UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to________ | --- | --- | |--------------------------------------------------------------------------------------------------------------------------- ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to________ Commission File Number: 001-36448 Bankwell Financial Group, Inc. (Exact Name of Registrant as specified in its Charter) Connecticut (State or o ...

Financial Performance - For the three months ended September 30, 2021, net interest income was $17.7 million, an increase of $4.1 million or 30.2% compared to the same period in 2020[193]. - Noninterest income for the three months ended September 30, 2021 increased by $0.8 million to $1.4 million compared to the same period in 2020[194]. - Net income available to common shareholders for the three months ended September 30, 2021 was $6.9 million, or $0.87 per diluted share, compared to $3.0 million, or $0.38 per diluted share for the same period in 2020[196]. - The return on average stockholders' equity for the three months ended September 30, 2021 was 14.09%, up from 6.87% for the same period in 2020[197]. - The net interest margin increased by 72 basis points to 3.39% for the three months ended September 30, 2021 compared to the same period in 2020[203]. - Interest expense for the three months ended September 30, 2021 decreased by $2.4 million, or 45.6%, compared to the same period in 2020[202]. - FTE net interest income for the three months ended September 30, 2021 was $17.8 million, compared to $13.7 million for the same period in 2020[199]. - The increase in net interest income for the nine months ended September 30, 2021 was $8.4 million, or 20.8% compared to the same period in 2020[193]. - Total noninterest income for the nine months ended September 30, 2021 was $4.8 million, an increase of 113.5% compared to the same period in 2020[217]. Asset and Liability Management - Total assets increased to $2,226,890 thousand in September 2021, up from $2,178,983 thousand in September 2020, representing a growth of 2.2%[206]. - Total loans reached $1,777,557 thousand with a net interest income of $17,775 thousand, resulting in a net interest margin of 3.39% for the three months ended September 30, 2021[206]. - Interest-bearing liabilities totaled $1,640,042 thousand, with a net interest income of $2,890 thousand, reflecting a decrease in the interest rate to 0.70%[206]. - The total interest-bearing deposits increased to $1,567,082 thousand, with an interest expense of $2,387 thousand, resulting in an average interest rate of 0.60%[206]. - The company reported a total shareholders' equity of $192,993 thousand as of September 30, 2021, up from $173,162 thousand in the previous year[206]. - The total liabilities increased to $2,033,897 thousand, reflecting a growth in noninterest-bearing deposits to $341,303 thousand[206]. - Total deposits increased to $1.9 billion at September 30, 2021, compared to $1.8 billion at December 31, 2020[230]. - The carrying value of the investment securities portfolio was $105.9 million, representing 4.8% of total assets as of September 30, 2021, compared to 4.7% at December 31, 2020[247]. - The net unrealized gain on the investment portfolio decreased to $5.0 million as of September 30, 2021, down from $7.5 million at December 31, 2020[248]. - Total advances from the Federal Home Loan Bank decreased by $95.0 million, or 54.3%, to $80.0 million as of September 30, 2021[251]. Loan and Credit Quality - Provision for loan losses decreased to $0.1 million for the three months ended September 30, 2021 compared to $0.7 million for the same period in 2020[214]. - Nonperforming assets totaled $28.9 million, representing 1.30% of total assets at September 30, 2021, down from $33.4 million and 1.48% at December 31, 2020[238]. - The allowance for loan losses was $16.8 million, or 0.92% of total gross loans, at September 30, 2021, compared to $21.0 million, or 1.29%, at December 31, 2020[243]. - Total nonaccrual loans decreased to $28.9 million at September 30, 2021, from $33.4 million at December 31, 2020[238]. - The company actively manages asset quality through disciplined underwriting and portfolio monitoring[236]. Operational Expenses - Noninterest expense increased by $0.6 million to $10.4 million for the three months ended September 30, 2021 compared to the same period in 2020, primarily due to occupancy and equipment expenses[220]. - Salaries and employee benefits decreased by 9.7% to $4.8 million for the three months ended September 30, 2021 compared to the same period in 2020[221]. - FDIC insurance expense increased by 69.3% to $0.3 million for the three months ended September 30, 2021 compared to the same period in 2020[221]. - Data processing expense increased by $0.4 million to $2.0 million for the nine months ended September 30, 2021 compared to the same period in 2020, due to costs associated with a new online banking system[225]. Market and Economic Conditions - The impact of COVID-19 continues to create uncertainty regarding future business operations and economic conditions[190]. - Inflation generally increases the costs of funds and operating overhead, which may adversely