Company Quick10K Filing
Bankwell Financial Group
Price27.98 EPS2
Shares8 P/E12
MCap219 P/FCF-71
Net Debt-83 EBIT51
TEV136 TEV/EBIT3
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-04
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8-K 2020-10-28
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8-K 2018-04-25
8-K 2018-04-25
8-K 2018-04-04
8-K 2018-01-31

BWFG 10Q Quarterly Report

Part 1 - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-31.1 bwfg09302020ex311.htm
EX-31.2 bwfg09302020ex312.htm
EX-32 bwfg09302020ex32.htm

Bankwell Financial Group Earnings 2020-09-30

Balance SheetIncome StatementCash Flow

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020

or

    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________to________

Commission File Number: 001-36448
Bankwell Financial Group, Inc.
(Exact Name of Registrant as specified in its Charter)
Connecticut20-8251355
(State or other jurisdiction of(I.R.S. Employer
Incorporation or organization)Identification No.)
220 Elm Street
New Canaan, Connecticut 06840
(203) 652-0166
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which
Registered
Common Stock, no par value per
share

BWFG
NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨
Accelerated filer þ
Non-accelerated filer ¨
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes þ No

As of October 31, 2020, there were 7,896,503 shares of the registrant’s common stock outstanding.
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Bankwell Financial Group, Inc.
Form 10-Q

Table of Contents
Certifications
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PART 1 – FINANCIAL INFORMATION
Item 1. Financial Statements
Bankwell Financial Group, Inc.
Consolidated Balance Sheets - (unaudited)
(In thousands, except share data)
September 30, 2020December 31, 2019
ASSETS
Cash and due from banks$333,103 $78,051 
Federal funds sold6,380  
Cash and cash equivalents339,483 78,051 
Investment securities
Marketable equity securities, at fair value2,203 2,118 
Available for sale investment securities, at fair value90,563 82,439 
Held to maturity investment securities, at amortized cost (fair values of $19,816 and $18,307 at September 30, 2020 and December 31, 2019, respectively)
16,138 16,308 
Total investment securities108,904 100,865 
Loans receivable (net of allowance for loan losses of $20,372 at September 30, 2020 and $13,509 at December 31, 2019)
1,600,776 1,588,840 
Accrued interest receivable7,294 5,959 
Federal Home Loan Bank stock, at cost7,860 7,475 
Premises and equipment, net26,616 28,522 
Bank-owned life insurance42,409 41,683 
Goodwill2,589 2,589 
Other intangible assets160 214 
Deferred income taxes, net11,149 5,788 
Other assets45,782 22,196 
Total assets$2,193,022 $1,882,182 
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing deposits$234,848 $191,518 
Interest bearing deposits1,532,680 1,300,385 
Total deposits1,767,528 1,491,903 
Advances from the Federal Home Loan Bank175,000 150,000 
Subordinated debentures ($25,500 face, less unamortized debt issuance costs of $255 and $293 at September 30, 2020 and December 31, 2019, respectively)
25,245 25,207 
Accrued expenses and other liabilities50,982 32,675 
Total liabilities2,018,755 1,699,785 
Commitments and contingencies
Shareholders' equity
Common stock, no par value; 10,000,000 shares authorized, 7,896,503 and 7,868,803 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively
120,854 120,589 
Retained earnings71,603 69,324 
Accumulated other comprehensive loss(18,190)(7,516)
Total shareholders' equity174,267 182,397 
Total liabilities and shareholders' equity$2,193,022 $1,882,182 

