Bankwell Financial (BWFG) 8-K Bankwell Financial Group Reports Record First Quarter Net Income of $1.9 Million

BANKWELL FINANCIAL GROUP REPORTS RECORD FIRST QUARTER NET INCOME OF $1.9 MILLION

New Canaan, CT – April 30, 2015 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $1.9 million for the first quarter of 2015.

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

"These first quarter results put us on track to deliver another strong year, as we continue to execute key elements of our Strategic Plan. At the end of the first quarter, gross loans totaled $978.6 million, up 5.2% over year-end 2014, while we maintained excellent credit quality.  We continued to focus on expense control, resulting in an improved efficiency ratio of 66.5% and, in spite of an increasingly challenging interest rate environment, our net interest margin was an outstanding 3.89%.

Additionally, March 31, 2015 marked the first full quarter of realizing the cost savings from our merger with Quinnipiac Bank and Trust Company. With greater lending resources and an experienced team, we continue to expand our presence in that market.  In March, we also opened our first branch in Norwalk, CT, a market we know well, and one that we believe holds high potential."

 Earnings

Revenues (net interest income plus non-interest income) for the quarter ended March 31, 2015 were $10.5 million, an increase of 32.6% compared to the quarter ended March 31, 2014. Net interest income for the quarter ended March 31, 2015 was $9.9 million, an increase of 38.5% compared to the quarter ended March 31, 2014. Our strong net interest income was fueled by record earning asset growth and a net interest margin of 3.89% for the quarter end. The increased loan loss provision of $0.7 million for the quarter ended March 31, 2015 is a direct result of significant growth in our loan portfolio.

The Company continues to focus on expense control as indicated by our improving efficiency ratio. The Company's efficiency ratio for the quarters ended March 31, 2015 and March 31, 2014 were 66.5% and 74.4%, respectively.

Financial Condition

Assets totaled $1.1 billion at March 31, 2015, a 36.0% increase compared to assets of $812.1 million at March 31, 2014. This increase reflects strong loan growth, IPO proceeds and the Quinnipiac Bank and Trust Company acquisition in 2014. Total gross loans were $978.6 million, a 48.9% increase compared to March 31, 2014. Deposits increased to $834.7 million, a 22.9% increase over March 31, 2014, with core deposits (total deposits less time deposits) showing a 13.8% increase over March 31, 2014 to $532.8 million.

Asset Quality

Asset quality remained exceptionally strong at March 31, 2015.  Non-performing assets as a percentage of total assets was 0.30% at March 31, 2015, down from 0.36% at March 31, 2014.  The allowance for loan losses as of March 31, 2015 was $11.6 million, representing 1.32% of total loans, excluding acquired loans.

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Capital

Shareholders' equity continued to remain strong at $131.4 million as of March 31, 2015, an increase of $2.2 million compared to December 31, 2014, primarily a result of Q1'15 net income of $1.9 million. As of March 31, 2015, the tangible common equity ratio and tangible book value per share were 10.63% and $16.62, respectively.

About Bankwell Financial Group

Bankwell is a commercial bank that serves the banking and lending needs of residents and businesses throughout Fairfield and New Haven Counties, CT.  For more information about this press release, interested parties may contact Christopher R. Gruseke, President and Chief Executive Officer or Ernest J. Verrico Sr., 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 securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.

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BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEET (unaudited)

(Dollars in thousands, except share data)

	March 31,		December 31,		March 31,
	2015		2014		2014
Assets
Cash and due from banks	$	19,428	$	48,559	$	82,246
Held to maturity investment securities, at amortized cost		11,398		11,454		13,780
Available for sale investment securities, at fair value		50,736		65,009		35,557
Loans held for sale		-		586		-
Loans receivable (net of allowance for loan losses of $11,596, $10,860,
$8,603 at March 31, 2015, December 31, 2014 and March 31, 2014
respectively)		964,034		915,981		646,583
Foreclosed real estate		830		950		829
Accrued interest receivable		3,342		3,323		2,344
Federal Home Loan Bank stock, at cost		6,794		6,109		4,834
Premises and equipment, net		12,120		11,910		8,060
Bank-owned life insurance		23,211		23,028		10,116
Goodwill		2,589		2,589		-
Other intangible assets		797		848		454
Deferred income taxes, net		7,436		7,156		5,514
Other assets		1,748		2,029		1,738
Total assets	$	1,104,463	$	1,099,531	$	812,055
Liabilities & Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	142,920	$	166,030	$	119,700
Interest-bearing		691,783		669,409		559,523
Total deposits		834,703		835,439		679,223
Advances from the Federal Home Loan Bank		133,000		129,000		59,000
Accrued expenses and other liabilities		5,352		5,882		2,726
Total liabilities		973,055		970,321		740,949
Shareholders' equity
Preferred stock, senior noncumulative perpetual, Series C, no par;
10,980 shares issued and outstanding at March 31, 2015,
December 31, 2014 and March 31, 2014 respectively;
liquidation value of $1,000 per share.		10,980		10,980		10,980
Common stock, no par value; 10,000,000 shares authorized,
7,243,252, 7,185,482 and 3,891,690 shares issued at
March 31, 2015, December 31, 2014 and March 31, 2014
respectively.		107,765		107,265		52,446
Retained earnings		12,280		10,434		7,072
Accumulated other comprehensive income		383		531		608
Total shareholders' equity		131,408		129,210		71,106
Total liabilities and shareholders' equity	$	1,104,463	$	1,099,531	$	812,055

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BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except per share data)

	Three Months EndedMarch 31,
	2015		2014
Interest and dividend income
Interest and fees on loans	$	10,757	$	7,428
Interest and dividends on securities		504		411
Interest on cash and cash equivalents		12		22
Total interest income		11,273		7,861
Interest expense
Interest expense on deposits		1,038		622
Interest on borrowings		341		93
Total interest expense		1,379		715
Net interest income		9,894		7,146
Provision for loan losses		733		211
Net interest income after provision for loan losses		9,161		6,935
Noninterest income
Service charges and fees		208		124
Bank owned life insurance		183		85
Gains and fees from sales of loans		89		428
Gain on sale of foreclosed real estate, net		18		-
Other		101		132
Total noninterest income		599		769
Noninterest expense
Salaries and employee benefits		3,962		3,342
Occupancy and equipment		1,349		1,065
Data processing		336		335
Professional services		325		369
FDIC insurance		158		118
Director fees		148		139
Marketing		148		110
Amortization of intangibles		51		27
Foreclosed real estate		5		14
Merger and acquisition related expenses		-		141
Other		490		381
Total noninterest expense		6,972		6,041
Income before income tax expense		2,788		1,663
Income tax expense		915		540
Net income	$	1,873	$	1,123
Net income attributable to common shareholders	$	1,846	$	1,096
Earnings Per Common Share:
Basic	$	0.26	$	0.28
Diluted		0.26		0.28
Weighted Average Common Shares Outstanding:
Basic		7,028,499		3,762,080
Diluted		7,056,141		3,795,946

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BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

(Dollars in thousands, except per share data)

	Three Months Ended March 31,
	2015			2014
Performance ratios:
Return on average assets		0.70	%		0.59	%
Return on average stockholders' equity		5.81	%		6.48	%
Net interest margin		3.89	%		3.97	%
Efficiency ratio (1)		66.5	%		74.4	%
Net loan charge-offs as a % of average loans		0.00	%		0.00	%

	As of
	March 31, 2015			December 31, 2014			March 31, 2014
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2)		12.08	%		N/	A		N/	A
Total Capital to Risk-Weighted Assets (2)		13.26	%		13.55	%		10.74	%
Tier I Capital to Risk-Weighted Assets (2)		12.08	%		12.47	%		9.49	%
Tier I Capital to Average Assets (2)		10.99	%		11.12	%		7.90	%
Tangible common equity to tangible assets		10.63	%		10.47	%		7.35	%
Tangible book value per common share (3)	$	16.62		$	16.35		$	15.81
Asset quality:
Nonaccrual loans	$	2,451		$	3,362		$	2,101
Other real estate owned		830			950			829
Total non-performing assets	$	3,281		$	4,312		$	2,930
Loans past due 90 days and still accruing	$	1,671		$	1,872		$	2,914
Nonperforming loans as a % of total loans		0.25	%		0.36	%		0.32	%
Nonperforming assets as a % of total assets		0.30	%		0.39	%		0.36	%
Allowance for loan losses as a % of total loans		1.18	%		1.17	%		1.31	%
Allowance for loan losses as a % of nonperforming loans		473.11	%		323.02	%		409.47	%
(1) Efficiency ratio is defined as non-interest expenses, less merger and acquisition related expenses and other real estate owned expenses, divided by our operating revenue, which is equal to net interest income plus non-interest 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)  Represents Bank ratios.
(3) Excludes preferred stock and unvested restricted stock awards of 200,962, 165,862 and 118,532 as of March 31, 2015, December 31, 2014 and March 31, 2014, respectively.

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BANKWELL FINANCIAL GROUP, INC.

NET INTEREST MARGIN ANALYSIS ON FULLY TAX EQUIVALENT BASIS

(Dollars in thousands)

	For the Three Months Ended
	March 31, 2015							March 31, 2014
	Average				Yield/			Average				Yield/
	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Cash and Fed funds sold	$	18,868	$	12		0.25	%	$	32,699	$	22		0.27	%
Securities (1)		66,508		592		3.56	%		47,782		501		4.20	%
Loans:
Commercial real estate		524,215		6,270		4.78	%		324,137		3,965		4.89	%
Residential real estate		173,304		1,579		3.65	%		156,069		1,395		3.58	%
Construction (2)		67,885		794		4.68	%		49,318		531		4.30	%
Commercial business		146,056		1,856		5.08	%		98,061		1,170		4.77	%
Home equity		18,067		170		3.82	%		14,207		127		3.62	%
Consumer		2,806		34		4.85	%		545		13		9.32	%
Acquired loan portfolio non accrual loans (net of mark)		3,106		54		7.06	%		3,375		228		27.39	%
Total loans		935,439		10,757		4.60	%		645,712		7,429		4.60	%
Federal Home Loan Bank stock		6,440		26		1.59	%		4,834		18		1.50	%
Total earning assets		1,027,255	$	11,387		4.43	%		731,027	$	7,970		4.36	%
Other assets		52,634							38,273
Total assets	$	1,079,889						$	769,300
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW	$	52,568		15		0.11	%	$	52,596		13		0.10	%
Money market		229,984		281		0.50	%		170,901		180		0.43	%
Savings		79,958		86		0.44	%		107,971		82		0.31	%
Time		306,072		656		0.87	%		183,664		347		0.77	%
Total interest-bearing deposits		668,582		1,038		0.63	%		515,132		622		0.40	%
Borrowed Money		120,217		341		1.15	%		49,733		93		0.76	%
Total interest bearing liabilities		788,799	$	1,379		0.71	%		564,865	$	715		0.42	%
Noninterest-bearing deposits		153,674							123,232
Other liabilities		6,604							10,887
Total liabilities		949,077							698,984
Shareholders' equity		130,812							70,316
Total liabilities and shareholders'  equity	$	1,079,889						$	769,300
Net interest income (3)			$	10,008						$	7,255
Interest rate spread						3.72	%						3.94	%
Net interest margin (4)						3.89	%						3.97	%
(1) Average balances and yields for securities are based on amortized cost.
(2) Includes commercial and residential real estate construction.
(3) The adjustment for securities and loans taxable equivalency amounted to $114 thousand and $109thousand, respectively for the three months ended March 31, 2015, and 2014.
(4) Net interest income as a percentage of earning assets.

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