Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net
income of $9.8 million, or $1.25 per share for the third quarter of
2023, versus $9.2 million, or $1.18 per share, for the same period
in 2022.
The Company's Board of Directors declared a $0.20 per share cash
dividend, payable November 20, 2023 to shareholders of record on
November 10, 2023.
We recommend reading this earnings release in conjunction
with the Third Quarter 2023 Investor Presentation, located at
http://investor.mybankwell.com/Presentations and included as an
exhibit to our October 25, 2023 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R.
Gruseke:
"We continue to generate quality returns for our shareholders in
a complex interest rate environment. Despite the compression of our
Net Interest Margin during the current tightening cycle, our team
has delivered a 1.16% Return on Average Assets and a 15.16% Return
on Average Equity thus far this year. Our commitment to rigorous
expense management lays a solid foundation for our financial
success. Non-Interest Expense as a percentage Average Assets stands
at 1.54% year-to date, putting Bankwell well ahead of industry
peers on this key metric. I applaud the efforts and hard work of
our team who enable the Company to perform at this level of
efficiency."
Third Quarter 2023 Highlights:
- Total gross loans were $2.8 billion, growing $94.7 million, or
3.5%, compared to December 31, 2022.
- Deposits were $2.8 billion, decreasing $32.2 million, or 1.1%,
compared to December 31, 2022.
- Brokered deposits decreased $75.3 million, when compared to
December 31, 2022.
- FDIC-insured deposits totaled $2.0 billion and represent 71.2%
of total deposits as of September 30, 2023.
- As of September 30, 2023, the Bank has $1.7 billion immediately
available liquidity, more than two times coverage of uninsured
deposits.
- Average yield on 2023 funded loans was 7.23% as of September
30, 2023.
- Return on average assets was 1.19% for the quarter ended
September 30, 2023.
- Return on average shareholders' equity was 15.19% for the
quarter ended September 30, 2023.
- The net interest margin was 2.85% for the quarter ended
September 30, 2023.
- Noninterest expense to average assets was 1.48% for the quarter
ended September 30, 2023.
- Investment securities totaled $115.8 million and represent 3.6%
of total assets, with HTM securities totaling $15.9 million, or
0.5% of total assets.
- Allowance for credit losses (ACL)-Loans to total loans was
1.06% as of September 30, 2023.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the
quarter ended September 30, 2023 were $23.5 million, versus $25.0
million for the quarter ended September 30, 2022. Revenues for the
nine months ended September 30, 2023 were $75.9 million, versus
$70.4 million for the nine months ended September 30, 2022. The
decrease in revenues for the quarter was primarily attributable to
an increase in interest expense partially offset by an increase in
interest on loans due to higher overall loan yields1. The increase
in revenues for the nine months ended 2023 was primarily
attributable to an increase in interest and fees on loans due to
loan growth and higher overall loan yields1 partially offset by an
increase in interest expense.
1 - The increase in overall loan yields
was 100 bps and 114 bps for the quarter and nine months ended
September 30, 2023, respectively.
Net income for the quarter ended September 30, 2023 was $9.8
million, versus $9.2 million for the quarter ended September 30,
2022. Net income for the nine months ended September 30, 2023 was
$28.1 million, versus $29.4 million for the nine months ended
September 30, 2022. The increase in net income for the quarter
ended 2023 was primarily due to the credit for credit losses,
partially offset by an increase in noninterest expense, and the
aforementioned decrease in revenues. The decrease in net income for
nine months ended 2023 was due to an increase in noninterest
expense partially offset by the aforementioned increase in
revenues.
Basic and diluted earnings per share were $1.25 and $1.25,
respectively, for the quarter ended September 30, 2023 compared to
basic and diluted earnings per share of $1.19 and $1.18,
respectively, for the quarter ended September 30, 2022. Basic and
diluted earnings per share were $3.61 and $3.58, respectively, for
the nine months ended September 30, 2023 compared to basic and
diluted earnings per share of $3.80 and $3.75, respectively, for
the nine months ended September 30, 2022.
The net interest margin (fully taxable equivalent basis) for the
quarters ended September 30, 2023 and September 30, 2022 was 2.85%
and 4.12%, respectively. The net interest margin (fully taxable
equivalent basis) for the nine months ended September 30, 2023 and
September 30, 2022 was 3.04% and 3.81%, respectively. The decrease
in the net interest margin was due to an increase in funding costs
partially offset by an increase in earning assets.
