (Loss) on Available for Sale Securities						Net Unrealized Gain (Loss) on Interest Rate Swaps						Total
			(In thousands)
Balance at March 31, 2026			$	(2,074)					$	1,599					$	(475)
Other comprehensive (loss) income before reclassifications, net of tax			(276)						223						(53)
Amounts reclassified from accumulated other comprehensive (loss), net of tax			—						(42)						(42)
Net other comprehensive (loss) income			(276)						181						(95)
Balance at June 30, 2026			$	(2,350)					$	1,780					$	(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, 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 (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 December 31, 2025			$	(1,774)					$	1,558					$	(216)
Other comprehensive (loss) income before reclassifications, net of tax			(576)						311						(265)
Amounts reclassified from accumulated other comprehensive (loss), net of tax			—						(89)						(89)
Net other comprehensive (loss) income			(576)						222						(354)
Balance at June 30, 2026			$	(2,350)					$	1,780					$	(570)

			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)
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)

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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
						2026						2025						2026						2025
						(In thousands)
Derivatives:
Unrealized gains on derivatives						$	57					$	187					$	116					$	799					Interest expense on borrowings
Tax expense						(13)						(44)						(27)						(189)						Income tax expense
Net of tax						$	44					$	143					$	89					$	610

Unvested restricted stock awards that contain non-forfeitable rights to dividends are participating securities and are included in the computation of EPS pursuant to the two-class method. The two-class method is an earnings allocation formula that determines EPS for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. The Company’s unvested restricted stock awards qualify as participating securities.

Net income is allocated between the common stock and participating securities pursuant to the two-class method. Basic EPS is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during the period, excluding participating unvested restricted stock awards.

Diluted EPS is computed in a similar manner, except that the denominator includes the number of additional common shares that would have been outstanding if potentially dilutive common shares were issued using the treasury stock method.

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  June 30,												Six Months Ended  June 30,
			2026						2025						2026						2025
			(In thousands, except per share data)
Net income			$	12,372					$	9,088					$	23,647					$	15,976
Dividends to participating securities(1)			(26)						(26)						(52)						(53)
Undistributed earnings allocated to participating securities(1)			(175)						(126)						(333)						(241)
Net income for earnings per share calculation			$	12,171					$	8,936					$	23,262					$	15,682
Weighted average shares outstanding, basic			7,856,210						7,777,469						7,790,596						7,724,143
Effect of dilutive equity-based awards(2)			124,763						42,359						86,562						71,677
Weighted average shares outstanding, diluted			7,980,973						7,819,828						7,877,158						7,795,820
Net earnings per common share:
Basic earnings per common share			$	1.55					$	1.15					$	2.99					$	2.03
Diluted earnings per common share			$	1.52					$	1.14					$	2.95					$	2.01

(1)    Represents dividends paid and undistributed earnings allocated to unvested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the effect of the assumed exercise of stock options and the vesting of restricted shares, as applicable, utilizing the treasury stock method.

---

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

Under the current guidelines, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier 1 risk-based capital ratio of 6.0%, a minimum Common Equity Tier 1 risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common equity in an amount above the minimum risk-based capital requirements for “adequately capitalized” institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Bank to effectively maintain Common Equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses, or to engage in share repurchases.

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, 2026, 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.

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The capital amounts and ratios for the Bank and the Company at June 30, 2026 and December 31, 2025 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
			Actual Capital
(Dollars in thousands)			Amount						Ratio						Amount						Ratio						Amount						Ratio
Bankwell Bank
June 30, 2026
Common Equity Tier 1 Capital to Risk-Weighted Assets			$	351,649					11.67		%				$	210,982					7.00		%				$	195,912					6.50		%
Tier I Capital to Risk-Weighted Assets			351,649						11.67		%				256,193						8.50		%				241,123						8.00		%
Total Capital to Risk-Weighted Assets			382,874						12.70		%				316,473						10.50		%				301,403						10.00		%
Tier I Capital to Average Assets			351,649						10.39		%				135,429						4.00		%				169,286						5.00		%
															Minimum Regulatory Capital Required for Capital Adequacy												Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
			Actual Capital
			Amount						Ratio						Amount						Ratio						Amount						Ratio
Bankwell Financial Group, Inc.
June 30, 2026
Common Equity Tier 1 Capital to Risk-Weighted Assets			$	319,886					10.58		%				$	136,047					4.50		%				$	196,513					6.50		%
Tier I Capital to Risk-Weighted Assets			319,886						10.58		%				181,397						6.00		%				241,862						8.00		%
Total Capital to Risk-Weighted Assets			420,931						13.92		%				241,862						8.00		%				302,328						10.00		%
Tier I Capital to Average Assets			319,886						9.41		%				135,926						4.00		%				169,908						5.00		%

