BWFG 10-K & 10-Q changes, risk factors and insider trading

Our businesses and operations,business, which primarily consist of lendingextending moneycredit to clients in the form ofthrough loans, borrowing money from clients in the form of deposits and investing in securities, areis sensitive to general business and economic conditions in the United States andand, to a lesser degreeextent, to secondary effects of global geopolitical events. IfA weakening of the U.S. economy weakens,could constrain our growth and profitability fromacross our lending, deposit and investment operationsactivities. couldBusinesses, beconsumers, constrained.and Uncertaintyinvestors aboutin the United States face ongoing uncertainty related to federal fiscal policymaking process,policymaking, the medium-termmedium- and long-term fiscal outlook of the federal government, the impact of tariffs, and future tax rates is a concern for businesses, consumers and investors in the United States.rates. In addition, adverse economic conditions in foreign countries could affect the stability ofdisrupt global financial markets,markets whichand couldnegatively hinderaffect U.S. economic growth. Weak economic conditions aremay be characterized by deflation,deflationary fluctuationspressures; volatility in in debt and equity capitalmarkets; markets, a lack ofreduced liquidity and/or; depressed prices in the secondary market for mortgage loans,loans; increased delinquencies on mortgage, consumer and commercial loans,loans; declines in residential and commercial real estate price declinesvalues; and lower levels of home sales and commercial activity. AllThese offactors, theseindividually factorsor arein detrimentalcombination, tocould adversely affect our business, and thetheir interplayinteraction between these factors canmay be complex and unpredictable.difficult to predict. Our business is also significantly affected by monetary and related policies of the U.S. federal government and its agencies. Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond our control. Adverse economic conditionsconditions, andtogether with government policy responses to suchthose conditionsconditions, could have a material adverse effect on our business, financial condition, results of operations and prospects.

TheLending businessactivities of lending isare inherently risky,subject to credit risk, including risksthe risk that theborrowers may be unable or unwilling to repay principal of or interest onwhen any loan will not be repaid timely or at alldue, or that the value of any collateral supportingsecuring thea loan willmay be insufficient to cover our outstanding exposure. These risks may be affectedinfluenced by theconditions strengthaffecting ofborrowers’ the borrower’s business sectorindustries and by local, regionalregional, and national market and economic conditions.trends. OurWhile we employ various risk management practices, such as monitoring the concentration of our loans within specific industries and ourincluding credit approval practices,standards and ongoing monitoring of industry and portfolio concentrations, these measures may not adequatelybe reduceeffective in mitigating credit risk,risk under all circumstances. Our credit policies, procedures and our credit administrators, policies and proceduresadministration may not adequatelyfully adapt to changes in economic conditions or any other conditionsfactors affecting clientsborrower creditworthiness and theoverall qualityportfolio of the loan portfolio.quality. Finally, many of our loans are made to middle-market businessesbusinesses, thatwhich may be lessmore ablevulnerable to withstand competitive, economic and financial pressures than larger borrowers. A failure to effectively identify, measure and limit themanage credit risk associated withwithin our loan portfolio could have a material adverse effect on our business, financial condition, results of operations and future prospects.

Our loan portfolio includes non-owner-occupied commercial real estate loans forto individuals and businesses for various purposes, which are secured by commercial properties. TheseRepayment of these loans typically involvedepends repaymenton dependent uponthe income generated, or expected to be generated, by the underlying property securing the loan in amounts sufficient to cover operating expenses and debt service. CommercialAs reala estateresult, these loans may be more adversely affected to a greater extent than residential loans by adverse conditionsdownturns in real estate markets or thebroader economyeconomic becauseconditions commercialthan residential real estate loans, as these borrowers’ ability to repay their loans depends on successful leasing of their properties, in addition to the factors affecting residential real estate borrowers. These loans also involve greater risk because they generally are not fully amortizing over the loan period,term butand havetypically require a balloon payment due at maturity. A borrower’s ability to make a balloon payment typically willis dependdependent on beingthe ableability to either refinance the loan or sell the underlying property in a timely manner.manner, which may be constrained by adverse market or credit conditions.

These loans expose a lender to greaterincreased credit risk than loans secured by residential real estate because the collateral securing thesethem loansis typicallygenerally cannotless beliquid liquidated as easily asthan residential real estate. Non-owner-occupied commercial real estate loans generally involve relatively largelarger balances to singleindividual borrowers or related groups of borrowers.borrowers, Accordingly, charge-offs on non-owner occupied commercial real estate loanswhich may beresult largerin higher charge-offs on a per loan basis thancompared those incurred with ourto residential or consumer loan portfolios.

CommercialThe repayment of our commercial loans areis typicallyprimarily baseddependent on the cash flows generated by borrowers’ abilitybusiness tooperations. repayAccordingly, repayment is substantially influenced by the loansfinancial fromperformance theand cashongoing flowviability of theirthose businesses. These loans may involve greater risk because the availability of funds to repay each loan depends substantially on the success of the business itself. In addition, theThe assets securing the loans have the following characteristics: (a)  they depreciate over time, (b)  they are difficult to appraise and liquidate, and (c)  they fluctuate in value based on the success of the business.

RiskThe risk of loss onassociated awith construction loanloans depends largelyin uponlarge whetherpart on the accuracy of our initial estimateestimates of thea property’sproject’s value atupon completion, the successful and timely completion of construction equals or exceeds the cost of the property construction (including interest),construction, the availability of permanent takeout financing, the completion ofand the project and/or the builder’sborrower’s ability to ultimately lease or sell the property. DuringConstruction projects are subject to delays, cost overruns, and other risks beyond the constructionborrower’s phase,or aour number of factors can result in delays and cost overruns.control. If estimates of value are inaccurate or if actual construction costs exceed estimates,estimates or projected values are not realized, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loanrefinancing or by sale of collateral.the property.

