Bankwell Financial Group, Inc.

Previous wording

The discussion and analysis of our results of operations and financial condition are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from our current estimates, as a result of changing conditions and future events. We believe that accounting estimates related to the measurement of the ACL-Loans, the valuation of derivative instruments, investment securities and deferred income taxes, and the evaluation of investment securities for other than temporary impairment are particularly critical and susceptible to significant near-term change.

Current wording

The discussion and analysis of our results of operations and financial condition are based on our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of financial statements in conformity with GAAP requires us to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses. Actual results could differ from our current estimates, as a result of changing conditions and future events. We believe that accounting estimates related to the measurement of the ACL-Loans, the valuation of derivative instruments, investment securities and deferred income taxes, and the evaluation of ACL-Securities are particularly critical and susceptible to significant near-term change.

Previous wording

Revenues (net interest income plus noninterest income) for the three months ended June 30, 2025 were $25.9 million, versus $21.9 million for the three months ended June 30, 2024. Revenues for the six months ended June 30, 2025 were $49.5 million, versus $44.0 million for the six months ended June 30, 2024. The increase in revenues for the three and six months ended June 30, 2024 was attributable to a decrease in interest expense on deposits, higher interest income, and higher gains from loan sales.

Current wording

Revenues (net interest income plus noninterest income) for the three months ended September 30, 2025 were $28.5 million, versus $21.9 million for the quarter ended September 30, 2024. Revenues for the nine months ended September 30, 2025 were $78.0 million, versus $65.8 million for the nine months ended September 30, 2024. The increase in revenues for the quarter and nines months ended September 30, 2025 was attributable to increased earning asset yields, a decrease in interest expense on deposits, and higher gains from loan sales.

Previous wording

Net income available to common shareholders was $9.1 million, or $1.15 per diluted share, and $1.1 million, or $0.14 per diluted share, for the three months ended June 30, 2025 and 2024, respectively. Net income available to common shareholders was $16.0 million, or $2.03 per diluted share, and $4.9 million, or $0.62 per diluted share, for the six months ended June 30, 2025 and 2024, respectively. The increase in net income for the quarter and six months ended June 30, 2025 was primarily due to the aforementioned increase in revenues and a decrease in provision for credit losses.

Current wording

Net income available to common shareholders was $10.1 million, or $1.27 per diluted share, and $1.9 million, or $0.24 per diluted share, for the three months ended September 30, 2025 and 2024, respectively. Net income available to common shareholders was $26.1 million, or $3.29 per diluted share, and $6.8 million, or $0.86 per diluted share, for the nine months ended September 30, 2025 and 2024, respectively. The increase in net income for the quarter and nine months ended September 30, 2025 was primarily due to the aforementioned increase in revenues and a decrease in provision for credit losses.

Previous wording

Returns on average shareholders' equity and average assets for the three months ended June 30, 2025 were 12.98% and 1.14%, respectively, compared to 1.65% and 0.14%, respectively, for the three months ended June 30, 2024. Returns on average shareholders' equity and average assets for the six months ended June 30, 2025 were 11.59% and 1.00%, respectively, compared to 3.61% and 0.31%, respectively, for the six months ended June 30, 2024.

Current wording

Returns on average shareholders' equity and average assets for the three months ended September 30, 2025 were 13.84% and 1.24%, respectively, compared to 2.83% and 0.24%, respectively, for the three months ended September 30, 2024. Returns on average shareholders' equity and average assets for the nine months ended September 30, 2025 were 12.37% and 1.08%, respectively, compared to 3.35% and 0.29%, respectively, for the nine months ended September 30, 2024.

Previous wording

FTE net interest income for the three months ended June 30, 2025 and 2024 was $24.1 million and $21.3 million, respectively. FTE net interest income for the six months ended June 30, 2025 and 2024 was $46.3 million and $42.5 million, respectively.

Current wording

FTE net interest income for the three months ended September 30, 2025 and 2024 was $26.1 million and $20.8 million, respectively. FTE net interest income for the nine months ended September 30, 2025 and 2024 was $72.4 million and $63.3 million, respectively.

Previous wording

FTE interest income for the three months ended June 30, 2025 increased by $1.0 million, or 2.2%, to $48.8 million, compared to FTE interest income for the three months ended June 30, 2024. FTE interest income for the six months ended June 30, 2025 increased by $1.3 million, or 1.4%, to $97.4 million, compared to FTE interest income for the six months ended June 30, 2024. This increase was due to an increase in interest and fees on loans due to higher overall loan yields.

Current wording

FTE interest income for the three months ended September 30, 2025 increased by $2.4 million, or 5.0%, to $50.7 million, compared to FTE interest income for the three months ended September 30, 2024. FTE interest income for the nine months ended September 30, 2025 increased by $3.8 million, or 2.6%, to $148.1 million, compared to FTE interest income for the nine months ended September 30, 2024. This increase was due to an increase in interest and fees on loans due to higher overall loan yields.

Previous wording

Interest expense for the three months ended June 30, 2025 decreased by $1.7 million compared to interest expense for the three months ended June 30, 2024. Interest expense for the six months ended June 30, 2025 decreased by $2.5 million compared to interest expense for the six months ended June 30, 2024. The decrease in interest expense for the three and six months ended June 30, 2025 was driven by a decrease in interest expense on deposits, resulting from a decrease in rates on interest bearing deposits and improved deposit mix.

Current wording

Interest expense for the three months ended September 30, 2025 decreased by $2.9 million compared to interest expense for the three months ended September 30, 2024. Interest expense for the nine months ended September 30, 2025 decreased by $5.3 million compared to interest expense for the nine months ended September 30, 2024. The decrease in interest expense for the three and nine months ended September 30, 2025 was driven by a decrease in interest expense on deposits, resulting from a decrease in rates on interest bearing deposits and improved deposit mix.

Previous wording

The following tables present 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 and six months ended June 30, 2025 and 2024.

Current wording

The following tables present 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 and nine months ended September 30, 2025 and 2024.

Previous wording

(2)The adjustment for securities and loans taxable equivalency amounted to $143 thousand and $67 thousand for the three months ended June 30, 2025 and 2024, respectively.

Current wording

(2)The adjustment for securities and loans taxable equivalency amounted to $141 thousand and $122 thousand for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

(2)The adjustment for securities and loans taxable equivalency amounted to $285 thousand and $118 thousand for the six months ended June 30, 2025 and 2024, respectively.

Current wording

(2)The adjustment for securities and loans taxable equivalency amounted to $427 thousand and $239 thousand for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

The (credit) provision for credit losses is based on management’s periodic assessment of the adequacy of our ACL-Loans and ACL-Unfunded Commitments which, in turn, is based on interrelated factors such as the composition of our loan portfolio and its inherent risk characteristics, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of real estate values, and regulatory guidelines. The provision for credit losses is charged against earnings in order to maintain our ACL-Loans and ACL-Unfunded Commitments and reflects management’s best estimate of probable losses inherent in our loan portfolio as of the balance sheet date.

Current wording

The provision for credit losses is based on management’s periodic assessment of the adequacy of our ACL-Loans and ACL-Unfunded Commitments which, in turn, is based on interrelated factors such as the composition of our loan portfolio and its inherent risk characteristics, the level of nonperforming loans and net charge-offs, both current and historic, local economic and credit conditions, the direction of real estate values, and regulatory guidelines. The provision for credit losses is charged against earnings in order to maintain our ACL-Loans and ACL-Unfunded Commitments and reflects management’s best estimate of probable losses inherent in our loan portfolio as of the balance sheet date.

Previous wording

The credit for credit losses for the three months ended June 30, 2025 was $0.4 million compared to a provision for credit losses of $8.2 million for the three months ended June 30, 2024. The provision for credit losses for the six months ended June 30, 2025 was $0.1 million compared to a provision for credit losses of $11.9 million for the six months ended June 30, 2024.

Current wording

The credit for credit losses for the three months ended September 30, 2025 was $0.4 million compared to a provision for credit losses of $6.3 million for the three months ended September 30, 2024. The provision for credit losses for the nine months ended September 30, 2025 was $0.4 million compared to a provision for credit losses of $18.2 million for the nine months ended September 30, 2024. The reduction in the credit for credit losses was primarily driven by charge-offs recorded during the three- and nine-month periods of the prior year.

Previous wording

The following tables compare noninterest income for the three and six months ended June 30, 2025 and 2024:

Current wording

The following tables compare noninterest income for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Noninterest income increased by $1.3 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Noninterest income increased by $1.9 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase in noninterest income for the three and six months ended June 30, 2025 was driven by higher gains from loan sales.

Current wording

Noninterest income increased by $1.3 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Noninterest income increased by $3.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in noninterest income for the three and nine months ended September 30, 2025 was driven by higher gains from SBA loan sales.

Previous wording

The following tables compare noninterest expense for the three and six months ended June 30, 2025 and 2024:

Current wording

The following tables compare noninterest expense for the three and nine months ended September 30, 2025 and 2024:

Previous wording

Noninterest expense increased by $2.3 million to $14.5 million for the three months ended June 30, 2025 compared to the three months ended June 30, 2024. Noninterest expense increased by $3.1 million to $28.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits mainly related to additional new hires. Additionally, professional services increased as a result of new initiatives including recruiting costs.

Current wording

Noninterest expense increased by $1.8 million to $14.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. Noninterest expense increased by $4.9 million to $43.3 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits mainly related to incremental new hires aligned with strategic initiatives. Additionally, professional services increased as a result of increased recruiting costs aligned with strategic initiatives.

Previous wording

Income tax expense for the three months ended June 30, 2025 and 2024 totaled $2.7 million and $0.4 million, respectively. The effective tax rates for the three months ended June 30, 2025 and 2024 were 23.1% and 24.2%, respectively. Income tax expense for the six months ended June 30, 2025 and 2024 totaled $4.8 million and $1.7 million, respectively. The effective tax rates for the six months ended June 30, 2025 and 2024 were 23.1% and 25.5%, respectively.

Current wording

Income tax expense for the three months ended September 30, 2025 and 2024 totaled $3.4 million and $0.8 million, respectively. The effective tax rates for the three months ended September 30, 2025 and 2024 were 25.2% and 29.0%, respectively. Income tax expense for the nine months ended September 30, 2025 and 2024 totaled $8.2 million and $2.5 million, respectively. The effective tax rates for the nine months ended September 30, 2025 and 2024 were 23.9% and 26.6%, respectively.

Previous wording

Assets totaled $3.2 billion at June 30, 2025 a decrease of $31.9 million or 1.0% compared to December 31, 2024. Gross loans totaled $2.7 billion at June 30, 2025, a decrease of $36.9 million or 1.4% compared to December 31, 2024. Deposits totaled $2.8 billion at June 30, 2025, a decrease of $28.3 million, or 1.0% compared to December 31, 2024.

Current wording

Assets totaled $3.2 billion at September 30, 2025 a decrease of $24.5 million or 0.7% compared to December 31, 2024. Gross loans totaled $2.7 billion at September 30, 2025, an increase of $12.3 million or 0.5% compared to December 31, 2024. Deposits totaled $2.8 billion at September 30, 2025, a decrease of $30.2 million, or 1.1% compared to December 31, 2024.

Previous wording

Shareholders’ equity totaled $283.3 million as of June 30, 2025, an increase of $1.2 million compared to December 31, 2024, primarily a result of net income of $16.0 million for the six months ended June 30, 2025. The increase was partially offset by dividends paid of $3.1 million and share repurchases of $1.3 million.

Current wording

Shareholders’ equity totaled $292.8 million as of September 30, 2025, an increase of $22.3 million compared to December 31, 2024, primarily a result of net income of $26.1 million for the nine months ended September 30, 2025. The increase was partially offset by dividends paid of $4.7 million.

