Company: BWFG
Filing Date: 2025-03-05
Form Type: 10-K
Source: 0001505732-25-000052
Chunk: 136

Company: Bankwell Financial Group, Inc.
Filing Date: 2025-03-05
Form: 10-K
Item: Item 7
Chunk 136
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000 Accrued expenses and other liabilities$259 Derivatives not designated as hedging instruments:Interest rate swaps(1)$38,500 Other assets$4,213 $38,500 Accrued expenses and other liabilities$4,213 

(1) Represents interest rate swaps with commercial banking clients, which are offset by derivatives with a third party.

57

As of December 31, 2023Derivative AssetsDerivative LiabilitiesOriginal Notional AmountBalance Sheet LocationFair ValueOriginal Notional AmountBalance Sheet LocationFair Value(In thousands)Derivatives designated as hedging instruments:Interest rate swaps$125,000 Other assets$5,240 $— Accrued expenses and other liabilities$— Fair value swap$— Other assets$— $150,000 Accrued expenses and other liabilities$917 Derivatives not designated as hedging instruments:Interest rate swaps(1)$38,500 Other assets$3,579 $38,500 Accrued expenses and other liabilities$3,579 

(1) Represents interest rate swaps with commercial banking clients, which are offset by derivatives with a third party.

Liquidity and Capital Resources

Liquidity Management

Liquidity is defined as the ability to generate sufficient cash flows to meet all present and future funding requirements at reasonable costs. Our primary source of liquidity is deposits. While our generally preferred funding strategy is to attract and retain low cost deposits, our ability to do so is affected by competitive interest rates and terms in the marketplace. Other sources of funding include discretionary use of purchased liabilities (e.g., FHLB term advances and other borrowings), cash flows from our investment securities portfolios, loan sales, loan repayments and earnings. Investment securities designated as available for sale may also be sold in response to short-term or long-term liquidity needs.

The Bank’s liquidity position is monitored daily by management. The Asset Liability Committee, or ALCO, establishes guidelines to ensure maintenance of prudent levels of liquidity. ALCO reports to the Company’s Board of Directors.

The Bank has a detailed liquidity funding policy and a contingency funding plan that provide for the prompt and comprehensive response to unexpected demands for liquidity. We employ a stress testing methodology to estimate needs for contingent funding that could result from unexpected outflows of funds in excess of “business as usual” cash flows. The Bank has established unsecured borrowing capacity with the Pacific Coast Bank (PCBB), Atlantic Community Bankers Bank (