OurAlthough underwriting,we employ underwriting standards, credit review processes, and monitoringongoing monitoring, these practices cannot eliminate all of the risks relatedassociated towith thesecommercial loans.real estate, commercial, and construction lending. Unexpected deterioration in the credit quality of our commercial real estate loan, commercial loan or constructionthese loan portfolios wouldcould require usincreased to increase our provisionprovisions for credit losses, which would reduce our profitabilityprofitability, and could have a material adverse effect on our business, financial condition, results of operations and future prospects.

As a result of our growth in recent  years, a large portion of loans in our loan portfolio and of our lending relationships are of relatively recent origin. InLoans general, loansgenerally do not begin to showexhibit signs of credit deterioration or default until they have been outstanding for somea period of time, a process commonly referred to as “seasoning.” AsAccordingly, a result,more aseasoned loan portfolio of older loans will usually behave more predictably than a newer portfolio. Because a large portion of our portfolio is relatively new, the current level of delinquenciesdelinquency and defaultsdefault levels may not representbe theindicative levelof thatfuture maycredit prevailperformance as the portfolio becomes more seasonedseasoned. andAs a result, these metrics may not serve asprovide a reliable basis for predicting thefuture healthtrends andin natureasset of our loan portfolio,quality, including net charge-offs and nonperforming assets. In addition, our limited operating history with our portfolio reduces the ratioavailability of nonperforming assets in the future. Our limited experience with these loans does not provide us with a significanthistorical payment historypatterns pattern withon which to judgeassess future collectability. As a result, it may be difficult to predict the future performance of our loan portfolio. If defaultscredit increase,performance deteriorates as the portfolio seasons, we could experience an increase inhigher delinquencies and charge-offs and we may be required to increase our ACL-Loans, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

WeOur arelending limitedcapacity inis the amount we can loan to a single borrowerconstrained by the amount of our capital. Based upon our current capital levels and ourapplicable internallending limitlimits, onwhich loans,restrict the amount we may lend both in the aggregate and to any onesingle borrowerborrower. isAs a result, the maximum loan amounts we can offer may be significantly lesslower than thatthose ofavailable from many of our competitorscompetitors. andThese limitations may discourage potential borrowers who havewith credit needs inthat excess ofexceed our lending limitlimits from doing business with us. We seek to accommodate larger loanscredit needs by selling participations in those loans to other financial institutions,institutions; buthowever, this strategy may not always be available.available or feasible in all circumstances. If we are unable to compete effectively for loans fromamong our target clients,clients due to these constraints, we may not be ableunable to effectivelysuccessfully implementexecute our business strategy, which could have a material adverse effect on our business, financial condition, results of operations and future prospects.

A highsignificant percentageportion of our loan portfolio is comprisedconsists of commercial real estate loans. TheWhile salethe ofunderlying real estate collateral inmay each case providesprovide an alternatealternative source of repayment in the event of defaultborrower bydefault, the borrowervalue andof such collateral may deteriorate in valuedecline during the timeterm of the credit is extended.loan. A declinedeterioration in real estate values could impair the value of our collateral and our ability to sellrecover theoutstanding collateralbalances uponthrough anyforeclosure foreclosure,or which would likely require us to increase our ACL-Loans.sale. In the event of adefault, defaultproceeds with respect to any of these loans,from the amounts we receive upon sale of the collateral may be insufficient to fully recover the outstanding principal and accrued interest on thethese loan.loans. IfIn weaddition, areif required to re-value the collateral securing a loan to satisfy the debt during a period of reduceddeclining real estate values orrequire us to re-evaluate collateral values or increase our ACL-Loans, our profitability could be adversely affected,affected. whichAny such impact could have a material adverse effect on our business, financial condition, results of operations and prospects.

Our profitability, like that of most financial institutions, depends to a large extentprimarily on our net interest income, which is the difference between our interest income on interest-earning assets, such as loans and investment securities, and our interest expense on interest bearing liabilities, such as deposits and borrowings.

Changes in monetary policy, particularly changesFluctuations in interest rates,rates directly influence the interestrates we earn on loans and securities, the interestrates we pay on deposits and borrowings, and our ability to originate loans and attract deposits. Furthermore, such changes affect the fair value and duration of our financial assets and liabilities, as well as the average duration of our assets.liabilities. If interest rates paid on deposits and other borrowingsfunding increasesources rise faster than the interest rates we receiveearn on loans and other investments, our net interest income,income and consequentlyoverall earnings could decline. Periods of heightened rate volatility or instability may also increase funding costs, pressure our net income,interest could be adversely affected. Periods of market volatility and instability may increase our funding costsmargin, and negatively affectimpact ourasset‑liability market risk mitigationmanagement strategies. Any substantial, unexpected, or prolonged changeshift in market interest rates could have a material adverse effect on our business, financial condition, results of operations, and future prospects.

As part of ourOur strategic plan,plan we pursueincludes initiatives focuseddesigned onto support the organic development and growth of our franchise. OurThese initiatives focus on delivering superior service to our clients, coupling technology with our deep client relationships. OurExecution abilityof tothis execute these initiativesstrategy requires investment in resourcesresources, as well as hiringsystems and retaininghuman skilled employees.capital. Our success will dependdepends on themanagement’s ability of our management team to effectively manage and execute multiple, concurrent initiatives designedintended to improve ourenhance operational systemscapabilities and expand our product offerings. OurAny inability to successfully execute on these initiatives maycould negatively impact our ability to attract new client relationships,acquisition maintainand existing client relationshipsretention and may adversely impact our operating results.

