Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net
income of $8.5 million, or $1.09 per share for the fourth quarter
of 2023, versus $8.0 million, or $1.04 per share, for the same
period in 2022. For the year ended 2023, net income totaled $36.7
million, or $4.67 per share, versus $37.4 million, or $4.79 per
share, for the same period in 2022.
The Company's Board of Directors declared a $0.20 per share cash
dividend, payable February 23, 2024 to shareholders of record on
February 13, 2024.
We recommend reading this earnings release in conjunction
with the Fourth Quarter 2023 Investor Presentation, located at
http://investor.mybankwell.com/Presentations and included as an
exhibit to our January 24, 2024 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R.
Gruseke:
"Thank you to my colleagues who helped the Company generate
quality returns for our shareholders amidst a volatile economic
backdrop in 2023. We achieved a total year Return on Average
Tangible Common Equity (“ROATCE") of 14.70% while generating a
1.13% Return on Average Assets (“ROAA”). Tangible Book Value grew
to $33.39 per share, which represents a 15% Compounded Annual
Growth Rate since December 31, 2020.
Looking to 2024, we expect low single digit loan growth as we
grow capital and implement innovative deposit solutions. The Net
Interest Margin is anticipated to trough in 3Q at approximately 250
to 260 basis points. Noninterest expense is estimated at $53 to $54
million, or approximately 1.65% of Average Assets, an amount
consistent with our historical efficiency.
The Balance Sheet is well positioned for any future interest
rate cuts taken by the Federal Reserve. We estimate that a
hypothetical 50 basis point expansion of the Net Interest Margin
would generate approximately $1.50 in incremental Earnings Per
Share on an annualized basis."
Fourth Quarter 2023 Highlights:
- Noninterest expense to average assets was 1.56% for the quarter
ended December 31, 2023 and 1.55% for the year ended December 31,
2023.
- Average yield on 2023 funded loans was 7.70% compared to 6.24%
for 2022.
- Total gross loans were $2.7 billion, growing $43.2 million, or
1.6%, compared to December 31, 2022.
- Return on average assets was 1.03% for the quarter ended
December 31, 2023 and 1.13% for the year ended December 31,
2023.
- Return on average tangible common equity was 12.95% for the
quarter ended December 31, 2023 and 14.70% for the year ended
December 31, 2023.
- The net interest margin was 2.81% for the quarter ended
December 31, 2023 and 2.98% for the year ended December 31,
2023.
- Investment securities totaled $127.6 million and represent 4.0%
of total assets.
- Fully diluted tangible book value per share rose to $33.39
compared to $30.51 at December 31, 2022.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the
quarter ended December 31, 2023 were $23.4 million, versus $27.3
million for the quarter ended December 31, 2022. Revenues for the
year ended December 31, 2023 were $99.3 million, versus $97.8
million for the year ended December 31, 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 year ended 2023 was primarily attributable to an increase
in interest and fees on loans due to loan growth and higher overall
loan yields1, an increase in gain on sales of loans, and an
increase in servicing charges and fees. This increase was partially
offset by an increase in interest expense.
1 - The increase in overall loan yields
were 71 bps and 100 bps, respectively, for the quarter and year
ended December 31, 2023.
Net income for the quarter ended December 31, 2023 was $8.5
million, versus $8.0 million for the quarter ended December 31,
2022. Net income for the year ended December 31, 2023 was $36.7
million, versus $37.4 million for the year ended December 31, 2022.
The increase in net income for the quarter ended 2023 was primarily
due to the credit for loan losses, partially offset by an increase
in noninterest expense, and the aforementioned decrease in
revenues. The decrease in net income for the year ended 2023 was
due to an increase in noninterest expense partially offset by the
aforementioned increase in revenues and a decrease in the provision
for loan losses.
Basic and diluted earnings per share were $1.09 and $1.09,
respectively, for the quarter ended December 31, 2023 compared to
basic and diluted earnings per share of $1.04 and $1.04,
respectively, for the quarter ended December 31, 2022. Basic and
diluted earnings per share were $4.71 and $4.67, respectively, for
the year ended December 31, 2023 compared to basic and diluted
earnings per share of $4.84 and $4.79, respectively, for the year
ended December 31, 2022.
