Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record
GAAP net income of $6.9 million, or $0.87 per share, for the third
quarter of 2021, versus $3.0 million, or $0.38 per share, for the
same period in 2020.
The Company's Board of Directors declared an $0.18 per share
cash dividend, payable November 22, 2021 to shareholders of record
on November 12, 2021.
We recommend reading this earnings release in conjunction with
the Third Quarter 2021 Investor Presentation, located at
http://investor.mybankwell.com/Presentations and included as an
exhibit to our October 27, 2021 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R.
Gruseke:
“On behalf of all of my colleagues at Bankwell, I am proud to
announce our results for the most recent quarter. The Company
achieved record levels in most performance categories of our
business. Loan originations for the quarter totaled $200 million,
with net loan growth of $92 million, excluding Paycheck Protection
Program ("PPP") loans. Year to date, gross loan balances excluding
PPP loans have grown by $232 million for an annualized growth rate
of 19%. The Company’s ROAE and ROAA were 14.09% and 1.22%,
respectively, for the quarter. Loan demand remains brisk; our
healthy pipeline positions us for a strong finish to the year and
lays the foundation for increased profitability in 2022.
“Confident in the strength of our balance sheet and the prospect
of growing earnings, the Company’s Board of Directors today
authorized the repurchase of an additional 200,000 shares of its
common stock.”
Third Quarter 2021 Highlights:
- Return on average assets was 1.22% and return on average equity
was 14.09% for the quarter ended September 30, 2021.
- The net interest margin improved to 3.39% for the quarter ended
September 30, 2021.
- The efficiency ratio improved to 54.1% for the quarter ended
September 30, 2021.
- Excluding Paycheck Protection Program ("PPP") loans, total
gross loans were $1.8 billion, growing $232.1 million, or 14.6%,
compared to December 31, 2020. On a quarterly basis loans grew
$92.3 million, or 5.3% compared to June 30, 2021.
- Gains from loan sales totaled $0.9 million and $2.3 million for
the quarter and nine months ended September 30, 2021, respectively,
compared to $27 thousand for the quarter and nine months ended
September 30, 2020.
- Total deposits were $1.9 billion compared to $1.8 billion at
December 31, 2020.
- Noninterest bearing deposits increased by $68.5 million, or
25.3% compared to December 31, 2020.
- The percentage of noninterest bearing deposits to total
deposits increased to 18.0% compared to 14.8% at December 31,
2020.
- The cost of interest bearing deposits decreased approximately
47 basis points to 0.60% for the quarter ended September 30, 2021
when compared to the quarter ended September 30, 2020.
- Investment securities totaled $105.9 million and represent 4.8%
of total assets.
- Tangible book value per share rose to $25.25 compared to $22.43
at December 31, 2020.
- Shares issued and outstanding were 7,842,824, reflecting
repurchases of 52,277 shares of common stock at a weighted average
price of $27.26 during the quarter ended September 30, 2021.
Post Third Quarter 2021 Highlights:
- Subsequent to September 30, 2021, the Company issued a 3.25%
fixed-to-floating rate subordinated note due 2031 in the principal
amount of $35.0 million. The proceeds will be used for repayment of
$15.5 million of existing subordinated notes and general corporate
purposes.
- The Company's Board of Directors authorized an additional
200,000 shares for its existing share repurchase program.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the
quarter ended September 30, 2021 were $19.2 million, versus $14.2
million for the quarter ended September 30, 2020. Revenues for the
nine months ended September 30, 2021 were $53.8 million, versus
$42.8 million for the nine months ended September 30, 2020. The
increase was primarily attributable to lower interest expense on
deposits, an increase in interest and fees on loans due to loan
growth and from the resumption of loan sales. Revenues for the nine
months ended September 30, 2021 also benefited from a one-time
federal payroll tax credit for COVID-19 of $0.9 million.
Net income for the quarter ended September 30, 2021 was $6.9
million, versus $3.0 million for the quarter ended September 30,
2020. Net income for the nine months ended September 30, 2021 was
$18.8 million, versus $5.6 million for the nine months ended
September 30, 2020. The increase in net income was primarily
impacted by the aforementioned increases in revenues and a decrease
in the provision for loan losses resulting from lower loan loss
reserves in 2021 when compared to 2020, which saw a large increase
in reserves due to the COVID-19 Pandemic.