We rely on communication and information systems to conduct business,systems, many of which are provided by third-party providers.providers, Potentialto failures,conduct our business. Failures, interruptions or security breaches ininvolving systemthese securitysystems could resultdisrupt incritical disruptionsoperations, or failures inincluding our key systems, such as general ledger, deposit orand loan systemssystems, asand welldigital asbanking online banking,platforms, including our online account opening channel, Bankwell Direct. The risk of electronic fraudulent activity within the financial services industry, especiallyparticularly in the commercial banking sectorsector, duecontinues to increase as cyber criminals targetingtarget bank accountssystems and other client informationinformation. isWhile on the rise. Wewe have developedimplemented policies and procedures aimeddesigned atto preventingprevent and limitingmitigate the effecteffects of failure,system interruptionfailures, orinterruptions, and security breaches, including cyber-attacks of information systems; however,cyber-attacks, there can be no assurance that thesesuch incidencesevents will not occur,occur or that, if they do occur, that they will be appropriatelyeffectively addressed. Furthermore,In addition, we may not be able to ensure that all our third-party service providers havemaintain appropriateadequate controls in place to protect themselvestheir systems and our information in the event of a cyber-attack. TheAny occurrencefailure, of any failures, interruptions,interruption, or security breaches,breach including cyber-attacks ofinvolving our information systems andor those of our third-party providers could damageharm our reputation, result in the loss of business, subject us to increasedincrease regulatory scrutinyscrutiny, or expose us to civil litigation and possibleor financial liability, any of which could have an adverse effect on our results of operation and financial condition.

We necessarily collect, useuse, and holdmaintain personal and financial information concerningrelating to individuals and businesses with whichwhom we have a banking relationship.relationships. Threats to data security, includingsuch as unauthorized accessaccess, cyber-attacks, and cyber-attacks,other evolving risks, are rapidly emergechanging and change,may exposingexpose us to additionalincreased costs for protectionprevention, or remediationdetection, and remediation, as well as competing timedemands constraintson our resources to secure ourprotect data in accordance with client expectations and applicable statutory and regulatory privacy and other requirements. It is difficultdifficult, and in some cases impossible, to anticipate or impossible to defend against every risk beingarising posedfrom by changingadvancing technologies, including the deploymentuse of artificial intelligence ("AI"), asand wellfrom asincreasingly criminals intent on committing cyber-crime. The increasing sophistication ofsophisticated cyber-criminals and terroristsother malicious actors. The complexity and frequency of cyber threats make keepingit challenging to keep pace with new threatsattack difficultmethods and couldmay result in a security breach. ControlsThe employedcontrols implemented by our information technology departmentsystems, and our other employeesemployees, and third-party service providers couldmay provebe inadequate.insufficient or fail. We couldmay also experience asecurity breachincidents dueresulting tofrom intentional or negligent conductacts on the part ofby employees or other internal sources,parties, software bugsdefects or technical failures, or other technical malfunctions, or otherunforeseen causes. As a result of any of these threats, ourresult, client accounts maycould become vulnerable to account takeover schemesschemes, cyber-fraud, or cyber-fraud.other Ourunauthorized activity. In addition, our systems and those of our third-party providers may alsobe become vulnerablesubject to damage or disruption duefrom to circumstancesevents beyond our or their control, suchincluding asnatural fromdisasters, power interruptions, network failures, catastrophic events, poweror anomaliesthe introduction of viruses or outages, natural disasters, network failures, and viruses and malware.

A breach of our security, or that of any of our third-party providers, which resultsresulting in unauthorized access to our data could expose us to a disruption or challenges relating todisrupt our daily operations asand well aslead to data loss, litigation, damages,regulatory enforcement actions, fines and penalties, significant increases inincreased compliance costs, and reputational damage,harm. anyAny of whichthese consequences could have a material adverse effect on our business, results of operations, financial condition and future prospects.

When we originateoriginating loans, we rely heavilyextensively uponon information suppliedprovided by third parties, including the information contained in the loan application,applications, property appraisal,appraisals, title information and employmentreports and income documentation. Additionally,In theaddition, our current and potential future utilizationuse of AI by the Company into support of loan origination couldprocesses createmay introduce additional risk forof inaccurate, incomplete, or misrepresented information. If any of thissuch information is intentionally or negligently misrepresented and suchthe misrepresentationmisstatement is not detectedidentified prior to loan funding, the value of the loan may be significantlymaterially lowerless than expected.anticipated. WhetherRegardless of whether a misrepresentation is made by thea loan applicant, ourclient, clients,vendor, vendors,third-party service provider, bad actors,actor, and/or one of our employees,employee, we generally bear the associated risk of lossloss. associated with the misrepresentation. A loanLoans subject to a material misrepresentationmisrepresentations isare typically unsaleableunsalable or may be subject to repurchase obligations if it is sold prior to detectionthe discovery of the misrepresentation,misrepresentation. andIn addition, the personsindividuals andor entities involvedresponsible for such misrepresentations are often difficult to locatelocate, and itrecovery isof often difficult to collect any monetaryresulting losses thatmay be limited or unsuccessful. While we have suffered from them. We cannot provide assurance that we have detected or will detect all misrepresented information in our loan originations, however, we havemaintain controls and processes designed to help us identify misrepresented information in our loan origination operations,activities, including human oversight of AIAI-supported activity.processes, we cannot provide assurance that all misrepresentations will be detected.

As a financial institution, we are also inherently exposed to riskrisks inassociated thewith formtheft, of theftfraud and other fraudulentdishonest or illegal activities by clients, vendors, bad actors, and/or employees targeting the Bank or our clients. These activities canmay manifest intake many forms, including check fraud, electronic fraud,and wire fraud, phishing, social engineering, and other dishonest acts.schemes. The increasing sophistication and frequency of fraudulent activity could damage our reputation, result in thefinancial losses, reputational harm, loss of business, subject us to increasedheightened regulatory scrutinyscrutiny, civil litigation, or toother civil litigation and possible financial liability.liabilities. Any of these outcomes could have an adverse effect on our results of operation and financial condition. To mitigate these risks, we maintain effective policies and internal controls, leverageutilize technology,technology-based monitoring tools, and provide ongoing employee training focuseddesigned onto identifyingidentify, prevent, and respond to fraudulent activity; however, these measures may not be effective in preventing suchall incidents.losses.

