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Bankwell Financial Group Reports Strong Operating Results on Record Loan Growth for the Third Quarter; Declares Fourth Quarter Dividend


Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $9.2 million, or $1.18 per share, for the third quarter of 2022, versus $6.9 million, or $0.87 per share, for the same period in 2021. During the quarter ended September 30, 2022 the Company experienced another quarter of elevated loan prepayments that positively impacted reported earnings. Adjusting for this, operating earnings per share totaled $1.08 for the third quarter of 2022. Please reference the table below for a reconciliation of reported earnings per share to operating earnings per share.

 

Earnings Per Common Share

3Q'22 QTD Reported Diluted EPS

$

1.18

 

Elevated Loan Prepayments(1)

 

(0.10

)

3Q'22 QTD Operating EPS(2)

$

1.08

 

(1) 3Q'22 loan prepayments exceeded historical quarterly averages and are not reflective of run rate.

(2) Non-gaap measure.

The Company's Board of Directors declared a $0.20 per share cash dividend, payable November 21, 2022 to shareholders of record on November 11, 2022.

We recommend reading this earnings release in conjunction with the Third Quarter 2022 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our October 26, 2022 Current Report on Form 8-K.

Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:

"The Company had another very strong quarter, growing loans by $230 million. This represents an 11% increase over the prior quarter, and a year to date increase of 21%. Profitability remains strong, with a 1.47% Return on Average Assets and a 15.73% Return on Average Equity.

"The Company's growth in 2021 and 2022 has created an exceptionally strong foundation to grow top line Interest Income in the coming year. We anticipate Interest Income to increase by more than 25% in 2023. The current cycle of tightening by the Federal Reserve will increase our cost of deposits in the quarters ahead. Based on forward market pricing we could expect Net Interest Income to decrease by 10% in 2023 versus 2022.

"We continue to build Book Value for our shareholders. Fully Diluted Book Value per share has increased by 3.2% this quarter and by 16.2% year to date. Importantly, all credit metrics remain benign.

"We thank our employees and clients who have made our success possible, and are confident that we have a great team in place to perform in an increasingly volatile economic environment."

"The Company had another very strong quarter, growing loans by $230 million. This represents an 11% increase over the prior quarter, and a year to date increase of 21%. Profitability remains strong, with a 1.47% Return on Average Assets and a 15.73% Return on Average Equity.

"The Company's growth in 2021 and 2022 has created an exceptionally strong foundation to grow top line Interest Income in the coming year. We anticipate Interest Income to increase by more than 25% in 2023. The current cycle of tightening by the Federal Reserve will increase our cost of deposits in the quarters ahead. Based on forward market pricing we could expect Net Interest Income to decrease by 10% in 2023 versus 2022.

"We continue to build Book Value for our shareholders. Fully Diluted Book Value per share has increased by 3.2% this quarter and by 16.2% year to date. Importantly, all credit metrics remain benign.

"We thank our employees and clients who have made our success possible, and are confident that we have a great team in place to perform in an increasingly volatile economic environment."

Third Quarter 2022 Highlights (performance metrics are impacted by certain one-time items - please refer to the table following the below highlights for adjusted performance metrics):

 

 

Quarter Ended September 30, 2022

 

Nine Months Ended September 30, 2022

Key metrics

 

Reported

 

Operating(1)

 

Variance

 

Reported

 

Operating(1)

 

Variance

Net interest margin

 

4.12

%

 

3.96

%

 

0.16

%

 

3.81

%

 

3.67

%

 

0.14

%

Efficiency ratio

 

44.1

%

 

46.0

%

 

(1.9

) %

 

45.3

%

 

46.9

%

 

(1.6

) %

Return on average assets

 

1.47

%

 

1.34

%

 

0.13

%

 

1.59

%

 

1.38

%

 

0.21

%

Return on average stockholders' equity

 

15.73

%

 

14.40

%

 

1.33

%

 

17.94

%

 

15.57

%

 

2.37

%

(1) Operating metrics are non-GAAP measures and have been adjusted for elevated loan prepayments for the quarter and nine months ended September 30, 2022, as noted in the above table. Adjustments also include the release of specific reserves and the historical loss update to the Company's peer group for the nine months ended September 30, 2022. Please reference the second quarter 2022 earnings release for more details on these adjustments.

Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended September 30, 2022 were $25.0 million, versus $19.2 million for the quarter ended September 30, 2021. Revenues for the nine months ended September 30, 2022 were $70.4 million, versus $53.8 million for the nine months ended September 30, 2021. The increase in revenues was primarily attributable to an increase in interest and fees on loans due to loan growth and higher overall loan yields. The increase in loan yields was aided by elevated loan prepayment fees, which totaled $1.3 million for the quarter ended September 30, 2022, compared to $0.1 million for the quarter ended September 30, 2021. The increase in revenues was partially offset by a decrease in noninterest income driven by a decrease in loans sales and the absence of rental income recognized during the quarter and nine months ended September 30, 2021, as a result of the disposition of the Company's former headquarters building. In addition, the increase in revenues for the nine months ended September 30, 2022 was muted as a result of a one-time federal payroll tax credit for COVID-19 of $0.9 million recognized in the quarter ended March 31, 2021. Finally, the increase in revenues for the quarter ended September 30, 2022 was also partially offset by an increase in interest expense on deposits, resulting from an increase in rates necessary to remain competitive in the current economic environment.

Net income for the quarter ended September 30, 2022 was $9.2 million, versus $6.9 million for the quarter ended September 30, 2021. Net income for the nine months ended September 30, 2022 was $29.4 million, versus $18.8 million for the nine months ended September 30, 2021. The increase in net income was primarily impacted by the aforementioned increases in revenues. In addition, the increase in net income was partially offset by an increase in the provision for loan losses primarily driven by loan growth and an increase in noninterest expense for the quarter and nine months ended September 30, 2022.