Basic and diluted earnings per share were $0.88 and $0.87,
respectively, for the quarter ended September 30, 2021 compared to
basic and diluted earnings per share of $0.38 each for the quarter
ended September 30, 2020. Basic and diluted earnings per share were
$2.38 and $2.37, respectively, for the nine months ended September
30, 2021 compared to basic and diluted earnings per share of $0.71
each for the nine months ended September 30, 2020.
The net interest margin (fully taxable equivalent basis) for the
quarters ended September 30, 2021 and September 30, 2020 was 3.39%
and 2.67%, respectively. The net interest margin (fully taxable
equivalent basis) for the nine months ended September 30, 2021 and
September 30, 2020 was 3.08% and 2.81%, respectively. The increase
in the net interest margin was due to a decrease in rates on
interest bearing deposits and a greater percentage of noninterest
bearing deposits. In addition, the increase in the net interest
margin for the quarter ended September 30, 2021 was positively
impacted by a reduction in excess liquidity when compared to the
quarter ended September 30, 2020.
Financial Condition
Assets totaled $2.23 billion at September 30, 2021, compared to
assets of $2.25 billion at December 31, 2020. The change in assets
remained relatively flat as the decrease in excess liquidity was
offset by an increase in loans. Gross loans totaled $1.8 billion at
September 30, 2021, an increase of $198.9 million compared to
December 31, 2020. Excluding PPP loans, gross loans increased by
$232.1 million at September 30, 2021 when compared to December 31,
2020. Deposits totaled $1.9 billion at September 30, 2021, compared
to deposits of $1.8 billion at December 31, 2020.
Capital
Shareholders’ equity totaled $196.2 million as of September 30,
2021, an increase of $19.6 million compared to December 31, 2020,
primarily a result of (i) net income of $18.8 million for the nine
months ended September 30, 2021 and (ii) a $6.2 million favorable
impact to accumulated other comprehensive income driven by fair
value marks related to hedge positions involving interest rate
swaps. The Company's interest rate swaps are used to hedge interest
rate risk. The Company's current interest rate swap positions will
cause a decrease to other comprehensive income in a falling
interest rate environment and an increase in a rising interest rate
environment. The increase in Shareholders’ equity was partially
offset by dividends paid of $3.6 million and common stock
repurchases 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 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, prolonged measures to
contain the spread of COVID-19 or premature easing of such
containment measures, either of 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,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
ASSETS
Cash and due from banks
$
169,417
$
297,851
$
351,194
$
405,340
$
333,103
Federal funds sold
8,097
4,036
10,811
4,258
6,380
Cash and cash equivalents
177,514
301,887
362,005
409,598
339,483
Investment securities
Marketable equity securities, at fair
value
2,185
2,192
2,178
2,207
2,203
Available for sale investment securities,
at fair value
87,565
90,983
83,218
88,605
90,563
Held to maturity investment securities, at
amortized cost
16,107
16,166
16,225
16,078
16,138
Total investment securities
105,857
109,341
101,621
106,890
108,904
Loans receivable (net of allowance for
loan losses of $16,803, $16,672, $20,545, $21,009, and $20,372 at
September 30, 2021, June 30, 2021, March 31, 2021, December 31,
2020, and September 30, 2020, respectively)
1,805,217
1,719,274
1,650,127
1,601,672
1,600,776
Accrued interest receivable
6,911
6,661
7,306
6,579
7,294
Federal Home Loan Bank stock, at cost
3,632
3,844
6,446
7,860
7,860
Premises and equipment, net
35,118
33,916
33,386
21,762
26,616
Bank-owned life insurance
48,903
48,632
42,881
42,651
42,409
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangible assets
48
58
67
76
160
Deferred income taxes, net
7,718
8,208
8,908
11,300
11,149
Other assets
33,181
35,415
29,131
42,770
45,782
Total assets
$
2,226,688
$
2,269,825
$
2,244,467
$
2,253,747
$
2,193,022
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
338,705
$
328,473
$
280,947
$
270,235
$
234,848
