bwfg-20201028

BANKWELL FINANCIAL GROUP REPORTS OPERATING RESULTS FOR THE THIRD QUARTER WITH STRONG CORE DEPOSIT GROWTH

New Canaan, CT – October 28, 2020 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $3.0 million, or $0.38 per share, for the third quarter of 2020, versus $4.1 million, or $0.52 per share, for the same period in 2019.

The Company's Board of Directors declared a $0.14 per share cash dividend, payable November 23, 2020 to shareholders of record on November 13, 2020.

We recommend reading this earnings release in conjunction with the Third Quarter 2020 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our October 28, 2020 Current Report on Form 8-K.

Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:

"I am grateful for the commitment and dedication of our team as we have made steady progress in the midst of the ongoing pandemic. Our balance sheet remains strong and credit metrics continue to improve. Loans on COVID-19-related deferrals have decreased from approximately 22% of outstanding loans to under 4% today. On the deposit front, we have increased core business accounts by $176 million year to date, including a 23% increase in non-interest bearing deposits. We have also continued to diversify our loan origination mix as the fourth quarter pipeline is comprised mostly of C&I loans."

"Having begun planning for the year ahead, we are committed to continue expense management with a goal of improving our operating expense run rate by 3-5% by the end of 2021."

Third Quarter 2020 Highlights:

•The allowance for loan losses was $20.4 million and represents 1.25% of total loans (1.30% excluding Paycheck Protection Program (“PPP”) loans) as of September 30, 2020, compared to an allowance for loan losses of $13.5 million, representing 0.84% of total loans as of December 31, 2019. The increase in the allowance for loan losses was primarily due to incremental loan loss reserves for increased credit risk relating to economic disruption and uncertainty caused by the COVID-19 pandemic.

•PPP loans totaled $56.7 million at September 30, 2020. As of October 20, 2020 approximately $11.3 million of PPP loans have completed applications for loan forgiveness and a majority of these applications have been submitted to the SBA.

•Less than 4% of the loan portfolio remains on COVID-19 deferral.

•Total deposits were $1.8 billion at September 30, 2020 compared to $1.5 billion at December 31, 2019, reflecting successful commercial core deposit gathering efforts, as well as a temporary increase in short term time deposits to expand on-balance sheet liquidity during the COVID-19 pandemic.

•Noninterest bearing deposits increased 23% when compared to December 31, 2019, totaling $234.8 million, a new high.

•The loan-to-deposit ratio for the Bank was 91.6% at September 30, 2020, reflecting the above-mentioned increase in deposits.

•Total gross loans were $1.6 billion at September 30, 2020, increasing slightly when compared to December 31, 2019.

•Investment securities totaled $108.9 million and represent 5% of total assets.

•Total noninterest income was $0.6 million for the quarter ended September 30, 2020, or 4% of total revenue.

•The tangible common equity ratio, as of September 30, 2020, decreased to 7.83%, as capital growth from earnings was more than offset by increased liquidity and corresponding balance sheet growth.

•Tangible book value per share, as of September 30, 2020, grew to $22.20.

•Subsequent to the third quarter, as part of the Company's ongoing operational review, the Company has committed to permanently close its North Haven, CT branch as of December 31, 2020 and rolled out a Voluntary Early Retirement Incentive Program.

Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended September 30, 2020 were $14.2 million, versus $14.6 million for the quarter ended September 30, 2019. Revenues for the nine months ended September 30, 2020 were $42.8 million, versus $45.1 million for the nine months ended September 30, 2019. The decrease in revenues was attributable to a decline in income from loan prepayments and the absence of SBA loan sales during the quarter and nine month periods ended September 30, 2020 when compared to the same periods in 2019. The decrease in revenues was also driven by lower loan yields as loans are re-priced in the current low interest rate environment. The decrease in revenues was partially offset by a decline in interest expense, driven by lower interest rates on deposits when compared to the same periods in 2019.

Net income for the quarter ended September 30, 2020 was $3.0 million, versus $4.1 million for the quarter ended September 30, 2019. Net income for the nine months ended September 30, 2020 was $5.6 million, versus $14.7 million for the nine months ended September 30, 2019. The decrease in net income for the quarter ended September 30, 2020 when compared to the same period in 2019 was primarily driven by an increase in noninterest expense. The decrease in net income for the nine month period ended September 30, 2020 when compared to the same period in 2019 was due to an increase in the provision for loan losses due to the COVID-19 pandemic and, to a lesser degree, an increase in noninterest expense. The provision for loan losses related to the COVID-19 pandemic totaled $7.9 million for the nine months ended September 30, 2020.

Basic and diluted earnings per share were each $0.38 for the quarter ended September 30, 2020 compared to basic and diluted earnings per share of $0.52 each for the quarter ended September 30, 2019. Basic and diluted earnings per share were each $0.71 for the nine months ended September 30, 2020 compared to basic and diluted earnings per share of $1.88 and $1.87, respectively, for the nine months ended September 30, 2019.

The net interest margin (fully taxable equivalent basis) for the quarters ended September 30, 2020 and September 30, 2019 was 2.67% and 2.96%, respectively. The net interest margin for the nine months ended September 30, 2020 and September 30, 2019 was 2.81% and 3.07%, respectively. The decrease in net interest margin for the quarter and nine month periods ended September 30, 2020, when compared to the same periods in 2019, was primarily due to excess cash held at low interest rates to maintain a higher level of liquidity during the COVID-19 pandemic. Excluding the impact of additional liquidity and PPP loans, the net interest margin would increase approximately 27 basis points and 23 basis points for the three and nine months ended September 30, 2020, respectively.

Financial Condition

Assets totaled $2.2 billion at September 30, 2020, compared to assets of $1.9 billion at December 31, 2019. The increase in assets is primarily due to an increase in cash and cash equivalents in order to maintain a higher level of liquidity during the COVID-19 pandemic. Gross loans totaled $1.6 billion at September 30, 2020, an increase of $20.2 million compared to December 31, 2019. Excluding PPP loans, gross loans decreased by $36.5 million at September 30, 2020 when compared to December 31, 2019. Deposits totaled $1.8 billion at September 30, 2020, compared to deposits of $1.5 billion at December 31, 2019. The increase in deposits was a result of successful commercial core deposit gathering efforts through Treasury Management, Business Development, and Lending channels, as well as a temporary increase in short term time deposits to expand on-balance sheet liquidity during the COVID-19 pandemic.

Capital

Shareholders’ equity totaled $174.3 million as of September 30, 2020, a decrease of $8.1 million compared to December 31, 2019, primarily a result of a $10.7 million unfavorable impact to accumulated other comprehensive loss

driven by fair value marks related to hedge positions involving interest rate swaps, as well as dividends paid of $3.3 million and common stock repurchases of $1.0 million. The decrease was partially offset by net income for the nine months ended September 30, 2020 of $5.6 million. The marks on the interest rate swaps are driven by lower long term market interest rates in 2020 when compared to 2019. 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.