The net interest margin (fully taxable equivalent basis) for the
quarters ended December 31, 2023 and December 31, 2022 was 2.81%
and 3.70%, respectively. The net interest margin (fully taxable
equivalent basis) for the year ended December 31, 2023 and December
31, 2022 was 2.98% and 3.78%, respectively. The decrease in the net
interest margin was due to an increase in funding costs partially
offset by an increase in yields on earning assets.
Allowance for Credit Losses ("ACL") - Loans
The ACL-Loans was $27.9 million as of December 31, 2023 compared
to $29.3 million as of September 30, 2023, for a reduction of $1.4
million for the quarter ended December 31, 2023. The ACL-Loans as a
percentage of total loans was 1.03% as of December 31, 2023
compared to 1.06% as of September 30, 2023. The reduction for the
quarter was primarily due to a decrease in loan balances and a
release of specific reserves, partially offset by charge-offs.
The ACL-Loans was $27.9 million as of December 31, 2023 compared
to $22.4 million as of December 31, 2022, an increase of $5.5
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 1.03% as of December 31, 2023
compared to 0.84% as of December 31, 2022. The increase in the
ACL-Loans provision for credit losses was primarily driven by
forward looking CECL macroeconomic factors.
Financial Condition
Assets totaled $3.22 billion at December 31, 2023, compared to
assets of $3.25 billion at December 31, 2022. Gross loans totaled
$2.7 billion at December 31, 2023, an increase of $43.2 million or
1.6% compared to December 31, 2022. Deposits totaled $2.7 billion
at December 31, 2023, compared to deposits of $2.8 billion at
December 31, 2022, a decrease of $64.1 million.
Capital
Shareholders’ equity totaled $265.8 million as of December 31,
2023, an increase of $27.3 million compared to December 31, 2022,
primarily a result of net income of $36.7 million for the year
ended December 31, 2023. The increase was partially offset by the
Day 1 CECL adoption impact of $4.9 million, dividends paid of $6.2
million, and a $1.5 million unfavorable impact to accumulated other
comprehensive income. The unfavorable impact to accumulated other
comprehensive income was driven by fair value marks related to
hedge positions involving interest rate swaps of $2.4 million
partially offset by fair value marks on the Company's available for
sale investment securities portfolio of $0.9 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 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 non interest 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)
December 31, 2023
September 30, 2023
June 30, 2023
March 31, 2023
December 31, 2022
ASSETS
Cash and due from banks
$
267,521
$
256,973
$
207,345
$
249,812
$
344,925
Federal funds sold
1,636
1,122
54,706
27,370
10,754
Cash and cash equivalents
269,157
258,095
262,051
277,182
355,679
Investment securities
Marketable equity securities, at fair
value
2,070
1,975
2,017
2,028
1,988
Available for sale investment securities,
at fair value
109,736
97,907
99,938
103,171
103,663
Held to maturity investment securities, at
amortized cost
15,817
15,885
15,884
15,931
15,983
Total investment securities
127,623
115,767
117,839
121,130
121,634
Loans receivable (net of allowance for
loan losses of $27,946, $29,284, $30,694, $27,998 and $22,431 at
December 31, 2023, September 30, 2023, June 30, 2023, March 31,
2023 and December 31, 2022, respectively)
2,685,301
2,735,242
2,736,607
2,724,514
2,646,384
Accrued interest receivable
14,863
15,648
14,208
14,261
13,070
Federal Home Loan Bank stock, at cost
5,696
5,696
5,696