Interest bearing deposits
1,544,118
1,610,829
1,578,861
1,557,081
1,532,680
Total deposits
1,882,823
1,939,302
1,859,808
1,827,316
1,767,528
Advances from the Federal Home Loan
Bank
80,000
75,000
125,000
175,000
175,000
Subordinated debentures
15,374
15,366
25,271
25,258
25,245
Accrued expenses and other liabilities
52,314
49,362
46,445
49,571
50,982
Total liabilities
2,030,511
2,079,030
2,056,524
2,077,145
2,018,755
Shareholders’ equity
Common stock, no par value
119,588
120,451
120,398
121,338
120,854
Retained earnings
85,992
80,543
75,418
70,839
71,603
Accumulated other comprehensive loss
(9,403)
(10,199)
(7,873)
(15,575)
(18,190)
Total shareholders’ equity
196,177
190,795
187,943
176,602
174,267
Total liabilities and shareholders’
equity
$
2,226,688
$
2,269,825
$
2,244,467
$
2,253,747
$
2,193,022
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,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
September 30,
2021
September 30,
2020
Interest and dividend income
Interest and fees on loans
$
19,795
$
19,266
$
17,900
$
18,194
$
18,027
$
56,961
$
55,471
Interest and dividends on securities
731
736
769
835
799
2,236
2,402
Interest on cash and cash equivalents
88
90
108
117
96
286
468
Total interest and dividend income
20,614
20,092
18,777
19,146
18,922
59,483
58,341
Interest expense
Interest expense on deposits
2,387
2,744
3,114
3,557
4,104
8,245
14,623
Interest expense on borrowings
503
769
1,008
1,285
1,210
2,280
3,187
Total interest expense
2,890
3,513
4,122
4,842
5,314
10,525
17,810
Net interest income
17,724
16,579
14,655
14,304
13,608
48,958
40,531
Provision (credit) for loan
losses
134
(20)
(296)
709
712
(182)
6,896
Net interest income after provision
(credit) for loan losses
17,590
16,599
14,951
13,595
12,896
49,140
33,635
Noninterest income
Gains and fees from sales of loans
924
814
513
16
27
2,251
27
Bank owned life insurance
271
251
231
241
242
753
726
Service charges and fees
199
217
199
210
190
615
578
Gain on sale of other real estate owned,
net
—
—
—
—
19
—
19
Other
43
158
1,013
154
136
1,213
913
Total noninterest income
1,437
1,440
1,956
621
614
4,832
2,263
Noninterest expense
Salaries and employee benefits
4,782
3,960
4,769
5,453
5,295
13,511
15,902
Occupancy and equipment
2,615
3,250
2,406
4,516
2,266
8,271
6,410
Data processing
632
833
512
1,658
529
1,977
1,558
Professional services
498
547
587
591
374
1,632
1,519
Director fees
324
327
317
331
301
968
883
FDIC insurance
298
300
403
262
176
1,001
529
Marketing
186
140
(9)
118
151
317
512
Other
1,035
695
653
774
637
2,383
1,797
Total noninterest expense
10,370
10,052
9,638
13,703
9,729
30,060
29,110
Income before income tax
expense
8,657
7,987
7,269
513
3,781
23,912
6,788
Income tax expense
1,802
1,759
1,579
177
790
5,140
1,220
Net income
$
6,855
$
6,228
$
5,690
$
336
$
2,991
$
18,772
$
5,568
Earnings Per Common Share:
Basic
$
0.88
$
0.79
$
0.72
$
0.04
$
0.38
$
2.38
$
0.71
Diluted
$
0.87
$
0.79
$
0.71
$
0.04
$
0.38
$
2.37
$
0.71
Weighted Average Common Shares
Outstanding:
Basic
7,677,822
7,722,481
7,758,540
7,726,926
7,721,247
7,721,943
7,728,798
Diluted
7,738,758
7,768,026
7,800,777
7,728,206
7,721,459
7,779,632
7,749,199
Dividends per common share
$
0.18
$
0.14
$
0.14
$
0.14
$
0.14
$
0.46
$
0.42
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
For the Quarter Ended
For the Nine Months
Ended
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
September 30,
2021
September 30,
2020
Performance ratios:
Return on average assets(1)
1.22
%
1.11
%
1.02
%
0.06
%
0.55
%
1.12
%
0.36
%
Return on average stockholders'
equity(1)
14.09
%
13.06
%
12.67
%
0.75
%
6.87
%
13.29
%
4.23
%
Return on average tangible common
equity(1)
14.29
%
13.25
%
12.86
%
0.76
%
6.98
%
13.48
%
4.30
%
Net interest margin
3.39
%
3.12
%
2.74
%
2.66
%
2.67
%
3.08
%
2.81
%
Efficiency ratio(2)
54.1
%
55.7
%
58.0
%
91.2
%
68.4
%
55.8
%
67.9
%
Net loan charge-offs as a % of average
loans
—
%
0.23
%
0.01
%
—
%
—
%
0.24
%
—
%
Dividend payout ratio(3)
20.69
%
17.72
%
19.72
%
350.00
%
36.84
%
19.41
%
59.15
%
(1) 2020 performance ratios were negatively impacted by
COVID-19 pandemic related loan loss reserves and $3.9 million in
one-time charges related to office consolidation, contract
termination and employee severance costs recognized in the fourth
quarter of 2020.
(2) 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.
(3) The dividend payout ratio is calculated by dividing
dividends per share by earnings per share.
As of
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
Capital ratios:
Total Common Equity Tier 1 Capital to
Risk-Weighted Assets(1)
10.59
%
10.95
%
11.02
%
11.06
%
12.36
%
Total Capital to Risk-Weighted
Assets(1)
11.44
%
11.84
%
12.17
%
12.28
%
13.57
%
Tier I Capital to Risk-Weighted
Assets(1)
10.59
%
10.95
%
11.02
%
11.06
%
12.36
%
Tier I Capital to Average Assets(1)
9.61
%
9.19
%
8.82
%
8.44
%
9.58
%
Tangible common equity to tangible
assets
8.70
%
8.30
%
8.27
%
7.73
%
7.83
%
Tangible book value per common
share(2)
$
25.25
$
24.40
$
23.99
$
22.43
$
22.20
(1) Represents Bank ratios. Current period capital ratios
are preliminary subject to finalization of the FDIC Call
Report.
(2) Excludes unvested restricted shares of 178,797,
184,548, 186,485, 163,369, and 170,083 as of September 30, 2021,
June 30, 2021, March 31, 2021, December 31, 2020, and September 30,
2020, respectively.
BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
For the Quarter Ended
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
Allowance for loan losses:
Balance at beginning of period
$
16,672
$
20,545
$
21,009
$
20,372
$
19,662
Charge-offs:
Commercial real estate
—
(3,814)
(163)
—
—
Commercial business
—
(51)
—
(75)
—
Consumer
(15)
(4)
(14)
(11)
(4)
Total charge-offs
(15)
(3,869)
(177)
(86)
(4)
Recoveries:
Commercial business
11
16
—
14
—
Consumer
1
—
9
—
2
Total recoveries
12
16
9
14
2
Net loan charge-offs
(3)
(3,853)
(168)
(72)
(2)
Provision (credit) for loan losses
134
(20)
(296)
709
712
Balance at end of period
$
16,803
$
16,672
$
20,545
$
21,009
$
20,372
As of
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
Asset quality:
Nonaccrual loans
Residential real estate
$
1,849
$
1,160
$
1,289
$
1,492
$
1,596
Commercial real estate
16,314
15,392
19,277
21,093
4,812
Commercial business
1,754
1,780
1,803
1,834
3,760
Construction
8,997
8,997
8,997
8,997
—
Total nonaccrual loans
28,914
27,329
31,366
33,416
10,168
Other real estate owned
—
—
—
—
—
Total nonperforming assets
$
28,914
$
27,329
$
31,366
$
33,416
$
10,168
Nonperforming loans as a % of total
loans
1.58
%
1.57
%
1.87
%
2.06
%
0.63
%
Nonperforming assets as a % of total
assets
1.30
%
1.20
%
1.40
%
1.48
%
0.46
%
Allowance for loan losses as a % of total
loans
0.92
%
0.96
%
1.23
%
1.29
%
1.25
%
Allowance for loan losses as a % of
nonperforming loans
58.11
%
61.00
%
65.50
%
62.87
%
200.35
%
Total nonaccrual loans declined $4.5 million to $28.9 million as
of September 30, 2021 when compared to December 31, 2020 partially
a result of the charge-offs recognized in the second quarter of
2021. The Bank continues work-out activity on its nonaccrual loan
population. Nonperforming assets as a percentage of total assets
was 1.30% at September 30, 2021, down from 1.48% at December 31,
2020. The allowance for loan losses at September 30, 2021 was $16.8
million, representing 0.92% of total loans.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO
(unaudited)
(Dollars in thousands)
Period End Loan Composition
September 30,
2021
June 30, 2021
December 31,
2020
Current QTD %
Change
YTD % Change
Residential Real Estate
$
90,110
$
100,260
$
113,557
(10.1)
%
(20.6)
%
Commercial Real Estate(1)
1,337,896
1,266,731
1,148,383
5.6
16.5
Construction
94,665
82,805
87,007
14.3
8.8
Total Real Estate Loans
1,522,671
1,449,796
1,348,947
5.0
12.9
Commercial Business(2)
292,825
279,814
276,601
4.6
5.9
Consumer
9,050
8,883
79
1.9
N/M(3)
Total Loans
$
1,824,546
$
1,738,493
$
1,625,627
4.9
%
12.2
%
(1) Includes owner occupied commercial
real estate.
(2) Includes $1.6 million, $7.9 million,
and $34.8 million of PPP loans at September 30, 2021, June 30, 2021
and December 31, 2020, respectively.
(3) Metric not meaningful.
Gross loans totaled $1.8 billion at September 30, 2021, an
increase of $198.9 million compared to December 31, 2020. Excluding
PPP loans, gross loans increased by $232.1 million, or 14.6%, at
September 30, 2021 when compared to December 31, 2020.
Period End Deposit Composition
September 30,
2021
June 30, 2021
December 31,
2020
Current QTD %
Change
YTD % Change
Noninterest bearing demand
$
338,705
$
328,473
$
270,235
3.1
%
25.3
%
NOW
103,180
136,558
101,737
(24.4)
1.4
Money Market
835,210
814,083
669,364
2.6
24.8
Savings
188,581
173,943
158,750
8.4
18.8
Time
417,147
486,245
627,230
(14.2)
(33.5)
Total Deposits
$
1,882,823
$
1,939,302
$
1,827,316
(2.9)
%
3.0
%
Total deposits were $1.9 billion at September 30, 2021, compared
to $1.8 billion at December 31, 2020, an increase of $55.5 million,
or 3.0%.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest income
September 30,
2021
June 30, 2021
September 30,
2020
Sep 21 vs. June 21 %
Change
Sep 21 vs. Sep 20 %
Change
Gains and fees from sales of loans
$
924
$
814
$
27
13.5
%
3,322.2
%
Bank owned life insurance
271
251
242
8.0
12.0
Service charges and fees
199
217
190
(8.3)
4.7
Gain on sale of other real estate owned,
net
—
—
19
N/A
(100.0)
Other
43
158
136
(72.8)
(68.4)
Total noninterest income
$
1,437
$
1,440
$
614
(0.2)
%
134.0
%
For the Nine Months
Ended
Noninterest income
September 30, 2021
September 30, 2020
% Change
Gains and fees from sales of loans
$
2,251
$
27
8,237.0
%
Bank owned life insurance
753
726
3.7
Service charges and fees
615
578
6.4
Gain on sale of other real estate owned,
net
—
19
(100.0)
Other
1,213
913
32.9
Total noninterest income
$
4,832
$
2,263
113.5
%
Noninterest income increased by $0.8 million to $1.4 million for
the quarter ended September 30, 2021 compared to the quarter ended
September 30, 2020. Noninterest income increased by $2.6 million to
$4.8 million for the nine months ended September 30, 2021 compared
to the nine months ended September 30, 2020.