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 and tangible book value per share are useful to evaluate the relative strength of the Company's 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)


	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
ASSETS
Cash and due from banks	$	333,103	$	201,380	$	203,569	$	78,051	$	83,109
Federal funds sold	6,380		5,886		6,427		—		—
Cash and cash equivalents	339,483		207,266		209,996		78,051		83,109

Investment securities
Marketable equity securities, at fair value	2,203		2,195		2,289		2,118		2,120
Available for sale investment securities, at fair value	90,563		82,220		82,342		82,439		86,017
Held to maturity investment securities, at amortized cost	16,138		16,196		16,252		16,308		17,365
Total investment securities	108,904		100,611		100,883		100,865		105,502
Loans receivable (net of allowance for loan losses of $20,372, $19,662, $16,686, $13,509, and $13,212 at September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively)	1,600,776		1,590,995		1,602,146		1,588,840		1,548,988
Other real estate owned	—		180		—		—		—
Accrued interest receivable	7,294		6,774		5,867		5,959		5,916
Federal Home Loan Bank stock, at cost	7,860		7,835		6,507		7,475		7,475
Premises and equipment, net	26,616		27,177		27,835		28,522		28,892
Bank-owned life insurance	42,409		42,167		41,926		41,683		41,433
Goodwill	2,589		2,589		2,589		2,589		2,589
Other intangible assets	160		178		196		214		232
Deferred income taxes, net	11,149		11,352		10,009		5,788		6,591
Other assets	45,782		46,511		45,671		22,196		27,815
Total assets	$	2,193,022	$	2,043,635	$	2,053,625	$	1,882,182	$	1,858,542

LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits	$	234,848	$	214,789	$	168,448	$	191,518	$	178,733
Interest bearing deposits	1,532,680		1,405,175		1,512,684		1,300,385		1,291,551
Total deposits	1,767,528		1,619,964		1,681,132		1,491,903		1,470,284

Advances from the Federal Home Loan Bank	175,000		175,000		125,000		150,000		150,000
Subordinated debentures	25,245		25,233		25,220		25,207		25,194
Accrued expenses and other liabilities	50,982		53,078		52,059		32,675		37,052
Total liabilities	2,018,755		1,873,275		1,883,411		1,699,785		1,682,530

Shareholders’ equity
Common stock, no par value	120,854		120,381		119,953		120,589		120,343
Retained earnings	71,603		69,712		69,595		69,324		66,870
Accumulated other comprehensive loss	(18,190)		(19,733)		(19,334)		(7,516)		(11,201)
Total shareholders’ equity	174,267		170,360		170,214		182,397		176,012

Total liabilities and shareholders’ equity	$	2,193,022	$	2,043,635	$	2,053,625	$	1,882,182	$	1,858,542

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except share data)


	For the Quarter Ended										For the Nine Months Ended
	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019		September 30, 2020		September 30, 2019
Interest and dividend income
Interest and fees on loans	$	18,027	$	18,459	$	18,985	$	18,648	$	19,055	$	55,471	$	58,691
Interest and dividends on securities	799		778		825		858		903		2,402		2,892
Interest on cash and cash equivalents	96		86		286		427		535		468		1,432
Total interest and dividend income	18,922		19,323		20,096		19,933		20,493		58,341		63,015

Interest expense
Interest expense on deposits	4,104		4,810		5,709		5,948		6,331		14,623		18,750
Interest expense on borrowings	1,210		876		1,101		1,103		1,151		3,187		3,386
Total interest expense	5,314		5,686		6,810		7,051		7,482		17,810		22,136

Net interest income	13,608		13,637		13,286		12,882		13,011		40,531		40,879
Provision for loan losses	712		2,999		3,185		310		773		6,896		127
Net interest income after provision for loan losses	12,896		10,638		10,101		12,572		12,238		33,635		40,752

Noninterest income
Bank owned life insurance	242		241		243		250		255		726		758
Service charges and fees	190		171		217		247		264		578		776
Gains and fees from sales of loans	27		—		—		382		703		27		1,409
Gain (loss) on sale of other real estate owned, net	19		—		—		—		(102)		19		(102)
Net gain on sale of available for sale securities	—		—		—		—		—		—		76
Other	136		165		612		169		432		913		1,279
Total noninterest income	614		577		1,072		1,048		1,552		2,263		4,196

Noninterest expense
Salaries and employee benefits	5,295		5,227		5,380		5,162		4,881		15,902		14,272
Occupancy and equipment	2,266		2,235		1,909		1,928		1,946		6,410		5,666
Data processing	529		493		536		499		505		1,558		1,568
Professional services	374		434		711		402		346		1,519		1,455
Director fees	301		287		295		224		235		883		639
FDIC insurance	176		283		70		—		(125)		529		74
Marketing	151		199		162		220		210		512		751
Amortization of intangibles	18		18		18		18		19		54		57
Other	619		546		578		771		655		1,743		1,920
Total noninterest expense	9,729		9,722		9,659		9,224		8,672		29,110		26,402

Income before income tax expense	3,781		1,493		1,514		4,396		5,118		6,788		18,546
Income tax expense	790		279		151		924		1,030		1,220		3,802
Net income	$	2,991	$	1,214	$	1,363	$	3,472	$	4,088	$	5,568	$	14,744

Earnings Per Common Share:
Basic	$	0.38	$	0.16	$	0.17	$	0.44	$	0.52	$	0.71	$	1.88
Diluted	$	0.38	$	0.16	$	0.17	$	0.44	$	0.52	$	0.71	$	1.87

Weighted Average Common Shares Outstanding:
Basic	7,721,247		7,715,094		7,750,135		7,745,227		7,750,490		7,728,798		7,761,441
Diluted	7,721,459		7,715,295		7,778,762		7,773,780		7,766,485		7,749,199		7,788,839
Dividends per common share	$	0.14	$	0.14	$	0.14	$	0.13	$	0.13	$	0.42	$	0.39

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)


	For the Quarter Ended										For the Nine Months Ended
	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019		September 30, 2020		September 30, 2019
Performance ratios:
Return on average assets(1)	0.55	%	0.23	%	0.29	%	0.73	%	0.87	%	0.36	%	1.05	%
Return on average stockholders' equity(1)	6.87	%	2.82	%	3.03	%	7.68	%	9.12	%	4.23	%	11.06	%
Return on average tangible common equity(1)	6.98	%	2.86	%	3.07	%	7.80	%	9.26	%	4.30	%	11.24	%
Net interest margin	2.67	%	2.81	%	2.98	%	2.92	%	2.96	%	2.81	%	3.07	%
Efficiency ratio(2)	68.4	%	68.2	%	67.1	%	66.1	%	58.9	%	67.9	%	58.3	%
Net loan charge-offs as a % of average loans	—	%	—	%	—	%	—	%	0.09	%	—	%	0.15	%
Dividend payout ratio(3)	36.84	%	87.50	%	82.35	%	29.55	%	25.00	%	59.15	%	20.86	%

(1)2020 performance ratios are negatively impacted by incremental COVID-19 pandemic related loan loss reserves, totaling $7.9 million for the nine months ended September 30, 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
	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)	12.36		%	12.44		%	12.14		%	12.53		%	12.65		%
Total Capital to Risk-Weighted Assets(1)	13.57		%	13.63		%	13.13		%	13.35		%	13.47		%
Tier I Capital to Risk-Weighted Assets(1)	12.36		%	12.44		%	12.14		%	12.53		%	12.65		%
Tier I Capital to Average Assets(1)	9.58		%	9.93		%	10.84		%	10.99		%	10.88		%
Tangible common equity to tangible assets	7.83		%	8.21		%	8.16		%	9.56		%	9.33		%
Tangible book value per common share(2)	$	22.20		$	21.70		$	21.69		$	23.15		$	22.34

(1)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.

(2)Excludes unvested restricted shares of 170,083, 165,708, 154,012, 110,975, and 88,473 as of September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, and September 30, 2019, respectively.

BANKWELL FINANCIAL GROUP, INC.

ASSET QUALITY (unaudited)

(Dollars in thousands)


	For the Quarter Ended
	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Allowance for loan losses:
Balance at beginning of period	$	19,662	$	16,686	$	13,509	$	13,212	$	13,890
Charge-offs:
Residential real estate	—		—		—		—		(78)
Commercial real estate	—		—		—		—		(594)
Commercial business	—		—		(8)		(13)		(748)
Consumer	(4)		(23)		(2)		(5)		(57)
Total charge-offs	(4)		(23)		(10)		(18)		(1,477)
Recoveries:

Commercial business	—		—		1		1		2
Consumer	2		—		1		4		24
Total recoveries	2		—		2		5		26
Net loan charge-offs	(2)		(23)		(8)		(13)		(1,451)
Provision for loan losses	712		2,999		3,185		310		773
Balance at end of period	$	20,372	$	19,662	$	16,686	$	13,509	$	13,212


	As of
	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Asset quality:
Nonaccrual loans
Residential real estate	$	1,596		$	1,622		$	1,532		$	1,560		$	1,583
Commercial real estate	4,812			5,172			5,339			5,222			5,332
Commercial business	3,760			3,783			3,783			3,806			2,963
Total nonaccrual loans	10,168			10,577			10,654			10,588			9,878
Other real estate owned	—			180			—			—			—
Total nonperforming assets	$	10,168		$	10,757		$	10,654		$	10,588		$	9,878

Nonperforming loans as a % of total loans	0.63		%	0.66		%	0.66		%	0.66		%	0.63		%
Nonperforming assets as a % of total assets	0.46		%	0.53		%	0.52		%	0.56		%	0.53		%
Allowance for loan losses as a % of total loans	1.25		%	1.22		%	1.03		%	0.84		%	0.84		%
Allowance for loan losses as a % of nonperforming loans	200.35		%	185.89		%	156.62		%	127.59		%	133.75		%

Total nonaccrual loans were $10.2 million as of September 30, 2020, of which $4.5 million are guaranteed by the Small Business Administration (SBA). Nonperforming assets as a percentage of total assets was 0.46% at September 30, 2020, down from 0.56% at December 31, 2019. The allowance for loan losses at September 30, 2020 was $20.4 million, representing 1.25% of total loans. The $6.9 million increase in the allowance for loan losses at September 30, 2020 when compared to December 31, 2019 was primarily due to incremental loan loss reserves for increased credit risk relating to economic disruption and uncertainty caused by the COVID-19 pandemic.

BANKWELL FINANCIAL GROUP, INC.

LOAN & DEPOSIT PORTFOLIO (unaudited)

(Dollars in thousands)


Period End Loan Composition	September 30, 2020		June 30, 2020		December 31, 2019		Current QTD % Change		YTD % Change
Residential Real Estate	$	120,531	$	128,683	$	147,109	(6.3)	%	(18.1)	%
Commercial Real Estate(1)	1,105,862		1,110,562		1,128,614		(0.4)		(2.0)
Construction	96,508		94,523		98,583		2.1		(2.1)
Total Real Estate Loans	1,322,901		1,333,768		1,374,306		(0.8)		(3.7)

Commercial Business	301,747		280,811		230,028		7.5		31.2

Consumer	78		87		150		(10.3)		(48.0)
Total Loans	$	1,624,726	$	1,614,666	$	1,604,484	0.6	%	1.3	%

(1) Includes owner occupied commercial real estate.


Period End Deposit Composition	September 30, 2020		June 30, 2020		December 31, 2019		Current QTD % Change		YTD % Change
Noninterest bearing demand	$	234,848	$	214,789	$	191,518	9.3	%	22.6	%
NOW	90,776		87,239		70,020		4.1		29.6
Money Market	561,101		482,462		419,495		16.3		33.8
Savings	164,590		162,891		183,729		1.0		(10.4)
Time	716,213		672,583		627,141		6.5		14.2
Total Deposits	$	1,767,528	$	1,619,964	$	1,491,903	9.1	%	18.5	%

Total deposits were $1.8 billion at September 30, 2020 compared to $1.5 billion at December 31, 2019, an increase of $0.3 billion, or 18.5%. The increase in total deposits was a result of successful commercial core deposit gathering efforts, as well as a temporary increase in short term time deposits to expand on-balance sheet liquidity during the COVID-19 pandemic.

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST INCOME (unaudited)

(Dollars in thousands)


	For the Quarter Ended
Noninterest income	September 30, 2020		June 30, 2020		September 30, 2019		Sep 20 vs. June 20 % Change		Sep 20 vs. Sep 19 % Change
Bank owned life insurance	$	242	$	241	$	255	0.4	%	(5.1)	%
Service charges and fees	190		171		264		11.1		(28.0)
Gains and fees from sales of loans	27		—		703		N/A		(96.2)

Gain (loss) on sale of other real estate owned, net	19		—		(102)		N/A		(118.6)
Other	136		165		432		(17.6)		(68.5)
Total noninterest income	$	614	$	577	$	1,552	6.4	%	(60.4)	%


	For the Nine Months Ended
Noninterest income	September 30, 2020		September 30, 2019		% Change
Bank owned life insurance	$	726	$	758	(4.2)	%
Service charges and fees	578		776		(25.5)
Gains and fees from sales of loans	27		1,409		(98.1)
Gain (loss) on sale of other real estate owned, net	19		(102)		(118.6)
Net gain on sale of available for sale securities	—		76		(100.0)
Other	913		1,279		(28.6)
Total noninterest income	$	2,263	$	4,196	(46.1)	%

Noninterest income decreased by $0.9 million to $0.6 million for the quarter ended September 30, 2020 compared to the quarter ended September 30, 2019. Noninterest income decreased by $1.9 million to $2.3 million for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019.

The decrease in noninterest income was primarily a result of the absence of gains and fees from the sales of SBA loans for the quarter and nine months ended September 30, 2020 compared to the same periods in 2019. To a lesser degree, the decrease in noninterest income was also driven by certain waived service charges and fees on depository accounts as a courtesy to customers during the COVID-19 pandemic. The decrease in other noninterest income was primarily a result of loan related interest rate swap fees recognized in 2019.

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST EXPENSE (unaudited)

(Dollars in thousands)


	For the Quarter Ended
Noninterest expense	September 30, 2020		June 30, 2020		September 30, 2019		Sep 20 vs. June 20 % Change		Sep 20 vs. Sep 19 % Change
Salaries and employee benefits	$	5,295	$	5,227	$	4,881	1.3	%	8.5	%
Occupancy and equipment	2,266		2,235		1,946		1.4		16.4
Data processing	529		493		505		7.3		4.8
Professional services	374		434		346		(13.8)		8.1
Director fees	301		287		235		4.9		28.1
FDIC insurance	176		283		(125)		(37.8)		(240.8)
Marketing	151		199		210		(24.1)		(28.1)
Amortization of intangibles	18		18		19		—		(5.3)
Other	619		546		655		13.4		(5.5)
Total noninterest expense	$	9,729	$	9,722	$	8,672	0.1	%	12.2	%


	For the Nine Months Ended
Noninterest expense	September 30, 2020		September 30, 2019		% Change
Salaries and employee benefits	$	15,902	$	14,272	11.4	%
Occupancy and equipment	6,410		5,666		13.1
Data processing	1,558		1,568		(0.6)
Professional services	1,519		1,455		4.4
Director fees	883		639		38.2
FDIC insurance	529		74		614.9
Marketing	512		751		(31.8)
Amortization of intangibles	54		57		(5.3)
Other	1,743		1,920		(9.2)
Total noninterest expense	$	29,110	$	26,402	10.3	%

Noninterest expense increased by $1.1 million, or 12.2%, to $9.7 million for the quarter ended September 30, 2020 compared to the quarter ended September 30, 2019. Noninterest expense increased by $2.7 million, or 10.3%, to $29.1 million for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits, occupancy and equipment expense and FDIC insurance expense.

Salaries and employee benefits totaled $5.3 million for the quarter ended September 30, 2020, an increase of $0.4 million when compared to the same period in 2019. Salaries and employee benefits totaled $15.9 million for the nine months ended September 30, 2020, an increase of $1.6 million when compared to the same period in 2019. The increase in salaries and employee benefits was primarily driven by normal annual salary increases, additional hires in support of growth initiatives and expanded employee benefits to assist employees impacted by the COVID-19 pandemic.

Occupancy and equipment expense totaled $2.3 million for the quarter ended September 30, 2020, an increase of $0.3 million when compared to the same period in 2019. Occupancy and equipment expense totaled $6.4 million for the nine months ended September 30, 2020, an increase of $0.7 million when compared to the same period in 2019. The increase in occupancy and equipment expense was primarily due to additional cleaning costs associated with precautions taken to prevent the spread of COVID-19.

FDIC insurance expense totaled $0.2 million for the quarter ended September 30, 2020, an increase of $0.3 million when compared to the same period in 2019. FDIC insurance expense totaled $0.5 million for the nine months ended September 30, 2020, an increase of $0.5 million when compared to the same period in 2019. The increase in FDIC insurance expense was primarily driven by a credit received during the quarter ended September 30, 2019.

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	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019
Total Equity	$	174,267		$	170,360		$	170,214		$	182,397		$	176,012
Less:
Goodwill	2,589			2,589			2,589			2,589			2,589
Other intangibles	160			178			196			214			232
Tangible Common Equity	$	171,518		$	167,593		$	167,429		$	179,594		$	173,191

Total Assets	$	2,193,022		$	2,043,635		$	2,053,625		$	1,882,182		$	1,858,542
Less:
Goodwill	2,589			2,589			2,589			2,589			2,589
Other intangibles	160			178			196			214			232
Tangible Assets	$	2,190,273		$	2,040,868		$	2,050,840		$	1,879,379		$	1,855,721

Tangible Common Equity to Tangible Assets	7.83		%	8.21		%	8.16		%	9.56		%	9.33		%


	As of
Computation of Tangible Book Value per Common Share	September 30, 2020		June 30, 2020		March 31, 2020		December 31, 2019		September 30, 2019
Total shareholders' equity	$	174,267	$	170,360	$	170,214	$	182,397	$	176,012
Less:
Preferred stock	—		—		—		—		—
Common shareholders' equity	$	174,267	$	170,360	$	170,214	$	182,397	$	176,012
Less:
Goodwill	2,589		2,589		2,589		2,589		2,589
Other intangibles	160		178		196		214		232
Tangible common shareholders' equity	$	171,518	$	167,593	$	167,429	$	179,594	$	173,191
Common shares	7,896,503		7,887,503		7,871,419		7,868,803		7,841,103
Less:
Shares of unvested restricted stock	170,083		165,708		154,012		110,975		88,473
Common shares less unvested restricted stock	7,726,420		7,721,795		7,717,407		7,757,828		7,752,630
Book value per share	$	22.55	$	22.06	$	22.06	$	23.51	$	22.70
Less:
Effects of intangible assets	$	0.36	$	0.36	$	0.36	$	0.36	$	0.36

Tangible Book Value per Common Share	$	22.20	$	21.70	$	21.69	$	23.15	$	22.34

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued

(Dollars in thousands)


	For the Quarter Ended															For the Nine Months Ended
Computation of Efficiency Ratio	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019			September 30, 2020			September 30, 2019
Noninterest expense	$	9,729		$	9,722		$	9,659		$	9,224		$	8,672		$	29,110		$	26,402
Less:
Amortization of intangible assets	18			18			18			18			19			54			57
Other real estate owned expenses	—			6			—			—			13			6			37
Adjusted noninterest expense	$	9,711		$	9,698		$	9,641		$	9,206		$	8,640		$	29,050		$	26,308
Net interest income	$	13,608		$	13,637		$	13,286		$	12,882		$	13,011		$	40,531		$	40,879
Noninterest income	614			577			1,072			1,048			1,552			2,263			4,196
Less:
Net gain on sale of available for sale securities	—			—			—			—			—			—			76
Gain (loss) on sale of other real estate owned, net	19			—			—			—			(102)			19			(102)
Operating revenue	$	14,203		$	14,214		$	14,358		$	13,930		$	14,665		$	42,775		$	45,101

Efficiency ratio	68.4		%	68.2		%	67.1		%	66.1		%	58.9		%	67.9		%	58.3		%


	For the Quarter Ended															For the Nine Months Ended
Computation of Return on Average Tangible Common Equity	September 30, 2020			June 30, 2020			March 31, 2020			December 31, 2019			September 30, 2019			September 30, 2020			September 30, 2019
Net Income Attributable to Common Shareholders	$	2,991		$	1,214		$	1,363		$	3,472		$	4,088		$	5,568		$	14,744
Total average shareholders' equity	$	173,162		$	173,289		$	181,127		$	179,312		$	177,916		$	175,838		$	178,237
Less:
Average Goodwill	2,589			2,589			2,589			2,589			2,589			2,589			2,589
Average Other intangibles	172			190			208			226			244			190			264
Average tangible common equity	$	170,401		$	170,510		$	178,330		$	176,497		$	175,083		$	173,059		$	175,384

Annualized Return on Average Tangible Common Equity	6.98		%	2.86		%	3.07		%	7.80		%	9.26		%	4.30		%	11.24		%

BANKWELL FINANCIAL GROUP, INC.

NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited)

(Dollars in thousands)


	For the Quarter Ended
	September 30, 2020						September 30, 2019
	Average Balance		Interest		Yield/ Rate (5)		Average Balance		Interest		Yield/ Rate (5)
Assets:
Cash and Fed funds sold	$	312,078	$	96	0.12	%	$	86,967	$	535	2.44	%
Securities(1)	96,448		776		3.22		109,247		845		3.09
Loans:
Commercial real estate	1,087,765		12,570		4.52		1,066,256		12,590		4.62
Residential real estate	125,069		1,097		3.51		161,312		1,559		3.87
Construction(2)	94,984		1,029		4.24		86,342		1,141		5.17
Commercial business	322,066		3,329		4.04		248,116		3,761		5.93
Consumer	121		2		7.37		229		4		6.93
Total loans	1,630,005		18,027		4.33		1,562,255		19,055		4.77
Federal Home Loan Bank stock	7,835		77		3.91		7,474		113		6.02
Total earning assets	2,046,366		$	18,976	3.63	%	1,765,943		$	20,548	4.55	%
Other assets	132,617						103,742
Total assets	$	2,178,983					$	1,869,685

Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	87,890	$	40	0.18	%	$	62,444	$	26	0.17	%
Money market	517,638		859		0.66		423,638		1,739		1.63
Savings	163,135		237		0.58		174,587		740		1.68
Time	757,176		2,968		1.56		644,536		3,826		2.36
Total interest bearing deposits	1,525,839		4,104		1.07		1,305,205		6,331		1.92
Borrowed Money	200,237		1,210		2.36		175,185		1,151		2.57
Total interest bearing liabilities	1,726,076		$	5,314	1.22	%	1,480,390		$	7,482	2.01	%
Noninterest bearing deposits	226,473						177,922
Other liabilities	53,272						33,457
Total liabilities	2,005,821						1,691,769
Shareholders' equity	173,162						177,916
Total liabilities and shareholders' equity	$	2,178,983					$	1,869,685
Net interest income(3)			$	13,662					$	13,066
Interest rate spread					2.41	%					2.54	%
Net interest margin(4)					2.67	%					2.96	%

(1)Average balances and yields for securities are based on amortized cost.

(2)Includes commercial and residential real estate construction.

(3)The adjustment for securities and loans taxable equivalency amounted to $54 thousand and $55 thousand for the quarters ended September 30, 2020 and 2019, respectively.

(4)Annualized net interest income as a percentage of earning assets.

(5)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 Nine Months Ended
	September 30, 2020						September 30, 2019
	Average Balance		Interest		Yield/ Rate (5)		Average Balance		Interest		Yield/ Rate (5)
Assets:
Cash and Fed funds sold	$	207,058	$	468	0.30	%	$	84,212	$	1,432	2.27	%
Securities(1)	96,761		2,289		3.15		115,586		2,722		3.14
Loans:
Commercial real estate	1,094,956		38,460		4.61		1,061,536		38,176		4.74
Residential real estate	134,369		3,636		3.61		169,297		4,892		3.85
Construction(2)	98,539		3,350		4.47		84,487		3,412		5.33
Commercial business	289,959		10,017		4.54		259,154		12,198		6.21
Consumer	130		8		8.15		274		13		6.60
Total loans	1,617,953		55,471		4.50		1,574,748		58,691		4.91
Federal Home Loan Bank stock	7,547		272		4.81		7,512		365		6.49
Total earning assets	1,929,319		$	58,500	3.98	%	1,782,058		$	63,210	4.68	%
Other assets	125,957						89,332
Total assets	$	2,055,276					$	1,871,390

Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	76,661	$	99	0.17	%	$	61,872	$	101	0.22	%
Money market	473,485		3,213		0.91		447,008		5,567		1.67
Savings	170,262		1,204		0.94		176,491		2,252		1.71
Time	721,051		10,107		1.87		638,978		10,830		2.27
Total interest bearing deposits	1,441,459		14,623		1.36		1,324,349		18,750		1.89
Borrowed Money	187,177		3,187		2.24		175,290		3,386		2.55
Total interest bearing liabilities	1,628,636		$	17,810	1.46	%	1,499,639		$	22,136	1.97	%
Noninterest bearing deposits	201,384						166,864
Other liabilities	49,418						26,650
Total liabilities	1,879,438						1,693,153
Shareholders' equity	175,838						178,237
Total liabilities and shareholders' equity	$	2,055,276					$	1,871,390
Net interest income(3)			$	40,690					$	41,074
Interest rate spread					2.52	%					2.71	%
Net interest margin(4)					2.81	%					3.07	%

(1)Average balances and yields for securities are based on amortized cost.

(2)Includes commercial and residential real estate construction.

(3)The adjustment for securities and loans taxable equivalency amounted to $159 thousand and $195 thousand for the nine months ended September 30, 2020 and 2019, respectively.

(4)Annualized net interest income as a percentage of earning assets.

(5)Yields are calculated using the contractual day count convention for each respective product type.

Bankwell Financial Group 3Q20 Investor Presentation

Safe Harbor 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 is adversely affecting 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. 2

Table of Contents • 3Q20 Performance • COVID-19 Deferrals & PPP Update • Credit • Impact of COVID-19 on 3Q20 Performance • Capital • Bankwell History & Overview 3

3Q20 Performance

3Q20 Summary • $2.99 million reported net income, or $0.38 earnings per share ̶ Provision for loan loss reserve build of $0.7 million, or $0.07 earnings per share • $4.49 million pre-tax, pre-provision net revenue (“PPNR”), or $0.57 per share1 ̶ Non-interest expense includes $0.35 million of COVID-19-related expenses, or $0.04 earnings per share ̶ Temporary COVID-19 liquidity adds $0.34 million to interest expense, or $0.03 earnings per share • Less than 4% of loan portfolio on COVID-19 deferral • $57 million PPP loans at end of 3Q20; loan forgiveness underway • Continued success with Core Business deposit generation, enabling further deposit cost reductions and improved deposit mix • Maintained strong capital and liquidity during the quarter • 3Q20 Net Interest Margin (“NIM”) was 2.81%; excluding the impact of COVID-19, NIM was 3.04% • The Company declared the 4Q20 dividend of $0.14 per share • Operational business review ongoing; pursuing multiple initiatives to decrease expenses and increase efficiency (see page 14 for details) 1 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense 5

3Q20 Results Quarter Year to Date • Net Income $3.0 million $5.6 million Profitability 1 • PPNR $4.5 million $13.7 million • Return on Average Assets 0.55% 0.36% • Return on Average Equity 6.87% 4.23% • $1.6 billion of gross loans Balance Sheet • $1.8 billion of deposits • $15 million of assets per FTE • Dividend of $0.14 per share paid Tier 1 Leverage 9.58% Capital • $22.20 Tangible Book Value Tier1/CET1 / RWA 12.36% Total Capital / RWA 13.57% • Considered “Well Capitalized”2,3 1 See page 22 for impact of COVID-19 on Bankwell’s performance 2 Ratios presented represent Bank ratios; presented ratios are preliminary, subject to finalization of the FDIC Call Report 6 3 Bankwell meets “adequate” + buffer standard, which exceeds “Well Capitalized” thresholds

3Q20 Consolidated Financial Statements Linked Quarter Dollars in millions, except per share data Income Statement 3Q20 2Q20 Var1 Balance Sheet 3Q20 2Q20 Var1 Total Interest Income $18.9 $19.3 $(0.4) Cash & Cash Equivalents $339 $207 $132 Total Interest Expense $5.3 $5.7 $0.4 Investment Securities $109 $101 $8 Net Interest Income $13.6 $13.6 $0.0 Loans Receivable, net $1,601 $1,591 $10 Non-Interest Income $0.6 $0.6 $0.0 All Other Assets $144 $145 $(1) Non-Interest Expense $9.7 $9.7 $0.0 Total Assets $2,193 $2,044 $149 Pre-Tax, Pre-Provision Net Revenue $4.5 $4.5 $0.0 Total Deposits $1,768 $1,620 $148 Provision for Loan Losses $0.7 $3.0 $2.3 Total Borrowings $200 $200 $0 Pre-Tax Income $3.8 $1.5 $2.3 Other Liabilities $51 $53 $(2) Income Tax Expense $0.8 $0.3 $(0.5) Total Liabilities $2,019 $1,873 $145 Reported Net Income $3.0 $1.2 $1.8 Equity $174 $170 $4 EPS $0.38 $0.16 $0.22 Total Liabilities & Equity $2,193 $2,044 $149 Pre-Tax, Pre-Provision Net Revenue per share2 $0.57 $0.57 $0.00 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 7

Liquidity • Added ~$185 million temporary liquidity to the balance sheet at onset of the COVID-19 pandemic (various maturities throughout 2020 - 1Q21) • Added $150 million of 3 year fixed rate brokered CDs to enhance Asset/Liability mix • Investments in commercial channels Liquidity Walk continue to generate quality organic ~19% deposit growth (4%) ~10% • Therefore, on-balance sheet (1%) liquidity is ~19% as of 9/30 (4%) • As COVID-19 liquidity and other time deposits mature, a normalized ~10% 9/30 COVID-19 Other Retail CD 2H'21 primary liquidity ratio is targeted liquidity Wholesale reduction for 2H’21 Maturities • Additional access to $356 million of FHLB borrowing capacity & $42 million of bank lines as of 9/30 8

Steadily Improving Deposit Mix Dollars in millions Recent Trends • In 3Q20, added $150 million of 3 year brokered CDs at an average rate of 0.55% as part of Asset/Liability Management (“ALM”) 1 Brokered Deposits Retail CDs Core Deposits Balance $1,502 $1,492 $1,768 ~$1,700 • Through 1Q21, scheduled maturities and continued efforts on commercial relationships will 100.0% drive further deposit mix & price improvements 90.0% • Based on current pipeline, non-interest bearing 80.0% 53.4% 55.3% 55.1% deposits anticipated to grow to ~$260 million by 70.0% 67.6% 1Q21, or 15.6% of deposits 60.0% 50.0% • Wholesale ratio3 expected to be ~18% by 1Q21, 40.0% 23.7% 28.1% 28.6% lowest since IPO 30.0% 20.0% 20.0% Wholesale Ratio 18.5% 21.2% 10.0% 16.2% 12.4% 30% 0.0% 24.9% 24.9% 24.9% 2 25% 23.4% 2018 2019 3Q20 1Q21 Est 20.6% Core Business 46% 50% 57% ~61% 20% ~18% Core Consumer 54% 50% 43% ~39% 15% 2015 2016 2017 2018 2019 1Q21 Est 1 Core Deposits include Business and Consumer checking, savings and money market accounts 2 Percentages exclude COVID-19-related liquidity of $109 million (brokered deposits) 9 3 Wholesale ratio defined as brokered deposits and FHLB borrowings to total assets

Positive Outlook For Cost of Deposits Dollars in millions Quarterly Cost of Deposits 1.59% 1.52% Sep-20 – Mar-21 Deposits $1,768 ~$100 ~$1,700 $60 0.45% 0.40% 1.16% <0.70%0.86% <0.70% $264 0.93% 1.56% ~0.80% ~0.70% Sep-20 CD Assumed CD New $ Mar-21 Est 4Q19 1Q20 2Q20 3Q20 4Q20 Est 1Q21 Est Maturities Rollover • ~$145 million wholesale deposits maturing, at an average rate of 0.97% • ~$120 million retail CDs maturing, at an average rate of 2.26%; anticipate ~50% retention at current rates • Expect ~$100 million additional commercial deposits based on current pipeline • Runoff of COVID-19 liquidity and other wholesale deposits to reduce deposit costs • Growth in commercial deposit relationships allows additional cuts to retail product pricing Low yield environment + strategic actions = interest expense savings 10

Expanding Commercial Relationships Dollars in millions Commercial Deposits Total Non-Interest Bearing $584 Focus on Commercial deposit relationships $600 $350 $550 yielding positive results $300 $500 $461 Commercial deposits grew ~$176 million $250 $450 $409 $396 $393 YTD, including $41 million (~23%) in non- $400 $369 $377 $372 interest bearing deposits: $218 $200 $350 $198 $178 $150 $162 $300 $156 $154 • $142 million commercial business $147 $142 relationships $250 $100 Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 ̶ Including $24 million (~17%) in 1 non-interest bearing deposits Core Deposit Composition Consumer Dec-18 Sep-20 1Q20 Est • $34 million municipal funds Business 46% 57% 43% ~61% ~39% ̶ Including $17 million (~50%) in 54% non-interest bearing deposits Strategic efforts on Commercial Banking yielding positive results 1 Core deposits exclude all brokered deposits and all time deposits 11

Total Loan Portfolio Consumer Loans / Other Commercial 0.51% Const. Residential 5.94% 6.91% 1 C&I 18.57% CRE Owner Occupied 9.51% CRE Investor 58.55% Total Loan Portfolio = $1,625 million 1 no single relationship represents more than 6% of total loans, as of September 30th, 2020 1 includes $57 million of PPP loans 12

Loan Portfolio Trends Dollars in millions Loan Portfolio Yields excluding $57 million PPP loans • Robust 4Q20 originations pipeline, with C&I 4.64% 5.00% accounting for ~65% 4.48% 4.58% 1,800 4.25% • Loan prepayments normalized to ~$30 $1,605 $1,604 4.00% million in 3Q20 1,600 $1,543 $1,568 • Limited portfolio exposure to future interest 3.00% rate decreases: 1,400 ̶ ~12% of portfolio are variable rate loans 2.00% 1,200 with either no floor or a floor < 4.00% ̶ ~$6 million of fixed rate loans have rate 1.00% 1,000 reset dates in 4Q202 $800 0.00% ̶ ~$63 million of fixed rate loans have rate 2 2017 2018 2019 3Q20 reset dates in 2021 Gross Loan Balance Portfolio Yield 1 Including PPP loans, 3Q20 loan yields are 4.14% 1 Weighted average yield based on active loans as of 12-31 for each of the respective years & 9-30 for 3Q20 2 Some fixed rate loans have a contractual interest rate reset after 3 or 5 years (as examples), prior to maturity 13

Operational Review & Efficiency Ongoing review of the Bank’s operating expenses underway, with goal of achieving 3% - 5% reduction in operating expense run rate by end of 2021 • Review of vendors and applications for streamlining / elimination • Ongoing evaluation of all existing locations and headcount during 4Q20; actions to date include: ̶ Announced year-end closure of branch in North Haven, CT ̶ Headquarters consolidation underway in New Canaan, CT, to bring multiple support functions under one roof • Introduced Voluntary Early Retirement Incentive Plan (“VERIP”) 14