See accompanying notes to consolidated financial statements (unaudited)
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Bankwell Financial Group, Inc.
Consolidated Statements of Income – (unaudited)
(In thousands, except share data)
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Interest and dividend income
Interest and fees on loans$18,027 $19,055 $55,471 $58,691 
Interest and dividends on securities799 903 2,402 2,892 
Interest on cash and cash equivalents96 535 468 1,432 
Total interest and dividend income18,922 20,493 58,341 63,015 
Interest expense
Interest expense on deposits4,104 6,331 14,623 18,750 
Interest expense on borrowings1,210 1,151 3,187 3,386 
Total interest expense5,314 7,482 17,810 22,136 
Net interest income13,608 13,011 40,531 40,879 
Provision for loan losses712 773 6,896 127 
Net interest income after provision for loan losses12,896 12,238 33,635 40,752 
Noninterest income
Bank-owned life insurance242 255 726 758 
Service charges and fees190 264 578 776 
Gains and fees from sales of loans27 703 27 1,409 
Gain (loss) on sale of other real estate owned, net19 (102)19 (102)
Net gain on sale of available for sale securities   76 
Other136 432 913 1,279 
Total noninterest income614 1,552 2,263 4,196 
Noninterest expense
Salaries and employee benefits5,295 4,881 15,902 14,272 
Occupancy and equipment2,266 1,946 6,410 5,666 
Data processing529 505 1,558 1,568 
Professional services374 346 1,519 1,455 
Director fees301 235 883 639 
FDIC insurance176 (125)529 74 
Marketing151 210 512 751 
Amortization of intangibles18 19 54 57 
Other619 655 1,743 1,920 
Total noninterest expense9,729 8,672 29,110 26,402 
Income before income tax expense3,781 5,118 6,788 18,546 
Income tax expense790 1,030 1,220 3,802 
Net income$2,991 $4,088 $5,568 $14,744 
Earnings Per Common Share:
Basic$0.38 $0.52 $0.71 $1.88 
Diluted$0.38 $0.52 $0.71 $1.87 
Weighted Average Common Shares Outstanding:
Basic7,721,247 7,750,490 7,728,798 7,761,441 
Diluted7,721,459 7,766,485 7,749,199 7,788,839 
Dividends per common share$0.14 $0.13 $0.42 $0.39 

See accompanying notes to consolidated financial statements (unaudited)
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Bankwell Financial Group, Inc.
Consolidated Statements of Comprehensive Income (Loss) – (unaudited)
(In thousands)
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
Net income$2,991 $4,088 $5,568 $14,744 
Other comprehensive income (loss):
Unrealized (losses) gains on securities:
Unrealized holding (losses) gains on available for sale securities(97)353 2,661 3,022 
Reclassification adjustment for gain realized in net income   (76)
Net change in unrealized (losses) gains(97)353 2,661 2,946 
Income tax benefit (expense) 21 (74)(589)(618)
Unrealized (losses) gains on securities, net of tax(76)279 2,072 2,328 
Unrealized gains (losses) on interest rate swaps:
Unrealized gains (losses) on interest rate swaps2,070 (5,766)(16,400)(15,811)
Income tax (expense) benefit(451)1,211 3,654 3,319 
Unrealized gains (losses) on interest rate swaps, net of tax1,619 (4,555)(12,746)(12,492)
Total other comprehensive income (loss), net of tax1,543 (4,276)(10,674)(10,164)
Comprehensive income (loss)$4,534 $(188)$(5,106)$4,580 

See accompanying notes to consolidated financial statements (unaudited)
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Bankwell Financial Group, Inc.
Consolidated Statements of Shareholders' Equity – (unaudited)
(In thousands, except share data)
Number of Outstanding SharesCommon StockRetained EarningsAccumulated Other Comprehensive LossTotal
Balance at June 30, 20207,887,503 $120,381 $69,712 $(19,733)$170,360 
Net income— — 2,991 — 2,991 
Other comprehensive income, net of tax— — — 1,543 1,543 
Cash dividends declared ($0.14 per share)
— — (1,100)— (1,100)
Stock-based compensation expense— 473 — — 473 
Issuance of restricted stock9,000 — — — — 
Balance at September 30, 20207,896,503 $120,854 $71,603 $(18,190)$174,267 
Number of Outstanding SharesCommon StockRetained EarningsAccumulated Other Comprehensive LossTotal
Balance at June 30, 20197,841,103 $120,064 $63,801 $(6,925)$176,940 
Net income— — 4,088 — 4,088 
Other comprehensive loss, net of tax— — — (4,276)(4,276)
Cash dividends declared ($0.13 per share)
— — (1,019)— (1,019)
Stock-based compensation expense— 279 — — 279 
Balance at September 30, 20197,841,103 $120,343 $66,870 $(11,201)$176,012 

