Regulatory Matters

3 Months Ended

Mar. 31, 2026

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.

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 March 31, 2026, 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 March 31, 2026 and December 31, 2025 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
March 31, 2026
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	347,622	11.97	%	$	203,353	7.00	%	$	188,828	6.50	%
Tier I Capital to Risk-Weighted Assets	347,622		11.97	%	246,928		8.50	%	232,403		8.00	%
Total Capital to Risk-Weighted Assets	377,617		13.00	%	305,029		10.50	%	290,504		10.00	%
Tier I Capital to Average Assets	347,622		10.32	%	134,761		4.00	%	168,451		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.
March 31, 2026
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	308,447	10.59	%	$	131,086	4.50	%	$	189,346	6.50	%
Tier I Capital to Risk-Weighted Assets	308,447		10.59	%	174,781		6.00	%	233,041		8.00	%
Total Capital to Risk-Weighted Assets	408,201		14.01	%	233,041		8.00	%	291,302		10.00	%
Tier I Capital to Average Assets	308,447		9.13	%	135,101		4.00	%	168,876		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, 2025
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	344,979	11.87	%	$	203,425	7.00	%	$	188,895	6.50	%
Tier I Capital to Risk-Weighted Assets	344,979		11.87	%	247,017		8.50	%	232,486		8.00	%
Total Capital to Risk-Weighted Assets	376,171		12.94	%	305,138		10.50	%	290,608		10.00	%
Tier I Capital to Average Assets	344,979		10.56	%	130,725		4.00	%	163,406		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, 2025
Common Equity Tier 1 Capital to Risk-Weighted Assets	$	298,121	10.23	%	$	131,112	4.50	%	$	189,385	6.50	%
Tier I Capital to Risk-Weighted Assets	298,121		10.23	%	174,816		6.00	%	233,089		8.00	%
Total Capital to Risk-Weighted Assets	399,010		13.69	%	233,089		8.00	%	291,361		10.00	%
Tier I Capital to Average Assets	298,121		9.11	%	130,961		4.00	%	163,701		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 March 31, 2026 or December 31, 2025.

- 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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