ACL-Loans
The ACL-Loans was $29.3 million as of September 30, 2023
compared to $30.7 million as of June 30, 2023, for a release of
$1.4 million for the quarter ended September 30, 2023. The
ACL-Loans as a percentage of total loans was 1.06% as of September
30, 2023 compared to 1.11% as of June 30, 2023. The reduction for
the quarter was primarily due to a revision in the CECL methodology
given further refinement of the Company's loan portfolio
segmentation.
The ACL-Loans was $29.3 million as of September 30, 2023
compared to $22.4 million as of December 31, 2022, an increase of
$6.9 million year to date, of which $5.1 million being the CECL
transition adjustment to retained earnings. The ACL-Loans as a
percentage of total loans was 1.06% as of September 30, 2023
compared to 0.84% as of December 31, 2022. The increase in the
ACL-Loans provision for credit losses was primarily driven by loan
growth and forward looking CECL macroeconomic factors.
Financial Condition
Assets totaled $3.2 billion at September 30, 2023, a decrease of
$2.7 million or 0.1% compared to December 31, 2022. Gross loans
totaled $2.8 billion at September 30, 2023, an increase of $94.7
million, or 3.5% compared to December 31, 2022. Deposits totaled
$2.8 billion at September 30, 2023, a decrease of $32.2 million, or
1.1% compared to December 31, 2022.
Capital
Shareholders’ equity totaled $257.9 million as of September 30,
2023, an increase of $19.4 million compared to December 31, 2022,
primarily a result of net income of $28.1 million for the nine
months ended September 30, 2023. The increase was partially offset
by the Day 1 CECL adoption of $4.9 million, dividends paid of $4.7
million, and a $1.3 million unfavorable impact to accumulated other
comprehensive income. The unfavorable impact to accumulated other
comprehensive income was driven by fair value marks on the
Company's available for sale investment securities portfolio of
$1.4 million partially offset by fair value marks related to hedge
positions involving interest rate swaps of $0.1 million. The
Company's interest rate swaps are used to hedge interest rate
risk.
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 Courtney E. Sacchetti,
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 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, 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,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
ASSETS
Cash and due from banks
$
256,973
$
207,345
$
249,812
$
344,925
$
212,175
Federal funds sold
1,122
54,706
27,370
10,754
10,947
Cash and cash equivalents
258,095
262,051
277,182
355,679
223,122
Investment securities
Marketable equity securities, at fair
value
1,975
2,017
2,028
1,988
1,973
Available for sale investment securities,
at fair value
97,907
99,938
103,171
103,663
95,095
Held to maturity investment securities, at
amortized cost
15,885
15,884
15,931
15,983
16,027
Total investment securities
115,767
117,839
121,130
121,634
113,095
Loans receivable (net of ACL-Loans of
$29,284, $30,694, $27,998, $22,431, and $18,167 at September 30,
2023, June 30, 2023, March 31, 2023, December 31, 2022, and
September 30, 2022, respectively)
2,735,242
2,736,607
2,724,514
2,646,384
2,263,432
Accrued interest receivable
15,648
14,208
14,261
13,070
9,552
Federal Home Loan Bank stock, at cost
5,696
5,696
5,234
5,216
5,039
Premises and equipment, net
26,899
27,658
27,619
27,199
27,510
Bank-owned life insurance
51,119
50,816
50,524
50,243
49,970
Goodwill
2,589
2,589
2,589
2,589
2,589
Deferred income taxes, net
9,395
10,014
8,692
7,422
5,952
Other assets
29,326
25,229
20,573
23,013
22,734
Total assets
$
3,249,776
$
3,252,707
$
3,252,318
$
3,252,449
$
2,722,995
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
345,433
$
367,635
$
377,667
$
404,559
$
380,365
Interest bearing deposits
2,423,193
2,421,228
2,420,641
2,396,259
1,906,337
Total deposits
2,768,626
2,788,863
2,798,308
2,800,818
2,286,702
Advances from the Federal Home Loan
Bank
90,000
90,000
90,000
90,000
90,000
Subordinated debentures
69,143
69,082
69,020
68,959
68,897
Accrued expenses and other liabilities
64,145
55,949
52,683
54,203
45,896
Total liabilities
2,991,914
3,003,894
3,010,011
3,013,980
2,491,495
Shareholders’ equity
Common stock, no par value
117,181
116,541
115,875
115,018
114,548
Retained earnings
142,205
133,988
127,566
123,640
117,152
Accumulated other comprehensive (loss)
(1,524
)
(1,716
)
(1,134
)
(189
)
(200
)
Total shareholders’ equity
257,862
248,813
242,307
238,469
231,500
Total liabilities and shareholders’
equity
$
3,249,776
$
3,252,707
$
3,252,318
$
3,252,449
$
2,722,995
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,
2023
June 30, 2023
March 31, 2023
December 31,
2022
September 30,
2022
September 30,
2023
September 30,
2022
Interest and dividend income
Interest and fees on loans
$
43,854
$
42,482
$
39,723
$
36,545
$
28,128
$
126,059
$
74,697
Interest and dividends on securities
1,016
1,002
1,000
898
811
3,018
2,305
Interest on cash and cash equivalents
3,393
3,022
3,568
2,150
747
9,983
1,350
Total interest and dividend income
48,263
46,506
44,291
39,593
29,686
139,060
78,352
Interest expense
Interest expense on deposits
23,789
20,777
17,033
11,083
4,092
61,599
8,281
Interest expense on borrowings
1,783
1,738
1,717
1,701
993
5,238
2,137
Total interest expense
25,572
22,515
18,750
12,784
5,085
66,837
10,418
Net interest income
22,691
23,991
25,541
26,809
24,601
72,223
67,934
(Credit) provision for credit
losses
(1,579
)
2,579
826
4,272
2,381
1,826
1,165
Net interest income after provision for
credit losses
24,270
21,412
24,715
22,537
22,220
70,397
66,769
Noninterest income
Bank owned life insurance
303
292
281
273
271
876
796
Service charges and fees
294
361
286
343
240
941
729
Gains and fees from sales of loans
237
725
931
12
(15
)
1,893
1,224
Other
(48
)
23
28
(100
)
(94
)
3
(237
)
Total noninterest income
786
1,401
1,526
528
402
3,713
2,512
Noninterest expense
Salaries and employee benefits
6,036
6,390
6,081
5,988
5,876
18,507
16,249
Occupancy and equipment
2,146
2,204
2,084
1,919
2,035
6,434
6,378
Professional services
491
692
1,322
912
994
2,505
2,975
Data processing
741
729
671
663
626
2,141
1,969
Director fees
362
453
392
378
325
1,207
1,016
FDIC insurance
1,026
1,050
1,062
898
255
3,138
740
Marketing
184
177
151
112
102
512
254
Other
1,219
946
928
1,601
818
3,093
2,311
Total noninterest expense
12,205
12,641
12,691
12,471
11,031
37,537
31,892
Income before income tax
expense
12,851
10,172
13,550
10,594
11,591
36,573
37,389
Income tax expense
3,074
2,189
3,171
2,573
2,417
8,434
7,981
Net income
$
9,777
$
7,983
$
10,379
$
8,021
$
9,174
$
28,139
$
29,408
Earnings Per Common Share:
Basic
$
1.25
$
1.02
$
1.34
$
1.04
$
1.19
$
3.61
$
3.80
Diluted
$
1.25
$
1.02
$
1.33
$
1.04
$
1.18
$
3.58
$
3.75
Weighted Average Common Shares
Outstanding:
Basic
7,598,230
7,593,417
7,554,689
7,507,540
7,553,718
7,582,272
7,582,175
Diluted
7,633,934
7,601,562
7,616,671
7,563,116
7,612,421
7,646,837
7,664,123
Dividends per common share
$
0.20
$
0.20
$
0.20
$
0.20
$
0.20
$
0.60
$
0.60
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
For the Quarter Ended
For the Nine Months
Ended
September 30,
2023
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
September 30,
2023
September 30,
2022
Performance ratios:
Return on average assets
1.19
%
0.99
%
1.30
%
1.07
%
1.47
%
1.16
%
1.59
%
Return on average shareholders' equity
15.19
%
12.91
%
17.48
%
13.38
%
15.73
%
15.16
%
17.94
%
Return on average tangible common
equity
15.35
%
13.05
%
17.67
%
13.52
%
15.91
%
15.32
%
18.16
%
Net interest margin
2.85
%
3.07
%
3.24
%
3.70
%
4.12
%
3.04
%
3.81
%
Efficiency ratio(1)
52.0
%
49.8
%
46.9
%
45.6
%
44.1
%
49.4
%
45.3
%
Net loan charge-offs as a % of average
loans
—
%
—
%
0.02
%
—
%
—
%
0.01
%
—
%
Dividend payout ratio(2)
16.00
%
19.61
%
15.04
%
19.23
%
16.95
%
16.76
%
16.00
%
(1)
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.
(2)
The dividend payout ratio is calculated by
dividing dividends per share by earnings per share.
As of
September 30,
2023
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
Capital ratios:
Total Common Equity Tier 1 Capital to
Risk-Weighted Assets(1)
10.82
%
10.34
%
10.17
%
10.28
%
11.42
%
Total Capital to Risk-Weighted
Assets(1)
11.86
%
11.41
%
11.16
%
11.07
%
12.16
%
Tier I Capital to Risk-Weighted
Assets(1)
10.82
%
10.34
%
10.17
%
10.28
%
11.42
%
Tier I Capital to Average Assets(1)
9.60
%
9.41
%
9.22
%
9.88
%
11.31
%
Tangible common equity to tangible
assets
7.86
%
7.58
%
7.38
%
7.26
%
8.41
%
Fully diluted tangible book value per
common share
$
32.55
$
31.45
$
30.56
$
30.51
$
29.68
(1)
Represents Bank ratios. Current period
capital ratios are preliminary subject to finalization of the FDIC
Call Report.
BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
For the Quarter Ended
September 30,
2023
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
ACL-Loans:
Balance at beginning of period
$
30,694
$
27,998
$
22,431
$
18,167
$
15,773
Day 1 CECL Adjustment on January 1,
2023
—
—
5,079
—
—
Beginning balance January 1, 2023
30,694
27,998
27,510
18,167
—
Charge-offs:
Commercial business
—
—
(440
)
—
—
Consumer
(31
)
(25
)
(12
)
(11
)
(8
)
Total charge-offs
(31
)
(25
)
(452
)
(11
)
(8
)
Recoveries:
Commercial real estate
—
—
—
—
—
Commercial business
35
32
—
—
21
Consumer
19
10
6
3
—
Total recoveries
54
42
6
3
21
Net loan recoveries (charge-offs)
23
17
(446
)
(8
)
13
(Credit) provision for credit losses -
loans
(1,433
)
2,679
934
4,272
2,381
Balance at end of period
$
29,284
$
30,694
$
27,998
$
22,431
$
18,167
As of
September 30,
2023
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
Asset quality:
Nonaccrual loans
Residential real estate
$
1,408
$
1,429
$
1,443
$
2,152
$
2,137
Commercial real estate
1,898
1,905
1,912
2,781
2,894
Commercial business
7,352
2,815
1,528
2,126
2,380
Construction
9,382
9,382
9,382
9,382
9,382
Consumer
7,917
—
—
—
—
Total nonaccrual loans
27,957
15,531
14,265
16,441
16,793
Other real estate owned
—
—
—
—
—
Total nonperforming assets
$
27,957
$
15,531
$
14,265
$
16,441
$
16,793
Nonperforming loans as a % of total
loans
1.01
%
0.56
%
0.52
%
0.61
%
0.73
%
Nonperforming assets as a % of total
assets
0.86
%
0.48
%
0.44
%
0.51
%
0.62
%
ACL-loans as a % of total loans
1.06
%
1.11
%
1.01
%
0.84
%
0.79
%
ACL-loans as a % of nonperforming
loans
104.75
%
197.63
%
196.27
%
136.43
%
108.18
%
Total past due loans to total loans
1.44
%
1.30
%
0.94
%
0.60
%
0.78
%
Total nonaccrual loans increased $11.5 million to $28.0 million
as of September 30, 2023 when compared to December 31, 2022.
Nonaccrual loans increased primarily due to three distinct
loans:
- One Consumer (insurance premium) loan of $7.9 million. As of
October 4, 2023, the loan balance has been reduced to $3.9 million.
The Bank holds collateral for the remaining balance, worth
approximately two times the outstanding amount.
- Two Commercial business loans totaling $5.5 million, of which
approximately 82% is guaranteed by the U.S. Government (SBA).
Nonperforming assets as a percentage of total assets increased
to 0.86% at September 30, 2023 from 0.51% at December 31, 2022. The
ACL-Loans at September 30, 2023 was $29.3 million, representing
1.06% of total loans.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO
(unaudited)
(Dollars in thousands)
Period End Loan Composition
September 30,
2023
June 30,
2023
December 31,
2022
Current QTD
% Change
YTD
% Change
Residential Real Estate
$
52,908
$
54,631
$
60,588
(3.2
)%
(12.7
)%
Commercial Real Estate(1)
1,955,992
1,930,972
1,921,252
1.3
1.8
Construction
199,972
219,615
155,198
(8.9
)
28.8
Total Real Estate Loans
2,208,872
2,205,218
2,137,038
0.2
3.4
Commercial Business
508,626
530,913
520,447
(4.2
)
(2.3
)
Consumer
52,612
37,475
17,963
40.4
192.9
Total Loans
$
2,770,110
$
2,773,606
$
2,675,448
(0.1
)%
3.5
%
(1) Includes owner occupied commercial
real estate.
Gross loans totaled $2.8 billion at September 30, 2023, an
increase of $94.7 million or 3.5% compared to December 31,
2022.
Period End Deposit Composition
September 30,
2023
June 30,
2023
December 31,
2022
Current QTD
% Change
YTD
% Change
Noninterest bearing demand
$
345,433
$
367,635
$
404,559
(6.0
)%
(14.6
)%
NOW
101,719
106,189
104,057
(4.2
)
(2.2
)
Money Market
879,978
879,017
913,868
0.1
(3.7
)
Savings
102,207
108,625
151,944
(5.9
)
(32.7
)
Time
1,339,289
1,327,397
1,226,390
0.9
9.2
Total Deposits
$
2,768,626
$
2,788,863
$
2,800,818
(0.7
)%
(1.1
)%
Total deposits were $2.8 billion at September 30, 2023, a
decrease of $32.2 million, or 1.1%, when compared to December 31,
2022. Brokered deposits have decreased $75.3 million, when compared
to December 31, 2022.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest expense
September 30,
2023
June 30,
2023
September 30,
2022
Sep 23 vs. June 23
% Change
Sep 23 vs. Sep 22
% Change
Salaries and employee benefits
$
6,036
$
6,390
$
5,876
(5.5
)%
2.7
%
Occupancy and equipment
2,146
2,204
2,035
(2.6
)
5.5
Professional services
491
692
994
(29.0
)
(50.6
)
Data processing
741
729
626
1.6
18.4
Director fees
362
453
325
(20.1
)
11.4
FDIC insurance
1,026
1,050
255
(2.3
)
302.4
Marketing
184
177
102
4.0
80.4
Other
1,219
946
818
28.9
49.0
Total noninterest expense
$
12,205
$
12,641
$
11,031
(3.4
)%
10.6
%
For the Nine Months
Ended
Noninterest expense
September 30, 2023
September 30, 2022
% Change
Salaries and employee benefits
$
18,507
$
16,249
13.9
%
Occupancy and equipment
6,434
6,378
0.9
%
Professional services
2,505
2,975
(15.8
)%
Data processing
2,141
1,969
8.7
%
Director fees
1,207
1,016
18.8
%
FDIC insurance
3,138
740
324.1
%
Marketing
512
254
101.6
%
Other
3,093
2,311
33.8
%
Total noninterest expense
$
37,537
$
31,892
17.7
%
Noninterest expense increased by $1.2 million to $12.2 million
for the quarter ended September 30, 2023 compared to the quarter
ended September 30, 2022. Noninterest expense increased by $5.6
million to $37.5 million for the nine months ended September 30,
2023 compared to the nine months ended September 30, 2022. The
increase in noninterest expense was primarily driven by an increase
in FDIC insurance expense and salaries and employee benefits
expense.
FDIC insurance expense totaled $1.0 million for the quarter
ended September 30, 2023, an increase of $0.8 million when compared
to the same period in 2022. FDIC insurance expense totaled $3.1
million for the nine months ended September 30, 2023, an increase
of $2.4 million when compared to the same period in 2022. The
increase in FDIC insurance expense is attributed to balance sheet
growth and composition, as well as an increase in FDIC insurance
rates.
Salaries and employee benefits expense totaled $18.5 million for
the nine months ended September 30, 2023, an increase of $2.3
million when compared to the same period in 2022. The increase in
salaries and employee benefits expense was driven by an increase in
average full time equivalent employees from 139 at September 30,
2023 compared to 131 for the same period in 2022. In addition,
salaries and employee benefits expense increased due to one-time
severance costs.
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,
2023
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
Total Equity
$
257,862
$
248,813
$
242,307
$
238,469
$
231,500
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
—
Tangible Common Equity
$
255,273
$
246,224
$
239,718
$
235,880
$
228,911
Total Assets
$
3,249,776
$
3,252,707
$
3,252,318
$
3,252,449
$
2,722,995
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
—
Tangible Assets
$
3,247,187
$
3,250,118
$
3,249,729
$
3,249,860
$
2,720,406
Tangible Common Equity to Tangible
Assets
7.86
%
7.58
%
7.38
%
7.26
%
8.41
%
As of
Computation of Fully Diluted Tangible
Book Value per Common Share
September 30,
2023
June 30,
2023
March 31,
2023
December 31,
2022
September 30,
2022
Total shareholders' equity
$
257,862
$
248,813
$
242,307
$
238,469
$
231,500
Less:
Preferred stock
—
—
—
—
—
Common shareholders' equity
$
257,862
$
248,813
$
242,307
$
238,469
$
231,500
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
—
Tangible common shareholders'
equity
$
255,273
$
246,224
$
239,718
$
235,880
$
228,911
Common shares issued and outstanding
7,841,616
7,829,950
7,843,438
7,730,699
7,711,843
Fully Diluted Tangible Book Value per
Common Share
$
32.55
$
31.45
$
30.56
$
30.51
$
29.68
BANKWELL FINANCIAL GROUP, INC.
EARNINGS PER SHARE ("EPS")
(unaudited)
(Dollars in thousands, except share
data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2023
2022
2023
2022
(In thousands, except per
share data)
Net income
$
9,777
$
9,174
$
28,140
$
29,408
Dividends to participating
securities(1)
(41
)
(33
)
(125
)
(101
)
Undistributed earnings allocated to
participating securities(1)
(209
)
(159
)
(613
)
(529
)
Net income for earnings per share
calculation
$
9,527
$
8,982
$
27,402
$
28,778
Weighted average shares outstanding,
basic
7,598
7,554
7,582
7,582
Effect of dilutive equity-based
awards(2)
36
58
65
82
Weighted average shares outstanding,
diluted
7,634
7,612
7,647
7,664
Net earnings per common share:
Basic earnings per common share
$
1.25
$
1.19
$
3.61
$
3.80
Diluted earnings per common share
$
1.25
$
1.18
$
3.58
$
3.75
(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.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest income
September 30,
2023
June 30,
2023
September 30,
2022
Sep 23 vs. June 23
% Change
Sep 23 vs. Sep 22
% Change
Bank owned life insurance
$
303
$
292
$
271
3.8
%
11.8
%
Service charges and fees
294
361
240
(18.6
)
22.5
Gains and fees from sales of loans
237
725
(15
)
(67.3
)
Favorable
Other
(48
)
23
(94
)
Unfavorable
Favorable
Total noninterest income
$
786
$
1,401
$
402
(43.9
)%
95.5
%
For the Nine Months
Ended
Noninterest income
September 30, 2023
September 30, 2022
% Change
Bank owned life insurance
$
876
$
796
10.1
%
Service charges and fees
941
729
29.1
Gains and fees from sales of loans
1,893
1,224
54.7
Other
3
(237
)
Favorable
Total noninterest income
$
3,713
$
2,512
47.8
%
Noninterest income increased by $0.4 million to $0.8 million for
the quarter ended September 30, 2023 compared to the quarter ended
September 30, 2022. Noninterest income increased by $1.2 million to
$3.7 million for the nine months ended September 30, 2023 compared
to the nine months ended September 30, 2022. The increase in
noninterest income was driven by an increase in gains on SBA loan
sales and service charges and fees for the quarter and nine months
ended 2023.
