About Bankwell Financial Group

Bankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides a range of financial services. The bank provides a wide range of services to clients in its market, an area encompassing approximately a 100 mile radius around its branch network. In addition, the bank pursues certain types of commercial lending opportunities outside its market, particularly where it has strong relationships. The bank operates branches in New Canaan, Stamford, Fairfield, Westport, Darien, Norwalk, and Hamden, Connecticut. The company focuses its marketing efforts on small to medium-sized businesses and professionals. Its loan portfolio includes non-owner-occupied commercial real estate loans for individuals and businesses for various purposes, which are secured by commercial properties. Business Strategy The company focuses on being the banking provider of choice in its highly attractive market areas through responsive, customer-centric products and services and a community focus; strategic acquisitions; the utilization of efficient and scalable infrastructure; and disciplined focus on risk management. Lending Activities The company’s primary lending focus is to serve commercial and middle-market businesses and not-for-profit organizations with a variety of financial products and services. It offers a wide array of commercial lending products to serve the needs of its clients. Commercial lending products include owner-occupied commercial real estate loans, commercial real estate investment loans, commercial loans (such as business term loans, equipment financing and lines of credit) to small and medium-sized businesses and real estate construction and development loans. The company focuses its lending activities on loans that it originates to borrowers located in its market or with whom the bank’s senior management has long-standing relationships. The company markets its lending products and services to qualified borrowers through conveniently located banking offices, relationship networks and high touch personal service. The company targets its business development and marketing strategy primarily on small to medium-sized businesses. The company’s relationship managers actively solicit the business of companies entering its market areas, as well as long-standing businesses operating in the communities it serves. Commercial Real Estate Loans: The company offers real estate loans for owner-occupied commercial properties, as well as commercial property owned by real estate investors. Commercial loans that are secured by owner-occupied commercial real estate and primarily collateralized by operating cash flows are also included in this category of loan throughout this document. Commercial real estate loan terms generally are limited to ten years or less, although payments may be structured on a longer amortization basis of twenty to thirty years. The interest rates on the company’s commercial real estate loans may be fixed or adjustable, although rates typically are not fixed for a period exceeding five to ten years. The company often requires personal guarantees from the principal owner of the business or real estate supported by a review of the principal owner's personal financial statements. The real estate securing the company’s existing commercial real estate loans include a wide variety of property types, such as owner-occupied offices/warehouses/production facilities, healthcare facilities, office buildings, industrial, mixed-use residential/commercial, retail centers and multifamily properties. The company’s commercial real estate loan portfolio presents a higher risk than its consumer real estate and consumer loan portfolios. Construction Loans: The company’s construction portfolio includes loans to small and medium-sized businesses to construct owner-used properties, loans to developers of commercial real estate investment properties and residential developments and, to a lesser extent, loans to individual clients for construction of single-family homes in its market. Commercial Business Loans: The company offers a wide range of commercial loans, including business term loans, equipment financing and lines of credit. Its target commercial loan market is small to medium-sized businesses, including retail and professional establishments. The commercial loans primarily are underwritten on the basis of the borrower’s ability to service the loan from cash flow. The company makes loans secured by accounts receivable or inventory, principal typically is repaid as the assets securing the loan are converted into cash, and for loans secured with other types of collateral, principal is fully or partially amortized during the loan term with any balloon amount due at maturity. From time-to-time, the company also makes equipment loans with conservative margins, generally for a term of ten years or less, supported by the useful life of the equipment, at fixed or variable rates, with the loan fully amortizing over the term. The company’s commercial loan portfolio presents a higher risk than its consumer real estate and consumer loan portfolios. Consumer Loans: As of December 31, 2022, the company’s consumer loans represented less than 1% of its total loan portfolio. Investment Activities The company invests in a variety of high-grade securities, including government agency securities, government guaranteed mortgage-backed securities, highly rated corporate bonds, and municipal securities. Deposits The company offers traditional depository products, including checking, savings, money market and certificates of deposit with a variety of rates. Deposits at the bank are insured by the FDIC (Federal Deposit Insurance Corporation) up to statutory limits. The company has built a network of deposit-taking branch offices and attracted significant transaction account