5,234
5,216
Premises and equipment, net
27,018
26,899
27,658
27,619
27,199
Bank-owned life insurance
51,435
51,119
50,816
50,524
50,243
Goodwill
2,589
2,589
2,589
2,589
2,589
Deferred income taxes, net
9,383
9,395
10,014
8,692
7,422
Other assets
22,417
29,326
25,229
20,573
23,013
Total assets
$
3,215,482
$
3,249,776
$
3,252,707
$
3,252,318
$
3,252,449
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
346,172
$
345,433
$
367,635
$
377,667
$
404,559
Interest bearing deposits
2,390,585
2,423,193
2,421,228
2,420,641
2,396,259
Total deposits
2,736,757
2,768,626
2,788,863
2,798,308
2,800,818
Advances from the Federal Home Loan
Bank
90,000
90,000
90,000
90,000
90,000
Subordinated debentures
69,205
69,143
69,082
69,020
68,959
Accrued expenses and other liabilities
53,768
64,145
55,949
52,683
54,203
Total liabilities
2,949,730
2,991,914
3,003,894
3,010,011
3,013,980
Shareholders’ equity
Common stock, no par value
118,247
117,181
116,541
115,875
115,018
Retained earnings
149,169
142,205
133,988
127,566
123,640
Accumulated other comprehensive (loss)
income
(1,664
)
(1,524
)
(1,716
)
(1,134
)
(189
)
Total shareholders’ equity
265,752
257,862
248,813
242,307
238,469
Total liabilities and shareholders’
equity
$
3,215,482
$
3,249,776
$
3,252,707
$
3,252,318
$
3,252,449
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,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
December 31,
2023
December 31,
2022
Interest and dividend income
Interest and fees on loans
$
44,122
$
43,854
$
42,482
$
39,723
$
36,545
$
170,181
$
111,242
Interest and dividends on securities
1,108
1,016
1,002
1,000
898
4,126
3,203
Interest on cash and cash equivalents
4,164
3,393
3,022
3,568
2,150
14,147
3,500
Total interest and dividend income
49,394
48,263
46,506
44,291
39,593
188,454
117,945
Interest expense
Interest expense on deposits
25,307
23,789
20,777
17,033
11,083
86,906
19,364
Interest expense on borrowings
1,842
1,783
1,738
1,717
1,701
7,080
3,838
Total interest expense
27,149
25,572
22,515
18,750
12,784
93,986
23,202
Net interest income
22,245
22,691
23,991
25,541
26,809
94,468
94,743
(Credit) provision for loan
losses
(960
)
(1,579
)
2,579
826
4,272
866
5,437
Net interest income after (credit)
provision for loan losses
23,205
24,270
21,412
24,715
22,537
93,602
89,306
Noninterest income
Bank owned life insurance
316
303
292
281
273
1,192
1,069
Service charges and fees
688
294
361
286
343
1,629
1,072
Gains (losses) and fees from sales of
loans
79
237
725
931
12
1,972
1,236
Other
46
(48
)
23
28
(100
)
49
(337
)
Total noninterest income
1,129
786
1,401
1,526
528
4,842
3,040
Noninterest expense
Salaries and employee benefits
6,088
6,036
6,390
6,081
5,988
24,595
22,237
Occupancy and equipment
2,231
2,146
2,204
2,084
1,919
8,665
8,297
Professional services
1,033
491
692
1,322
912
3,538
3,887
Data processing
747
741
729
671
663
2,888
2,632
Director fees
605
362
453
392
378
1,812
1,394
FDIC insurance
1,026
1,026
1,050
1,062
898
4,164
1,638
Marketing
139
184
177
151
112
651
366
Other
995
1,219
946
928
1,601
4,088
3,912
Total noninterest expense
12,864
12,205
12,641
12,691
12,471
50,401
44,363
Income before income tax
expense
11,470
12,851
10,172
13,550
10,594
48,043
47,983
Income tax expense
2,946
3,074
2,189
3,171
2,573
11,380
10,554
Net income
$
8,524
$
9,777
$
7,983
$
10,379
$
8,021
$
36,663
$
37,429
Earnings Per Common Share:
Basic
$
1.09
$
1.25
$
1.02
$
1.34
$
1.04
$
4.71
$
4.84
Diluted
$
1.09
$
1.25
$
1.02
$
1.33
$
1.04
$
4.67
$
4.79
Weighted Average Common Shares
Outstanding:
Basic
7,603,938
7,598,230
7,593,417
7,554,689
7,507,540
7,587,768
7,563,363
Diluted
7,650,451
