Bankwell Financial Group Reports Operating Results for the Third Quarter, Declares Fourth Quarter Dividend, and Announces Share Repurchase Plan

Bankwell Financial Group, Inc. (NASDAQ: BWFG), a leading commercial bank with a growing digital focus, reported GAAP net income of $1.9 million, or $0.24 per share for the third quarter of 2024, versus $1.1 million, or $0.14 per share, for the second quarter of 2024. The Company's Board of Directors declared a $0.20 per share cash dividend, payable November 22, 2024 to shareholders of record on November 11, 2024.

Third quarter of 2024 results include an $8.2 million previously disclosed charge-off taken against a $13.7 million office loan participation as a $0.79 drag to earnings per share. Pre-tax, pre-provision net revenue (PPNR) of $9.0 million, or $1.17 per share, fell 7% relative to the second quarter of 2024 at $9.7 million, or $1.25 per share.

On October 28, 2024, the Company announced that on October 23, 2024, its Board of Directors authorized a new share repurchase plan. Under the terms of the share repurchase plan, the Company is authorized to buy back up to 250,000 shares of its outstanding common stock. In connection with the authorization of the new plan, the Company terminated its existing plan, originally approved in 2018 and amended in 2021, pursuant to which the Company has purchased 532,802 shares of its common stock.

Discussion of Outlook; Bankwell Financial Group President and CEO, Christopher R. Gruseke:

"Although we were disappointed with the elevated charge-off in the third quarter, the Company’s go-forward outlook remains favorable. Our liability sensitive balance sheet leaves us well positioned for accelerating margin expansion in the coming quarters, and we believe that strategic investments in our commercial lending platform will help us diversify our assets and improve our profitability."

Key Points for Third Quarter and Bankwell’s Outlook

Brokered Deposits Decrease, Liability Sensitive Balance Sheet.

• Brokered deposits declined $24.2 million in the third quarter of 2024 and are down $168.5 million since December 31, 2023.
• Reported net interest margin was 2.72%, which included a -6 basis point impact as a result of charges associated with a single non-performing loan and fees associated with called brokered CDs.
• With $1.3 billion of time deposits maturing in the next 12 months at a weighted average rate of 4.89%, the Company anticipates an annualized reduction in funding costs by $3.35 million, given current pricing. This translates into approximately $0.33 incremental EPS, or approximately 11 basis points on net interest margin, given no further changes to Fed Funds and stable asset yields.
• Further, the Company anticipates $0.5 billion of loans to reprice or mature over the same period, which could further benefit net interest margin by an additional 15 to 20 basis points on an annualized basis.

NPL to be Sold, Residential Care Upgrades a Positive Sign.

• A $27.1 million multifamily commercial real estate loan was placed on nonperforming status as of September 30, 2024. As of October 28, 2024, the Company has a signed agreement for the sale of this loan at par value. As of September 30, 2024, this loan comprises 103 basis points of the 2.50% nonperforming loans as a percentage of total loans.
• Elsewhere, favorable macroeconomic trends were reflected in improved operating results among the Company's residential care borrowers. Specifically, during the quarter four relationships totaling $42 million were upgraded. The Company anticipates the positive trend to continue as both Medicaid reimbursement rates and operational costs normalize.

Ongoing Investments with Continued Focus on Efficiency.

• The Company continues to invest for future growth, with notable recent developments including a lending partnership with Lendio, the launch of Bankwell Direct, the launch of a new Small Business Administration (SBA) division, and hiring key leadership personnel.
• The Company continues to operate efficiently with a non-interest expense to average asset ratio of 1.62% for the quarter ended September 30, 2024.

Third Quarter 2024 Financial Highlights and Key Performance Indicators (KPIs):

 

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

Return on average assets(1)

 

0.24

%

 

 

0.14

%

 

 

0.47

%

 

 

1.03

%

 

 

1.19

%

Pre-tax, pre-provision net revenue return on average assets(1)

 

1.13

%

 

 

1.22

%

 

 

1.10

%

 

 

1.27

%

 

 

1.37

%

Return on average shareholders' equity(1)

 

2.83

%

 

 

1.65

%

 

 

5.59

%

 

 

12.82

%

 

 

15.19

%

Net interest margin(1)

 

2.72

%

 

 

2.75

%

 

 

2.71

%

 

 

2.81

%

 

 

2.85

%

Efficiency Ratio(1)(2)

 

58.8

%

 

 

55.9

%

 

 

60.3

%

 

 

55.0

%

 

 

52.0

%

Noninterest expense to average assets(1)

 

1.62

%

 

 

1.55

%

 

 

1.66

%

 

 

1.56

%

 

 

1.48

%

Net loan charge-offs as % of average loans(1)

 

0.56

%

 

 

0.01

%

 

 

0.11

%

 

 

0.01

%

 

