8-K
Bankwell Financial Group, Inc. (BWFG)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 26, 2022
Bankwell Financial Group, Inc.
(Exact name of registrant as specified in its charter)
| Connecticut | 001-36448 | 20-8251355 |
|---|---|---|
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
258 Elm Street
New Canaan, Connecticut 06840
(203) 652-0166
(Address of Principal Executive Officers and Telephone Number)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | 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)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of Each Exchange on Which<br>Registered |
|---|---|---|
| Common Stock, no par value per<br><br>share | BWFG | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
| 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 January 26, 2022, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued a press release describing its results of operations for the period ended December 31, 2021.<br> <br>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 January 26, 2022, 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 December 31, 2021. A copy of the material will also be available on the Company’s website, http://investor.mybankwell.com/CorporateProfile.<br> <br>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 January 26, 2022, 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 $0.20 per share on February 24, 2022 to all shareholders of record as of February 14, 2022. | ||||
| 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 January 26, 2022 | |||
| 99.2 | Presentation Materials | |||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | 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 | ||||
| January 26, 2022 | By: /s/ Penko K. Ivanov | |||
| Penko K. Ivanov | ||||
| Executive Vice President | ||||
| and Chief Financial Officer |
Document
BANKWELL FINANCIAL GROUP REPORTS RECORD NET INCOME FOR THE FOURTH QUARTER AND FULL YEAR 2021; INCREASES DIVIDEND BY 11%; PROVIDES GUIDANCE FOR 2022
New Canaan, CT – January 26, 2022 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record GAAP net income for the fourth quarter and year ended 2021. For the fourth quarter of 2021 net income totaled $7.8 million, or $0.99 per share, versus $0.3 million, or $0.04 per share, for the same period in 2020. For the year ended 2021 net income totaled $26.6 million, or $3.36 per share, versus $5.9 million, or $0.75 per share, for the same period in 2020.
The Company's Board of Directors declared a $0.20 per share cash dividend, payable February 24, 2022 to shareholders of record on February 14, 2022, representing an 11% increase when compared to the prior quarter’s dividend.
We recommend reading this earnings release in conjunction with the Fourth Quarter 2021 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our January 26, 2022 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
“We are proud to announce record performance for the fourth quarter and full year of 2021. In addition to generating a Return on Average Equity of 14% for the year, the Company made significant strides in all aspects of its business. While originating approximately $800 million in loans, we also continued to diversify our asset base. Core deposits grew by 31.7%, year over year, and non-interest bearing deposits increased by 47.6% over the same period.
“I offer my heartfelt gratitude and sincere congratulations to every member of our team. Their hard work and commitment, during a time of historic disruption, has made these impressive achievements possible.
“We enter the year ahead with confidence and momentum and look forward to another outstanding year. Loan and deposit pipelines remain strong. Inclusive of four expected rate hikes by the Federal Reserve, we expect net interest income to grow by 12-14% in 2022.”
Fourth Quarter 2021 Highlights:
•Return on average assets was 1.32% and return on average equity was 15.44% for the quarter ended December 31, 2021.
•The net interest margin improved to 3.43% for the quarter ended December 31, 2021 and 3.17% for the year ended December 31, 2021.
•Total gross loans were $1.9 billion, growing $303.9 million excluding Paycheck Protection Program ("PPP") loans, or 19.1%, compared to December 31, 2020. On a quarterly basis, loans grew $71.7 million, or 3.9% compared to September 30, 2021.
•Gains from loan sales totaled $0.4 million and $2.7 million for the quarter and year ended December 31, 2021, respectively.
•Total deposits were $2.1 billion compared to $1.8 billion at December 31, 2020.
•Noninterest bearing deposits increased by $128.7 million, or 47.6% compared to December 31, 2020.
•The percentage of noninterest bearing deposits to total deposits increased to 18.8% compared to 14.8% at December 31, 2020.
•The cost of interest bearing deposits decreased approximately 35 basis points to 0.54% for the quarter ended December 31, 2021 when compared to the quarter ended December 31, 2020.
•Investment securities totaled $108.4 million and represent 4.4% of total assets.
•Tangible book value per share rose to $26.19 compared to $22.43 at December 31, 2020.
•Shares issued and outstanding were 7,803,166, reflecting repurchases of 59,338 shares of common stock at a weighted average price of $31.29 during the quarter ended December 31, 2021.
•The Company issued a 3.25% fixed-to-floating rate subordinated note due 2031 in the principal amount of $35.0 million. Part of the proceeds were used to repay $15.5 million of previously issued subordinated notes.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the quarter ended December 31, 2021 were $19.8 million, versus $14.9 million for the quarter ended December 31, 2020. Revenues for the year ended December 31, 2021 were $73.5 million, versus $57.7 million for the year ended December 31, 2020. The increase was primarily attributable to lower interest expense on deposits, an increase in interest and fees on loans due to loan growth and from the resumption of loan sales.
Net income for the quarter ended December 31, 2021 was $7.8 million, versus $0.3 million for the quarter ended December 31, 2020. Net income for the year ended December 31, 2021 was $26.6 million, versus $5.9 million for the year ended December 31, 2020. The increase in net income was primarily impacted by the aforementioned increases in revenues, a decrease in noninterest expense, and a decrease in the provision for loan losses resulting from lower loan loss reserves in 2021 when compared to 2020, which saw a large increase in reserves due to the COVID-19 Pandemic.
Basic and diluted earnings per share were $1.00 and $0.99, respectively, for the quarter ended December 31, 2021 compared to basic and diluted earnings per share of $0.04 each for the quarter ended December 31, 2020. Basic and diluted earnings per share were $3.38 and $3.36, respectively, for the year ended December 31, 2021 compared to basic and diluted earnings per share of $0.75 each for the year ended December 31, 2020.
The net interest margin (fully taxable equivalent basis) for the quarters ended December 31, 2021 and December 31, 2020 was 3.43% and 2.66%, respectively. The net interest margin (fully taxable equivalent basis) for the years ended December 31, 2021 and December 31, 2020 was 3.17% and 2.77%, respectively. The increase in the net interest margin was due to lower interest expense from a decrease in rates on interest bearing deposits and a greater proportion of noninterest bearing deposits.
Financial Condition
Assets totaled $2.46 billion at December 31, 2021, compared to assets of $2.25 billion at December 31, 2020. The increase in assets was primarily due to loan growth, partially offset by a decrease in excess liquidity. Gross loans totaled $1.9 billion at December 31, 2021, an increase of $269.3 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $303.9 million at December 31, 2021 when compared to December 31, 2020. Deposits totaled $2.1 billion at December 31, 2021, compared to deposits of $1.8 billion at December 31, 2020.
Capital
Shareholders’ equity totaled $202.0 million as of December 31, 2021, an increase of $25.4 million compared to December 31, 2020, primarily a result of (i) net income of $26.6 million for the year ended December 31, 2021 and (ii) a $7.0 million favorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps. The Company's interest rate swaps are used to hedge interest rate risk. The Company's current interest rate swap positions will cause a decrease to other comprehensive income in a falling interest rate environment and an increase in a rising interest rate environment. The increase in Shareholders’ equity was partially offset by dividends paid of $5.0 million and common stock repurchases of $5.1 million.
About Bankwell Financial Group
Bankwell is a commercial bank that serves the banking needs of residents and businesses throughout Fairfield and New Haven Counties, Connecticut. For more information about this press release, interested parties may contact Christopher R. Gruseke, President and Chief Executive Officer or Penko Ivanov, Executive Vice President and Chief Financial Officer of Bankwell Financial Group at (203) 652-0166.
For more information, visit www.mybankwell.com.
This press release may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, uncertain impacts of, or additional changes in, monetary, fiscal or tax policy to address the impact of COVID-19, prolonged measures to contain the spread of COVID-19 or premature easing of such containment measures, either of which could further exacerbate the effects on the Company’s business and results of operations, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.