business through its relationship-based approach. Supervision and Regulation The bank is subject to extensive regulation by the Connecticut Department of Banking, as its chartering agency, and by the FDIC, as its deposit insurer. The bank’s deposits are insured up to applicable limits by the FDIC through the Deposit Insurance Fund. The bank is required to file reports with, and is periodically examined by, the FDIC and the Connecticut Department of Banking concerning its activities and financial condition and must obtain regulatory approvals prior to entering into certain transactions, such as mergers with, or acquisitions of, other financial institutions. The Economic Growth, Regulatory Relief, and Consumer Protection Act (the Economic Growth Act) provides insured depository institutions and their affiliates with less than $10 billion in total consolidated assets and limited trading activities with an exemption from the Dodd-Frank Act’s ‘Volcker Rule’ (which generally restricts certain banking entities, such as the company and the bank from engaging in proprietary trading activities and entering into certain relationships with hedge funds and private-equity funds). The Connecticut Department of Banking regulates the internal organization, as well as the deposit, lending and investment activities of state-chartered banks, including the bank. As a bank holding company, the company is subject to comprehensive regulation and regular examinations by the Federal Reserve Board. The FDIC has extensive enforcement authority over insured banks, including the bank. Deposit accounts at the bank are insured by the Deposit Insurance Fund, generally up to a maximum of $250,000 per separately insured depositor. In addition to the regulations above, the bank’s deposit operations are subject to other federal laws applicable to depository accounts, such as the Truth-In-Savings Act, requiring certain disclosures for consumer deposit accounts; Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; Electronic Fund Transfer Act and Regulation E issued by the Consumer Financial Protection Bureau to implement that act, which govern electronic deposits to and withdrawals from deposit accounts and clients’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; and rules and regulations of the various federal banking agencies charged with the responsibility of implementing these federal laws. The bank is a member of the Federal Home Loan Bank of Boston (FHLB). Connecticut has its own statutory counterpart to the Community Reinvestment Act (CRA), which is applicable to the bank. As a public company, the company also files reports with the SEC and is subject to its regulatory authority, as well as the disclosure and regulatory requirements of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, with respect to its securities, financial reporting and certain governance matters. Because the company’s securities are listed on the Nasdaq Global Market (Nasdaq), it is subject to Nasdaq's rules for listed companies, including rules relating to corporate governance. In addition, the Fair Credit Reporting Act of 1970, or FCRA, includes many provisions concerning national credit reporting standards and permits consumers, including clients of the bank, to opt out of information-sharing for marketing purposes among affiliated companies. Among other things, the USA PATRIOT Act requires all financial institutions, including the company, to institute and maintain a risk-based anti-money laundering compliance program that includes a client identification program, provides for information sharing with law enforcement and between certain financial institutions by means of an exemption from the privacy provisions of the Gramm-Leach-Bliley Act, prohibits the U.S. banks and broker-dealers from maintaining accounts with foreign ‘shell’ banks, establishes due diligence and enhanced due diligence requirements for certain foreign correspondent banking and foreign private banking accounts and imposes additional record keeping requirements for certain correspondent banking arrangements. The company is subject to a variety of federal and Connecticut statutes and regulations that are intended to protect consumers and prohibit discrimination in the granting of credit. At the federal level, these laws include, among others, the following: Federal Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers (Connecticut chartered banks are generally exempt from the Federal Truth-in-Lending Act, but are otherwise subject to a substantially similar state Truth-in-Lending Act administered and enforced by the Connecticut Department of Banking); Home Mortgage Disclosure Act of 1975, requiring financial institutions to provide information to enable the public and public officials to determine whether a financial institution is fulfilling its obligation to help meet the housing needs of the community it serves; Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, color, religion or other prohibited factors in extending credit; Fair Credit Reporting Act of 1978, governing the use of consumer credit reports and the provision of information to credit reporting agencies; Fair Debt Collection Practices Act, governing the manner in which consumer debts may be collected by collection agencies; Real Estate Settlement Procedures Act, governing closing costs and settlement procedures and disclosures to consumers related thereto; Service members Civil Relief Act of 2004, governing the repayment terms of, and property rights underlying, secured obligations of persons in military service; and Rules and regulations of the various federal agencies charged with the responsibility of implementing these federal laws. History Bankwell Financial Group, Inc. was founded in 2002. The company was incorporated in the state of Connecticut in 2007.