affect liquidity, earnings, and shareholders' equity[273]. - The company acknowledges that deposit balances may shift into higher yielding alternatives as market rates change, impacting the overall interest rate risk[268]. Risk Management - Interest rate risk management is identified as the primary market risk for the company, with ongoing discussions on asset/liability management strategies[270]. - The estimated percentage change in net interest income at risk for a 200 basis point increase in rates was -3.40% as of September 30, 2021[265]. - The estimated percentage change in Economic Value of Equity (EVE) at risk shows a decrease of (25.20)% under a -100 basis points scenario as of September 30, 2021, compared to (47.30)% as of December 31, 2020[268]. - In a +100 basis points scenario, the EVE is projected to increase by 2.40% as of September 30, 2021, up from 9.30% as of December 31, 2020[268]. - The company has modeled increased costs of deposits in rising rate scenarios, indicating proactive risk management[268]. - The static balance sheet assumption does not reflect future growth expectations, which depend on the business environment and customer behavior[269]. - The company remains well-capitalized despite the significant change in EVE under the -100 basis points scenario, indicating resilience in the current interest rate environment[268].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to________ | --- | --- | |---------------------------------------------------------------------------------------------------------------------------- ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents Bankwell Financial Group's unaudited consolidated financial statements for Q1 2021, including balance sheets, income statements, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) Total assets slightly decreased to $2.24 billion, driven by reduced cash and FHLB advances, while net loans and shareholders' equity increased Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **$2,244,467** | **$2,253,747** | | Cash and cash equivalents | $362,005 | $409,598 | | Loans receivable, net | $1,650,127 | $1,601,672 | | Total investment securities | $101,621 | $106,890 | | **Total Liabilities** | **$2,056,524** | **$2,077,145** | | Total deposits | $1,859,808 | $1,827,316 | | Advances from the FHLB | $125,000 | $175,000 | | **Total Shareholders' Equity** | **$187,943** | **$176,602** | [Consolidated Statements of Income](index=5&type=section&id=Consolidated%20Statements%20of%20Income) Net income significantly increased to $5.7 million in Q1 2021, driven by higher net interest income and a credit for loan losses Q1 2021 vs. Q1 2020 Income Statement (in thousands, except per share data) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net Interest Income | $14,655 | $13,286 | | (Credit) Provision for Loan Losses | ($296) | $3,185 | | Total Noninterest Income | $1,956 | $1,072 | | Total Noninterest Expense | $9,638 | $9,659 | | **Net Income** | **$5,690** | **$1,363** | | **Diluted EPS** | **$0.71** | **$0.17** | [Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive income turned positive to $13.4 million in Q1 2021, primarily due to net income and unrealized gains on interest rate swaps - Total other comprehensive income was **$7.7 million** in Q1 2021, primarily due to **$8.5 million** in unrealized gains on interest rate swaps (net of tax) This contrasts with a total other comprehensive loss of **$11.8 million** in Q1 2020, which was driven by **$13.5 million** in unrealized losses on interest rate swaps[13](index=13&type=chunk) [Consolidated Statements of Shareholders' Equity](index=7&type=section&id=Consolidated%20Statements%20of%20Shareholders'%20Equity) Shareholders' equity increased to $187.9 million, primarily from net income and other comprehensive income, partially offset by dividends and repurchases - Key changes in shareholders' equity for Q1 2021 included: **+$5.7M Net Income**, **+$7.7M Other Comprehensive Income**, **-$1.1M Cash Dividends**, and **-$1.4M Stock Repurchases**[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by $47.6 million, driven by investing and financing outflows, partially offset by operating inflows Cash Flow Summary for Three Months Ended March 31 (in thousands) | Cash Flow Activity | 2021 | 2020 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $16,694 | ($16,842) | | Net cash used in investing activities | ($44,297) | ($13,329) | | Net cash (used in) provided by financing activities | ($19,990) | $162,116 | | **Net (decrease) increase in cash and cash equivalents** | **($47,593)** | **$131,945** | [Notes to Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section details accounting policies, financial account specifics, and disclosures on loans, equity, derivatives, and regulatory matters - The Company's primary market is Connecticut, with a significant concentration of commercial real estate loans in Fairfield and New Haven Counties[23](index=23&type=chunk)[28](index=28&type=chunk) - The Company qualifies as a smaller reporting company and has elected to defer the adoption of ASU No. 2016-13 (CECL model) until fiscal years beginning after December 15, 