BANKWELL FINANCIAL GROUP REPORTS RECORD QUARTERLY NET INCOME OF $5.6 MILLION OR $0.71 PER SHARE FOR THE SECOND QUARTER AND DECLARES THIRD QUARTER DIVIDEND
New Canaan, CT – July 30, 2019 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $5.6 million or $0.71 per share for the second quarter of 2019, versus $4.7 million or $0.60 per share for the same period in 2018.
The Company's Board of Directors declared a $0.13 per share cash dividend, payable August 26, 2019 to shareholders of record on August 16, 2019.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
"The Bankwell team once again delivered strong operating results against the backdrop of a competitive deposit market and a flattening yield curve. Year-to-date loan originations are ahead of 2018’s pace and the loan pipeline is quite robust. Once we begin to experience a more normalized trend in prepayments, these originations should translate to solid organic growth. Our investments in our Treasury Management product suite have also begun to bear fruit, as we see a strong pipeline there as well. Deposit pricing appears to have peaked as competitors’ rates have dropped consistently over the last several weeks. Bankwell’s balance sheet is well-positioned to take advantage of any rate decreases going forward."
Second Quarter 2019 Highlights:
| |
| • | Second quarter diluted earnings per share were $0.71, an increase of 18% compared to the second quarter of 2018. |
| |
| • | Total noninterest income was $1.3 million for the second quarter of 2019, or 9% of total revenue. |
| |
| • | Return on average assets for the second quarter of 2019 totaled 1.20% compared to 1.02% for the same period in 2018. |
| |
| • | Return on average tangible common equity for the second quarter of 2019 totaled 12.68% compared to 11.41% for the same period in 2018. |
| |
| • | Total gross loans were $1.6 billion for the second quarter of 2019. |
| |
| • | The allowance for loan losses was $13.9 million and represents 0.89% of total loans. |
| |
| • | Investment securities totaled $116.4 million and represent 6% of total assets. |
| |
| • | Total deposits were $1.5 billion for the second quarter of 2019. |
| |
| • | The Company repurchased 34,168 shares of its outstanding common stock at a cost of $1.0 million. |
| |
| • | The tangible common equity ratio and tangible book value per share was 9.38% and $22.47, respectively. |
| |
| • | The efficiency ratio was 58.0% for the six months ended June 30, 2019 compared to 60.1% for the same period in 2018. |
| |
| • | Return on average assets for the six months ended June 30, 2019 totaled 1.15% compared to 1.03% for the same period in 2018. |
| |
| • | Loan originations totaled $75.2 million, with $59.6 million of loan fundings for the quarter ended June 30, 2019. Loan originations totaled $168.5 million, with $121.4 million of loan fundings for the six months ended June 30, 2019. |
| |
| • | Tax equivalent net interest margin was 3.07% for the second quarter of 2019 and 3.13% for the six months ended June 30, 2019. |
Earnings
Revenues (net interest income plus noninterest income) for the quarter ended June 30, 2019 were $14.9 million, a decrease of 1% compared to the quarter ended June 30, 2018. Net interest income for the quarter ended June 30, 2019 was $13.6 million, a decrease of 2% compared to the quarter ended June 30, 2018. Net income for the quarter ended June 30, 2019 was $5.6 million, an increase of 18% compared to the quarter ended June 30, 2018. Revenues for the six months ended
June 30, 2019 were $30.5 million, an increase of 2% compared to the six months ended June 30, 2018. Net interest income for the six months ended June 30, 2019 was $27.9 million, an increase of 1% compared to the six months ended June 30, 2018. Net income for the six months ended June 30, 2019 was $10.7 million, an increase of 14% compared to the six months ended June 30, 2018. The increase in net income for the quarter and six months ended June 30, 2019 was primarily due to a decrease in the allowance for loan losses and by fees recognized from elevated loan pre-payments. The allowance for loan losses declined as a result of a decrease in the general reserve driven by improving historical loss trends. Pre-payment fees totaled $1.0 million for the quarter ended June 30, 2019 compared to $0.3 million for the same period in 2018. Pre-payment fees totaled $2.1 million for the six months ended June 30, 2019 compared to $0.3 million for the same period in 2018.
Basic and diluted earnings per share were each $0.71 for the quarter ended June 30, 2019 compared to $0.60 for the quarter ended June 30, 2018. Basic and diluted earnings per share were $1.36 and $1.35, respectively, for the six months ended June 30, 2019 compared to basic and diluted earnings per share of $1.19 for the six months ended June 30, 2018.
