Bankwell Financial Group, Inc 8-K, filed Apr 30, 2020

Bankwell Financial Group, Inc. (BWFG)

8-K 2020-04-30 For: 2020-04-29

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Added on April 11, 2026

About this 8-K

Bankwell Financial Group, Inc filed this 8-K on April 30, 2020, reporting on events of April 29, 2020.

Items reported

Item 2.02: Financial results
Item 7.01: Regulation FD disclosure
Item 8.01: Other events
Item 9.01: Financial statements and exhibits

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Connecticut	001-36448	20-8251355
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)



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



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.	☐



Item 2.02	Results of Operations and Financial Condition

	On April 29, 2020, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued a press release describing its results of operations for the first quarter ended March 31, 2020. A copy of the press release is included as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.

	The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, regardless of any general incorporation language in such filing.

Item 7.01	Regulation FD Disclosure

	On April 29, 2020, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued slide presentation material, which includes among other things, a review of financial results and trends through the period ended March 31, 2020. A copy of the material will also be available on the Company’s website, http://investor.mybankwell.com/CorporateProfile. A copy of the Presentation Material is included as Exhibit 99.2 to this current report on Form 8-K and is incorporated herein by reference.

	The information furnished under this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, regardless of any general incorporation language in such filing.

Item 8.01	Other Events

	On April 29, 2020, Bankwell Financial Group, Inc., parent company of Bankwell Bank, announced its Board of Directors has voted to pay a quarterly dividend in the amount of $0.14 per share on May 28, 2020 to all shareholders of record as of May 18, 2020.

Item 9.01	Financial Statements and Exhibits
(a)	Not applicable.
(b)	Not applicable.
(c)	Not applicable.
(d)	Exhibits.



Exhibit Number	Description

99.1	Press Release Dated April 29, 2020
99.2	Presentation Materials



☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BANKWELL FINANCIAL GROUP, INC.
	Registrant



April 30, 2020	By: /s/ Penko K. Ivanov
	Penko K. Ivanov
	Executive Vice President
	and Chief Financial Officer


•	Reduced rates on approximately $0.5 billion of non-maturity deposit products by an average of approximately 70 basis points during the quarter ended March 31, 2020. We expect these rate reductions to drive lower deposit costs for the remainder of the year.


•	Tax equivalent net interest margin was 2.98% for the quarter ended March 31, 2020, representing a 6 basis point increase compared to the quarter ended December 31, 2019.


•	The Company repurchased 58,499 shares of common stock at an average price of $17.69 per share, during the quarter ended March 31, 2020.


•	Total deposits were $1.68 billion at March 31, 2020 compared to $1.49 billion at December 31, 2019, primarily reflecting increases in brokered deposits to increase on-balance sheet liquidity.


•	The loan-to-deposit ratio was 96.1% at March 31, 2020, reflecting the above-mentioned increase in brokered deposits.


•	Total gross loans were $1.62 billion at March 31, 2020, and grew by $16.5 million during the quarter.


•	Investment securities totaled $100.9 million and represent 5% of total assets.



	March 31, 2020			December 31, 2019			March 31, 2019
ASSETS
Cash and due from banks	$	203,569		$	78,051		$	88,827
Federal funds sold	6,427			—			4,764
Cash and cash equivalents	209,996			78,051			93,591

Investment securities
Marketable equity securities, at fair value	2,289			2,118			2,049
Available for sale investment securities, at fair value	82,342			82,439			96,423
Held to maturity investment securities, at amortized cost	16,252			16,308			21,364
Total investment securities	100,883			100,865			119,836
Loans receivable (net of allowance for loan losses of $16,686, $13,509, and $15,430 at March 31, 2020, December 31, 2019, and March 31, 2019, respectively)	1,602,146			1,588,840			1,578,609
Accrued interest receivable	5,867			5,959			6,534
Federal Home Loan Bank stock, at cost	6,507			7,475			7,475
Premises and equipment, net	27,835			28,522			29,629
Bank-owned life insurance	41,926			41,683			40,925
Goodwill	2,589			2,589			2,589
Other intangible assets	196			214			270
Deferred income taxes, net	10,009			5,788			4,835
Other assets	45,671			22,196			13,465
Total assets	$	2,053,625		$	1,882,182		$	1,897,758

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits	$	168,448		$	191,518		$	161,844
Interest bearing deposits	1,512,684			1,300,385			1,359,521
Total deposits	1,681,132			1,491,903			1,521,365

Advances from the Federal Home Loan Bank	125,000			150,000			150,000
Subordinated debentures	25,220			25,207			25,168
Accrued expenses and other liabilities	52,059			32,675			24,384
Total liabilities	1,883,411			1,699,785			1,720,917