The increase in noninterest income was driven by resumed loan
sales, totaling $0.9 million and $2.3 million for the quarter and
nine months ended September 30, 2021, respectively. In addition,
the increase in noninterest income for the nine months ended
September 30, 2021 was impacted by a one-time federal payroll tax
credit for COVID-19 of $0.9 million, partially offset by $0.4
million of non-recurring interest rate swap fees recognized during
the nine months ended September 30, 2020.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest expense
September 30,
2021
June 30, 2021
September 30,
2020
Sep 21 vs. June 21 %
Change
Sep 21 vs. Sep 20 %
Change
Salaries and employee benefits
$
4,782
$
3,960
$
5,295
20.8
%
(9.7)
%
Occupancy and equipment
2,615
3,250
2,266
(19.5)
15.4
Data processing
632
833
529
(24.1)
19.5
Professional services
498
547
374
(9.0)
33.2
Director fees
324
327
301
(0.9)
7.6
FDIC insurance
298
300
176
(0.7)
69.3
Marketing
186
140
151
32.9
23.2
Other
1,035
695
637
48.9
62.5
Total noninterest expense
$
10,370
$
10,052
$
9,729
3.2
%
6.6
%
For the Nine Months
Ended
Noninterest expense
September 30, 2021
September 30, 2020
% Change
Salaries and employee benefits
$
13,511
$
15,902
(15.0)
%
Occupancy and equipment
8,271
6,410
29.0
Data processing
1,977
1,558
26.9
Professional services
1,632
1,519
7.4
FDIC insurance
1,001
529
89.2
Director fees
968
883
9.6
Marketing
317
512
(38.1)
Other
2,383
1,797
32.6
Total noninterest expense
$
30,060
$
29,110
3.3
%
Noninterest expense increased by $0.6 million to $10.4 million
for the quarter ended September 30, 2021 compared to the quarter
ended September 30, 2020. The increase in noninterest expense was
primarily driven by an increase in occupancy and equipment expense
and other expense, partially offset by a decrease in salaries and
employee benefits expense.
Noninterest expense increased by $1.0 million to $30.1 million
for the nine months ended September 30, 2021 compared to the nine
months ended September 30, 2020. The increase in noninterest
expense was primarily driven by an increase in occupancy and
equipment expense, data processing expense, FDIC insurance expense
and other expense, partially offset by a decrease in salaries and
employee benefits expense.
Occupancy and equipment expense totaled $2.6 million for the
quarter ended September 30, 2021, an increase of $0.3 million when
compared to the same period in 2020. Occupancy and equipment
expense totaled $8.3 million for the nine months ended September
30, 2021, an increase of $1.9 million when compared to the same
period in 2020. The increase in occupancy and equipment expense was
primarily due to additional one-time charges associated with office
consolidation activity (previously disclosed in the fourth quarter
of 2020) and an increase in lease expense resulting from the
commencement of the lease on the Company's new headquarters
building.
Data processing expense totaled $2.0 million for the nine months
ended September 30, 2021, an increase of $0.4 million when compared
to the same period in 2020. The increase in data processing expense
was primarily due to $0.4 million in costs associated with the
conversion to a new online banking system implemented in the second
quarter of 2021.
FDIC insurance expense totaled $1.0 million for the nine months
ended September 30, 2021, an increase of $0.5 million when compared
to the same period in 2020. The increase in FDIC insurance expense
was due to the absence of available FDIC insurance credits
recognized in the first quarter of 2020 and elevated expense due to
liquidity driven balance sheet growth in the first half 2021.
Salaries and employee benefits expense totaled $4.8 million for
the quarter ended September 30, 2021, a decrease of $0.5 million
when compared to the same period in 2020. Salaries and employee
benefits expense totaled $13.5 million for the nine months ended
September 30, 2021, a decrease of $2.4 million when compared to the
same period in 2020. The decrease in salaries and employee benefits
expense was primarily driven by a decrease in full time equivalent
employees as a direct result of the Voluntary Early Retirement
Incentive Plan offered to eligible employees and other employee
actions taken during the fourth quarter of 2020. Full time
equivalent employees totaled 134 at September 30, 2021 compared to
142 for the same period in 2020. Average full time equivalent
employees totaled 127 for the nine months ended September 30, 2021
compared to 151 for the same period in 2020. In addition, salaries
and employee benefits expense also benefited by one-time deferrals
of $0.6 million for the nine months ended September 30, 2021 in
costs associated with a new online banking and other systems.
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,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
Total Equity
$
196,177
$
190,795
$
187,943
$
176,602
$
174,267
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
48
58
67
76
160
Tangible Common Equity
$
193,540
$
188,148
$
185,287
$
173,937
$
171,518
Total Assets
$
2,226,688
$
2,269,825
$
2,244,467
$
2,253,747
$
2,193,022
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
48
58
67
76
160
Tangible Assets
$
2,224,051
$
2,267,178
$
2,241,811
$
2,251,082
$
2,190,273
Tangible Common Equity to Tangible
Assets
8.70
%
8.30
%
8.27
%
7.73
%
7.83
%
As of
Computation of Tangible Book Value per
Common Share
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
Total shareholders' equity
$
196,177
$
190,795
$
187,943
$
176,602
$
174,267
Less:
Preferred stock
—
—
—
—
—
Common shareholders' equity
$
196,177
$
190,795
$
187,943
$
176,602
$
174,267
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
48
58
67
76
160
Tangible common shareholders'
equity
$
193,540
$
188,148
$
185,287
$
173,937
$
171,518
Common shares
7,842,824
7,895,101
7,908,630
7,919,278
7,896,503
Less:
Shares of unvested restricted stock
178,797
184,548
186,485
163,369
170,083
Common shares less unvested restricted
stock
7,664,027
7,710,553
7,722,145
7,755,909
7,726,420
Book value per share
$
25.60
$
24.74
$
24.34
$
22.77
$
22.55
Less:
Effects of intangible assets
$
0.34
$
0.34
$
0.34
$
0.34
$
0.36
Tangible Book Value per Common
Share
$
25.25
$
24.40
$
23.99
$
22.43
$
22.20
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,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
September 30,
2021
September 30,
2020
Noninterest expense
$
10,370
$
10,052
$
9,638
$
13,703
$
9,729
$
30,060
$
29,110
Less:
Amortization of intangible assets
9
9
9
84
18
28
54
Other real estate owned expenses
—
—
—
—
—
—
6
Adjusted noninterest expense
$
10,361
$
10,043
$
9,629
$
13,619
$
9,711
$
30,032
$
29,050
Net interest income
$
17,724
$
16,579
$
14,655
$
14,304
$
13,608
$
48,958
$
40,531
Noninterest income
1,437
1,440
1,956
621
614
4,832
2,263
Less:
Net gain on sale of available for sale
securities
—
—
—
—
—
—
—
Gain on sale of other real estate owned,
net
—
—
—
—
19
—
19
Operating revenue
$
19,161
$
18,019
$
16,611
$
14,925
$
14,203
$
53,790
$
42,775
Efficiency ratio
54.1
%
55.7
%
58.0
%
91.2
%
68.4
%
55.8
%
67.9
%
For the Quarter Ended
For the Nine Months
Ended
Computation of Return on Average
Tangible Common Equity
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
September 30,
2020
September 30,
2021
September 30,
2020
Net Income Attributable to Common
Shareholders
$
6,855
$
6,228
$
5,690
$
336
$
2,991
$
18,772
$
5,568
Total average shareholders' equity
$
192,993
$
191,224
$
182,058
$
178,439
$
173,162
$
188,794
$
175,838
Less:
Average Goodwill
2,589
2,589
2,589
2,589
2,589
2,589
2,589
Average Other intangibles
54
64
73
153
172
64
190
Average tangible common equity
$
190,350
$
188,571
$
179,396
$
175,697
$
170,401
$
186,141
$
173,059
Annualized Return on Average Tangible
Common Equity
14.29
%
13.25
%
12.86
%
0.76
%
6.98
%
13.48
%
4.30
%
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, 2021
September 30, 2020
Average Balance
Interest
Yield/ Rate (4)
Average Balance
Interest
Yield/ Rate (4)
Assets:
Cash and Fed funds sold
$
209,500
$
88
0.17
%
$
312,078
$
96
0.12
%
Securities(1)
105,030
766
2.92
96,448
776
3.22
Loans:
Commercial real estate
1,270,375
14,345
4.42
1,087,765
12,570
4.52
Residential real estate
95,100
809
3.40
125,069
1,097
3.51
Construction
88,728
845
3.73
94,984
1,029
4.24
Commercial business
314,484
3,707
4.61
322,066
3,329