Basic and diluted earnings per share were $1.19 and $1.18, respectively, for the quarter ended September 30, 2022 compared to basic and diluted earnings per share of $0.88 and $0.87, respectively, for the quarter ended September 30, 2021. Basic and diluted earnings per share were $3.80 and $3.75, respectively, for the nine months ended September 30, 2022 compared to basic and diluted earnings per share of $2.38 and $2.37, respectively, for the nine months ended September 30, 2021.

The net interest margin (fully taxable equivalent basis) for the quarters ended September 30, 2022 and September 30, 2021 was 4.12% and 3.39%, respectively. The net interest margin (fully taxable equivalent basis) for the nine months ended September 30, 2022 and September 30, 2021 was 3.81% and 3.08%, respectively. The increase in the net interest margin was due to elevated loan prepayment fees and an increase in overall loan yields.

Financial Condition

Assets totaled $2.72 billion at September 30, 2022, compared to assets of $2.46 billion at December 31, 2021. The increase in assets was primarily due to loan growth and a corresponding increase in deposits and borrowings. Gross loans totaled $2.3 billion at September 30, 2022, an increase of $391.9 million compared to December 31, 2021. Deposits totaled $2.3 billion at September 30, 2022, compared to deposits of $2.1 billion at December 31, 2021.

Capital

Shareholders' equity totaled $231.5 million as of September 30, 2022, an increase of $29.5 million compared to December 31, 2021, primarily a result of (i) net income of $29.4 million for the nine months ended September 30, 2022 and (ii) an $8.4 million favorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps, partially offset by fair value marks on the Company's investment portfolio. The Company's interest rate swaps are used to hedge interest rate risk. The increase in Shareholders' equity was partially offset by dividends paid of $4.7 million and common stock repurchases of $5.5 million.

About Bankwell Financial Group

Bankwell is a commercial bank that serves the banking needs of residents and businesses throughout Fairfield and New Haven Counties, Connecticut. For more information about this press release, interested parties may contact Christopher R. Gruseke, President and Chief Executive Officer or Penko Ivanov, Executive Vice President and Chief Financial Officer of Bankwell Financial Group at (203) 652-0166.

For more information, visit www.mybankwell.com.

This press release may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as "believe," "expect," "anticipate," "estimate," and "intend" or future or conditional verbs such as "will," "would," "should," "could," or "may." Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, uncertain impacts of, or additional changes in, monetary, fiscal or tax policy to address the impact of COVID-19, which could further exacerbate the effects on the Company's business and results of operations, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.

Non-GAAP Financial Measures

In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management may evaluate certain non-GAAP financial measures, such as the efficiency ratio. A computation and reconciliation of certain non-GAAP financial measures used for these purposes is contained in the accompanying Reconciliation of GAAP to Non-GAAP Measures tables. We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. For example, the Company believes that the efficiency ratio is useful in the assessment of financial performance, including noninterest expense control. The Company believes that tangible common equity, tangible book value per share, and return on average tangible common equity are useful to evaluate the relative strength of the Company's performance and capital position. We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.

 

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)

 
 

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

ASSETS

 

 

 

 

 

 

 

 

 

Cash and due from banks

$

212,175

 

 

$

149,522

 

$

280,471

 

 

$

291,598

 

 

$

169,417

 

Federal funds sold

 

10,947

 

 

 

21,505

 

 

19,022

 

 

 

53,084

 

 

 

8,097

 

Cash and cash equivalents

 

223,122

 

 

 

171,027

 

 

299,493

 

 

 

344,682

 

 

 

177,514

 

 

 

 

 

 

 

 

 

 

 

Investment securities

 

 

 

 

 

 

 

 

 

Marketable equity securities, at fair value

 

1,973

 

 

 

2,126

 

 

2,090

 

 

 

2,168

 

 

 

2,185

 

Available for sale investment securities, at fair value

 

95,095

 

 

 

94,907

 

 

98,733

 

 

 

90,198

 

 

 

87,565

 

Held to maturity investment securities, at amortized cost

 

16,027

 

 

 

15,917

 

 

15,979

 

 

 

16,043

 

 

 

16,107

 

Total investment securities

 

113,095

 

 

 

112,950

 

 

116,802

 

 

 

108,409

 

 

 

105,857

 

Loans receivable (net of allowance for loan losses of $18,167, $15,773, $17,141, $16,902 and $16,803 at September 30, 2022, June 30, 2022, March 31, 2022, December 31, 2021 and September 30, 2021, respectively)

 

2,263,432

 

 

 

2,036,626

 

 

1,964,567

 

 

 

1,875,167

 

 

 

1,805,217

 

Accrued interest receivable

 

9,552

 

 

 

8,047

 

 

7,733

 

 

 

7,512

 

 

 

6,911

 

Federal Home Loan Bank stock, at cost

 

5,039

 

 

 

5,064

 

 

2,870

 

 

 

2,814

 

 

 

3,632

 

Premises and equipment, net

 

27,510

 

 

 

27,768

 

 

25,661

 

 

 

25,588

 

 

 

35,118

 

Bank-owned life insurance

 

49,970

 

 

 

49,699

 

 

49,434

 

 

 

49,174

 

 

 

48,903

 

Goodwill

 

2,589

 

 

 

2,589

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Other intangible assets

 

?

 

 

 

?

 

 

?

 

 

 

?