Non-GAAP Financial Measures
In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management may evaluate certain non-GAAP financial measures, such as the efficiency ratio. A computation and reconciliation of certain non-GAAP financial measures used for these purposes is contained in the accompanying Reconciliation of GAAP to Non-GAAP Measures tables. We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. For example, the Company believes that the efficiency ratio is useful in the assessment of financial performance, including noninterest expense control. The Company believes that tangible common equity, tangible book value per share, and return on average tangible common equity are useful to evaluate the relative strength of the Company's performance and capital position. We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Cash and due from banks | $ | 291,598 | $ | 169,417 | $ | 297,851 | $ | 351,194 | $ | 405,340 |
| Federal funds sold | 53,084 | 8,097 | 4,036 | 10,811 | 4,258 | |||||
| Cash and cash equivalents | 344,682 | 177,514 | 301,887 | 362,005 | 409,598 | |||||
| Investment securities | ||||||||||
| Marketable equity securities, at fair value | 2,168 | 2,185 | 2,192 | 2,178 | 2,207 | |||||
| Available for sale investment securities, at fair value | 90,198 | 87,565 | 90,983 | 83,218 | 88,605 | |||||
| Held to maturity investment securities, at amortized cost | 16,043 | 16,107 | 16,166 | 16,225 | 16,078 | |||||
| Total investment securities | 108,409 | 105,857 | 109,341 | 101,621 | 106,890 | |||||
| Loans receivable (net of allowance for loan losses of $16,902, $16,803, $16,672, $20,545, and $21,009 at December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively) | 1,875,167 | 1,805,217 | 1,719,274 | 1,650,127 | 1,601,672 | |||||
| Accrued interest receivable | 7,512 | 6,911 | 6,661 | 7,306 | 6,579 | |||||
| Federal Home Loan Bank stock, at cost | 2,814 | 3,632 | 3,844 | 6,446 | 7,860 | |||||
| Premises and equipment, net | 25,588 | 35,118 | 33,916 | 33,386 | 21,762 | |||||
| Bank-owned life insurance | 49,174 | 48,903 | 48,632 | 42,881 | 42,651 | |||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | |||||
| Other intangible assets | — | 48 | 58 | 67 | 76 | |||||
| Deferred income taxes, net | 7,621 | 7,718 | 8,208 | 8,908 | 11,300 | |||||
| Other assets | 32,708 | 33,181 | 35,415 | 29,131 | 42,770 | |||||
| Total assets | $ | 2,456,264 | $ | 2,226,688 | $ | 2,269,825 | $ | 2,244,467 | $ | 2,253,747 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Liabilities | ||||||||||
| Deposits | ||||||||||
| Noninterest bearing deposits | $ | 398,956 | $ | 338,705 | $ | 328,473 | $ | 280,947 | $ | 270,235 |
| Interest bearing deposits | 1,725,042 | 1,544,118 | 1,610,829 | 1,578,861 | 1,557,081 | |||||
| Total deposits | 2,123,998 | 1,882,823 | 1,939,302 | 1,859,808 | 1,827,316 | |||||
| Advances from the Federal Home Loan Bank | 50,000 | 80,000 | 75,000 | 125,000 | 175,000 | |||||
| Subordinated debentures | 34,441 | 15,374 | 15,366 | 25,271 | 25,258 | |||||
| Accrued expenses and other liabilities | 45,838 | 52,314 | 49,362 | 46,445 | 49,571 | |||||
| Total liabilities | 2,254,277 | 2,030,511 | 2,079,030 | 2,056,524 | 2,077,145 | |||||
| Shareholders’ equity | ||||||||||
| Common stock, no par value | 118,148 | 119,588 | 120,451 | 120,398 | 121,338 | |||||
| Retained earnings | 92,400 | 85,992 | 80,543 | 75,418 | 70,839 | |||||
| Accumulated other comprehensive loss | (8,561) | (9,403) | (10,199) | (7,873) | (15,575) | |||||
| Total shareholders’ equity | 201,987 | 196,177 | 190,795 | 187,943 | 176,602 | |||||
| Total liabilities and shareholders’ equity | $ | 2,456,264 | $ | 2,226,688 | $ | 2,269,825 | $ | 2,244,467 | $ | 2,253,747 |
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except share data)
| For the Quarter Ended | For the Year Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | ||||||||
| Interest and dividend income | ||||||||||||||
| Interest and fees on loans | $ | 21,081 | $ | 19,795 | $ | 19,266 | $ | 17,900 | $ | 18,194 | $ | 78,042 | $ | 73,665 |
| Interest and dividends on securities | 722 | 731 | 736 | 769 | 835 | 2,958 | 3,237 | |||||||
| Interest on cash and cash equivalents | 90 | 88 | 90 | 108 | 117 | 376 | 585 | |||||||
| Total interest and dividend income | 21,893 | 20,614 | 20,092 | 18,777 | 19,146 | 81,376 | 77,487 | |||||||
| Interest expense | ||||||||||||||
| Interest expense on deposits | 2,198 | 2,387 | 2,744 | 3,114 | 3,557 | 10,443 | 18,180 | |||||||
| Interest expense on borrowings | 767 | 503 | 769 | 1,008 | 1,285 | 3,047 | 4,472 | |||||||
| Total interest expense | 2,965 | 2,890 | 3,513 | 4,122 | 4,842 | 13,490 | 22,652 | |||||||
| Net interest income | 18,928 | 17,724 | 16,579 | 14,655 | 14,304 | 67,886 | 54,835 | |||||||
| Provision (credit) for loan losses | 125 | 134 | (20) | (296) | 709 | (57) | 7,605 | |||||||
| Net interest income after provision (credit) for loan losses | 18,803 | 17,590 | 16,599 | 14,951 | 13,595 | 67,943 | 47,230 | |||||||
| Noninterest income | ||||||||||||||
| Gains and fees from sales of loans | 441 | 924 | 814 | 513 | 16 | 2,692 | 43 | |||||||
| Bank owned life insurance | 270 | 271 | 251 | 231 | 241 | 1,023 | 967 | |||||||
| Service charges and fees | 257 | 199 | 217 | 199 | 210 | 872 | 788 | |||||||
| Gain on sale of other real estate owned, net | — | — | — | — | — | — | 19 | |||||||
| Other | (143) | 43 | 158 | 1,013 | 154 | 1,070 | 1,067 | |||||||
| Total noninterest income | 825 | 1,437 | 1,440 | 1,956 | 621 | 5,657 | 2,884 | |||||||
| Noninterest expense | ||||||||||||||
| Salaries and employee benefits | 4,806 | 4,782 | 3,960 | 4,769 | 5,453 | 18,317 | 21,355 | |||||||
| Occupancy and equipment | 2,411 | 2,615 | 3,250 | 2,406 | 4,516 | 10,682 | 10,926 | |||||||
| Professional services | 628 | 498 | 547 | 587 | 591 | 2,260 | 2,110 | |||||||
| Data processing | 432 | 632 | 833 | 512 | 1,658 | 2,409 | 3,216 | |||||||
| Director fees | 335 | 324 | 327 | 317 | 331 | 1,303 | 1,214 | |||||||
| FDIC insurance | 231 | 298 | 300 | 403 | 262 | 1,232 | 791 | |||||||
| Marketing | 87 | 186 | 140 | (9) | 118 | 404 | 630 | |||||||
| Other | 749 | 1,035 | 695 | 653 | 774 | 3,132 | 2,571 | |||||||
| Total noninterest expense | 9,679 | 10,370 | 10,052 | 9,638 | 13,703 | 39,739 | 42,813 | |||||||
| Income before income tax expense | 9,949 | 8,657 | 7,987 | 7,269 | 513 | 33,861 | 7,301 | |||||||
| Income tax expense | 2,135 | 1,802 | 1,759 | 1,579 | 177 | 7,275 | 1,397 | |||||||
| Net income | $ | 7,814 | $ | 6,855 | $ | 6,228 | $ | 5,690 | $ | 336 | $ | 26,586 | $ | 5,904 |
| Earnings Per Common Share: | ||||||||||||||
| Basic | $ | 1.00 | $ | 0.88 | $ | 0.79 | $ | 0.72 | $ | 0.04 | $ | 3.38 | $ | 0.75 |
| Diluted | $ | 0.99 | $ | 0.87 | $ | 0.79 | $ | 0.71 | $ | 0.04 | $ | 3.36 | $ | 0.75 |
| Weighted Average Common Shares Outstanding: | ||||||||||||||
| Basic | 7,660,307 | 7,677,822 | 7,722,481 | 7,758,540 | 7,726,926 | 7,706,407 | 7,728,328 | |||||||
| Diluted | 7,726,420 | 7,738,758 | 7,768,026 | 7,800,777 | 7,728,206 | 7,761,811 | 7,748,453 | |||||||
| Dividends per common share | $ | 0.18 | $ | 0.18 | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.64 | $ | 0.56 |
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
| For the Quarter Ended | For the Year Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | ||||||||
| Performance ratios: | ||||||||||||||
| Return on average assets(1) | 1.32 | % | 1.22 | % | 1.11 | % | 1.02 | % | 0.06 | % | 1.17 | % | 0.28 | % |
| Return on average stockholders' equity(1) | 15.44 | % | 14.09 | % | 13.06 | % | 12.67 | % | 0.75 | % | 13.86 | % | 3.35 | % |
| Return on average tangible common equity(1) | 15.65 | % | 14.29 | % | 13.25 | % | 12.86 | % | 0.76 | % | 14.05 | % | 3.40 | % |
| Net interest margin | 3.43 | % | 3.39 | % | 3.12 | % | 2.74 | % | 2.66 | % | 3.17 | % | 2.77 | % |
| Efficiency ratio(2) | 48.8 | % | 54.1 | % | 55.7 | % | 58.0 | % | 91.2 | % | 53.9 | % | 73.9 | % |
| Net loan charge-offs as a % of average loans | — | % | — | % | 0.23 | % | 0.01 | % | — | % | 0.23 | % | 0.01 | % |
| Dividend payout ratio(3) | 18.18 | % | 20.69 | % | 17.72 | % | 19.72 | % | 350.00 | % | 19.05 | % | 74.67 | % |
(1)2020 performance ratios were negatively impacted by COVID-19 pandemic related loan loss reserves and $3.9 million in one-time charges related to office consolidation, contract termination and employee severance costs recognized in the fourth quarter of 2020.
