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 and ACL-Securities 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, 2026 were $32.8 million, versus $25.9 million for the three months ended June 30, 2025. Revenues for the six months ended June 30, 2026 were $63.0 million, versus $49.5 million for the six months ended June 30, 2025. The increase in revenues for the three months ended June 30, 2026 was attributable to a decrease in interest expense on deposits and higher interest income. The increase in revenues for the six months ended June 30, 2026 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, 2026 were $35.3 million, versus $28.5 million for the quarter ended September 30, 2025. Revenues for the nine months ended September 30, 2026 were $98.3 million, versus $78.0 million for the nine months ended September 30, 2025. The increase in revenues for the quarter and nine months ended September 30, 2026 was attributable to a decrease in interest expense on deposits and higher gains from loan sales.

Previous wording

Net income available to common shareholders was $12.4 million, or $1.52 per diluted share, and $9.1 million, or $1.14 per diluted share, for the three months ended June 30, 2026 and 2025, respectively. Net income available to common shareholders was $23.6 million, or $2.95 per diluted share, and $16.0 million, or $2.01 per diluted share, for the six months ended June 30, 2026 and 2025, respectively. The increase in net income for the quarter and six months ended June 30, 2026 was primarily due to the aforementioned increase in revenues partially offset by an increase in provision for credit losses.

Current wording

Net income was $12.7 million, or $1.58 per diluted share, and $10.1 million, or $1.26 per diluted share, for the three months ended September 30, 2026 and 2025, respectively. Net income available to common shareholders was $36.4 million, or $4.52 per diluted share, and $26.1 million, or $3.27 per diluted share, for the nine months ended September 30, 2026 and 2025, respectively. The increase in net income for the quarter and nine months ended September 30, 2026 was primarily due to the aforementioned increase in revenues and an increase in credit for credit losses.

Previous wording

Returns on average shareholders' equity and average assets for the three months ended June 30, 2026 were 15.49% and 1.46%, respectively, compared to 12.98% and 1.14%, respectively, for the three months ended June 30, 2025. Returns on average shareholders' equity and average assets for the six months ended June 30, 2026 were 15.19% and 1.41%, respectively, compared to 11.59% and 1.00%, respectively, for the six months ended June 30, 2025.

Current wording

Returns on average tangible shareholders' equity and average assets for the three months ended September 30, 2026 were 15.28% and 1.45%, respectively, compared to 13.96% and 1.24%, respectively, for the three months ended September 30, 2025. Returns on average tangible shareholders' equity and average assets for the nine months ended September 30, 2026 were 15.30% and 1.42%, respectively, compared to 12.48% and 1.08%, respectively, for the nine months ended September 30, 2025.

Previous wording

FTE net interest income for the three months ended June 30, 2026 and 2025 was $29.6 million and $24.1 million, respectively. FTE net interest income for the six months ended June 30, 2026 and 2025 was $56.6 million and $46.3 million, respectively.

Current wording

FTE net interest income for the three months ended September 30, 2026 and 2025 was $31.5 million and $26.1 million, respectively. FTE net interest income for the nine months ended September 30, 2026 and 2025 was $88.1 million and $72.4 million, respectively.

Previous wording

FTE interest income for the three months ended June 30, 2026 increased by $3.6 million, or 7.3%, to $52.3 million, compared to FTE interest income for the three months ended June 30, 2025. FTE interest income for the six months ended June 30, 2026 increased by $5.6 million, or 5.7%, to $103.0 million, compared to FTE interest income for the six months ended June 30, 2025. This increase was due to an increase in average loan balances.

Current wording

FTE interest income for the three months ended September 30, 2026 increased by $4.2 million, or 8.3%, to $54.9 million, compared to FTE interest income for the three months ended September 30, 2025. FTE interest income for the nine months ended September 30, 2026 increased by $9.8 million, or 6.6%, to $157.9 million, compared to FTE interest income for the nine months ended September 30, 2025. This increase was due to an increase in interest and fees on loans due to higher overall loan volume.

Previous wording

Interest expense for the three months ended June 30, 2026 decreased by $2.0 million compared to interest expense for the three months ended June 30, 2025. Interest expense for the six months ended June 30, 2026 decreased by $4.7 million compared to interest expense for the six months ended June 30, 2025. The decrease in interest expense for the three and six months ended June 30, 2026 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, 2026 decreased by $1.2 million compared to interest expense for the three months ended September 30, 2025. Interest expense for the nine months ended September 30, 2026 decreased by $5.9 million compared to interest expense for the nine months ended September 30, 2025. The decrease in interest expense for the three and nine months ended September 30, 2026 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, 2026 and 2025.

