PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20%28unaudited%29) This section presents the unaudited consolidated financial statements for Q1 2025, encompassing balance sheets, income, and cash flow statements, along with detailed notes [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets decreased to **$3.18 billion** as of March 31, 2025, from **$3.27 billion**, primarily due to reduced loans receivable, with liabilities also declining Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$3,183,893** | **$3,268,476** | | Loans receivable, net | $2,611,495 | $2,672,959 | | Total investment securities | $135,963 | $146,099 | | Cash and cash equivalents | $304,928 | $307,524 | | **Total Liabilities** | **$2,908,679** | **$2,997,956** | | Total deposits | $2,750,445 | $2,787,570 | | Advances from the FHLB | $40,000 | $90,000 | | **Total Shareholders' Equity** | **$275,214** | **$270,520** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income for Q1 2025 significantly increased to **$6.89 million** from **$3.76 million**, driven by higher net interest income and a substantial decrease in the provision for credit losses Consolidated Income Statement Highlights (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net Interest Income | $22,066 | $21,147 | | Provision for credit losses | $463 | $3,683 | | Noninterest Income | $1,505 | $915 | | Noninterest Expense | $14,141 | $13,297 | | **Net Income** | **$6,888** | **$3,763** | | **Diluted EPS** | **$0.87** | **$0.48** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies and financial data, covering operations, credit risk, ACL methodology, and portfolio composition - The company operates as a single reportable segment, with the CEO as the Chief Operating Decision Maker (CODM), assessing all activities as a single unit[19](index=19&type=chunk)[20](index=20&type=chunk) - The company has a significant concentration of credit risk in commercial real estate loans located in Connecticut and the New York metro area[22](index=22&type=chunk) - The Allowance for Credit Losses (ACL) is calculated using a third-party software model, which is calibrated using a "peer scalar" to better reflect the Company's specific loan portfolio characteristics and regional concentration in the Northeast[25](index=25&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=47&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q1 2025 financial performance, noting increased net income, decreased total assets, and improved asset quality, while maintaining strong capital and liquidity - Revenues (net interest income plus noninterest income) for Q1 2025 were **$23.6 million**, up from **$22.1 million** in Q1 2024, driven by decreased interest expense and increased fee income[177](index=177&type=chunk) - The provision for credit losses was significantly lower at **$0.5 million** for Q1 2025 compared to **$3.7 million** for Q1 2024[189](index=189&type=chunk) - Total assets decreased by **$84.6 million (2.6%)** to **$3.2 billion** at March 31, 2025, compared to year-end 2024, while gross loans decreased by **$61.0 million (2.3%)**[194](index=194&type=chunk) - Nonperforming assets decreased to **$26.4 million (0.83% of total assets)** at March 31, 2025, from **$61.6 million (1.88% of total assets)** at December 31, 2024, primarily due to the sale of a **$27.1 million** nonperforming commercial real estate loan[210](index=210&type=chunk) [Results of Operations](index=48&type=section&id=Results%20of%20Operations) Net income for Q1 2025 increased to **$6.9 million**, primarily due to higher net interest income and a significant reduction in the provision for credit losses, despite increased noninterest expenses Net Interest Income Analysis (Q1 2025 vs Q1 2024) | Component | Change | Reason | | :--- | :--- | :--- | | **Net Interest Income** | **+$1.0M** | Increased loan yields and lower deposit interest expense | | Interest Income | +$0.3M | Higher overall loan yields | | Interest Expense | -$0.7M | Decrease in rates on interest-bearing deposits | Noninterest Income and Expense Changes (Q1 2025 vs Q1 2024, in thousands) | Category | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Noninterest Income** | **$1,505** | **$915** | **$590** | **64.5%** | | Service charges and fees | $602 | $304 | $298 | 98.0% | | **Noninterest Expense** | **$14,141** | **$13,297** | **$844** | **6.3%** | | Salaries and employee benefits | $7,052 | $6,291 | $761 | 12.1% | | Professional services | $1,529 | $1,065 | $464 | 43.6% | [Financial Condition](index=51&type=section&id=Financial%20Condition) Total assets decreased to **$3.2 billion** as