Bankwell Financial Group Reports Operating Results for the Second Quarter and Declares Third Quarter Dividend
Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $1.1 million, or $0.14 per share for the second quarter of 2024, versus $8.0 million, or $1.02 per share, for the same period in 2023. Pre-tax, pre-provision net revenue ("PPNR") was $9.7 million, or $1.25 per share, for the second quarter of 2024, versus $12.8 million, or $1.68 per share for the same period in 2023.
The Company's Board of Directors declared a $0.20 per share cash dividend, payable August 23, 2024 to shareholders of record on August 12, 2024.
We recommend reading this earnings release in conjunction with the Second Quarter 2024 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our July 24, 2024 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
"The Company’s core profitability has begun to expand; PPNR Return on Average Assets grew to 1.22% for the quarter, while the Net interest margin (“NIM”) has expanded to 2.75%. We continue to achieve peer-leading operational efficiency with a Noninterest Expense to Average Assets ratio of 1.55% for the quarter. Going forward, the Company’s liability sensitive balance sheet is well positioned for any potential Federal Reserve rate cuts.
Earnings per share for the second quarter were reduced by approximately $0.66 due to a specific reserve taken on a non-real estate related commercial credit. The Company announced this addition to its Allowance for Credit Losses in its 8-K filed on July 2, 2024. Notwithstanding this idiosyncratic credit event, other areas of the loan portfolio have experienced improving credit trends. A significant portion of criticized and classified loans have demonstrated improved operating results and may be subject to future credit upgrades if these trends continue. Additional details regarding the specific reserve as well as other credit metrics can be found in the accompanying Investor Presentation.
We are also pleased to announce that the Company will host its first earnings call after third quarter financial results are released in October 2024. The date and time of that call will be announced in the coming weeks."
Second Quarter 2024 Highlights:
PPNR was $9.7 million and PPNR return on average assets was 1.22% for the quarter ended June 30, 2024. Net income of $1.1 million for the quarter reflects the impact of an $8.2 million provision for credit losses. $6.6 million of the provision for credit losses is related to a specific reserve taken against an $8.7 million commercial business credit1. The net interest margin was 2.75% and 2.73% for the quarter and six months ended June 30, 2024, respectively. Noninterest expense to average assets was 1.55% and 1.60% for the quarter and six months ended June 30, 2024, respectively. Total gross loans were $2.7 billion, decreasing $61.4 million, or 2.3%, compared to December 31, 2023. Average yield on total loans was 6.37% for the six months ended June 30, 2024. Deposits were $2.7 billion, decreasing $74.4 million, or 2.7%, compared to December 31, 2023. Brokered deposits decreased $144.2 million compared to December 31, 2023. FDIC-insured deposits totaled $1.9 billion and represent 72.9% of total deposits as of June 30, 2024. Return on average assets was 0.14% and 0.31% for the quarter and six months ended June 30, 2024, respectively. Return on average tangible common equity was 1.67% and 3.65% for the quarter and six months ended June 30, 2024, respectively. Investment securities totaled $138.0 million and represent 4.4% of total assets. The Company repurchased 40,140 shares and 76,320 at the weighted average prices of $24.55 and $24.94 per share for the quarter and six months ended June 30, 2024, respectively.1 - 8-K was filed on July 2, 2024.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the quarter ended June 30, 2024 were $21.9 million, versus $25.4 million for the quarter ended June 30, 2023. Revenues for the six months ended June 30, 2024 were $44.0 million, versus $52.5 million for the six months ended June 30, 2023. The decrease in revenues for the quarter and six months ended June 30, 2024 was attributable to an increase in interest expense on deposits and lower gains from loan sales partially offset by an increase in interest and fees on loans, given higher loan yields2 and prepayment fees.
Net income for the quarter ended June 30, 2024 was $1.1 million, versus $8.0 million for the quarter ended June 30, 2023. Net income for the six months ended June 30, 2024 was $4.9 million, versus $18.4 million for the six months ended June 30, 2023. The decrease in net income for the quarter and six months ended 2024 was primarily due to the aforementioned decrease in revenues and an increase in provision for credit losses.