See accompanying notes to consolidated financial statements (unaudited)
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Bankwell Financial Group, Inc.
Consolidated Statements of Shareholders' Equity – (continued)
(In thousands, except share data)


Number of Outstanding SharesCommon StockRetained EarningsAccumulated Other Comprehensive LossTotal
Balance at December 31, 20197,868,803 $120,589 $69,324 $(7,516)$182,397 
Net income— — 5,568 — 5,568 
Other comprehensive loss, net of tax— — — (10,674)(10,674)
Cash dividends declared ($0.42 per share)
— — (3,289)— (3,289)
Stock-based compensation expense— 1,286 — — 1,286 
Forfeitures of restricted stock(1,500)— — — — 
Issuance of restricted stock86,199 — — — — 
Stock options exercised1,500 16 — — 16 
Repurchase of common stock(58,499)(1,037)— — (1,037)
Balance at September 30, 20207,896,503 $120,854 $71,603 $(18,190)$174,267 
Number of Outstanding SharesCommon StockRetained EarningsAccumulated Other Comprehensive LossTotal
Balance at December 31, 20187,842,271 $120,527 $54,706 $(1,037)$174,196 
Net income— — 14,744 — 14,744 
Other comprehensive loss, net of tax— — — (10,164)(10,164)
Cash dividends declared ($0.39 per share)
— — (3,061)— (3,061)
Stock-based compensation expense— 774 — — 774 
ASU 2016-02 transition adjustment, net of tax
— — 481 — 481 
Forfeitures of restricted stock(3,800)— — — — 
Issuance of restricted stock34,450 — — — — 
Stock options exercised2,350 30 — — 30 
Repurchase of common stock(34,168)(988)— — (988)
Balance at September 30, 20197,841,103 $120,343 $66,870 $(11,201)$176,012 

See accompanying notes to consolidated financial statements (unaudited)
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Bankwell Financial Group, Inc.
Consolidated Statements of Cash Flows – (unaudited)
(In thousands)
Nine Months Ended September 30,
20202019
Cash flows from operating activities
Net income$5,568 $14,744 
Adjustments to reconcile net income to net cash used in operating activities:
Net amortization (accretion) of premiums and discounts on investment securities47 (375)
Provision for loan losses6,896 127 
(Credit) provision for deferred income taxes(2,353)330 
Net gain on sales of available for sale securities (76)
Change in fair value of marketable equity securities(57)(77)
Depreciation and amortization2,484 2,534 
Amortization of debt issuance costs39 39 
Increase in cash surrender value of bank-owned life insurance(726)(758)
Gains and fees from sales of loans(27)(1,409)
Stock-based compensation1,286 774 
Amortization of intangibles54 57 
Loss on sale of premises and equipment 10 
(Gain) loss on sale of other real estate owned, net(19)102 
Net change in:
Deferred loan fees1,440 (362)
Accrued interest receivable(1,335)459 
Other assets(20,322)(33,590)
Accrued expenses and other liabilities(1,470)14,398 
Net cash used in operating activities(8,495)(3,073)
Cash flows from investing activities
Proceeds from principal repayments on available for sale securities9,920 7,337 
Proceeds from principal repayments on held to maturity securities176 168 
Net proceeds from sales and calls of available for sale securities2,200 15,455 
Net proceeds from calls of held to maturity securities 3,900 
Purchases of marketable equity securities(28)(34)
Purchases of available for sale securities(17,636)(12,270)
Net (increase) decrease in loans(20,452)36,807 
Loan principal sold from loans not originated for sale(214)(21,664)
Proceeds from sales of loans not originated for sale241 23,073 
Purchases of premises and equipment, net(409)(473)
(Purchase) reduction of Federal Home Loan Bank stock(385)635 
Proceeds from the sale of other real estate owned199 1,115 
Net cash (used in) provided by investing activities(26,388)54,049 
See accompanying notes to consolidated financial statements (unaudited)
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Bankwell Financial Group, Inc.
Consolidated Statements of Cash Flows - (Continued)
(In thousands)
Nine Months Ended September 30,
20202019
Cash flows from financing activities
Net change in time certificates of deposit$89,072 $28,704 
Net change in other deposits186,553 (60,664)
Net change in FHLB advances25,000 (10,000)
Proceeds from exercise of options16 30 
Dividends paid on common stock(3,289)(3,061)
Repurchase of common stock(1,037)(988)
Net cash provided by (used in) financing activities296,315 (45,979)
Net increase in cash and cash equivalents261,432 4,997 
Cash and cash equivalents:
Beginning of year78,051 78,112 
End of period$339,483 $83,109 
Supplemental disclosures of cash flows information:
Cash paid for:
Interest$18,067 $21,940 
Income taxes3,393 2,118 
Noncash investing and financing activities:
Loans transferred to other real estate owned$180 $1,217 
Net change in unrealized gains or losses on available for sale securities2,661 2,946 
Net change in unrealized gains or losses on interest rate swaps(16,400)(15,811)
Establishment of right-of-use asset and lease liability169 11,192 
ASU 2016-02 transition adjustment, net of tax
 481 