of March 31, 2025, with a **2.3%** reduction in the loan portfolio, while asset quality improved and nonaccrual loans dropped significantly Loan Portfolio Composition (in thousands) | Loan Type | March 31, 2025 | Dec 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Commercial Real Estate | $1,810,923 | $1,899,134 | ($88,211) | | Construction | $188,339 | $173,555 | $14,784 | | Commercial Business | $529,000 | $515,125 | $13,875 | | **Total Loans** | **$2,644,903** | **$2,705,888** | **($60,985)** | Asset Quality Metrics | Metric | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Nonperforming assets to total assets | 0.83% | 1.88% | | Nonaccrual loans to total gross loans | 1.00% | 1.97% | | ACL-Loans as a % of total loans | 1.11% | 1.07% | - The commercial real estate portfolio includes **$160.4 million** in office loans (**8.9% of total loans**) and **$253.6 million** in multifamily loans (**9.6% of total loans**), with **96.6%** of the office portfolio pass-rated[201](index=201&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity, primarily from deposits and FHLB access, and both the Bank and Company exceed all regulatory capital requirements to be considered 'well-capitalized' - As of March 31, 2025, the Bank had immediate availability to borrow an additional **$373.1 million** from the FHLB[224](index=224&type=chunk) Bank Capital Ratios (as of March 31, 2025) | Ratio | Actual | Well-Capitalized Minimum | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Ratio | 12.10% | 6.50% | | Tier 1 Capital Ratio | 12.10% | 8.00% | | Total Capital Ratio | 13.21% | 10.00% | | Tier 1 Leverage Ratio | 10.14% | 5.00% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=61&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Interest rate risk is the company's primary market risk, with inflation affecting operating costs but interest rates having a more significant impact on performance - The company's primary market risk is interest rate risk, which is managed through asset/liability strategies[240](index=240&type=chunk) - Inflation affects the company's operating costs and the value of its monetary assets and liabilities, but interest rates are considered to have a more significant impact on performance[242](index=242&type=chunk) [Item 4. Controls and Procedures](index=61&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures are effective as of the end of the reporting period[243](index=243&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to affect, these controls[244](index=244&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=62&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management anticipates no material loss from pending lawsuits - In the opinion of management, no material loss is expected from any pending lawsuits[245](index=245&type=chunk) [Item 1A. Risk Factors](index=62&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 were reported - No material changes in risk factors were reported for the period[246](index=246&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=62&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **29,924** shares of common stock during Q1 2025 under a new plan authorized in October 2024 for up to **250,000** shares Issuer Purchases of Equity Securities (Q1 2025) | Period | Shares Purchased | Average Price Paid | | :--- | :--- | :--- | | Jan 2025 | 0 | $ - | | Feb 2025 | 10,628 | $31.15 | | Mar 2025 | 19,296 | $30.08 | | **Total** | **29,924** | **$30.46** | - A new share repurchase plan for up to **250,000 shares** was authorized on October 23, 2024, terminating the prior plan, with **220,076 shares** remaining available for repurchase under the new plan as of March 31, 2025[249](index=249&type=chunk)[248](index=248&type=chunk) - Subsequent to March 31, 2025, the Company purchased an additional **14,626 shares** at a weighted average price of **$28.86 per share**[251](index=251&type=chunk) [Item 3. Defaults Upon Senior Securities](index=62&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) None reported - None[252](index=252&type=chunk) [Item 4. Mine Safety Disclosures](index=63&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - None[253](index=253&type=chunk) [Item 5. Other Information](index=63&type=section&id=Item%205.%20Other%20Information) None reported - None[254](index=254&type=chunk) [Item 6. Exhibits](index=63&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including CEO and CFO certifications and financial statements formatted in Inline XBRL - Exhibits filed include CEO and CFO certifications (**31.1, 31.2, 32**) and financial data in Inline XBRL format (**101, 104**)[255](index=255&type=chunk)

