Company: BWFG
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001505732-25-000052
Chunk: 127

Company: Bankwell Financial Group, Inc.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 7
Chunk 127
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 identified and reasonably determined. The balance of our ACL-Loans is based on internally assigned risk classifications of loans, the Bank’s and peer banks’ historical loss experience, changes in the nature of the loan portfolio, overall portfolio quality, industry concentrations, delinquency trends, current economic factors and the estimated impact of current economic conditions on certain historical loan loss rates. See additional discussion regarding our Allowance for Credit Losses-Loans ("ACL-Loans") and Allowance for Credit Losses-Unfunded commitments ("ACL-Unfunded commitments") under the caption "Critical Accounting Policies and Estimates."

Our general practice is to identify problem credits early and recognize full or partial charge-offs as promptly as practicable when it is determined that it is probable that the loan will not be repaid according to its original contractual terms, including principal and interest. Full or partial charge-offs on collateral dependent loans are recognized when the collateral is deemed to be insufficient to support the carrying value of the loan. We do not recognize a recovery when an updated appraisal indicates a subsequent increase in value of the collateral.

Our charge-off policies, which comply with standards established by our banking regulators, are consistently applied from period to period. Charge-offs are recorded on a monthly basis, as incurred. Partially charged-off loans continue to be evaluated on a monthly basis and additional charge-offs or loan loss provisions may be recorded on the remaining loan balance based on the same criteria.

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The following table presents the activity in our ACL-Loans and related ratios for the dates indicated:At December 31,20242023(Dollars in thousands)Balance at beginning of period$27,946 $22,431 Day 1 CECL Adjustment on January 1, 2023— 5,079 Charge-offs:Residential real estate(141)— Commercial real estate(13,111)(824)Construction(1,771)— Commercial business(7,909)(440)Consumer(84)(83)Total charge-offs(23,016)(1,347)Recoveries:Residential real estate141 — Commercial real estate1,126 — Commercial business(3)531 Consumer23 39 Total recoveries1,287 570 Net (charge-offs) recoveries(21,729)(777)Provision charged to earnings22,790 1,213 Balance at end of period$29,007 $27,946 Net charge-offs or (recoveries) to average loans0.81