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, 2026 and 2025.

Previous wording

(2)The adjustment for securities and loans taxable equivalency amounted to $111 thousand and $143 thousand for the three months ended June 30, 2026 and 2025, respectively.

Current wording

(2)The adjustment for securities and loans taxable equivalency amounted to $113 thousand and $142 thousand for the three months ended September 30, 2026 and 2025, respectively.

Previous wording

(2)The adjustment for securities and loans taxable equivalency amounted to $221 thousand and $285 thousand for the six months ended June 30, 2026 and 2025, respectively.

Current wording

(2)The adjustment for securities and loans taxable equivalency amounted to $334 thousand and $427 thousand for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

The provision (credit) 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 expected credit losses in our loan portfolio as of the balance sheet date.

Previous wording

The provision for credit losses for the three months ended June 30, 2026 was $1.2 million compared to a credit for credit losses of $0.4 million for the three months ended June 30, 2025. The provision for credit losses for the six months ended June 30, 2026 was $0.2 million compared to a provision for credit losses of $0.1 million for the six months ended June 30, 2025.

Current wording

The credit for credit losses for the three months ended September 30, 2026 was $1.3 million compared to a provision for credit losses of $0.4 million for the three months ended September 30, 2025. The credit for credit losses for the nine months ended September 30, 2026 was $1.1 million compared to a provision for credit losses of $0.4 million for the nine months ended September 30, 2025.

Previous wording

Noninterest income is a component of our revenue and is comprised primarily of fees generated from sales and referrals of loans, deposit relationships with our clients, and income earned on bank-owned life insurance.

Current wording

Noninterest income is a component of our revenue and is comprised primarily of fees generated from sales and referrals of loans, fees generated from deposit relationships with our clients, and income earned on bank-owned life insurance.

Previous wording

The following tables compare noninterest income for the three and six months ended June 30, 2026 and 2025:

Current wording

The following tables compare noninterest income for the three and nine months ended September 30, 2026 and 2025:

Previous wording

Noninterest income increased by $1.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Noninterest income increased by $3.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in noninterest income for the three and six months ended June 30, 2026 was driven by higher gains from SBA loan sales.

Current wording

Noninterest income increased by $1.5 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Noninterest income increased by $4.6 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase in noninterest income for the three and nine months ended September 30, 2026 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, 2026 and 2025:

Current wording

The following tables compare noninterest expense for the three and nine months ended September 30, 2026 and 2025:

Previous wording

Noninterest expense increased by $0.7 million to $15.3 million for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. Noninterest expense increased by $3.5 million to $32.1 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits mainly related to incremental new hires in support of strategic initiatives.

Current wording

Noninterest expense increased by $5.2 million to $19.8 million for the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Noninterest expense increased by $8.7 million to $52.0 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025. The increase in noninterest expense was attributed to $3.0 million of core conversion related costs, primarily contract termination fees, as well as an increase in salaries and employee benefits due to ongoing investments in talent to support growth. The Company expects to incur additional core conversion-related costs in future quarters as implementation activities progress.

Previous wording

Income tax expense for the three months ended June 30, 2026 and 2025 totaled $3.9 million and $2.7 million, respectively. The effective tax rates for the three months ended June 30, 2026 and 2025 were 24.1% and 23.1%, respectively. Income tax expense for the six months ended June 30, 2026 and 2025 totaled $7.0 million and $4.8 million, respectively. The effective tax rates for the six months ended June 30, 2026 and 2025 were 22.9% and 23.1%, respectively.

Current wording

Income tax expense for the three months ended September 30, 2026 and 2025 totaled $4.0 million and $3.4 million, respectively. The effective tax rates for the three months ended September 30, 2026 and 2025 were 24.0% and 25.2%, respectively. Income tax expense for the nine months ended September 30, 2026 and 2025 totaled $11.1 million and $8.2 million, respectively. The effective tax rates for the nine months ended September 30, 2026 and 2025 were 23.3% and 23.9%, respectively.

Previous wording

Assets totaled $3.5 billion at June 30, 2026 an increase of $115.7 million or 3.4% compared to December 31, 2025. Gross loans totaled $3.0 billion at June 30, 2026, an increase of $119.6 million or 4.2% compared to December 31, 2025. Deposits totaled $3.0 billion at June 30, 2026, an increase of $171.0 million, or 6.0% compared to December 31, 2025.

Current wording

Assets totaled $3.6 billion at September 30, 2026, an increase of $195.4 million or 5.8% compared to December 31, 2025. Gross loans totaled $3.0 billion at September 30, 2026, an increase of $142.6 million or 5.0% compared to December 31, 2025. Deposits totaled $3.0 billion at September 30, 2026, an increase of $138.2 million, or 4.9% compared to December 31, 2025.

Previous wording

Shareholders’ equity totaled $323.5 million as of June 30, 2026, an increase of $22.0 million compared to December 31, 2025, primarily a result of net income of $23.6 million for the six months ended June 30, 2026. The increase was partially offset by dividends paid of $3.2 million.

Current wording

Shareholders’ equity totaled $334.1 million as of September 30, 2026, an increase of $32.6 million compared to December 31, 2025, primarily a result of net income of $36.4 million for the nine months ended September 30, 2026. 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 $3.0 billion at June 30, 2026 and $2.8 billion at December 31, 2025. Total gross loans increased $119.6 million as of June 30, 2026 compared to the year ended December 31, 2025.

Current wording

Total loans before deferred loan fees and the ACL-Loans were $3.0 billion at September 30, 2026 and $2.8 billion at December 31, 2025. Total gross loans increased $142.6 million as of September 30, 2026 compared to the year ended December 31, 2025.

Previous wording

As of June 30, 2026, the Bank had $137.1 million of loans collateralized by offices, which represented 4.6% of the total loan portfolio. Most of the properties in this portfolio are in suburban locations. 95.3% of this portfolio was pass rated, and there was one relationship totaling $4.9 million on nonaccrual status. As of June 30, 2026, the Bank had $328.6 million of loans collateralized by multifamily properties, which represented 11.1% of the total loan portfolio. 93.2% of this portfolio is pass rated and current; these properties are all located in Connecticut, New York, or New Jersey, with nine properties, totaling $69.5 million, located in New York City. 55.8% of the New York City exposure is located in Brooklyn, 28.8% in the Bronx, 8.5% in Manhattan and the remaining 7.0% in Queens.

Current wording

As of September 30, 2026, the Bank had $135.4 million of loans collateralized by offices, which represented 4.5% of the total loan portfolio. Most of the properties in this portfolio are in suburban locations. 95.7% of this portfolio was pass rated, and there was one relationship totaling $4.3 million on nonaccrual status. As of September 30, 2026, the Bank had $334.0 million of loans collateralized by multifamily properties, which represented 11.2% of the total loan portfolio. 85.1% of this portfolio is pass rated and current; the majority of these properties are located in Connecticut, New York, or New Jersey, with ten properties, totaling $75.9 million, located in New York City. 50.3% of the New York City exposure is located in Brooklyn, 26.4% in the Bronx, 17.0% in Manhattan and the remaining 6.4% in Queens.

Previous wording

The Company has established credit policies applicable to each type of lending activity in which it engages. The Company evaluates the creditworthiness of each client and extends credit of up to 80% of the market value of the collateral, (85% maximum for owner occupied commercial real estate), depending on the client's creditworthiness and the type of collateral. The client’s ability to service the debt is monitored on an ongoing basis. Real estate is the primary form of collateral. Other important forms of collateral are business assets, time deposits and marketable securities. While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment for commercial loans to be based on the client’s ability to generate continuing cash flows. The Company does not provide first or second consumer mortgage loans secured by residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Current wording

The Company has established credit policies applicable to each type of lending activity in which it engages. The Company evaluates the creditworthiness of each client and extends credit of up to 80% of the market value of the collateral, (85% maximum for owner occupied commercial real estate), depending on the client's creditworthiness and the type of collateral. The client’s ability to service the debt is monitored on an ongoing basis. Real estate is the primary form of collateral. Other important forms of collateral are business assets, time deposits and marketable securities. While collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment for commercial loans to be based on the client’s ability to generate continuing cash flows. The Company does not provide first or second residential mortgage loans secured by residential properties but has a small legacy portfolio which continues to amortize, pay off due to the sale of the collateral, or refinance away from the Company.

Previous wording

(1) 98.6% and 100.0% of Risk Rated 6 loans are current on payments, 88.0% and 99.3% are guaranteed by ultra-high net worth sponsors as of June 30, 2026 and December 31, 2025, respectively.

Current wording

(1) 100.0% and 100.0% of Risk Rated 6 loans are current on payments, 90.0% and 93.3% are guaranteed by ultra-high net worth sponsor groups as of September 30, 2026 and December 31, 2025, respectively.

Previous wording

Nonaccrual loans totaled $15.9 million at June 30, 2026 and $16.3 million at December 31, 2025.

Current wording

Nonaccrual loans totaled $7.1 million at September 30, 2026 and $16.3 million at December 31, 2025. The decrease primarily reflects the sale of a note secured by a suburban retail CRE loan in Westchester County, New York, that had been modified during the COVID-19 pandemic.

Previous wording

There was no Other Real Estate Owned ("OREO") at June 30, 2026 and December 31, 2025, respectively.

Current wording

There was no Other Real Estate Owned ("OREO") at September 30, 2026 or December 31, 2025, respectively.

Previous wording

Our Board of Directors has adopted an Allowance for Credit Losses policy designed to provide management with a methodology for determining and documenting the allowance for credit losses for each reporting period. We evaluate the adequacy of the ACL-Loans at least quarterly, and in determining our ACL-Loans, we estimate losses on specific loans, or groups of loans, where the probable loss can be 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.

Current wording

Our Board of Directors has adopted an Allowance for Credit Losses policy designed to provide management with a methodology for determining and documenting the allowance for credit losses for each reporting period. We evaluate the adequacy of the ACL-Loans at least quarterly, and in determining our ACL-Loans, we estimate losses on specific loans, or groups of loans, based on available information. 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.

Previous wording

At June 30, 2026, our ACL-Loans was $30.6 million and represented 1.03% of total loans, compared to $30.7 million or 1.08% of total loans, at December 31, 2025.

Current wording

At September 30, 2026, our ACL-Loans was $30.7 million and represented 1.03% of total gross loans, compared to $30.7 million or 1.08% of total gross loans, at December 31, 2025.

Previous wording

The allocation of the ACL-Loans at June 30, 2026 reflects our assessment of credit risk and probable loss within each portfolio. We believe that the level of the ACL-Loans at June 30, 2026 is appropriate to cover probable losses.

Current wording

The allocation of the ACL-Loans at September 30, 2026 reflects our assessment of credit risk and expected credit losses within each portfolio. We believe that the level of the ACL-Loans at September 30, 2026 is appropriate to cover expected credit losses.

Previous wording

At June 30, 2026, the carrying value of our investment securities portfolio totaled $205.6 million and represented 5.9% of total assets, compared to $192.1 million, or 5.7% of total assets, at December 31, 2025.

Current wording

At September 30, 2026, the carrying value of our investment securities portfolio totaled $200.2 million and represented 5.6% of total assets, compared to $192.1 million, or 5.7% of total assets, at December 31, 2025.

Previous wording

The net unrealized loss position on our investment portfolio at June 30, 2026 was $1.6 million and included gross unrealized gains of $1.8 million. The net unrealized loss position on our investment portfolio at December 31, 2025 was $0.7 million and included gross unrealized gains of $2.0 million.

Current wording

The net unrealized loss position on our investment portfolio at September 30, 2026 was $6.1 million and included gross unrealized gains of $0.8 million. The net unrealized loss position on our investment portfolio at December 31, 2025 was $0.7 million and included gross unrealized gains of $2.0 million.

Previous wording

Total deposits were $3.0 billion at June 30, 2026, an increase of $171.0 million, from the balance at December 31, 2025.

Current wording

Total deposits were $3.0 billion at September 30, 2026, an increase of $138.2 million, from the balance at December 31, 2025.

