Regulatory Matters

6 Months Ended

Jun. 30, 2025

The Federal Reserve, the FDIC and other federal and state bank regulatory agencies establish regulatory capital guidelines for U.S. banking organizations.

Under the current guidelines, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier 1 risk-based capital ratio of 6.0%, a minimum Common Equity Tier 1 risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a capital conservation buffer consisting of common equity in an amount above the minimum risk-based capital requirements for “adequately capitalized” institutions equal to 2.5% of total risk-weighted assets, resulting in a requirement for the Bank to effectively maintain Common Equity Tier 1, Tier 1 and total capital ratios of 7.0%, 8.5% and 10.5%, respectively. The Bank must maintain the capital conservation buffer to avoid restrictions on the ability to pay dividends, pay discretionary bonuses, or to engage in share repurchases.

As of June 30, 2023, the Company no longer met the definition of a Small Bank Holding Company as the Company's assets exceeded $3 billion. Effective March 31, 2024, the Company became subject to the larger company capital requirements as set forth in the Economic Growth Act.

Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements.

As of June 30, 2025, the Bank and Company met all capital adequacy requirements to which they are subject. There are no conditions or events since then that management believes have changed this conclusion.

The capital amounts and ratios for the Bank and the Company at June 30, 2025 and December 31, 2024 were as follows:


					Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer				Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
	Actual Capital
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Bankwell Bank
June 30, 2025
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	336,061	12.20	%	$	192,868	7.00	%	$	179,091	6.50	%
Tier I Capital to Risk-Weighted Assets	336,061		12.20	%	234,196		8.50	%	220,420		8.00	%
Total Capital to Risk-Weighted Assets	365,917		13.28	%	289,301		10.50	%	275,525		10.00	%
Tier I Capital to Average Assets	336,061		10.57	%	127,136		4.00	%	158,920		5.00	%
					Minimum Regulatory Capital Required for Capital Adequacy				Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
	Actual Capital
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Bankwell Financial Group, Inc.
June 30, 2025
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	281,024	10.18	%	$	124,256	4.50	%	$	179,481	6.50	%
Tier I Capital to Risk-Weighted Assets	281,024		10.18	%	165,675		6.00	%	220,899		8.00	%
Total Capital to Risk-Weighted Assets	380,454		13.78	%	220,899		8.00	%	276,124		10.00	%
Tier I Capital to Average Assets	281,024		8.81	%	127,559		4.00	%	159,449		5.00	%


					Minimum Regulatory Capital Required for Capital Adequacy plus Capital Conservation Buffer				Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
	Actual Capital
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Bankwell Bank
December 31, 2024
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	325,296	11.64	%	$	195,690	7.00	%	$	181,712	6.50	%
Tier I Capital to Risk-Weighted Assets	325,296		11.64	%	237,623		8.50	%	223,645		8.00	%
Total Capital to Risk-Weighted Assets	355,058		12.70	%	296,535		10.50	%	279,557		10.00	%
Tier I Capital to Average Assets	325,296		10.09	%	128,998		4.00	%	161,248		5.00	%
					Minimum Regulatory Capital Required for Capital Adequacy				Minimum Regulatory Capital to be Well Capitalized Under Prompt Corrective Action Provisions
	Actual Capital
	Amount		Ratio		Amount		Ratio		Amount		Ratio
Bankwell Financial Group, Inc.
December 31, 2024
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	268,733	9.60	%	$	126,030	4.50	%	$	182,043	6.50	%
Tier I Capital to Risk-Weighted Assets	268,733		9.60	%	168,040		6.00	%	224,053		8.00	%
Total Capital to Risk-Weighted Assets	367,946		13.14	%	224,053		8.00	%	280,066		10.00	%
Tier I Capital to Average Assets	268,733		8.34	%	128,943		4.00	%	161,179		5.00	%

Regulatory Restrictions on Dividends

The ability of the Company to pay dividends depends, in part, on the ability of the Bank to pay dividends to the Parent Corporation. In accordance with Connecticut statutes, regulatory approval is required to pay dividends in excess of the Bank’s profits retained in the current year plus retained profits from the previous two years. The Bank is also prohibited from paying dividends that would reduce its capital ratios below minimum regulatory requirements.

Reserve Requirements on Cash

The Bank was not required to maintain a minimum reserve balance in the Federal Reserve Bank (FRB) at June 30, 2025 or December 31, 2024.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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