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															Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer												Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
			Actual Capital
(Dollars in thousands)			Amount						Ratio						Amount						Ratio						Amount						Ratio
Bankwell Bank
December 31, 2025
Common Equity Tier 1 Capital to Risk-Weighted Assets			$	344,979					11.87		%				$	203,425					7.00		%				$	188,895					6.50		%
Tier I Capital to Risk-Weighted Assets			344,979						11.87		%				247,017						8.50		%				232,486						8.00		%
Total Capital to Risk-Weighted Assets			376,171						12.94		%				305,138						10.50		%				290,608						10.00		%
Tier I Capital to Average Assets			344,979						10.56		%				130,725						4.00		%				163,406						5.00		%
															Minimum Regulatory Capital Required for Capital Adequacy												Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
			Actual Capital
			Amount						Ratio						Amount						Ratio						Amount						Ratio
Bankwell Financial Group, Inc.
December 31, 2025
Common Equity Tier 1 Capital to Risk-Weighted Assets			$	298,121					10.23		%				$	131,112					4.50		%				$	189,385					6.50		%
Tier I Capital to Risk-Weighted Assets			298,121						10.23		%				174,816						6.00		%				233,089						8.00		%
Total Capital to Risk-Weighted Assets			399,010						13.69		%				233,089						8.00		%				291,361						10.00		%
Tier I Capital to Average Assets			298,121						9.11		%				130,961						4.00		%				163,701						5.00		%

Regulatory Restrictions on Dividends

The ability of the Company to pay dividends depends, in part, on the ability of the Bank to pay dividends to the Parent Corporation. In accordance with Connecticut statutes, regulatory approval is required to pay dividends in excess of the Bank’s profits retained in the current year plus retained profits from the previous two years. The Bank is also prohibited from paying dividends that would reduce its capital ratios below minimum regulatory requirements.

Reserve Requirements on Cash

The Bank was not required to maintain a minimum reserve balance in the Federal Reserve Bank (FRB) at June 30, 2026 or December 31, 2025.

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At June 30, 2026 and December 31, 2025, deposits consisted of the following:

			June 30, 2026						December 31, 2025
			(In thousands)
Noninterest bearing demand deposit accounts			$	472,008					$	403,652
Interest bearing accounts:
NOW			133,032						90,205
Money market			1,175,536						1,007,844
Savings			98,626						97,418
Time certificates of deposit			1,121,328						1,230,362
Total interest bearing accounts			2,528,522						2,425,829
Total deposits			$	3,000,530					$	2,829,481

Maturities of time certificates of deposit as of June 30, 2026 and December 31, 2025 are summarized below:

			June 30, 2026						December 31, 2025
			(In thousands)
2026			$	726,748					$	1,224,995
2027			393,096						4,271
2028			1,424						1,038
2029			34						33
2030 and thereafter			26						25
Total			$	1,121,328					$	1,230,362

The aggregate amount of individual certificate accounts, with balances of $250,000 or more, was approximately $228.1 million at June 30, 2026 and $245.0 million at December 31, 2025.