7,633,934
7,601,562
7,616,671
7,563,116
7,647,411
7,640,218
Dividends per common share
$
0.20
$
0.20
$
0.20
$
0.20
$
0.20
$
0.80
$
0.80
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
For the Quarter Ended
For the Year Ended
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
December 31,
2023
December 31,
2022
Performance ratios:
Return on average assets
1.03
%
1.19
%
0.99
%
1.30
%
1.07
%
1.13
%
1.44
%
Return on average shareholders' equity
12.82
%
15.19
%
12.91
%
17.48
%
13.38
%
14.55
%
16.72
%
Return on average tangible common
equity
12.95
%
15.35
%
13.05
%
17.67
%
13.52
%
14.70
%
16.91
%
Net interest margin
2.81
%
2.85
%
3.07
%
3.24
%
3.70
%
2.98
%
3.78
%
Efficiency ratio(1)
55.0
%
52.0
%
49.8
%
46.9
%
45.6
%
50.8
%
45.4
%
Net loan charge-offs as a % of average
loans
0.01
%
—
%
—
%
0.02
%
—
%
0.03
%
—
%
Dividend payout ratio(2)
18.35
%
16.00
%
19.61
%
15.04
%
19.23
%
17.13
%
16.70
%
(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
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
Capital ratios:
Total Common Equity Tier 1 Capital to
Risk-Weighted Assets(1)
11.15
%
10.82
%
10.34
%
10.17
%
10.28
%
Total Capital to Risk-Weighted
Assets(1)
12.15
%
11.86
%
11.41
%
11.16
%
11.07
%
Tier I Capital to Risk-Weighted
Assets(1)
11.15
%
10.82
%
10.34
%
10.17
%
10.28
%
Tier I Capital to Average Assets(1)
9.81
%
9.60
%
9.41
%
9.22
%
9.88
%
Tangible common equity to tangible
assets
8.19
%
7.86
%
7.58
%
7.38
%
7.26
%
Fully diluted tangible book value per
common share
$
33.39
$
32.55
$
31.45
$
30.56
$
30.51
(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
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
ACL-Loans:
Balance at beginning of period
$
29,284
$
30,694
$
27,998
$
22,431
$
18,167
Day 1 CECL Adjustment on January 1,
2023
—
—
—
5,079
—
Beginning balance January 1, 2023
29,284
30,694
27,998
27,510
18,167
Charge-offs:
Residential real estate
—
—
—
—
—
Commercial real estate
(824
)
—
—
—
—
Commercial business
—
—
—
(440
)
—
Consumer
(15
)
(31
)
(25
)
(12
)
(11
)
Total charge-offs
(839
)
(31
)
(25
)
(452
)
(11
)
Recoveries:
Commercial real estate
—
—
—
—
—
Commercial business
464
35
32
—
—
Consumer
3
19
10
6
3
Total recoveries
467
54
42
6
3
Net loan (charge-offs) recoveries
(372
)
23
17
(446
)
(8
)
(Credit) provision for loan losses
(966
)
(1,433
)
2,679
934
4,272
Balance at end of period
$
27,946
$
29,284
$
30,694
$
27,998
$
22,431
As of
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
Asset quality:
Nonaccrual loans
Residential real estate
$
1,386
$
1,408
$
1,429
$
1,443
$
2,152
Commercial real estate
23,009
1,898
1,905
1,912
2,781
Commercial business
15,430
7,352
2,815
1,528
2,126
Construction
9,382
9,382
9,382
9,382
9,382
Consumer
—
7,917
—
—
—
Total nonaccrual loans
49,207
27,957
15,531
14,265
16,441
Other real estate owned
—
—
—
—
—
Total nonperforming assets
$
49,207
$
27,957
$
15,531
$
14,265
$
16,441
Nonperforming loans as a % of total
loans
1.81
%
1.01
%
0.56
%
0.52
%
0.61
%
Nonperforming assets as a % of total
assets
1.53
%
0.86
%
0.48
%
0.44
%
0.51
%
ACL-loans as a % of total loans
1.03
%
1.06
%
1.11
%
1.01
%
0.84
%
ACL-loans as a % of nonaccrual loans
56.79
%
104.75
%
197.63
%
196.27
%
136.43
%
Total past due loans to total loans
0.78
%
1.44
%
1.30
%
0.94
%
0.60
%
Total nonaccrual loans increased $32.8 million to $49.2 million
as of December 31, 2023 when compared to December 31, 2022.
Nonperforming assets as a percentage of total assets increased to
1.53% at December 31, 2023, when compared to 0.51% at December 31,
2022. The ACL-Loans at December 31, 2023 was $27.9 million,
representing 1.03% of total loans.