 

—

%

Dividend payout(1)(3)

 

82.30

%

 

 

142.86

%

 

 

41.67

%

 

 

18.35

%

 

 

16.00

%

Fully diluted tangible book value per common share(1)

$

33.76

 

 

$

33.61

 

 

$

33.57

 

 

$

33.39

 

 

$

32.55

 

Total capital to risk-weighted assets(1)(4)

 

12.83

%

 

 

12.98

%

 

 

12.63

%

 

 

12.32

%

 

 

11.86

%

Total common equity tier 1 capital to risk-weighted assets(1)(4)

 

11.80

%

 

 

11.73

%

 

 

11.60

%

 

 

11.30

%

 

 

10.82

%

Tier I Capital to Average Assets(1)(4)

 

10.24

%

 

 

10.17

%

 

 

10.09

%

 

 

9.81

%

 

 

9.60

%

Tangible common equity to tangible assets(1)

 

8.40

%

 

 

8.42

%

 

 

8.42

%

 

 

8.19

%

 

 

7.86

%

Earnings per common share - diluted

$

0.24

 

 

$

0.14

 

 

$

0.48

 

 

$

1.09

 

 

$

1.25

 

Common shares issued and outstanding

 

7,858,573

 

 

 

7,866,499

 

 

 

7,908,180

 

 

 

7,882,616

 

 

 

7,841,616

 

(1)

 

Non-GAAP Financial Measure, refer to the "Non-GAAP Financial Measures" and the "Reconciliation of GAAP to Non-GAAP Measures" sections of this document for additional detail.

 

 

 

(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.

 

 

 

(4)

 

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

Pre-Tax, Pre-Provision Net Revenue(1) ("PPNR")

PPNR for the three and nine months ended September 30, 2024, were $9.0 million and $27.4 million, respectively, a decrease of 20.1% and 28.6%, respectively, from the $11.3 million and $38.4 million recognized in the three and nine months ended September 30, 2023, respectively.

 

For the Quarter Ended

For the Nine Months Ended

(Dollars in thousands)

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Net interest income

$

20,717

 

$

21,219

 

$

21,147

 

$

22,245

 

$

22,691

 

$

63,083

 

$

72,223

Total noninterest income

 

1,156

 

 

683

 

 

915

 

 

1,129

 

 

786

 

 

2,754

 

 

3,713

Total revenues

 

21,873

 

 

21,902

 

 

22,062

 

 

23,374

 

 

23,477

 

 

65,837

 

 

75,936

Total noninterest expense

 

12,865

 

 

12,245

 

 

13,297

 

 

12,864

 

 

12,205

 

 

38,407

 

 

37,537

PPNR

$

9,008

 

$

9,657

 

$

8,765

 

$

10,510

 

$

11,272

 

$

27,430

 

$

38,399

(1) Non-GAAP Financial Measure,  refer to the "Non-GAAP Financial Measures" section of this document for additional detail.

• Revenues (net interest income plus noninterest income) for the quarter ended September 30, 2024 were $21.9 million, versus $23.5 million for the quarter ended September 30, 2023. The decrease in revenues for the quarter ended September 30, 2024 was attributable to an increase in interest expense on deposits. Revenues for the nine months ended September 30, 2024 were $65.8 million, versus $75.9 million for the nine months ended September 30, 2023. The decrease in revenues for the quarter ended September 30, 2024 was attributable to an increase in interest expense on deposits and lower gains from loan sales, partially offset by an increase in interest and fees on loans due to higher loan yields and prepayment fees.
• The net interest margin (fully taxable equivalent basis) for the quarters ended September 30, 2024 and September 30, 2023 was 2.72% and 2.85%, respectively. The decrease in the net interest margin was due to an increase in funding costs, partially offset by an increase in interest income on earning assets. For the quarter ended September 30, 2024, the net interest margin includes a -5 basis point unfavorable impact as a result of the $27.1 million commercial real estate loan being placed on non-performing status plus a -1 basis point unfavorable impact from one-time costs associated with Brokered CDs called during the quarter.
• Overall non-interest income of $1.2 million increased 69.3% when compared to the second quarter, primarily due to higher gains as a result of more SBA loan sales. Service charges increased when compared to the second quarter and continues to grow on a positive trend line.
• Total non-interest expense of $12.9 million increased 5% compared to the second quarter as the Company continues to invest in strategic initiatives.

Allowance for Credit Losses - Loans ("ACL-Loans")

The ACL-Loans was $27.8 million as of September 30, 2024 compared to $27.9 million as of December 31, 2023. The ACL-Loans as a percentage of total loans was 1.06% as of September 30, 2024 compared to 1.03% as of December 31, 2023.

Provision for credit losses was $6.3 million for the quarter ended September 30, 2024. The increase in the provision for credit losses for the quarter was primarily due to a charge-off of $8.2 million which previously did not have an associated specific reserve. The increase was partially offset by a $1.0 million recovery on a previously charged-off loan.

Total nonaccrual loans increased $9.3 million to $65.5 million as of September 30, 2024 when compared to the previous quarter. The increase was primarily due to a $27.1 million commercial real estate multifamily loan1. The increase was partially offset by two loans that were partially charged-off for a total of $15.4 million and two loans that were paid off totaling $4.7 million in the third quarter of 2024. Nonperforming assets as a percentage of total assets increased to 2.07% at September 30, 2024 from 1.53% at December 31, 2023.

1. As of October 28, 2024, the Company has a signed agreement for the sale of this loan at par value.

BANKWELL FINANCIAL GROUP, INC. ASSET QUALITY (unaudited) (Dollars in thousands)

 

For the Quarter Ended

 

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

ACL-Loans:

 

 

 

 

 

 

 

 

 

Balance at beginning of period

$

36,083

 

 

$

27,991

 

 

$

27,946

 

 

$

29,284

 

 

$

30,694

 

Charge-offs:

 

 

 

 

 

 

 

 

 

Residential real estate

 

—

 

 

 

(9

)

 

 

(132

)

 

 

—

 

 

 

—

 

Commercial real estate

 

(8,184

)

 

 

(522

)

 

 

(3,306

)

 

 

(824

)

 

 

—

 

Commercial business

 

(7,010

)

 

 

—

 

 

 

(197

)

 

 

—

 

 

 

—

 

Consumer

 

(17

)

 

 

(12

)

 

 

(49

)

 

 

(15

)

 

 

(31

)

Construction

 

(616

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total charge-offs

 

(15,827

)

 

 

(543

)

 

 

(3,684

)

 

 

(839

)

 

 

(31

)

Recoveries:

 

 

 

 

 

 

 

 

 

Residential real estate

 

—

 

 

 

141

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial real estate

 

1,013

 

 

 

113

 

 

 

—

 

 

 

—

 

 

 

—

 

Commercial business

 

(34

)

 

 

—

 

 

 

27

 

 

 

464

 

 

 

35

 

Consumer

 

1

 

 

 

13

 

 

 

4

 

 

 

3

 

 

 

19

 

Construction

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total recoveries

 

980

 

 

 

267

 

 

 

31

 

 

 

467

 

 

 

54

 

Net loan (charge-offs) recoveries

 

(14,847

)

 

 

(276

)

 

 

(3,653

)

 

 

(372

)

 

 

23

 

Provision (credit) for credit losses - loans

 

6,516

 

 

 

8,368

 

 

 

3,698

 

 

 

(966

)

 

 

(1,433

)

Balance at end of period

$

27,752

 

 

$

36,083

 

 

$

27,991

 

 

$

27,946

 

 

$

29,284

 

 

As of

 

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

Asset quality:

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

 

 

 

 

 

 

 

 

Residential real estate

$

1,316

 

 

$

1,339

 

 

$

1,237

 

 

$

1,386

 

 

$

1,408

 

Commercial real estate

 

46,360

 

 

 

28,088

 

 

 

19,083

 

 

 

23,009

 

 

 

1,898

 

Commercial business

 

9,101

 

 

 

17,396

 

 

 

16,841

 

 

 

15,430

 

 

 

7,352

 

Construction

 

8,766

 

 

 

9,382

 

 

 

9,382

 

 

 

9,382

 

 

 

9,382

 

Consumer

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7,917

 

Total nonaccrual loans

 

65,543

 

 

 

56,205

 

 

 

46,543

 

 

 

49,207

 

 

 

27,957

 

Other real estate owned

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total nonperforming assets

$

65,543

 

 

$

56,205

 

 

$

46,543

 

 

$

49,207

 

 

$

27,957

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans as a % of total loans

 

2.50

%

 

 

2.12

%

 

 

1.74

%

 

 

1.81

%

 

 

1.01

%

Nonperforming assets as a % of total assets

 

2.07

%

 

 

1.79

%

 

 

1.48

%

 

 

1.53

%

 

 

0.86

%

ACL-loans as a % of total loans

 

1.06

%

 

 

1.36

%

 

 

1.04

%

 

 

1.03

%

 

 

1.06

%

ACL-loans as a % of nonperforming loans

 

42.34

%

 

 

64.20

%

 

 

60.14

%

 

 

56.79

%

 

 

104.75

%

Total past due loans to total loans

 

2.48

%

 

 

0.84

%

 

 

1.44

%

 

 

0.78

%

 

 

1.44

%

Financial Condition & Capital

Assets totaled $3.2 billion at September 30, 2024, a decrease of $54.4 million, or 1.7% compared to December 31, 2023. Gross loans totaled $2.6 billion at September 30, 2024, a decrease of $95.4 million, or 3.5% compared to December 31, 2023. Deposits totaled $2.7 billion at September 30, 2024, a decrease of $48.6 million, or 1.8% compared to December 31, 2023. Brokered deposits have decreased $168.5 million or 17.7%, when compared to December 31, 2023

Period End Loan Composition

September 30, 2024

 

June 30, 2024

 

December 31, 2023

 

Current QTD % Change

 

YTD % Change

Residential Real Estate

$

45,553

 

$

47,875

 

$

50,931

 

(4.9

)%

 

(10.6

)%

Commercial Real Estate(1)

 

1,887,942

 

 

1,912,701

 

 

1,947,648

 

(1.3

)

 

(3.1

)

Construction

 

160,292

 

 

150,259

 

 

183,414

 

6.7

 

 

(12.6

)

Total Real Estate Loans

 

2,093,787

 

 

2,110,835

 

 

2,181,993

 

(0.8

)

 

(4.0

)

Commercial Business

 

490,292

 

 

503,444

 

 

500,569

 

(2.6

)

 

(2.1

)

Consumer

 

39,126

 

 

42,906

 

 

36,045

 

(8.8

)

 

8.5

 

Total Loans

$

2,623,205

 

$

2,657,185

 

$

2,718,607

 

(1.3

)%

 

(3.5

)%

(1) Includes owner occupied commercial real estate of $0.7 billion at September 30, 2024, June 30, 2024, and December 31, 2023, respectively.

Period End Deposit Composition

September 30, 2024

 

June 30, 2024

 

December 31, 2023

 

Current QTD % Change

 

YTD % Change

Noninterest bearing demand

$

295,552

 

$

328,475

 

$

346,172

 

(10.0

)%

 

(14.6

)%

NOW

 

76,413

 

 

122,112

 

 

90,829

 

(37.4

)

 

(15.9

)

Money Market

 

840,234

 

 

825,599

 

 

887,352

 

1.8

 

 

(5.3

)

Savings

 

87,212

 

 

91,870

 

 

97,331

 

(5.1

)

 

(10.4

)

Time

 

1,388,760

 

 

1,294,319

 

 

1,315,073

 

7.3

 

 

5.6

 

Total Deposits

$

2,688,171

 

$

2,662,375

 

$

2,736,757

 

1.0

%

 

(1.8

)%

Shareholders’ equity totaled $267.9 million as of September 30, 2024, an increase of $2.2 million compared to December 31, 2023, primarily a result of net income of $6.8 million for the nine months ended September 30, 2024. The increase was partially offset by dividends paid of $4.7 million.

The Company's capital position was generally stable during the third quarter, with total risk-based capital, common-equity tier 1 capital and leverage ratios at 12.83%, 11.80%, and 10.24%, respectively, at September 30, 2024. The Company repurchased 9,670 shares and 85,990 shares at weighted average prices of $23.86 and $24.82 per share for the quarter and nine months ended September 30, 2024.

We recommend reading this earnings release in conjunction with the Third Quarter 2024 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our October 28, 2024 Current Report on Form 8-K.

Conference Call

Bankwell will host a conference call to discuss the Company’s financial results and business outlook on October 29, 2024, at 10:00 a.m. E.T. The call will be accessible by telephone and webcast using https://investor.mybankwell.com/news-market-data/event-calendar/default.aspx. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event.

About Bankwell Financial Group

Bankwell Financial Group, Inc. is the holding company for Bankwell Bank (“Bankwell”). Bankwell is a full-service Commercial Bank, established in 2013. Headquartered in New Canaan, CT, Bankwell serves customers nationwide, delivering unmatched accessibility, expertise, and responsiveness. Bankwell offers an array of commercial financing products, including Working Capital lines of credit, SBA loans, Acquisition loans, and Commercial mortgages, in addition to digital and physical treasury management and deposit services.

For more information about this press release, interested parties may contact Christopher R. Gruseke, President and Chief Executive Officer or Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer of Bankwell Financial Group at [phone] or at [e-mail].

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 increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the banking industry or securities markets, 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 assets, tangible common equity to tangible assets, tangible common shareholders' equity, fully diluted tangible book value per common share, adjusted noninterest expense, operating revenue, efficiency ratio, average tangible common equity, annualized return on average tangible common equity, return on average assets, return on average shareholders' equity, pre-tax, pre-provision net revenue, net interest margin, net loan charge-offs as a percentage of average loans, pre-tax, pre-provision net revenue on average assets, and the dividend payout ratio 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, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

275,829

 

 

$

234,277

 

 

$

245,043

 

 

$

267,521

 

 

$

256,973

 

Federal funds sold

 

15,508

 

 

 

17,103

 

 

 

2,584

 

 

 

1,636

 

 

 

1,122

 

Cash and cash equivalents

 

291,337

 

 

 

251,380

 

 

 

247,627

 

 

 

269,157

 

 

 

258,095

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

 

 

 

 

 

 

 

Marketable equity securities, at fair value

 

2,148

 

 

 

2,079

 

 

 

2,069

 

 

 

2,070

 

 

 

1,975

 

Available for sale investment securities, at fair value

 

108,866

 

 

 

107,635

 

 

 

108,417

 

 

 

109,736

 

 

 

97,907

 

Held to maturity investment securities, at amortized cost

 

34,886

 

 

 

28,286

 

 

 

15,739

 

 

 

15,817

 

 

 

15,885

 

Total investment securities

 

145,900

 

 

 

138,000

 

 

 

126,225

 

 

 

127,623

 

 

 

115,767

 

Loans receivable (net of ACL-Loans of $27,752, $36,083, $27,991, $27,946, and $29,284 at September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively)

 

2,591,551

 

 

 

2,616,691

 

 

 

2,646,686

 

 

 

2,685,301

 

 

 

2,735,242

 

Accrued interest receivable

 

14,714

 

 

 

14,675

 

 

 

15,104

 

 

 

14,863

 

 

 

15,648

 

Federal Home Loan Bank stock, at cost

 

5,655

 

 

 

5,655

 

 

 

5,655

 

 

 

5,696

 

 

 

5,696

 

Premises and equipment, net

 

24,780

 

 

 

25,599

 

 

 

26,161

 

 

 

27,018

 

 

 

26,899

 

Bank-owned life insurance

 

52,443

 

 

 

52,097

 

 

 

51,764

 

 

 

51,435

 

 

 

51,119

 

Goodwill

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Deferred income taxes, net

 

9,300

 

 

 

11,345

 

 

 

9,137

 

 

 

9,383

 

 

 

9,395

 

Other assets

 

22,811

 

 

 

23,623

 

 

 

24,326

 

 

 

22,417

 

 

 

29,326

Total assets

$

3,161,080

 

 

$

3,141,654

 

 

$

3,155,274

 

$

3,215,482

 

 

$

3,249,776

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest bearing deposits

$

293,195

 

 

$

328,475

 

 

$

376,248

 

 

$

346,172

 

 

$

345,433

 

Interest bearing deposits

 

2,394,976

 

 

 

2,333,900

 

 

 

2,297,274

 

 

 

2,390,585

 

 

 

2,423,193

 

Total deposits

 

2,688,171

 

 

 

2,662,375

 

 

 

2,673,522

 

 

 

2,736,757

 

 

 

2,768,626

 

 

 

 

 

 

 

 

 

 

 

Advances from the Federal Home Loan Bank

 

90,000

 

 

 

90,000

 

 

 

90,000

 

 

 

90,000

 

 

 

90,000

 

Subordinated debentures

 

69,389

 

 

 

69,328

 

 

 

69,266

 

 

 

69,205

 

 

 

69,143

 

Accrued expenses and other liabilities

 

45,594

 

 

 

52,975

 

 

 

54,454

 

 

 

53,768

 

 

 

64,145

 

Total liabilities

 

2,893,154

 

 

 

2,874,678

 

 

 

2,887,242

 

 

 

2,949,730

 

 

 

2,991,914

 

 

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

118,429

 

 

 

118,037

 

 

 

118,401

 

 

 

118,247

 

 

 

117,181

 

Retained earnings

 

151,257

 

 

 

150,895

 

 

 

151,350

 

 

 

149,169

 

 

 

142,205

 

Accumulated other comprehensive (loss)

 

(1,760

)

 

 

(1,956

)

 

 

(1,719

)

 

 

(1,664

)

 

 

(1,524

)

Total shareholders’ equity

 

267,926

 

 

 

266,976

 

 

 

268,032

 

 

 

265,752

 

 

 

257,862

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

$

3,161,080

 

 

$

3,141,654

 

 

$

3,155,274

 

$

3,215,482

 

 

$

3,249,776

 

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, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

 

September 30, 2024

 

September 30, 2023

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

43,596

 

$

43,060

 

 

$

43,325

 

 

$

44,122

 

 

$

43,854

 

 

$

129,981

 

 

$

126,059

Interest and dividends on securities

 

1,390

 

 

1,190

 

 

 

1,130

 

 

 

1,108

 

 

 

1,016

 

 

 

3,710

 

 

 

3,018

Interest on cash and cash equivalents

 

3,205

 

 

3,429

 

 

 

3,826

 

 

 

4,164

 

 

 

3,393

 

 

 

10,460

 

 

 

9,983

Total interest and dividend income

 

48,191

 

 

47,679

 

 

 

48,281

 

 

 

49,394

 

 

 

48,263

 

 

 

144,151

 

 

 

139,060

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense on deposits

 

25,579

 

 

24,677

 

 

 

25,362

 

 

 

25,307

 

 

 

23,789

 

 

 

75,618

 

 

 

61,599

Interest expense on borrowings

 

1,895

 

 

1,783

 

 

 

1,772

 

 

 

1,842

 

 

 

1,783

 

 

 

5,450

 

 

 

5,238

Total interest expense

 

27,474

 

 

26,460

 

 

 

27,134

 

 

 

27,149

 

 

 

25,572

 

 

 

81,068

 

 

 

66,837

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

20,717

 

 

21,219

 

 

 

21,147

 

 

 

22,245

 

 

 

22,691

 

 

 

63,083

 

 

 

72,223

Provision (credit) for credit losses

 

6,296

 

 

8,183

 

 

 

3,683

 

 

 

(960

)

 

 

(1,579

)

 

 

18,162

 

 

 

1,826

Net interest income after provision (credit) for credit losses

 

14,421

 

 

13,036

 

 

 

17,464

 

 

 

23,205

 

 

 

24,270

 

 

 

44,921

 

 

 

70,397

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank owned life insurance

 

346

 

 

333

 

 

 

329

 

 

 

316

 

 

 

303

 

 

 

1,008

 

 

 

876

Service charges and fees

 

575

 

 

495

 

 

 

304

 

 

 

688

 

 

 

294

 

 

 

1,374

 

 

 

941

Gains and fees from sales of loans

 

133

 

 

45

 

 

 

321

 

 

 

79

 

 

 

237

 

 

 

499

 

 

 

1,893

Other

 

102

 

 

(190

)

 

 

(39

)

 

 

46

 

 

 

(48

)

 

 

(127

)

 

 

3

Total noninterest income

 

1,156

 

 

683

 

 

 

915

 

 

 

1,129

 

 

 

786

 

 

 

2,754

 

 

 

3,713

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

6,223

 

 

6,176

 

 

 

6,291

 

 

 

6,088

 

 

 

6,036

 

 

 

18,690

 

 

 

18,507

Occupancy and equipment

 

2,334

 

 

2,238

 

 

 

2,322

 

 

 

2,231

 

 

 

2,146

 

 

 

6,894

 

 

 

6,434

Professional services

 

1,142

 

 

989

 

 

 

1,065

 

 

 

1,033

 

 

 

491

 

 

 

3,196

 

 

 

2,505

Data processing

 

851

 

 

755

 

 

 

740

 

 

 

747

 

 

 

741

 

 

 

2,346

 

 

 

2,141

Director fees

 

292

 

 

306

 

 

 

900

 

 

 

605

 

 

 

362

 

 

 

1,498

 

 

 

1,207

FDIC insurance

 

853

 

 

705

 

 

 

930

 

 

 

1,026

 

 

 

1,026

 

 

 

2,488

 

 

 

3,138

Marketing

 

73

 

 

90

 

 

 

114

 

 

 

139

 

 

 

184

 

 

 

277

 

 

 

512

Other

 

1,097

 

 

986

 

 

 

935

 

 

 

995

 

 

 

1,219

 

 

 

3,018

 

 

 

3,093

Total noninterest expense

 

12,865

 

 

12,245

 

 

 

13,297

 

 

 

12,864

 

 

 

12,205

 

 

 

38,407

 

 

 

37,537

Income before income tax expense

 

2,712

 

 

1,474

 

 

 

5,082

 

 

 

11,470

 

 

 

12,851

 

 

 

9,268

 

 

 

36,573

Income tax expense

 

786

 

 

356

 

 

 

1,319

 

 

 

2,946

 

 

 

3,074

 

 

 

2,461

 

 

 

8,434

Net income

$

1,926

 

$

1,118

 

 

$

3,763

 

 

$

8,524

 

 

$

9,777

 

 

$

6,807

 

 

$

28,139

Earnings Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

0.24

 

$

0.14

 

 

$

0.48

 

 

$

1.09

 

 

$

1.25

 

 

$

0.86

 

 

$

3.61

Diluted

$

0.24

 

$

0.14

 

 

$

0.48

 

 

$

1.09

 

 

$

1.25

 

 

$

0.86

 

 

$

3.58

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

7,715,040

 

 

7,747,675

 

 

 

7,663,521

 

 

 

7,603,938

 

 

 

7,598,230

 

 

 

7,708,768

 

 

 

7,582,272

Diluted

 

7,720,895

 

 

7,723,888

 

 

 

7,687,679

 

 

 

7,650,451

 

 

 

7,633,934

 

 

 

7,731,454

 

 

 

7,646,837

Dividends per common share

$

0.20

 

$

0.20

 

 

$

0.20

 

 

$

0.20

 

 

$

0.20

 

 

$

0.60

 

 

$

0.60

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, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

Total Equity

$

267,926

 

 

$

266,976

 

 

$

268,032

 

 

$

265,752

 

 

$

257,862

 

Less:

 

 

 

 

 

 

 

 

 

Goodwill

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Other intangibles

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tangible Common Equity

$

265,337

 

 

$

264,387

 

 

$

265,443

 

 

$

263,163

 

 

$

255,273

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

3,161,080

 

 

$

3,141,654

 

 

$

3,155,274

 

 

$

3,215,482

 

 

$

3,249,776

 

Less:

 

 

 

 

 

 

 

 

 

Goodwill

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Other intangibles

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Tangible Assets

$

3,158,491

 

 

$

3,139,065

 

 

$

3,152,685

 

 

$

3,212,893

 

 

$

3,247,187

 

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity to Tangible Assets

 

8.40

%

 

 

8.42

%

 

 

8.42

%

 

 

8.19

%

 

 

7.86

%

 

As of

Computation of Fully Diluted Tangible Book Value per Common Share

September 30, 2024

 

June 30, 2024

 

March 31, 2024

 

December 31, 2023

 

September 30, 2023

Total shareholders' equity

$

267,926

 

$

266,976

 

$

268,032

 

$

265,752

 

$

257,862

Less:

 

 

 

 

 

 

 

 

 

Preferred stock

 

—

 

 

—

 

 

—

 

 

—

 

 

—

Common shareholders' equity

$

267,926

 

$

266,976

 

$

268,032

 

$

265,752

 

$

257,862

Less:

 

 

 

 

 

 

 

 

 

Goodwill

 

2,589

 

 

2,589

 

 

2,589

 

 

2,589

 

 

2,589

Other intangibles

 

—

 

 

—

 

 

—

 

 

—

 

 

—

Tangible common shareholders' equity

$

265,337

 

$

264,387

 

$

265,443

 

$

263,163

 

$

255,273

 

 

 

 

 

 

 

 

 

 

Common shares issued and outstanding

 

7,858,573

 

 

7,866,499

 

 

7,908,180

 

 

7,882,616

 

 

7,841,616

 

 

 

 

 

 

 

 

 

 

Fully Diluted Tangible Book Value per Common Share

$

33.76

 

$

33.61

 

$

33.57

 

$

33.39

 

$

32.55

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, 2024

 

September 30, 2023

 

Average Balance

 

Interest

 

Yield/ Rate (4)

 

Average Balance

 

Interest

 

Yield/ Rate (4)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and Fed funds sold

$

253,664

 

$

3,205

 

5.03

%

 

$

265,115

 

$

3,393

 

5.08

%

Securities(1)

 

147,431

 

 

1,390

 

3.78

 

 

 

127,229

 

 

953

 

3.00

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

1,905,506

 

 

28,288

 

5.81

 

 

 

1,943,725

 

 

28,140

 

5.67

 

Residential real estate

 

47,481

 

 

736

 

6.20

 

 

 

53,966

 

 

671

 

4.97

 

Construction

 

156,273

 

 

3,070

 

7.69

 

 

 

209,154

 

 

3,908

 

7.31

 

Commercial business

 

512,507

 

 

10,783

 

8.23

 

 

 

539,185

 

 

10,394

 

7.54

 

Consumer

 

41,845

 

 

719

 

6.84

 

 

 

44,020

 

 

741

 

6.66

 

Total loans

 

2,663,612

 

 

43,596

 

6.40

 

 

 

2,790,050

 

 

43,854

 

6.15

 

Federal Home Loan Bank stock

 

5,655

 

 

122

 

8.32

 

 

 

5,696

 

 

115

 

8.13

 

Total earning assets

 

3,070,362

 

$

48,313

 

6.16

%

 

 

3,188,090

 

$

48,315

 

5.93

%

Other assets

 

90,410

 

 

 

 

 

 

78,089

 

 

 

 

Total assets

$

3,160,772

 

 

 

 

 

$

3,266,179

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

NOW

$

94,958

 

$

45

 

0.18

%

 

$

102,149

 

$

47

 

0.18

%

Money market

 

832,430

 

 

8,597

 

4.11

 

 

 

922,036

 

 

9,064

 

3.90

 

Savings

 

89,463

 

 

691

 

3.07

 

 

 

105,366

 

 

817

 

3.08

 

Time

 

1,347,857

 

 

16,246

 

4.79

 

 

 

1,322,074

 

 

13,861

 

4.16

 

Total interest bearing deposits

 

2,364,708

 

 

25,579

 

4.30

 

 

 

2,451,625

 

 

23,789

 

3.85

 

Borrowed Money

 

159,349

 

 

1,895

 

4.73

 

 

 

159,103

 

 

1,783

 

4.39

 

Total interest bearing liabilities

 

2,524,057

 

$

27,474

 

4.33

%

 

 

2,610,728

 

$

25,572

 

3.89

%

Noninterest bearing deposits

 

303,213

 

 

 

 

 

 

345,988

 

 

 

 

Other liabilities

 

62,602

 

 

 

 

 

 

54,136

 

 

 

 

Total liabilities

 

2,889,872

 

 

 

 

 

 

3,010,852

 

 

 

 

Shareholders' equity

 

270,900

 

 

 

 

 

 

255,327

 

 

 

 

Total liabilities and shareholders' equity

$

3,160,772

 

 

 

 

 

$

3,266,179

 

 

 

 

Net interest income(2)

 

 

$

20,839

 

 

 

 

 

$

22,743

 

 

Interest rate spread

 

 

 

 

1.83

%

 

 

 

 

 

2.04

%

Net interest margin(3)

 

 

 

 

2.72

%

 

 

 

 

 

2.85

%

(1)

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

(2)

The adjustment for securities and loans taxable equivalency amounted to $122 thousand and $52 thousand for the quarters ended September 30, 2024 and 2023, 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, 2024

 

September 30, 2023

 

Average Balance

 

Interest

 

Yield/ Rate (4)

 

Average Balance

 

Interest

 

Yield/ Rate (4)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and Fed funds sold

$

273,138

 

$

10,460

 

5.12

%

 

$

281,033

 

$

9,983

 

4.75

%

Securities(1)

 

139,871

 

 

3,592

 

3.42

 

 

 

128,554

 

 

2,864

 

2.97

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

1,909,390

 

 

84,582

 

5.82

 

 

 

1,932,549

 

 

79,958

 

5.46

 

Residential real estate

 

48,912

 

 

2,226

 

6.07

 

 

 

56,798

 

 

1,957

 

4.59

 

Construction

 

158,884

 

 

8,913

 

7.37

 

 

 

194,396

 

 

10,582

 

7.18

 

Commercial business

 

517,880

 

 

32,097

 

8.14

 

 

 

546,329

 

 

32,073

 

7.74

 

Consumer

 

41,383

 

 

2,162

 

6.98

 

 

 

30,571

 

 

1,489

 

6.51

 

Total loans

 

2,676,449

 

 

129,980

 

6.38

 

 

 

2,760,643

 

 

126,059

 

6.02

 

Federal Home Loan Bank stock

 

5,670

 

 

358

 

8.43

 

 

 

5,527

 

 

308

 

7.46

 

Total earning assets

 

3,095,128

 

$

144,390

 

6.13

%

 

 

3,175,757

 

$

139,214

 

5.78

%

Other assets

 

92,249

 

 

 

 

 

 

66,342

 

 

 

 

Total assets

$

3,187,377

 

 

 

 

 

$

3,242,099

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

NOW

$

97,970

 

$

133

 

0.18

%

 

$

97,741

 

$

127

 

0.17

%

Money market

 

849,860

 

 

26,294

 

4.13

 

 

 

910,840

 

 

23,532

 

3.45

 

Savings

 

91,135

 

 

2,093

 

3.07

 

 

 

117,984

 

 

2,404

 

2.72

 

Time

 

1,319,031

 

 

47,097

 

4.77

 

 

 

1,291,124

 

 

35,536

 

3.68

 

Total interest bearing deposits

 

2,357,996

 

 

75,617

 

4.28

 

 

 

2,417,689

 

 

61,599

 

3.41

 

Borrowed Money

 

159,288

 

 

5,450

 

4.57

 

 

 

161,166

 

 

5,238

 

4.29

 

Total interest bearing liabilities

 

2,517,284

 

$

81,067

 

4.30

%

 

 

2,578,855

 

$

66,837

 

3.47

%

Noninterest bearing deposits

 

336,129

 

 

 

 

 

 

374,943

 

 

 

 

Other liabilities

 

62,631

 

 

 

 

 

 

40,192

 

 

 

 

Total liabilities

 

2,916,044

 

 

 

 

 

 

2,993,990

 

 

 

 

Shareholders' equity

 

271,333

 

 

 

 

 

 

248,109

 

 

 

 

Total liabilities and shareholders' equity

$

3,187,377

 

 

 

 

 

$

3,242,099

 

 

 

 

Net interest income(2)

 

 

$

63,323

 

 

 

 

 

$

72,377

 

 

Interest rate spread

 

 

 

 

1.83

%

 

 

 

 

 

2.31

%

Net interest margin(3)

 

 

 

 

2.73

%

 

 

 

 

 

3.04

%

(1)

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

(2)

The adjustment for securities and loans taxable equivalency amounted to $240 thousand and $154 thousand for the nine months ended September 30, 2024 and 2023, 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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241028117073/en/

Christopher R. Gruseke, President and Chief Executive Officer or Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer Bankwell Financial Group [phone] [e-mail]