(2)Efficiency ratio is defined as noninterest expense, less other real estate owned expenses and amortization of intangible assets, divided by our operating revenue, which is equal to net interest income plus noninterest income excluding gains and losses on sales of securities and gains and losses on other real estate owned. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.
(3)The dividend payout ratio is calculated by dividing dividends per share by earnings per share.
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, <br>2021 | September 30, <br>2021 | June 30, <br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
| Capital ratios: | |||||||||||||||
| Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1) | 11.18 | % | 10.59 | % | 10.95 | % | 11.02 | % | 11.06 | % | |||||
| Total Capital to Risk-Weighted Assets(1) | 12.00 | % | 11.44 | % | 11.84 | % | 12.17 | % | 12.28 | % | |||||
| Tier I Capital to Risk-Weighted Assets(1) | 11.18 | % | 10.59 | % | 10.95 | % | 11.02 | % | 11.06 | % | |||||
| Tier I Capital to Average Assets(1) | 9.94 | % | 9.61 | % | 9.19 | % | 8.82 | % | 8.44 | % | |||||
| Tangible common equity to tangible assets | 8.13 | % | 8.70 | % | 8.30 | % | 8.27 | % | 7.73 | % | |||||
| Tangible book value per common share(2) | $ | 26.19 | $ | 25.25 | $ | 24.40 | $ | 23.99 | $ | 22.43 |
(1)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.
(2)Excludes unvested restricted shares of 190,359, 178,797, 184,548, 186,485, and 163,369 as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.
BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
| For the Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
| Allowance for loan losses: | |||||||||||||||
| Balance at beginning of period | $ | 16,803 | $ | 16,672 | $ | 20,545 | $ | 21,009 | $ | 20,372 | |||||
| Charge-offs: | |||||||||||||||
| Commercial real estate | — | — | (3,814) | (163) | — | ||||||||||
| Commercial business | (26) | — | (51) | — | (75) | ||||||||||
| Consumer | (5) | (15) | (4) | (14) | (11) | ||||||||||
| Total charge-offs | (31) | (15) | (3,869) | (177) | (86) | ||||||||||
| Recoveries: | |||||||||||||||
| Commercial business | 2 | 11 | 16 | — | 14 | ||||||||||
| Consumer | 3 | 1 | — | 9 | — | ||||||||||
| Total recoveries | 5 | 12 | 16 | 9 | 14 | ||||||||||
| Net loan charge-offs | (26) | (3) | (3,853) | (168) | (72) | ||||||||||
| Provision (credit) for loan losses | 125 | 134 | (20) | (296) | 709 | ||||||||||
| Balance at end of period | $ | 16,902 | $ | 16,803 | $ | 16,672 | $ | 20,545 | $ | 21,009 | |||||
| As of | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | |||||||||||
| Asset quality: | |||||||||||||||
| Nonaccrual loans | |||||||||||||||
| Residential real estate | $ | 2,380 | $ | 1,849 | $ | 1,160 | $ | 1,289 | $ | 1,492 | |||||
| Commercial real estate | 3,482 | 16,314 | 15,392 | 19,277 | 21,093 | ||||||||||
| Commercial business | 1,728 | 1,754 | 1,780 | 1,803 | 1,834 | ||||||||||
| Construction | 8,997 | 8,997 | 8,997 | 8,997 | 8,997 | ||||||||||
| Total nonaccrual loans | 16,587 | 28,914 | 27,329 | 31,366 | 33,416 | ||||||||||
| Other real estate owned | — | — | — | — | — | ||||||||||
| Total nonperforming assets | $ | 16,587 | $ | 28,914 | $ | 27,329 | $ | 31,366 | $ | 33,416 | |||||
| Nonperforming loans as a % of total loans | 0.88 | % | 1.58 | % | 1.57 | % | 1.87 | % | 2.06 | % | |||||
| Nonperforming assets as a % of total assets | 0.68 | % | 1.30 | % | 1.20 | % | 1.40 | % | 1.48 | % | |||||
| Allowance for loan losses as a % of total loans | 0.89 | % | 0.92 | % | 0.96 | % | 1.23 | % | 1.29 | % | |||||
| Allowance for loan losses as a % of nonperforming loans | 101.90 | % | 58.11 | % | 61.00 | % | 65.50 | % | 62.87 | % |
Total nonaccrual loans declined $16.8 million to $16.6 million as of December 31, 2021 when compared to December 31, 2020, primarily a result of $11.0 million of previously reported nonaccrual loans becoming performing loans during the fourth quarter of 2021. Nonperforming assets as a percentage of total assets was 0.68% at December 31, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at December 31, 2021 was $16.9 million, representing 0.89% of total loans.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
| Period End Loan Composition | September 30,<br>2021 | December 31,<br>2020 | Current QTD <br>% Change | YTD <br>% Change | |||||
|---|---|---|---|---|---|---|---|---|---|
| Residential Real Estate | 79,987 | $ | 90,110 | $ | 113,557 | (11.2) | % | (29.6) | % |
| Commercial Real Estate(1) | 1,337,896 | 1,148,383 | 1.4 | 18.1 | |||||
| Construction | 94,665 | 87,007 | 3.9 | 13.0 | |||||
| Total Real Estate Loans | 1,522,671 | 1,348,947 | 0.8 | 13.8 | |||||
| Commercial Business(2) | 292,825 | 276,601 | 19.9 | 26.9 | |||||
| Consumer | 9,050 | 79 | (2.0) | N/M(3) | |||||
| Total Loans | 1,894,881 | $ | 1,824,546 | $ | 1,625,627 | 3.9 | % | 16.6 | % |
| (1) Includes owner occupied commercial real estate.(2) Includes 0.2 million, 1.6 million, and 34.8 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.(3) Metric not meaningful. |
All values are in US Dollars.
