Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net
income of $8.0 million, or $1.02 per share for the second quarter
of 2023, versus $12.0 million, or $1.55 per share, for the same
period in 2022.
The Company's Board of Directors declared a $0.20 per share cash
dividend, payable August 24, 2023 to shareholders of record on
August 14, 2023.
We recommend reading this earnings release in conjunction
with the Second Quarter 2023 Investor Presentation, located at
http://investor.mybankwell.com/Presentations and included as an
exhibit to our July 26, 2023 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R.
Gruseke:
"Against the headwinds of an inverted yield curve, the Company
generated a 0.99% Return on Average Assets and a 12.91% Return on
Average Shareholders' Equity this quarter. As we look to the second
half of the year, we can revise our prior guidance upward regarding
full year 2023 Net Interest Income (“NII”). Prior guidance had
indicated a year-over-year decrease to NII of approximately 10%. We
can now guide to a 5-6% decline for 2023 NII versus 2022
performance.
Future margin compression can be expected as the Federal Reserve
holds short term rates higher for longer than earlier market
consensus, however, our operational efficiency and increasing loan
yields will provide a cushion against the uncertain policy
backdrop. The Company’s year to date non-interest expense was 1.58%
of average assets year for the six-month period ending June 30,
2023, while the average loan yield for the same period stood at
5.95%. The average yield on loans originated thus far in 2023
was 7.38%.
Capital and liquidity positions are strong, and we are confident
in the credit quality of the loan book.
Please see the Company's recent Press Release regarding the
Company’s newly appointed Executive Vice President and Chief
Innovation Officer, Ryan Hildebrand. We are delighted to have Ryan
join the management team."
Second Quarter 2023 Highlights:
- Total gross loans were $2.8 billion, growing $98.2 million, or
3.7%, compared to December 31, 2022.
- Deposits of $2.8 billion for the quarter ended June 30, 2023,
decreasing $12.0 million, or 0.4% from December 31, 2022.
- Non-brokered deposits were $1.8 billion as of June 30, 2023, up
by $48 million, or an increase of 2.7% from March 31, 2023; as of
July 25, 2023, non-brokered deposits increased an additional $57
million since June 30, 2023.
- FDIC-insured deposits totaled $2.0 billion and represent 71.2%
of total deposits as of June 30, 2023.
- As of June 30, 2023, the Bank has $1.7 billion immediately
available liquidity, comprised of cash, AFS securities and
borrowing capacity with the FHLB of Boston and FRB.
- Immediately available liquidity provides more than two times
coverage of uninsured deposits.
- Average yield on 2023 funded loans was 7.38% as of June 30,
2023.
- Return on average assets was 0.99% for the quarter ended June
30, 2023.
- Return on average shareholders' equity was 12.91% for the
quarter ended June 30, 2023.
- The net interest margin was 3.07% for the quarter ended June
30, 2023.
- The efficiency ratio was 49.8% for the quarter ended June 30,
2023.
- Investment securities totaled $117.8 million and represent 3.6%
of total assets, with HTM securities totaling $15.9 million, or
0.5% of total assets.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the
quarter ended June 30, 2023 were $25.4 million, versus $25.0
million and for the quarter ended June 30, 2022. Revenues for the
six months ended June 30, 2023 were $52.5 million, versus $45.4
million for the six months ended June 30, 2022. The increase in
revenues for the quarter and six months ended 2023 was primarily
attributable to an increase in interest and fees on loans due to
loan growth and higher overall loan yields1 for the quarter ended
June 30, 2023. The increase in revenues was partially offset by an
increase in interest expense.
1 - The increase in overall loan yields was 111 bps and 123 bps for
the quarter and six months ended June 30, 2023, respectively.
Net income for the quarter ended June 30, 2023 was $8.0 million,
versus $12.0 million for the quarter ended June 30, 2022. Net
income for the six months ended June 30, 2023 was $18.4 million,
versus $20.2 million for the six months ended June 30, 2022. The
decrease in net income for the quarter and six months ended 2023
was primarily due to an increase in the provision for credit losses
and an increase in noninterest expense, primarily due to increased
FDIC insurance expense, and an increase in salary and employee
benefits expense, mainly due to severance costs. The decrease was
partially offset by a direct result of the aforementioned increases
in revenues.