Brokered certificates of deposits totaled $453.0 million at June 30, 2026 and $505.0 million at December 31, 2025, respectively. Brokered money market accounts totaled $53.7 million at June 30, 2026 and $53.7 million at December 31, 2025, respectively. Certificates of deposits from national listing services were $26.8 million and $42.3 million as of June 30, 2026 and December 31, 2025, 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, 2026 or December 31, 2025. 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, 2026 and 2025:

			Three Months Ended June 30,												Six Months Ended June 30,
			2026						2025						2026						2025
			(In thousands)
NOW			$	59					$	77					$	108					$	187
Money market			9,681						8,579						18,746						17,100
Savings			677						667						1,349						1,325
Time certificates of deposits			10,850						13,760						22,994						29,243
Total interest expense on deposits			$	21,267					$	23,083					$	43,197					$	47,855

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Equity award plans

The Company has unvested restricted stock outstanding under the 2022 Bankwell Financial Group, Inc. Stock Plan, or the “2022 Plan”. 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. Although the 2022 Plan authorizes multiple forms of equity grants, to date, all equity awards under the 2022 Plan have been in the form of restricted stock. At June 30, 2026, there were 197,746 shares reserved for future issuance under the 2022 Plan.

Restricted Stock: Restricted stock provides grantees with rights to shares of common stock upon completion of a service period. Shares of unvested restricted stock are considered participating securities. 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, 2026:

			Six Months Ended June 30, 2026
			Number of Shares						Weighted Average Grant Date Fair Value
Unvested at beginning of period			206,822			(1)			$	31.74
Granted			76,845			(2)			50.38
Vested			(81,136)			(3)			49.89
Forfeited			(291)						47.88
Unvested at end of period			202,240

(1)    Includes 74,921 shares of performance based restricted stock.

(2)    Includes 14,618 shares of performance based restricted stock.

(3)    Includes 16,664 shares of performance based restricted stock.

The total fair value of restricted stock awards vested during the six months ended June 30, 2026 was $4.0 million.

The Company's restricted stock expense for the six months ended June 30, 2026 and June 30, 2025 was $2.0 million and $0.9 million, respectively. At June 30, 2026, there was $5.8 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 Company has 72,875 shares of performance based restricted stock outstanding as of June 30, 2026 pursuant to the Company’s 2022 Plan. Awards granted prior to 2025 generally vest in equal annual installments over a three-year service period, provided certain performance metrics are met. In 2025, the Company transitioned to three-year cliff vesting for performance-based awards. The share quantity that ultimately vests can range between 0% and 150%, (200% for awards granted prior to 2022 and 150% for awards granted after 2023), 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.

The Company manages economic risks, including interest rate, liquidity, and credit risk, by managing the amount, sources, and duration of its funding along with the use of interest rate derivative financial instruments, namely interest rate swaps. The Company does not use derivatives for speculative purposes. As of June 30, 2026, 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 is $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.

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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. The Company designated the fair value swap under the portfolio layer method (“PLM”). Under this method, the hedged item was designated as a hedged layer of a closed portfolio of financial loans that is anticipated to remain outstanding for the designated hedged period. Adjustments were made to record the swap at fair value on the Consolidated Balance Sheets, with changes in fair value recognized in interest income. The carrying value of the fair value swap on the Consolidated Balance Sheets was also adjusted through interest income, based on changes in fair value attributable to changes in the hedged risk. The pay-fixed portfolio layer method fair value swap matured in the first quarter of 2026.

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, 2026 and December 31, 2025:

			June 30, 2026						December 31, 2025						June 30, 2026						December 31, 2025
			Carrying Value of Hedged Asset												Hedged Items
			(In thousands)
Fixed Rate Asset (1)			$	—					$	150,142					$	—					$	(108)

(1) The amount includes the amortized cost basis of the closed portfolio 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 December 31, 2025, the amortized cost basis of the closed portfolio used in this hedging relationship was $470.6 million, the cumulative basis adjustments associated with this hedging relationship was $0.2 million, respectively. As of December 31, 2025, the amount of the designated hedged item was $150.0 million.

As of June 30, 2026, 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. None of the interest rate swap agreements contain any credit risk related contingent features. A hedging instrument is expected at inception to be highly effective at offsetting changes in the hedged transactions attributable to the changes in the hedged risk.

Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan clients. The Company executes interest rate swaps with commercial banking clients to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. 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. 