2022[34](index=34&type=chunk) - Subsequent to the quarter end, on April 28, 2021, the Board declared a **$0.14 per share** cash dividend and the company committed to retire **$10.0 million** of subordinated debt on May 15, 2021[178](index=178&type=chunk)[179](index=179&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=40&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2021 financial performance, focusing on increased net income, financial condition, liquidity, capital, and interest rate risk management [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Net income significantly increased to $5.7 million in Q1 2021, driven by higher net interest income, a loan loss credit, and increased noninterest income - Net interest income increased by **$1.4 million (10.3%)** YoY, mainly due to a decline in interest expense on deposits[190](index=190&type=chunk)[196](index=196&type=chunk) - Noninterest income increased by **$0.9 million** YoY, driven by **$0.5 million** in SBA loan sales and a **$0.9 million** one-time federal payroll tax credit[191](index=191&type=chunk)[210](index=210&type=chunk) - Noninterest expense was stable YoY A **$0.6 million** decrease in salaries and employee benefits, due to a lower employee count, was offset by increases in occupancy and FDIC insurance expenses[211](index=211&type=chunk)[212](index=212&type=chunk) [Financial Condition](index=45&type=section&id=Financial%20Condition) Total assets were $2.2 billion, with growth in loans and deposits, and improved asset quality indicated by decreased nonperforming assets - Gross loans increased by **$47.6 million** in Q1 2021, driven by growth in commercial real estate and construction loans[217](index=217&type=chunk)[219](index=219&type=chunk) Asset Quality Metrics | Metric | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Nonperforming assets | $31,366 | $33,416 | | Nonperforming assets to total assets | 1.40% | 1.48% | | Allowance for loan losses to total gross loans | 1.23% | 1.29% | [Liquidity and Capital Resources](index=49&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and capital, exceeding regulatory requirements with $362.0 million in cash and a Common Equity Tier 1 ratio of 11.02% - Shareholders' equity increased by **$11.3 million** in Q1 2021, driven by net income and a **$7.7 million** favorable change in accumulated other comprehensive income from interest rate swaps[247](index=247&type=chunk)[248](index=248&type=chunk) Bank's Capital Ratios (March 31, 2021) | Ratio | Actual | Well-Capitalized Minimum | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Ratio | 11.02% | 6.50% | | Tier 1 Capital Ratio | 11.02% | 8.00% | | Total Capital Ratio | 12.17% | 10.00% | | Tier 1 Leverage Ratio | 8.82% | 5.00% | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, managed through simulation analysis and considering inflation impacts - The company's primary market risk is interest rate risk, which is managed through asset/liability strategies and monitored using simulation analysis[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, with no material changes to internal controls over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[264](index=264&type=chunk) - No material changes were made to internal controls over financial reporting during the quarter ended March 31, 2021[265](index=265&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in legal proceedings, but management anticipates no material losses from pending lawsuits - Management believes no material loss is expected from any pending legal proceedings[266](index=266&type=chunk) [Item 1A. Risk Factors](index=54&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the period - No material changes to risk factors were reported for the period[268](index=268&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 65,626 common shares at $21.66 per share, with 241,707 shares remaining under the repurchase program Issuer Purchases of Equity Securities (Q1 2021) | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | Jan 2021 | 0 | N/A | | Feb 2021 | 65,626 | $21.66 | | Mar 2021 | 0 | N/A | | **Total** | **65,626** | **$21.66** | - The share repurchase program was authorized on December 19, 2018, for up to **400,000 shares**[270](index=270&type=chunk) [Other Information](index=54&type=section&id=Other%20Information) This section confirms no defaults on senior securities, no mine safety disclosures, and lists exhibits filed with the report - The company reported "None" for Item 3 (Defaults Upon Senior Securities), Item 4 (Mine Safety Disclosures), and Item 5 (Other Information)[271](index=271&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk)