Financial Performance - Fully diluted EPS reached $0.87, an increase of 81% compared to the previous year's quarter, driven by improved net interest margin and lower provision expense[9] - PPNR increased by 11% compared to the last quarter, reaching $9.4 million, or $1.22 per share[9] - Net Interest Income was $22.1 million, benefiting from a 12 bps decrease in deposit costs compared to the last quarter[9] - Non-interest income increased by 56% compared to the last quarter, driven by $442 thousand of SBA gain-on-sale in Q1[9] Balance Sheet & Capital - The NPA ratio decreased by 105 basis points to 0.83% due to dispositions of $27.1 million in CRE Multifamily NPL and $8.3 million in OREO assets[8] - Brokered deposits decreased by $81 million compared to the last quarter, while core deposits increased by $43 million, including $28 million growth in non-interest bearing deposits[8] - Tangible book value increased by $0.47 compared to the last quarter and $0.99 compared to the previous year's quarter, reaching $34.56[9] - Consolidated CET1 ratio was 10.04%, and the Bank Total Capital ratio was 13.22%[9] Loan Portfolio - Loan balances decreased by $61 million compared to the last quarter, negatively impacted by elevated payoffs[9] - Non-performing loans decreased to 1% of total loans[29] - CRE concentration decreased to 362%[27]

Financial Data and Key Metrics Changes - The company reported GAAP fully diluted earnings per share of $0.87, which represents a 135% increase compared to the fourth quarter and an 81% increase year-over-year [6] - Pre-provision net revenue for the first quarter was $9.4 million, or $1.22 per share, an 11% increase from the previous quarter [12] - The net interest margin for the quarter was 281 basis points, a 21 basis point increase from the linked quarter [12] Business Line Data and Key Metrics Changes - SBA originations grew to $10 million in the first quarter, with gain on sale margins exceeding 10% [9] - Noninterest income increased by 56% to $1.5 million, driven largely by SBA gain on sale income [16] - The first quarter provision expense was $463,000, significantly lower than $4.5 million in the prior quarter [18] Market Data and Key Metrics Changes - Core deposits grew by $43 million, including $28 million in noninterest-bearing deposits, while broker deposits declined by $81 million [10] - The company expects low single-digit loan growth for the full year despite a slower first quarter [9] Company Strategy and Development Direction - The company successfully disposed of two nonperforming credits, which reduced nonperforming assets as a percentage of total assets to 83 basis points [7] - The management emphasized the importance of attracting talented professionals and has added two deposit teams in the New York Metro Area [20] - The company plans to continue expanding its net interest margin and reaffirmed its net interest income guidance for the full year 2025 of $93 million to $95 million [16] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the SBA gain on sale activity accelerating in Q2 2025 [9] - The management noted that credit trends were benign and highlighted the company's strong balance sheet and liquidity [19] - The company is cautious about potential changes in the SBA environment that could impact growth [52][54] Other Important Information - The company repurchased 29,924 shares at a weighted average price of $30.46 during the quarter, with 220,000 shares remaining on its authorization [19] - The efficiency ratio for the quarter was 59.9%, with expectations for improvement as net interest margin expands [18] Q&A Session Summary Question: Update on new teams and their focus - The focus of the new teams is primarily on deposits, with some loans mixed in, and both teams have prior books over $100 million [26] Question: Update on loan pipeline and growth outlook - The company still expects low single-digit growth, with a robust pipeline despite some unexpected payoffs in Q1 [30][31] Question: Core loan yield for the quarter - The core loan yield for the quarter was approximately 6.40%, reflecting a 10 basis point expansion over the fourth quarter [38] Question: Thoughts on interest-bearing costs and margin - Timing issues affected the interest-bearing costs, with some callable brokered CDs called in Q1 leading to a one-time drag [41][42] Question: Expectations for SBA originations and fee income - Originations were better than expected, with the strongest quarter anticipated in Q4 2025 [50] Question: Share repurchase strategy - The company aims to balance share repurchases with the need to build consolidated CET1 capital, currently at 11% [72]