Basic and diluted earnings per share were $0.14 and $0.14, respectively, for the quarter ended June 30, 2024 compared to basic and diluted earnings per share of $1.02 and $1.02, respectively, for the quarter ended June 30, 2023. Basic and diluted earnings per share were $0.62 and $0.62, respectively, for the six months ended June 30, 2024 compared to basic and diluted earnings per share of $2.36 and $2.34, respectively, for the six months ended June 30, 2023.
The net interest margin (fully taxable equivalent basis) for the quarters ended June 30, 2024 and June 30, 2023 was 2.75% and 3.07%, respectively. The net interest margin (fully taxable equivalent basis) for the six months ended June 30, 2024 and June 30, 2023 was 2.73% and 3.15%, respectively. The decrease in the net interest margin was due to an increase in funding costs partially offset by an increase in interest income on earning assets.
2 - The increase in overall loan yields was 28 bps and 38 bps for the quarter and six months ended June 30, 2024, respectively.
Allowance for Credit Losses - Loans ("ACL-Loans")
The ACL-Loans was $36.1 million as of June 30, 2024 compared to $27.9 million as of December 31, 2023. The ACL-Loans as a percentage of total loans was 1.36% as of June 30, 2024 compared to 1.03% as of December 31, 2023. Provision for credit losses was $8.2 million for the quarter ended June 30, 2024. The increase in the provision for credit losses for the quarter was primarily due to an additional $7.4 million for two loans. Of the $7.4 million, $6.6 million is related to a specific reserve taken against an $8.7 million commercial business credit. The credit had been previously reported as a non-performing loan as of the fourth quarter of 2023 and had previously carried a $0.4 million specific reserve. The Company's estimated remaining exposure for the commercial business credit is $1.7 million. The additional $0.8 million specific reserve was related to a construction loan.
Financial Condition
Assets totaled $3.1 billion at June 30, 2024, a decrease of $73.8 million, or 2.3% compared to December 31, 2023. Gross loans totaled $2.7 billion at June 30, 2024, a decrease of $61.4 million, or 2.3% compared to December 31, 2023. Deposits totaled $2.7 billion at June 30, 2024, a decrease of $74.4 million, or 2.7% compared to December 31, 2023.
Shareholders’ equity totaled $267.0 million as of June 30, 2024, an increase of $1.2 million compared to December 31, 2023, primarily a result of net income of $4.9 million for the six months ended June 30, 2024. The increase was partially offset by dividends paid of $3.2 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 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, pre-tax, pre-provision net revenue, pre-tax, pre-provision net revenue on average assets, and the dividend payout ratio are useful to evaluate the relative strength of the Company's performance and capital position. We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
ASSETS
Cash and due from banks
$
234,277
$
245,043
$
267,521
$
207,345
Federal funds sold
17,103
2,584
1,636
54,706
Cash and cash equivalents
251,380
247,627
269,157
262,051
Investment securities
Marketable equity securities, at fair value
2,079
2,069
2,070
2,017
Available for sale investment securities, at fair value
107,635
108,417
109,736
99,938
Held to maturity investment securities, at amortized cost
28,286
15,739
15,817
15,884
Total investment securities
138,000
126,225
127,623
117,839
