Company: BWFG
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0001505732-25-000089
Chunk: 117

Company: Bankwell Financial Group, Inc.
Filing Date: 2025-05-07
Form: 10-Q
Item: Part I, Item 8
Chunk 117
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 2024Carrying Value of Hedged AssetHedged Items(In thousands)Fixed Rate Asset (1)$150,392 $150,250 $142 $(665)(1) These amounts include the amortized cost basis of closed portfolios of fixed rate loans used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolio anticipated to be outstanding for the designated hedged period.  As of  March 31, 2025 and December 31, 2024, the amortized cost basis of the closed portfolio used in this hedging relationship was $514.7 million and $529.6 million, the cumulative basis adjustments associated with this hedging relationships was $0.1 million and $2.1 million, respectively.  As of  March 31, 2025 and December 31, 2024, the amount of the designated hedged item was $150.0 million, respectively.As of March 31, 2025, the Company has interest rate swaps not designated as hedging instruments, to minimize interest 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 March 31, 2025 and December 31, 2024 is as follows:As of March 31, 2025Derivative AssetsDerivative LiabilitiesOriginal Notional AmountBalance Sheet LocationFair ValueOriginal Notional AmountBalance Sheet LocationFair Value(In thousands)Derivatives designated as hedging instruments:Interest rate swaps$75,000 Other assets$2,128 $— Acc