Financial Data and Key Metrics Changes - The company reported GAAP fully diluted earnings per share of $0.87, which represents a 135% increase compared to the fourth quarter and an 81% increase year-over-year [5] - Pre-provision net revenue for the first quarter was $9,400,000, or $1.22 per share, reflecting an 11% increase from the previous quarter [9] - The net interest margin for the quarter was 281 basis points, a 21 basis point increase from the linked quarter [9] Business Line Data and Key Metrics Changes - SBA originations grew during the first quarter, with gain on sale margins exceeding 10% [6] - Non-interest income increased by 56% compared to the linked quarter, driven largely by $424,000 of SBA gain on sale income [11] - The efficiency ratio for the quarter was 59.9%, an increase over the prior quarter, but expected to improve as net interest margin expands [12] Market Data and Key Metrics Changes - The company experienced elevated payoff activity of $200,000,000, which offset strong origination activity of $130,000,000 funded during the first quarter [6] - Core deposits grew by $43,000,000, including $28,000,000 in non-interest bearing deposits [7] - Brokered deposits declined by $81,000,000 relative to the fourth quarter, with a total reduction of $207,000,000 over the last twelve months [7] Company Strategy and Development Direction - The company is focused on expanding its SBA business and expects continued growth in SBA gain on sale activity throughout 2025 [6][11] - The addition of new deposit teams in the New York Metro Area is aimed at enhancing customer acquisition and deposit growth [14] - The company plans to selectively add professionals to achieve strategic goals, particularly in technology and banking [15] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about low single-digit loan growth for the full year despite a slower start [6][22] - The company anticipates continued margin expansion as maturing term deposits reprice to lower current rates [9][10] - Management expressed confidence in the company's ability to navigate changes in the SBA landscape while maintaining growth [37] Other Important Information - The company disposed of two nonperforming credits, which significantly reduced nonperforming assets as a percentage of total assets to 83 basis points [5] - The balance sheet remains well-capitalized and liquid, with total assets of $3,200,000,000 [13] - The company repurchased 29,924 shares at a weighted average price of $30.46 during the quarter [13] Q&A Session Summary Question: Update on new teams and their focus - The new teams are primarily focused on deposits, with both teams having books of business over $100,000,000 [19][20] Question: Loan pipeline and growth outlook - The company still expects low single-digit growth, with a robust pipeline despite some unexpected payoffs in the first quarter [22][23] Question: Core loan yield and margin expectations - The core loan yield for the quarter was approximately $6.40, with expectations for continued margin expansion [27][29] Question: SBA gain on sale and future expectations - Originations were better than expected, with the strongest quarter anticipated in Q4 [35] Question: Professional fees and expense outlook - Some professional fees are one-time investments that may shift into employee expenses, but elevated levels are not expected to continue [41] Question: Updates on remaining nonperforming assets - No material updates on the remaining loans, but management is optimistic about their status [45] Question: Share repurchase strategy - The company aims to balance share repurchases with the need to grow consolidated CET1 capital [52]

Financial Performance - GAAP net income for Q1 2025 was $6.9 million, or $0.87 per share, compared to $3.0 million, or $0.37 per share, in Q4 2024[1] - Net income for the quarter ended March 31, 2025, was $6,888, representing a significant increase of 132.5% compared to $2,963 in the previous quarter[30] - Net income for Q1 2025 was $6,888,000, compared to $3,763,000 in Q1 2024, representing an increase of 83.5%[32] - Basic earnings per common share for Q1 2025 was $0.88, up from $0.48 in Q1 2024, reflecting an increase of 83.3%[32] Revenue and Income - Pre-tax, pre-provision net revenue (PPNR) increased by 10.7% to $9.4 million, or $1.22 per share, from $8.5 million, or $1.11 per share, in Q4 2024[2][11] - Total revenues for Q1 2025 were $23.6 million, up from $22.1 million in Q4 2024, driven by improved funding costs and gains on SBA loans[12][14] - Net