See accompanying notes to consolidated financial statements (unaudited)
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1. Nature of Operations and Summary of Significant Accounting Policies

Bankwell Financial Group, Inc. (the "Parent Corporation") is a bank holding company headquartered in New Canaan, Connecticut. The Parent Corporation offers a broad range of financial services through its banking subsidiary, Bankwell Bank (the "Bank" and, collectively with the Parent Corporation and the Parent Corporation's subsidiaries, the "Company"). In November 2013, the Bank acquired The Wilton Bank and in October 2014, the Bank acquired Quinnipiac Bank and Trust Company.

The Bank is a Connecticut state chartered commercial bank, founded in 2002, whose deposits are insured under the Deposit Insurance Fund administered by the Federal Deposit Insurance Corporation (“FDIC”). The Bank provides a full range of banking services to commercial and consumer customers, primarily concentrated in the New York metropolitan area and throughout Connecticut, with the majority of the Company's loans in Fairfield and New Haven Counties, Connecticut, with branch locations in New Canaan, Stamford, Fairfield, Wilton, Westport, Darien, Norwalk, Hamden and North Haven Connecticut. The Company has committed to permanently close its North Haven branch as of December 31, 2020.

Principles of consolidation

The consolidated financial statements include the accounts of the Company and the Bank, including its wholly owned passive investment company subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.

Use of estimates

The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America (“GAAP”) and general practices within the banking industry. In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities as of the date of the consolidated balance sheet, and revenue and expenses for the period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the allowance for loan losses, the valuation of derivative instruments, investment securities valuation, evaluation of investment securities for other than temporary impairment and deferred income taxes valuation.
In March 2020, the World Health Organization declared novel coronavirus disease 2019 ("COVID-19") as a global pandemic. The COVID-19 pandemic has negatively impacted the global and U.S. economies. Many businesses in the U.S., including those in the markets we serve, were required to close, causing a significant increase in unemployment and loss of revenue for those businesses.
The COVID-19 pandemic influenced the assumptions and estimates used in the consolidated financial statements. The COVID-19 pandemic had an adverse impact on our earnings, increasing the provision for loan losses when compared to the same period in 2019.
We are unable to estimate the full impact of COVID-19 on our business and operations at this time. The extent of such impact will depend on future developments, which are highly uncertain, including when COVID-19 can be controlled and abated. The pandemic could cause us to experience higher credit losses in our loan portfolio, impairment of our goodwill, reduced demand for our products and services, or other negative impacts on our financial position, results of operations, and prospects.

Basis of consolidated financial statement presentation

The unaudited consolidated financial statements presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10-Q and Rule 10-01 of Regulation S-X and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying unaudited interim consolidated financial statements have been included. Interim results are not necessarily reflective of the results that may be expected for the year ending December 31, 2020. The accompanying unaudited interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included on Form 10-K for the year ended December 31, 2019.