PART I [Business](index=5&type=section&id=Item%201%2E%20Business) Bankwell Financial Group, Inc. operates as a bank holding company through Bankwell Bank, primarily serving the New York metropolitan area with a focus on commercial and real estate lending [General Overview](index=6&type=section&id=General%20Overview) Bankwell Financial Group, Inc. is a bank holding company headquartered in New Canaan, Connecticut, serving the New York metropolitan area - Bankwell Financial Group, Inc. is a bank holding company headquartered in New Canaan, Connecticut, operating through its subsidiary, Bankwell Bank[11](index=11&type=chunk) Financial Snapshot as of December 31, 2020 | Metric | Value (approx.) | | :--- | :--- | | Total Assets | $2.3 billion | | Net Loans | $1.6 billion | | Total Deposits | $1.8 billion | | Shareholders' Equity | $176.6 million | - The company's primary market is the New York metropolitan area, including Fairfield and New Haven Counties, Connecticut, served by a main office and ten branch offices[11](index=11&type=chunk) [History and Growth](index=6&type=section&id=History%20and%20Growth) The company has grown through strategic mergers, significantly increasing its total assets, gross loans, and deposits between 2016 and 2020 - The company has grown through mergers, including the acquisition of The Wilton Bank in 2013 and Quinnipiac Bank and Trust Company in 2014[12](index=12&type=chunk) Growth from Dec 31, 2016 to Dec 31, 2020 | Metric | 2016 | 2020 | | :--- | :--- | :--- | | Total Assets | $1.6 billion | ~$2.3 billion | | Gross Loans | $1.4 billion | $1.6 billion | | Deposits | $1.3 billion | ~$1.8 billion | [Business Strategy and Competitive Strengths](index=6&type=section&id=Business%20Strategy%20and%20Competitive%20Strengths) The company's strategy focuses on being a customer-centric "Hometown" bank, pursuing organic growth, strategic acquisitions, and disciplined risk management - The company's strategy is centered on being a customer-centric "Hometown" bank, pursuing organic growth complemented by strategic acquisitions, utilizing a scalable infrastructure, and maintaining a disciplined focus on risk management[13](index=13&type=chunk) - Key competitive strengths include its operation in the affluent New York metropolitan market, an experienced management team, a community-involved Board of Directors, a strong capital position, and a scalable technology platform[16](index=16&type=chunk) [Lending Activities](index=9&type=section&id=Lending%20Activities) The company primarily focuses on commercial and middle-market lending, with a significant portion of its portfolio in commercial real estate loans - The primary lending focus is on commercial and middle-market businesses and not-for-profit organizations, with products including commercial real estate, commercial business, and construction loans[21](index=21&type=chunk) Loan Portfolio Composition (2016-2020) | Loan Type | 2020 ($M) | 2019 ($M) | 2018 ($M) | 2017 ($M) | 2016 ($M) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Real Estate Loans** | | | | | | | Residential | 113.6 | 147.1 | 178.1 | 193.5 | 195.7 | | Commercial | 1,148.4 | 1,128.6 | 1,094.1 | 987.2 | 845.3 | | Construction | 87.0 | 98.6 | 73.2 | 101.6 | 107.4 | | **Commercial Business** | 276.6 | 230.0 | 259.0 | 260.0 | 215.9 | | **Consumer** | 0.1 | 0.2 | 0.4 | 0.6 | 1.5 | | **Total Loans** | **1,625.6** | **1,604.5** | **1,604.7** | **1,543.0** | **1,365.9** | - The company strategically decided to cease originating residential mortgage loans in Q4 2017 and home equity loans/lines of credit in Q3 2019[24](index=24&type=chunk) - Commercial business loans include Paycheck Protection Program (PPP) loans made under the CARES Act, which are fully guaranteed by the U.S. Small Business Administration (SBA)[26](index=26&type=chunk) [Credit Policy and Risk Management](index=11&type=section&id=Credit%20Policy%20and%20Risk%20Management) The company maintains disciplined underwriting standards and a service-driven credit culture, with active portfolio monitoring and risk assessment - The company maintains disciplined underwriting standards with a tiered credit approval process, while focusing on a service-driven, relationship-based credit culture[27](index=27&type=chunk) - An informal internal lending limit is set at **40% of unimpaired capital and allowance for loan losses** for a single relationship secured by commercial real estate, with top 20 borrowing relationships ranging from **$16.4 million to $92.0 million**[27](index=27&type=chunk) - Credit risk management involves active portfolio monitoring, annual reviews of commercial loans over $1 million, a Watch List for potential credit issues, semi-annual third-party loan reviews, and an annual stress test of the commercial loan portfolio[29](index=29&type=chunk) [Funding and Investments](index=12&type=section&id=Funding%20and%20Investments) Deposits are the primary source of funds, complemented by an investment portfolio for liquidity and stable income, and FHLB advances - Deposits are the primary source of funds, offering traditional products like checking, savings, money market, and certificates of deposit[31](index=31&type=chunk) - The investment portfolio's primary purpose is to provide liquidity, with a secondary goal of generating stable income, consisting of high-grade securities like government agency and mortgage-backed securities[30](index=30&type=chunk) - The company utilizes advances from the Federal Home Loan Bank of Boston (FHLB) for funding and liquidity, and has **$25.5 million in subordinated notes** issued in 2015, which qualify as Tier 2 capital[32](index=32&type=chunk)[34](index=34&type=chunk) [Supervision and