interest income for the quarter ended March 31, 2025, was $22,066, an increase of 9.2% from $20,199 in the previous quarter[30] - Total noninterest income increased to $1,505 for the quarter ended March 31, 2025, compared to $964 in the previous quarter, reflecting a growth of 56.2%[30] Asset Quality - Nonperforming assets as a percentage of total assets decreased to 0.83% from 1.88% as of December 31, 2024, reflecting improved asset quality[3][16] - Nonperforming loans as a percentage of total loans improved to 1.00% as of March 31, 2025, from 1.97% as of December 31, 2024[19] - Total nonaccrual loans decreased to $26.4 million as of March 31, 2025, from $53.3 million as of December 31, 2024[19] Deposits and Loans - Core deposits increased by $43.4 million, including a $27.7 million growth in non-interest bearing deposits[8] - Total deposits decreased by $37.1 million, or 1.3%, to $2.8 billion as of March 31, 2025, compared to December 31, 2024[19] - Gross loans decreased by $61.0 million, or 2.3%, to $2.6 billion as of March 31, 2025, compared to December 31, 2024[19] Capital and Equity - Shareholders' equity increased by $4.7 million to $275.2 million as of March 31, 2025, primarily due to net income of $6.9 million[21] - The Company’s regulatory capital ratios were all above 'well capitalized' values, with total risk-based capital at 13.22% as of March 31, 2025[22] - Tangible common equity as of March 31, 2025, was $272,625,000, compared to $267,931,000 as of December 31, 2024, an increase of 1.0%[31] Operational Efficiency - The efficiency ratio for Q1 2025 was 59.9%, compared to 56.4% in Q4 2024, indicating a slight increase in operational costs relative to revenues[9] - Interest expense on deposits was $24,772 for the quarter ended March 31, 2025, a decrease of 3.4% from $25,640 in the previous quarter[30] Shareholder Returns - The company declared a cash dividend of $0.20 per share, payable on May 20, 2025[1] - The Company repurchased 29,924 shares at a weighted average price of $30.46 per share during the quarter ended March 31, 2025[22]

Financial Performance - Net income for 2024 was $9,770 thousand, significantly lower than $36,663 thousand in 2023, resulting in basic earnings per share of $1.24 compared to $4.71[218]. - Total revenue for 2024 was $87,000,000, a decrease of 12.3% from $99,310,000 in 2023[229]. - Net income for the year ended December 31, 2024 was $9.8 million, a decrease of $26.9 million, or 73.4%, compared to $36.7 million for the year ended December 31, 2023[254][256]. - Revenues for the year ended December 31, 2024 were $87.0 million, down from $99.3 million in 2023, primarily due to increased interest expense on deposits and lower gains from loan sales[255]. - Net interest income for 2024 was $83,282,000, down from $94,468,000 in 2023, reflecting a decline of 11.8%[229]. - Net interest income for the year ended December 31, 2024 was $83.3 million, a decrease of $11.2 million compared to the previous year, with a net interest margin decrease of 28 basis points to 2.70%[257]. - Net interest income for 2024 was $83.7 million, down from $94.7 million in 2023[268]. - Noninterest income decreased by $1.1 million to $3.7 million in 2024, driven by a decline in gains on SBA loan sales[271]. Asset Quality - Nonperforming loans to total loans increased to 1.97% in 2024 from 1.81% in 2023, reflecting a slight deterioration in asset quality[218]. - The net charge-offs to average loans ratio rose to 0.81% in 2024 from 0.03% in 2023, indicating an increase in loan losses[218]. - Nonperforming assets as a percentage of total assets increased to 1.88% at December 31, 2024, from 1.53% at December 31, 2023[304]. - Total past due loans amounted to $44.1 million as of December 31, 2024, an increase of $22.8 million from $21.3 million in 2023, representing 1.63% of total loans[308]. - The Allowance for Credit Losses on Loans (ACL-Loans) was $29.0 million at December 31, 2024, representing 1.07% of total loans[304]. - The company actively manages asset quality through disciplined underwriting and ongoing monitoring of borrowers' ability to service debt[301]. - The company expects fluctuations in nonperforming assets and potential problem loans in response to changing economic conditions[314]. Capital and Equity - Total assets as of December 31, 2024, were $3,268,476 thousand, up from $3,215,482 thousand in 2023, while total equity increased to $270,520 thousand from $265,752 thousand[218]. - Shareholders' equity grew to $270.5 million as of December 31, 2024, an increase of $4.8 million from the previous year[277]. - The Bank's