The Company’s efficiency ratios for the quarters ended June 30, 2019 and June 30, 2018 were 58.6% and 58.2%, respectively. The Company's efficiency ratios for the six months ended June 30, 2019 and June 30, 2018 were 58.0% and 60.1%, respectively. The decrease in the efficiency ratio for the six months ended June 30, 2019 was driven by a reduction in noninterest expense and by an increase in net interest income resulting from the aforementioned loan pre-payments.
Noninterest Income and Expense
Noninterest income increased by $0.2 million, or 21%, to $1.3 million for the quarter ended June 30, 2019 compared to the quarter ended June 30, 2018. The increase in noninterest income was primarily a result of a $0.3 million increase in gains and fees from the sales of loans and a $0.1 million gain recognized on the sale of available for sale securities. The increase in noninterest income was partially offset by a decrease in other income totaling $0.1 million.
Noninterest income increased by $0.2 million, or 8%, for the six months ended June 30, 2019 compared to the six months ended June 30, 2018. The increase in noninterest income was primarily a result of a $0.4 million increase in other income, attributable to an interest rate swap fee recognized in the first quarter of 2019. The increase in noninterest income was partially offset by a decrease of $0.1 million in gains recognized on the sale of available for sale securities.
Noninterest expense remained flat, totaling $8.8 million for each of the quarters ended June 30, 2019 and June 30, 2018. Noninterest expense decreased $0.2 million, or 1%, for the six months ended June 30, 2019 compared to the six months ended June 30, 2018. The decrease was primarily driven by a $0.2 million decrease in marketing expense and a $0.2 million decrease in FDIC insurance expense. The decrease in noninterest expense was partially offset by an increase in occupancy and equipment expense related to the prior year's branch expansion and overall investment in technology.
Financial Condition
Assets totaled $1.86 billion at June 30, 2019, an annualized decrease of 1% compared to assets of $1.87 billion at December 31, 2018. Total gross loans were $1.57 billion at June 30, 2019 and $1.60 billion at December 31, 2018. Deposits decreased to $1.48 billion compared to $1.50 billion at December 31, 2018, an annualized decrease of 3% over December 31, 2018.
Asset Quality
Nonperforming assets as a percentage of total assets was 0.69% at June 30, 2019, down from 0.75% at December 31, 2018. Net charge-offs to average loans was 0.04% for the quarter ended June 30, 2019. The allowance for loan losses at June 30, 2019 was $13.9 million, representing 0.89% of total loans. The Company continues to work on the resolution of its previously disclosed nonperforming lending relationship and progress to date has been in line with the Company's estimates.
Capital
Shareholders’ equity totaled $176.9 million as of June 30, 2019, an increase of $2.7 million compared to December 31, 2018, primarily a result of net income for the six months ended June 30, 2019 of $10.7 million, offset by dividends paid of $2.0 million, common stock repurchased of $1.0 million and a $5.9 million unfavorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps. As of June 30, 2019, the tangible common equity ratio and tangible book value per share were 9.38% and $22.47, respectively.
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.
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.