Basic and diluted earnings per share were $1.02 and $1.02,
respectively, for the quarter ended June 30, 2023 compared to basic
and diluted earnings per share of $1.56 and $1.55, respectively,
for the quarter ended June 30, 2022. Basic and diluted earnings per
share were $2.36 and $2.34, respectively, for the six months ended
June 30, 2023 compared to basic and diluted earnings per share of
$2.61 and $2.58, respectively, for the six months ended June 30,
2022.
The net interest margin (fully taxable equivalent basis) for the
quarters ended June 30, 2023 and June 30, 2022 was 3.07% and 4.01%,
respectively. The net interest margin (fully taxable equivalent
basis) for the six months ended June 30, 2023 and June 30, 2022 was
3.15% and 3.65%, respectively. The decrease in the net interest
margin was due to an increase in funding costs partially offset by
an increase in overall loan yields.
Allowance for Credit Losses (ACL)
Provision for credit losses was $2.6 million for the quarter
ended June 30, 2023, bringing the ACL-Loans as a percentage of
total loans to 1.11%. Provision for credit losses was $0.8 million
for the quarter ended March 31, 2023. The increase in the provision
for credit losses is mainly attributable to forward looking CECL
macroeconomic factors.
Financial Condition
Assets totaled $3.3 billion at June 30, 2023 and remained flat
compared to December 31, 2022. Gross loans totaled $2.8 billion at
June 30, 2023, an increase of $98.2 million or 3.7% compared to
December 31, 2022. Deposits totaled $2.8 billion at June 30, 2023,
and remained flat compared to December 31, 2022.
Capital
Shareholders’ equity totaled $248.8 million as of June 30, 2023,
an increase of $10.3 million compared to December 31, 2022,
primarily a result of net income of $18.4 million for the six
months ended June 30, 2023. The increase was partially offset by
the Day 1 CECL adoption of $4.9 million, dividends paid of $3.1
million, and a $1.5 million unfavorable impact to accumulated other
comprehensive income. The unfavorable impact to accumulated other
comprehensive income was driven by fair value marks on the
Company's Available for sale investment securities portfolio of
$0.9 million and fair value marks related to hedge positions
involving interest rate swaps of $0.7 million. The Company's
interest rate swaps are used to hedge interest rate risk.
About Bankwell Financial Group
Bankwell is a commercial bank that serves the banking needs of
residents and businesses throughout Fairfield and New Haven
Counties, Connecticut. For more information about this press
release, interested parties may contact Christopher R. Gruseke,
President and Chief Executive Officer or Courtney E. Sacchetti,
Executive Vice President and Chief Financial Officer of Bankwell
Financial Group at (203) 652-0166.
For more information, visit www.mybankwell.com.
This press release may contain certain forward-looking
statements about the Company. Forward-looking statements include
statements regarding anticipated future events and can be
identified by the fact that they do not relate strictly to
historical or current facts. They often include words such as
“believe,” “expect,” “anticipate,” “estimate,” and “intend” or
future or conditional verbs such as “will,” “would,” “should,”
“could,” or “may.” Forward-looking statements, by their nature, are
subject to risks and uncertainties. Certain factors that could
cause actual results to differ materially from expected results
include increased competitive pressures, changes in the interest
rate environment, general economic conditions or conditions within
the 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, 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, 2023
March 31, 2023
December 31,
2022
June 30, 2022
ASSETS
Cash and due from banks
$
207,345
$
249,812
$
344,925
$
149,522
Federal funds sold
54,706
27,370
10,754
21,505
Cash and cash equivalents
262,051
277,182
355,679
171,027