shareholders' equity rose to $270.5 million as of December 31, 2024, an increase of $4.8 million from the previous year, driven by a net income of $9.8 million[353]. - The Bank's ratio of total common equity tier 1 capital to risk-weighted assets was 11.64% as of December 31, 2024, exceeding the regulatory minimum[354]. Efficiency and Ratios - The efficiency ratio increased to 57.9% in 2024 from 50.8% in 2023, indicating a rise in non-interest expenses relative to operating revenue[218]. - The return on average assets decreased to 0.31% in 2024 from 1.13% in 2023, and return on average common shareholders' equity fell to 3.60% from 14.55%[218]. - Return on average common shareholders' equity for 2024 was 3.60%, significantly lower than 14.55% in 2023[231]. - Efficiency ratio increased to 57.9% in 2024 from 50.8% in 2023, indicating a decline in operational efficiency[231]. Loans and Deposits - Total assets increased to $3.3 billion as of December 31, 2024, compared to $3.2 billion in 2023[276]. - Gross loans remained stable at $2.7 billion for both December 31, 2024, and December 31, 2023[276]. - Deposits rose to $2.8 billion as of December 31, 2024, up from $2.7 billion in 2023[276]. - Total deposits reached $2.79 billion at December 31, 2024, with a weighted average rate of 4.27%, compared to $2.74 billion and 3.59% in 2023[332]. - Time deposits of $100 thousand or more totaled $1.2 billion for both 2024 and 2023, with maturing amounts within 3 months increasing from $317.5 million in 2023 to $421.8 million in 2024[336]. Interest Income and Expense - Interest income for 2024 was $191,994 thousand, an increase from $188,454 thousand in 2023, while interest expense rose to $108,712 thousand from $93,986 thousand[218]. - Interest expense for the year ended December 31, 2024 increased by $14.7 million, or 15.7%, due to higher rates paid on interest-bearing deposits[261]. - The total yield on earning assets increased to 6.09% at December 31, 2024, compared to 5.86% at December 31, 2023, driven by higher yields on loans and securities[260]. Regulatory and Compliance - The company has met all minimum regulatory capital requirements to be considered "well capitalized" as of December 31, 2024[367]. - The Company adopted new credit loss measurement guidance in January 2023, resulting in a $6.4 million increase in the allowance for credit losses[235]. - The Company adopted ASU 2022-02 effective January 1, 2023, which had an immaterial impact on financial reporting[244]. Risk Management - The company remains liability sensitive, indicating more liabilities than assets subject to repricing as market rates change[370]. - The company manages liquidity to ensure adequate sources to fund commitments and honor drafts under standby letters of credit[361]. - The simulation analyses for interest rate risk are updated quarterly to reflect changes in market conditions[365].

January 22, 2025 Fourth Quarter 2024 Investor Presentation Forward Looking Statement Important note regarding forward-looking statements: Statements made in this presentation which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management's plans, objectives, or goals for future operations, products or services, and forecasts of its revenues, earnings, or other measures of performance. Such ...

Financial Data and Key Metrics Changes - The earnings release for Q4 2024 is available on the company's website, indicating a structured approach to financial reporting [3]. - The call includes forward-looking statements and references to non-GAAP financial measures, highlighting the company's focus on transparency [4]. Business Line Data and Key Metrics Changes - Specific details regarding the performance of various business lines were not provided in the available content. Market Data and Key Metrics Changes - No specific market data or key metrics changes were mentioned in the provided content. Company Strategy and Development Direction and Industry Competition - The CEO, Chris Gruseke, emphasized the importance of the earnings call and the presence of key executives, indicating a collaborative approach to discussing the company's strategy [5]. Management's Comments on Operating Environment and Future Outlook - Management has not yet provided comments on the operating environment or future outlook in the available content. Other Important Information - The call is structured to include a question-and-answer session, allowing for further engagement with analysts and investors [1]. Q&A Session Summary - No specific questions or answers from the Q&A session were included in the provided content.

Financial Performance - Bankwell Financial Group reported GAAP net income of $2.5 million, or $0.32 per share for Q4 2024, an increase from $1.9 million, or $0.24 per share in Q3 2024[1]. - Total revenues for Q4 2024 were $21.2 million, down from $23.4 million in Q4 2023, primarily due to lower loan fees[18]. - Net income for the quarter was $2,507 thousand, reflecting an increase of 30.1% from $1,926 thousand in the prior quarter[32]. - Basic earnings per common share for the quarter ended December 31, 2024, is $0.32, down from $1.09 in the same quarter of 2023[34]. - For the year ended December 31, 2024, net interest income was $83,665 thousand, compared to $94,675 thousand for the year ended December 31, 2023[38]. Revenue and Income Sources - Bankwell anticipates $93-$95 million in net interest income and $7-$8 million in noninterest income for the full year 2025[6]. - Net interest income for the quarter ended December 31, 2024, was $20,199 thousand, a decrease of 4.7% compared to $22,245 thousand in the same quarter of the previous year[32]. - The average yield on total earning assets increased from 5.86% in 2023 to 6.09% in 2024[38]. - Commercial real estate loans generated an interest income of $112,804 thousand with a yield of 5.82% in 2024, compared to $109,110 thousand and 5.57% in 2023[38]. Asset and Liability Management - Total assets increased by $53.1 million, or 1.7%, to $3.3 billion as of December 31, 2024, compared to December 31, 2023[20]. - Total deposits increased by $50.8 million, or 1.9%, reaching $2.8 billion as of December 31, 2024, compared to December 31, 2023[20]. - Brokered deposits decreased by $78.4 million in Q4 2024, totaling a decline of $246.8 million since December 31, 2023[10]. - Total loans for the quarter ended December 31, 2024, amount to $2,661,094,000, with a total interest yield of 6.30%[36]. Nonperforming Assets and Credit Losses - The allowance for credit losses on loans was $29.0 million as of December 31, 2024, compared to $27.9 million a year earlier[15]. - Nonperforming assets as a percentage of total assets increased to 1.88% as of December 31, 2024, from 1.53% a year prior[17]. - Provision for credit losses was $4,458 thousand for the quarter, compared to a credit of $(960) thousand in the same quarter last year, indicating a significant increase in provisions[32]. - Nonperforming loans as a percentage of total loans decreased to 1.97% as of December 31, 2024, from 2.42% as of September 30, 2024[21]. Shareholder Information - Shareholders' equity increased by $4.3 million to $270.1 million as of December 31, 2024, primarily due to net income of $9.3 million for the year[22]. - The company repurchased 85,990 shares at a weighted average price of $24.82 per share during the year ended December 31, 2024[23]. - The company declared dividends of $0.20 per common share for the quarter, consistent with the previous quarter's dividend[32]. - Total equity as of December 31, 2024, is $270,063,000, an increase from $267,926,000 as of September 30, 2024[33]. Operational Efficiency - The company recorded total noninterest expense of $13.2 million in Q4 2024, a 2.9% increase compared to Q3 2024[18]. - Noninterest expense totaled $13,243 thousand for the quarter, an increase of 2.9% from $12,864 thousand in the same quarter of the previous year[32]. - The efficiency ratio and other non-GAAP financial measures are used to assess financial performance and trends[29]. Future Outlook - The company will host a conference call on January 23, 2025, to discuss financial results and business outlook[24].