Bank failures may haveadversely a profound impact onaffect the national, regional, and local business environment in which the Bank operates. Although we were not directly affectedimpacted by the bank failures whichthat occurred in 2023, the speed and ability of depositors to withdraw their funds from these and other financial institutions contributed to the broader volatility inacross the banking sectorsector. observed during the year. In response to these failures and the resulting market reaction, various agencies of theWhile U.S. government agencies took stepsactions to protectsupport depositorsdepositor confidence and bolster banks’bank liquidity, but it is uncertain thatwhether these or any other potential future actionsmeasures will be sufficient to reduce the risk ofprevent future bank failures or significant depositordeposit withdrawals.outflows. Any future bank failurefailures eventsor related market disruptions may adversely impact the Bank’s future operating results and financial condition, including capital and liquidity.

Banking is highly regulated under federal and state law. We are subject to extensive regulation and supervision that governs almost all aspects of our operations. As a registered bank holding company, we are subject to supervision, regulation and examination by the Federal Reserve.FRB. As a commercial bank chartered under the laws of Connecticut, the Bank is subject to supervision, regulation and examination by the StateCT of Connecticut Department of BankingDOB and the FDIC. The Bank is also subject to regulation by the NY DFS in connection with its New York operations.

The Federal Reserve,FRB, the FDIC and the ConnecticutCT Department of BankingDOB periodically examine our business, including our compliance with laws and regulations. If, as a result of an examination, a regulatory agency were to determine that our financial condition, capital resources, asset quality, earnings prospects, management, liquidity or other aspects of any of our operations had become unsatisfactory, or that we were in violation of any law or regulation, it may take a number of different remedial actions as it deems appropriate. These actions include the power to enjoin “unsafe or unsound” practices, to require affirmative action to correct any conditions resulting from any violation or practice, to issue an administrative order that can be judicially enforced, to direct an increase in our capital, to restrict our growth, to assess civil monetary penalties against our officers or directors, to remove officers and directors and, if it is concluded that such conditions cannot be corrected or there is an imminent risk of loss to depositors, to terminate our deposit insurance and place us into receivership or conservatorship. Any regulatory action against us could have a material adverse effect on our business, results of operations, financial condition and future prospects.

IncreasingThe scrutinyevolving and evolvingoften expectationsconflicting from clients, regulators, investors,political and otherregulatory stakeholderslandscape with respectrelated to our environmental, socialsocial, and governance (“ESG”) practices creates uncertainty and compliance challenges that may imposeincrease additionalour costs on us orand expose us to new or additional risks.

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 relationships. The Bank operates ninefull-service branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The Bank also operates in a limited service Domestic Representative Office in New Canaan, Connecticut and in Garden City, New York. During 2025, the Bank received regulatory approval from the FDIC, the CT DOB, and the NY DFS to establish a new full-service branch in Brooklyn, New York, which opened during the first quarter of 2026.

(gf)Return on average assets is calculated by dividing net income by average assets. Return on average common shareholders' equity is calculated by dividing net income by average shareholders' equity. Average shareholders' equity to average assets is calculated by dividing average shareholders' equity by average assets. Net interest margin is calculated by dividing net interest income (interest income minus interest expense) by average earning assets. Net loan charge-offs as a percentage of average loans is calculated by dividing net loan (charge offs) recoveries by average total loans.

We identify “efficiency ratio”, “net interest margin”, “tangible common equity ratio”, “tangible book value per share”, “total revenue”, “return on average assets”, and “return on average common shareholders’ equity” as “non-GAAP financial measures.” In accordance with the SEC’s rules, we classify a financial measure as being a non-GAAP financial measure if that financial measure excludes or includes amounts, or is subject to adjustments that have the effect of excluding or including amounts, that are included or excluded, as the case may be, in the most directly comparable measure calculated and presented in accordance with generally accepted accounting principles as in effect from time to time in the United States in our statements of income, balance sheet or statements of cash flows. Non-GAAP financial measures do not include operating and other statistical measures or ratios or statistical measures calculated using exclusively either financial measures calculated in accordance with GAAP, operating measures or other measures that are not non-GAAP financial measures or both.

(cb)This measure is not a measure recognized under GAAP and is therefore considered to be a non-GAAP financial measure. See “Non-GAAP Financial Measures” for a description of this measure and a reconciliation of this measure to its most directly comparable GAAP measure.

We believe that accounting estimates related to the measurement of the ACL-Loans, the valuation of derivative instruments, investment securitiessecurities, and deferred income taxes, and the evaluation of investment securitiestaxes are particularly critical and susceptible to significant near-term change.

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. TheThis 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 utilizesuses third-party software providedthat byincorporates a third party, which includes variousmultiple models forto forecastingestimate expected credit losses,losses toin calculatecalculating itsthe 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.

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. Additionally, when loans do not share risk characteristics with other financial assets they are also evaluated individually. Management applies its normal loan review procedures in making these judgments. The Company also individually evaluates all insurance premium loans as well as a cash-secured loanloans to an individual.individuals. While these loans are considered consumer loans, the third-party Consumer ACL model is designed for unsecured lending, whereas these loans are secured. To account for the fully secured structure of thisthese typeloan of loan,types, management determined each loan will be individually evaluated, regardless of the credit quality indicators. These loans are evaluated based upon their collateral, which primarily consists of cash, cash surrender value life insurance, and in some cases real estate. 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.

Pursuant to ASUASC No. 2016-13, each quarter326, the Company individually evaluates the available for sale debt securities and held to maturity securities for impairment credit losses.losses quarterly. 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 December 31, 2024.2025. For the corporate bond portfolio, the Company developed a metric which 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 was no expected credit loss, and therefore, no ACL-Securities were recognized on the corporate bond portfolio as of December 31, 2024.2025. Of our held to maturity securities portfolio, onefour security’ssecurities' fair valuevalues waswere less than itstheir respective amortized costcosts as of December 31, 2024.2025. Since thisthese is aare highly rated state agency and municipal obligation,obligations, the Company's expectation of nonpayment of the amortized cost basis is zero. No allowance for ALC-SecuritiesACL-Securities was recorded for thisthese securitysecurities as of December 31, 2024.2025.