Loans receivable (net of ACL-Loans of $36,083, $27,991, $27,946, and $30,694 at June 30, 2024, March 31, 2024, December 31, 2023, and June 30, 2023, respectively)
2,616,691
2,646,686
2,685,301
2,736,607
Accrued interest receivable
14,675
15,104
14,863
14,208
Federal Home Loan Bank stock, at cost
5,655
5,655
5,696
5,696
Premises and equipment, net
25,599
26,161
27,018
27,658
Bank-owned life insurance
52,097
51,764
51,435
50,816
2,589
2,589
2,589
2,589
Deferred income taxes, net
11,345
9,137
9,383
10,014
Other assets
23,623
24,326
22,417
25,229
Total assets
$
3,141,654
$
3,155,274
$
3,215,482
$
3,252,707
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
328,475
$
376,248
$
346,172
$
367,635
Interest bearing deposits
2,333,900
2,297,274
2,390,585
2,421,228
Total deposits
2,662,375
2,673,522
2,736,757
2,788,863
Advances from the Federal Home Loan Bank
90,000
90,000
90,000
90,000
Subordinated debentures
69,328
69,266
69,205
69,082
Accrued expenses and other liabilities
52,975
54,454
53,768
55,949
Total liabilities
2,874,678
2,887,242
2,949,730
3,003,894
Shareholders’ equity
Common stock, no par value
118,037
118,401
118,247
116,541
Retained earnings
150,895
151,350
149,169
133,988
Accumulated other comprehensive (loss)
(1,956
)
(1,719
)
(1,664
)
(1,716
)
Total shareholders’ equity
266,976
268,032
265,752
248,813
Total liabilities and shareholders’ equity
$
3,141,654
$
3,155,274
$
3,215,482
$
3,252,707
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except share data)
For the Quarter Ended
For the Six Months Ended
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
June 30,
2024
June 30,
2023
Interest and fees on loans
$
43,060
$
43,325
$
44,122
$
42,482
$
86,385
$
82,205
Interest and dividends on securities
1,190
1,130
1,108
1,002
2,320
2,002
Interest on cash and cash equivalents
3,429
3,826
4,164
3,022
7,255
6,590
Total interest and dividend income
47,679
48,281
49,394
46,506
95,960
90,797
Interest expense
Interest expense on deposits
24,677
25,362
25,307
20,777
50,039
37,810
Interest expense on borrowings
1,783
1,772
1,842
1,738
3,555
3,455
Total interest expense
26,460
27,134
27,149
22,515
53,594
41,265
Net interest income
21,219
21,147
22,245
23,991
42,366
49,532
Provision (credit) for credit losses
8,183
3,683
(960
)
2,579
11,866
3,405
Net interest income after provision for credit losses
13,036
17,464
23,205
21,412
30,500
46,127
Noninterest income
Bank owned life insurance
333
329
316
292
662
573
Service charges and fees
495
304
688
361
799
647
Gains and fees from sales of loans
45
321
79
725
366
1,656
Other
(190
)
(39
)
46
23
(229
)
51
Total noninterest income
683
915
1,129
1,401
1,598
2,927
Noninterest expense
Salaries and employee benefits
6,176
6,291
6,088
6,390
12,467
12,471
Occupancy and equipment
2,238
2,322
2,231
2,204
4,561
4,288
Professional services
989
1,065
1,033
692
2,054
2,014
Data processing
755
740
747
729
1,495
1,400
Director fees
306
900
605
453
1,206
845
FDIC insurance
705
930
1,026
1,050
1,635
2,112
90
114
139
177
203
328
Other
986
935
995
946
1,921
1,874
Total noninterest expense
12,245
13,297
12,864
12,641
25,542
25,332
Income before Income tax expense
1,474
5,082
11,470
10,172
6,556
23,722
Income tax expense
356
1,319
2,946
2,189
1,675
5,360
Net income
$
1,118
$
3,763
$
8,524
$
7,983
$
4,881
$
18,362
Earnings Per Common Share:
Basic
$
0.14
$
0.48
$
1.09
$
1.02
$
0.62
$
2.36
Diluted
$
0.14
$
0.48
$
1.09
$
1.02
$
0.62
$
2.34
Weighted Average Common Shares Outstanding:
Basic
7,747,675
7,663,521
7,603,938
7,593,417
7,705,598
7,574,160
Diluted
7,723,888
7,687,679
7,650,451
7,601,562
7,721,880
7,639,828
Dividends per common share
$
0.20
$
0.20
$
0.20
$
0.20
$
0.40