Shareholders’ equity
Common stock, no par value	119,953			120,589			120,750
Retained earnings	69,595			69,324			59,247
Accumulated other comprehensive loss	(19,334		)	(7,516		)	(3,156		)



	For the Quarter Ended
	March 31, 2020		December 31, 2019		March 31, 2019
Interest and dividend income
Interest and fees on loans	$	18,985	$	18,648	$	20,096
Interest and dividends on securities	825		858		997
Interest on cash and cash equivalents	286		427		383
Total interest and dividend income	20,096		19,933		21,476

Interest expense
Interest expense on deposits	5,709		5,948		6,100
Interest expense on borrowings	1,101		1,103		1,103
Total interest expense	6,810		7,051		7,203

Net interest income	13,286		12,882		14,273
Provision for loan losses	3,185		310		195
Net interest income after provision for loan losses	10,101		12,572		14,078

Noninterest income
Bank owned life insurance	243		250		249
Service charges and fees	217		247		249
Gains and fees from sales of loans	—		382		89
Other	612		169		721
Total noninterest income	1,072		1,048		1,308

Noninterest expense
Salaries and employee benefits	5,380		5,162		4,836
Occupancy and equipment	1,909		1,928		1,887
Professional services	711		402		590
Data processing	536		499		512
Director fees	295		224		189
Marketing	162		220		193
FDIC insurance	70		—		123
Amortization of intangibles	18		18		19
Other	578		771		626
Total noninterest expense	9,659		9,224		8,975

Income before income tax expense	1,514		4,396		6,411
Income tax expense	151		924		1,331



	For the Quarter Ended
	March 31, 2020		December 31, 2019		March 31, 2019
Performance ratios:
Return on average assets⁽¹⁾	0.29	%	0.73	%	1.10	%
Return on average stockholders' equity⁽¹⁾	3.03	%	7.68	%	11.60	%
Return on average tangible common equity⁽¹⁾	3.07	%	7.80	%	11.80	%
Net interest margin	2.98	%	2.92	%	3.19	%
Efficiency ratio⁽²⁾	67.1	%	66.1	%	57.5	%
Net loan charge-offs as a % of average loans	—	%	—	%	0.01	%
Dividend payout ratio⁽³⁾	82.35	%	29.55	%	20.00	%


•	Total noninterest income was $1.1 million for the quarter ended March 31, 2020, or 7% of total revenue.


•	The tangible common equity ratio and tangible book value per share, as of March 31, 2020, were 8.16% and $21.69, respectively. The tangible book value per share was primarily impacted by a $1.75 mark to market



	As of
	March 31, 2020			December 31, 2019			March 31, 2019
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets⁽¹⁾	12.14		%	12.53		%	12.00		%
Total Capital to Risk-Weighted Assets⁽¹⁾	13.13		%	13.35		%	12.94		%
Tier I Capital to Risk-Weighted Assets⁽¹⁾	12.14		%	12.53		%	12.00		%
Tier I Capital to Average Assets⁽¹⁾	10.84		%	10.99		%	10.53		%
Tangible common equity to tangible assets	8.16		%	9.56		%	9.18		%
Tangible book value per common share⁽²⁾	$	21.69		$	23.15		$	22.38



Period End Loan Composition	March 31, 2020		December 31, 2019		% Change
Residential Real Estate	$	139,353	$	147,109	(5.3	)%
Commercial Real Estate⁽¹⁾	1,131,206		1,128,614		0.2
Construction	107,594		98,583		9.1
Total Real Estate Loans	1,378,153		1,374,306		0.3

Commercial Business	242,705		230,028		5.5

Consumer	113		150		(24.7	)
Total Loans	$	1,620,971	$	1,604,484	1.0	%

(1) Includes owner occupied commercial real estate.



Period End Deposit Composition	March 31, 2020		December 31, 2019		% Change
Noninterest bearing demand	$	168,448	$	191,518	(12.0	)%
NOW	69,562		70,020		(0.7	)
Money Market	455,634		419,495		8.6
Savings	164,673		183,729		(10.4	)
Time	822,815		627,141		31.2
Total Deposits	$	1,681,132	$	1,491,903	12.7	%



	As of
Computation of Tangible Common Equity to Tangible Assets	March 31, 2020			December 31, 2019			March 31, 2019
Total Equity	$	170,214		$	182,397		$	176,841
Less:
Goodwill	2,589			2,589			2,589
Other intangibles	196			214			270
Tangible Common Equity	$	167,429		$	179,594		$	173,982