Investment securities
Marketable equity securities, at fair
value
2,017
2,028
1,988
2,126
Available for sale investment securities,
at fair value
99,938
103,171
103,663
94,907
Held to maturity investment securities, at
amortized cost
15,884
15,931
15,983
15,917
Total investment securities
117,839
121,130
121,634
112,950
Loans receivable (net of ACL-Loans of
$30,694, $27,998, $22,431, and $15,773 at June 30, 2023, March 31
2023, December 31, 2022, and June 30, 2022, respectively)
2,736,607
2,724,514
2,646,384
2,036,626
Accrued interest receivable
14,208
14,261
13,070
8,047
Federal Home Loan Bank stock, at cost
5,696
5,234
5,216
5,064
Premises and equipment, net
27,658
27,619
27,199
27,768
Bank-owned life insurance
50,816
50,524
50,243
49,699
Goodwill
2,589
2,589
2,589
2,589
Deferred income taxes, net
10,014
8,692
7,422
4,768
Other assets
25,229
20,573
23,013
17,014
Total assets
$
3,252,707
$
3,252,318
$
3,252,449
$
2,435,552
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
367,635
$
377,667
$
404,559
$
372,584
Interest bearing deposits
2,421,228
2,420,641
2,396,259
1,660,941
Total deposits
2,788,863
2,798,308
2,800,818
2,033,525
Advances from the Federal Home Loan
Bank
90,000
90,000
90,000
105,000
Subordinated debentures
69,082
69,020
68,959
34,500
Accrued expenses and other liabilities
55,949
52,683
54,203
37,060
Total liabilities
3,003,894
3,010,011
3,013,980
2,210,085
Shareholders’ equity
Common stock, no par value
116,541
115,875
115,018
115,599
Retained earnings
133,988
127,566
123,640
109,523
Accumulated other comprehensive (loss)
income
(1,716
)
(1,134
)
(189
)
345
Total shareholders’ equity
248,813
242,307
238,469
225,467
Total liabilities and shareholders’
equity
$
3,252,707
$
3,252,318
$
3,252,449
$
2,435,552
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, 2023
March 31, 2023
December 31,
2022
June 30, 2022
June 30, 2023
June 30, 2022
Interest and dividend income
Interest and fees on loans
$
42,482
$
39,723
$
36,545
$
25,141
$
82,205
$
46,569
Interest and dividends on securities
1,002
1,000
898
774
2,002
1,494
Interest on cash and cash equivalents
3,022
3,568
2,150
449
6,590
603
Total interest and dividend income
46,506
44,291
39,593
26,364
90,797
48,666
Interest expense
Interest expense on deposits
20,777
17,033
11,083
1,983
37,810
4,189
Interest expense on borrowings
1,738
1,717
1,701
558
3,455
1,144
Total interest expense
22,515
18,750
12,784
2,541
41,265
5,333
Net interest income
23,991
25,541
26,809
23,823
49,532
43,333
Provision (credit) for credit
losses
2,579
826
4,272
(1,445
)
3,405
(1,216
)
Net interest income after provision for
credit losses
21,412
24,715
22,537
25,268
46,127
44,549
Noninterest income
Bank owned life insurance
292
281
273
265
573
525
Service charges and fees
361
286
343
249
647
489
Gains and fees from sales of loans
725
931
12
608
1,656
1,239
Other
23
28
(100
)
30
51
(143
)
Total noninterest income
1,401
1,526
528
1,152
2,927
2,110
Noninterest expense
Salaries and employee benefits
6,390
6,081
5,988
5,433
12,471
10,373
Occupancy and equipment
2,204
2,084
1,919
2,193
4,288
4,343
Professional services
692
1,322
912
1,000
2,014
1,981
Data processing
729
671
663
689
1,400
1,343
Director fees
453
392
378
339
845
691
FDIC insurance
1,050
1,062
898
262
2,112
485
Marketing
177
151
112
107
328
152
Other
946
928
1,601
913
1,874
1,493
Total noninterest expense
12,641
12,691
12,471
10,936
25,332
20,861
Income before income tax
expense
10,172
13,550
10,594
15,484
23,722
25,798
Income tax expense
2,189
3,171
2,573
3,462
5,360
5,564
Net income
$
7,983
$
10,379
$
8,021
$
12,022
$
18,362
$
20,234
Earnings Per Common Share:
Basic
$
1.02
$
1.34
$
1.04
$
1.56
$
2.36
$
2.61
Diluted
$
1.02
$
1.33
$
1.04
$
1.55
$
2.34
$
2.58
Weighted Average Common Shares
Outstanding:
Basic
7,593,417
7,554,689
7,507,540
7,556,645
7,574,160
7,596,639
Diluted
7,601,562
7,616,671
7,563,116
7,614,243
7,639,828
7,683,305
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,