 

 

 

48

 

Deferred income taxes, net

 

5,952

 

 

 

4,768

 

 

6,879

 

 

 

7,621

 

 

 

7,718

 

Other assets

 

22,734

 

 

 

17,014

 

 

20,849

 

 

 

32,708

 

 

 

33,181

Total assets

$

2,722,995

 

 

$

2,435,552

 

$

2,496,877

 

 

$

2,456,264

$

2,226,688

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

 

Noninterest bearing deposits

$

380,365

 

 

$

372,584

 

$

412,985

 

 

$

398,956

 

 

$

338,705

 

Interest bearing deposits

 

1,906,337

 

 

 

1,660,941

 

 

1,753,219

 

 

 

1,725,042

 

 

 

1,544,118

 

Total deposits

 

2,286,702

 

 

 

2,033,525

 

 

2,166,204

 

 

 

2,123,998

 

 

 

1,882,823

 

 

 

 

 

 

 

 

 

 

 

Advances from the Federal Home Loan Bank

 

90,000

 

 

 

105,000

 

 

50,000

 

 

 

50,000

 

 

 

80,000

 

Subordinated debentures

 

68,897

 

 

 

34,500

 

 

34,471

 

 

 

34,441

 

 

 

15,374

 

Accrued expenses and other liabilities

 

45,896

 

 

 

37,060

 

 

35,982

 

 

 

45,838

 

 

 

52,314

 

Total liabilities

 

2,491,495

 

 

 

2,210,085

 

 

2,286,657

 

 

 

2,254,277

 

 

 

2,030,511

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

 

 

 

Common stock, no par value

 

114,548

 

 

 

115,599

 

 

114,882

 

 

 

118,148

 

 

 

119,588

 

Retained earnings

 

117,152

 

 

 

109,523

 

 

99,047

 

 

 

92,400

 

 

 

85,992

 

Accumulated other comprehensive (loss) income

 

(200

)

 

 

345

 

 

(3,709

)

 

 

(8,561

)

 

 

(9,403

)

Total shareholders' equity

 

231,500

 

 

 

225,467

 

 

210,220

 

 

 

201,987

 

 

 

196,177

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and shareholders' equity

$

2,722,995

 

 

$

2,435,552

 

$

2,496,877

 

 

$

2,456,264

 

 

$

2,226,688

 

 

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,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

September 30,
2022

 

September 30,
2021

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

$

28,128

 

 

$

25,141

 

 

$

21,428

 

 

$

21,081

 

 

$

19,795

 

$

74,697

 

 

$

56,961

 

Interest and dividends on securities

 

811

 

 

 

774

 

 

 

720

 

 

 

722

 

 

 

731

 

 

2,305

 

 

 

2,236

 

Interest on cash and cash equivalents

 

747

 

 

 

449

 

 

 

154

 

 

 

90

 

 

 

88

 

 

1,350

 

 

 

286

 

Total interest and dividend income

 

29,686

 

 

 

26,364

 

 

 

22,302

 

 

 

21,893

 

 

 

20,614

 

 

78,352

 

 

 

59,483

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense on deposits

 

4,092

 

 

 

1,983

 

 

 

2,206

 

 

 

2,198

 

 

 

2,387

 

 

8,281

 

 

 

8,245

 

Interest expense on borrowings

 

993

 

 

 

558

 

 

 

586

 

 

 

767

 

 

 

503

 

 

2,137

 

 

 

2,280

 

Total interest expense

 

5,085

 

 

 

2,541

 

 

 

2,792

 

 

 

2,965

 

 

 

2,890

 

 

10,418

 

 

 

10,525

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income

 

24,601

 

 

 

23,823

 

 

 

19,510

 

 

 

18,928

 

 

 

17,724

 

 

67,934

 

 

 

48,958

 

Provision (credit) for loan losses

 

2,381

 

 

 

(1,445

)

 

 

229

 

 

 

125

 

 

 

134

 

 

1,165

 

 

 

(182

)

Net interest income after provision (credit) for loan losses

 

22,220

 

 

 

25,268

 

 

 

19,281

 

 

 

18,803

 

 

 

17,590

 

 

66,769

 

 

 

49,140

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

Bank owned life insurance

 

271

 

 

 

265

 

 

 

260

 

 

 

270

 

 

 

271

 

 

796

 

 

 

753

 

Service charges and fees

 

240

 

 

 

249

 

 

 

240

 

 

 

257

 

 

 

199

 

 

729

 

 

 

615

 

(Losses) gains and fees from sales of loans

 

(15

)

 

 

608

 

 

 

631

 

 

 

441

 

 

 

924

 

 

1,224

 

 

 

2,251

 

Other

 

(94

)

 

 

30

 

 

 

(173

)

 

 

(143

)

 

 

43

 

 

(237

)

 

 

1,213

 

Total noninterest income

 

402

 

 

 

1,152

 

 

 

958

 

 

 

825

 

 

 

1,437

 

 

2,512

 

 

 

4,832

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

5,876

 

 

 

5,433

 

 

 

4,940

 

 

 

4,806

 

 

 

4,782

 

 

16,249

 

 

 

13,511

 

Occupancy and equipment

 

2,035

 

 

 

2,193

 

 

 

2,150

 

 

 

2,411

 

 

 

2,615

 

 

6,378

 

 

 

8,271

 

Professional services

 

994

 

 

 

1,000

 

 

 

981

 

 

 

628

 

 

 

498

 

 

2,975

 

 

 

1,632

 

Data processing

 

626

 

 

 

689

 

 

 

654

 

 

 

432

 

 

 

632

 

 

1,969

 

 

 

1,977

 

Director fees

 

325

 

 

 

339

 

 

 

352

 

 

 

335

 

 

 

324

 

 

1,016

 

 

 

968

 

FDIC insurance

 

255

 

 

 

262

 

 

 

223

 

 

 

231

 

 

 

298

 

 

740

 

 

 

1,001

 

Marketing

 

102

 

 

 

107

 

 

 

45

 

 

 

87

 

 

 

186

 

 

254

 

 

 

317

 

Other

 

818

 

 

 

913

 

 

 

580

 

 

 

749

 

 

 

1,035

 

 

2,311

 

 

 

2,383

 