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Information about derivative instruments at June 30, 2026 and December 31, 2025 is as follows:

			As of June 30, 2026
			Derivative Assets																		Derivative Liabilities
			Original Notional Amount						Balance Sheet Location						Fair Value						Original Notional Amount						Balance Sheet Location						Fair Value
			(In thousands)
Derivatives designated as hedging instruments:
Interest rate swap			$	25,000					Other assets						$	2,222					$	—					Accrued expenses and other liabilities						$	—
Fair value swap			$	—					Other assets						$	—					$	—					Accrued expenses and other liabilities						$	—
Derivatives not designated as hedging instruments:
Interest rate swaps(1)			$	38,500					Other assets						$	3,257					$	38,500					Accrued expenses and other liabilities						$	3,257

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

Accrued interest receivables related to interest rate swaps as of June 30, 2026 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 $2.3 million as of June 30, 2026.

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			As of December 31, 2025
			Derivative Assets																		Derivative Liabilities
			Original Notional Amount						Balance Sheet Location						Fair Value						Original Notional Amount						Balance Sheet Location						Fair Value
			(In thousands)
Derivatives designated as hedging instruments:
Interest rate swap			$	25,000					Other assets						$	1,925					$	—					Accrued expenses and other liabilities						$	—
Fair value swap			$	—					Other assets						$	—					$	150,000					Accrued expenses and other liabilities						$	156
Derivatives not designated as hedging instruments:
Interest rate swaps(1)			$	38,500					Other assets						$	3,045					$	38,500					Accrued expenses and other liabilities						$	3,045

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

Accrued interest receivables related to interest rate swaps as of December 31, 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 $1.9 million as of December 31, 2025.

The effective portion of changes in the fair value of derivatives designated as cash flow hedges is recorded in accumulated other comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The Company expects to reclassify $0.3 million to reduce interest expense during the next 12 months.

The Company assesses the cash flow swaps hedge effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged item or transaction. The Company does not offset derivative assets and derivative liabilities for financial statement presentation purposes.

The Company assesses the effectiveness of the fair value swap hedge with a regression analysis that compares the changes in forward curves to determine the value. The effective portion of changes in the fair value of derivatives designated as fair value hedges is recorded through interest income. The Company does not offset derivative assets and derivative liabilities for financial statement presentation purposes.

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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, 2026 and June 30, 2025:

			Three Months Ended June 30,												Six Months Ended June 30,
(In thousands)			2026						2025						2026						2025
Interest rate swaps designated as cash flow hedges:
Unrealized gain (loss) recognized in accumulated other comprehensive income before reclassifications			$	293					$	(92)					$	406					$	(614)
Amounts reclassified from accumulated other comprehensive income			(56)						(185)						(115)						(797)
Income tax (expense) benefit on items recognized in accumulated other comprehensive income			(56)						66						(69)						332
Other comprehensive income (loss)			$	181					$	(211)					$	222					$	(1,079)

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, 2026 and June 30, 2025:

			Three Months Ended June 30,												Six Months Ended June 30,
(In thousands)			2026						2025						2026						2025
(Loss) gain on fair value hedging relationship:
Hedged asset			$	—					$	(162)					$	(142)					$	(20)
Fair value derivative designated as hedging instrument			—						202						3						104
Total gain (loss) recognized in the consolidated statements of income within interest and fees on loans			$	—					$	40					$	(139)					$	84

The following tables summarize gross and net information about derivative instruments that are offset in the Consolidated Balance Sheets at June 30, 2026 and December 31, 2025:

			June 30, 2026
			(In thousands)
																					Gross Amounts Not Offset in the Consolidated Balance Sheets
			Gross Amounts of Recognized Assets(1)						Gross Amounts Offset in the Statement of Financial Position						Net Amounts of Assets presented in the Statement of Financial Position						Financial Instruments						Cash Collateral Received						Net Amount
Derivative assets			$	5,534					$	—					$	5,534					$	—					$	5,449					$	85

(1) Includes accrued interest receivable totaling $55 thousand.

