Company: BWFG
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001505732-25-000089
Chunk: 156

Company: Bankwell Financial Group, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 2
Chunk 156
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 and is the primary source of our operating income. Net interest income is affected by the level of interest rates, changes in interest rates and changes in the amount and composition of interest earning assets and interest bearing liabilities. Included in interest income are certain loan fees, such as deferred origination fees and late charges. We convert tax-exempt income to a fully taxable equivalent ("FTE") basis using the statutory federal income tax rate adjusted for applicable state income taxes net of the related federal tax benefit. The average balances are principally daily averages. Interest income on loans includes the effect of deferred loan fees and costs accounted for as yield adjustments. Premium amortization and discount accretion are included in the respective interest income and interest expense amounts.

FTE net interest income for the three months ended March 31, 2025 and 2024 was $22.2 million and $21.2 million, respectively.

FTE interest income for the three months ended March 31, 2025 increased by $0.3 million, or 0.6%, to $48.6 million, compared to FTE interest income for the three months ended March 31, 2024. This increase was due to an increase in interest and fees on loans due to higher overall loan yields.

Interest expense for the three months ended March 31, 2025 decreased by $0.7 million compared to interest expense for the three months ended March 31, 2024. The decrease in interest expense for the three months ended March 31, 2025 was driven by a decrease in interest expense on deposits, resulting from a decrease in rates on interest bearing deposits.

48

Distribution of Assets, Liabilities and Shareholders’ Equity; Interest Rates and Interest Differential

The following table presents the average balances and yields earned on interest earning assets and average balances and weighted average rates paid on our funding liabilities for the three months ended March 31, 2025 and 2024.

For the Quarter EndedMarch 31, 2025March 31, 2024AverageBalanceInterestYield/Rate (4)AverageBalanceInterestYield/Rate (4)Assets:Cash and Fed funds sold$349,235 $3,557 4.13 %$292,662 $3,826 5.26 %Securities(1)150,650 1,477 3.92 134,737 1,060 3.15 Loans:Commercial real estate1,848,208