Total noninterest expense

 

11,031

 

 

 

10,936

 

 

 

9,925

 

 

 

9,679

 

 

 

10,370

 

 

31,892

 

 

 

30,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income tax expense

 

11,591

 

 

 

15,484

 

 

 

10,314

 

 

 

9,949

 

 

 

8,657

 

 

37,389

 

 

 

23,912

 

Income tax expense

 

2,417

 

 

 

3,462

 

 

 

2,102

 

 

 

2,135

 

 

 

1,802

 

 

7,981

 

 

 

5,140

 

Net income

$

9,174

 

 

$

12,022

 

 

$

8,212

 

 

$

7,814

 

 

$

6,855

 

$

29,408

 

 

$

18,772

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

$

1.19

 

 

$

1.56

 

 

$

1.05

 

 

$

1.00

 

 

$

0.88

 

$

3.80

 

 

$

2.38

 

Diluted

$

1.18

 

 

$

1.55

 

 

$

1.04

 

 

$

0.99

 

 

$

0.87

 

$

3.75

 

 

$

2.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted Average Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

7,553,718

 

 

 

7,556,645

 

 

 

7,637,077

 

 

 

7,660,307

 

 

 

7,677,822

 

 

7,582,175

 

 

 

7,721,943

 

Diluted

 

7,612,421

 

 

 

7,614,243

 

 

 

7,719,405

 

 

 

7,726,420

 

 

 

7,738,758

 

 

7,664,123

 

 

 

7,779,632

 

Dividends per common share

$

0.20

 

 

$

0.20

 

 

$

0.20

 

 

$

0.18

 

 

$

0.18

 

$

0.60

 

 

$

0.46

 

 

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

 

 

For the Quarter Ended

 

For the Nine Months

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

September 30,
2022

 

September 30,
2021

Performance ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets

1.47

%

 

1.96

%

 

1.35

%

 

1.32

%

 

1.22

%

 

1.59

%

 

1.12

%

Return on average shareholders' equity

15.73

%

 

22.09

%

 

16.05

%

 

15.44

%

 

14.09

%

 

17.94

%

 

13.29

%

Return on average tangible common equity

15.91

%

 

22.36

%

 

16.25

%

 

15.65

%

 

14.29

%

 

18.16

%

 

13.48

%

Net interest margin

4.12

%

 

4.01

%

 

3.30

%

 

3.43

%

 

3.39

%

 

3.81

%

 

3.08

%

Efficiency ratio(1)

44.1

%

 

43.8

%

 

48.5

%

 

48.8

%

 

54.1

%

 

45.3

%

 

55.8

%

Net loan charge-offs as a % of average loans

?

%

 

?

%

 

?

%

 

?

%

 

?

%

 

?

%

 

0.24

%

Dividend payout ratio(2)

16.95

%

 

12.90

%

 

19.23

%

 

18.18

%

 

20.69

%

 

16.00

%

 

19.41

%

(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,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

Capital ratios:

 

 

 

 

 

 

 

 

 

Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)

 

11.42

%

 

 

11.10

%

 

 

11.20

%

 

 

11.18

%

 

 

10.59

%

Total Capital to Risk-Weighted Assets(1)

 

12.16

%

 

 

11.80

%

 

 

12.00

%

 

 

12.00

%

 

 

11.44

%

Tier I Capital to Risk-Weighted Assets(1)

 

11.42

%

 

 

11.10

%

 

 

11.20

%

 

 

11.18

%

 

 

10.59

%

Tier I Capital to Average Assets(1)

 

11.31

%

 

 

10.15

%

 

 

9.80

%

 

 

9.94

%

 

 

9.61

%

Tangible common equity to tangible assets

 

8.41

%

 

 

9.16

%

 

 

8.32

%

 

 

8.13

%

 

 

8.70

%

Fully diluted tangible book value per common share

$

29.68

 

 

$

28.75

 

 

$

26.75

 

 

$

25.55

 

 

$

24.68

 

(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,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

Balance at beginning of period

$

15,773

 

 

$

17,141

 

 

$

16,902

 

 

$

16,803

 

 

$

16,672

 

Charge-offs:

 

 

 

 

 

 

 

 

 

Commercial business

 

?

 

 

 

?

 

 

 

?

 

 

 

(26

)

 

 

?

 

Consumer

 

(8

)

 

 

?

 

 

 

(4

)

 

 

(5

)

 

 

(15

)

Total charge-offs

 

(8

)

 

 

?

 

 

 

(4

)

 

 

(31

)

 

 

(15

)

Recoveries:

 

 

 

 

 

 

 

 

 

Commercial real estate

 

?

 

 

 

77

 

 

 

?

 

 

 

?

 

 

 

?

 

Commercial business

 

21

 

 

 

?

 

 

 

13

 

 

 

2

 

 

 

11

 

Consumer

 

?

 

 

 

?

 

 

 

1

 

 

 

3

 

 

 

1

 

Total recoveries

 

21

 

 

 

77

 

 

 

14

 

 

 

5

 

 

 

12

 

Net loan recoveries (charge-offs)

 

13

 

 

 

77

 

 

 

10

 

 

 

(26

)

 

 

(3

)

Provision (Credit) for loan losses

 

2,381

 

 

 

(1,445

)

 

 

229

 

 

 

125

 

 

 

134

 

Balance at end of period

$

18,167

 

 

$

15,773

 

 

$

17,141

 

 

$

16,902

 

 

$

16,803

 

 

 

As of

 

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

Asset quality:

 

 

 

 

 

 

 

 

 

Nonaccrual loans

 

 

 

 

 

 

 

 

 

Residential real estate

$

2,137

 

 

$

2,161

 

 

$

2,181

 

 

$

2,380

 

 

$

1,849

 

Commercial real estate

 

2,894

 

 

 

2,955

 

 

 

3,365

 

 

 

3,482

 

 

 

16,314

 

Commercial business

 

2,380

 

 

 

787

 

 

 

817

 

 

 

1,728

 

 

 

1,754

 

Construction

 

9,382

 

 

 

9,382

 

 

 

9,382

 

 

 

8,997

 

 

 

8,997

 

Total nonaccrual loans

 

16,793

 

 

 

15,285

 

 

 

15,745

 

 

 

16,587

 

 

 

28,914

 

Other real estate owned

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Total nonperforming assets

$

16,793

 

 

$

15,285

 

 

$

15,745

 

 

$

16,587

 

 

$

28,914

 

 

 

 

 

 

 

 

 

 

 

Nonperforming loans as a % of total loans

 

0.73

%

 

 

0.74

%

 

 

0.79

%

 

 

0.88

%

 

 

1.58

%

Nonperforming assets as a % of total assets

 

0.62

%

 

 

0.63

%

 

 

0.63

%

 

 

0.68

%

 

 

1.30

%

Allowance for loan losses as a % of total loans

 

0.79

%

 

 

0.77

%

 

 

0.86

%

 

 

0.89

%

 

 

0.92

%

Allowance for loan losses as a % of nonperforming loans

 

108.18

%

 

 

103.19

%

 

 

108.87

%

 

 

101.90

%

 

 

58.11

%

Total past due loans to total loans

 

0.78

%

 

 

1.40

%

 

 

0.85

%

 

 

1.72

%

 

 

1.69

%

Total nonaccrual loans increased $0.2 million to $16.8 million as of September 30, 2022 when compared to December 31, 2021. Nonperforming assets as a percentage of total assets decreased to 0.62% at September 30, 2022, down from 0.68% at December 31, 2021. The allowance for loan losses at September 30, 2022 was $18.2 million, representing 0.79% of total loans.

Past due loans decreased to $17.8 million, or 0.78% of total loans, as of September 30, 2022, compared to $32.6 million, or 1.72% of total loans, as of December 31, 2021.

 

BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)

 

Period End Loan Composition

September 30,
2022

 

June 30,
2022

 

December 31,
2021

 

 

Current QTD
% Change

 

YTD
% Change

Residential Real Estate

$

61,664

 

$

64,253

 

$

79,987

 

(4.0

) %

 

(22.9

) %

Commercial Real Estate(1)

 

1,647,928

 

 

1,499,364

 

 

1,356,709

 

9.9

 

 

21.5

 

Construction

 

117,355

 

 

111,422

 

 

98,341

 

5.3

 

 

19.3

 

Total Real Estate Loans

 

1,826,947

 

 

1,675,039

 

 

1,535,037

 

9.1

 

 

19.0

 

 

 

 

 

 

 

 

 

 

 

Commercial Business

 

443,288

 

 

372,361

 

 

350,975

 

19.0

 

 

26.3

 

 

 

 

 

 

 

 

 

 

 

Consumer

 

16,558

 

 

9,196

 

 

8,869

 

80.1

 

 

86.7

 

Total Loans

$

2,286,793

 

$

2,056,596

 

$

1,894,881

 

11.2

%

 

20.7

%

 

 

 

 

 

 

 

 

 

 

(1) Includes owner occupied commercial real estate.

Gross loans totaled $2.3 billion at September 30, 2022, an increase of $391.9 million compared to December 31, 2021.

Period End Deposit Composition

September 30,
2022

 

June 30,
2022

 

December 31,
2021

 

 

Current QTD
% Change

 

YTD
% Change

Noninterest bearing demand

$

380,365

 

$

372,584

 

$

398,956

 

2.1

%

 

(4.7

) %

NOW

 

115,200

 

 

155,026

 

 

119,479

 

(25.7

)

 

(3.6

)

Money Market

 

836,564

 

 

833,730

 

 

954,674

 

0.3

 

 

(12.4

)

Savings

 

183,576

 

 

196,075

 

 

193,631

 

(6.4

)

 

(5.2

)

Time

 

770,997

 

 

476,110

 

 

457,258

 

61.9

 

 

68.6

 

Total Deposits

$

2,286,702

 

$

2,033,525

 

$

2,123,998

 

12.5

%

 

7.7

%

Total deposits were $2.3 billion at September 30, 2022, compared to $2.1 billion at December 31, 2021, an increase of $162.7 million, or 7.7%. The increase in deposits is primarily a result of an increase in brokered time deposits to fund the significant loan growth during the third quarter of 2022, increasing $338.1 million compared to December 31, 2021.

 

BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)

 

 

For the Quarter Ended

 

 

 

 

Noninterest income

September 30,
2022

 

June 30,
2022

 

September 30,
2021

 

Sep 22 vs. June 22
% Change

 

Sep 22 vs. Sep 21
% Change

Bank owned life insurance

$

271

 

 

$

265

 

$

271

 

2.3

%

 

?

%

Service charges and fees

 

240

 

 

 

249

 

 

199

 

(3.6

)

 

20.6

 

(Losses) gains and fees from sales of loans

 

(15

)

 

 

608

 

 

924

 

(102.5

)

 

(101.6

)

Other

 

(94

)

 

 

30

 

 

43

 

(413.3

)

 

(318.6

)

Total noninterest income

$

402

 

 

$

1,152

 

$

1,437

 

(65.1

) %

 

(72.0

) %

 

For the Nine Months Ended

 

 

Noninterest income

September 30, 2022

 

September 30, 2021

 

% Change

Gains and fees from sales of loans

$

1,224

 

 

$

2,251

 

(45.6

) %

Bank owned life insurance

 

796

 

 

 

753

 

5.7

 

Service charges and fees

 

729

 

 

 

615

 

18.5

 

Other

 

(237

)

 

 

1,213

 

(119.5

)

Total noninterest income

$

2,512

 

 

$

4,832

 

(48.0

) %

Noninterest income decreased by $1.0 million to $0.4 million for the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021. Noninterest income decreased by $2.3 million to $2.5 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

The decrease in noninterest income was driven by a reduction in loan sales for the quarter and nine months ended September 30, 2022 when compared to the same periods in 2021. Loan sales decreased $0.9 million and $1.0 million for the quarter and nine months ended September 30, 2022, respectively. In addition, noninterest income declined due to the absence of rental income recognized during the quarter and nine months ended September 30, 2021, as a result of the disposition of the Company's former headquarters building. Noninterest income also declined for the nine months ended September 30, 2022 due to a one-time federal payroll tax credit for COVID-19 of $0.9 million recognized in the quarter ended March 31, 2021.

 

BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)

 

 

For the Quarter Ended

 

 

 

 

Noninterest expense

September 30,
2022

 

June 30,
2022

 

September 30,
2021

 

Sep 22 vs. June 22
% Change

 

Sep 22 vs. Sep 21
% Change

Salaries and employee benefits

$

5,876

 

$

5,433

 

$

4,782

 

8.2

%

 

22.9

%

Occupancy and equipment

 

2,035

 

 

2,193

 

 

2,615

 

(7.2

)

 

(22.2

)

Professional services

 

994

 

 

1,000

 

 

498

 

(0.6

)

 

99.6

 

Data processing

 

626

 

 

689

 

 

632

 

(9.1

)

 

(0.9

)

Director fees

 

325

 

 

339

 

 

324

 

(4.1

)

 

0.3

 

FDIC insurance

 

255

 

 

262

 

 

298

 

(2.7

)

 

(14.4

)

Marketing

 

102

 

 

107

 

 

186

 

(4.7

)

 

(45.2

)

Other

 

818

 

 

913

 

 

1,035

 

(10.4

)

 

(21.0

)

Total noninterest expense

$

11,031

 

$

10,936

 

$

10,370

 

0.9

%

 

6.4

%

 

 

For the Nine Months Ended

 

 

Noninterest expense

September 30, 2022

 

September 30, 2021

 

% Change

Salaries and employee benefits

$

16,249

 

$

13,511

 

20.3

%

Occupancy and equipment

 

6,378

 

 

8,271

 

(22.9

)

Professional services

 

2,975

 

 

1,632

 

82.3

 

Data processing

 

1,969

 

 

1,977

 

(0.4

)

Director fees

 

1,016

 

 

968

 

5.0

 

FDIC insurance

 

740

 

 

1,001

 

(26.1

)

Marketing

 

254

 

 

317

 

(19.9

)

Other

 

2,311

 

 

2,383

 

(3.0

)

Total noninterest expense

$

31,892

 

$

30,060

 

6.1

%

Noninterest expense increased by $0.7 million to $11.0 million for the quarter ended September 30, 2022 compared to the quarter ended September 30, 2021. Noninterest expense increased by $1.8 million to $31.9 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits expense and professional services expense, partially offset by a decrease in occupancy and equipment expense.

Salaries and employee benefits expense totaled $5.9 million for the quarter ended September 30, 2022, an increase of $1.1 million when compared to the same period in 2021. Salaries and employee benefits expense totaled $16.2 million for the nine months ended September 30, 2022, an increase of $2.7 million when compared to the same period in 2021. The increase in salaries and employee benefits expense was driven by an increase in full time equivalent employees, as well as an increase in variable compensation as a result of the Bank's overall growth and improved performance. Full time equivalent employees totaled 140 at September 30, 2022 compared to 134 for the same period in 2021. Average full time equivalent employees totaled 131 for the nine months ended September 30, 2022 compared to 127 for the same period in 2021. The increase in salaries and employee benefits expense was partially offset by higher loan originations, which enabled the bank to defer a greater amount of expenses.

Professional services expense totaled $1.0 million for the quarter ended September 30, 2022, an increase of $0.5 million when compared to the same period in 2021. Professional services expense totaled $3.0 million for the nine months ended September 30, 2022, an increase of $1.3 million when compared to the same period in 2021. The increase in professional services expense was primarily driven by consulting fees associated with various projects, including our core system conversion.

Occupancy and equipment expense totaled $2.0 million for the quarter ended September 30, 2022, a decrease of $0.6 million when compared to the same period in 2021. Occupancy and equipment expense totaled $6.4 million for the nine months ended September 30, 2022, a decrease of $1.9 million when compared to the same period in 2021. The decrease in occupancy and equipment expense was primarily driven by the curtailment of additional cleaning costs associated with precautions taken to prevent the spread of COVID-19 during the nine months ended September 30, 2021. In addition, the decrease in occupancy and equipment expense was impacted by a reduction in lease expense as a result of the branch closure in New Canaan, which occurred during the third quarter of 2021.

 

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,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

Total Equity

$

231,500

 

 

$

225,467

 

 

$

210,220

 

 

$

201,987

 

 

$

196,177

 

Less:

 

 

 

 

 

 

 

 

 

Goodwill

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Other intangibles

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

58

 

Tangible Common Equity

$

228,911

 

 

$

222,878

 

 

$

207,631

 

 

$

199,398

 

 

$

193,530

 

 

 

 

 

 

 

 

 

 

 

Total Assets

$

2,722,995

 

 

$

2,435,552

 

 

$

2,496,877

 

 

$

2,456,264

 

 

$

2,226,688

 

Less:

 

 

 

 

 

 

 

 

 

Goodwill

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Other intangibles

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

58

 

Tangible Assets

$

2,720,406

 

 

$

2,432,963

 

 

$

2,494,288

 

 

$

2,453,675

 

 

$

2,224,041

 

 

 

 

 

 

 

 

 

 

 

Tangible Common Equity to Tangible Assets

 

8.41

%

 

 

9.16

%

 

 

8.32

%

 

 

8.13

%

 

 

8.70

%

 
 

 

As of

Computation of Fully Diluted Tangible Book Value per Common Share

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

Total shareholders' equity

$

231,500

 

$

225,467

 

$

210,220

 

$

201,987

 

$

196,177

Less:

 

 

 

 

 

 

 

 

 

Preferred stock

 

?

 

 

?

 

 

?

 

 

?

 

 

?

Common shareholders' equity

$

231,500

 

$

225,467

 

$

210,220

 

$

201,987

 

$

196,177

Less:

 

 

 

 

 

 

 

 

 

Goodwill

 

2,589

 

 

2,589

 

 

2,589

 

 

2,589

 

 

2,589

Other intangibles

 

?

 

 

?

 

 

?

 

 

?

 

 

48

Tangible common shareholders' equity

$

228,911

 

$

222,878

 

$

207,631

 

$

199,398

 

$

193,540

 

 

 

 

 

 

 

 

 

 

Common shares issued and outstanding

 

7,711,843

 

 

7,752,389

 

 

7,761,338

 

 

7,803,166

 

 

7,842,824

 

 

 

 

 

 

 

 

 

 

Fully Diluted Tangible Book Value per Common Share

$

29.68

 

$

28.75

 

$

26.75

 

$

25.55

 

$

24.68

 

BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued
(Dollars in thousands)

 

 

For the Quarter Ended

 

For the Nine Months Ended

Computation of Efficiency Ratio

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

September 30,
2022

 

September 30,
2021

Noninterest expense

$

11,031

 

 

$

10,936

 

 

$

9,925

 

 

$

9,679

 

 

$

10,370

 

 

$

31,892

 

 

$

30,060

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

?

 

 

 

?

 

 

 

?

 

 

 

48

 

 

 

9

 

 

 

?

 

 

 

28

 

Other real estate owned expenses

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Adjusted noninterest expense

$

11,031

 

 

$

10,936

 

 

$

9,925

 

 

$

9,631

 

 

$

10,361

 

 

$

31,892

 

 

$

30,032

 

Net interest income

$

24,601

 

 

$

23,823

 

 

$

19,510

 

 

$

18,928

 

 

$

17,724

 

 

$

67,934

 

 

$

48,958

 

Noninterest income

 

402

 

 

 

1,152

 

 

 

958

 

 

 

825

 

 

 

1,437

 

 

 

2,512

 

 

 

4,832

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain on sale of available for sale securities

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Gain on sale of other real estate owned, net

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

?

 

Operating revenue

$

25,003

 

 

$

24,975

 

 

$

20,468

 

 

$

19,753

 

 

$

19,161

 

 

$

70,446

 

 

$

53,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Efficiency ratio

 

44.1

%

 

 

43.8

%

 

 

48.5

%

 

 

48.8

%

 

 

54.1

%

 

 

45.3

%

 

 

55.8

%

 

For the Quarter Ended

 

For the Nine Months Ended

Computation of Return on Average Tangible Common Equity

September 30,
2022

 

June 30,
2022

 

March 31,
2022

 

December 31,
2021

 

September 30,
2021

 

September 30,
2022

 

September 30,
2021

Net Income Attributable to Common Shareholders

$

9,174

 

 

$

12,022

 

 

$

8,212

 

 

$

7,814

 

 

$

6,855

 

 

$

29,408

 

 

$

18,772

 

Total average shareholders' equity

$

231,378

 

 

$

218,250

 

 

$

207,541

 

 

$

200,752

 

 

$

192,993

 

 

$

219,138

 

 

$

188,794

 

Less:

 

 

 

 

 

 

 

 

 

 

 

 

 

Average Goodwill

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

 

 

2,589

 

Average Other intangibles

 

?

 

 

 

?

 

 

 

?

 

 

 

45

 

 

 

54

 

 

 

?

 

 

 

64

 

Average tangible common equity

$

228,789

 

 

$

215,661

 

 

$

204,952

 

 

$

198,118

 

 

$

190,350

 

 

$

216,549

 

 

$

186,141

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annualized Return on Average Tangible Common Equity

 

15.91

%

 

 

22.36

%

 

 

16.25

%

 

 

15.65

%

 

 

14.29

%

 

 

18.16

%

 

 

13.48

%

 

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, 2022

 

September 30, 2021

 

Average
Balance

 

Interest

 

Yield/
Rate (4)

 

Average
Balance

 

Interest

 

Yield/
Rate (4)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and Fed funds sold

$

130,440

 

$

747

 

2.27

%

 

$

209,500

 

$

88

 

0.17

%

Securities(1)

 

120,092

 

 

829

 

2.76

 

 

 

105,030

 

 

766

 

2.92

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

1,512,381

 

 

18,830

 

4.87

 

 

 

1,270,375

 

 

14,345

 

4.42

 

Residential real estate

 

62,915

 

 

586

 

3.72

 

 

 

95,100

 

 

809

 

3.40

 

Construction

 

116,256

 

 

1,512

 

5.09

 

 

 

88,728

 

 

845

 

3.73

 

Commercial business

 

431,917

 

 

7,058

 

6.39

 

 

 

314,484

 

 

3,707

 

4.61

 

Consumer

 

12,145

 

 

142

 

4.65

 

 

 

8,870

 

 

89

 

3.99

 

Total loans

 

2,135,614

 

 

28,128

 

5.15

 

 

 

1,777,557

 

 

19,795

 

4.36

 

Federal Home Loan Bank stock

 

5,021

 

 

31

 

2.51

 

 

 

3,133

 

 

16

 

2.04

 

Total earning assets

 

2,391,167

 

$

29,735

 

4.87

%

 

 

2,095,220

 

$

20,665

 

3.86

%

Other assets

 

89,173

 

