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].

Financial Performance - The company reported a net interest margin of 2.60%, a decrease of 12 bps compared to the previous quarter, driven by lower loan fees and asset mix[6] - Fully diluted EPS was $0.32, including $0.29 from charge-offs and $0.07 from one-time OREO expenses[7] - PPNR was $7.9 million, or $1.02 per share, a decrease of 12% compared to the previous quarter[7] - Net interest income was $20.2 million, adversely impacted by reduced loan fee income[7] - Deposits increased by $99 million, with core deposits up $169 million and brokered deposits down $78 million (both compared to the previous quarter)[6, 7] Balance Sheet Strength - Tangible book value was $34.03, up $0.27 versus the previous quarter and up $0.64 versus the prior year quarter[7] - The consolidated CET1 ratio was 9.57%, and the Bank Total Capital ratio was 12.67%[7] - The company has $1,505 million in unencumbered securities, $662 million in unencumbered cash, and $307 million in borrowing capacity[10] - Brokered deposit balances have fallen by $247 million in 2024, with total deposits stable between approximately $2.7 and $2.8 billion[19] Credit Quality - Non-performing assets decreased by $4 million compared to the previous quarter[6] - Non-performing loans were $53.3 million, representing 1.97% of total loans[26] - Non-performing assets were $61.6 million, representing 1.88% of total assets[26]

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].