Regulation](index=13&type=section&id=Supervision%20and%20Regulation) The company operates in a highly regulated environment, subject to extensive state and federal banking laws, including those influenced by the Dodd-Frank Act and COVID-19 responses - The Bank is extensively regulated by the Connecticut Department of Banking and the FDIC, while the holding company is regulated by the Federal Reserve Board[36](index=36&type=chunk)[47](index=47&type=chunk) - The Dodd-Frank Act and the Economic Growth Act have significantly influenced the regulatory structure, affecting capital requirements, consumer protection, and compliance costs[37](index=37&type=chunk)[40](index=40&type=chunk) - In response to the COVID-19 pandemic, the company participated in the Paycheck Protection Program (PPP) under the CARES Act and followed regulatory guidance on loan modifications for affected borrowers[43](index=43&type=chunk) - The Bank is subject to Basel III capital rules, which establish minimum capital requirements and a capital conservation buffer that can limit dividend payments if not met[52](index=52&type=chunk) [Taxation](index=23&type=section&id=Taxation) The company is subject to federal income tax and the Connecticut corporation business tax, with strategies to reduce state tax liability - The company is subject to federal income tax and the Connecticut corporation business tax at a rate of **7.5% for 2020 and 2019**[64](index=64&type=chunk)[65](index=65&type=chunk) - In 2015, the company created Bankwell Loan Servicing Group, Inc., a Passive Investment Company (PIC), which holds certain real estate loans, reducing the Bank's state tax liability through income exemption[65](index=65&type=chunk) [Risk Factors](index=23&type=section&id=Item%201A%2E%20Risk%20Factors) The company faces significant business, market, operational, and regulatory risks, including economic downturns, credit portfolio vulnerabilities, geographic concentration, intense competition, and the ongoing impact of the COVID-19 pandemic - **Business Risks:** The company is exposed to risks from weak economic conditions, credit risk in its loan portfolio, and potential inadequacy of its allowance for loan losses, with concentrations of large loans and a focus on commercial real estate lending increasing this risk[68](index=68&type=chunk)[69](index=69&type=chunk)[71](index=71&type=chunk)[73](index=73&type=chunk) - **Market and Operational Risks:** The business is geographically concentrated in Fairfield and New Haven Counties, making it vulnerable to local economic downturns, and faces strong competition, interest rate risk, and technological risks such as system failures and cyber-crime[78](index=78&type=chunk)[79](index=79&type=chunk)[77](index=77&type=chunk)[84](index=84&type=chunk) - **COVID-19 Pandemic Risk:** The pandemic has negatively impacted the economy and is likely to continue causing significant economic disruption, potentially leading to increased loan delinquencies, defaults, and reduced demand for services[94](index=94&type=chunk) - **Regulatory Risks:** The company operates in a highly regulated environment, where compliance with complex laws is costly, and changes in regulations or adverse findings from regulatory examinations could lead to remedial actions, penalties, and growth restrictions[95](index=95&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk) [Unresolved Staff Comments](index=35&type=section&id=Item%201B%2E%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments - There are no unresolved staff comments[109](index=109&type=chunk) [Properties](index=36&type=section&id=Item%202%2E%20Properties) The company maintains a main office and executive offices in New Canaan, with a mix of owned and leased branch locations across its primary service areas - The Bank's main office is leased, while the executive management office property was purchased in 2016, and the company has entered into a **10-year lease** for a new headquarters building at 258 Elm Street in New Canaan[111](index=111&type=chunk) Branch Office Ownership Status | Branch Location | Status | | :--- | :--- | | Elm Street, New Canaan | Leased | | Cherry Street, New Canaan | Leased | | Bedford, Stamford | Leased | | High Ridge, Stamford | Leased | | Black Rock, Fairfield | Leased | | Sasco Hill, Fairfield | Leased | | Wilton | Owned | | Norwalk | Leased | | Hamden | Owned | | Westport | Leased | [Legal Proceedings](index=36&type=section&id=Item%203%2E%20Legal%20Proceedings) The company is party to various litigation matters incidental to its business but does not believe the resolution of any current proceedings would have a material adverse effect on its financial condition or results of operations - The company is not presently a party to any legal proceedings that are expected to have a material adverse effect on its business or financial condition[112](index=112&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) Not applicable - This item is not applicable to the company[113](index=113&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=37&type=section&id=Item%205%2E%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ, with dividend payments subject to regulatory restrictions and an active share repurchase program with **307,333 shares** remaining available as of December 31, 2020 - The Company's Common Stock trades on the NASDAQ Global Market under the symbol "BWFG"[116](index=116&type=chunk) - A share repurchase program for up to **400,000 shares** was authorized on December 19, 2018, with **307,333 shares** remaining available for repurchase as of December 31, 2020[119](index=119&type=chunk) - No shares were repurchased during the three-month period ended December 31, 2020[117](index=117&type=chunk)[119](index=119&type=chunk) [Selected Financial Data](index=38&type=section&id=Item%206%2E%20Selected%20Financial%20Data) This section provides selected consolidated financial data for the five years ended December 31, 2020, highlighting the **$5.9 million net income** in 2020 and reconciliations for non-GAAP financial measures - Performance ratios for 2020 were negatively impacted by incremental loan loss reserves due to the COVID-19 pandemic and a **$3.9 million one-time charge** for office consolidation, vendor contract termination, and severance costs[121](index=121&type=chunk) Selected Financial Data (2018-2020) | Metric (in thousands, except per share) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net Interest Income | $54,835 | $53,761 | $56,326 | | Provision for Loan Losses | $7,605 | $437 | $3,440 | | Net Income | $5,904 | $18,216 | $17,433 | | Diluted EPS | $0.75 | $2.31 | $2.21 | | Total Assets | $2,253,747 | $1,882,182 | $1,873,665 | | Gross Portfolio Loans | $1,625,627 | $1,604,484 | $1,604,726 | | Total Deposits | $1,827,316 | $1,491,903 | $1,502,244 | | Total Equity | $176,602 | $182,397 | $174,196 | [Non-GAAP Financial Measures](index=40&type=section&id=Non-GAAP%20Financial%20Measures) The company utilizes non-GAAP financial measures such as efficiency ratio and tangible book value per share to provide additional performance insights - The company uses non-GAAP measures including "efficiency ratio", "tangible common equity ratio", and "tangible book value per share" to provide additional insight into its performance[127](index=127&type=chunk) Key Non-GAAP Reconciliations (2018-2020) | Metric | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Efficiency Ratio | 73.9% | 60.2% | 59.2% | | Tangible Common Equity Ratio | 7.73% | 9.56% | 9.16% | | Tangible Book Value per Share | $22.43 | $23.15 | $22.06 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%207%2E%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's 2020 financial performance, noting a significant decrease in net income to **$5.9 million** due to increased loan loss provisions and one-time charges, alongside asset growth and stable capital ratios [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Management identifies critical accounting policies requiring significant judgment, including the allowance for loan losses and valuation of investment securities - Management identifies several critical accounting policies that require significant judgment and estimation, including the allowance for loan losses, valuation of derivative instruments, and accounting for deferred income taxes[142](index=142&type=chunk) - The allowance for loan losses is determined using a methodology that includes specific reserves for impaired loans and general allocations for non-impaired loans based on historical loss experience, peer data, and qualitative factors[143](index=143&type=chunk) [Results of Operations](index=45&type=section&id=Results%20of%20Operations) This section details the company's operational performance, highlighting the **67.6% decrease in net income** for 2020 primarily due to higher loan loss provisions and noninterest expenses 2020 vs. 2019 Performance Summary | Metric | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | Net Income | $5.9M | $18.2M | -67.6% | | Diluted EPS | $0.75 | $2.31 | -67.5% | | Net Interest Income | $54.8M | $53.8M | +1.9% | | Provision for Loan Losses | $7.6M | $0.4M | +1640% | | Noninterest Income | $2.9M | $5.2M | -44.2% | | Noninterest Expense | $42.8M | $35.6M | +20.2% | - The decrease in 2020 net income was primarily driven by a **$7.6 million provision for loan losses** (including **$9.0 million in COVID-19 related reserves**) and a **$3.9 million one-time charge** for office consolidation, vendor contract termination, and severance[150](index=150&type=chunk)[153](index=153&type=chunk)[167](index=167&type=chunk) - Net interest margin decreased by **26 basis points to 2.77%** in 2020, reflecting excess liquidity from deposit growth and the low interest rate environment[153](index=153&type=chunk) [Financial Condition](index=51&type=section&id=Financial%20Condition) The company's financial condition shows **total assets increasing to $2.3 billion** in 2020, driven by liquidity management during the COVID-19 pandemic, while shareholders' equity slightly decreased Balance Sheet Summary (December 31) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Total Assets | $2.3B | $1.9B | | Gross Loans | $1.6B | $1.6B | | Total Deposits | $1.8B | $1.5B | | Shareholders' Equity | $176.6M | $182.4M | - Total assets increased primarily due to a rise in cash and cash equivalents to maintain higher liquidity during the COVID-19 pandemic[171](index=171&type=chunk) - Shareholders' equity decreased by **$5.8 million**, mainly due to an **$8.1 million unfavorable impact** to accumulated other comprehensive loss from interest rate swap valuations, dividends of **$4.4 million**, and stock repurchases of **$1.0 million**, partially offset by net income[171](index=171&type=chunk) [Asset Quality](index=53&type=section&id=Asset%20Quality) Asset quality metrics deteriorated in 2020, with nonperforming assets increasing to **1.48% of total assets** and a higher allowance for loan losses due to COVID-19 related risks Asset Quality Ratios (December 31) | Ratio | 2020 | 2019 | | :--- | :--- | :--- | | Nonperforming Assets to Total Assets | 1.48% | 0.56% | | Nonperforming Loans to Total Loans | 2.06% | 0.66% | | Allowance for Loan Losses to Total Loans | 1.29% | 0.84% | - Total nonaccrual loans increased to **$33.4 million** at year-end 2020 from **$10.6 million** at year-end 2019, largely due to a **$25.6 million increase** in the nonperforming loan population from COVID-19 impacted loans[180](index=180&type=chunk) - The allowance for loan losses increased by **$7.5 million to $21.0 million** at year-end 2020, primarily due to incremental reserves for increased credit risk related to the COVID-19 pandemic[180](index=180&type=chunk)[187](index=187&type=chunk) - As of December 31, 2020, the company had active COVID-19 related loan payment deferrals totaling **$29.4 million**, which are not considered Troubled Debt Restructurings (TDRs) under the CARES Act[182](index=182&type=chunk) [Liquidity and Capital Resources](index=63&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity through deposits and FHLB borrowings, with Bankwell Bank exceeding all regulatory capital requirements to be considered **well-capitalized** as of December 31, 2020 - Primary sources of liquidity include deposits, FHLB borrowings, and cash flows from loan and investment portfolios, supported by a detailed contingency funding plan and additional borrowing capacity[210](index=210&type=chunk)[212](index=212&type=chunk) - At December 31, 2020, the Bank exceeded all regulatory capital requirements to be considered "**well-capitalized**"[213](index=213&type=chunk) Bankwell Bank Capital Ratios (December 31, 2020) | Ratio | Actual | Well-Capitalized Minimum | | :--- | :--- | :--- | | Common Equity Tier 1 Capital | 11.06% | 6.50% | | Tier 1 Capital | 11.06% | 8.00% | | Total Capital | 12.28% | 10.00% | | Tier 1 Leverage | 8.44% | 5.00% | [Quantitative and Qualitative Disclosures About Market Risk](index=66&type=section&id=Item%207A%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk through ALCO, using simulation analysis to assess the sensitivity of net interest income and economic value of equity to rate changes, indicating a liability-sensitive position - The company measures interest rate risk using simulation of net interest income (NII) and economic value of equity (EVE)[223](index=223&type=chunk) Net Interest Income at Risk (Parallel Shock, 1-Year) | Rate Change (bps) | Estimated % Change in NII (Dec 31, 2020) | | :--- | :--- | | +300 | (2.00)% | | +200 | (1.70)% | | +100 | (1.00)% | | -100 | (0.30)% | Economic Value of Equity at Risk (Parallel Shock) | Rate Change (bps) | Estimated % Change in EVE (Dec 31, 2020) | | :--- | :--- | | +300 | 18.40% | | +200 | 13.80% | | +100 | 9.30% | | -100 | (47.30)% | - The NII simulation results indicate the company is **liability sensitive** as of December 31, 2020, while the EVE simulation shows a **significant decline in a -100 bps scenario**, deemed unlikely in the current environment[228](index=228&type=chunk)[231](index=231&type=chunk) [Financial Statements and Supplementary Data](index=69&type=section&id=Item%208%2E%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2018-2020, including the unqualified auditor's report from RSM US LLP, which identified allowance for loan losses as a critical audit matter [Report of Independent Registered Public Accounting Firm](index=70&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) RSM US LLP issued an unqualified opinion on the financial statements, identifying qualitative factor adjustments to the allowance for loan losses as a critical audit matter - RSM US LLP issued an unqualified opinion, stating that the consolidated financial statements present fairly the financial position of the company as of December 31, 2020 and 2019, and the results of its operations and cash flows for the three years then ended[238](index=238&type=chunk) - The audit identified "Qualitative Factor Adjustments to the Allowance for Loan Losses" as a **critical audit matter** due to the significant auditor judgment and high degree of estimation uncertainty involved in management's subjective analysis[242](index=242&type=chunk)[243](index=243&type=chunk) [Consolidated Financial Statements](index=72&type=section&id=Consolidated%20Financial%20Statements) This section provides the Consolidated Balance Sheets, Statements of Income, Comprehensive (Loss) Income, Shareholders' Equity, and Cash Flows for the company Consolidated Balance Sheet Highlights (December 31) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Cash and cash equivalents | $409,598 | $78,051 | | Loans receivable, net | $1,601,672 | $1,588,840 | | Total assets | $2,253,747 | $1,882,182 | | Total deposits | $1,827,316 | $1,491,903 | | Total liabilities | $2,077,145 | $1,699,785 | | Total shareholders' equity | $176,602 | $182,397 | Consolidated Statement of Income Highlights (Year Ended Dec 31) | (in thousands) | 2020 | 2019 | 2018 | | :--- | :--- | :--- | :--- | | Net interest income | $54,835 | $53,761 | $56,326 | | Provision for loan losses | $7,605 | $437 | $3,440 | | Noninterest income | $2,884 | $5,244 | $3,900 | | Noninterest expense | $42,813 | $35,626 | $35,633 | | Net income | $5,904 | $18,216 | $17,433 | [Notes to Consolidated Financial Statements](index=78&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes provide further information on the company's loan portfolio, deposits, derivative instruments, and quarterly financial performance - **Note 5 (Loans):** As of December 31, 2020, the loan portfolio totaled **$1.63 billion**, with commercial real estate comprising the largest segment at **$1.15 billion (70.6%)**, and the allowance for loan losses was **$21.0 million**, or **1.29% of total loans**[323](index=323&type=chunk)[187](index=187&type=chunk) - **Note 9 (Deposits):** Total deposits were **$1.83 billion** at year-end 2020, with time deposits of **$250,000 or more** aggregating **$353.7 million**[358](index=358&type=chunk)[360](index=360&type=chunk) - **Note 18 (Derivatives):** The company uses interest rate swaps to manage interest rate risk, with nine swaps designated as hedging instruments totaling a notional amount of **$225 million** and a net fair value liability of **$23.6 million** as of December 31, 2020[394](index=394&type=chunk)[397](index=397&type=chunk) - **Note 24 (Quarterly Info):** In Q4 2020, the company recognized a **$3.9 million one-time charge** related to office consolidation (**$2.0M**), vendor contract termination (**$1.1M**), and employee severance (**$0.8M**), significantly impacting quarterly earnings[430](index=430&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=124&type=section&id=Item%209%2E%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) None - There were no changes in or disagreements with accountants on accounting and financial disclosure[434](index=434&type=chunk) [Controls and Procedures](index=124&type=section&id=Item%209A%2E%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2020 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2020[435](index=435&type=chunk) - Based on an assessment using the COSO framework, management concluded that the company's internal control over financial reporting was effective as of December 31, 2020[439](index=439&type=chunk) [Other Information](index=125&type=section&id=Item%209B%2E%20Other%20Information) None - There is no other information to report[440](index=440&type=chunk) PART III [Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accountant Fees](index=126&type=section&id=Items%2010-14) Information for these items, covering directors, executive officers, compensation, security ownership, and accountant fees, is incorporated by reference from the company's 2021 proxy statement - The information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the Registrant's definitive proxy statement for its 2021 Annual Meeting of Stockholders[443](index=443&type=chunk)[444](index=444&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=127&type=section&id=Item%2015%2E%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and various exhibits filed with or incorporated by reference into the Form 10-K, including corporate governance documents and material contracts - This section lists the consolidated financial statements included in Item 8 of the report[447](index=447&type=chunk) - An Exhibit Index is provided, listing all documents filed as part of the Form 10-K, such as corporate governance documents, material contracts, and certifications[450](index=450&type=chunk) [Form 10-K Summary](index=128&type=section&id=Item%2016%2E%20Form%2010-K%20Summary) None - No Form 10-K summary is provided[454](index=454&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to________ Commission File Number: 001-36448 Bankwell Financial Group, Inc. (Exact Name of Registrant as specified in its Charter) Connecticut 20 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to________ Commission File Number: 001-36448 Bankwell Financial Group, Inc. (Exact Name of Registrant as specified in its Charter) Connecticut 20-8251 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of Each Class Trading Symbol(s) Name of Each Exchange on Which Registered Common Stock, no par value per share BWFG NASDAQ Global Market FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2020 or o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to____ ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 or ¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________to________ Commission File Number: 001-36448 Bankwell Financial Group, Inc. (Exact Name of Registrant as specified in its Charter) Title of Each Class Tra ...