Bankwell Financial Group Inc.
Bankwell Financial Group Inc.
24/07/2024 | Press release | Distributed by Public on 24/07/2024 20:46
Bankwell Financial Group Reports Operating Results for the Second Quarter and Declares Third Quarter Dividend
NEW CANAAN, Conn.--(BUSINESS WIRE)-- 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.
Capital
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, |
March 31, |
December 31, |
June 30, |
||||||||||||
|
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 |
|||||||||||
|
Goodwill |
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, |
March 31, |
December 31, |
June 30, |
June 30, |
June 30, |
||||||||||||||||
|
Interest and dividend income |
|||||||||||||||||||||
|
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 |
|||||||||||||||
|
Marketing |
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, |
March 31, |
December 31, |
June 30, |
June 30, |
June 30, |
||||||||||||
|
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, |
March 31, |
December 31, |
June 30, |
||||||||||||
|
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, |
March 31, |
December 31, |
June 30, |
||||||||||||
|
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, |
March 31, |
December 31, |
June 30, |
||||||||||||
|
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, |
March 31, |
December 31, |
Current QTD |
YTD |
|||||||||
|
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, |
March 31, |
December 31, |
Current QTD |
YTD |
|||||||||
|
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, |
March 31, |
June 30, |
June 24 vs. Mar 24 |
Jun 24 vs. Jun 23 |
|||||||||
|
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 |
) |
|||||||
|
Marketing |
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, |
June 30, |
Jun 24 vs. Jun 23 |
|||||
|
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 |
) |
||||
|
Marketing |
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, |
March 31, |
December 31, |
June 30, |
|||||||||||
|
Total Equity |
$ |
266,976 |
$ |
268,032 |
$ |
265,752 |
$ |
248,813 |
|||||||
|
Less: |
|||||||||||||||
|
Goodwill |
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: |
|||||||||||||||
|
Goodwill |
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, |
March 31, |
December 31, |
June 30, |
|||||||
|
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: |
|||||||||||
|
Goodwill |
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, |
March 31, |
December 31, |
June 30, |
June 30, |
June 30, |
|||||
|
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 |
Six Months Ended |
||||||||||||||
|
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, |
March 31, |
June 30, |
Jun 24 vs. Mar 24 |
Jun 24 vs. Jun 23 |
|||||||||||
|
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, |
June 30, |
Jun 24 vs. Jun 23 |
||||||
|
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 |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
||||||||||||
|
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 |
Interest |
Yield/ |
Average |
Interest |
Yield/ |
||||||||||||
|
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. |
Christopher R. Gruseke
President and Chief Executive Officer
(203) 652-0166
or
Courtney E. Sacchetti
Executive Vice President and Chief Financial Officer of Bankwell Financial Group
(203) 652-0166