2023
March 31,
2023
December 31,
2022
June 30, 2022
June 30,
2023
June 30,
2022
Performance ratios:
Return on average assets
0.99
%
1.30
%
1.07
%
1.96
%
1.14
%
1.65
%
Return on average shareholders' equity
12.91
%
17.48
%
13.38
%
22.09
%
15.15
%
19.16
%
Return on average tangible common
equity
13.05
%
17.67
%
13.52
%
22.36
%
15.31
%
19.40
%
Net interest margin
3.07
%
3.24
%
3.70
%
4.01
%
3.15
%
3.65
%
Efficiency ratio(1)
49.8
%
46.9
%
45.6
%
43.8
%
48.3
%
45.9
%
Net loan charge-offs as a % of average
loans
—
%
0.02
%
—
%
—
%
0.02
%
—
%
Dividend payout ratio(2)
19.61
%
15.04
%
19.23
%
12.90
%
17.09
%
15.50
%
(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,
2023
March 31,
2023
December 31,
2022
June 30,
2022
Capital ratios:
Total Common Equity Tier 1 Capital to
Risk-Weighted Assets(1)
10.34
%
10.17
%
10.28
%
11.10
%
Total Capital to Risk-Weighted
Assets(1)
11.41
%
11.16
%
11.07
%
11.80
%
Tier I Capital to Risk-Weighted
Assets(1)
10.34
%
10.17
%
10.28
%
11.80
%
Tier I Capital to Average Assets(1)
9.41
%
9.22
%
9.88
%
10.15
%
Tangible common equity to tangible
assets
7.58
%
7.38
%
7.26
%
9.16
%
Fully diluted tangible book value per
common share
$
31.45
$
30.56
$
30.51
$
28.75
(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,
2023
March 31,
2023
December 31,
2022
June 30,
2022
ACL-Loans:
Balance at beginning of period
$
27,998
$
22,431
$
18,167
$
17,141
Day 1 CECL Adjustment on January 1,
2023
—
5,079
—
—
Beginning balance January 1, 2023
27,998
27,510
18,167
—
Charge-offs:
Commercial business
—
(440
)
—
—
Consumer
(25
)
(12
)
(11
)
—
Total charge-offs
(25
)
(452
)
(11
)
—
Recoveries:
Commercial real estate
—
—
—
77
Commercial business
32
—
—
—
Consumer
10
6
3
—
Total recoveries
42
6
3
77
Net loan recoveries (charge-offs)
17
(446
)
(8
)
77
Provision for credit losses - loans
2,679
934
4,272
(1,445
)
Balance at end of period
$
30,694
$
27,998
$
22,431
$
15,773
As of
June 30,
2023
March 31,
2023
December 31,
2022
June 30,
2022
Asset quality:
Nonaccrual loans
Residential real estate
$
1,429
$
1,443
$
2,152
$
2,161
Commercial real estate
1,905
1,912
2,781
2,955
Commercial business
2,815
1,528
2,126
787
Construction
9,382
9,382
9,382
9,382
Total nonaccrual loans
15,531
14,265
16,441
15,285
Other real estate owned
—
—
—
—
Total nonperforming assets
$
15,531
$
14,265
$
16,441
$
15,285
Nonperforming loans as a % of total
loans
0.56
%
0.52
%
0.61
%
0.74
%
Nonperforming assets as a % of total
assets
0.48
%
0.44
%
0.51
%
0.63
%
ACL-loans as a % of total loans
1.11
%
1.01
%
0.84
%
0.77
%
ACL-loans as a % of nonperforming
loans
197.63
%
196.27
%
136.43
%
103.19
%
Total past due loans to total loans
1.30
%
0.94
%
0.60
%
1.40
%
Total nonaccrual loans decreased $0.9 million to $15.5 million
as of June 30, 2023 when compared to December 31, 2022.
Nonperforming assets as a percentage of total assets decreased to
0.48% at June 30, 2023, down from 0.51% at December 31, 2022. The
ACL-Loans at June 30, 2023 was $30.7 million, representing 1.11% of
total loans.
Past due loans increased to $36.0 million, or 1.30% of total
loans, as of June 30, 2023, compared to $16.1 million, or 0.60% of
total loans, as of December 31, 2022. Of the June 30, 2023 past due
loans, $9.3 million of loans were between 31 - 33 days past due and
have subsequently become current.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO
(unaudited)
(Dollars in thousands)
Period End Loan Composition
June 30,
2023
March 31,
2023
December 31,
2022
Current QTD
% Change
YTD
% Change
Residential Real Estate
$
54,631
$
58,541
$
60,588
(6.7
)%
(9.8
)%
Commercial Real Estate(1)
1,930,972
1,960,712
1,921,252
(1.5
)
0.5
Construction
219,615
177,115
155,198
24.0
41.5
Total Real Estate Loans
2,205,218
2,196,368
2,137,038
0.4
3.2
Commercial Business
530,913
543,457
520,447
(2.3
)
2.0
Consumer
37,475
19,464
17,963
92.5
108.6
Total Loans
$
2,773,606
$
2,759,289
$
2,675,448
0.5
%
3.7
%
(1) Includes owner occupied commercial
real estate.
