Company: BWFG
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001505732-25-000162
Chunk: 129

Company: Bankwell Financial Group, Inc.
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 8
Chunk 129
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 rate risk exposure with loans to clients.The Company accounts for all non-client related interest rate swaps as either effective cash flow or fair value swaps. None of the interest rate swap agreements contain any credit risk related contingent features. A hedging instrument is expected at inception to be highly effective at offsetting changes in the hedged transactions attributable to the changes in the hedged risk. Derivatives not designated as hedges are not speculative and result from a service the Company provides to certain loan clients. The Company executes interest rate swaps with commercial banking clients to facilitate their respective risk management strategies. Those interest rate swaps are simultaneously hedged by offsetting derivatives that the Company executes with a third party, such that the Company minimizes its net risk exposure resulting from such transactions. As the interest rate derivatives associated with this program do not meet the strict hedge accounting requirements, changes in the fair value of both the client derivatives and the offsetting derivatives are recognized directly in earnings.  

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Information about derivative instruments at September 30, 2025 and December 31, 2024 is as follows:As of September 30, 2025Derivative AssetsDerivative LiabilitiesOriginal Notional AmountBalance Sheet LocationFair ValueOriginal Notional AmountBalance Sheet LocationFair Value(In thousands)Derivatives designated as hedging instruments:Interest rate swap$25,000 Other assets$1,709 $— Accrued expenses and other liabilities$— Fair value swap$— Other assets$— $150,000 Accrued expenses and other liabilities$253 Derivatives not designated as hedging instruments:Interest rate swaps(1)$38,500 Other assets$2,970 $38,500 Accrued expenses and other liabilities$2,970 (1) Represents interest rate swaps with commercial banking clients, which are offset by derivatives with a third party.Accrued interest receivables related to interest rate swaps as of September 30, 2025 totaled $0.1 million and is excluded from the fair value presented in the table above. The fair value of interest rate swaps in a net asset position, including accrued interest, totaled $1.6 million as of September 30, 2025. 

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As of December 31, 2024Derivative AssetsDerivative LiabilitiesOriginal Notional AmountBalance Sheet LocationFair ValueOriginal Notional AmountBalance Sheet LocationFair Value(In thousands)Derivatives designated as hedging instruments:Interest rate swap$75,