Gross loans totaled $1.9 billion at December 31, 2021, an increase of $269.3 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $303.9 million, or 19.1%, at December 31, 2021 when compared to December 31, 2020.
| Period End Deposit Composition | December 31,<br>2021 | September 30,<br>2021 | December 31,<br>2020 | Current QTD <br>% Change | YTD <br>% Change | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Noninterest bearing demand | $ | 398,956 | $ | 338,705 | $ | 270,235 | 17.8 | % | 47.6 | % |
| NOW | 119,479 | 103,180 | 101,737 | 15.8 | 17.4 | |||||
| Money Market | 954,674 | 835,210 | 669,364 | 14.3 | 42.6 | |||||
| Savings | 193,631 | 188,581 | 158,750 | 2.7 | 22.0 | |||||
| Time | 457,258 | 417,147 | 627,230 | 9.6 | (27.1) | |||||
| Total Deposits | $ | 2,123,998 | $ | 1,882,823 | $ | 1,827,316 | 12.8 | % | 16.2 | % |
Total deposits were $2.1 billion at December 31, 2021, compared to $1.8 billion at December 31, 2020, an increase of $296.7 million, or 16.2%. Noninterest bearing deposits grew by $128.7 million, or 47.6%, as of December 31, 2021, compared to December 31, 2020.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
| For the Quarter Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Noninterest income | December 31,<br>2021 | September 30,<br>2021 | December 31,<br>2020 | Dec 21 vs. Sep 21 <br>% Change | Dec 21 vs. Dec 20 <br>% Change | |||||||||||||
| Gains and fees from sales of loans | $ | 441 | $ | 924 | $ | 16 | (52.3) | % | 2,656.3 | % | ||||||||
| Bank owned life insurance | 270 | 271 | 241 | (0.4) | 12.0 | |||||||||||||
| Service charges and fees | 257 | 199 | 210 | 29.1 | 22.4 | |||||||||||||
| Other | (143) | 43 | 154 | (432.6) | (192.9) | |||||||||||||
| Total noninterest income | $ | 825 | $ | 1,437 | $ | 621 | (42.6) | % | 32.9 | % | For the Year Ended | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Noninterest income | December 31, 2021 | December 31, 2020 | % Change | |||||||||||||||
| Gains and fees from sales of loans | $ | 2,692 | $ | 43 | 6,160.5 | % | ||||||||||||
| Bank owned life insurance | 1,023 | 967 | 5.8 | |||||||||||||||
| Service charges and fees | 872 | 788 | 10.7 | |||||||||||||||
| Gain on sale of other real estate owned, net | — | 19 | (100.0) | |||||||||||||||
| Other | 1,070 | 1,067 | 0.3 | |||||||||||||||
| Total noninterest income | $ | 5,657 | $ | 2,884 | 96.2 | % |
Noninterest income increased by $0.2 million to $0.8 million for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. Noninterest income increased by $2.8 million to $5.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020.
The increase in noninterest income was driven by resumed loan sales, totaling $0.4 million and $2.7 million for the quarter and year ended December 31, 2021, respectively. The increase for the year was also impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by a $0.2 million loss on the sale of the Company's former headquarters building. In addition, in 2020 the Company recognized a $0.4 million benefit of non-recurring interest rate swap fees.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
| For the Quarter Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Noninterest expense | December 31,<br>2021 | September 30,<br>2021 | December 31,<br>2020 | Dec 21 vs. Sep 21 <br>% Change | Dec 21 vs. Dec 20 <br>% Change | |||||
| Salaries and employee benefits | $ | 4,806 | $ | 4,782 | $ | 5,453 | 0.5 | % | (11.9) | % |
| Occupancy and equipment | 2,411 | 2,615 | 4,516 | (7.8) | (46.6) | |||||
| Professional services | 628 | 498 | 591 | 26.1 | 6.3 | |||||
| Data processing | 432 | 632 | 1,658 | (31.6) | (73.9) | |||||
| Director fees | 335 | 324 | 331 | 3.4 | 1.2 | |||||
| FDIC insurance | 231 | 298 | 262 | (22.5) | (11.8) | |||||
| Marketing | 87 | 186 | 118 | (53.2) | (26.3) | |||||
| Other | 749 | 1,035 | 774 | (27.6) | (3.2) | |||||
| Total noninterest expense | $ | 9,679 | $ | 10,370 | $ | 13,703 | (6.7) | % | (29.4) | % |
| For the Year Ended | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| Noninterest expense | December 31, 2021 | December 31, 2020 | % Change | |||||||
| Salaries and employee benefits | $ | 18,317 | $ | 21,355 | (14.2) | % | ||||
| Occupancy and equipment | 10,682 | 10,926 | (2.2) | |||||||
| Data processing | 2,409 | 3,216 | (25.1) | |||||||
| Professional services | 2,260 | 2,110 | 7.1 | |||||||
| Director fees | 1,303 | 1,214 | 7.3 | |||||||
| FDIC insurance | 1,232 | 791 | 55.8 | |||||||
| Marketing | 404 | 630 | (35.9) | |||||||
| Other | 3,132 | 2,571 | 21.8 | |||||||
| Total noninterest expense | $ | 39,739 | $ | 42,813 | (7.2) | % |
Noninterest expense decreased by $4.0 million to $9.7 million for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. The decrease in noninterest expense was primarily driven by a decrease in salaries and employee benefits expense, occupancy and equipment expense and data processing expense.
Noninterest expense decreased by $3.1 million to $39.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The decrease in noninterest expense was primarily driven by a decrease in salaries and employee benefits expense and data processing expense.
Salaries and employee benefits expense totaled $4.8 million for the quarter ended December 31, 2021, a decrease of $0.6 million when compared to the same period in 2020. Salaries and employee benefits expense totaled $18.3 million for the year ended December 31, 2021, a decrease of $3.0 million when compared to the same period in 2020. The decrease in salaries and employee benefits expense was primarily driven by a decrease in full time equivalent employees as a direct result of the Voluntary Early Retirement Incentive Plan offered to eligible employees and other employee actions taken during the fourth quarter of 2020. Average full time equivalent employees totaled 126 for the year ended December 31, 2021 compared to 146 for the same period in 2020. In addition, salaries and employee benefits expense also benefited by one-time deferrals of $0.9 million for the year ended December 31, 2021 related to costs associated with the implementation of a new online banking and other systems. Salaries and employee benefits were also favorably impacted as higher loan originations enabled the Bank to defer a greater amount of expenses.
Occupancy and equipment expense totaled $2.4 million for the quarter ended December 31, 2021, a decrease of $2.1 million when compared to the same period in 2020. The decrease in occupancy and equipment expense was primarily due to costs associated with office and branch consolidation, recognized during the fourth quarter of 2020.
Data processing expense totaled $0.4 million for the quarter ended December 31, 2021, a decrease of $1.2 million when compared to the same period in 2020. Data processing expense totaled $2.4 million for the year ended December 31, 2021, a decrease of $0.8 million when compared to the same period in 2020. The decrease in data processing expense was primarily driven by a $1.1 million one-time charge related to early termination fees payable to a legacy technology vendor recognized during the fourth quarter of 2020.
BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)
(Dollars in thousands, except share data)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Computation of Tangible Common Equity to Tangible Assets | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||||||
| Total Equity | $ | 201,987 | $ | 196,177 | $ | 190,795 | $ | 187,943 | $ | 176,602 | |||||
| Less: | |||||||||||||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||
| Other intangibles | — | 48 | 58 | 67 | 76 | ||||||||||
| Tangible Common Equity | $ | 199,398 | $ | 193,540 | $ | 188,148 | $ | 185,287 | $ | 173,937 | |||||
| Total Assets | $ | 2,456,264 | $ | 2,226,688 | $ | 2,269,825 | $ | 2,244,467 | $ | 2,253,747 | |||||
| Less: | |||||||||||||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||
| Other intangibles | — | 48 | 58 | 67 | 76 | ||||||||||
| Tangible Assets | $ | 2,453,675 | $ | 2,224,051 | $ | 2,267,178 | $ | 2,241,811 | $ | 2,251,082 | |||||
| Tangible Common Equity to Tangible Assets | 8.13 | % | 8.70 | % | 8.30 | % | 8.27 | % | 7.73 | % | |||||
| As of | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Computation of Tangible Book Value per Common Share | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | ||||||||||
| Total shareholders' equity | $ | 201,987 | $ | 196,177 | $ | 190,795 | $ | 187,943 | $ | 176,602 | |||||
| Less: | |||||||||||||||
| Preferred stock | — | — | — | — | — | ||||||||||
| Common shareholders' equity | $ | 201,987 | $ | 196,177 | $ | 190,795 | $ | 187,943 | $ | 176,602 | |||||
| Less: | |||||||||||||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||
| Other intangibles | — | 48 | 58 | 67 | 76 | ||||||||||
| Tangible common shareholders' equity | $ | 199,398 | $ | 193,540 | $ | 188,148 | $ | 185,287 | $ | 173,937 | |||||
| Common shares | 7,803,166 | 7,842,824 | 7,895,101 | 7,908,630 | 7,919,278 | ||||||||||
| Less: | |||||||||||||||
| Shares of unvested restricted stock | 190,359 | 178,797 | 184,548 | 186,485 | 163,369 | ||||||||||
| Common shares less unvested restricted stock | 7,612,807 | 7,664,027 | 7,710,553 | 7,722,145 | 7,755,909 | ||||||||||
| Book value per share | $ | 26.53 | $ | 25.60 | $ | 24.74 | $ | 24.34 | $ | 22.77 | |||||
| Less: | |||||||||||||||
| Effects of intangible assets | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | |||||
| Tangible Book Value per Common Share | $ | 26.19 | $ | 25.25 | $ | 24.40 | $ | 23.99 | $ | 22.43 |
BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued
(Dollars in thousands)
| For the Quarter Ended | For the Year Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Computation of Efficiency Ratio | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | |||||||||||||||
| Noninterest expense | $ | 9,679 | $ | 10,370 | $ | 10,052 | $ | 9,638 | $ | 13,703 | $ | 39,739 | $ | 42,813 | ||||||||
| Less: | ||||||||||||||||||||||
| Amortization of intangible assets | 48 | 9 | 9 | 9 | 84 | 76 | 138 | |||||||||||||||
| Other real estate owned expenses | — | — | — | — | — | — | 6 | |||||||||||||||
| Adjusted noninterest expense | $ | 9,631 | $ | 10,361 | $ | 10,043 | $ | 9,629 | $ | 13,619 | $ | 39,663 | $ | 42,669 | ||||||||
| Net interest income | $ | 18,928 | $ | 17,724 | $ | 16,579 | $ | 14,655 | $ | 14,304 | $ | 67,886 | $ | 54,835 | ||||||||
| Noninterest income | 825 | 1,437 | 1,440 | 1,956 | 621 | 5,657 | 2,884 | |||||||||||||||
| Less: | ||||||||||||||||||||||
| Net gain on sale of available for sale securities | — | — | — | — | — | — | — | |||||||||||||||
| Gain on sale of other real estate owned, net | — | — | — | — | — | — | 19 | |||||||||||||||
| Operating revenue | $ | 19,753 | $ | 19,161 | $ | 18,019 | $ | 16,611 | $ | 14,925 | $ | 73,543 | $ | 57,700 | ||||||||
| Efficiency ratio | 48.8 | % | 54.1 | % | 55.7 | % | 58.0 | % | 91.2 | % | 53.9 | % | 73.9 | % | ||||||||
| For the Quarter Ended | For the Year Ended | |||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||
| Computation of Return on Average Tangible Common Equity | December 31,<br>2021 | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | December 31,<br>2021 | December 31,<br>2020 | |||||||||||||||
| Net Income Attributable to Common Shareholders | $ | 7,814 | $ | 6,855 | $ | 6,228 | $ | 5,690 | $ | 336 | $ | 26,586 | $ | 5,904 | ||||||||
| Total average shareholders' equity | $ | 200,752 | $ | 192,993 | $ | 191,224 | $ | 182,058 | $ | 178,439 | $ | 191,808 | $ | 176,489 | ||||||||
| Less: | ||||||||||||||||||||||
| Average Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | |||||||||||||||
| Average Other intangibles | 45 | 54 | 64 | 73 | 153 | 59 | 180 | |||||||||||||||
| Average tangible common equity | $ | 198,118 | $ | 190,350 | $ | 188,571 | $ | 179,396 | $ | 175,697 | $ | 189,160 | $ | 173,720 | ||||||||
| Annualized Return on Average Tangible Common Equity | 15.65 | % | 14.29 | % | 13.25 | % | 12.86 | % | 0.76 | % | 14.05 | % | 3.40 | % |
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited)
(Dollars in thousands)
| For the Quarter Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | |||||||||||
| Average<br>Balance | Interest | Yield/<br><br>Rate (4) | Average<br>Balance | Interest | Yield/<br><br>Rate (4) | |||||||
| Assets: | ||||||||||||
| Cash and Fed funds sold | $ | 233,196 | $ | 90 | 0.15 | % | $ | 424,327 | $ | 117 | 0.11 | % |
| Securities(1) | 104,797 | 756 | 2.89 | 105,422 | 814 | 3.09 | ||||||
| Loans: | ||||||||||||
| Commercial real estate | 1,337,147 | 15,104 | 4.42 | 1,096,912 | 12,753 | 4.55 | ||||||
| Residential real estate | 83,763 | 694 | 3.31 | 115,104 | 1,009 | 3.51 | ||||||
| Construction | 95,611 | 972 | 3.98 | 93,909 | 910 | 3.79 | ||||||
| Commercial business | 347,394 | 4,222 | 4.75 | 311,995 | 3,520 | 4.41 | ||||||
| Consumer | 8,904 | 89 | 3.97 | 96 | 2 | 7.41 | ||||||
| Total loans | 1,872,819 | 21,081 | 4.40 | 1,618,016 | 18,194 | 4.40 | ||||||
| Federal Home Loan Bank stock | 2,814 | 16 | 2.28 | 7,859 | 74 | 3.75 | ||||||
| Total earning assets | 2,213,626 | $ | 21,943 | 3.88 | % | 2,155,624 | $ | 19,199 | 3.48 | % | ||
| Other assets | 130,512 | 123,435 | ||||||||||
| Total assets | $ | 2,344,138 | $ | 2,279,059 | ||||||||
| Liabilities and shareholders' equity: | ||||||||||||
| Interest bearing liabilities: | ||||||||||||
| NOW | $ | 114,158 | $ | 51 | 0.18 | % | $ | 93,126 | $ | 42 | 0.18 | % |
| Money market | 874,352 | 1,097 | 0.50 | 644,685 | 858 | 0.53 | ||||||
| Savings | 190,118 | 100 | 0.21 | 168,307 | 164 | 0.39 | ||||||
| Time | 438,627 | 950 | 0.86 | 686,827 | 2,493 | 1.44 | ||||||
| Total interest bearing deposits | 1,617,255 | 2,198 | 0.54 | 1,592,945 | 3,557 | 0.89 | ||||||
| Borrowed Money | 89,726 | 767 | 3.35 | 200,250 | 1,285 | 2.51 | ||||||
| Total interest bearing liabilities | 1,706,981 | $ | 2,965 | 0.69 | % | 1,793,195 | $ | 4,842 | 1.07 | % | ||
| Noninterest bearing deposits | 383,557 | 255,843 | ||||||||||
| Other liabilities | 52,848 | 51,582 | ||||||||||
| Total liabilities | 2,143,386 | 2,100,620 | ||||||||||
| Shareholders' equity | 200,752 | 178,439 | ||||||||||
| Total liabilities and shareholders' equity | $ | 2,344,138 | $ | 2,279,059 | ||||||||
| Net interest income(2) | $ | 18,978 | $ | 14,357 | ||||||||
| Interest rate spread | 3.19 | % | 2.41 | % | ||||||||
| Net interest margin(3) | 3.43 | % | 2.66 | % |
(1)Average balances and yields for securities are based on amortized cost.
(2)The adjustment for securities and loans taxable equivalency amounted to $50 thousand and $53 thousand for the quarters ended December 31, 2021 and 2020, respectively.
(3)Annualized net interest income as a percentage of earning assets.
(4)Yields are calculated using the contractual day count convention for each respective product type.