Past due loans increased to $21.3 million, or 0.78% of total
loans, as of December 31, 2023, compared to $16.1 million, or 0.60%
of total loans, as of December 31, 2022.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO
(unaudited)
(Dollars in thousands)
Period End Loan Composition
December 31,
2023
September 30,
2023
December 31,
2022
Current QTD %
Change
YTD % Change
Residential Real Estate
$
50,931
$
52,908
$
60,588
(3.7
) %
(15.9
) %
Commercial Real Estate(1)
1,947,648
1,955,992
1,921,252
(0.4
)
1.4
Construction
183,414
199,972
155,198
(8.3
)
18.2
Total Real Estate Loans
2,181,993
2,208,872
2,137,038
(1.2
)
2.1
Commercial Business
500,569
508,626
520,447
(1.6
)
(3.8
)
Consumer
36,045
52,612
17,963
(31.5
)
100.7
Total Loans
$
2,718,607
$
2,770,110
$
2,675,448
(1.9
) %
1.6
%
(1)
Includes owner occupied commercial real
estate.
Gross loans totaled $2.7 billion at December 31, 2023, a
increase of $43.2 million or 1.6% compared to December 31,
2022.
Period End Deposit Composition
December 31,
2023
September 30,
2023
December 31,
2022
Current QTD %
Change
YTD % Change
Noninterest bearing demand
$
346,172
$
345,433
$
404,559
0.2
%
(14.4
) %
NOW
90,829
101,719
104,057
(10.7
)
(12.7
)
Money Market
887,352
879,978
913,868
0.8
(2.9
)
Savings
97,331
102,207
151,944
(4.8
)
(35.9
)
Time
1,315,073
1,339,289
1,226,390
(1.8
)
7.2
Total Deposits
$
2,736,757
$
2,768,626
$
2,800,818
(1.2
) %
(2.3
) %
Total deposits were $2.7 billion at December 31, 2023, compared
to $2.8 billion at December 31, 2022, a decrease of $64.1 million,
or 2.3%. Brokered deposits have decreased $83.0 million, when
compared to December 31, 2022.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest income
December 31,
2023
September 30,
2023
December 31,
2022
Dec 23 vs. Sep 23 %
Change
Dec 23 vs. Dec 22 %
Change
Bank owned life insurance
$
316
$
303
$
273
4.3
%
15.8
%
Service charges and fees
688
294
343
134.0
100.6
Gains (losses) and fees from sales of
loans
79
237
12
(66.7
)
558.3
Other
46
(48
)
(100
)
Favorable
Favorable
Total noninterest income
$
1,129
$
786
$
528
43.6
%
113.8
%
For the Year Ended
Noninterest income
December 31, 2023
December 31, 2022
% Change
Gains and fees from sales of loans
$
1,972
$
1,236
59.5
%
Bank owned life insurance
1,192
1,069
11.5
Service charges and fees
1,629
1,072
52.0
Other
49
(337
)
Favorable
Total noninterest income
$
4,842
$
3,040
59.3
%
Noninterest income increased by $0.6 million to $1.1 million for
the quarter ended December 31, 2023 compared to the quarter ended
December 31, 2022. Noninterest income increased by $1.8 million to
$4.8 million for the year ended December 31, 2023 compared to the
year ended December 31, 2022. The increase in noninterest income
for the quarter ended December 31, 2023 was mainly driven by an
increase in service charges and fees. The increase for the year
ended December 31, 2023 was mainly driven by an increase in gains
on SBA loan sales and service charges and fees.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest expense
December 31,
2023
September 30,
2023
December 31,
2022
Dec 23 vs. Sep 23 %
Change
Dec 23 vs. Dec 22 %
Change
Salaries and employee benefits
$
6,088
$
6,036
$
5,988
0.9
%
1.7
%
Occupancy and equipment
2,231
2,146
1,919
4.0
16.3
Professional services
1,033
491
912
110.4
13.3
Data processing
747
741
663
0.8
12.7
Director fees
605
362
378
67.1
60.1
FDIC insurance
1,026
1,026
898
—
14.3
Marketing
139
184
112
(24.5
)
24.1
Other
995
1,219
1,601
(18.4
)
(37.9
)
Total noninterest expense
$
12,864
$
12,205
$
12,471
5.4
%
3.2
%
For the Year Ended
Noninterest expense
December 31, 2023
December 31, 2022
% Change
Salaries and employee benefits
$
24,595
$
22,237
10.6
%
Occupancy and equipment
8,665
8,297
4.4
Professional services
3,538
3,887
(9.0
)
Data processing
2,888
2,632
9.7
Director fees
1,812
1,394
30.0
FDIC insurance
4,164
1,638
154.2
Marketing
651
366
77.9
Other
4,088
3,912
4.5
Total noninterest expense
$
50,401
$
44,363
13.6
%
Noninterest expense increased by $0.4 million to $12.9 million
for the quarter ended December 31, 2023 compared to the quarter
ended December 31, 2022. Noninterest expense increased by $6.0
million to $50.4 million for the year ended December 31, 2023
compared to the year ended December 31, 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 December 31, 2023, an increase of $0.1 million when compared
to the same period in 2022. FDIC insurance expense totaled $4.2
million for the year ended December 31, 2023, an increase of $2.5
million when compared to the same period in 2022. The higher FDIC
insurance expense is attributed to the overall balance sheet growth
and increased use of brokered deposits.