Total Assets	$	2,053,625		$	1,882,182		$	1,897,758
Less:
Goodwill	2,589			2,589			2,589
Other intangibles	196			214			270
Tangible Assets	$	2,050,840		$	1,879,379		$	1,894,899

Tangible Common Equity to Tangible Assets	8.16		%	9.56		%	9.18		%



	As of
Computation of Tangible Book Value per Common Share	March 31, 2020		December 31, 2019		March 31, 2019
Total shareholders' equity	$	170,214	$	182,397	$	176,841
Less:
Preferred stock	—		—		—
Common shareholders' equity	$	170,214	$	182,397	$	176,841
Less:
Goodwill	2,589		2,589		2,589
Other intangibles	196		214		270
Tangible common shareholders' equity	$	167,429	$	179,594	$	173,982
Common shares	7,871,419		7,868,803		7,873,471
Less:
Shares of unvested restricted stock	154,012		110,975		99,061
Common shares less unvested restricted stock	7,717,407		7,757,828		7,774,410
Book value per share	$	22.06	$	23.51	$	22.75
Less:
Effects of intangible assets	$	0.36	$	0.36	$	0.37

Tangible Book Value per Common Share	$	21.69	$	23.15	$	22.38



	For the Quarter Ended
Computation of Efficiency Ratio	March 31, 2020			December 31, 2019			March 31, 2019
Noninterest expense	$	9,659		$	9,224		$	8,975
Less:
Amortization of intangible assets	18			18			19
Adjusted noninterest expense	$	9,641		$	9,206		$	8,956
Net interest income	$	13,286		$	12,882		$	14,273
Noninterest income	1,072			1,048			1,308
Operating revenue	$	14,358		$	13,930		$	15,581

Efficiency ratio	67.1		%	66.1		%	57.5		%



	For the Quarter Ended
Computation of Return on Average Tangible Common Equity	March 31, 2020			December 31, 2019			March 31, 2019
Net Income Attributable to Common Shareholders	$	1,363		$	3,472		$	5,080
Total average shareholders' equity	$	181,127		$	179,312		$	177,532
Less:
Average Goodwill	2,589			2,589			2,589
Average Other intangibles	208			226			283
Average tangible common equity	$	178,330		$	176,497		$	174,660

Annualized Return on Average Tangible Common Equity	3.07		%	7.80		%	11.80		%



	For the Quarter Ended
	March 31, 2020						March 31, 2019
	Average Balance		Interest		Yield/ Rate ⁽⁵⁾		Average Balance		Interest		Yield/ Rate ⁽⁵⁾
Assets:
Cash and Fed funds sold	$	73,497	$	286	1.56	%	$	73,128	$	383	2.12	%
Securities⁽¹⁾	98,566		775		3.15		117,575		932		3.17
Loans:
Commercial real estate	1,108,709		13,024		4.65		1,065,636		12,426		4.66
Residential real estate	143,826		1,357		3.77		176,490		1,703		3.86
Construction⁽²⁾	100,437		1,215		4.78		81,136		1,124		5.54
Commercial business	258,848		3,386		5.18		276,744		4,838		6.99
Consumer	156		3		8.37		323		5		6.42
Total loans	1,611,976		18,985		4.66		1,600,329		20,096		5.02
Federal Home Loan Bank stock	7,325		103		5.65		7,587		137		7.30
Total earning assets	1,791,364		$	20,149	4.45	%	1,798,619		$	21,548	4.79	%
Other assets	111,585						78,903
Total assets	$	1,902,949					$	1,877,522

Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	67,925	$	28	0.17	%	$	58,812	$	47	0.33	%
Money market	438,588		1,492		1.37		473,084		1,981		1.70
Savings	185,478		672		1.46		180,367		769		1.73
Time	640,580		3,517		2.21		627,510		3,303		2.13
Total interest bearing deposits	1,332,571		5,709		1.72		1,339,773		6,100		1.85
Borrowed Money	172,464		1,101		2.53		175,515		1,103		2.51
Total interest bearing liabilities	1,505,035		$	6,810	1.82	%	1,515,288		$	7,203	1.93	%
Noninterest bearing deposits	179,066						163,558
Other liabilities	37,721						21,144
Total liabilities	1,721,822						1,699,990
Shareholders' equity	181,127						177,532
Total liabilities and shareholders' equity	$	1,902,949					$	1,877,522
Net interest income⁽³⁾			$	13,339					$	14,345
Interest rate spread					2.63	%					2.86	%
Net interest margin⁽⁴⁾					2.98	%					3.19	%