Previous wording

Brokered certificates of depo sits totaled $453.0 million at June 30, 2026 and $505.0 million at December 31, 2025, respectively. Brokered money market accounts totaled $53.7 million at June 30, 2026 and$53.7 million at December 31, 2025, respectively. Certificates of deposits from national listing services were $26.8 million and $42.3 million as of June 30, 2026 and December 31, 2025, respectively. There were no one-way buy CDARS or one-way buy ICS at June 30, 2026 or December 31, 2025. 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 deposits totaled $453.0 million at September 30, 2026 and $505.0 million at December 31, 2025. Brokered money market accounts totaled $53.7 million at September 30, 2026 and $53.7 million at December 31, 2025. Certificates of deposits from national listing services were $15.9 million and $42.3 million as of September 30, 2026 and December 31, 2025, respectively. There were no one-way buy CDARS or one-way buy ICS at September 30, 2026 or December 31, 2025. 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, 2026, our FDIC insured deposits were $1,831.0 million, or 61% of total deposits. Additionally, deposits totaling $80.1 million, or 3% of total deposits, are secured by standby letters of credit with the Federal Home Loan Bank of Boston.

Current wording

As of September 30, 2026, our FDIC insured deposits were $1,817.4 million, or 61% of total deposits. Additionally, deposits totaling $78.6 million, or 3% of total deposits, are secured by standby letters of credit with the Federal Home Loan Bank of Boston.

Previous wording

At June 30, 2026 and December 31, 2025, time deposits with a denomination of $100 thousand or more, including CDARS and brokered deposits, totaled $1.0 billion and $1.1 billion, respectively, maturing during the periods indicated in the table below:

Current wording

At September 30, 2026 and December 31, 2025, time deposits with a denomination of $100 thousand or more, including CDARS and brokered deposits, totaled $0.9 billion and $1.1 billion, respectively, maturing during the periods indicated in the table below:

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$30.0 million and$110.0 million June 30, 2026 and December 31, 2025, 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$125.0 million and$110.0 million at September 30, 2026 and December 31, 2025, 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, 2026, the Bank had pledged $919.7 million of eligible loans and investment securities as collateral to support borrowing capacity at the FHLB. As of June 30, 2026, the Bank had immediate availability to borrow an additional $562.9 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, 2026, the Bank had pledged $894.1 million of eligible loans and investment securities as collateral to support borrowing capacity at the FHLB. As of September 30, 2026, the Bank had immediate availability to borrow an additional $448.4 million from the FHLB based on qualified collateral.

Previous wording

At June 30, 2026, the Bank had a secured borrowing line with the FRB, a letter of credit with the FHLB, and unsecured lines of credit with Zions Bank, Pacific Coast Bankers Bank ("PCBB"), and Atlantic Community Bankers Bank ("ACBB"). The total borrowing line, letter, or line of credit and the amount outstanding at June 30, 2026 is summarized below:

Current wording

At September 30, 2026, the Bank had a secured borrowing line with the FRB, a letter of credit with the FHLB, and unsecured lines of credit with Zions Bank, Pacific Coast Bankers Bank ("PCBB"), and Atlantic Community Bankers Bank ("ACBB"). The total borrowing line, letter, or line of credit and the amount outstanding at September 30, 2026 are summarized below:

Previous wording

Shareholders’ equity totaled $323.5 million as of June 30, 2026, an increase of $22.0 million compared to December 31, 2025, primarily a result of net income of $23.6 million for the six months ended June 30, 2026. The increase was partially offset by dividends paid of $3.2 million.

Current wording

Shareholders’ equity totaled $334.1 million as of September 30, 2026, an increase of $32.6 million compared to December 31, 2025, primarily a result of net income of $36.4 million for the nine months ended September 30, 2026. 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, 2026, 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, 2026, the Bank’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 11.67%, Tier 1 capital to risk-weighted assets was 11.67%, total capital to risk-weighted assets was 12.70% and Tier 1 capital to average assets was 10.39%. At June 30, 2026, 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, 2026, the Company’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 10.58%, Tier 1 capital to risk-weighted assets was 10.58%, total capital to risk-weighted assets was 13.92% and Tier 1 capital to average assets was 9.41%.

Current wording

2026, 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, 2026, the Bank’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 11.65%, Tier I capital to risk-weighted assets was 11.65%, total capital to risk-weighted assets was 12.68% and Tier 1 capital to average assets was 10.28%. At September 30, 2026, 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, 2026, the Company’s ratio of Common Equity Tier 1 capital to risk-weighted assets was 10.81%, Tier 1 capital to risk weighted assets was 10.81%, total capital to risk-weighted assets was 14.12% and Tier 1 capital to average assets was 9.53%.