Gross loans totaled $2.8 billion at June 30, 2023, an increase
of $98.2 million or 3.7% compared to December 31, 2022.
Period End Deposit Composition
June 30,
2023
March 31,
2023
December 31,
2022
Current QTD
% Change
YTD
% Change
Noninterest bearing demand
$
367,635
$
377,667
$
404,559
(2.7
)%
(9.1
)%
NOW
106,189
89,896
104,057
18.1
2.0
Money Market
879,017
874,202
913,868
0.6
(3.8
)
Savings
108,625
117,986
151,944
(7.9
)
(28.5
)
Time
1,327,397
1,338,557
1,226,390
(0.8
)
8.2
Total Deposits
$
2,788,863
$
2,798,308
$
2,800,818
(0.3
)%
(0.4
)%
Total deposits were $2.8 billion at June 30, 2023, a decrease of
$12.0 million, or 0.4%, when compared to December 31, 2022.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest income
June 30,
2023
March 31,
2023
June 30,
2022
June 23 vs. Mar 23
% Change
Jun 23 vs. Jun 22
% Change
Bank owned life insurance
$
292
$
281
$
265
3.9
%
10.2
%
Service charges and fees
361
286
249
26.2
45.0
Gains and fees from sales of loans
725
931
608
(22.1
)
19.2
Other
23
28
30
(17.9
)
(23.3
)
Total noninterest income
$
1,401
$
1,526
$
1,152
(8.2
)%
21.6
%
For the Six Months
Ended
Noninterest income
June 30, 2023
June 30, 2022
% Change
Bank owned life insurance
$
573
$
525
9.1
%
Service charges and fees
647
489
32.3
Gains and fees from sales of loans
1,656
1,239
33.7
Other
51
(143
)
Favorable
Total noninterest income
$
2,927
$
2,110
38.7
%
Noninterest income increased by $0.2 million to $1.4 million for
the quarter ended June 30, 2023 compared to the quarter ended June
30, 2022. Noninterest income increased by $0.8 million to $2.9
million for the six months ended June 30, 2023 compared to the six
months ended June 30, 2022. The increase in noninterest income was
driven by an increase in SBA loan sales and increases in service
charges and fees for the quarter and six months ended 2023.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest expense
June 30,
2023
March 31,
2023
June 30,
2022
June 23 vs. Mar 23
% Change
Jun 23 vs. Jun 22
% Change
Salaries and employee benefits
$
6,390
$
6,081
$
5,433
5.1
%
17.6
%
Occupancy and equipment
2,204
2,084
2,193
5.8
0.5
Professional services
692
1,322
1,000
(47.7
)
(30.8
)
Data processing
729
671
689
8.6
5.8
Director fees
453
392
339
15.6
33.6
FDIC insurance
1,050
1,062
262
(1.1
)
300.8
Marketing
177
151
107
17.2
65.4
Other
946
928
913
1.9
3.6
Total noninterest expense
$
12,641
$
12,691
$
10,936
(0.4
)%
15.6
%
For the Six Months
Ended
Noninterest expense
June 30, 2023
June 30, 2022
% Change
Salaries and employee benefits
$
12,471
$
10,373
20.2
%
Occupancy and equipment
4,288
4,343
(1.3
)%
Professional services
2,014
1,981
1.7
%
Data processing
1,400
1,343
4.2
%
Director fees
845
691
22.3
%
FDIC insurance
2,112
485
335.5
%
Marketing
328
152
115.8
%
Other
1,874
1,493
25.5
%
Total noninterest expense
25,332
20,861
21.4
%
Noninterest expense increased by $1.7 million to $12.6 million
for the quarter ended June 30, 2023 compared to the quarter ended
June 30, 2022. Noninterest expense increased by $4.5 million to
$25.3 million for the six months ended June 30, 2023 compared to
the six months ended June 30, 2022. The increase in noninterest
expense was primarily driven by an increase in salaries and
employee benefits expense and FDIC insurance expense.
Salaries and employee benefits expense totaled $6.4 million for
the quarter ended June 30, 2023, an increase of $1.0 million when
compared to the same period in 2022. Salaries and employee benefits
expense totaled $12.5 million for the six months ended June 30,
2023, an increase of $2.1 million when compared to the same period
in 2022. The increase in salaries and employee benefits expense was
driven by an increase in full time equivalent employees, with full
time equivalent employees totaling 141 at June 30, 2023 compared to
132 for the same period in 2022. The increase in salaries and
employee benefits expense was also due to one-time severance costs
and lower loan originations, which reduces the Bank's ability to
defer expenses.
FDIC insurance expense totaled $1.1 million for the quarter
ended June 30, 2023, an increase of $0.8 million when compared to
the same period in 2022. FDIC insurance expense totaled $2.1
million for the six months ended June 30, 2023, an increase of $1.6
million when compared to the same period in 2022. The increase in
FDIC insurance expense is attributed to the overall balance sheet
growth, increased use of brokered deposits, and an increase in FDIC
insurance rates.
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,
2023
March 31,
2023
December 31,
2022
June 30,
2022
Total Equity
$
248,813
$
242,307
$
238,469
$
225,467
Less:
Goodwill
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
Tangible Common Equity
$
246,224
$
239,718
$
235,880
$
222,878
Total Assets
$
3,252,707
$
3,252,318
$
3,252,449
$
2,435,552
Less:
Goodwill
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
Tangible Assets
$
3,250,118
$
3,249,729
$
3,249,860
$
2,432,963
Tangible Common Equity to Tangible
Assets
7.58
%
7.38
%
7.26
%
9.16
%
As of
Computation of Fully Diluted Tangible
Book Value per Common Share
June 30,
2023
March 31,
2023
December 31,
2022
June 30,
2022
Total shareholders' equity
$
248,813
$
242,307
$
238,469
$
225,467
Less:
Preferred stock
—
—
—
—
Common shareholders' equity
$
248,813
$
242,307
$
238,469
$
225,467
Less:
Goodwill
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
—
Tangible common shareholders'
equity
$
246,224
$
239,718
$
235,880
$
222,878
Common shares issued and outstanding
7,829,950
7,843,438
7,730,699
7,752,389
Fully Diluted Tangible Book Value per
Common Share
$
31.45
$
30.56
$
30.51
$
28.75
BANKWELL FINANCIAL GROUP, INC.
EARNINGS PER SHARE ("EPS")
(unaudited)
(Dollars in thousands)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
(In thousands, except per
share data)
Net income
$
7,983
$
12,022
$
18,362
$
20,234
Dividends to participating
securities(1)
(41
)
(33
)
(84
)
(68
)
Undistributed earnings allocated to
participating securities(1)
(172
)
(224
)
(403
)
(371
)
Net income for earnings per share
calculation
$
7,770
$
11,765
$
17,875
$
19,795
Weighted average shares outstanding,
basic
7,593
7,557
7,574
7,597
Effect of dilutive equity-based
awards(2)
8
57
66
86
Weighted average shares outstanding,
diluted
7,601
7,614
7,640
7,683
Net earnings per common share:
Basic earnings per common share
$
1.02
$
1.56
$
2.36
$
2.61
Diluted earnings per common share
$
1.02
$
1.55
$
2.34
$
2.58
(1)
Represents dividends paid and undistributed earnings
allocated to unvested stock-based awards that contain
non-forfeitable rights to dividends.
(2)
Represents the effect of the assumed exercise of stock
options and the vesting of restricted shares, as applicable,
utilizing the treasury stock method.
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY
TAX EQUIVALENT BASIS - QTD (unaudited)
(Dollars in thousands)
For the Quarter Ended
June 30, 2023
June 30, 2022
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
227,777
$
3,023
5.32
%
$
247,013
$
449
0.73
%
Securities(1)
128,576
955
2.97
118,534
809
2.73
Loans:
Commercial real estate
1,935,058
27,099
5.54
1,443,239
17,278
4.74
Residential real estate
56,981
643
4.51
66,460
553
3.33
Construction
206,844
3,691
7.06
106,285
1,938
7.21
Commercial business
557,482
10,646
7.55
393,318
5,327
5.36
Consumer
29,326
500
6.84
5,298
45
3.43
Total loans
2,785,691
42,579
6.05
2,014,600
25,141
4.94
Federal Home Loan Bank stock
5,610
98
7.00
3,263
15
1.79
Total earning assets
3,147,654
$
46,655
5.86
%
2,383,410
$
26,414
4.38
%
Other assets
96,603
79,380
Total assets
$
3,244,257
$
2,462,790
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
98,048
$
42
0.18
%
$
136,414
$
59
0.17
%
Money market
902,225
8,083
3.59
931,101
1,146
0.49
Savings
112,585
860
3.06
198,304
103
0.21
Time
1,298,170
11,792
3.64
451,508
675
0.60
Total interest bearing deposits
2,411,028
20,777
3.46
1,717,327
1,983
0.46
Borrowed Money
163,138
1,738
4.21
85,092
558
2.59
Total interest bearing liabilities
2,574,166
$
22,515
3.51
%
1,802,419
$
2,541
0.57
%
Noninterest bearing deposits
375,514
407,890
Other liabilities
46,565
34,231
Total liabilities
2,996,245
2,244,540
Shareholders' equity
248,012
218,250
Total liabilities and shareholders'
equity
$
3,244,257
$
2,462,790
Net interest income(2)
$
24,140
$
23,873
Interest rate spread
2.36
%
3.81
%
Net interest margin(3)
3.07
%
4.01
%
(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 $50 thousand for the quarters ended
June 30, 2023 and 2022, respectively.
(3)
Annualized net interest income as a percentage of earning
assets.
(4)
Yields are calculated using the contractual day count
convention for each respective product type.
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY
TAX EQUIVALENT BASIS - YTD (unaudited)
(Dollars in thousands)
For the Six Months
Ended
June 30, 2023
June 30, 2022
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
271,328
$
6,590
4.90
%
$
296,239
$
603
0.41
%
Securities(1)
129,225
1,912
2.96
%
115,452
1,563
2.71
%
Loans:
Commercial real estate
1,926,852
52,125
5.38
%
1,393,836
32,273
4.61
%
Residential real estate
58,207
1,286
4.42
%
70,125
1,224
3.49
%
Construction
186,684
6,651
7.09
%
104,176
2,971
5.67
%
Commercial business
549,963
21,394
7.74
%
388,249
9,954
5.10
%
Consumer
23,971
749
6.30
%
5,666
147
5.25
%
Total loans
2,745,677
82,205
5.95
%
1,962,052
46,569
4.72
%
Federal Home Loan Bank stock
5,442
193
7.14
%
3,051
29
1.94
%
Total earning assets
3,151,672
$
90,900
5.74
%
2,376,794
$
48,764
4.08
%
Other assets
90,427
89,866
Total assets
$
3,242,099
$
2,466,660
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
95,494
$
81
0.17
%
$
124,361
$
106
0.17
%
Money market
905,021
14,468
3.22
%
950,131
2,326
0.49
%
Savings
124,387
1,586
2.57
%
196,400
204
0.21
%
Time
1,275,417
21,675
3.43
%
452,676
1,553
0.69
%
Total interest bearing deposits
2,400,319
37,810
3.18
%
1,723,568
4,189
0.49
%
Borrowed Money
162,215
3,454
4.24
%
84,770
1,144
2.68
%
Total interest bearing liabilities
2,562,534
$
41,264
3.25
%
1,808,338
$
5,333
0.59
%
Noninterest bearing deposits
389,608
406,707
Other liabilities
45,494
38,683
Total liabilities
2,997,636
2,253,728
Shareholders' equity
244,463
212,932
Total liabilities and shareholders'
equity
$
3,242,099
$
2,466,660
Net interest income(2)
$
49,636
$
43,431
Interest rate spread
2.49
%
3.49
%
Net interest margin(3)
3.15
%
3.65
%
(1)
Average balances and yields for securities are based on
amortized cost.
(2)
The adjustment for securities and loans taxable equivalency
amounted to $102 thousand and $98 thousand for the six months ended
June 30, 2023 and 2022, respectively.
(3)
Annualized net interest income as a percentage of earning
assets.
(4)
Yields are calculated using the contractual day count
convention for each respective product type.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230726212892/en/
Courtney E. Sacchetti (203) 652-0166
Bankwell Financial (NASDAQ:BWFG)
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