Salaries and employee benefits expense totaled $6.1 million for
the quarter ended December 31, 2023, an increase of $0.1 million
when compared to the same period in 2022. Salaries and employee
benefits expense totaled $24.6 million for the year ended December
31, 2023, an increase of $2.4 million when compared to the same
period in 2022. The increase in salaries and employee benefits
expense was mainly driven by lower loan originations, which reduces
the Bank's ability to defer expenses.
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,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
Total Equity
$
265,752
$
257,862
$
248,813
$
242,307
$
238,469
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
—
Tangible Common Equity
$
263,163
$
255,273
$
246,224
$
239,718
$
235,880
Total Assets
$
3,215,482
$
3,249,776
$
3,252,707
$
3,252,318
$
3,252,449
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
—
Tangible Assets
$
3,212,893
$
3,247,187
$
3,250,118
$
3,249,729
$
3,249,860
Tangible Common Equity to Tangible
Assets
8.19
%
7.86
%
7.58
%
7.38
%
7.26
%
As of
Computation of Fully Diluted Tangible
Book Value per Common Share
December 31,
2023
September 30,
2023
June 30, 2023
March 31, 2023
December 31,
2022
Total shareholders' equity
$
265,752
$
257,862
$
248,813
$
242,307
$
238,469
Less:
Preferred stock
—
—
—
—
—
Common shareholders' equity
$
265,752
$
257,862
$
248,813
$
242,307
$
238,469
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
—
Tangible common shareholders'
equity
$
263,163
$
255,273
$
246,224
$
239,718
$
235,880
Common shares issued and outstanding
7,882,616
7,841,616
7,829,950
7,843,438
7,730,699
Fully Diluted Tangible Book Value per
Common Share
$
33.39
$
32.55
$
31.45
$
30.56
$
30.51
BANKWELL FINANCIAL GROUP, INC.
EARNINGS PER SHARE ("EPS")
(unaudited)
(Dollars in thousands, except share
data)
For the Quarter Ended
December 31,
For the Year Ended
December 31,
2023
2022
2023
2022
(In thousands, except per
share data)
Net income
$
8,524
$
8,021
$
36,663
$
37,429
Dividends to participating
securities(1)
(40
)
(32
)
(164
)
(133
)
Undistributed earnings allocated to
participating securities(1)
(181
)
(154
)
(794
)
(680
)
Net income for earnings per share
calculation
$
8,303
$
7,835
$
35,705
$
36,616
Weighted average shares outstanding,
basic
7,604
7,508
7,588
7,563
Effect of dilutive equity-based
awards(2)
46
56
60
77
Weighted average shares outstanding,
diluted
7,650
7,564
7,648
7,640
Net earnings per common share:
Basic earnings per common share
$
1.09
$
1.04
$
4.71
$
4.84
Diluted earnings per common share
$
1.09
$
1.04
$
4.67
$
4.79
(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, 2023
December 31, 2022
Average Balance
Interest
Yield/ Rate (4)
Average Balance
Interest
Yield/ Rate (4)
Assets:
Cash and Fed funds sold
$
314,950
$
4,164
5.25
%
$
231,767
$
2,150
3.68
%
Securities(1)
133,440
989
2.97
123,274
887
2.88
Loans:
Commercial real estate
1,933,736
28,546
5.78
1,828,306
24,998
5.35
Residential real estate
52,026
718
5.52
61,057
599
3.92
Construction
199,541
3,793
7.44
138,552
2,185
6.17
Commercial business
496,476
9,944
7.84
499,030
8,549
6.70
Consumer
43,639
1,120
10.18
16,875
214
5.05
Total loans
2,725,418
44,121
6.33
2,543,820
36,545
5.62
Federal Home Loan Bank stock