$
0.40
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
For the Quarter Ended
For the Six Months Ended
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
June 30,
2024
June 30,
2023
Performance ratios:
Return on average assets
0.14
%
0.47
%
1.03
%
0.99
%
0.31
%
1.14
%
Return on average shareholders' equity
1.65
%
5.59
%
12.82
%
12.91
%
3.61
%
15.15
%
Return on average tangible common equity
1.67
%
5.65
%
12.95
%
13.05
%
3.65
%
15.31
%
Net interest margin
2.75
%
2.71
%
2.81
%
3.07
%
2.73
%
3.15
%
Efficiency ratio(1)
55.9
%
60.3
%
55.0
%
49.8
%
58.1
%
48.3
%
Net loan charge-offs as a % of average loans
0.01
%
0.11
%
0.01
%
—
%
0.13
%
0.02
%
Dividend payout ratio(2)
142.86
%
41.67
%
18.35
%
19.61
%
64.52
%
17.09
%
(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
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)
11.73
%
11.60
%
11.30
%
10.34
%
Total Capital to Risk-Weighted Assets(1)
12.98
%
12.63
%
12.32
%
11.41
%
Tier I Capital to Risk-Weighted Assets(1)
11.73
%
11.60
%
11.30
%
10.34
%
Tier I Capital to Average Assets(1)
10.17
%
10.09
%
9.81
%
9.41
%
Tangible common equity to tangible assets
8.42
%
8.42
%
8.19
%
7.58
%
Fully diluted tangible book value per common share
$
33.61
$
33.57
$
33.39
$
31.45
(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
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
ACL-Loans:
Balance at beginning of period
$
27,991
$
27,946
$
29,284
$
27,998
Charge-offs:
Residential real estate
(9
)
(132
)
—
—
Commercial real estate
(522
)
(3,306
)
(824
)
—
Commercial business
—
(197
)
—
—
Consumer
(12
)
(49
)
(15
)
(25
)
Total charge-offs
(543
)
(3,684
)
(839
)
(25
)
Recoveries:
Residential real estate
141
—
—
—
Commercial real estate
113
—
—
—
Commercial business
—
27
464
32
Consumer
13
4
3
10
Total recoveries
267
31
467
42
Net loan (charge-offs) recoveries
(276
)
(3,653
)
(372
)
17
Provision (credit) for credit losses - loans
8,368
3,698
(966
)
2,679
Balance at end of period
$
36,083
$
27,991
$
27,946
$
30,694
As of
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
Asset quality:
Nonaccrual loans
Residential real estate
$
1,339
$
1,237
$
1,386
$
1,429
Commercial real estate
28,088
19,083
23,009
1,905
Commercial business
17,396
16,841
15,430
2,815
Construction
9,382
9,382
9,382
9,382
Consumer
—
—
—
—
Total nonaccrual loans
56,205
46,543
49,207
15,531
Other real estate owned
—
—
—
—
Total nonperforming assets
$
56,205
$
46,543
$
49,207
$
15,531
Nonperforming loans as a % of total loans
2.12
%
1.74
%
1.81
%
0.56
%
Nonperforming assets as a % of total assets
1.79
%
1.48
%
1.53
%
0.48
%
ACL-loans as a % of total loans
1.36
%
1.04
%
1.03
%
1.11
%
ACL-loans as a % of nonperforming loans
64.20
%
60.14
%
56.79
%
197.63
%
Total past due loans to total loans
0.84
%
1.44
%
0.78
%
1.30
%
Total nonaccrual loans increased $7.0 million to $56.2 million as of June 30, 2024 when compared to December 31, 2023. The increase was primarily due to a $13.9 million commercial real estate non-owner occupied office loan put on nonaccrual during the six months ended June 30, 2024. This loan represents a 16.5% participation in a $84.3 million club transaction. The increase was partially offset by the payoff of two loans totaling $4.4 million and four loans that were partially charged-off for a total of $4.0 million during the six months ended June 30, 2024.
Nonperforming assets as a percentage of total assets increased to 1.79% at June 30, 2024 from 1.53% at December 31, 2023. The ACL-Loans at June 30, 2024 was $36.1 million, representing 1.36% of total loans.
BANKWELL FINANCIAL GROUP, INC.
LOAN DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
Period End Loan Composition
June 30,
2024
March 31,
2024
December 31,
2023
Current QTD
% Change
YTD
% Change
Residential Real Estate
$
47,875
$
49,098
$
50,931
(2.5
)%
(6.0
)%
Commercial Real Estate(1)
1,912,701
1,927,636
1,947,648
(0.8
)
(1.8
)
Construction
150,259
151,967
183,414
(1.1
)
(18.1
)
Total Real Estate Loans
2,110,835
2,128,701
2,181,993
(0.8
)
(3.3
)
Commercial Business
503,444
508,912
500,569
(1.1
)
0.6
Consumer
42,906
41,946
36,045
2.3
19.0
Total Loans
$
2,657,185
$
2,679,559
$
2,718,607
(0.8
)%
(2.3
)%
(1) Includes owner occupied commercial real estate of $0.7 billion at June 30, 2024, March 31, 2024, and December 31, 2023, respectively.
Gross loans totaled $2.7 billion at June 30, 2024, a decrease of $61.4 million or 2.3% compared to December 31, 2023.
Period End Deposit Composition
June 30,
2024
March 31,
2024
December 31,
2023
Current QTD
% Change
YTD
% Change
Noninterest bearing demand
$
328,475
$
376,248
$
346,172
(12.7
)%
(5.1
)%
NOW
122,112
95,227
90,829
28.2
34.4
Money Market
825,599
818,408
887,352
0.9
(7.0
)
Savings
91,870
92,188
97,331
(0.3
)
(5.6
)
Time
1,294,319
1,291,451
1,315,073
0.2
(1.6
)
Total Deposits
$
2,662,375
$
2,673,522
$
2,736,757
(0.4
)%
(2.7
)%
Total deposits were $2.7 billion at June 30, 2024, a decrease of $74.4 million, or 2.7%, when compared to December 31, 2023. Brokered deposits have decreased $144.2 million, when compared to December 31, 2023.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest expense
June 30,
2024
March 31,
2024
June 30,
2023
June 24 vs. Mar 24
% Change
Jun 24 vs. Jun 23
% Change
Salaries and employee benefits
$
6,176
$
6,291
$
6,390
(1.8
)%
(3.3
)%
Occupancy and equipment
2,238
2,322
2,204
(3.6
)
1.5
Professional services
989
1,065
692
(7.1
)
42.9
Data processing
755
740
729
2.0
3.6
Director fees
306
900
453
(66.0
)
(32.5
)
FDIC insurance
705
930
1,050
(24.2
)
(32.9
)
90
114
177
(21.1
)
(49.2
)
Other
986
935
946
5.5
4.2
Total noninterest expense
$
12,245
$
13,297
$
12,641
(7.9
)%
(3.1
)%
Noninterest expense decreased by $0.4 million to $12.2 million for the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023. The decrease in noninterest expense was primarily driven by a decrease in FDIC insurance costs, mainly driven by a reduction in the Bank's brokered deposits.
For the Six Months Ended
Noninterest expense
June 30,
2024
June 30,
2023
Jun 24 vs. Jun 23
% Change
Salaries and employee benefits
$
12,467
$
12,471
—
%
Occupancy and equipment
4,561
4,288
6.4
Professional services
2,054
2,014
2.0
Data processing
1,495
1,400
6.8
Director fees
1,206
845
42.7
FDIC insurance
1,635
2,112
(22.6
)
203
328
(38.1
)
Other
1,921
1,874
2.5
Total noninterest expense
$
25,542
$
25,332
0.8
%
Noninterest expense increased by $0.2 million to $25.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in noninterest expense was primarily driven by an increase in director fees related to timing of compensation and accelerated vestings in connection with the death of a director. The increase was partially offset by a decrease in FDIC insurance costs, mainly attributable by a reduction in the Bank's brokered deposits.