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 and tangible book value per share are useful to evaluate the relative strength of the Company's 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, except share data)
|
| | | | | | | | | | | | | | | |
| | June 30,
2019 | | March 31,
2019 | | December 31,
2018 | | June 30,
2018 |
| Assets | | | | | | | |
| Cash and due from banks | $ | 75,647 |
| | $ | 88,827 |
| | $ | 75,411 |
| | $ | 89,214 |
|
| Federal funds sold | 3,237 |
| | 4,764 |
| | 2,701 |
| | 105 |
|
| Cash and cash equivalents | 78,884 |
| | 93,591 |
| | 78,112 |
| | 89,319 |
|
| | | | | | | | |
| Investment securities | | | | | | | |
| Marketable equity securities, at fair value | 2,090 |
| | 2,049 |
| | 2,009 |
| | — |
|
| Available for sale investment securities, at fair value | 93,017 |
| | 96,423 |
| | 93,154 |
| | 92,608 |
|
| Held to maturity investment securities, at amortized cost | 21,318 |
| | 21,364 |
| | 21,421 |
| | 21,505 |
|
| Total investment securities | 116,425 |
| | 119,836 |
| | 116,584 |
| | 114,113 |
|
| Loans receivable (net of allowance for loan losses of $13,890, $15,430, $15,462 and $19,006 at June 30, 2019, March 31, 2019, December 31, 2018 and June 30, 2018, respectively) | 1,551,620 |
| | 1,578,609 |
| | 1,586,775 |
| | 1,572,591 |
|
| Other real estate owned | 1,217 |
| | — |
| | — |
| | — |
|
| Accrued interest receivable | 6,165 |
| | 6,534 |
| | 6,375 |
| | 5,522 |
|
| Federal Home Loan Bank stock, at cost | 7,475 |
| | 7,475 |
| | 8,110 |
| | 9,333 |
|
| Premises and equipment, net | 29,060 |
| | 29,629 |
| | 19,771 |
| | 20,313 |
|
| Bank-owned life insurance | 41,178 |
| | 40,925 |
| | 40,675 |
| | 40,146 |
|
| Goodwill | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
|
| Other intangible assets | 251 |
| | 270 |
| | 290 |
| | 334 |
|
| Deferred income taxes, net | 5,596 |
| | 4,835 |
| | 4,347 |
| | 4,683 |
|
| Other assets | 19,205 |
| | 13,465 |
| | 10,037 |
| | 11,859 |
|
| Total assets | $ | 1,859,665 |
| | $ | 1,897,758 |
| | $ | 1,873,665 |
| | $ | 1,870,802 |
|
| | | | | | | | |
| Liabilities & Shareholders’ Equity | | | | | | | |
| Liabilities | | | | | | | |
| Deposits | | | | | | | |
| Noninterest bearing deposits | $ | 161,704 |
| | $ | 161,844 |
| | $ | 173,198 |
| | $ | 168,295 |
|
| Interest bearing deposits | 1,316,027 |
| | 1,359,521 |
| | 1,329,046 |
| | 1,297,343 |
|
| Total deposits | 1,477,731 |
| | 1,521,365 |
| | 1,502,244 |
| | 1,465,638 |
|
| | | | | | | | |
| Advances from the Federal Home Loan Bank | 150,000 |
| | 150,000 |
| | 160,000 |
| | 199,000 |
|
| Subordinated debentures | 25,181 |
| | 25,168 |
| | 25,155 |
| | 25,129 |
|
| Accrued expenses and other liabilities | 29,813 |
| | 24,384 |
| | 12,070 |
| | 11,462 |
|
| Total liabilities | 1,682,725 |
| | 1,720,917 |
| | 1,699,469 |
| | 1,701,229 |
|
| | | | | | | | |
| Shareholders’ equity | | | | | | | |
| Common stock, no par value | 120,064 |
| | 120,750 |
| | 120,527 |
| | 119,824 |
|
| Retained earnings | 63,801 |
| | 59,247 |
| | 54,706 |
| | 48,470 |
|
| Accumulated other comprehensive (loss) income | (6,925 | ) | | (3,156 | ) | | (1,037 | ) | | 1,279 |
|
| Total shareholders’ equity | 176,940 |
| | 176,841 |
| | 174,196 |
| | 169,573 |
|
| | | | | | | | |
| Total liabilities and shareholders’ equity | $ | 1,859,665 |
| | $ | 1,897,758 |
| | $ | 1,873,665 |
| | $ | 1,870,802 |
|
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,
2019 | | March 31,
2019 | | December 31,
2018 | | June 30,
2018 | | June 30,