Financial Performance - For the three months ended September 30, 2024, net interest income was $20.7 million, a decrease of $2.0 million or 8.7% compared to the same period in 2023[209]. - Net income available to common shareholders for the three months ended September 30, 2024 was $1.9 million, or $0.24 per diluted share, down from $9.8 million, or $1.25 per diluted share in 2023[210]. - Returns on average shareholders' equity for the three months ended September 30, 2024 were 2.83%, significantly lower than 15.19% for the same period in 2023[211]. - FTE net interest income for the nine months ended September 30, 2024 was $63.3 million, down from $72.4 million in 2023, reflecting a decrease of 12.7%[213]. - Noninterest income for the three months ended September 30, 2024, increased by $370 thousand to $1,156 million compared to $786 million in the same period of 2023[226]. - Noninterest income decreased by $959 thousand to $2,754 million for the nine months ended September 30, 2024, compared to $3,713 million in the same period of 2023[227]. Interest and Loan Metrics - Interest expense for the three months ended September 30, 2024 increased by $1.9 million compared to the same period in 2023, driven by higher rates on interest-bearing deposits[215]. - Total loans averaged $2.66 billion for the three months ended September 30, 2024, with a yield of 6.40%[217]. - The interest rate spread for the three months ended September 30, 2024 was 1.83%, down from 2.04% in the same period in 2023[217]. - Total loans averaged $2,676,449 million with a yield of 6.38% for the nine months ended September 30, 2024, compared to $2,760,643 million and a yield of 6.02% for the same period in 2023[1]. - The interest rate spread for the nine months ended September 30, 2024, was 1.83%, down from 2.31% in the same period of 2023[1]. Asset and Liability Management - Total assets as of September 30, 2024 were $3.16 billion, a decrease from $3.27 billion as of September 30, 2023[217]. - Total assets decreased to $3,187,377 million as of September 30, 2024, from $3,242,099 million a year earlier[1]. - Total interest-bearing liabilities averaged $2,517,284 million with an interest expense of $81,068 million for the nine months ended September 30, 2024, compared to $2,578,855 million and $66,837 million in the same period of 2023[1]. - Total deposits decreased by $48.6 million or 1.8% to $2.7 billion as of September 30, 2024, compared to December 31, 2023[232]. - Brokered certificates of deposits totaled $730.6 million at September 30, 2024, down from $860.5 million at December 31, 2023[260]. - FDIC insured deposits were $2.0 billion, representing 75% of total deposits as of September 30, 2024[260]. Credit Quality and Loss Provisions - Provision for credit losses increased to $6.3 million for the three months ended September 30, 2024, compared to a credit of $1.6 million for the same period in 2023[224]. - Nonperforming assets totaled $65.5 million, representing 2.07% of total assets, an increase from $49.2 million and 1.53% at December 31, 2023[246]. - Nonaccrual loans reached $65.5 million at September 30, 2024, compared to $49.2 million at December 31, 2023, primarily due to a $27.1 million commercial real estate multi-family loan placed on nonaccrual[246]. - The Allowance for Credit Losses (ACL) on loans was $27.8 million, or 1.06% of total gross loans, as of September 30, 2024, compared to $27.9 million, or 1.03% at December 31, 2023[253]. - The allocation of ACL-Loans at September 30, 2024, included $21,978 thousand for commercial real estate, representing 79.19% of total ACL-Loans[254]. Strategic Initiatives and Market Position - The company aims for organic growth and strategic acquisitions to enhance its market position[206]. - The company actively manages asset quality through disciplined underwriting and portfolio monitoring, with a focus on early problem recognition[243]. - The Directors Loan Committee oversees credit risk management, ensuring adherence to prudent underwriting standards[243]. Economic and Regulatory Environment - The Bank's Common Equity Tier 1 capital ratio was 11.80% as of September 30, 2024, exceeding the regulatory minimum requirements[268]. - The estimated percentage change in net interest income at risk for a +200 basis point shift in rates was -2.20% as of September 30, 2024[275]. - The economic value of equity at risk showed a -10.80% change for a +300 basis point shift in rates as of September 30, 2024[278]. - Interest rate risk management is identified as the primary market risk for the company[280]. - Financial statements are prepared in accordance with GAAP, not accounting for inflation's impact on purchasing power[281]. - Inflation increases costs of funds and operating overhead, significantly affecting financial institutions compared to industrial companies[282]. - Rising inflation and interest rates generally decrease the market value of investments and loans, adversely affecting liquidity and earnings[282].