Our net income for the year ended December 31, 20242025 was $9.8$35.2 million, aan decreaseincrease of $26.9$25.4 million, or 73.4%,260.3%, compared to the year ended December 31, 2023.2024. Diluted earnings per share was $4.45 for the year ended December 31, 2025, compared to diluted earnings per share of $1.23 for the year ended December 31, 2024, compared to diluted earnings per share of $4.67 for the year ended December 31, 2023.2024. Our returns on average shareholders' equity and average assets for the year ended December 31, 2024,2025, were 3.60%12.32% and 0.31%,1.09%, respectively, compared to 14.55%3.60% and 1.13%,0.31%, respectively for the year ended December 31, 2023.2024. Net income for the year ended December 31, 2025 was $35.2 million, versus $9.8 million for the year ended December 31, 2024. The increase in net income for the year ended December 31, 2025 was primarily due to the aforementioned increase in revenues, a decrease in provision for credit losses, partially offset by an increase in income tax expense.

Revenues (net interest income plus noninterest income) for the year ended December 31, 20242025 were $87.0$108.3 million, versus $99.3$87.0 million for the year ended December 31, 2023.2024. The decreaseincrease in revenues for the year ended December 31, 20242025 was attributable to anincreased increaseearning asset yields, a decrease in interest expense on depositsdeposits, and lowerhigher gains from loan sales, partially offset by an increase in interest and fees on loans due to higher loan yields and prepayment fees.sales.

Net interest income for the year ended December 31, 20242025 was $83.3$98.9 million, aan decreaseincrease of $11.2$15.7 million compared to the year ended December 31, 2023.2024. Our net interest margin decreasedincreased 2846 basis points to 2.70%3.16% for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The decreaseincrease in the net interest margin was due to an increase in funding costs partially offset by an increase in yields on earningloans assets.and a decrease in funding costs.

FTE net interest income for the years ended December 31, 20242025 and 20232024 was $83.7$99.5 million and $94.7$83.7 million, respectively. FTE net interest income decreased primarilyincreased due to ana increasedecrease in interest expense partially offset byand an increase in interest income attributable to higher loan yields.

FTE basis interest income for the year ended December 31, 20242025 increased $3.7$6.5 million, or 2.0%,3.37%, to $192.4$198.9 million compared to FTE basis interest income for the year ended December 31, 20232024, due primarily to an increase in commercial real estate loans. Average interest earning assets were $3.1 billion for the year ended December 31, 2024,2025, decreasingincreasing by $72.4$40.4 million, or 2.3%,1.30%, from the year ended December 31, 2023. The average balance of total loans decreased $79.2 million, or 2.9%. The total average balance of securities for the year ended December 31, 2024 increased by $13.0 million, or 10.0, from the year ended December 31, 2023. The total yield in earnings assets increased to 6.09% at December 31, 2024, compared to 5.86% at December 31, 2023. The increase in earning asset yield was primarily driven by higher yields on loans, as well as higher yields on our cash and securities balances as a result of the overall higher interest rate environment in 2024.

The provision for credit losses for the year ended December 31, 20242025 was $22.6$1.0 million compared to a $0.9$22.6 million provision for credit losses for the year ended December 31, 2023.2024. The increasedecrease in the provision for credit losses during the year was primarily due to net charge offs.offs taken during the year ended December 31, 2024.

Noninterest income decreasedincreased by $1.1$5.7 million to $3.7$9.4 million for the year ended December 31, 2024,2025, compared to the year ended December 31, 2023.2024. The decreaseincrease for the year ended December 31, 20242025 was mainly driven by a decrease inhigher gains onfrom SBA loan sales partially offset by an increase in service charges and fees.sales.

Noninterest expense increased by $0.7$7.7 million, or 1.3%,15.2%, to $51.1$58.8 million for the year ended December 31, 20242025 compared to the year ended December 31, 2023.2024. The increase in noninterest expense was primarily drivenattributable byto increasesan in professional services and occupancy and equipment costs, partially offset by decreasesincrease in salaries and employee benefits andresulting FDICfrom insuranceincremental expensenew duehires toin reducedsupport brokeredof depositstrategic balances.initiatives. Additionally, professional services increased, reflecting higher recruiting costs aligned with these initiatives.

Our net deferred tax assetassets at December 31, 20242025 was $9.7$11.4 million, compared to $9.4$9.7 million at December 31, 2023.2024.

On October 8, 2015, the Bank established a wholly-owned subsidiary, Bankwell Loan Servicing Group, Inc.Inc., (which serves as a Passive Investment Company (“PIC”). The PIC wasis organized in accordance with Connecticut statutes to hold and manage certain loans that are collateralized by real estate. Income earned by the PIC is exempt from Connecticut income tax and any dividends paid by the PIC to the Bank are not taxable income for Connecticut income tax purposes. See Note 13 to our Consolidated Financial Statements for further information regarding income taxes.

Commercial real estate. Commercial real estate loans were $1.9 billion and represented 70%68.0% of our total loan portfolio at December 31, 2024,2025, aan net decreaseincrease of $48.5$31.8 million, or 2.5%,1.7%, from December 31, 2023.2024. Commercial real estate loans are secured by a variety of property types, including healthcare facilities, office buildings, retail facilities, commercial mixed use and multi-family dwellings.

Commercial business. Commercial business loans were $515.1$645.3 million and represented 19.0%22.7% of our total loan portfolio at December 31, 2024,2025, a netan increase of $14.6$130.2 million, or 2.9%,25.3%, from December 31, 2023.2024. Commercial business loans primarily provide working capital, equipment financing, financing for leasehold improvements and financing for expansion and are generally secured by assignments of corporate assets, real estate and personal guarantees of the business owners.