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			June 30, 2026
			(In thousands)
																					Gross Amounts Not Offset in the Consolidated Balance Sheets
			Gross Amounts of Recognized Liabilities(1)						Gross Amounts Offset in the Statement of Financial Position						Net Amounts of Liabilities presented in the Statement of Financial Position						Financial Instruments						Cash Collateral Posted						Net Amount
Derivative liabilities			$	3,292					$	—					$	3,292					$	—					$	—					$	3,292

(1) Includes accrued interest payable totaling $34 thousand.

			December 31, 2025
			(In thousands)
																					Gross Amounts Not Offset in the Consolidated Balance Sheets
			Gross Amounts of Recognized Assets(1)						Gross Amounts Offset in the Statement of Financial Position						Net Amounts of Assets presented in the Statement of Financial Position						Financial Instruments						Cash Collateral Received						Net Amount
Derivative assets			$	5,034					$	—					$	5,034					$	202					$	4,832					$	—

(1) Includes accrued interest receivable totaling $64 thousand.

			December 31, 2025
			(In thousands)
																					Gross Amounts Not Offset in the Consolidated Balance Sheets
			Gross Amounts of Recognized Liabilities(1)						Gross Amounts Offset in the Statement of Financial Position						Net Amounts of Liabilities presented in the Statement of Financial Position						Financial Instruments						Cash Collateral Posted						Net Amount
Derivative liabilities			$	3,285					$	—					$	3,285					$	202					$	—					$	3,083

(1) Includes net interest payable totaling $84 thousand.

GAAP requires disclosure of fair value information about financial instruments, whether or not recognized in the Consolidated Balance Sheets, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rates and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparisons to independent markets and, in many cases, could not be realized in immediate settlement of the instrument.

Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. Therefore, for substantially all financial instruments, the fair value estimates presented herein are not necessarily indicative of the amounts the Company could have realized in a sales transaction. The estimated fair value amounts have been measured as of the respective period ends and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than the amounts reported at each period-end.

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The Company assumes interest rate risk (the risk that general interest rate levels will change) as a result of its normal operations. As a result, the fair values of the Company’s financial instruments will change when interest rate levels change and that change may be either favorable or unfavorable to the Company. Management attempts to match maturities of assets and liabilities to the extent believed necessary to minimize interest rate risk. However, borrowers with fixed rate obligations are less likely to prepay in a rising rate environment and more likely to prepay in a falling rate environment. Conversely, depositors who are receiving fixed rates are more likely to withdraw funds before maturity in a rising rate environment and less likely to do so in a falling rate environment. 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, 2026 and December 31, 2025 were as follows:

			June 30, 2026
			Carrying Value						Fair Value						Level 1						Level 2						Level 3
			(In thousands)
Financial Assets:
Cash and due from banks			$	191,378					$	191,378					$	191,378					$	—					$	—
Federal funds sold			12,018						12,018						12,018						—						—
Marketable equity securities			2,263						2,263						2,263						—						—
Available for sale securities			174,036						174,036						64,384						109,652						—
Held to maturity securities			29,314						30,814						—						—						30,814
Loans receivable, net			2,924,890						2,920,772						—						—						2,920,772
Accrued interest receivable			16,270						16,270						—						16,270						—
FHLB stock			3,143						3,143						—						3,143						—
Servicing asset, net of valuation allowance			1,641						1,641						—						—						1,641
Derivative asset			5,479						5,479						—						5,479						—
Financial Liabilities:
Noninterest bearing deposits			$	472,008					$	472,008					$	—					$	472,008					$	—
NOW and money market			1,308,568						1,308,568						—						1,308,568						—
Savings			98,626						98,626						—						98,626						—
Time deposits			1,121,328						1,120,687						—						—						1,120,687
Accrued interest payable			9,843						9,843						—						9,843						—
Advances from the FHLB			30,000						29,997						—						—						29,997
Subordinated debentures			69,820						69,625						—						—						69,625
Servicing liability			—						—						—						—						—
Derivative liability			3,258						3,258						—						3,258						—

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			December 31, 2025
			Carrying Value						Fair Value						Level 1						Level 2						Level 3
			(In thousands)
Financial Assets:
Cash and due from banks			$	214,567					$	214,567					$	214,567					$	—					$	—
Federal funds sold			10,354						10,354						10,354						—						—
Marketable equity securities			2,248						2,248						2,248						—						—
Available for sale securities			160,409						160,409						74,668						85,741						—
Held to maturity securities			29,465						31,045						—						—						31,045
Loans receivable, net			2,804,441						2,811,784						—						—						2,811,784
Accrued interest receivable			16,143						16,143						—						16,143						—
FHLB stock			6,207						6,207						—						6,207						—
Servicing asset, net of valuation allowance			1,035						1,035						—						—						1,035
Derivative asset			4,970						4,970						—						4,970						—
Financial Liabilities:
Noninterest bearing deposits			$	403,652					$	403,652					$	—					$	403,652					$	—
NOW and money market			1,098,049						1,098,049						—						1,098,049						—
Savings			97,418						97,418						—						97,418						—
Time deposits			1,230,362						1,232,581						—						—						1,232,581
Accrued interest payable			9,019						9,019						—						9,019						—
Advances from the FHLB			110,000						110,008						—						—						110,008
Subordinated debentures			69,697						70,075						—						—						70,075
Servicing liability			—						—						—						—						—
Derivative liability			3,201						3,201						—						3,201						—

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

Cash and due from banks, federal funds sold, accrued interest receivable and accrued interest payable: The carrying amount is a reasonable estimate of fair value.

Marketable equity securities and available for sale securities: Fair values are based on quoted market prices or dealer quotes, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. The majority of the available for sale securities are considered to be Level 2 as other observable inputs are utilized, such as quoted prices for similar securities. Level 1 investment securities include investments in U.S. Treasury notes and in marketable equity securities for which a quoted price is readily available in the market. 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 4.3% to 6.5% as of June 30, 2026 and 4.1% to 6.4% as of December 31, 2025. These securities are CRA eligible investments.

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

Loans receivable: For variable rate loans which reprice frequently and have no significant change in credit risk, fair values are based on carrying values. The fair value of fixed rate loans are estimated by discounting the future cash flows using the rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. The fair value methodology includes prepayment, default and loss severity assumptions applied by type of loan. The fair value estimate of the loans includes an expected credit loss.

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Derivative asset (liability): The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. The Company also considers the creditworthiness of each counterparty for assets and the creditworthiness of the Company for liabilities.

Deposits: The fair value of demand deposits, regular savings and certain money market deposits is the amount payable on demand at the reporting date. The fair value of certificates of deposit and other time deposits is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities to a schedule of aggregated expected maturities on such deposits.

Borrowings and subordinated debentures: The fair value of the Company’s borrowings and subordinated debentures is estimated using a discounted cash flow calculation that applies discount rates currently offered based on similar maturities. The Company also considers its own creditworthiness in determining the fair value of its borrowings and subordinated debt. Contractual cash flows for the subordinated debt are reduced based on the estimated rates of default, the severity of losses to be incurred on a default, and the rates at which the subordinated debt is expected to prepay after the call date.

Servicing asset (liability): Servicing assets and liabilities do not trade in an active, open market with readily observable prices. The Company estimates the fair value of servicing assets and liabilities using discounted cash flow models, incorporating numerous assumptions from the perspective of a market participant, including market discount rates.

Off-balance-sheet instruments: Loan commitments on which the committed interest rate is less than the current market rate are insignificant at June 30, 2026 and December 31, 2025.

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.

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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, 2026 and December 31, 2025, 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, 2026 and for the year ended December 31, 2025.

			Fair Value
(In thousands)			Level 1						Level 2						Level 3
June 30, 2026:
Marketable equity securities			$	2,263					$	—					$	—
Available for sale investment securities:
U.S. Government and agency obligations			64,384						101,977						—
Corporate bonds			—						7,675						—
Derivative asset			—						5,479						—
Derivative liability			—						3,258						—
December 31, 2025:
Marketable equity securities			$	2,248					$	—					$	—
Available for sale investment securities:
U.S. Government and agency obligations			74,668						75,256						—
Corporate bonds			—						10,845						—
Derivative asset			—						4,970						—
Derivative liability			—						3,201						—

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.

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The following table details the financial instruments measured at fair value on a nonrecurring basis at June 30, 2026 and December 31, 2025, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine the fair value:

			Fair Value
(In thousands)			Level 1						Level 2						Level 3
June 30, 2026:
Individually evaluated loans			$	—					$	—					$	72,373
Servicing asset, net			—						—						1,641
December 31, 2025:
Individually evaluated loans			$	—					$	—					$	78,933
Servicing asset, net			—						—						1,035

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, 2026 and December 31, 2025:

			Fair Value						Valuation Methodology						Unobservable Input						Range
			(Dollars in thousands)
June 30, 2026:
Individually evaluated loans			$	41,159					Appraisals						Discount to appraised value						0.00% - 8.00%
			25,380						Appraisals, cash surrender value life insurance, securities, cash held as collateral						Discounts to appraised value and securities value						—% - 10.00%
			5,834						Discounted cash flows						Discount rate						3.38% - 10.25%
			$	72,373
Servicing asset, net			$	1,641					Discounted cash flows						Discount rate						10.00%
															Prepayment rate						3.00% - 18.00%
December 31, 2025:
Individually evaluated loans			$	37,036					Appraisals						Discount to appraised value						5.00% - 8.00%
			38,820						Appraisals, cash surrender value life insurance, securities, cash held as collateral						Discounts to appraised value and securities value						—% - 8.00%
			3,077						Discounted cash flows						Discount rate						3.38% - 10.25%
			$	78,933
Servicing asset, net			$	1,035					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

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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.

On October 14, 2021, the Company completed a private placement of a $35.0 million fixed-to-floating rate subordinated note (the “2021 Note”) to an institutional accredited investor. The Company used the net proceeds to repay the outstanding balance of subordinated debt issued in 2015 and for general corporate purposes.

The 2021 Note bears interest at a fixed rate of 3.25% per year until October 14, 2026. Thereafter, the interest rate will reset quarterly at a variable rate equal to the then current three-month term SOFR plus 233 basis points. The 2021 Note has a stated maturity of October 15, 2031 and is non-callable for five years. Beginning October 15, 2026, the Company may redeem the 2021 Note, in whole or in part, at its option. The 2021 Note is not redeemable at the option of the holder. The 2021 Note has been structured to qualify for the Company as Tier 2 capital under regulatory guidelines.

On August 19, 2022, the Company entered into a Subordinated Note Purchase Agreement with certain qualified institutional buyers, pursuant to which the Company issued and sold 6.0% fixed-to-floating rate subordinated notes due 2032 (the “2022 Notes”) in the aggregate principal amount of $35.0 million. The Company used the net proceeds from the sale of the 2022 Notes for general corporate purposes.

The 2022 Notes bear interest at a fixed rate of 6.0% per year until August 31, 2027. Thereafter, the interest rate will reset quarterly at a variable rate equal to the then current three-month term SOFR plus 326 basis points. The 2022 Notes have a stated maturity of September 1, 2032 and are non-callable for five years. Beginning August 19, 2027, the Company may redeem the 2022 Notes, in whole or in part, at its option. The 2022 Notes are not subject to redemption at the option of the holder. The 2022 Notes have been structured to qualify for the Company as Tier 2 capital under regulatory guidelines.

The Company incurred certain costs associated with the issuance of its subordinated debt. The Company capitalized these costs and they have been presented within subordinated debentures on the consolidated balance sheets. At June 30, 2026 and December 31, 2025, unamortized debt issuance costs were $0.2 million and $0.3 million, respectively. Debt issuance costs amortize over the expected life of the related debt. For the three months ended June 30, 2026 and 2025 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, 2026 and 2025 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, 2026 and 2025, 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, 2026 and 2025, respectively.

On July 22, 2026, the Company’s Board of Directors declared a $0.20 per share cash dividend, payable on August 21, 2026, to shareholders of record on August 10, 2026.    

Subsequent to June 30, 2026, the Company provided notice on July 7, 2026 to terminate a vendor service agreement in connection with its core system conversion and technology modernization efforts.

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