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - YTD (unaudited)
(Dollars in thousands)
| For the Year Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2021 | December 31, 2020 | |||||||||||
| Average<br>Balance | Interest | Yield/<br><br>Rate (3) | Average<br>Balance | Interest | Yield/<br><br>Rate (3) | |||||||
| Assets: | ||||||||||||
| Cash and Fed funds sold | $ | 294,471 | $ | 376 | 0.13 | % | $ | 261,689 | $ | 585 | 0.22 | % |
| Securities(1) | 103,592 | 3,071 | 2.96 | 98,938 | 3,103 | 3.14 | ||||||
| Loans: | ||||||||||||
| Commercial real estate | 1,225,770 | 55,995 | 4.51 | 1,095,367 | 51,218 | 4.60 | ||||||
| Residential real estate | 99,101 | 3,363 | 3.39 | 129,585 | 4,645 | 3.58 | ||||||
| Construction | 97,163 | 3,780 | 3.84 | 97,230 | 4,262 | 4.31 | ||||||
| Commercial business | 313,422 | 14,589 | 4.59 | 295,662 | 13,530 | 4.50 | ||||||
| Consumer | 7,929 | 315 | 3.97 | 121 | 10 | 8.00 | ||||||
| Total loans | 1,743,385 | 78,042 | 4.42 | 1,617,965 | 73,665 | 4.48 | ||||||
| Federal Home Loan Bank stock | 4,156 | 88 | 2.12 | 7,625 | 346 | 4.53 | ||||||
| Total earning assets | 2,145,604 | $ | 81,577 | 3.75 | % | 1,986,217 | $ | 77,699 | 3.85 | % | ||
| Other assets | 120,955 | 125,261 | ||||||||||
| Total assets | $ | 2,266,559 | $ | 2,111,478 | ||||||||
| Liabilities and shareholders' equity: | ||||||||||||
| Interest bearing liabilities: | ||||||||||||
| NOW | $ | 111,515 | $ | 198 | 0.18 | % | $ | 80,805 | $ | 141 | 0.17 | % |
| Money market | 804,679 | 4,042 | 0.50 | 516,527 | 4,071 | 0.79 | ||||||
| Savings | 175,629 | 413 | 0.23 | 169,763 | 1,368 | 0.81 | ||||||
| Time | 508,651 | 5,790 | 1.14 | 712,461 | 12,600 | 1.77 | ||||||
| Total interest bearing deposits | 1,600,474 | 10,443 | 0.65 | 1,479,556 | 18,180 | 1.23 | ||||||
| Borrowed Money | 103,919 | 3,047 | 2.89 | 190,463 | 4,472 | 2.31 | ||||||
| Total interest bearing liabilities | 1,704,393 | $ | 13,490 | 0.79 | % | 1,670,019 | $ | 22,652 | 1.36 | % | ||
| Noninterest bearing deposits | 323,648 | 215,073 | ||||||||||
| Other liabilities | 46,710 | 49,897 | ||||||||||
| Total liabilities | 2,074,751 | 1,934,989 | ||||||||||
| Shareholders' equity | 191,808 | 176,489 | ||||||||||
| Total liabilities and shareholders' equity | $ | 2,266,559 | $ | 2,111,478 | ||||||||
| Net interest income(2) | $ | 68,087 | $ | 55,047 | ||||||||
| Interest rate spread | 2.96 | % | 2.49 | % | ||||||||
| Net interest margin | 3.17 | % | 2.77 | % |
(1)Average balances and yields for securities are based on amortized cost.
(2)The adjustment for securities and loans taxable equivalency amounted to $201 thousand and $212 thousand for the years ended December 31, 2021 and 2020, respectively.
(3)Yields are calculated using the contractual day count convention for each respective product type.
15
a4q2021bwfginvestorprese
BWFG | LISTED | NASDAQ 4Q21 Investor Presentation January 26th, 2022
2 BWFG LISTED NASDAQ BWFG LISTED NASDAQ This presentation may contain certain forward-looking statements about Bankwell Financial Group, Inc. (the “Company”). Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged. The COVID-19 pandemic continues to affect Bankwell Financial Group, its customers, counterparties, employees, and third party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is unknown. Safe Harbor
3 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Table of Contents • 4Q21 & 2021 Performance • Trends • ALLL & Non-Performing Loans • Loan Portfolio • Capital • Bankwell History & Overview
BWFG | LISTED | NASDAQ 4Q21 & 2021 Performance
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Summary • Record net income of $7.81 million, or $0.99 earnings per share for the quarter, and $26.59 million, or $3.36 earnings per share for the full year • Return on Average Assets and Return on Average Equity were 1.32% and 15.44%, respectively for the quarter, and 1.17% and 13.86% for the full year • 4Q21 results includes: ̶ ~$0.4 million release of COVID-19 reserves in the Provision for Loan Losses, given improving economic trends ̶ ~$0.3 million negative mark on held-for-sale property for former Bankwell office building ̶ ~$0.2 million loss resulting from sale of former HQ building • Pre-tax, pre-provision net revenue (“PPNR”)1 of $10.07 million, or 1.70% PPNR ROAA for the quarter, and $33.80 million, or 1.49% PPNR ROAA for the full year • 2021 loan growth of $304 million, or 19%, excluding PPP loan balances ̶ Quarterly loan growth of $72 million, or ~4% • Noninterest bearing deposits percentage increased to 18.8% from 14.8% versus December 31, 2020 ̶ During 4Q21, noninterest bearing deposits grew $60 million, or ~18% • 6 basis point linked quarter deposit cost reduction to 44 basis points • 4Q21 Net Interest Margin (“NIM”) of 3.43%, 2021 NIM of 3.17% • Repurchased 59,338 shares at an average price of $31.29 per share during the quarter • Issued $35 million of subordinated notes at 3.25%, using $15.5 million to repay previously issued subordinated notes • Raising 1Q22 dividend by 11% from the prior quarter, to $0.20 per share 1 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Results 1 Ratios presented represent Bank ratios; presented ratios are preliminary, subject to finalization of the FDIC Call Report 2 Bankwell meets Adequate + buffer standard, which exceeds Well Capitalized thresholds Profitability Balance Sheet Capital • $1.9 billion of gross loans • $2.1 billion of deposits • 0.89% ALLL; not subject to CECL • Dividend of $0.18 per share paid • $26.19 Tangible Book Value • Well Capitalized1,2 Tier 1 Leverage 9.94% Tier1/CET1 / RWA 11.18% Total Capital / RWA 12.00% 4Q21 TY 2021 • Net Income $7.8 million $26.6 million • PPNR $10.1 million $33.8 million • Return on Average Assets 1.32% 1.17% • PPNR / Average Assets 1.70% 1.49% • Return on Average Equity 15.44% 13.86%
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 4Q21 3Q21 Var1 Total Interest Income $21.9 $20.6 $1.3 Total Interest Expense $3.0 $2.9 $(0.1) Net Interest Income $18.9 $17.7 $1.2 Non-Interest Income $0.8 $1.4 $(0.6) Non-Interest Expense $9.7 $10.4 $0.7 Pre-Tax, Pre-Provision Net Revenue $10.1 $8.8 $1.3 Provision for Loan Losses $0.1 $0.1 $0.0 Pre-Tax Income $9.9 $8.7 $1.3 Income Tax Expense $2.1 $1.8 $(0.3) Reported Net Income $7.8 $6.9 $1.0 EPS $0.99 $0.87 $0.12 Pre-Tax, Pre-Provision Net Revenue per share2 $1.30 $1.14 $0.16 1 Variances are rounded based on actual whole dollar amounts 2 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense Dollars in millions, except per share data Balance Sheet 4Q21 3Q21 Var1 Cash & Cash Equivalents $345 $178 $167 Investment Securities $108 $106 $3 Loans Receivable, net $1,875 $1,805 $70 All Other Assets $128 $138 $(10) Total Assets $2,456 $2,227 $230 Total Deposits $2,124 $1,883 $241 Total Borrowings $84 $95 $(11) Other Liabilities $46 $52 $(6) Total Liabilities $2,254 $2,031 $224 Equity $202 $196 $6 Total Liabilities & Equity $2,456 $2,227 $230 4Q21 Consolidated Financial Statements Linked Quarter