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, depending on the borrower's creditworthiness and the type of collateral. The borrower’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, time 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 borrower’s ability to generate continuing cash flows. InManagement the fourth quarter of 2017 management made the strategic decision to cease originatingdiscontinued residential mortgage loans.loan Inoriginations thein third2017 quarterand of 2019, the Company stoppedceased offering home equity loans orand lines of credit.credit in 2019. The Company’s policy for residential lending generally required that the amount of the loan may not exceed 80% of the original appraised value of the property. In certain situations, the amount may have exceeded 80% LTV either with private mortgage insurance being required for that portion of the residential loan in excess of 80% of the appraised value of the property or where secondary financing is provided by a housing authority program second mortgage, a community’s low/moderate income housing program, or a religious or civic organization.

Acquired Loans. Loans acquired in acquisitions are initially recorded at fair value with no carryover of the related allowance for credit losses. Acquired loans that have evidence of deterioration in credit quality since origination and for which it is probable, at acquisition, that all contractually required payments will not be collected are initially recorded at fair value without recording an ACL-Loans. The fair value of the loans is determined by using market participant assumptions to estimate the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest.

Total past due loans totaled $44.1$8.9 million and represented 1.63%0.31% of total loans as of December 31, 2024,2025, increasingdecreasing $22.8$35.2 million from December 31, 2023.2024.

Modifications. Loans are considered restructuredmodified when the borrower is experiencing financial difficulties and the Bank has granted concessions to a borrower due to the borrower’s financial condition that we otherwise would not have considered. These concessions may include modifications of the terms of the debt such as reduction of the stated interest rate other than normal market rate adjustments, extension of maturity dates, or reduction of principal balance or accrued interest. The decision to restructuremodify a loan, rather than aggressively enforcing the collection of the loan, may benefit us by increasing the ultimate probability of collection.

RestructuredModified loans are classified as accruing or nonaccruing based on management’s assessment of the collectability of the loan. Loans which are already on nonaccrual status at the time of the restructuringmodifying generally remain on nonaccrual status for approximately six months before management considers such loans for return to accruing status. Accruing restructuredmodified loans are placed into nonaccrual status if and when the borrower fails to comply with the restructuredmodified terms and management deems it unlikely that the borrower will return to a status of compliance in the near term. There were no nonaccrual loans modified during the years ended December 31, 20242025 and 2023.2024.

Potential Problem Loans. We classify certain loans as “special mention”, “substandard”, or “doubtful”, based on criteria consistent with guidelines provided by our banking regulators. Potential problem loans represent loans that are currently performing, but for which known information about possible credit problems of the related borrowers causes management to have doubts as to the ability of such borrowers to comply with the present loan repayment terms and which may result in disclosure of such loans as nonperforming at some time in the future. We cannot predict the extent to which economic conditions or other factors may impact borrowers and the potential problem loans. Accordingly, there can be no assurance that other loans will not become 90 days or more past due, be placed on nonaccrual, become restructured,modified, or require increased allowance coverage and provision for credit losses. Potential problem loans are assessed for loss exposure using the methods described in Note 5 to our Consolidated Financial Statements under the caption “Credit Quality Indicators”.

At December 31, 2024,2025, the carrying value of our investment securities portfolio totaled $146.1$192.1 million and represented 4%6% of total assets, compared to $127.6$146.1 million and 4% of total assets at December 31, 2023.2024. The increase of $18.5$46.0 million primarily reflects purchases of heldavailable tofor maturitysale securities. We purchase investment grade securities with a focus on liquidity, earnings and duration exposure.

Bankwell Financial Group, Inc. is a bank holding company headquartered in New Canaan, Connecticut. Through our wholly-owned subsidiary, Bankwell Bank, or the Bank, we serve small and medium-sized businesses and retail clients. We have a history of building long-term client relationships and attracting new clients through what we believe is outour superior service and our ability to deliver a diverse product offering.

We striveare tofocused beon being the preferred banking provider,provider offeringof achoice compellingand serving as an alternative to our larger institutions.competitors. OurWe strategyaim reststo ondo ourthis competitive strengthsthrough:

The discussion and analysis of our results of operations and financial condition are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from our current estimates, as a result of changing conditions and future events. We believe that accounting estimates related to the measurement of the ACL-Loans, the valuation of derivative instruments, investment securitiesACL-Loans and deferred income taxes, and the evaluation of investment securities forACL-Securities are particularly critical and susceptible to significant near-term change.

Revenues (net interest income plus noninterest income) for the quarterthree months ended MarchJune 31,30, 2026 were $30.2$32.8 million, versus $23.6$25.9 million for the quarterthree months ended MarchJune 31,30, 2025. Revenues for the six months ended June 30, 2026 were $63.0 million, versus $49.5 million for the six months ended June 30, 2025. The increase in revenues for the three months ended June 30, 2026 was mainly attributable to a decrease in interest expense,expense on deposits and higher interest income. The increase in revenues for the six months ended June 30, 2026 was attributable to a decrease in interest expense on deposits, higher interest income, and higher gains from loansloan sales, and an increase in earning asset yields.sales.

Net income available to common shareholders was $11.3$12.4 million, or $1.41$1.52 per diluted share, and $6.9$9.1 million, or $0.87$1.14 per diluted share, for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Net income available to common shareholders was $23.6 million, or $2.95 per diluted share, and $16.0 million, or $2.01 per diluted share, for the six months ended June 30, 2026 and 2025, respectively. The increase in net income for the quarter and six months ended June 30, 2026 was primarily due to the aforementioned increase in revenues andpartially aoffset decreaseby an increase in provision for credit losses.

Returns on average shareholders' equity and average assets for the three months ended MarchJune 31,30, 2026 were 14.88%15.49% and 1.35%,1.46%, respectively, compared to 10.16%12.98% and 0.86%,1.14%, respectively, for the three months ended MarchJune 31,30, 2025. Returns on average shareholders' equity and average assets for the six months ended June 30, 2026 were 15.19% and 1.41%, respectively, compared to 11.59% and 1.00%, respectively, for the six months ended June 30, 2025.