Previous wording

Total loans before deferred loan fees and the ACL-Loans were $2.7 billion at June 30, 2025 and $2.7 billion at December 31, 2024. Total gross loans decreased $36.9 million as of June 30, 2025 compared to the year ended December 31, 2024.

Current wording

Total loans before deferred loan fees and the ACL-Loans were $2.7 billion at September 30, 2025 and $2.7 billion at December 31, 2024. Total gross loans increased $12.3 million as of September 30, 2025 compared to the year ended December 31, 2024.

Previous wording

(1) Excludes the positive fair value effect of the portfolio layer swap of $210 thousand and the positive fair value effective of the portfolio layer swap of $219 thousand for Commercial Real Estate at June 30, 2025 and December 31, 2024, respectively.

Current wording

(1) Excludes the positive fair value effect of the portfolio layer swap of $220 thousand and the positive fair value effective of the portfolio layer swap of $219 thousand for Commercial Real Estate at September 30, 2025 and December 31, 2024, respectively.

Previous wording

As of June 30, 2025, the Bank had $149.7 million of loans collateralized by offices, which represented 8.3% of the total loan portfolio. Most of the properties in this portfolio are in suburban locations. 95.2% of this portfolio was pass rated, and there was one relationship totaling $5.5 million on nonaccrual status. As of June 30, 2025, the Bank had $244.8 million of loans collateralized by multifamily properties, which represented 9.2% of the total loan portfolio. 89.0% of this portfolio is pass rated and current; these properties are all located in Connecticut, New York, or New Jersey, with eight properties, totaling $50.0 million, located in New York City. 78.3% of the New York City exposure is located in Brooklyn, 11.9% in Manhattan and the remaining 9.8% in Queens.

Current wording

As of September 30, 2025, the Bank had $144.5 million of loans collateralized by offices, which represented 7.6% of the total loan portfolio. Most of the properties in this portfolio are in suburban locations. 95.1% of this portfolio was pass rated, and there was one relationship totaling $5.4 million on nonaccrual status. As of September 30, 2025, the Bank had $264.3 million of loans collateralized by multifamily properties, which represented 9.7% of the total loan portfolio. 89.5% of this portfolio is pass rated and current; these properties are all located in Connecticut, New York, or New Jersey, with eight properties, totaling $49.9 million, located in New York City. 78.3% of the New York City exposure is located in Brooklyn, 11.9% in Manhattan and the remaining 9.8% in Queens.

Previous wording

(1) 99.6% and 99.6% of Risk Rated 6 loans are current on payments, 96.5% and 93.0% are guaranteed by ultra-high net worth sponsors as of June 30, 2025 and December 31, 2024, respectively.

Current wording

(1) 99.9% and 99.6% of Risk Rated 6 loans are current on payments, 97.7% and 93.0% are guaranteed by ultra-high net worth sponsors as of September 30, 2025 and December 31, 2024, respectively.

Previous wording

Nonaccrual loans totaled $23.9 million at June 30, 2025 and $53.3 million at December 31, 2024. In the first quarter of 2025, the Company sold a $27.1 million multifamily commercial real estate loan on nonperforming status at par value.

Current wording

Nonaccrual loans totaled $17.0 million at September 30, 2025 and $53.3 million at December 31, 2024. In the first quarter of 2025, the Company sold a $27.1 million multifamily commercial real estate loan on nonperforming status at par value.

Previous wording

At June 30, 2025, our ACL-Loans was $29.3 million and represented 1.10% of total gross loans, compared to $29.0 million or 1.07% of total gross loans, at December 31, 2024.

Current wording

At September 30, 2025, our ACL-Loans was $30.0 million and represented 1.10% of total gross loans, compared to $29.0 million or 1.07% of total gross loans, at December 31, 2024.

Previous wording

At June 30, 2025, the carrying value of our investment securities portfolio totaled $142.6 million and represented 4.4% of total assets, compared to $146.1 million, or 4.5% of total assets, at December 31, 2024.

Current wording

At September 30, 2025, the carrying value of our investment securities portfolio totaled $128.2 million and represented 4.0% of total assets, compared to $146.1 million, or 4.5% of total assets, at December 31, 2024.

Previous wording

The net unrealized loss position on our investment portfolio at June 30, 2025 was $1.8 million and included gross unrealized gains of $1.8 million. The net unrealized loss position on our investment portfolio at December 31, 2024 was $4.9 million and included gross unrealized gains of $1.3 million.

Current wording

The net unrealized loss position on our investment portfolio at September 30, 2025 was $1.3 million and included gross unrealized gains of $1.7 million. The net unrealized loss position on our investment portfolio at December 31, 2024 was $4.9 million and included gross unrealized gains of $1.3 million.

Previous wording

Total deposits were $2.8 billion at June 30, 2025, a decrease of $28.3 million, from the balance at December 31, 2024.

Current wording

Total deposits were $2.8 billion at September 30, 2025, a decrease of $30.2 million, from the balance at December 31, 2024.

Previous wording

Brokered certificates of depo sits totaled $570.2 million at June 30, 2025 and $651.5 million at December 31, 2024, respectively. Brokered money market accounts totaled $53.7 million at June 30, 2025 and$53.5 million at December 31, 2024, respectively. Certificates of deposits from national listing services were $68.4 million and $109.1 million as of June 30, 2025 and December 31, 2024, respectively. There were no one-way buy CDARS or one-way buy ICS at June 30, 2025 or December 31, 2024. Brokered deposits are comprised of Brokered CDs, brokered money market accounts, one-way buy CDARS, and one-way buy ICS.

Current wording

Brokered certificates of depo sits totaled $555.0 million at September 30, 2025 and $651.5 million at December 31, 2024, respectively. Brokered money market accounts totaled $53.7 million at September 30, 2025 and$53.5 million at December 31, 2024, respectively. Certificates of deposits from national listing services were $54.6 million and $109.1 million as of September 30, 2025 and December 31, 2024, respectively. There were no one-way buy CDARS or one-way buy ICS at September 30, 2025 or December 31, 2024. Brokered deposits are comprised of Brokered CDs, brokered money market accounts, one-way buy CDARS, and one-way buy ICS.

Previous wording

As of June 30, 2025, our FDIC insured deposits were $1,903.8 million, or 69% of total deposits. Additionally, deposits totaling $120.0 million, or 4% of total deposits, are secured by standby letters of credit with the Federal Home Loan Bank of Boston.

Current wording

As of September 30, 2025, our FDIC insured deposits were $1,974.7 million, or 72% of total deposits. Additionally, deposits totaling $78.3 million, or 3% of total deposits, are secured by standby letters of credit with the Federal Home Loan Bank of Boston.

Previous wording

We utilize advances from the Federal Home Loan Bank of Boston, or FHLB, as part of our overall funding strategy and to meet short-term liquidity needs, and to a lesser degree, manage interest rate risk arising from the difference in asset and liability maturities. Total FHLB advances were$75.0 million and$90.0 million June 30, 2025 and December 31, 2024, respectively.

Current wording

We utilize advances from the Federal Home Loan Bank of Boston, or FHLB, as part of our overall funding strategy and to meet short-term liquidity needs, and to a lesser degree, manage interest rate risk arising from the difference in asset and liability maturities. Total FHLB advances were$75.0 million and$90.0 million at September 30, 2025 and December 31, 2024, respectively.

Previous wording

The Bank has additional borrowing capacity at the FHLB up to a certain percentage of the value of qualified collateral. In accordance with agreements with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances. At June 30, 2025, the Bank had pledged $795.0 million of eligible loans as collateral to support borrowing capacity at the FHLB. As of June 30, 2025, the Bank had immediate availability to borrow an additional $329.6 million from the FHLB based on qualified collateral.

Current wording

The Bank has additional borrowing capacity at the FHLB up to a certain percentage of the value of qualified collateral. In accordance with agreements with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances. At September 30, 2025, the Bank had pledged $716.6 million of eligible loans as collateral to support borrowing capacity at the FHLB. As of September 30, 2025, the Bank had immediate availability to borrow an additional $312.5 million from the FHLB based on qualified collateral.

Previous wording

Shareholders’ equity totaled $283.3 million as of June 30, 2025, an increase of $12.8 million compared to December 31, 2024, primarily a result of net income of $16.0 million for the six months ended June 30, 2025. The increase was partially offset by dividends paid of $3.1 million and share repurchases of $1.3 million.

Current wording

Shareholders’ equity totaled $292.8 million as of September 30, 2025, an increase of $22.3 million compared to December 31, 2024, primarily a result of net income of $26.1 million for the nine months ended September 30, 2025. The increase was partially offset by dividends paid of $4.7 million.

Previous wording

The Bank and Company are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. At June 30, 2025, the Bank met all capital adequacy requirements to which it was subject and exceeded the regulatory minimum capital levels to be considered well-capitalized under the regulatory framework for prompt corrective action. At June 30, 2025, the Bank’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 12.20%, total capital to risk-weighted assets was 12.20%, Tier 1 capital to risk-weighted assets was 13.28% and Tier 1 capital to average assets was 10.57%. At June 30, 2025, the Company met all capital adequacy requirements to which it was subject and exceeded the regulatory minimum capital levels to be considered well-capitalized under the regulatory framework for prompt corrective action. At June 30, 2025, the Company’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 10.18%, total capital to risk-weighted assets was 10.18%, Tier 1 capital to risk-weighted assets was 13.78% and Tier 1 capital to average assets was 8.81%.

Current wording

2025, the Bank met all capital adequacy requirements to which it was subject and exceeded the regulatory minimum capital levels to be considered well-capitalized under the regulatory framework for prompt corrective action. At September 30, 2025, the Bank’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 12.39%, total capital to risk-weighted assets was 12.39%, Tier 1 capital to risk-weighted assets was 13.48% and Tier 1 capital to average assets was 10.71%. At September 30, 2025, the Company met all capital adequacy requirements to which it was subject and exceeded the regulatory minimum capital levels to be considered well-capitalized under the regulatory framework for prompt corrective action. At September 30, 2025, the Company’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 10.39%, total capital to risk-weighted assets was 10.39%, Tier 1 capital to risk-weighted assets was 13.98% and Tier 1 capital to average assets was 8.99%.

Previous wording

It should be noted that the static balance sheet assumption does not necessarily reflect our expectation for future balance sheet growth, which is a function of the business environment and client behavior. Another significant simulation assumption is the sensitivity of core deposits to fluctuations in interest rates. Income simulation results assume that changes in both core savings deposit rates and balances are related to changes in short-term interest rates. Lastly, mortgage-backed securities and mortgage loans involve a level of risk that unforeseen changes in prepayment speeds may cause related cash flows to vary significantly in differing rate environments. Such changes could affect the level of reinvestment risk associated with cash flow from these instruments, as well as their market value. Changes in prepayment speeds could also increase or decrease the amortization of premium or accretion of discounts related to such instruments, thereby affecting interest income.

Current wording

It should be noted that the static balance sheet assumption does not necessarily reflect our expectation for future balance sheet growth, which is a function of the business environment and client behavior. Another significant simulation assumption is the sensitivity of core deposits to fluctuations in interest rates. Income simulation results assume that changes in both core savings deposit rates and balances are related to changes in short-term interest rates. Lastly, mortgage-backed securities and mortgage loans involve a level of risk that unforeseen changes in prepayment speeds may cause related cash flows to vary significantly in differing rate environments. Such changes could affect the level of reinvestment risk associated with cash flow from these instruments, as well as their market value. Changes in prepayment speeds could also increase or decrease the amortization of premium or accretion of discounts related to such instruments, thereby affecting interest income. Accordingly, although the above measurements provide an indication of the Company’s interest rate risk exposure at a particular point in time, such measurements are not intended to provide a precise forecast of the effect of changes in market interest rates.