2019 | | June 30,
2018 |
| Interest and dividend income | | | | | | | | | | | |
| Interest and fees on loans | $ | 19,540 |
| | $ | 20,096 |
| | $ | 20,030 |
| | $ | 18,114 |
| | $ | 39,636 |
| | $ | 35,532 |
|
| Interest and dividends on securities | 992 |
| | 997 |
| | 1,009 |
| | 975 |
| | 1,989 |
| | 1,910 |
|
| Interest on cash and cash equivalents | 514 |
| | 383 |
| | 504 |
| | 325 |
| | 897 |
| | 579 |
|
| Total interest and dividend income | 21,046 |
| | 21,476 |
| | 21,543 |
| | 19,414 |
| | 42,522 |
| | 38,021 |
|
| | | | | | | | | | | | |
| Interest expense | | | | | | | | | | | |
| Interest expense on deposits | 6,319 |
| | 6,100 |
| | 5,942 |
| | 4,309 |
| | 12,419 |
| | 7,965 |
|
| Interest expense on borrowings | 1,132 |
| | 1,103 |
| | 1,134 |
| | 1,197 |
| | 2,235 |
| | 2,443 |
|
| Total interest expense | 7,451 |
| | 7,203 |
| | 7,076 |
| | 5,506 |
| | 14,654 |
| | 10,408 |
|
| | | | | | | | | | | | |
| Net interest income | 13,595 |
| | 14,273 |
| | 14,467 |
| | 13,908 |
| | 27,868 |
| | 27,613 |
|
| (Credit) provision for loan losses | (841 | ) | | 195 |
| | 2,795 |
| | 310 |
| | (646 | ) | | 323 |
|
| Net interest income after (credit) provision for loan losses | 14,436 |
| | 14,078 |
| | 11,672 |
| | 13,598 |
| | 28,514 |
| | 27,290 |
|
| | | | | | | | | | | | |
| Noninterest income | | | | | | | | | | | |
| Gains and fees from sales of loans | 617 |
| | 89 |
| | 149 |
| | 315 |
| | 706 |
| | 685 |
|
| Service charges and fees | 263 |
| | 249 |
| | 284 |
| | 265 |
| | 512 |
| | 521 |
|
| Bank owned life insurance | 254 |
| | 249 |
| | 262 |
| | 265 |
| | 503 |
| | 528 |
|
| Net gain on sale of available for sale securities | 76 |
| | — |
| | — |
| | — |
| | 76 |
| | 222 |
|
| Other | 126 |
| | 721 |
| | (94 | ) | | 262 |
| | 847 |
| | 484 |
|
| Total noninterest income | 1,336 |
| | 1,308 |
| | 601 |
| | 1,107 |
| | 2,644 |
| | 2,440 |
|
| | | | | | | | | | | | |
| Noninterest expense | | | | | | | | | | | |
| Salaries and employee benefits | 4,555 |
| | 4,836 |
| | 4,503 |
| | 4,539 |
| | 9,391 |
| | 9,567 |
|
| Occupancy and equipment | 1,833 |
| | 1,887 |
| | 1,671 |
| | 1,731 |
| | 3,720 |
| | 3,348 |
|
| Data processing | 551 |
| | 512 |
| | 487 |
| | 509 |
| | 1,063 |
| | 1,034 |
|
| Professional services | 519 |
| | 590 |
| | 583 |
| | 424 |
| | 1,109 |
| | 1,199 |
|
| Marketing | 348 |
| | 193 |
| | 416 |
| | 479 |
| | 541 |
| | 776 |
|
| Director fees | 215 |
| | 189 |
| | 295 |
| | 274 |
| | 404 |
| | 489 |
|
| FDIC insurance | 76 |
| | 123 |
| | 159 |
| | 203 |
| | 199 |
| | 417 |
|
| Amortization of intangibles | 19 |
| | 19 |
| | 20 |
| | 24 |
| | 38 |
| | 48 |
|
| Other | 639 |
| | 626 |
| | 662 |
| | 581 |
| | 1,265 |
| | 1,089 |
|
| Total noninterest expense | 8,755 |
| | 8,975 |
| | 8,796 |
| | 8,764 |
| | 17,730 |
| | 17,967 |
|
| | | | | | | | | | | | |
| Income before income tax expense | 7,017 |
| | 6,411 |
| | 3,477 |
| | 5,941 |
| | 13,428 |
| | 11,763 |
|
| Income tax expense | 1,441 |
| | 1,331 |
| | 216 |
| | 1,226 |
| | 2,772 |
| | 2,448 |
|
| Net income | $ | 5,576 |
| | $ | 5,080 |
| | $ | 3,261 |
| | $ | 4,715 |
| | $ | 10,656 |
| | $ | 9,315 |
|
| | | | | | | | | | | | |
| Earnings Per Common Share: | | | | | | | | | | | |
| Basic | $ | 0.71 |
| | $ | 0.65 |
| | $ | 0.42 |
| | $ | 0.60 |
| | $ | 1.36 |
| | $ | 1.19 |
|
| Diluted | $ | 0.71 |
| | $ | 0.65 |
| | $ | 0.41 |
| | $ | 0.60 |
| | $ | 1.35 |
| | $ | 1.19 |
|
| | | | | | | | | | | | |
| Weighted Average Common Shares Outstanding: | | | | | | | | | | | |