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, 2023
September 30, 2022
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
265,115
$
3,393
5.08
%
$
130,440
$
747
2.27
%
Securities(1)
127,229
953
3.00
120,092
829
2.76
Loans:
Commercial real estate
1,943,725
28,140
5.67
1,512,381
18,830
4.87
Residential real estate
53,966
671
4.97
62,915
586
3.72
Construction
209,154
3,908
7.31
116,256
1,512
5.09
Commercial business
539,185
10,394
7.54
431,917
7,058
6.39
Consumer
44,020
740
6.66
12,145
142
4.65
Total loans
2,790,050
43,853
6.15
2,135,614
28,128
5.15
Federal Home Loan Bank stock
5,696
116
8.13
5,021
31
2.51
Total earning assets
3,188,090
$
48,315
5.93
%
2,391,167
$
29,735
4.87
%
Other assets
78,089
89,173
Total assets
$
3,266,179
$
2,480,340
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
102,149
$
47
0.18
%
$
119,593
$
52
0.17
%
Money market
922,036
9,064
3.90
828,541
2,346
1.12
Savings
105,366
817
3.08
189,279
474
0.99
Time
1,322,074
13,860
4.16
557,243
1,220
0.87
Total interest bearing deposits
2,451,625
23,788
3.85
1,694,656
4,092
0.96
Borrowed Money
159,103
1,784
4.39
135,221
993
2.87
Total interest bearing liabilities
2,610,728
$
25,572
3.89
%
1,829,877
$
5,085
1.10
%
Noninterest bearing deposits
345,988
383,048
Other liabilities
54,136
36,037
Total liabilities
3,010,852
2,248,962
Shareholders' equity
255,327
231,378
Total liabilities and shareholders'
equity
$
3,266,179
$
2,480,340
Net interest income(2)
$
22,743
$
24,650
Interest rate spread
2.04
%
3.77
%
Net interest margin(3)
2.85
%
4.12
%
(1)
Average balances and yields for securities
are based on amortized cost.
(2)
The adjustment for securities and loans
taxable equivalency amounted to $52 thousand and $49 thousand for
the quarters ended September 30, 2023 and 2022, 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, 2023
September 30, 2022
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
281,033
$
9,983
4.75
%
$
240,252
$
1,350
0.75
%
Securities(1)
128,554
2,864
2.97
%
117,008
2,392
2.73
%
Loans:
Commercial real estate
1,932,549
79,958
5.46
%
1,433,642
51,104
4.70
%
Residential real estate
56,798
1,957
4.59
%
67,705
1,810
3.56
%
Construction
194,396
10,582
7.18
%
108,249
4,482
5.46
%
Commercial business
546,329
32,073
7.74
%
402,876
17,011
5.57
%
Consumer
30,571
1,489
6.51
%
7,844
290
4.94
%
Total loans
2,760,643
126,059
6.02
%
2,020,316
74,697
4.88
%
Federal Home Loan Bank stock
5,527
308
7.46
%
3,715
61
2.19
%
Total earning assets
3,175,757
$
139,214
5.78
%
2,381,291
$
78,500
4.35
%
Other assets
66,342
89,747
Total assets
$
3,242,099
$
2,471,038
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
97,741
$
127
0.17
%
$
122,792
$
158
0.17
%
Money market
910,840
23,532
3.45
%
909,106
4,672
0.69
%
Savings
117,984
2,404
2.72
%
194,013
678
0.47
%
Time
1,291,124
35,536
3.68
%
487,792
2,773
0.76
%
Total interest bearing deposits
2,417,689
61,599
3.41
%
1,713,703
8,281
0.65
%
Borrowed Money
161,166
5,238
4.29
%
101,685
2,137
2.77
%
Total interest bearing liabilities
2,578,855
$
66,837
3.47
%
1,815,388
$
10,418
0.77
%
Noninterest bearing deposits
374,943
398,728
Other liabilities
40,192
37,784
Total liabilities
2,993,990
2,251,900
Shareholders' equity
248,109
219,138
Total liabilities and shareholders'
equity
$
3,242,099
$
2,471,038
Net interest income(2)
$
72,377
$
68,082
Interest rate spread
2.31
%
3.58
%
Net interest margin(3)
3.04
%
3.81
%
(1)
Average balances and yields for securities
are based on amortized cost.
(2)
The adjustment for securities and loans
taxable equivalency amounted to $154 thousand and $148 thousand for
the nine months ended September 30, 2023 and 2022,
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/20231025644768/en/
Christopher R. Gruseke, President and Chief Executive Officer or
Courtney E. Sacchetti, Executive Vice President and Chief Financial
Officer (203) 652-0166
Bankwell Financial (NASDAQ:BWFG)
Historical Stock Chart
From Jun 2024 to Jul 2024
Bankwell Financial (NASDAQ:BWFG)
Historical Stock Chart
From Jul 2023 to Jul 2024