Net interest income is the difference between interest earned on loans and securities and interest paid on deposits and other borrowings,borrowings and is the primary source of our operating income. Net interest income is affected by the level of interest rates, changes in interest rates and changes in the amount and composition of interest earning assets and interest bearing liabilities. Included in interest income are certain loan fees, such as deferred origination fees and late charges. We convert tax-exempt income to a fully taxable equivalent ("FTE") basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. The average balances are principally daily averages. Interest income on loans includes the effect of deferred loan fees and costs accounted for as yield adjustments. Premium amortization and discount accretion are included in the respective interest income and interest expense amounts.

FTE net interest income for the three months ended MarchJune 31,30, 2026 and 2025 was $27.0$29.6 million and $22.2$24.1 million, respectively. FTE net interest income for the six months ended June 30, 2026 and 2025 was $56.6 million and $46.3 million, respectively.

FTE interest income for the three months ended MarchJune 31,30, 2026 increased by $2.0$3.6 million, or 4.2%,7.3%, to $50.6$52.3 million, compared to FTE interest income for the three months ended MarchJune 31,30, 2025. FTE interest income for the six months ended June 30, 2026 increased by $5.6 million, or 5.7%, to $103.0 million, compared to FTE interest income for the six months ended June 30, 2025. This increase was due to an increase in interest and fees on loans due to higher overallaverage loan balances.

Interest expense for the three months ended MarchJune 31,30, 2026 decreased by $2.8$2.0 million compared to interest expense for the three months ended MarchJune 31,30, 2025. Interest expense for the six months ended June 30, 2026 decreased by $4.7 million compared to interest expense for the six months ended June 30, 2025. The decrease in interest expense for the three and six months ended June 30, 2026 was driven by a decrease in interest expense on deposits, resulting from a decrease in rates on interest bearing deposits.deposits and improved deposit mix.

The following tabletables presentspresent the average balances and yields earned on interest earning assets and average balances and weighted average rates paid on our funding liabilities for the three and six months ended MarchJune 31,30, 2026 and 2025.

(2)The adjustment for securities and loans taxable equivalency amounted to $109$111 thousand and $142$143 thousand for the three months ended MarchJune 31,30, 2026 and 2025, respectively.

Provision (credit) for Credit Losses

The provision (credit) for credit losses is based on management’s periodic assessment of the adequacy of our ACL-Loans and ACL-Unfunded Commitments which, in turn, is based on interrelated factors such as the composition of our loan portfolio and its inherent risk characteristics, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of real estate values, and regulatory guidelines. The provision for credit losses is charged against earnings in order to maintain our ACL-Loans and ACL-Unfunded Commitments and reflects management’s best estimate of probable losses inherent in our loan portfolio as of the balance sheet date.

The creditprovision for credit losses for the three months ended MarchJune 31,30, 2026 was $1.0$1.2 million compared to a credit for credit losses of $0.4 million for the three months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2026 was $0.2 million compared to a provision for credit losses of $0.5$0.1 million for the threesix months ended MarchJune 31,30, 2025.

Noninterest income is a component of our revenue and is comprised primarily of fees generated from sales and referrals of loans, deposit relationships with our clients, fees generated from sales and referrals of loans, and income earned on bank-owned life insurance.

The following tabletables comparescompare noninterest income for the three and six months ended MarchJune 31,30, 2026 and 2025:

Noninterest income increased by $1.8$1.3 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Noninterest income increased by $3.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in noninterest income for the three and six months ended June 30, 2026 was mainly driven by higher gains from SBA loan sales.

The following tabletables comparescompare noninterest expense for the three and six months ended MarchJune 31,30, 2026 and 2025:

Noninterest expense increased by $2.7$0.7 million to $16.9$15.3 million for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025. Noninterest expense increased by $3.5 million to $32.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in noninterest expense was primalityprimarily attributabledriven toby an increase in salaries and employee benefits resultingmainly fromrelated to incremental new hires in support of strategic initiatives.

Income tax expense for the three months ended MarchJune 31,30, 2026 and 2025 totaled $3.1$3.9 million and $2.1$2.7 million, respectively. The effective tax rates for the three months ended MarchJune 31,30, 2026 and 2025 were 21.5%24.1% and 23.2%,23.1%, respectively. Income tax expense for the six months ended June 30, 2026 and 2025 totaled $7.0 million and $4.8 million, respectively. The effective tax rates for the six months ended June 30, 2026 and 2025 were 22.9% and 23.1%, respectively.

Assets totaled $3.4$3.5 billion at MarchJune 31,30, 2026,2026 an increase of $14.0$115.7 million or 0.4%3.4% compared to December 31, 2025. Gross loans totaled $2.9$3.0 billion at MarchJune 31,30, 2026, an increase of $26.5$119.6 million or 0.9%4.2% compared to December 31, 2025. Deposits totaled $2.9$3.0 billion at MarchJune 31,30, 2026, an increase of $55.8$171.0 million, or 2.0%6.0% compared to December 31, 2025.

Shareholders’ equity totaled $311.9$323.5 million as of MarchJune 31,30, 2026, an increase of $10.4$22.0 million compared to December 31, 2025, primarily a result of net income of $11.3$23.6 million for the threesix months ended MarchJune 31,30, 2026. The increase was partially offset by dividends paid of $1.6$3.2 million.

We originate commercial real estate loans, construction loans, commercial business loans and consumer loans in our market. We also pursue certain types of commercial lending opportunities outside our market.market, particularly where we have strong business relationships. Our loan portfolio is the largest category of our earning assets.

Total loans before deferred loan fees and the ACL-Loans were $2.9$3.0 billion at MarchJune 31,30, 2026 and $2.8 billion at December 31, 2025. Total gross loans increased $26.5$119.6 million as of MarchJune 31,30, 2026 compared to the year ended December 31, 2025.