5,696
119
8.38
5,371
64
4.72
Total earning assets
3,179,504
$
49,393
6.08
%
2,904,232
$
39,646
5.34
%
Other assets
94,459
76,703
Total assets
$
3,273,963
$
2,980,935
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
95,603
$
42
0.17
%
$
107,118
$
45
0.17
%
Money market
893,043
9,369
4.16
837,486
4,158
1.97
Savings
99,242
759
3.04
170,903
581
1.35
Time
1,341,871
15,136
4.48
1,002,012
6,299
2.49
Total interest bearing deposits
2,429,759
25,306
4.13
2,117,519
11,083
2.08
Borrowed Money
159,165
1,842
4.53
170,202
1,701
3.91
Total interest bearing liabilities
2,588,924
$
27,148
4.16
%
2,287,721
$
12,784
2.22
%
Noninterest bearing deposits
351,071
407,923
Other liabilities
70,181
47,369
Total liabilities
3,010,176
2,743,013
Shareholders' equity
263,787
237,922
Total liabilities and shareholders'
equity
$
3,273,963
$
2,980,935
Net interest income(2)
$
22,245
$
26,862
Interest rate spread
1.92
%
3.12
%
Net interest margin(3)
2.81
%
3.70
%
(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 $52 thousand for
the quarters ended December 31, 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 Year Ended
December 31, 2023
December 31, 2022
Average Balance
Interest
Yield/ Rate (4)
Average Balance
Interest
Yield/ Rate (4)
Assets:
Cash and Fed funds sold
$
289,582
$
14,147
4.89
%
$
238,233
$
3,500
1.47
%
Securities(1)
129,785
3,699
2.85
118,591
3,280
2.77
Loans:
Commercial real estate
1,932,627
109,110
5.57
1,532,971
76,103
4.90
Residential real estate
55,607
2,751
4.95
66,028
2,408
3.65
Construction
195,773
14,268
7.19
115,902
6,666
5.67
Commercial business
533,736
41,406
7.65
427,178
25,561
5.90
Consumer
34,022
2,645
7.77
10,121
504
4.98
Total loans
2,751,765
170,180
6.10
2,152,200
111,242
5.10
Federal Home Loan Bank stock
5,570
428
7.68
4,132
124
3.00
Total earning assets
3,176,702
$
188,454
5.85
%
2,513,156
$
118,146
4.64
%
Other assets
79,571
86,485
Total assets
$
3,256,273
$
2,599,641
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
97,203
$
170
0.17
%
$
118,837
$
203
0.17
%
Money market
906,354
32,901
3.63
891,095
8,830
0.99
Savings
113,260
3,163
2.79
188,186
1,259
0.67
Time
1,303,915
50,672
3.89
617,480
9,072
1.47
Total interest bearing deposits
2,420,732
86,906
3.59
1,815,598
19,364
1.07
Borrowed Money
160,661
7,080
4.35
118,960
3,838
3.18
Total interest bearing liabilities
2,581,393
$
93,986
3.64
%
1,934,558
$
23,202
1.20
%
Noninterest bearing deposits
368,926
401,005
Other liabilities
53,893
40,204
Total liabilities
3,004,212
2,375,767
Shareholders' equity
252,061
223,874
Total liabilities and shareholders'
equity
$
3,256,273
$
2,599,641
Net interest income(2)
$
94,468
$
94,944
Interest rate spread
2.21
%
3.44
%
Net interest margin(3)
2.98
%
3.78
%
(1)
Average balances and yields for securities
are based on amortized cost.
(2)
The adjustment for securities and loans
taxable equivalency amounted to $206 thousand and $200 thousand for
the year ended December 31, 2023 and 2022, respectively.
(3)
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/20240124761345/en/
Christopher R. Gruseke, President and Chief Executive Officer or
Courtney E. Sacchetti, Executive Vice President and Chief Financial
Officer (203) 652-0166
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