 

 

 

 

 

131,670

 

 

 

 

Total assets

$

2,480,340

 

 

 

 

 

$

2,226,890

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

NOW

$

119,593

 

$

52

 

0.17

%

 

$

111,813

 

$

51

 

0.18

%

Money market

 

828,541

 

 

2,346

 

1.12

 

 

 

824,203

 

 

1,053

 

0.51

 

Savings

 

189,279

 

 

474

 

0.99

 

 

 

182,848

 

 

96

 

0.21

 

Time

 

557,243

 

 

1,220

 

0.87

 

 

 

448,218

 

 

1,187

 

1.05

 

Total interest bearing deposits

 

1,694,656

 

 

4,092

 

0.96

 

 

 

1,567,082

 

 

2,387

 

0.60

 

Borrowed Money

 

135,221

 

 

993

 

2.87

 

 

 

72,960

 

 

503

 

2.70

 

Total interest bearing liabilities

 

1,829,877

 

$

5,085

 

1.10

%

 

 

1,640,042

 

$

2,890

 

0.70

%

Noninterest bearing deposits

 

383,048

 

 

 

 

 

 

341,303

 

 

 

 

Other liabilities

 

36,037

 

 

 

 

 

 

52,552

 

 

 

 

Total liabilities

 

2,248,962

 

 

 

 

 

 

2,033,897

 

 

 

 

Shareholders' equity

 

231,378

 

 

 

 

 

 

192,993

 

 

 

 

Total liabilities and shareholders' equity

$

2,480,340

 

 

 

 

 

$

2,226,890

 

 

 

 

Net interest income(2)

 

 

$

24,650

 

 

 

 

 

$

17,775

 

 

Interest rate spread

 

 

 

 

3.77

%

 

 

 

 

 

3.16

%

Net interest margin(3)

 

 

 

 

4.12

%

 

 

 

 

 

3.39

%

(1) Average balances and yields for securities are based on amortized cost.
(2) The adjustment for securities and loans taxable equivalency amounted to $49 thousand and $51 thousand for the quarters ended September 30, 2022 and 2021, 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, 2022

 

September 30, 2021

 

Average
Balance

 

Interest

 

Yield/
Rate (4)

 

Average
Balance

 

Interest

 

Yield/
Rate (4)

Assets:

 

 

 

 

 

 

 

 

 

 

 

Cash and Fed funds sold

$

240,252

 

$

1,350

 

0.75

%

 

$

315,102

 

$

286

 

0.12

%

Securities(1)

 

117,008

 

 

2,392

 

2.73

 

 

 

103,192

 

 

2,315

 

2.99

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

Commercial real estate

 

1,433,642

 

 

51,104

 

4.70

 

 

 

1,188,049

 

 

40,802

 

4.53

 

Residential real estate

 

67,705

 

 

1,810

 

3.56

 

 

 

104,320

 

 

2,669

 

3.41

 

Construction

 

108,249

 

 

4,482

 

5.46

 

 

 

97,828

 

 

2,769

 

3.73

 

Commercial business

 

402,876

 

 

17,011

 

5.57

 

 

 

302,019

 

 

10,495

 

4.58

 

Consumer

 

7,844

 

 

290

 

4.94

 

 

 

7,601

 

 

226

 

3.97

 

Total loans

 

2,020,316

 

 

74,697

 

4.88

 

 

 

1,699,817

 

 

56,961

 

4.42

 

Federal Home Loan Bank stock

 

3,715

 

 

61

 

2.19

 

 

 

4,608

 

 

72

 

2.09

 

Total earning assets

 

2,381,291

 

$

78,500

 

4.35

%

 

 

2,122,719

 

$

59,634

 

3.70

%

Other assets

 

89,747

 

 

 

 

 

 

119,098

 

 

 

 

Total assets

$

2,471,038

 

 

 

 

 

$

2,241,817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities and shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

Interest bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

NOW

$

122,792

 

$

158

 

0.17

%

 

$

110,637

 

$

148

 

0.18

%

Money market

 

909,106

 

 

4,672

 

0.69

 

 

 

781,178

 

 

2,944

 

0.50

 

Savings

 

194,013

 

 

678

 

0.47

 

 

 

170,749

 

 

313

 

0.24

 

Time

 

487,792

 

 

2,773

 

0.76

 

 

 

532,278

 

 

4,840

 

1.22

 

Total interest bearing deposits

 

1,713,703

 

 

8,281

 

0.65

 

 

 

1,594,842

 

 

8,245

 

0.69

 

Borrowed Money

 

101,685

 

 

2,137

 

2.77

 

 

 

108,737

 

 

2,280

 

2.77

 

Total interest bearing liabilities

 

1,815,388

 

$

10,418

 

0.77

%

 

 

1,703,579

 

$

10,525

 

0.83

%

Noninterest bearing deposits

 

398,728

 

 

 

 

 

 

303,421

 

 

 

 

Other liabilities

 

37,784

 

 

 

 

 

 

46,023

 

 

 

 

Total liabilities

 

2,251,900

 

 

 

 

 

 

2,053,023

 

 

 

 

Shareholders' equity

 

219,138

 

 

 

 

 

 

188,794

 

 

 

 

Total liabilities and shareholders' equity

$

2,471,038

 

 

 

 

 

$

2,241,817

 

 

 

 

Net interest income(2)

 

 

$

68,082

 

 

 

 

 

$

49,109

 

 

Interest rate spread

 

 

 

 

3.58

%

 

 

 

 

 

2.87

%

Net interest margin(3)

 

 

 

 

3.81

%

 

 

 

 

 

3.08

%

(1) Average balances and yields for securities are based on amortized cost.
(2) The adjustment for securities and loans taxable equivalency amounted to $148 thousand and $151 thousand for the nine months ended September 30, 2022 and 2021, 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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