The following table compares the composition of our commercial real estate loan portfolio by non-owner occupied and owner occupied loans at MarchJune 31,30, 2026 and December 31, 2025:

The following table compares the composition of our commercial real estate loan portfolio by property type, and collateral location as of MarchJune 31,30, 2026:

As of MarchJune 31,30, 2026, the Bank had $154.1$137.1 million of loans collateralized by offices, which represented 11.9%4.6% of the total loan portfolio. Most of the properties in this portfolio are in suburban locations. 95.7%95.3% of this portfolio was pass rated, and there was one relationship totaling $5.1$4.9 million on nonaccrual status. We also performed an additional review of our multifamily exposure. As of MarchJune 31,30, 2026, wethe Bank had $266.8$328.6 million of loans collateralized by multifamily properties, which represented 9.3%11.1% of the total loan portfolio. 89.4%93.2% of this portfolio is pass rated and current.current; Thesethese properties are all located in Connecticut, New York, or New Jersey, or Pennsylvania, with eightnine properties, totaling $49.7$69.5 million, located in New York City. 78.3%55.8% of the New York City exposure is located in Brooklyn, 11.9%28.8% in the Bronx, 8.5% in Manhattan and the remaining 9.8%7.0% in Queens.

The following table presents an analysis of the commercial real estate portfolio's loan to value at origination and by property type as of MarchJune 31,30, 2026.

We actively manage asset quality through our underwriting practices and collection operations. Our Board of Directors monitors credit risk management. The Directors Loan Committee ("DLC") has primary oversight responsibility for the credit-granting function including approval authority for credit-granting policies, review of management’s credit-granting activities and approval of large exposure credit requests, as well as loan review and problem loan management and resolution. The committee reports the results of its respective oversight functions to our Board of Directors. In addition, our Board of Directors receives information concerning asset quality measurements and trends on a monthly basis. While we continue to adhere to prudent underwriting standards, our loan portfolio is not immune to potential negative consequences as a result of general economic weakness, such as a prolonged downturn in the housing market or commercial real estate market on a national scale. Decreases in real estate values could adversely affect the value of property used as collateral for loans. In addition, adverse changes in the economy could have a negative effect on the ability of borrowers to make scheduled loan payments, which would likely have an adverse impact on earnings.

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, for conventional loans,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, time 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 consumer mortgage loans secured by residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Credit quality 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 following table presents credit risk ratings as of MarchJune 31,30, 2026 and December 31, 2025:

(1) 95.7%98.6% and 100.0% of Risk Rated 6 loans are current on paymentspayments, of which 99.6%88.0% and 99.3% are guaranteed by ultra-high net worth sponsors as of MarchJune 31,30, 2026 and December 31, 2025, respectively.

Nonaccrual loans totaled $19.0$15.9 million at MarchJune 31,30, 2026 and $16.3 million at December 31, 2025.

There was no Other Real Estate Owned ("OREO") at MarchJune 31,30, 2026 and December 31, 2025, respectively.

At MarchJune 31,30, 2026, our ACL-Loans was $29.6$30.6 million and represented 1.03% of total gross loans, compared to $30.7 million or 1.08% of total gross loans, at December 31, 2025.

The allocation of the ACL-Loans at MarchJune 31,30, 2026 reflects our assessment of credit risk and probable loss within each portfolio. We believe that the level of the ACL-Loans at MarchJune 31,30, 2026 is appropriate to cover probable losses.

At MarchJune 31,30, 2026, the carrying value of our investment securities portfolio totaled $187.6$205.6 million and represented 5.6%5.9% of total assets, compared to $192.1 million, or 5.7% of total assets, at December 31, 2025.

The net unrealized loss position on our investment portfolio at MarchJune 31,30, 2026 was $1.9$1.6 million and included gross unrealized gains of $1.3$1.8 million. The net unrealized loss position on our investment portfolio at December 31, 2025 was $0.7 million and included gross unrealized gains of $2.0 million.

Total deposits were $2.9$3.0 billion at MarchJune 31,30, 2026, an increase of $55.8$171.0 million, from the balance at December 31, 2025.

Brokered certificates of deposits totaled $460.6$453.0 million at MarchJune 31,30, 2026 and $505.0 million at December 31, 2025, respectively. Brokered money market accounts totaled $53.7 million at MarchJune 31,30, 2026 and $53.7 million at December 31, 2025, respectively. CertificateCertificates of deposits from national listing services were $32.9$26.8 million and $42.3 million as of MarchJune 31,30, 2026 and December 31, 2025, respectively. There were no one-way buy CDARS or one-way buy ICS at MarchJune 31,30, 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.

As of MarchJune 31,30, 2026, our FDIC insured deposits were $1,851.8$1,831.0 million, or 64%61% of total deposits. Additionally, deposits totaling $80.0$80.1 million, or 3% of total deposits, are insuredsecured by standby letters of credit with the Federal Home Loan Bank of Boston.

At MarchJune 31,30, 2026 and December 31, 2025, time deposits with a denomination of $100 thousand or more, including CDARS and brokered deposits, totaled $1.0 billion and $1.1 billion, respectively, maturing during the periods indicated in the table below:

We utilize advances from the Federal Home Loan Bank of Boston, or FHLB, as part of our overall funding strategy and to meet short-term liquidity needs, and to a lesser degree, manage interest rate risk arising from the difference in asset and liability maturities. Total FHLB advances were $60.0$30.0 million and $110.0 million atJune March 31,30, 2026 and December 31, 2025, respectively.

The Bank has additional borrowing capacity at the FHLB up to a certain percentage of the value of qualified collateral. In accordance with agreements with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances. At MarchJune 31,30, 2026, the Bank had pledged $889.3$919.7 million of eligible loans and investment securities as collateral to support borrowing capacity at the FHLB. As of MarchJune 31,30, 2026, the Bank had immediate availability to borrow an additional $509.1$562.9 million from the FHLB based on qualified collateral.

At MarchJune 31,30, 2026, the Bank had a secured borrowing line with the FRB, a letter of credit with the FHLB, and unsecured lines of credit with Zions Bank, Pacific Coast Bankers Bank ("PCBB"), and Atlantic Community Bankers Bank ("ACBB"). The total borrowing line, letter, or line of credit and the amount outstanding at MarchJune 31,30, 2026 is summarized below: