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): October 27, 2021
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 October 27, 2021, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued a press release describing its results of operations for the period ended September 30, 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 October 27, 2021, 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, 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 October 27, 2021, 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 $0.18 per share on November 22, 2021 to all shareholders of record as of November 12, 2021. | ||||
| On October 27, 2021, Bankwell Financial Group, Inc., parent company of Bankwell Bank, announced its Board of Directors authorized an additional 200,000 shares for its existing share repurchase program. | ||||
| 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 27, 2021 | |||
| 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 | ||||
| October 27, 2021 | 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 THIRD QUARTER; DECLARES FOURTH QUARTER DIVIDEND; AND AUTHORIZES AN ADDITIONAL 200 THOUSAND SHARES FOR ITS SHARE REPURCHASE PROGRAM
New Canaan, CT – October 27, 2021 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record GAAP net income of $6.9 million, or $0.87 per share, for the third quarter of 2021, versus $3.0 million, or $0.38 per share, for the same period in 2020.
The Company's Board of Directors declared an $0.18 per share cash dividend, payable November 22, 2021 to shareholders of record on November 12, 2021.
We recommend reading this earnings release in conjunction with the Third Quarter 2021 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our October 27, 2021 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
“On behalf of all of my colleagues at Bankwell, I am proud to announce our results for the most recent quarter. The Company achieved record levels in most performance categories of our business. Loan originations for the quarter totaled $200 million, with net loan growth of $92 million, excluding Paycheck Protection Program ("PPP") loans. Year to date, gross loan balances excluding PPP loans have grown by $232 million for an annualized growth rate of 19%. The Company’s ROAE and ROAA were 14.09% and 1.22%, respectively, for the quarter. Loan demand remains brisk; our healthy pipeline positions us for a strong finish to the year and lays the foundation for increased profitability in 2022.
“Confident in the strength of our balance sheet and the prospect of growing earnings, the Company’s Board of Directors today authorized the repurchase of an additional 200,000 shares of its common stock.”
Third Quarter 2021 Highlights:
•Return on average assets was 1.22% and return on average equity was 14.09% for the quarter ended September 30, 2021.
•The net interest margin improved to 3.39% for the quarter ended September 30, 2021.
•The efficiency ratio improved to 54.1% for the quarter ended September 30, 2021.
•Excluding Paycheck Protection Program ("PPP") loans, total gross loans were $1.8 billion, growing $232.1 million, or 14.6%, compared to December 31, 2020. On a quarterly basis loans grew $92.3 million, or 5.3% compared to June 30, 2021.
•Gains from loan sales totaled $0.9 million and $2.3 million for the quarter and nine months ended September 30, 2021, respectively, compared to $27 thousand for the quarter and nine months ended September 30, 2020.
•Total deposits were $1.9 billion compared to $1.8 billion at December 31, 2020.
•Noninterest bearing deposits increased by $68.5 million, or 25.3% compared to December 31, 2020.
•The percentage of noninterest bearing deposits to total deposits increased to 18.0% compared to 14.8% at December 31, 2020.
•The cost of interest bearing deposits decreased approximately 47 basis points to 0.60% for the quarter ended September 30, 2021 when compared to the quarter ended September 30, 2020.
•Investment securities totaled $105.9 million and represent 4.8% of total assets.
•Tangible book value per share rose to $25.25 compared to $22.43 at December 31, 2020.
•Shares issued and outstanding were 7,842,824, reflecting repurchases of 52,277 shares of common stock at a weighted average price of $27.26 during the quarter ended September 30, 2021.
Post Third Quarter 2021 Highlights:
•Subsequent to September 30, 2021, the Company issued a 3.25% fixed-to-floating rate subordinated note due 2031 in the principal amount of $35.0 million. The proceeds will be used for repayment of $15.5 million of existing subordinated notes and general corporate purposes.
•The Company's Board of Directors authorized an additional 200,000 shares for its existing share repurchase program.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the quarter ended September 30, 2021 were $19.2 million, versus $14.2 million for the quarter ended September 30, 2020. Revenues for the nine months ended September 30, 2021 were $53.8 million, versus $42.8 million for the nine months ended September 30, 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. Revenues for the nine months ended September 30, 2021 also benefited from a one-time federal payroll tax credit for COVID-19 of $0.9 million.
Net income for the quarter ended September 30, 2021 was $6.9 million, versus $3.0 million for the quarter ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $18.8 million, versus $5.6 million for the nine months ended September 30, 2020. The increase in net income was primarily impacted by the aforementioned increases in revenues 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 $0.88 and $0.87, respectively, for the quarter ended September 30, 2021 compared to basic and diluted earnings per share of $0.38 each for the quarter ended September 30, 2020. Basic and diluted earnings per share were $2.38 and $2.37, respectively, for the nine months ended September 30, 2021 compared to basic and diluted earnings per share of $0.71 each for the nine months ended September 30, 2020.
The net interest margin (fully taxable equivalent basis) for the quarters ended September 30, 2021 and September 30, 2020 was 3.39% and 2.67%, respectively. The net interest margin (fully taxable equivalent basis) for the nine months ended September 30, 2021 and September 30, 2020 was 3.08% and 2.81%, respectively. The increase in the net interest margin was due to a decrease in rates on interest bearing deposits and a greater percentage of noninterest bearing deposits. In addition, the increase in the net interest margin for the quarter ended September 30, 2021 was positively impacted by a reduction in excess liquidity when compared to the quarter ended September 30, 2020.
Financial Condition
Assets totaled $2.23 billion at September 30, 2021, compared to assets of $2.25 billion at December 31, 2020. The change in assets remained relatively flat as the decrease in excess liquidity was offset by an increase in loans. Gross loans totaled $1.8 billion at September 30, 2021, an increase of $198.9 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $232.1 million at September 30, 2021 when compared to December 31, 2020. Deposits totaled $1.9 billion at September 30, 2021, compared to deposits of $1.8 billion at December 31, 2020.
Capital
Shareholders’ equity totaled $196.2 million as of September 30, 2021, an increase of $19.6 million compared to December 31, 2020, primarily a result of (i) net income of $18.8 million for the nine months ended September 30, 2021 and (ii) a $6.2 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 $3.6 million and common stock repurchases of $3.2 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)
| September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | ||||||
|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||||
| Cash and due from banks | $ | 169,417 | $ | 297,851 | $ | 351,194 | $ | 405,340 | $ | 333,103 |
| Federal funds sold | 8,097 | 4,036 | 10,811 | 4,258 | 6,380 | |||||
| Cash and cash equivalents | 177,514 | 301,887 | 362,005 | 409,598 | 339,483 | |||||
| Investment securities | ||||||||||
| Marketable equity securities, at fair value | 2,185 | 2,192 | 2,178 | 2,207 | 2,203 | |||||
| Available for sale investment securities, at fair value | 87,565 | 90,983 | 83,218 | 88,605 | 90,563 | |||||
| Held to maturity investment securities, at amortized cost | 16,107 | 16,166 | 16,225 | 16,078 | 16,138 | |||||
| Total investment securities | 105,857 | 109,341 | 101,621 | 106,890 | 108,904 | |||||
| Loans receivable (net of allowance for loan losses of $16,803, $16,672, $20,545, $21,009, and $20,372 at September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively) | 1,805,217 | 1,719,274 | 1,650,127 | 1,601,672 | 1,600,776 | |||||
| Accrued interest receivable | 6,911 | 6,661 | 7,306 | 6,579 | 7,294 | |||||
| Federal Home Loan Bank stock, at cost | 3,632 | 3,844 | 6,446 | 7,860 | 7,860 | |||||
| Premises and equipment, net | 35,118 | 33,916 | 33,386 | 21,762 | 26,616 | |||||
| Bank-owned life insurance | 48,903 | 48,632 | 42,881 | 42,651 | 42,409 | |||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | |||||
| Other intangible assets | 48 | 58 | 67 | 76 | 160 | |||||
| Deferred income taxes, net | 7,718 | 8,208 | 8,908 | 11,300 | 11,149 | |||||
| Other assets | 33,181 | 35,415 | 29,131 | 42,770 | 45,782 | |||||
| Total assets | $ | 2,226,688 | $ | 2,269,825 | $ | 2,244,467 | $ | 2,253,747 | $ | 2,193,022 |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
| Liabilities | ||||||||||
| Deposits | ||||||||||
| Noninterest bearing deposits | $ | 338,705 | $ | 328,473 | $ | 280,947 | $ | 270,235 | $ | 234,848 |
| Interest bearing deposits | 1,544,118 | 1,610,829 | 1,578,861 | 1,557,081 | 1,532,680 | |||||
| Total deposits | 1,882,823 | 1,939,302 | 1,859,808 | 1,827,316 | 1,767,528 | |||||
| Advances from the Federal Home Loan Bank | 80,000 | 75,000 | 125,000 | 175,000 | 175,000 | |||||
| Subordinated debentures | 15,374 | 15,366 | 25,271 | 25,258 | 25,245 | |||||
| Accrued expenses and other liabilities | 52,314 | 49,362 | 46,445 | 49,571 | 50,982 | |||||
| Total liabilities | 2,030,511 | 2,079,030 | 2,056,524 | 2,077,145 | 2,018,755 | |||||
| Shareholders’ equity | ||||||||||
| Common stock, no par value | 119,588 | 120,451 | 120,398 | 121,338 | 120,854 | |||||
| Retained earnings | 85,992 | 80,543 | 75,418 | 70,839 | 71,603 | |||||
| Accumulated other comprehensive loss | (9,403) | (10,199) | (7,873) | (15,575) | (18,190) | |||||
| Total shareholders’ equity | 196,177 | 190,795 | 187,943 | 176,602 | 174,267 | |||||
| Total liabilities and shareholders’ equity | $ | 2,226,688 | $ | 2,269,825 | $ | 2,244,467 | $ | 2,253,747 | $ | 2,193,022 |
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,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | September 30,<br>2021 | September 30,<br>2020 | ||||||||
| Interest and dividend income | ||||||||||||||
| Interest and fees on loans | $ | 19,795 | $ | 19,266 | $ | 17,900 | $ | 18,194 | $ | 18,027 | $ | 56,961 | $ | 55,471 |
| Interest and dividends on securities | 731 | 736 | 769 | 835 | 799 | 2,236 | 2,402 | |||||||
| Interest on cash and cash equivalents | 88 | 90 | 108 | 117 | 96 | 286 | 468 | |||||||
| Total interest and dividend income | 20,614 | 20,092 | 18,777 | 19,146 | 18,922 | 59,483 | 58,341 | |||||||
| Interest expense | ||||||||||||||
| Interest expense on deposits | 2,387 | 2,744 | 3,114 | 3,557 | 4,104 | 8,245 | 14,623 | |||||||
| Interest expense on borrowings | 503 | 769 | 1,008 | 1,285 | 1,210 | 2,280 | 3,187 | |||||||
| Total interest expense | 2,890 | 3,513 | 4,122 | 4,842 | 5,314 | 10,525 | 17,810 | |||||||
| Net interest income | 17,724 | 16,579 | 14,655 | 14,304 | 13,608 | 48,958 | 40,531 | |||||||
| Provision (credit) for loan losses | 134 | (20) | (296) | 709 | 712 | (182) | 6,896 | |||||||
| Net interest income after provision (credit) for loan losses | 17,590 | 16,599 | 14,951 | 13,595 | 12,896 | 49,140 | 33,635 | |||||||
| Noninterest income | ||||||||||||||
| Gains and fees from sales of loans | 924 | 814 | 513 | 16 | 27 | 2,251 | 27 | |||||||
| Bank owned life insurance | 271 | 251 | 231 | 241 | 242 | 753 | 726 | |||||||
| Service charges and fees | 199 | 217 | 199 | 210 | 190 | 615 | 578 | |||||||
| Gain on sale of other real estate owned, net | — | — | — | — | 19 | — | 19 | |||||||
| Other | 43 | 158 | 1,013 | 154 | 136 | 1,213 | 913 | |||||||
| Total noninterest income | 1,437 | 1,440 | 1,956 | 621 | 614 | 4,832 | 2,263 | |||||||
| Noninterest expense | ||||||||||||||
| Salaries and employee benefits | 4,782 | 3,960 | 4,769 | 5,453 | 5,295 | 13,511 | 15,902 | |||||||
| Occupancy and equipment | 2,615 | 3,250 | 2,406 | 4,516 | 2,266 | 8,271 | 6,410 | |||||||
| Data processing | 632 | 833 | 512 | 1,658 | 529 | 1,977 | 1,558 | |||||||
| Professional services | 498 | 547 | 587 | 591 | 374 | 1,632 | 1,519 | |||||||
| Director fees | 324 | 327 | 317 | 331 | 301 | 968 | 883 | |||||||
| FDIC insurance | 298 | 300 | 403 | 262 | 176 | 1,001 | 529 | |||||||
| Marketing | 186 | 140 | (9) | 118 | 151 | 317 | 512 | |||||||
| Other | 1,035 | 695 | 653 | 774 | 637 | 2,383 | 1,797 | |||||||
| Total noninterest expense | 10,370 | 10,052 | 9,638 | 13,703 | 9,729 | 30,060 | 29,110 | |||||||
| Income before income tax expense | 8,657 | 7,987 | 7,269 | 513 | 3,781 | 23,912 | 6,788 | |||||||
| Income tax expense | 1,802 | 1,759 | 1,579 | 177 | 790 | 5,140 | 1,220 | |||||||
| Net income | $ | 6,855 | $ | 6,228 | $ | 5,690 | $ | 336 | $ | 2,991 | $ | 18,772 | $ | 5,568 |
| Earnings Per Common Share: | ||||||||||||||
| Basic | $ | 0.88 | $ | 0.79 | $ | 0.72 | $ | 0.04 | $ | 0.38 | $ | 2.38 | $ | 0.71 |
| Diluted | $ | 0.87 | $ | 0.79 | $ | 0.71 | $ | 0.04 | $ | 0.38 | $ | 2.37 | $ | 0.71 |
| Weighted Average Common Shares Outstanding: | ||||||||||||||
| Basic | 7,677,822 | 7,722,481 | 7,758,540 | 7,726,926 | 7,721,247 | 7,721,943 | 7,728,798 | |||||||
| Diluted | 7,738,758 | 7,768,026 | 7,800,777 | 7,728,206 | 7,721,459 | 7,779,632 | 7,749,199 | |||||||
| Dividends per common share | $ | 0.18 | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.14 | $ | 0.46 | $ | 0.42 |
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
| For the Quarter Ended | For the Nine Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | September 30,<br>2021 | September 30,<br>2020 | ||||||||
| Performance ratios: | ||||||||||||||
| Return on average assets(1) | 1.22 | % | 1.11 | % | 1.02 | % | 0.06 | % | 0.55 | % | 1.12 | % | 0.36 | % |
| Return on average stockholders' equity(1) | 14.09 | % | 13.06 | % | 12.67 | % | 0.75 | % | 6.87 | % | 13.29 | % | 4.23 | % |
| Return on average tangible common equity(1) | 14.29 | % | 13.25 | % | 12.86 | % | 0.76 | % | 6.98 | % | 13.48 | % | 4.30 | % |
| Net interest margin | 3.39 | % | 3.12 | % | 2.74 | % | 2.66 | % | 2.67 | % | 3.08 | % | 2.81 | % |
| Efficiency ratio(2) | 54.1 | % | 55.7 | % | 58.0 | % | 91.2 | % | 68.4 | % | 55.8 | % | 67.9 | % |
| Net loan charge-offs as a % of average loans | — | % | 0.23 | % | 0.01 | % | — | % | — | % | 0.24 | % | — | % |
| Dividend payout ratio(3) | 20.69 | % | 17.72 | % | 19.72 | % | 350.00 | % | 36.84 | % | 19.41 | % | 59.15 | % |
(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 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, <br>2021 | June 30, <br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30, <br>2020 | |||||||||||
| Capital ratios: | |||||||||||||||
| Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1) | 10.59 | % | 10.95 | % | 11.02 | % | 11.06 | % | 12.36 | % | |||||
| Total Capital to Risk-Weighted Assets(1) | 11.44 | % | 11.84 | % | 12.17 | % | 12.28 | % | 13.57 | % | |||||
| Tier I Capital to Risk-Weighted Assets(1) | 10.59 | % | 10.95 | % | 11.02 | % | 11.06 | % | 12.36 | % | |||||
| Tier I Capital to Average Assets(1) | 9.61 | % | 9.19 | % | 8.82 | % | 8.44 | % | 9.58 | % | |||||
| Tangible common equity to tangible assets | 8.70 | % | 8.30 | % | 8.27 | % | 7.73 | % | 7.83 | % | |||||
| Tangible book value per common share(2) | $ | 25.25 | $ | 24.40 | $ | 23.99 | $ | 22.43 | $ | 22.20 |
(1)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.
(2)Excludes unvested restricted shares of 178,797, 184,548, 186,485, 163,369, and 170,083 as of September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.
BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
| For the Quarter Ended | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30, <br>2020 | |||||||||||
| Allowance for loan losses: | |||||||||||||||
| Balance at beginning of period | $ | 16,672 | $ | 20,545 | $ | 21,009 | $ | 20,372 | $ | 19,662 | |||||
| Charge-offs: | |||||||||||||||
| Commercial real estate | — | (3,814) | (163) | — | — | ||||||||||
| Commercial business | — | (51) | — | (75) | — | ||||||||||
| Consumer | (15) | (4) | (14) | (11) | (4) | ||||||||||
| Total charge-offs | (15) | (3,869) | (177) | (86) | (4) | ||||||||||
| Recoveries: | |||||||||||||||
| Commercial business | 11 | 16 | — | 14 | — | ||||||||||
| Consumer | 1 | — | 9 | — | 2 | ||||||||||
| Total recoveries | 12 | 16 | 9 | 14 | 2 | ||||||||||
| Net loan charge-offs | (3) | (3,853) | (168) | (72) | (2) | ||||||||||
| Provision (credit) for loan losses | 134 | (20) | (296) | 709 | 712 | ||||||||||
| Balance at end of period | $ | 16,803 | $ | 16,672 | $ | 20,545 | $ | 21,009 | $ | 20,372 | |||||
| As of | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30, <br>2020 | |||||||||||
| Asset quality: | |||||||||||||||
| Nonaccrual loans | |||||||||||||||
| Residential real estate | $ | 1,849 | $ | 1,160 | $ | 1,289 | $ | 1,492 | $ | 1,596 | |||||
| Commercial real estate | 16,314 | 15,392 | 19,277 | 21,093 | 4,812 | ||||||||||
| Commercial business | 1,754 | 1,780 | 1,803 | 1,834 | 3,760 | ||||||||||
| Construction | 8,997 | 8,997 | 8,997 | 8,997 | — | ||||||||||
| Total nonaccrual loans | 28,914 | 27,329 | 31,366 | 33,416 | 10,168 | ||||||||||
| Other real estate owned | — | — | — | — | — | ||||||||||
| Total nonperforming assets | $ | 28,914 | $ | 27,329 | $ | 31,366 | $ | 33,416 | $ | 10,168 | |||||
| Nonperforming loans as a % of total loans | 1.58 | % | 1.57 | % | 1.87 | % | 2.06 | % | 0.63 | % | |||||
| Nonperforming assets as a % of total assets | 1.30 | % | 1.20 | % | 1.40 | % | 1.48 | % | 0.46 | % | |||||
| Allowance for loan losses as a % of total loans | 0.92 | % | 0.96 | % | 1.23 | % | 1.29 | % | 1.25 | % | |||||
| Allowance for loan losses as a % of nonperforming loans | 58.11 | % | 61.00 | % | 65.50 | % | 62.87 | % | 200.35 | % |
Total nonaccrual loans declined $4.5 million to $28.9 million as of September 30, 2021 when compared to December 31, 2020 partially a result of the charge-offs recognized in the second quarter of 2021. The Bank continues work-out activity on its nonaccrual loan population. Nonperforming assets as a percentage of total assets was 1.30% at September 30, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at September 30, 2021 was $16.8 million, representing 0.92% of total loans.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
| Period End Loan Composition | June 30,<br>2021 | December 31,<br>2020 | Current QTD <br>% Change | YTD <br>% Change | |||||
|---|---|---|---|---|---|---|---|---|---|
| Residential Real Estate | 90,110 | $ | 100,260 | $ | 113,557 | (10.1) | % | (20.6) | % |
| Commercial Real Estate(1) | 1,266,731 | 1,148,383 | 5.6 | 16.5 | |||||
| Construction | 82,805 | 87,007 | 14.3 | 8.8 | |||||
| Total Real Estate Loans | 1,449,796 | 1,348,947 | 5.0 | 12.9 | |||||
| Commercial Business(2) | 279,814 | 276,601 | 4.6 | 5.9 | |||||
| Consumer | 8,883 | 79 | 1.9 | N/M(3) | |||||
| Total Loans | 1,824,546 | $ | 1,738,493 | $ | 1,625,627 | 4.9 | % | 12.2 | % |
| (1) Includes owner occupied commercial real estate.(2) Includes 1.6 million, 7.9 million, and 34.8 million of PPP loans at September 30, 2021, June 30, 2021 and December 31, 2020, respectively.(3) Metric not meaningful. |
All values are in US Dollars.
Gross loans totaled $1.8 billion at September 30, 2021, an increase of $198.9 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $232.1 million, or 14.6%, at September 30, 2021 when compared to December 31, 2020.
| Period End Deposit Composition | September 30,<br>2021 | June 30,<br>2021 | December 31,<br>2020 | Current QTD <br>% Change | YTD <br>% Change | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| Noninterest bearing demand | $ | 338,705 | $ | 328,473 | $ | 270,235 | 3.1 | % | 25.3 | % |
| NOW | 103,180 | 136,558 | 101,737 | (24.4) | 1.4 | |||||
| Money Market | 835,210 | 814,083 | 669,364 | 2.6 | 24.8 | |||||
| Savings | 188,581 | 173,943 | 158,750 | 8.4 | 18.8 | |||||
| Time | 417,147 | 486,245 | 627,230 | (14.2) | (33.5) | |||||
| Total Deposits | $ | 1,882,823 | $ | 1,939,302 | $ | 1,827,316 | (2.9) | % | 3.0 | % |
Total deposits were $1.9 billion at September 30, 2021, compared to $1.8 billion at December 31, 2020, an increase of $55.5 million, or 3.0%.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
| For the Quarter Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Noninterest income | September 30,<br>2021 | June 30,<br>2021 | September 30,<br>2020 | Sep 21 vs. June 21 <br>% Change | Sep 21 vs. Sep 20 <br>% Change | |||||||||||||
| Gains and fees from sales of loans | $ | 924 | $ | 814 | $ | 27 | 13.5 | % | 3,322.2 | % | ||||||||
| Bank owned life insurance | 271 | 251 | 242 | 8.0 | 12.0 | |||||||||||||
| Service charges and fees | 199 | 217 | 190 | (8.3) | 4.7 | |||||||||||||
| Gain on sale of other real estate owned, net | — | — | 19 | N/A | (100.0) | |||||||||||||
| Other | 43 | 158 | 136 | (72.8) | (68.4) | |||||||||||||
| Total noninterest income | $ | 1,437 | $ | 1,440 | $ | 614 | (0.2) | % | 134.0 | % | For the Nine Months Ended | |||||||
| --- | --- | --- | --- | --- | --- | --- | ||||||||||||
| Noninterest income | September 30, 2021 | September 30, 2020 | % Change | |||||||||||||||
| Gains and fees from sales of loans | $ | 2,251 | $ | 27 | 8,237.0 | % | ||||||||||||
| Bank owned life insurance | 753 | 726 | 3.7 | |||||||||||||||
| Service charges and fees | 615 | 578 | 6.4 | |||||||||||||||
| Gain on sale of other real estate owned, net | — | 19 | (100.0) | |||||||||||||||
| Other | 1,213 | 913 | 32.9 | |||||||||||||||
| Total noninterest income | $ | 4,832 | $ | 2,263 | 113.5 | % |
Noninterest income increased by $0.8 million to $1.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. Noninterest income increased by $2.6 million to $4.8 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.
The increase in noninterest income was driven by resumed loan sales, totaling $0.9 million and $2.3 million for the quarter and nine months ended September 30, 2021, respectively. In addition, the increase in noninterest income for the nine months ended September 30, 2021 was impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by $0.4 million of non-recurring interest rate swap fees recognized during the nine months ended September 30, 2020.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
| For the Quarter Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Noninterest expense | September 30,<br>2021 | June 30,<br>2021 | September 30,<br>2020 | Sep 21 vs. June 21 <br>% Change | Sep 21 vs. Sep 20 <br>% Change | |||||
| Salaries and employee benefits | $ | 4,782 | $ | 3,960 | $ | 5,295 | 20.8 | % | (9.7) | % |
| Occupancy and equipment | 2,615 | 3,250 | 2,266 | (19.5) | 15.4 | |||||
| Data processing | 632 | 833 | 529 | (24.1) | 19.5 | |||||
| Professional services | 498 | 547 | 374 | (9.0) | 33.2 | |||||
| Director fees | 324 | 327 | 301 | (0.9) | 7.6 | |||||
| FDIC insurance | 298 | 300 | 176 | (0.7) | 69.3 | |||||
| Marketing | 186 | 140 | 151 | 32.9 | 23.2 | |||||
| Other | 1,035 | 695 | 637 | 48.9 | 62.5 | |||||
| Total noninterest expense | $ | 10,370 | $ | 10,052 | $ | 9,729 | 3.2 | % | 6.6 | % |
| For the Nine Months Ended | ||||||||||
| --- | --- | --- | --- | --- | --- | --- | ||||
| Noninterest expense | September 30, 2021 | September 30, 2020 | % Change | |||||||
| Salaries and employee benefits | $ | 13,511 | $ | 15,902 | (15.0) | % | ||||
| Occupancy and equipment | 8,271 | 6,410 | 29.0 | |||||||
| Data processing | 1,977 | 1,558 | 26.9 | |||||||
| Professional services | 1,632 | 1,519 | 7.4 | |||||||
| FDIC insurance | 1,001 | 529 | 89.2 | |||||||
| Director fees | 968 | 883 | 9.6 | |||||||
| Marketing | 317 | 512 | (38.1) | |||||||
| Other | 2,383 | 1,797 | 32.6 | |||||||
| Total noninterest expense | $ | 30,060 | $ | 29,110 | 3.3 | % |
Noninterest expense increased by $0.6 million to $10.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. The increase in noninterest expense was primarily driven by an increase in occupancy and equipment expense and other expense, partially offset by a decrease in salaries and employee benefits expense.
Noninterest expense increased by $1.0 million to $30.1 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in noninterest expense was primarily driven by an increase in occupancy and equipment expense, data processing expense, FDIC insurance expense and other expense, partially offset by a decrease in salaries and employee benefits expense.
Occupancy and equipment expense totaled $2.6 million for the quarter ended September 30, 2021, an increase of $0.3 million when compared to the same period in 2020. Occupancy and equipment expense totaled $8.3 million for the nine months ended September 30, 2021, an increase of $1.9 million when compared to the same period in 2020. The increase in occupancy and equipment expense was primarily due to additional one-time charges associated with office consolidation activity (previously disclosed in the fourth quarter of 2020) and an increase in lease expense resulting from the commencement of the lease on the Company's new headquarters building.
Data processing expense totaled $2.0 million for the nine months ended September 30, 2021, an increase of $0.4 million when compared to the same period in 2020. The increase in data processing expense was primarily due to $0.4 million in costs associated with the conversion to a new online banking system implemented in the second quarter of 2021.
FDIC insurance expense totaled $1.0 million for the nine months ended September 30, 2021, an increase of $0.5 million when compared to the same period in 2020. The increase in FDIC insurance expense was due to the absence of available FDIC insurance credits recognized in the first quarter of 2020 and elevated expense due to liquidity driven balance sheet growth in the first half 2021.
Salaries and employee benefits expense totaled $4.8 million for the quarter ended September 30, 2021, a decrease of $0.5 million when compared to the same period in 2020. Salaries and employee benefits expense totaled $13.5 million for the nine months ended September 30, 2021, a decrease of $2.4 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. Full time equivalent employees totaled 134 at September 30, 2021 compared to 142 for the same period in 2020. Average full time equivalent employees totaled 127 for the nine months ended September 30, 2021 compared to 151 for the same period in 2020. In addition, salaries and employee benefits expense also benefited by one-time deferrals of $0.6 million for the nine months ended September 30, 2021 in costs associated with a new online banking and other systems.
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,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | ||||||||||
| Total Equity | $ | 196,177 | $ | 190,795 | $ | 187,943 | $ | 176,602 | $ | 174,267 | |||||
| Less: | |||||||||||||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||
| Other intangibles | 48 | 58 | 67 | 76 | 160 | ||||||||||
| Tangible Common Equity | $ | 193,540 | $ | 188,148 | $ | 185,287 | $ | 173,937 | $ | 171,518 | |||||
| Total Assets | $ | 2,226,688 | $ | 2,269,825 | $ | 2,244,467 | $ | 2,253,747 | $ | 2,193,022 | |||||
| Less: | |||||||||||||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||
| Other intangibles | 48 | 58 | 67 | 76 | 160 | ||||||||||
| Tangible Assets | $ | 2,224,051 | $ | 2,267,178 | $ | 2,241,811 | $ | 2,251,082 | $ | 2,190,273 | |||||
| Tangible Common Equity to Tangible Assets | 8.70 | % | 8.30 | % | 8.27 | % | 7.73 | % | 7.83 | % | |||||
| As of | |||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |||||
| Computation of Tangible Book Value per Common Share | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | ||||||||||
| Total shareholders' equity | $ | 196,177 | $ | 190,795 | $ | 187,943 | $ | 176,602 | $ | 174,267 | |||||
| Less: | |||||||||||||||
| Preferred stock | — | — | — | — | — | ||||||||||
| Common shareholders' equity | $ | 196,177 | $ | 190,795 | $ | 187,943 | $ | 176,602 | $ | 174,267 | |||||
| Less: | |||||||||||||||
| Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||
| Other intangibles | 48 | 58 | 67 | 76 | 160 | ||||||||||
| Tangible common shareholders' equity | $ | 193,540 | $ | 188,148 | $ | 185,287 | $ | 173,937 | $ | 171,518 | |||||
| Common shares | 7,842,824 | 7,895,101 | 7,908,630 | 7,919,278 | 7,896,503 | ||||||||||
| Less: | |||||||||||||||
| Shares of unvested restricted stock | 178,797 | 184,548 | 186,485 | 163,369 | 170,083 | ||||||||||
| Common shares less unvested restricted stock | 7,664,027 | 7,710,553 | 7,722,145 | 7,755,909 | 7,726,420 | ||||||||||
| Book value per share | $ | 25.60 | $ | 24.74 | $ | 24.34 | $ | 22.77 | $ | 22.55 | |||||
| Less: | |||||||||||||||
| Effects of intangible assets | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.34 | $ | 0.36 | |||||
| Tangible Book Value per Common Share | $ | 25.25 | $ | 24.40 | $ | 23.99 | $ | 22.43 | $ | 22.20 |
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,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | September 30,<br>2021 | September 30,<br>2020 | ||||||||||||||
| Noninterest expense | $ | 10,370 | $ | 10,052 | $ | 9,638 | $ | 13,703 | $ | 9,729 | $ | 30,060 | $ | 29,110 | |||||||
| Less: | |||||||||||||||||||||
| Amortization of intangible assets | 9 | 9 | 9 | 84 | 18 | 28 | 54 | ||||||||||||||
| Other real estate owned expenses | — | — | — | — | — | — | 6 | ||||||||||||||
| Adjusted noninterest expense | $ | 10,361 | $ | 10,043 | $ | 9,629 | $ | 13,619 | $ | 9,711 | $ | 30,032 | $ | 29,050 | |||||||
| Net interest income | $ | 17,724 | $ | 16,579 | $ | 14,655 | $ | 14,304 | $ | 13,608 | $ | 48,958 | $ | 40,531 | |||||||
| Noninterest income | 1,437 | 1,440 | 1,956 | 621 | 614 | 4,832 | 2,263 | ||||||||||||||
| Less: | |||||||||||||||||||||
| Net gain on sale of available for sale securities | — | — | — | — | — | — | — | ||||||||||||||
| Gain on sale of other real estate owned, net | — | — | — | — | 19 | — | 19 | ||||||||||||||
| Operating revenue | $ | 19,161 | $ | 18,019 | $ | 16,611 | $ | 14,925 | $ | 14,203 | $ | 53,790 | $ | 42,775 | |||||||
| Efficiency ratio | 54.1 | % | 55.7 | % | 58.0 | % | 91.2 | % | 68.4 | % | 55.8 | % | 67.9 | % | |||||||
| For the Quarter Ended | For the Nine Months Ended | ||||||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| Computation of Return on Average Tangible Common Equity | September 30,<br>2021 | June 30,<br>2021 | March 31,<br>2021 | December 31,<br>2020 | September 30,<br>2020 | September 30,<br>2021 | September 30,<br>2020 | ||||||||||||||
| Net Income Attributable to Common Shareholders | $ | 6,855 | $ | 6,228 | $ | 5,690 | $ | 336 | $ | 2,991 | $ | 18,772 | $ | 5,568 | |||||||
| Total average shareholders' equity | $ | 192,993 | $ | 191,224 | $ | 182,058 | $ | 178,439 | $ | 173,162 | $ | 188,794 | $ | 175,838 | |||||||
| Less: | |||||||||||||||||||||
| Average Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||
| Average Other intangibles | 54 | 64 | 73 | 153 | 172 | 64 | 190 | ||||||||||||||
| Average tangible common equity | $ | 190,350 | $ | 188,571 | $ | 179,396 | $ | 175,697 | $ | 170,401 | $ | 186,141 | $ | 173,059 | |||||||
| Annualized Return on Average Tangible Common Equity | 14.29 | % | 13.25 | % | 12.86 | % | 0.76 | % | 6.98 | % | 13.48 | % | 4.30 | % |
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, 2021 | September 30, 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 | $ | 209,500 | $ | 88 | 0.17 | % | $ | 312,078 | $ | 96 | 0.12 | % |
| Securities(1) | 105,030 | 766 | 2.92 | 96,448 | 776 | 3.22 | ||||||
| Loans: | ||||||||||||
| Commercial real estate | 1,270,375 | 14,345 | 4.42 | 1,087,765 | 12,570 | 4.52 | ||||||
| Residential real estate | 95,100 | 809 | 3.40 | 125,069 | 1,097 | 3.51 | ||||||
| Construction | 88,728 | 845 | 3.73 | 94,984 | 1,029 | 4.24 | ||||||
| Commercial business | 314,484 | 3,707 | 4.61 | 322,066 | 3,329 | 4.04 | ||||||
| Consumer | 8,870 | 89 | 3.99 | 121 | 2 | 7.37 | ||||||
| Total loans | 1,777,557 | 19,795 | 4.36 | 1,630,005 | 18,027 | 4.33 | ||||||
| Federal Home Loan Bank stock | 3,133 | 16 | 2.04 | 7,835 | 77 | 3.91 | ||||||
| Total earning assets | 2,095,220 | $ | 20,665 | 3.86 | % | 2,046,366 | $ | 18,976 | 3.63 | % | ||
| Other assets | 131,670 | 132,617 | ||||||||||
| Total assets | $ | 2,226,890 | $ | 2,178,983 | ||||||||
| Liabilities and shareholders' equity: | ||||||||||||
| Interest bearing liabilities: | ||||||||||||
| NOW | $ | 111,813 | $ | 51 | 0.18 | % | $ | 87,890 | $ | 40 | 0.18 | % |
| Money market | 824,203 | 1,053 | 0.51 | 517,638 | 859 | 0.66 | ||||||
| Savings | 182,848 | 96 | 0.21 | 163,135 | 237 | 0.58 | ||||||
| Time | 448,218 | 1,187 | 1.05 | 757,176 | 2,968 | 1.56 | ||||||
| Total interest bearing deposits | 1,567,082 | 2,387 | 0.60 | 1,525,839 | 4,104 | 1.07 | ||||||
| Borrowed Money | 72,960 | 503 | 2.70 | 200,237 | 1,210 | 2.36 | ||||||
| Total interest bearing liabilities | 1,640,042 | $ | 2,890 | 0.70 | % | 1,726,076 | $ | 5,314 | 1.22 | % | ||
| Noninterest bearing deposits | 341,303 | 226,473 | ||||||||||
| Other liabilities | 52,552 | 53,272 | ||||||||||
| Total liabilities | 2,033,897 | 2,005,821 | ||||||||||
| Shareholders' equity | 192,993 | 173,162 | ||||||||||
| Total liabilities and shareholders' equity | $ | 2,226,890 | $ | 2,178,983 | ||||||||
| Net interest income(2) | $ | 17,775 | $ | 13,662 | ||||||||
| Interest rate spread | 3.16 | % | 2.41 | % | ||||||||
| Net interest margin(3) | 3.39 | % | 2.67 | % |
(1)Average balances and yields for securities are based on amortized cost.
(2)The adjustment for securities and loans taxable equivalency amounted to $51 thousand and $54 thousand for the quarters ended September 30, 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 Nine Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| September 30, 2021 | September 30, 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 | $ | 315,102 | $ | 286 | 0.12 | % | $ | 207,058 | $ | 468 | 0.30 | % |
| Securities(1) | 103,192 | 2,315 | 2.99 | 96,761 | 2,289 | 3.15 | ||||||
| Loans: | ||||||||||||
| Commercial real estate | 1,188,049 | 40,802 | 4.53 | 1,094,956 | 38,460 | 4.61 | ||||||
| Residential real estate | 104,320 | 2,669 | 3.41 | 134,369 | 3,636 | 3.61 | ||||||
| Construction | 97,828 | 2,769 | 3.73 | 98,539 | 3,350 | 4.47 | ||||||
| Commercial business | 302,019 | 10,495 | 4.58 | 289,959 | 10,017 | 4.54 | ||||||
| Consumer | 7,601 | 226 | 3.97 | 130 | 8 | 8.15 | ||||||
| Total loans | 1,699,817 | 56,961 | 4.42 | 1,617,953 | 55,471 | 4.50 | ||||||
| Federal Home Loan Bank stock | 4,608 | 72 | 2.09 | 7,547 | 272 | 4.81 | ||||||
| Total earning assets | 2,122,719 | $ | 59,634 | 3.70 | % | 1,929,319 | $ | 58,500 | 3.98 | % | ||
| Other assets | 119,098 | 125,957 | ||||||||||
| Total assets | $ | 2,241,817 | $ | 2,055,276 | ||||||||
| Liabilities and shareholders' equity: | ||||||||||||
| Interest bearing liabilities: | ||||||||||||
| NOW | $ | 110,637 | $ | 148 | 0.18 | % | $ | 76,661 | $ | 99 | 0.17 | % |
| Money market | 781,178 | 2,944 | 0.50 | 473,485 | 3,213 | 0.91 | ||||||
| Savings | 170,749 | 313 | 0.24 | 170,262 | 1,204 | 0.94 | ||||||
| Time | 532,278 | 4,840 | 1.22 | 721,051 | 10,107 | 1.87 | ||||||
| Total interest bearing deposits | 1,594,842 | 8,245 | 0.69 | 1,441,459 | 14,623 | 1.36 | ||||||
| Borrowed Money | 108,737 | 2,280 | 2.77 | 187,177 | 3,187 | 2.24 | ||||||
| Total interest bearing liabilities | 1,703,579 | $ | 10,525 | 0.83 | % | 1,628,636 | $ | 17,810 | 1.46 | % | ||
| Noninterest bearing deposits | 303,421 | 201,384 | ||||||||||
| Other liabilities | 46,023 | 49,418 | ||||||||||
| Total liabilities | 2,053,023 | 1,879,438 | ||||||||||
| Shareholders' equity | 188,794 | 175,838 | ||||||||||
| Total liabilities and shareholders' equity | $ | 2,241,817 | $ | 2,055,276 | ||||||||
| Net interest income(2) | $ | 49,109 | $ | 40,690 | ||||||||
| Interest rate spread | 2.87 | % | 2.52 | % | ||||||||
| Net interest margin(3) | 3.08 | % | 2.81 | % |
(1)Average balances and yields for securities are based on amortized cost.
(2)The adjustment for securities and loans taxable equivalency amounted to $151 thousand and $159 thousand for the nine months ended September 30, 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.
15
a3q2021bwfginvestorprese
BWFG | LISTED | NASDAQ 3Q21 Investor Presentation October 27th, 2021
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 • 3Q21 Performance • Trends • ALLL & Non-Performing Loans • Loan Portfolio • Capital • Bankwell History & Overview
BWFG | LISTED | NASDAQ 3Q21 Performance
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 3Q21 Summary • $6.85 million reported net income, or $0.87 earnings per share • Pre-tax, pre-provision net revenue (“PPNR”)1 of $8.79 million; 96% year-over-year increase • Quarterly loan growth of $92 million, or 5%, excluding PPP loan balances ̶ Year-to-date total loan growth of ~$232 million, or 19% annualized • Return on Average Assets and Return on Average Equity were 1.22% and 14.09%, respectively for the quarter, and 1.12% and 13.29% year-to-date • 8 basis point linked quarter deposit cost reduction to 50 basis points • 3Q21 Net Interest Margin (“NIM”) of 3.39%, year-to-date NIM of 3.08% • Repurchased 52,277 shares at an average price of $27.26 per share ̶ Authorized an additional 200 thousand shares, for a total of ~376 thousand shares available for repurchase • The Company declared a 4Q21 dividend of $0.18 per share • Subsequent to September 30th, 2021, Bankwell issued $35 million of subordinated notes at 3.25%; proceeds will be used for: ̶ Repayment of $15.5 million of existing subordinated notes ̶ General corporate purposes 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 3Q21 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 • $1.8 billion of gross loans • $1.9 billion of deposits • 0.92% ALLL; not subject to CECL • Dividend of $0.18 per share paid • $25.25 Tangible Book Value • Well Capitalized1,2 Tier 1 Leverage 9.61% Tier1/CET1 / RWA 10.59% Total Capital / RWA 11.44% 3Q21 YTD 2021 • Net Income $6.9 million $18.8 million • PPNR $8.8 million $23.7 million • Return on Average Assets 1.22% 1.12% • PPNR / Average Assets 1.57% 1.42% • Return on Average Equity 14.09% 13.29%
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 3Q21 2Q21 Var1 Total Interest Income $20.6 $20.1 $0.5 Total Interest Expense $2.9 $3.5 $0.6 Net Interest Income $17.7 $16.6 $1.1 Non-Interest Income $1.4 $1.4 $(0.0) Non-Interest Expense $10.4 $10.1 $(0.3) Pre-Tax, Pre-Provision Net Revenue $8.8 $8.0 $0.8 Provision/Credit for Loan Losses $0.1 $(0.0) $(0.2) Pre-Tax Income $8.7 $8.0 $0.7 Income Tax Expense $1.8 $1.8 $(0.0) Reported Net Income $6.9 $6.2 $0.6 EPS $0.87 $0.79 $0.08 Pre-Tax, Pre-Provision Net Revenue per share2 $1.14 $1.03 $0.11 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 3Q21 2Q21 Var1 Cash & Cash Equivalents $178 $302 $(124) Investment Securities $106 $109 $(3) Loans Receivable, net $1,805 $1,719 $86 All Other Assets $138 $139 $(1) Total Assets $2,227 $2,270 $(43) Total Deposits $1,883 $1,939 $(56) Total Borrowings $95 $90 $5 Other Liabilities $52 $49 $3 Total Liabilities $2,031 $2,079 $(49) Equity $196 $191 $5 Total Liabilities & Equity $2,227 $2,270 $(43) 3Q21 Consolidated Financial Statements Linked Quarter
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 3Q21 YTD 3Q20 YTD Var1 Total Interest Income $59.5 $58.3 $1.1 Total Interest Expense $10.5 $17.8 $7.3 Net Interest Income $49.0 $40.5 $8.4 Non-Interest Income2 $4.8 $2.3 $2.6 Non-Interest Expense $30.1 $29.1 $(1.0) Pre-Tax, Pre-Provision Net Revenue $23.7 $13.7 $10.0 Credit/Provision for Loan Losses $(0.2) $6.9 $7.1 Pre-Tax Income $23.9 $6.8 $17.1 Income Tax Expense $5.1 $1.2 $(3.9) Reported Net Income $18.8 $5.6 $13.2 EPS $2.37 $0.71 $1.66 Pre-Tax, Pre-Provision Net Revenue per share3 $3.06 $1.77 $1.29 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 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 3Q21 YTD 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 $25.25 2016 2017 2018 2019 2020 3Q21 Tangible Book Value $1.62 $1.78 $2.21 $2.31 $0.75 $2.37 2016 2017 2018 2019 2020 3Q21 YTD Diluted EPS 0.85% 0.80% 0.94% 0.97% 0.28% 1.12% 2016 2017 2018 2019 2020 3Q21 YTD Return on Average Assets 8.94% 8.93% 10.19% 10.20% 3.35% 13.29% 2016 2017 2018 2019 2020 3Q21 YTD Return on Average Equity
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin 3.54% 3.30% 3.18% 3.03% 2.77% 3.08% 2016 2017 2018 2019 2020 3Q21 YTD Net Interest Margin • 3Q21 NIM of 3.39% • Favorable NIM outlook ̶ ~$100 million retail CDs maturing in next 2 quarters, at 1.43% average rate 0.91% 1.08% 1.42% 1.75% 1.20% 0.70% 0.73% 0.93% 1.30% 1.66% 1.07% 0.58% 2016 2017 2018 2019 2020 3Q21 YTD 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% 3.72% 2016 2017 2018 2019 2020 3Q21 YTD 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 $1,237 $371 $436 $436 $402 $444 $587 $1,366 $1,543 $1,605 $1,604 $1,626 $1,825 2016 2017 2018 2019 2020 3Q21 Loan Balances All Other C&I + CRE Owner Occupied 3Q21 Loan Mix 3Q21 Portfolio Yield by Vintage1 C&I + CRE Owner Occupied / Total Loans 27.2% 28.3% 27.2% 25.1% 27.3% 32.2% 1 Weighted average yield based on active loans as of 9-30-2021 4.22% Pre 2018 4.71% 2018 3.98% 2019 3.99% 2020 4.43% 2021 Residential 4.62% C&I 16.07% CRE Owner Occupied 16.10% CRE Investor 57.23% Commercial Const. 5.19% Consumer Loans / Other 0.80% Dollars in millions
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 11.5% 12.8% 14.8% 15.1% 16.9% 18.0% 4Q18 4Q19 4Q20 1Q21 2Q21 3Q21 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% 16.3% 29.0% 30.3% 28.1% 28.6% 20.1% 11.4% 51.7% 52.0% 53.4% 55.3% 64.9% 72.3% $1,289 $1,398 $1,502 $1,492 $1,827 $1,883 2016 2017 2018 2019 2020 3Q21 Deposit Balances Brokered Deposits Retail CDs Core Deposits $213 $231 $471 $525 $512 $495 $156 $178 $255 $263 $309 $331 $369 $409 $725 $788 $821 $827 4Q18 4Q19 4Q20 1Q21 2Q21 3Q21 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% 17.3% Wholesale Funding ratio2 FHLB Borrowings Dollars in millions $160 $199 $160 $150 $175 $80
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Non Interest Expense 3Q21 YTD Non Interest Expense increased $1.0 million year over year to support revenue growth and increase operational efficiencies 58.0% 55.7% 54.1% 1Q21 2Q21 3Q21 2021 Quarterly Efficiency Ratio 1.93% 1.90% 2.03% 1.79% 2018 2019 2020 3Q21 YTD Non Interest Expense / Avg Assets 59.2% 60.2% 73.9% 55.8% 2018 2019 2020 3Q21 YTD 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% 1.58% 2018 2019 2020 3Q21 Non Performing Loans / Gross Loans NPLs $14,082 $10,588 $33,416 $28,914 0.60% 1.19% 0.18% 0.21% 3Q21 Detail 1.58% SBA-guaranteed portion of NPLs All other NPLs NPL population adequately collateralized or individually reserved in ALLL Total COVID-19 related NPLs Dollars in thousands $11 million of NPLs expected to be classified as performing TDRs by year-end 2021 • No remaining COVID-19 deferral loans at the end of 3Q21 • Permanent loan modifications executed on ~$11 million of NPLs expected to be classified as performing TDRs by year-end 2021
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.98% 0.76% 0.31% $(4.0) million $2.0 million ($2.1) million 0.16% 2020 Improving Economic Factors Asset Growth / Mix Specifics 3Q21 General Specific 2021 ALLL Coverage Allowance for Loan Loss (“ALLL”) Walk 1.29% 0.92% • 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 $16.8 Million
BWFG | LISTED | NASDAQ Loan Portfolio
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CT 52% NY 19% NJ 5% All Other 24% Industrial Warehouse 8.32% Mixed Use 5.33% MultiFamily 9.73% Office 24.46% Other 15.89% 1-4 Family Investment 1.33% Retail 31.40% Special Use 3.55% • 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 Total CRE Portfolio = $1,338 million Type Count $ % LTV3 Retail2 85 $259 62% 64.9% Grocery 11 $101 24% 65.0% Restaurant 28 $25 6% 62.4% Pharmacy 7 $22 5% 65.7% Gas / Auto Services 13 $12 3% 67.2% Total Retail 144 $420 100% 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 • ~76% 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) 81 $242 74% 63.6% Medical 37 $84 26% 68.9% Condo 7 $2 1% 66.8% Total Office 125 $327 100% 65.0% 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 = $293 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 $37 million as of 9/30/21, 2% of total loans • Majority of the Lines of Credit are uncommitted lines Finance 22% Insurance (Primarily Brokers) 30%Health Care & Social Assistance 13% Wholesale 6% Arts, Entertainment & Recreation 6% Professional, Sci & Tech Services 5% Retail Trade 4% Real Estate and Rental/Leasing 3% All Other 11%
BWFG | LISTED | NASDAQ Capital
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Tangible Book Value Tangible Book Value (TBV) Per Share Walk • $0.80 increase in OCI primarily from mark-to-market on long-dated interest rate swaps • Repurchased 131,432 shares at an average price of $24.50 per share through September 30, 2021 1 Misc includes items such as, but not limited to, changes related to stock grants and share count 1 $22.43 $25.25 $2.37 $0.46 $0.80 $0.01 $0.11 2020 Net Income Dividends AOCI Share Buyback Misc 3Q21
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 8.30% 9.19% 10.95% 11.84% 8.70% 9.61% 10.59% 11.44% 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 3Q21 2Q21 ‘Adequate’ + Buffer Min Bankwell’s capital position remains strong 2 Tier 1CET1 • Linked quarter decline in Total Capital and Tier 1 / CET1 ratios reflect change in asset mix from cash into loans • As of October 27th, 2021, the expanded share repurchase program has ~376 thousand shares authorized for repurchase • CRE concentration of 489%1 • Metrics don’t reflect anticipated capital contribution from the Holding Company to the Bank of up to $10 million 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: • Second 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 6/30/20, 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, 2019 news release 11/17/20 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 $2.3 billion commercial bank • 10 branches in Fairfield & New Haven Counties • $136 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 3Q21 YTD Total assets $1,628,919 $1,796,607 $1,873,665 $1,882,182 $2,253,747 $2,226,688 Net loans $1,343,895 $1,520,879 $1,586,775 $1,588,840 $1,601,672 $1,805,217 Loan-to-deposit ratio 105.6% 110.1% 106.4% 107.1% 87.9% 96.7% Efficiency ratio2 56.5% 54.9% 59.2% 60.2% 73.9% 55.8% Non-interest expense / avg. assets 2.03% 1.88% 1.93% 1.90% 2.03% 1.79% Net interest margin 3.54% 3.30% 3.18% 3.03% 2.77% 3.08% Total capital to risk weighted assets 12.85% 12.19% 12.50% 13.35% 12.28% 11.44% Tangible common equity ratio2 8.78% 8.81% 9.16% 9.56% 7.73% 8.70% Return on average equity 8.94% 8.93% 10.19% 10.20% 3.35% 13.29% Tangible book value per share2 $18.98 $20.59 $22.06 $23.15 $22.43 $25.25 Net interest income $49,092 $54,364 $56,326 $53,761 $54,835 $48,958 Pre-tax, pre-provision net revenue2 $22,224 $26,470 $24,593 $23,379 $14,907 $23,729 Net income $12,350 $13,830 $17,433 $18,216 $5,904 $18,772 EPS (fully diluted) $1.62 $1.78 $2.21 $2.31 $0.75 $2.37 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