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
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
Total Equity
$
266,976
$
268,032
$
265,752
$
248,813
Less:
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
Tangible Common Equity
$
264,387
$
265,443
$
263,163
$
246,224
Total Assets
$
3,141,654
$
3,155,274
$
3,215,482
$
3,252,707
Less:
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
Tangible Assets
$
3,139,065
$
3,152,685
$
3,212,893
$
3,250,118
Tangible Common Equity to Tangible Assets
8.42
%
8.42
%
8.19
%
7.58
%
As of
Computation of Fully Diluted Tangible Book Value per Common Share
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
Total shareholders' equity
$
266,976
$
268,032
$
265,752
$
248,813
Less:
Preferred stock
—
—
—
—
Common shareholders' equity
$
266,976
$
268,032
$
265,752
$
248,813
Less:
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
Tangible common shareholders' equity
$
264,387
$
265,443
$
263,163
$
246,224
Common shares issued and outstanding
7,866,499
7,908,180
7,882,616
7,829,950
Fully Diluted Tangible Book Value per Common Share
$
33.61
$
33.57
$
33.39
$
31.45
For the Quarter Ended
For the Six Months Ended
Computation of PPNR
June 30,
2024
March 31,
2024
December 31,
2023
June 30,
2023
June 30,
2024
June 30,
2023
Income before Income tax expense
$ 1,474
$ 5,082
$ 11,470
$ 10,172
$ 6,556
$ 23,722
Add:
Provision (credit) for credit losses
8,183
3,683
(960)
2,579
11,866
3,405
PPNR
$ 9,657
$ 8,765
$ 10,510
$ 12,751
$ 18,422
$ 27,127
PPNR return on average assets
1.22 %
1.10 %
1.27 %
1.58 %
1.16 %
1.69 %
BANKWELL FINANCIAL GROUP, INC.
EARNINGS PER SHARE ("EPS") (unaudited)
(Dollars in thousands, except share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2024
2023
2024
2023
(In thousands, except per share data)
Net income
$
1,118
$
7,983
$
4,881
$
18,362
Dividends to participating securities(1)
(40
)
(41
)
(79
)
(84
)
Undistributed earnings allocated to participating securities(1)
14
(172
)
(52
)
(403
)
Net income for earnings per share calculation
$
1,092
$
7,770
$
4,750
$
17,875
Weighted average shares outstanding, basic
7,748
7,593
7,706
7,574
Effect of dilutive equity-based awards(2)
(24
)
8
16
66
Weighted average shares outstanding, diluted
7,724
7,601
7,722
7,640
Net earnings per common share:
Basic earnings per common share
$
0.14
$
1.02
$
0.62
$
2.36
Diluted earnings per common share
$
0.14
$
1.02
$
0.62
$
2.34
(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
June 30,
2024
March 31,
2024
June 30,
2023
Jun 24 vs. Mar 24
% Change
Jun 24 vs. Jun 23
% Change
Bank owned life insurance
$
333
$
329
$
292
1.2
%
14.0
%
Service charges and fees
495
304
361
62.8
37.1
Gains and fees from sales of loans
45
321
725
(86.0
)
(93.8
)
Other
(190
)
(39
)
23
Unfavorable
Unfavorable
Total noninterest income
$
683
$
915
$
1,401
(25.4
)%
(51.2
)%
Noninterest income decreased $0.7 million for the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023. The decrease in noninterest income was driven by lower gains as a result of fewer SBA loan sales for the quarter ended June 30, 2024.
For the Six Months Ended
Noninterest income
June 30,
2024
June 30,
2023
Jun 24 vs. Jun 23
% Change
Bank owned life insurance
$
662
$
573
15.5
%
Service charges and fees
799
647
23.5
%
Gains and fees from sales of loans
366
1,656
(77.9
)%
Other
(229
)
51
Unfavorable
Total noninterest income
$
1,598
$
2,927
(45.4
)%
Noninterest income decreased $1.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in noninterest income was driven by lower gains as a result of fewer SBA loan sales for the six months ended June 30, 2024.
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited)
(Dollars in thousands)
For the Quarter Ended
June 30, 2024
June 30, 2023
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
273,301
$
3,429
5.05
%
$
227,777
$
3,023
5.32
%
Securities(1)
137,360
1,139
3.32
128,576
955
2.97
Loans:
Commercial real estate
1,901,189
27,654
5.75
1,935,058
27,099
5.54
Residential real estate
49,046
772
6.30
56,981
643
4.51
Construction
159,184
2,871
7.14
206,844
3,691
7.06
Commercial business
523,382
11,028
8.34
557,482
10,646
7.55
Consumer
42,335
735
6.98
29,326
500
6.84
Total loans
2,675,136
43,060
6.37
2,785,691
42,579
6.05
Federal Home Loan Bank stock
5,655
118
8.42
5,610
98
7.00
Total earning assets
3,091,452
$
47,746
6.11
%
3,147,654
$
46,655
5.86
%
Other assets
95,453
96,603
Total assets
$
3,186,905
$
3,244,257
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
107,310
$
49
0.18
%
$
98,048
$
42
0.18
%
Money market
833,489
8,552
4.13
902,225
8,083
3.59
Savings
90,987
688
3.04
112,585
860
3.06
Time
1,291,595
15,388
4.79
1,298,170
11,792
3.64
Total interest bearing deposits
2,323,381
24,677
4.27
2,411,028
20,777
3.46
Borrowed Money
159,288
1,783
4.43
163,138
1,738
4.21
Total interest bearing liabilities
2,482,669
$
26,460
4.29
%
2,574,166
$
22,515
3.51
%
Noninterest bearing deposits
368,516
375,514
Other liabilities
63,177
46,565
Total liabilities
2,914,362
2,996,245
Shareholders' equity
272,543
248,012
Total liabilities and shareholders' equity
$
3,186,905
$
3,244,257
Net interest income(2)
$
21,286
$
24,140
Interest rate spread
1.82
%
2.36
%
Net interest margin(3)
2.75
%
3.07
%
(1)
Average balances and yields for securities are based on amortized cost.
(2)
The adjustment for securities and loans taxable equivalency amounted to $67 thousand and $51 thousand for the quarters ended June 30, 2024 and 2023, respectively.
(3)
Annualized net interest income as a percentage of earning assets.
(4)
Yields are calculated using the contractual day count convention for each respective product type.
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - YTD (unaudited)
(Dollars in thousands)
For the Six Months Ended
June 30, 2024
June 30, 2023
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
282,981
$
7,255
5.16
%
$
271,328
$
6,590
4.90
%
Securities(1)
136,049
2,199
3.23
129,225
1,912
2.96
Loans:
Commercial real estate
1,911,896
56,295
5.82
1,926,852
52,125
5.38
Residential real estate
49,624
1,490
6.01
58,207
1,286
4.42
Construction
160,080
5,844
7.22
186,684
6,651
7.09
Commercial business
520,188
21,314
8.10
549,963
21,394
7.74
Consumer
41,150
1,442
7.05
23,971
749
6.30
Total loans
2,682,938
86,385
6.37
2,745,677
82,205
5.95
Federal Home Loan Bank stock
5,678
239
8.44
5,442
193
7.14
Total earning assets
3,107,646
$
96,078
6.12
%
3,151,672
$
90,900
5.74
%
Other assets
93,179
90,427
Total assets
$
3,200,825
$
3,242,099
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
99,493
$
88
0.18
%
$
95,494
$
81
0.17
%
Money market
858,670
17,698
4.14
905,021
14,468
3.22
Savings
91,979
1,402
3.06
124,387
1,586
2.57
Time
1,304,332
30,851
4.76
1,275,417
21,675
3.43
Total interest bearing deposits
2,354,474
50,039
4.27
2,400,319
37,810
3.18
Borrowed Money
159,257
3,555
4.42
162,215
3,454
4.24
Total interest bearing liabilities
2,513,731
$
53,594
4.29
%
2,562,534
$
41,264
3.25
%
Noninterest bearing deposits
352,768
389,608
Other liabilities
62,775
45,494
Total liabilities
2,929,274
2,997,636
Shareholders' equity
271,551
244,463
Total liabilities and shareholders' equity
$
3,200,825
$
3,242,099
Net interest income(2)
$
42,484
$
49,636
Interest rate spread
1.83
%
2.49
%
Net interest margin(3)
2.73
%
3.15
%
(1)
Average balances and yields for securities are based on amortized cost.
(2)
The adjustment for securities and loans taxable equivalency amounted to $118 thousand and $102 thousand for the six months ended June 30, 2024 and 2023, respectively.
(3)
Annualized net interest income as a percentage of earning assets.
(4)
Yields are calculated using the contractual day count convention for each respective product type.
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