4.04
Consumer
8,870
89
3.99
121
2
7.37
Total loans
1,777,557
19,795
4.36
1,630,005
18,027
4.33
Federal Home Loan Bank stock
3,133
16
2.04
7,835
77
3.91
Total earning assets
2,095,220
$
20,665
3.86
%
2,046,366
$
18,976
3.63
%
Other assets
131,670
132,617
Total assets
$
2,226,890
$
2,178,983
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
111,813
$
51
0.18
%
$
87,890
$
40
0.18
%
Money market
824,203
1,053
0.51
517,638
859
0.66
Savings
182,848
96
0.21
163,135
237
0.58
Time
448,218
1,187
1.05
757,176
2,968
1.56
Total interest bearing deposits
1,567,082
2,387
0.60
1,525,839
4,104
1.07
Borrowed Money
72,960
503
2.70
200,237
1,210
2.36
Total interest bearing liabilities
1,640,042
$
2,890
0.70
%
1,726,076
$
5,314
1.22
%
Noninterest bearing deposits
341,303
226,473
Other liabilities
52,552
53,272
Total liabilities
2,033,897
2,005,821
Shareholders' equity
192,993
173,162
Total liabilities and shareholders'
equity
$
2,226,890
$
2,178,983
Net interest income(2)
$
17,775
$
13,662
Interest rate spread
3.16
%
2.41
%
Net interest margin(3)
3.39
%
2.67
%
(1) Average balances and yields for securities are based on
amortized cost. (2) The adjustment for securities and loans taxable
equivalency amounted to $51 thousand and $54 thousand for the
quarters ended September 30, 2021 and 2020, 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, 2021
September 30, 2020
Average Balance
Interest
Yield/ Rate (4)
Average Balance
Interest
Yield/ Rate (4)
Assets:
Cash and Fed funds sold
$
315,102
$
286
0.12
%
$
207,058
$
468
0.30
%
Securities(1)
103,192
2,315
2.99
96,761
2,289
3.15
Loans:
Commercial real estate
1,188,049
40,802
4.53
1,094,956
38,460
4.61
Residential real estate
104,320
2,669
3.41
134,369
3,636
3.61
Construction
97,828
2,769
3.73
98,539
3,350
4.47
Commercial business
302,019
10,495
4.58
289,959
10,017
4.54
Consumer
7,601
226
3.97
130
8
8.15
Total loans
1,699,817
56,961
4.42
1,617,953
55,471
4.50
Federal Home Loan Bank stock
4,608
72
2.09
7,547
272
4.81
Total earning assets
2,122,719
$
59,634
3.70
%
1,929,319
$
58,500
3.98
%
Other assets
119,098
125,957
Total assets
$
2,241,817
$
2,055,276
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
110,637
$
148
0.18
%
$
76,661
$
99
0.17
%
Money market
781,178
2,944
0.50
473,485
3,213
0.91
Savings
170,749
313
0.24
170,262
1,204
0.94
Time
532,278
4,840
1.22
721,051
10,107
1.87
Total interest bearing deposits
1,594,842
8,245
0.69
1,441,459
14,623
1.36
Borrowed Money
108,737
2,280
2.77
187,177
3,187
2.24
Total interest bearing liabilities
1,703,579
$
10,525
0.83
%
1,628,636
$
17,810
1.46
%
Noninterest bearing deposits
303,421
201,384
Other liabilities
46,023
49,418
Total liabilities
2,053,023
1,879,438
Shareholders' equity
188,794
175,838
Total liabilities and shareholders'
equity
$
2,241,817
$
2,055,276
Net interest income(2)
$
49,109
$
40,690
Interest rate spread
2.87
%
2.52
%
Net interest margin(3)
3.08
%
2.81
%
(1) Average balances and yields for securities are based
on amortized cost. (2) The adjustment for securities and
loans taxable equivalency amounted to $151 thousand and $159
thousand for the nine months ended September 30, 2021 and 2020,
respectively. (3) Annualized net interest income as a
percentage of earning assets. (4) Yields are calculated
using the contractual day count convention for each respective
product type.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20211027006126/en/
Bankwell Financial Group Christopher R. Gruseke, President and
Chief Executive Officer Penko Ivanov, Executive Vice President and
Chief Financial Officer (203) 652-0166
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