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2021 2020 Var1 Total Interest Income $81.4 $77.5 $3.9 Total Interest Expense $13.5 $22.7 $9.2 Net Interest Income $67.9 $54.8 $13.1 Non-Interest Income2 $5.7 $2.9 $2.8 Non-Interest Expense3 $39.7 $42.8 $3.1 Pre-Tax, Pre-Provision Net Revenue $33.8 $14.9 $18.9 Credit/Provision for Loan Losses $(0.1) $7.6 $7.7 Pre-Tax Income $33.9 $7.3 $26.6 Income Tax Expense $7.3 $1.4 $(5.9) Reported Net Income $26.6 $5.9 $20.7 EPS $3.36 $0.75 $2.61 Pre-Tax, Pre-Provision Net Revenue per share4 $4.36 $1.92 $2.44 1 Variances are rounded based on actual whole dollar amounts 2 2021 includes the one-time benefit for the federal payroll tax credit for COVID-19-impacted small businesses 3 2020 includes one-time charges; please refer to BWFG’s 4Q20 Earnings Release for further detail 4 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense Dollars in millions, except per share data 2021 Consolidated Income Statement Prior Year
BWFG | LISTED | NASDAQ Trends
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $18.98 $20.59 $22.06 $23.15 $22.43 $26.19 2016 2017 2018 2019 2020 2021 Tangible Book Value $1.62 $1.78 $2.21 $2.31 $0.75 $3.36 2016 2017 2018 2019 2020 2021 Diluted EPS 0.85% 0.80% 0.94% 0.97% 0.28% 1.17% 2016 2017 2018 2019 2020 2021 Return on Average Assets 8.94% 8.93% 10.19% 10.20% 3.35% 13.86% 2016 2017 2018 2019 2020 2021 Return on Average Equity
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin 3.54% 3.30% 3.18% 3.03% 2.77% 3.17% 2016 2017 2018 2019 2020 2021 Net Interest Margin • 4Q21 NIM of 3.43% • NIM run rate to moderate in 2022, subject to Fed actions 0.91% 1.08% 1.42% 1.75% 1.20% 0.67% 0.73% 0.93% 1.30% 1.66% 1.07% 0.54% 2016 2017 2018 2019 2020 2021 Cost of Funds / Deposits Cost of Funds Cost of Deposits 4.64% 4.51% 4.67% 4.85% 4.48% 4.42% 4.34% 4.23% 4.45% 4.61% 3.85% 3.75% 2016 2017 2018 2019 2020 2021 Loan & Earning Asset Yields Loan Yield Earning Asset Yield Yields include origination fee amortization
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Trends $995 $1,107 $1,168 $1,202 $1,182 $1,235 $371 $436 $436 $402 $444 $660 $1,366 $1,543 $1,605 $1,604 $1,626 $1,895 2016 2017 2018 2019 2020 2021 Loan Balances All Other C&I + CRE Owner Occupied 4Q21 Loan Mix 4Q21 Portfolio Yield by Vintage1 C&I + CRE Owner Occupied / Total Loans 27% 28% 27% 25% 27% 35% 1 Weighted average yield based on active loans as of 12-31-2021 Residential 3.92% C&I 18.52% CRE Owner Occupied 16.38% CRE Investor 55.22% Commercial Const. 5.19% Consumer Loans / Other 0.76% Dollars in millions 4.21% Pre 2018 4.35% 2018 4.08% 2019 3.98% 2020 4.56% 2021
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 11.5% 12.8% 14.8% 15.1% 16.9% 18.0% 18.8% 4Q18 4Q19 4Q20 1Q21 2Q21 3Q21 4Q21 Deposit Trends 18.5% 16.2% 12.4% 14.1% 15.9% 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings to total assets Non-Interest Bearing Deposits Mix Trend 19.2% 17.7% 18.5% 16.2% 15.0% 16.7% 29.0% 30.3% 28.1% 28.6% 20.1% 9.7% 51.7% 52.0% 53.4% 55.3% 64.9% 73.6% $1,289 $1,398 $1,502 $1,492 $1,827 $2,124 2016 2017 2018 2019 2020 2021 Deposit Balances Brokered Deposits Retail CDs Core Deposits $213 $231 $471 $525 $512 $495 $611 $156 $178 $255 $263 $309 $331 $383 $369 $409 $725 $788 $821 $827 $994 4Q18 4Q19 4Q20 1Q21 2Q21 3Q21 4Q21 Commercial Deposits Recent Trends Interest Bearing Non-Interest Bearing • $100 million FHLB borrowings replaced by lower cost brokered deposits in 2021 24.9% 24.9% 23.4% 20.6% 19.8% 16.4% Wholesale Funding ratio2 FHLB Borrowings Dollars in millions $160 $199 $160 $150 $175 $50 Core deposit growth staying ahead of strong loan pipeline
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Non Interest Expense Full year 2022 Efficiency Ratio expected to improve versus 2021 despite anticipated Fed rate hikes 1.93% 1.90% 2.03% 1.75% 2018 2019 2020 2021 Non Interest Expense / Avg Assets 59.2% 60.2% 73.9% 53.9% 2018 2019 2020 2021 Efficiency Ratio
BWFG | LISTED | NASDAQ ALLL & Non-Performing Loans
16 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Non Performing Loans 0.88% 0.66% 2.06% 0.88% 2018 2019 2020 2021 Non Performing Loans / Gross Loans NPLs $14,082 $10,588 $33,416 $16,587 0.47% 0.20% 0.21% 2021 Detail 0.88% SBA-guaranteed portion of NPLs All other NPLs NPL population adequately collateralized or individually reserved in ALLL COVID-19 related NPL Dollars in thousands • 70 basis point reduction in NPL / Gross Loans versus prior quarter • ~$11 million of previously reported NPLs became performing TDRs at year-end 2021 • ~$2 million of previously reported NPLs paid off during the quarter • No remaining COVID-19 deferral loans at the end of 4Q21 • Single loan - 57% LTV • Full recourse • High net worth guarantors • Full repayment in 2022 expected
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.98% 0.74% 0.31% $(4.6) million $2.6 million ($2.2 million) 0.15% 2020 Improving Economic Factors Asset Growth / Mix Specifics 2021 General Specific 2021 ALLL Coverage Allowance for Loan Loss (“ALLL”) Walk 1.29% 0.89% • Bankwell not subject to CECL; ALLL calculated in accordance with the incurred loss model • Lower Reserve ratios reflect charge offs for previously reserved loans as well as improving macro-economic conditions $21.0 Million $16.9 Million
BWFG | LISTED | NASDAQ Loan Portfolio
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CT 47% NY 20% NJ 6% All Other 27% Industrial Warehouse 8.5% Mixed Use 5.0% MultiFamily 10.8% Office 21.9% Other 3.5% 1-4 Family Investment 1.3% Retail 29.8% Special Use 3.6% Healthcare & Social Assistance 15.6% • Property Type mix continues to show well diversified exposure • ~ 50% of all CRE loan balances have recourse ̶ Non recourse loans require lower LTV and higher DSCR Diversified CRE Portfolio $1,357 million Type Count $ % LTV3 Retail2 82 $238 59% 64.2% Grocery 11 $100 25% 65.0% Restaurant 25 $25 6% 63.2% Pharmacy 7 $22 5% 65.7% Gas / Auto Services 15 $20 5% 73.3% Total Retail 140 $405 100% 64.9% Retail Segment Detail • No significant exposure to any one retailer • No exposure to bankrupt retailers 1 Includes Owner Occupied CRE, does not include Construction 2 Comprised primarily of neighborhood and convenience centers, typically characterized by: size up to 125,000 sq. ft.; convenience and service oriented 3 LTVs based on original LTV values, at origination Office Segment Detail • ~73% Office loans located in Bankwell’s primary lending area • Out of primary market loans are generally either GSA-leased, credit tenants, owner-occupied or medical office Type Count $ % LTV3 Office (primarily suburban) 76 $214 72% 62.4% Medical 36 $82 28% 69.0% Condo 4 $1 0% 64.9% Total Office 116 $297 100% 64.2% CRE Loan Portfolio1 Dollars in millions
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ C&I Loan Portfolio Loans by Industry Type Total C&I Portfolio = $351 million • Minimal exposure to the following industries (each industry < $5 million) : ̶ Accommodation & Food Services ̶ Transportation / Airlines • No exposure to the Energy or Hotel industries • Limited leverage loan exposure of $33 million as of 12/31/21, 2% of total loans • Majority of the Lines of Credit are uncommitted lines Finance 21% Insurance (Primarily Brokers) 36% Health Care & Social Assistance 17% Wholesale 5% Arts, Entertainment & Recreation 5% Retail Trade 3% Professional, Sci & Tech Services 3% Real Estate and Rental/Leasing 3% All Other 7%
BWFG | LISTED | NASDAQ Capital
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Tangible Book Value Tangible Book Value (TBV) Per Share Walk • $0.90 increase in OCI primarily from mark-to-market on long-dated interest rate swaps • As of January 23, 2022 the mark-to-market would increase TBV by an additional ~$0.30 • Repurchased 190,770 shares at an average price of $26.62 per share through December 31, 2021 1 Misc includes items such as, but not limited to, changes related to stock grants and share count 1 $22.43 $26.19 $3.36 $0.64 $0.90 $0.01 $0.15 2020 Net Income Dividends AOCI Share Buyback Misc 2021