Significant concentrations of credit risk

Many of the Company's activities are with customers located in the New York Metropolitan area and throughout Fairfield and New Haven Counties and the surrounding region of Connecticut, and declines in property values in these areas could
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significantly impact the Company. The Company has significant concentrations in commercial real estate loans. The Company does not have any significant concentrations in any one industry or customer.

Common Share Repurchases

The Company is incorporated in the state of Connecticut. Connecticut law does not provide for treasury shares, rather shares repurchased by the Company constitute authorized, but unissued shares. GAAP states that accounting for treasury stock shall conform to state law. Therefore, the cost of shares repurchased by the Company has been allocated to common stock balances.

Reclassification

Certain prior period amounts have been reclassified to conform to the 2020 financial statement presentation. These reclassifications only changed the reporting categories and did not affect the consolidated results of operations or consolidated financial position of the Company.

Recent accounting pronouncements

The following section includes changes in accounting principles and potential effects of new accounting guidance and pronouncements.

Recently issued accounting pronouncements not yet adopted
ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): “Measurement of Credit Losses on Financial Instruments.” This ASU changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, entities will be required to use a new forward-looking “expected loss” model that will replace today’s “incurred loss” model and can result in the earlier recognition of credit losses. For available-for-sale debt securities with unrealized losses, entities will measure credit losses in a manner similar to current practice, except that the losses will be recognized as an allowance. On July 17, 2019, the FASB proposed deferring the effective date of ASC 326 for smaller reporting companies as defined by the SEC. The FASB proposed a three-year deferral for smaller reporting companies, with an effective date of January 1, 2023. On October 16, 2019, the FASB voted in favor of finalizing its proposal to defer the effective date of this standard. The FASB issued ASU No. 2019-10, which officially delayed the adoption of this standard for smaller reporting companies until fiscal years beginning after December 15, 2022. The Company does qualify to defer the adoption of this standard and has not yet adopted this standard. Management continues to evaluate the impact of its future adoption of this guidance on the Company’s financial statements.

ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): “Simplifying the Test for Goodwill Impairment.” This ASU simplifies the test for goodwill impairment by eliminating Step 2 from the goodwill impairment test. In computing the implied fair value of goodwill under Step 2, an entity was required to perform procedures to determine the fair value at the impairment testing date of its assets and liabilities (including unrecognized assets and liabilities) following the procedure that would be required in determining the fair value of assets acquired and liabilities assumed in a business combination. Instead, under the amendments in this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, this ASU also eliminated the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. Therefore, the same impairment assessment applies to all reporting units. An entity is required to disclose the amount of goodwill allocated to each reporting unit with a zero or negative carrying amount of net assets. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. On October 16, 2019, the FASB voted in favor of a proposal to defer the effective date of this standard in the same manner it is deferring the effective date of ASC 326. The Company does not expect the application of this guidance to have a material impact on the Company’s financial statements.


Recently adopted accounting pronouncements
ASU No. 2018-13, Fair Value Measurement (Topic 820): “Changes to the Disclosure Requirements for Fair Value Measurement.” The amendments in this update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The following disclosure requirements were removed from topic 820 for public entities: (1) the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy; (2) the policy for timing of
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transfers between levels; and (3) the valuation processes for Level 3 fair value measurements. This update also modified and added disclosure requirements to Topic 820, including adding (1) the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period; and (2) the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements. The guidance was effective for the Company on January 1, 2020. The application of this guidance did not have a material impact on the Company's financial statements.

ASU No. 2020-04, Reference Rate Reform (Topic 848): "Facilitation of the Effects of Reference Rate Reform on Financial Reporting." This ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022. Optional expedients include that modifications of contracts should be accounted for by prospectively adjusting the effective interest rate and modifications of leases should be accounted for as a continuation of the existing contract with no reassessments of lease classification and discount rate or remeasurements of lease payments. This ASU also provides many practical expedients for derivative accounting. In addition, an entity may elect to sell and/or transfer held to maturity securities that reference a rate affected by the reference rate reform classified as held to maturity prior to January 1, 2020. The application of this guidance did not have a material impact on the Company's financial statements.

2. Investment Securities

The amortized cost, gross unrealized gains and losses and fair value of available for sale and held to maturity securities at September 30, 2020 were as follows: