Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $2.5 million, or $0.32 per share for the fourth quarter of 2024, versus $1.9 million, or $0.24 per share, for the third quarter of 2024. The Company's Board of Directors declared a $0.20 per share cash dividend, payable February 21, 2025 to shareholders of record on February 11, 2025.
Pre-tax, pre-provision net revenue (PPNR) of $7.9 million, or $1.02 per share, fell 12% relative to the third quarter of 2024 of $9.0 million, or $1.17 per share.
Discussion of Outlook; Bankwell Financial Group Chief Executive Officer, Christopher R. Gruseke:
"Results for the fourth quarter of 2024 include $3.0 million in charge-offs. The main components of these charge offs are discussed in this earnings release as well as in our Investor Presentation. As of January 22, 2025, however, the Company has executed purchase and sale agreements on two nonperforming assets, totaling $35.4 million. These sales will reduce the reported nonperforming assets as a percentage of total assets of 1.88% reported as of December 31, 2024 by 108 basis points upon final disposition early in the first quarter with no further impact to the Company’s financial results. We look forward to further reductions in nonperforming assets in the quarters ahead. We have also made significant progress in reducing CRE exposure. The Company’s CRE concentration as a percentage of total risked based capital stood at 375% at year-end 2024 versus 397% at year-end 2023, and 425% at year-end 2022.
Regarding our liability sensitive balance sheet, $1.3 billion of time deposits are due to re-price at lower rates in the next 12 months. These deposits alone will contribute approximately $4.4 million on an annualized basis to net interest income. This repricing assumes no further actions by the Fed. With approximately $500 million in loans maturing in the year ahead, net interest margin could further benefit by an additional 15-20 basis points on an annualized basis.
After investing in robust infrastructure and risk management in 2024, the Company’s new SBA lending division has begun to originate loans in the first quarter of 2025. Given stable market conditions, we expect material growth in noninterest income attributable to future gains on sale of the guaranteed portions of the new SBA loans.
Given the above, we are guiding to $93-$95 million in net interest income and $7-$8 million in noninterest income, as well as a $56-$57 million spend in noninterest expense for the full year 2025.
On behalf of the Company’s Board of Directors, I’d also like to congratulate Matt McNeill on his promotion to President of Bankwell Financial Group and its wholly owned subsidiary, Bankwell Bank. We salute Matt for a job well done."
Key Points for Fourth Quarter and Bankwell’s Outlook
Brokered Deposits Decrease, Liability Sensitive Balance Sheet.
- Brokered deposits declined $78.4 million in the fourth quarter of 2024 and have decreased by $246.8 million since December 31, 2023.
- Reported net interest margin was 2.60%, down 12 basis points from the third quarter of 2024, primarily due to lower loan fees and elevated cash balances. Total deposit costs of 3.72% declined 9 basis points from the third quarter of 2024.
- With $1.3 billion of time deposits maturing in the next 12 months at a weighted average rate of 4.79%, the Company anticipates an annualized reduction in funding costs of $4.4 million, given current market pricing. This translates into approximately $0.44 of incremental EPS, or approximately 14 basis points of increase to the net interest margin, assuming no further changes to Fed Funds and stable asset yields.
- 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.
Credit Trends Stable, Material Improvement Expected in Early 2025.
- The Company disposed of a previously disclosed non-performing C&I loan (pediatric dental practice), recognizing a $0.7 million charge off and reducing non-performing loan balances by $1.7 million during the quarter.
- The Company took possession of the collateral securing a non-performing construction loan, creating a $8.3 million Other Real Estate Owned (“OREO”) asset. The Company recorded a $1.2 million charge off and incurred $0.7 million in OREO expenses during the quarter. Subsequent to December 31, 2024, the Company executed an agreement to sell the property at book value.
- During the third quarter of 2024, a $27.1 million multifamily commercial real estate loan was put on nonperforming status. Subsequent to December 31, 2024, the Company executed a signed purchase agreement for the sale of this loan at par value. As of December 31, 2024, this loan comprised 83 basis points of the 1.88% nonperforming assets as a percentage of total assets.
Ongoing Investments with Continued Focus on Efficiency.
- The Company launched an SBA Lending division, which began originating loans in December of 2024.
- The Company continues to grow Bankwell Direct, our digital deposit channel. Bankwell Direct balances have increased to $136 million as of December 31, 2024.
- The Company continues to operate efficiently with a non-interest expense to average asset ratio of 1.63% for the quarter ended December 31, 2024.
Fourth Quarter 2024 Financial Highlights and Key Performance Indicators (KPIs):
December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| |||||||||||||||
Return on average assets(1)(6) | 0.31 | % | 0.24 | % | 0.14 | % | 0.47 | % | 1.03 | % | |||||||||
Pre-tax, pre-provision net revenue return on average assets(1)(6) | 0.98 | % | 1.13 | % | 1.22 | % | 1.10 | % | 1.27 | % | |||||||||
Return on average shareholders' equity(1)(6) | 3.68 | % | 2.83 | % | 1.65 | % | 5.59 | % | 12.82 | % | |||||||||
Net interest margin(1)(6) | 2.60 | % | 2.72 | % | 2.75 | % | 2.71 | % | 2.81 | % | |||||||||
Efficiency Ratio(1)(3) | 59.2 | % | 58.8 | % | 55.9 | % | 60.3 | % | 55.0 | % | |||||||||
Noninterest expense to average assets(1)(6) | 1.63 | % | 1.62 | % | 1.55 | % | 1.66 | % | 1.56 | % | |||||||||
Net loan charge-offs as a percentage of average loans(1)(6) | 0.11 | % | 0.56 | % | 0.01 | % | 0.11 | % | 0.01 | % | |||||||||
Dividend payout(1)(4) | 62.50 | % | 82.30 | % | 142.86 | % | 41.67 | % | 18.35 | % | |||||||||
Fully diluted tangible book value per common share(1)(2) | $ | 34.03 | $ | 33.76 | $ | 33.61 | $ | 33.57 | $ | 33.39 | |||||||||
Total capital to risk-weighted assets(1)(5) | 12.67 | % | 12.83 | % | 12.98 | % | 12.63 | % | 12.32 | % | |||||||||
Total common equity tier 1 capital to risk-weighted assets(1)(5) | 11.61 | % | 11.80 | % | 11.73 | % | 11.60 | % | 11.30 | % | |||||||||
Tier I Capital to Average Assets(1)(5) | 10.07 | % | 10.24 | % | 10.17 | % | 10.09 | % | 9.81 | % | |||||||||
Tangible common equity to tangible assets(1)(2) | 8.19 | % | 8.40 | % | 8.42 | % | 8.42 | % | 8.19 | % | |||||||||
Earnings per common share - diluted | $ | 0.32 | $ | 0.24 | $ | 0.14 | $ | 0.48 | $ | 1.09 | |||||||||
Common shares issued and outstanding | 7,859,873 | 7,858,573 | 7,866,499 | 7,908,180 | 7,882,616 | ||||||||||||||
(1) | Non-GAAP Financial Measure, refer to the "Non-GAAP Financial Measures" section of this document for additional detail. | |
(2) | Refer to the "Reconciliation of GAAP to Non-GAAP Measures" section of this document for additional detail. | |
(3) | 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. | |
(4) | The dividend payout ratio is calculated by dividing dividends per share by earnings per share. | |
(5) | Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report. | |
(6) | Return on average assets is calculated by dividing annualized net income by average assets. Pre-tax, pre-provision net revenue return on average is calculated by dividing PPNR (using the "Pre-Tax, Pre-Provision Net Revenue (PPNR)) section of this document by average assets. Return on average shareholders' equity is calculated by dividing annualized net income by average shareholders' equity. Net interest margin is calculated by dividing average annualized net interest income by average total earning assets. Noninterest expense to average assets is calculated by dividing annualized noninterest expense by average total assets. Net loan charge-offs as a percentage of average loans is calculated by dividing net loan (charge offs) recoveries by average total loans. |
Pre-Tax, Pre-Provision Net Revenue(1) ("PPNR")
PPNR for the quarter and year ended December 31, 2024, were $7.9 million and $35.4 million, respectively, a decrease of 24.6% and 27.7%, respectively, from the $10.5 million and $48.9 million recognized for the quarter and year ended December 31, 2023, respectively.
For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
(Dollars in thousands) | December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| December 31,
| December 31,
| ||||||||||||||||||||
Net interest income | $ | 20,199 | $ | 20,717 | $ | 21,219 | $ | 21,147 | $ | 22,245 | $ | 83,282 | $ | 94,468 | |||||||||||||
Total noninterest income | 964 | 1,156 | 683 | 915 | 1,129 | 3,718 | 4,842 | ||||||||||||||||||||
Total revenues | 21,163 | 21,873 | 21,902 | 22,062 | 23,374 | 87,000 | 99,310 | ||||||||||||||||||||
Total noninterest expense | 13,243 | 12,865 | 12,245 | 13,297 | 12,864 | 51,650 | 50,401 | ||||||||||||||||||||
PPNR | $ | 7,920 | $ | 9,008 | $ | 9,657 | $ | 8,765 | $ | 10,510 | $ | 35,350 | $ | 48,909 | |||||||||||||
(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 December 31, 2024 were $21.2 million, versus $23.4 million for the quarter ended December 31, 2023. The decrease in revenues for the quarter ended December 31, 2024 was mainly attributable to lower fees on loans. Revenues for the year ended December 31, 2024 were $87.0 million, versus $99.3 million for the year ended December 31, 2023. The decrease in revenues for the year ended December 31, 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 December 31, 2024 and December 31, 2023 was 2.60% and 2.81%, respectively. The decrease in the net interest margin was due to an increase in funding costs.
- Total non-interest expense of $13.2 million increased 2.9% compared to the third quarter which was mainly driven by an increase in OREO expenses.
Allowance for Credit Losses - Loans ("ACL-Loans")
The ACL-Loans was $29.0 million as of December 31, 2024 compared to $27.9 million as of December 31, 2023. The ACL-Loans as a percentage of total loans was 1.07% as of December 31, 2024 compared to 1.03% as of December 31, 2023.
Provision for credit losses was $4.5 million for the quarter ended December 31, 2024. The increase in the provision for credit losses for the quarter was primarily due to charge-offs of $3.0 million, including a $1.2 million charge off taken on a Construction loan transferred to OREO during the quarter.
Total nonperforming loans decreased $12.3 million to $53.3 million as of December 31, 2024 when compared to the previous quarter. The decrease was primarily due to an $8.8 million construction loan transferred to OREO, the disposition of a C&I loan (pediatric dental practice) of $1.7 million, and a charge off to a commercial real estate loan of $1.1 million in the fourth quarter of 2024. Nonperforming assets as a percentage of total assets increased to 1.88% at December 31, 2024 from 1.53% at December 31, 2023.
BANKWELL FINANCIAL GROUP, INC. ASSET QUALITY (unaudited) (Dollars in thousands) | |||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||
December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| |||||||||||||||
ACL-Loans: | |||||||||||||||||||
Balance at beginning of period | $ | 27,752 | $ | 36,083 | $ | 27,991 | $ | 27,946 | $ | 29,284 | |||||||||
Charge-offs: | |||||||||||||||||||
Residential real estate | — | — | (9 | ) | (132 | ) | — | ||||||||||||
Commercial real estate | (1,100 | ) | (8,184 | ) | (522 | ) | (3,306 | ) | (824 | ) | |||||||||
Commercial business | (703 | ) | (7,010 | ) | — | (197 | ) | — | |||||||||||
Consumer | (5 | ) | (17 | ) | (12 | ) | (49 | ) | (15 | ) | |||||||||
Construction | (1,155 | ) | (616 | ) | — | — | — | ||||||||||||
Total charge-offs | (2,963 | ) | (15,827 | ) | (543 | ) | (3,684 | ) | (839 | ) | |||||||||
Recoveries: | |||||||||||||||||||
Residential real estate | — | — | 141 | — | — | ||||||||||||||
Commercial real estate | — | 1,013 | 113 | — | — | ||||||||||||||
Commercial business | 4 | (34 | ) | — | 27 | 464 | |||||||||||||
Consumer | 5 | 1 | 13 | 4 | 3 | ||||||||||||||
Construction | — | — | — | — | — | ||||||||||||||
Total recoveries | 9 | 980 | 267 | 31 | 467 | ||||||||||||||
Net loan (charge-offs) recoveries | (2,954 | ) | (14,847 | ) | (276 | ) | (3,653 | ) | (372 | ) | |||||||||
Provision (credit) for credit losses - loans | 4,209 | 6,516 | 8,368 | 3,698 | (966 | ) | |||||||||||||
Balance at end of period | $ | 29,007 | $ | 27,752 | $ | 36,083 | $ | 27,991 | $ | 27,946 | |||||||||
As of | |||||||||||||||||||
December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| |||||||||||||||
Asset quality: | |||||||||||||||||||
Nonaccrual loans | |||||||||||||||||||
Residential real estate | $ | 791 | $ | 1,316 | $ | 1,339 | $ | 1,237 | $ | 1,386 | |||||||||
Commercial real estate | 44,814 | 46,360 | 28,088 | 19,083 | 23,009 | ||||||||||||||
Commercial business | 7,672 | 9,101 | 17,396 | 16,841 | 15,430 | ||||||||||||||
Construction | — | 8,766 | 9,382 | 9,382 | 9,382 | ||||||||||||||
Consumer | — | — | — | — | — | ||||||||||||||
Total nonaccrual loans | 53,277 | 65,543 | 56,205 | 46,543 | 49,207 | ||||||||||||||
Other real estate owned | 8,299 | — | — | — | — | ||||||||||||||
Total nonperforming assets | $ | 61,576 | $ | 65,543 | $ | 56,205 | $ | 46,543 | $ | 49,207 | |||||||||
Nonperforming loans as a % of total loans | 1.97 | % | 2.42 | % | 2.12 | % | 1.74 | % | 1.81 | % | |||||||||
Nonperforming assets as a % of total assets | 1.88 | % | 2.01 | % | 1.79 | % | 1.48 | % | 1.53 | % | |||||||||
ACL-loans as a % of total loans | 1.07 | % | 1.07 | % | 1.36 | % | 1.04 | % | 1.03 | % | |||||||||
ACL-loans as a % of nonperforming loans | 54.44 | % | 44.26 | % | 64.20 | % | 60.14 | % | 56.79 | % | |||||||||
Total past due loans to total loans | 1.63 | % | 2.40 | % | 0.84 | % | 1.44 | % | 0.78 | % | |||||||||
Financial Condition & Capital
Assets totaled $3.3 billion at December 31, 2024, an increase of $53.1 million, or 1.7% compared to December 31, 2023. Gross loans totaled $2.7 billion at December 31, 2024, a decrease of $12.7 million, or 0.5% compared to December 31, 2023. Deposits totaled $2.8 billion at December 31, 2024, an increase of $50.8 million, or 1.9% compared to December 31, 2023. Brokered deposits have decreased $246.8 million or 25.9%, when compared to December 31, 2023.
Period End Loan Composition | December 31,
| September 30,
| December 31,
| Current QTD % Change | YTD % Change | ||||||||||||
Residential Real Estate | $ | 42,766 | $ | 45,553 | $ | 50,931 | (6.1 | )% | (16.0 | )% | |||||||
Commercial Real Estate(1) | 1,899,134 | 1,887,942 | 1,947,648 | 0.6 | (2.5 | ) | |||||||||||
Construction | 173,555 | 160,292 | 183,414 | 8.3 | (5.4 | ) | |||||||||||
Total Real Estate Loans | 2,115,455 | 2,093,787 | 2,181,993 | 1.0 | (3.0 | ) | |||||||||||
Commercial Business | 515,125 | 490,292 | 500,569 | 5.1 | 2.9 | ||||||||||||
Consumer | 75,308 | 39,126 | 36,045 | 92.5 | 108.9 | ||||||||||||
Total Loans | $ | 2,705,888 | $ | 2,623,205 | $ | 2,718,607 | 3.2 | % | (0.5 | )% | |||||||
(1) | Includes owner occupied commercial real estate of $0.7 billion at December 31, 2024, September 30, 2024, and December 31, 2023, respectively. |
| Period End Deposit Composition | December 31,
| September 30,
| December 31,
| Current QTD % Change | YTD % Change | ||||||||||||
Noninterest bearing demand | $ | 321,875 | $ | 295,552 | $ | 346,172 | 8.9 | % | (7.0 | )% | |||||||
NOW | 105,090 | 76,413 | 90,829 | 37.5 | 15.7 | ||||||||||||
Money Market | 899,413 | 840,234 | 887,352 | 7.0 | 1.4 | ||||||||||||
Savings | 90,220 | 87,212 | 97,331 | 3.4 | (7.3 | ) | |||||||||||
Time | 1,370,972 | 1,388,760 | 1,315,073 | (1.3 | ) | 4.3 | |||||||||||
Total Deposits | $ | 2,787,570 | $ | 2,688,171 | $ | 2,736,757 | 3.7 | % | 1.9 | % | |||||||
Shareholders’ equity totaled $270.1 million as of December 31, 2024, an increase of $4.3 million compared to December 31, 2023, primarily a result of net income of $9.3 million for the year ended December 31, 2024. The increase was partially offset by dividends paid of $6.3 million.
The Company's capital position was generally stable during the fourth quarter, with total risk-based capital, common-equity tier 1 capital and leverage ratios at 12.67%, 11.61%, and 10.07%, respectively, at December 31, 2024. The Company repurchased 85,990 shares at a weighted average price of $24.82 per share for the year ended December 31, 2024.
We recommend reading this earnings release in conjunction with the Fourth Quarter 2024 Investor Presentation, located at https://investor.mybankwell.com/events-and-presentations/ and included as an exhibit to our January 22, 2025 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 January 23, 2025, at 10:00 a.m. E.T. The call will be accessible by telephone and webcast using https://investor.mybankwell.com/events-and-presentations/. 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"), a full-service commercial bank headquartered in New Canaan, CT. Bankwell offers its customers unmatched accessibility, expertise, and responsiveness through a range of commercial financing products including working capital lines of credit, SBA loans, acquisition loans, and commercial mortgages as well as treasury management and deposit services.
For more information about this press release, interested parties may contact Christopher R. Gruseke, Chief Executive Officer or Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer of Bankwell Financial Group at (203) 652-0166 or at [email protected].
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, operating revenue, efficiency ratio, noninterest expense to average assets, 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) | |||||||||||||||||||
December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| |||||||||||||||
ASSETS | |||||||||||||||||||
Cash and due from banks | $ | 293,552 | $ | 275,829 | $ | 234,277 | $ | 245,043 | $ | 267,521 | |||||||||
Federal funds sold | 13,972 | 15,508 | 17,103 | 2,584 | 1,636 | ||||||||||||||
Cash and cash equivalents | 307,524 | 291,337 | 251,380 | 247,627 | 269,157 | ||||||||||||||
Investment securities | |||||||||||||||||||
Marketable equity securities, at fair value | 2,118 | 2,148 | 2,079 | 2,069 | 2,070 | ||||||||||||||
Available for sale investment securities, at fair value | 107,428 | 108,866 | 107,635 | 108,417 | 109,736 | ||||||||||||||
Held to maturity investment securities, at amortized cost | 36,553 | 34,886 | 28,286 | 15,739 | 15,817 | ||||||||||||||
Total investment securities | 146,099 | 145,900 | 138,000 | 126,225 | 127,623 | ||||||||||||||
Loans receivable (net of ACL-Loans of $29,007, $27,752, $36,083, $27,991, and $27,946 at December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024, and December 31, 2023, respectively) | 2,672,959 | 2,591,551 | 2,616,691 | 2,646,686 | 2,685,301 | ||||||||||||||
Accrued interest receivable | 14,535 | 14,714 | 14,675 | 15,104 | 14,863 | ||||||||||||||
Federal Home Loan Bank stock, at cost | 5,655 | 5,655 | 5,655 | 5,655 | 5,696 | ||||||||||||||
Premises and equipment, net | 23,856 | 24,780 | 25,599 | 26,161 | 27,018 | ||||||||||||||
Bank-owned life insurance | 52,791 | 52,443 | 52,097 | 51,764 | 51,435 | ||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||
Deferred income taxes, net | 9,742 | 9,300 | 11,345 | 9,137 | 9,383 | ||||||||||||||
Other real estate owned | 8,299 | — | — | — | — | ||||||||||||||
Other assets | 24,571 | 22,811 | 23,623 | 24,326 | 22,417 | ||||||||||||||
Total assets | $ | 3,268,620 | $ | 3,161,080 | $ | 3,141,654 | $ | 3,155,274 | $ | 3,215,482 | |||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||
Liabilities | |||||||||||||||||||
Deposits | |||||||||||||||||||
Noninterest bearing deposits | $ | 321,875 | $ | 295,552 | $ | 328,475 | $ | 376,248 | $ | 346,172 | |||||||||
Interest bearing deposits | 2,465,695 | 2,392,619 | 2,333,900 | 2,297,274 | 2,390,585 | ||||||||||||||
Total deposits | 2,787,570 | 2,688,171 | 2,662,375 | 2,673,522 | 2,736,757 | ||||||||||||||
Advances from the Federal Home Loan Bank | 90,000 | 90,000 | 90,000 | 90,000 | 90,000 | ||||||||||||||
Subordinated debentures | 69,451 | 69,389 | 69,328 | 69,266 | 69,205 | ||||||||||||||
Accrued expenses and other liabilities | 51,536 | 45,594 | 52,975 | 54,454 | 53,768 | ||||||||||||||
Total liabilities | 2,998,557 | 2,893,154 | 2,874,678 | 2,887,242 | 2,949,730 | ||||||||||||||
Shareholders’ equity | |||||||||||||||||||
Common stock, no par value | 119,108 | 118,429 | 118,037 | 118,401 | 118,247 | ||||||||||||||
Retained earnings | 152,199 | 151,257 | 150,895 | 151,350 | 149,169 | ||||||||||||||
Accumulated other comprehensive (loss) | (1,244 | ) | (1,760 | ) | (1,956 | ) | (1,719 | ) | (1,664 | ) | |||||||||
Total shareholders’ equity | 270,063 | 267,926 | 266,976 | 268,032 | 265,752 | ||||||||||||||
Total liabilities and shareholders’ equity | $ | 3,268,620 | $ | 3,161,080 | $ | 3,141,654 | $ | 3,155,274 | $ | 3,215,482 | |||||||||
BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) (Dollars in thousands, except share data) | |||||||||||||||||||||||||||
For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||
December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| December 31,
| December 31,
| |||||||||||||||||||||
Interest and dividend income | |||||||||||||||||||||||||||
Interest and fees on loans | $ | 42,851 | $ | 43,596 | $ | 43,060 | $ | 43,325 | $ | 44,122 | $ | 172,832 | $ | 170,181 | |||||||||||||
Interest and dividends on securities | 1,482 | 1,390 | 1,190 | 1,130 | 1,108 | 5,192 | 4,126 | ||||||||||||||||||||
Interest on cash and cash equivalents | 3,510 | 3,205 | 3,429 | 3,826 | 4,164 | 13,970 | 14,147 | ||||||||||||||||||||
Total interest and dividend income | 47,843 | 48,191 | 47,679 | 48,281 | 49,394 | 191,994 | 188,454 | ||||||||||||||||||||
Interest expense | |||||||||||||||||||||||||||
Interest expense on deposits | 25,640 | 25,579 | 24,677 | 25,362 | 25,307 | 101,258 | 86,906 | ||||||||||||||||||||
Interest expense on borrowings | 2,004 | 1,895 | 1,783 | 1,772 | 1,842 | 7,454 | 7,080 | ||||||||||||||||||||
Total interest expense | 27,644 | 27,474 | 26,460 | 27,134 | 27,149 | 108,712 | 93,986 | ||||||||||||||||||||
Net interest income | 20,199 | 20,717 | 21,219 | 21,147 | 22,245 | 83,282 | 94,468 | ||||||||||||||||||||
Provision (credit) for credit losses | 4,458 | 6,296 | 8,183 | 3,683 | (960 | ) | 22,620 | 866 | |||||||||||||||||||
Net interest income after provision (credit) for credit losses | 15,741 | 14,421 | 13,036 | 17,464 | 23,205 | 60,662 | 93,602 | ||||||||||||||||||||
Noninterest income | |||||||||||||||||||||||||||
Bank owned life insurance | 348 | 346 | 333 | 329 | 316 | 1,356 | 1,192 | ||||||||||||||||||||
Service charges and fees | 589 | 575 | 495 | 304 | 688 | 1,963 | 1,629 | ||||||||||||||||||||
Gains and fees from sales of loans | 24 | 133 | 45 | 321 | 79 | 523 | 1,972 | ||||||||||||||||||||
Other | 3 | 102 | (190 | ) | (39 | ) | 46 | (124 | ) | 49 | |||||||||||||||||
Total noninterest income | 964 | 1,156 | 683 | 915 | 1,129 | 3,718 | 4,842 | ||||||||||||||||||||
Noninterest expense | |||||||||||||||||||||||||||
Salaries and employee benefits | 5,656 | 6,223 | 6,176 | 6,291 | 6,088 | 24,346 | 24,595 | ||||||||||||||||||||
Occupancy and equipment | 2,600 | 2,334 | 2,238 | 2,322 | 2,231 | 9,494 | 8,665 | ||||||||||||||||||||
Professional services | 1,286 | 1,142 | 989 | 1,065 | 1,033 | 4,482 | 3,538 | ||||||||||||||||||||
Data processing | 905 | 851 | 755 | 740 | 747 | 3,251 | 2,888 | ||||||||||||||||||||
Director fees | 342 | 292 | 306 | 900 | 605 | 1,840 | 1,812 | ||||||||||||||||||||
FDIC insurance | 862 | 853 | 705 | 930 | 1,026 | 3,350 | 4,164 | ||||||||||||||||||||
Marketing | 175 | 73 | 90 | 114 | 139 | 452 | 651 | ||||||||||||||||||||
Other | 1,417 | 1,097 | 986 | 935 | 995 | 4,435 | 4,088 | ||||||||||||||||||||
Total noninterest expense | 13,243 | 12,865 | 12,245 | 13,297 | 12,864 | 51,650 | 50,401 | ||||||||||||||||||||
Income before income tax expense | 3,462 | 2,712 | 1,474 | 5,082 | 11,470 | 12,730 | 48,043 | ||||||||||||||||||||
Income tax expense | 955 | 786 | 356 | 1,319 | 2,946 | 3,416 | 11,380 | ||||||||||||||||||||
Net income | $ | 2,507 | $ | 1,926 | $ | 1,118 | $ | 3,763 | $ | 8,524 | $ | 9,314 | $ | 36,663 | |||||||||||||
Earnings Per Common Share: | |||||||||||||||||||||||||||
Basic | $ | 0.32 | $ | 0.24 | $ | 0.14 | $ | 0.48 | $ | 1.09 | $ | 1.18 | $ | 4.71 | |||||||||||||
Diluted | $ | 0.32 | $ | 0.24 | $ | 0.14 | $ | 0.48 | $ | 1.09 | $ | 1.17 | $ | 4.67 | |||||||||||||
Weighted Average Common Shares Outstanding: | |||||||||||||||||||||||||||
Basic | 7,713,970 | 7,715,040 | 7,747,675 | 7,663,521 | 7,603,938 | 7,710,076 | 7,587,768 | ||||||||||||||||||||
Diluted | 7,727,412 | 7,720,895 | 7,723,888 | 7,687,679 | 7,650,451 | 7,737,952 | 7,647,411 | ||||||||||||||||||||
Dividends per common share | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.80 | $ | 0.80 | |||||||||||||
BANKWELL FINANCIAL GROUP, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) (Dollars in thousands, except share data) | |||||||||||||||||||
As of | |||||||||||||||||||
Computation of Tangible Common Equity to Tangible Assets | December 31,
| September 30,
| June 30,
| March 31,
| December 31,
| ||||||||||||||
Total Equity | $ | 270,063 | $ | 267,926 | $ | 266,976 | $ | 268,032 | $ | 265,752 | |||||||||
Less: | |||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||
Other intangibles | — | — | — | — | — | ||||||||||||||
Tangible Common Equity | $ | 267,474 | $ | 265,337 | $ | 264,387 | $ | 265,443 | $ | 263,163 | |||||||||
Total Assets | $ | 3,268,620 | $ | 3,161,080 | $ | 3,141,654 | $ | 3,155,274 | $ | 3,215,482 | |||||||||
Less: | |||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||
Other intangibles | — | — | — | — | — | ||||||||||||||
Tangible Assets | $ | 3,266,031 | $ | 3,158,491 | $ | 3,139,065 | $ | 3,152,685 | $ | 3,212,893 | |||||||||
Tangible Common Equity to Tangible Assets | 8.19 | % | 8.40 | % | 8.42 | % | 8.42 | % | 8.19 | % | |||||||||
As of | |||||||||||||||||||
Computation of Fully Diluted Tangible Book Value per Common Share | December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | ||||||||||||||
Total shareholders' equity | $ | 270,063 | $ | 267,926 | $ | 266,976 | $ | 268,032 | $ | 265,752 | |||||||||
Less: | |||||||||||||||||||
Preferred stock | — | — | — | — | — | ||||||||||||||
Common shareholders' equity | $ | 270,063 | $ | 267,926 | $ | 266,976 | $ | 268,032 | $ | 265,752 | |||||||||
Less: | |||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||
Other intangibles | — | — | — | — | — | ||||||||||||||
Tangible common shareholders' equity | $ | 267,474 | $ | 265,337 | $ | 264,387 | $ | 265,443 | $ | 263,163 | |||||||||
Common shares issued and outstanding | 7,859,873 | 7,858,573 | 7,866,499 | 7,908,180 | 7,882,616 | ||||||||||||||
Fully Diluted Tangible Book Value per Common Share | $ | 34.03 | $ | 33.76 | $ | 33.61 | $ | 33.57 | $ | 33.39 | |||||||||
BANKWELL FINANCIAL GROUP, INC. EARNINGS PER SHARE ("EPS") (unaudited) (Dollars in thousands, except share data) | |||||||||||||||
For the Quarter Ended
| For the Year Ended
| ||||||||||||||
2024 | 2023 | 2024 | 2023 | ||||||||||||
(In thousands, except per share data) | |||||||||||||||
Net income | $ | 2,507 | $ | 8,524 | $ | 9,314 | $ | 36,663 | |||||||
Dividends to participating securities(1) | (39 | ) | (40 | ) | (156 | ) | (164 | ) | |||||||
Undistributed earnings allocated to participating securities(1) | (23 | ) | (181 | ) | (76 | ) | (794 | ) | |||||||
Net income for earnings per share calculation | 2,445 | 8,303 | 9,082 | 35,705 | |||||||||||
Weighted average shares outstanding, basic | 7,714 | 7,604 | 7,710 | 7,588 | |||||||||||
Effect of dilutive equity-based awards(2) | 13 | 46 | 28 | 60 | |||||||||||
Weighted average shares outstanding, diluted | 7,727 | 7,650 | 7,738 | 7,648 | |||||||||||
Net earnings per common share: | |||||||||||||||
Basic earnings per common share | $ | 0.32 | $ | 1.09 | $ | 1.18 | $ | 4.71 | |||||||
Diluted earnings per common share | $ | 0.32 | $ | 1.09 | $ | 1.17 | $ | 4.67 | |||||||
(1) | Represents dividends paid and undistributed earnings allocated to unvested stock-based awards that contain non-forfeitable rights to dividends. | |
(2) | Represents the effect of the assumed exercise of stock options and the vesting of restricted shares, as applicable, utilizing the treasury stock method. |
BANKWELL FINANCIAL GROUP, INC. NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited) (Dollars in thousands) | |||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||
December 31, 2024 | December 31, 2023 | ||||||||||||||||||||
Average Balance | Interest | Yield/ Rate (4) | Average Balance | Interest | Yield/ Rate (4) | ||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and Fed funds sold | $ | 313,777 | $ | 3,510 | 4.45 | % | $ | 314,950 | $ | 4,164 | 5.25 | % | |||||||||
Securities(1) | 151,300 | 1,506 | 3.98 | 133,440 | 1,041 | 3.12 | |||||||||||||||
Loans: | |||||||||||||||||||||
Commercial real estate | 1,896,551 | 28,222 | 5.82 | 1,933,736 | 28,546 | 5.78 | |||||||||||||||
Residential real estate | 44,329 | 753 | 6.79 | 52,026 | 718 | 5.52 | |||||||||||||||
Construction | 171,244 | 3,281 | 7.50 | 199,541 | 3,793 | 7.44 | |||||||||||||||
Commercial business | 505,655 | 9,911 | 7.67 | 496,476 | 9,944 | 7.84 | |||||||||||||||
Consumer | 43,315 | 684 | 6.29 | 43,639 | 1,120 | 10.18 | |||||||||||||||
Total loans | 2,661,094 | 42,851 | 6.30 | 2,725,418 | 44,121 | 6.33 | |||||||||||||||
Federal Home Loan Bank stock | 5,655 | 119 | 8.36 | 5,696 | 119 | 8.31 | |||||||||||||||
Total earning assets | 3,131,826 | $ | 47,986 | 6.00 | % | 3,179,504 | $ | 49,445 | 6.08 | % | |||||||||||
Other assets | 94,781 | 94,459 | |||||||||||||||||||
Total assets | $ | 3,226,607 | $ | 3,273,963 | |||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
NOW | $ | 90,497 | $ | 42 | 0.18 | % | $ | 95,603 | $ | 42 | 0.17 | % | |||||||||
Money market | 855,522 | 8,472 | 3.94 | 893,043 | 9,369 | 4.16 | |||||||||||||||
Savings | 88,956 | 692 | 3.10 | 99,242 | 759 | 3.04 | |||||||||||||||
Time | 1,385,264 | 16,434 | 4.72 | 1,341,871 | 15,136 | 4.48 | |||||||||||||||
Total interest bearing deposits | 2,420,239 | 25,640 | 4.21 | 2,429,759 | 25,306 | 4.13 | |||||||||||||||
Borrowed Money | 159,416 | 2,004 | 5.00 | 159,165 | 1,842 | 4.59 | |||||||||||||||
Total interest bearing liabilities | 2,579,655 | $ | 27,644 | 4.27 | % | 2,588,924 | $ | 27,148 | 4.16 | % | |||||||||||
Noninterest bearing deposits | 322,135 | 351,071 | |||||||||||||||||||
Other liabilities | 54,013 | 70,181 | |||||||||||||||||||
Total liabilities | 2,955,803 | 3,010,176 | |||||||||||||||||||
Shareholders' equity | 270,804 | 263,787 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,226,607 | $ | 3,273,963 | |||||||||||||||||
Net interest income(2) | $ | 20,342 | $ | 22,297 | |||||||||||||||||
Interest rate spread | 1.73 | % | 1.92 | % | |||||||||||||||||
Net interest margin(3) | 2.60 | % | 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 $143 thousand and $52 thousand for the quarters ended December 31, 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 Year Ended | |||||||||||||||||||||
December 31, 2024 | December 31, 2023 | ||||||||||||||||||||
Average Balance | Interest | Yield/ Rate (4) | Average Balance | Interest | Yield/ Rate (4) | ||||||||||||||||
Assets: | |||||||||||||||||||||
Cash and Fed funds sold | $ | 283,353 | $ | 13,970 | 4.93 | % | $ | 289,582 | $ | 14,147 | 4.89 | % | |||||||||
Securities(1) | 142,744 | 5,098 | 3.57 | 129,785 | 3,906 | 3.01 | |||||||||||||||
Loans: | |||||||||||||||||||||
Commercial real estate | 1,905,973 | 112,804 | 5.82 | 1,932,627 | 109,110 | 5.57 | |||||||||||||||
Residential real estate | 47,767 | 2,978 | 6.23 | 55,607 | 2,751 | 4.95 | |||||||||||||||
Construction | 162,180 | 12,197 | 7.40 | 195,773 | 14,268 | 7.19 | |||||||||||||||
Commercial business | 514,800 | 42,006 | 8.03 | 533,736 | 41,406 | 7.65 | |||||||||||||||
Consumer | 41,869 | 2,847 | 6.80 | 34,022 | 2,646 | 7.77 | |||||||||||||||
Total loans | 2,672,589 | 172,832 | 6.36 | 2,751,765 | 170,181 | 6.10 | |||||||||||||||
Federal Home Loan Bank stock | 5,666 | 477 | 8.41 | 5,570 | 427 | 7.68 | |||||||||||||||
Total earning assets | 3,104,352 | $ | 192,377 | 6.09 | % | 3,176,702 | $ | 188,661 | 5.86 | % | |||||||||||
Other assets | 92,886 | 79,571 | |||||||||||||||||||
Total assets | $ | 3,197,238 | $ | 3,256,273 | |||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||
Interest bearing liabilities: | |||||||||||||||||||||
NOW | $ | 96,091 | $ | 175 | 0.18 | % | $ | 97,203 | $ | 170 | 0.17 | % | |||||||||
Money market | 851,283 | 34,767 | 4.08 | 906,354 | 32,901 | 3.63 | |||||||||||||||
Savings | 90,587 | 2,785 | 3.07 | 113,260 | 3,163 | 2.79 | |||||||||||||||
Time | 1,335,680 | 63,531 | 4.76 | 1,303,915 | 50,672 | 3.89 | |||||||||||||||
Total interest bearing deposits | 2,373,641 | 101,258 | 4.27 | 2,420,732 | 86,906 | 3.59 | |||||||||||||||
Borrowed Money | 159,320 | 7,454 | 4.68 | 160,661 | 7,080 | 4.35 | |||||||||||||||
Total interest bearing liabilities | 2,532,961 | $ | 108,712 | 4.29 | % | 2,581,393 | $ | 93,986 | 3.64 | % | |||||||||||
Noninterest bearing deposits | 332,611 | 368,926 | |||||||||||||||||||
Other liabilities | 60,466 | 53,893 | |||||||||||||||||||
Total liabilities | 2,926,038 | 3,004,212 | |||||||||||||||||||
Shareholders' equity | 271,200 | 252,061 | |||||||||||||||||||
Total liabilities and shareholders' equity | $ | 3,197,238 | $ | 3,256,273 | |||||||||||||||||
Net interest income(2) | $ | 83,665 | $ | 94,675 | |||||||||||||||||
Interest rate spread | 1.80 | % | 2.22 | % | |||||||||||||||||
Net interest margin(3) | 2.70 | % | 2.98 | % | |||||||||||||||||
(1) | Average balances and yields for securities are based on amortized cost. | |
(2) | The adjustment for securities and loans taxable equivalency amounted to $383 thousand and $207 thousand for the year ended December 31, 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. |
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