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 8.70% 9.61% 10.59% 11.44% 8.13% 9.94% 11.18% 12.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% TC E Ti er 1 Le ve ra ge Ti er 1 / CE T1 To ta l C ap ita l 4Q21 3Q21 ‘Adequate’ + Buffer Min Bankwell’s capital position remains strong 2 Tier 1CET1 • $35 million subordinated debt issued during the quarter (at the Holding Company level) • $10 million capital contribution from the Holding Company to the Bank during the quarter • As of January 24, 2022, the expanded share repurchase program has ~315 thousand shares authorized for repurchase • CRE concentration of 454%1 1 Current period Bank capital ratios are preliminary, subject to finalization of the FDIC Call Report 2 TCE calculation is a consolidated BWFG ratio Key Bank Capital Ratios1
BWFG | LISTED | NASDAQ History & Overview
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • Third most affluent MSA in the Nation in per capita personal income (PCPI)2 • 4 of the top 25 wealthiest towns in the U.S.3 • MSA ranked 12th most educated overall, tied for 1st with the highest percentage of graduate or professional degree holders4 • Headquarters of 9 Fortune 500 companies5 • Home to two of the largest hedge funds in the U.S. • $27 billion total AUM managed by 68 firms with $1 billion or less in AUM6 • 375 thousand housing units with a median value of owner-occupied units of $429 thousand7 ̶ In addition, New Haven County has 369 thousand housing units with a median value of owner-occupied units of $249 thousand7 1 Source: S&P Global Market Intelligence’s Branch Competitors & Pricing Report as of 6/30/21, excluding global money center banks (tickers BAC, WFC, JPM, TD & C) 2 Source: Bureau of Economic Analysis’ Metropolitan Area Table, contained within the Personal Income by County & Metropolitan Area, 2020 news release 11/16/21 3 Source: Bloomberg: 2020 Richest Places 4 Source: WalletHub: Most & Least Educated Cities in America, 7/19/21 5 Source: Fortune.com: 2021 Fortune 500 6 Source: US News and World Report 7 Source: US Census Bureau QuickFacts (2019 data) Existing Branches (10) Fairfield County Profile • Connecticut-based $2.5 billion commercial bank • 10 branches in Fairfield & New Haven Counties • $177 million deposits per branch; one of the highest in Fairfield & New Haven Counties1
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2016 2017 2018 2019 2020 2021 Total assets $1,628,919 $1,796,607 $1,873,665 $1,882,182 $2,253,747 $2,456,264 Net loans $1,343,895 $1,520,879 $1,586,775 $1,588,840 $1,601,672 $1,875,167 Loan-to-deposit ratio 105.6% 110.1% 106.4% 107.1% 87.9% 88.8% Efficiency ratio2 56.5% 54.9% 59.2% 60.2% 73.9% 53.9% Non-interest expense / avg. assets 2.03% 1.88% 1.93% 1.90% 2.03% 1.75% Net interest margin 3.54% 3.30% 3.18% 3.03% 2.77% 3.17% Total capital to risk weighted assets 12.85% 12.19% 12.50% 13.35% 12.28% 12.00% Tangible common equity ratio2 8.78% 8.81% 9.16% 9.56% 7.73% 8.13% Return on average equity 8.94% 8.93% 10.19% 10.20% 3.35% 13.86% Tangible book value per share2 $18.98 $20.59 $22.06 $23.15 $22.43 $26.19 Net interest income $49,092 $54,364 $56,326 $53,761 $54,835 $67,886 Pre-tax, pre-provision net revenue2 $22,224 $26,470 $24,593 $23,379 $14,907 $33,803 Net income $12,350 $13,830 $17,433 $18,216 $5,904 $26,586 EPS (fully diluted) $1.62 $1.78 $2.21 $2.31 $0.75 $3.36 1 1 Values are based on reported earnings / performance, which were impacted primarily as a result of the Tax Cut and Jobs Act passed in December 2017 along with several other smaller items. Please refer to BWFG’s 4Q’17 Earnings Release for further detail 2 A non-GAAP metric Dollars in thousands, except per share data
27 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Name Years Experience Selected Professional Biography Christopher Gruseke Chief Executive Officer Director (since 2015) 30+ Mr. Gruseke was a founding investor and director of Bankwell Financial Group’s predecessors, BNC Financial Group, Inc., and The Bank of New Canaan. He brings more than 25 years of capital markets, operations, sales and finance experience to his role at the Company. Most recently, he was a member of the Executive Committee at CRT Capital, a Stamford, Connecticut-based broker/dealer. He also served as Co-Chief Operating Officer and a member of the Board of Greenwich Capital Markets. Mr. Gruseke earned a B.A. from Williams College and an M.S. from the Stern School of Business at New York University. Christine A. Chivily Chief Risk Officer Chief Credit Officer (since 2013) 40+ Ms. Chivily has over 40 years of experience in banking and real estate finance. She previously served in a risk management role for the CRE and C&I loan portfolios at People's United Bank. Her prior experience also includes five years as Director of Freddie Mac’s New England region for multifamily properties and 11 years as Senior Credit Officer at RBS Greenwich Capital. She also has over 10 years of combined experience in lending, loan administration and workouts at other various banking institutions. Ms. Chivily received her B.A. from Mt. Holyoke College. Penko Ivanov Chief Financial Officer (since 2016) 30+ Mr. Ivanov has over 30 years of experience in accounting and finance. His more recent roles include CFO for the U.S. Operations of Doral Bank, where he created a scalable finance organization to support the rapid growth of several business units from infancy to $3 billion in assets, and as CFO of Darien Rowayton Bank. He began his career with Ernst & Young and held various accounting/finance positions at PepsiCo, GE Capital and Bridgewater Associates. His experience includes building, improving and overseeing all finance areas, including Controllership, SOX, Treasury, FP&A, as well as internal and external reporting functions. Mr. Ivanov holds M.B.A. and bachelor degrees in accounting and finance from the University of South Florida and is a CPA. He is also Six Sigma Black Belt certified. Matthew McNeill Chief Banking Officer (since 2020) 20+ Mr. McNeill has more than 20 years of experience in Commercial Banking. He most recently served as Head of Commercial Lending at Metropolitan Commercial Bank. During his 8 years at Metropolitan Commercial Bank the bank grew it’s lending assets from $400 million to over $3 billion. Mr. McNeill has additionally held lending roles at HSBC Bank US and Banco Santander. Mr. McNeill has also served as Managing Partner at American Real Estate Lending; a Commercial Real Estate finance company. Laura J. Waitz Chief Operating Officer (since 2017) 35+ Ms. Waitz has over 35 years of experience for various businesses and previously was Senior Managing Director, Global Head of Human Resources at The Blackstone Group. She also served as Managing Director and Global Head of Compensation at Citi Alternative Investments and as Head of Compensation (Americas) for Deutsche Bank. Prior to that she served as Global Compensation Manager for private equity and investment banks. Ms. Waitz received her B.S. from Penn State University. Experienced Leadership Team
BWFG | LISTED | NASDAQ Thank You & Questions