COVID-19 Deferrals & PPP Update

COVID-19 Deferral Update Dollars in millions COVID-19 Loan Deferral Trend $350 $400 25%• Additional ~$21 million reduction anticipated 22% by year-end: $350 $10 $235 20% $300 • COVID-19 deferral population decrease 15% $250 15% of ~$13 million, including the decrease $17 $200 in construction exposure of $9 million $340 10% $150 $60 • SBA population decrease of ~$8 million $100 $218 <4% 5% $50 • Actively working with the customers to find $51 $9 $0 0% both short and long term solutions 1Q20 2Q20 Current 1 COVID-19 Deferral SBA Loans % Total Loans 2 3 Current Detail CRE Property Type $ LTV Retail $22.2 65.7% Loan Type Deferrals SBA Total Mixed Use 6.7 62.6% CRE $40.5 $2.8 $43.2 Special Use 6.5 66.9% C&I $1.5 $6.7 $8.1 Self Storage 6.4 68.4% Residential -- -- -- Industrial/Warehouse 1.1 68.1% Construction $9.0 -- $9.0 Office 0.4 54.0% Total $50.9 $9.4 $60.4 Total $43.2 65.8% 1 As of 10/22/20 2 Excluding PPP loan balances 16 3 LTVs based on original LTV values, at origination

PPP update • $56.7 million of PPP loans remain as of September 30th: Category $ Balance Count Average Size ≤ $50K $4.1 million 187 $21,903 $50K - $150K $9.7 million 107 $90,447 ≥ $150K $42.9 million 95 $451,843 Total $56.7 million 389 $145,755 • ~$466 thousand of SBA fees recognized as income through 3Q20 • Remaining SBA fees to be accreted are ~$1.7 million; ~$256 thousand per quarter until forgiveness or maturity • As of October 20th, the status of forgiveness for PPP loans is as follows: ̶ $11 million (72 loans) completed applications for forgiveness with Bankwell ̶ Of the $11 million, $10 million (64 loans) have been submitted to the SBA ̶ Bankwell received $0.7 million for 21 loans forgiven to date 17

Credit

Strong Asset Quality Dollars in thousands Non Performing Loans / Gross Loans 0.63% 0.88% SBA-guaranteed portion of NPLs ($4.5 million) 0.28% 0.66% 0.63% 0.36% NPL exposure not guaranteed by SBA 0.35% CRE 0.23% Resi 0.10% C&I 0.02% 2017 2018 2019 3Q20 3Q20 Detail NPLs $5,481 $14,082 $10,588 $10,169 SBA guarantee reduces NPLs by 28 basis points 19

YTD ALLL Update YTD Allowance for Loan Loss (“ALLL”) Walk • Bankwell is not subject to CECL; ALLL is calculated General Specific 1.25% in accordance with the incurred loss model $1.0MM 0.09% • PPP loans are guaranteed by the US government $6.9MM 0.84% and therefore carry no reserve 0.03% ̶ Assumed all loans eligible for forgiveness; if any ($1.0MM) 1.16% deemed ineligible, they will be subject to the general loan reserve 0.81% • Excluding PPP loan balances, the ALLL % increases from 1.25% to 1.30% 2019 Growth / Mix COVID-19 3Q20 • General COVID-19 reserves decreased $1.0 million in 3Q due to improving economic conditions & General ALLL Reserve Detail reduced deferral population Dollars in thousands Resi & CRE C&I Other Const. Total • Specific reserves increased $1.0 million related to 1 4Q19 Balance $10,179 $1,770 $730 $324 $13,003 COVID-19-impacted loan Portfolio growth/mix ($811) $203 ($336) ($81) ($1,024) COVID-19 $4,038 $2,321 $320 $190 $6,870 • The remaining change in provision driven by shifts 3Q20 Balance $13,407 $4,294 $714 $434 $18,848 in portfolio mix As a % of loan type 1.21% 1.42% 0.61% 0.45% 1.16% ~$7.9 million total reserves (general & specific) related to COVID-19 20

3Q20 Performance Impact of COVID-19

COVID-19 Impact on Year-to-Date Metrics Dollars in thousands, except per share data Excluding 2 3Q20 YTD Metrics Reported COVID-19 2 Key Drivers Total assets $2,193,022 $2,091,293 Net loans $1,600,776 $1,533,611 • ~$7.9 million ALLL provision for COVID-19 Loan-to-deposit ratio 91.6% 94.1% • Up to ~$185 million additional liquidity Efficiency ratio1 67.9% 65.7% Non-interest expense / avg. assets 1.89% 1.95% • ~$57 million PPP loans Net interest margin 2.81% 3.04% ̶ 1.00% interest rate Total capital to risk weighted assets 13.57% 13.52% ̶ ~$2.2 million fees from SBA Tangible common equity ratio1 7.83% 8.55% (amortized/earned over life of Return on average equity 4.23% 9.29% loans) Tangible book value per share1 $22.20 $23.10 • ~$0.3 million additional Non-Interest Net interest income $40,531 $40,626 Expense for Employee support and Pre-tax, pre-provision net revenue $13,684 $14,691 overall COVID-19 preparedness and Net income $5,568 $12,559 reopening efforts YTD EPS (fully diluted) $0.71 $1.59 3Q EPS (fully diluted) $0.38 $0.41 1 A non-GAAP metric 2 Values and metrics presented exclude impact of COVID-19, specifically the items listed in Key Drivers; see pages 24-26 for additional detail 22

3Q20 Net Interest Margin Net Interest Margin Walk 3.04% 0.23% 2.81% 0.06% • Reported interest expense impacted by 0.05% cost of additional liquidity, temporarily preventing further NIM expansion Reported NIM PPP Income Additional Avg Assets NIM • Earning asset yields improve 27 basis liquidity cost (no addit. excl. COVID-19 points excluding additional liquidity and liquidity) PPP loans Net Interest Margin Components Expressed as % of total earning assets Excl. • Projecting NIM expansion into low 3% Reported COVID-19 V (bps) range for 2021 Income on Earning Assets 4.04% 4.31% 27 Interest Expense (1.23%) (1.27%) (4) Net Interest Margin 2.81% 3.04% 23 23

COVID-19 Adjusted Balance Sheet Dollars in millions Excl. Balance Sheet Reported COVID-19 Var1 Adjusted balance sheet reflects the following: • ($109) million elimination of additional liquidity Cash & Cash Equivalents $339 $285 $(55) • ($2) million deferred loan fees from PPP loans • $57 PPP loan fundings Investment Securities $109 $109 $0 • ($57) million PPP loans Loans Receivable, net $1,601 $1,554 $(47) • $8 million Allowance for Loan Losses • $2 million deferred loan fees from PPP loans All Other Assets $144 $144 $0 Total Assets $2,193 $2,091 $(102) Total Deposits $1,768 $1,659 $(109) • Elimination of additional liquidity Total Borrowings $200 $200 $0 Other Liabilities $51 $51 $0 Total Liabilities $2,019 $1,910 $(109) • Net income; a result of lower provision for loan loss and non- Equity $174 $181 $7 interest expenses Total Liabilities & Equity $2,193 $2,091 $(102) 1 Variances are rounded based on actual whole dollar amounts 24

COVID-19 Adjusted Income Statement Dollars in millions Excl. QTR Income Statement Reported COVID-19 Var1 Adjusted income statement reflects the following: • ($0.4) interest income & fees associated with PPP loans Total Interest Income $18.9 $18.5 $(0.4) • ($0.0) nominal interest earned on additional liquidity Total Interest Expense $5.3 $5.0 $0.3 • Deposit costs from additional liquidity Net Interest Income $13.6 $13.5 $(0.1) Non-Interest Income $0.6 $0.6 $0.0 Non-Interest Expense $9.7 $9.4 ($0.3) • See next slide for detail Pre-tax, Pre-Provision Net Revenue $4.5 $4.8 $0.3 Provision for Loan Losses $0.7 $0.7 $0.0 • Net-COVID-19-related provision negligible Pre-Tax Income $3.8 $4.0 $0.3 Income Tax Expense $0.8 $0.8 $0.1 Net Income $3.0 $3.2 $0.2 Earnings Per Share $0.38 $0.41 $0.03 Pre-Tax, Pre-Provision $0.57 $0.60 $0.03 Net Revenue per share2 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 25

COVID-19 Adjusted Non-Interest Expense Dollars in millions Excl. QTR Non-Interest Expense Reported COVID Var1 Salaries and employee benefits $5.29 $5.22 $(0.07) $0.35 million of additional non-interest expense comprised of: Occupancy and equipment $2.27 $2.00 $(0.26) Professional services $0.37 $0.37 -- Salaries and employee benefits Data processing $0.53 $0.53 -- • Employee support costs, such as Director fees $0.30 $0.30 -- enhanced childcare coverage FDIC insurance $0.18 $0.18 -- Occupancy and equipment Marketing $0.15 $0.14 $(0.01) • Additional cleaning costs in preparation Amortization of intangibles $0.02 $0.02 -- for branch / office reopening and ongoing cleaning Other $0.62 $0.62 -- Total Non-Interest Expense $9.73 $9.38 $(0.35) 1 Variances are rounded based on actual whole dollar amounts 26

Capital

Tangible Book Value Tangible Book Value (TBV) Per Share Walk $22.20 $0.41 $0.20 $0.07 $21.69 $0.03 $0.14 $0.38 reported EPS 1 2Q20 NI ex-COVID-19 COVID-19 Dividends OCI All Other 3Q20 • $0.20 increase primarily from mark to market on 15 year interest rate swaps 1 All Other includes items such as, but not limited to, changes related to stock grants and share count 28

Capital Position Key Capital Ratios • ~$50 million of additional 1 Total Capital above 13.57% ‘adequate’ + buffer 13.63% • This estimate represents the Total Capital Total magnitude of credit costs 1 12.36% BWFG could withstand and CET1 12.44% is NOT an estimate of what Tier 1 Tier / CET1 Tier 1 the Company believes will 1 happen 9.58% Tier 1 Tier 9.93% • Tier 1 Leverage and TCE ratio Leverage reductions reflect the impact of carrying additional 7.83% liquidity on the balance TCE 8.21% sheet 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% • CRE concentration of 451% 3Q20 2Q20 ‘Adequate’ + Buffer Min Bankwell’s capital position remains strong in the current environment 1 Represents Bank ratios; current period capital ratios are estimates 29

Bankwell History & Overview

Bankwell Profile Company Overview NASDAQ: BWFG • Connecticut-based $2 billion bank, with focus on CRE and C&I lending • 12 existing branches in Fairfield & New Haven Counties; 1 branch to be permanently closed on 12/31 • BWFG has $136 million deposits per branch; one of the highest in Fairfield & New Haven Counties1 • Our core market of Fairfield County (the Bridgeport-Stamford-Norwalk MSA) is the premier Connecticut location, highlighted by: + Second most affluent MSA in the Nation in + Headquarters of 9 Fortune 500 companies4 per capita personal income (PCPI)2 + Home to the two largest hedge funds in the + 4 of the top 25 wealthiest towns in the U.S.3 U.S.5 1 Source: S&P Global Market Intelligence’s Branch Competitors & Pricing Report as of 6/30/20, excluding global money center banks (tickers BAC, WFC, JPM, TD & C) 2 Source: Bureau of Economic Analysis’ Metropolitan Area Table, contained within the Local Area Personal Income, 2018 news release 11/14/19 3 Source: Bloomberg: 2020 Richest Places 31 4 Source: Fortune.com: 2020 Fortune 500 5 Source: Business Insider: The 10 Biggest Hedge Funds in the U.S., 5/18/18

Financial Snapshot 1 Dollars in thousands, except per share data 2016 2017 2018 2019 3Q20 YTD Total assets $1,628,919 $1,796,607 $1,873,665 $1,882,182 $2,193,022 Net loans $1,343,895 $1,520,879 $1,586,775 $1,588,840 $1,600,776 Loan-to-deposit ratio 105.6% 110.1% 106.4% 107.1% 91.6% Efficiency ratio2 56.5% 54.9% 59.2% 60.2% 67.9% Non-interest expense / avg. assets 2.03% 1.88% 1.93% 1.90% 1.89% Net interest margin 3.54% 3.30% 3.18% 3.03% 2.81% Total capital to risk weighted assets 12.85% 12.19% 12.50% 13.35% 13.57% Tangible common equity ratio2 8.78% 8.81% 9.16% 9.56% 7.83% Return on average equity 8.94% 8.93% 10.19% 10.20% 4.23% Tangible book value per share2 $18.98 $20.59 $22.06 $23.15 $22.20 Net interest income $49,092 $54,364 $56,326 $53,761 $40,531 Pre-tax, pre-provision net revenue $22,224 $26,470 $24,593 $23,379 $13,684 Net income $12,350 $13,830 $17,433 $18,216 $5,568 EPS (fully diluted) $1.62 $1.78 $2.21 $2.31 $0.71 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 32 2 A non-GAAP metric

Experienced Leadership Team Years Name Experience Selected Professional Biography Christopher Gruseke 30+ Mr. Gruseke was a founding investor and director of Bankwell Financial Group’s predecessors, BNC Financial President & CEO Group, Inc., and The Bank of New Canaan. He brings more than 30 years of capital markets, operations, sales (since 2015) 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 40 Ms. Chivily has 40 years of experience in banking and real estate finance. She previously served in a risk management EVP & Chief Risk & Credit role for the CRE and C&I loan portfolios at People's United Bank. Her prior experience also includes 5 years as Officer Director of Freddie Mac’s New England region for multifamily properties and 11 years as Senior Credit Officer at RBS (since 2013) 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 25+ Mr. Ivanov has more than 28 years of experience in accounting and finance. His more recent roles include CFO of EVP & CFO Darien Rowayton Bank, and CFO for the U.S. Operations of Doral Bank, where he created a scalable finance (since 2016) organization to support the rapid growth of several business units from infancy to $3 billion in assets. 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. He is a CPA and is also Six Sigma Black Belt certified. Matthew McNeill 20+ Mr. McNeill has more than 20 years of experience in Commercial Banking. He most recently served as Head of EVP & Chief Banking Officer Commercial Lending at Metropolitan Commercial Bank. He previously served as Senior Commercial Relationship (since 2020) Manager at HSBC, a Business Banker at Santander and a Managing Partner at American Real Estate Lending. Laura J. Waitz 35+ Ms. Waitz has over 35 years of experience for various businesses and previously was Senior Managing Director, EVP & Chief of Staff Global Head of Human Resources at The Blackstone Group. She also served as Managing Director and Global (since 2017) 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. 33

Thank You & Questions


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 October 28, 2020, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued a press release describing its results of operations for the third quarter ended September 30, 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 October 28, 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 September 30, 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 October 28, 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 November 23, 2020 to all shareholders of record as of November 13, 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 October 28, 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



October 28, 2020			By: /s/ Penko K. Ivanov
			Penko K. Ivanov
			Executive Vice President
			and Chief Financial Officer