| Basic | 7,773,466 |
| | 7,760,460 |
| | 7,749,616 |
| | 7,722,892 |
| | 7,766,999 |
| | 7,699,977 |
|
| Diluted | 7,790,760 |
| | 7,776,378 |
| | 7,781,153 |
| | 7,761,560 |
| | 7,791,975 |
| | 7,747,068 |
|
| Dividends per common share | $ | 0.13 |
| | $ | 0.13 |
| | $ | 0.12 |
| | $ | 0.12 |
| | $ | 0.26 |
| | $ | 0.24 |
|
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except share data)
|
| | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | For the Six Months Ended |
| | June 30, 2019 | | March 31, 2019 | | December 31,
2018 | | June 30, 2018 | | June 30, 2019 | | June 30, 2018 |
| Performance ratios: | | | | | | | | | | | |
| Return on average assets | 1.20 | % | | 1.10 | % | | 0.69 | % | | 1.02 | % | | 1.15 | % | | 1.03 | % |
| Return on average stockholders' equity | 12.48 | % | | 11.60 | % | | 7.28 | % | | 11.21 | % | | 12.05 | % | | 11.28 | % |
| Return on average tangible common equity | 12.68 | % | | 11.80 | % | | 7.40 | % | | 11.41 | % | | 12.24 | % | | 11.48 | % |
| Net interest margin | 3.07 | % | | 3.19 | % | | 3.20 | % | | 3.14 | % | | 3.13 | % | | 3.15 | % |
Efficiency ratio(1) | 58.6 | % | | 57.5 | % | | 58.2 | % | | 58.2 | % | | 58.0 | % | | 60.1 | % |
| | | | | | | | | | | | |
| Net loan charge-offs as a % of average loans | 0.04 | % | | 0.01 | % | | 0.41 | % | | 0.01 | % | | 0.06 | % | | 0.01 | % |
|
| | | | | | | | | | | | | | | |
| | As of |
| | June 30, 2019 | | March 31, 2019 | | December 31,
2018 | | June 30,
2018 |
| Capital ratios: | | | | | | | |
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(2) | 12.40 | % | | 12.00 | % | | 11.56 | % | | 11.31 | % |
Total Capital to Risk-Weighted Assets(2) | 13.26 | % | | 12.94 | % | | 12.50 | % | | 12.47 | % |
Tier I Capital to Risk-Weighted Assets(2) | 12.40 | % | | 12.00 | % | | 11.56 | % | | 11.31 | % |
Tier I Capital to Average Assets(2) | 10.75 | % | | 10.53 | % | | 10.14 | % | | 10.03 | % |
| Tangible common equity to tangible assets | 9.38 | % | | 9.18 | % | | 9.16 | % | | 8.92 | % |
| | | | | | | | |
Tangible book value per common share(3) | $ | 22.47 |
| | $ | 22.38 |
| | $ | 22.06 |
| | $ | 21.56 |
|
| | | | | | | | |
| Asset quality: | | | | | | | |
| Nonaccrual loans | $ | 11,688 |
| | $ | 13,233 |
| | $ | 14,082 |
| | $ | 23,325 |
|
| Other real estate owned | 1,217 |
| | — |
| | — |
| | — |
|
| Total nonperforming assets | $ | 12,905 |
| | $ | 13,233 |
| | $ | 14,082 |
| | $ | 23,325 |
|
| | | | | | | | |
| Nonperforming loans as a % of total loans | 0.75 | % | | 0.83 | % | | 0.88 | % | | 1.46 | % |
| Nonperforming assets as a % of total assets | 0.69 | % | | 0.70 | % | | 0.75 | % | | 1.25 | % |
| Allowance for loan losses as a % of total loans | 0.89 | % | | 0.97 | % | | 0.96 | % | | 1.19 | % |
| Allowance for loan losses as a % of nonperforming loans | 118.84 | % | | 116.60 | % | | 109.80 | % | | 81.48 | % |
(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)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.
(3)Excludes unvested restricted shares of 94,598, 99,061, 77,624, and 112,009 as of June 30, 2019, March 31, 2019, December 31, 2018, and June 30, 2018, respectively.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
|
| | | | | | | | | | | | | | | | | |
| Period End Loan Composition | June 30, 2019 | | March 31, 2019 | | December 31,
2018 | | Current QTD % Change | | YTD % Change |
| Residential Real Estate | $ | 164,066 |
| | $ | 174,054 |
| | $ | 178,079 |
| | (5.7 | )% | | (7.9 | )% |
Commercial Real Estate(1) | 1,080,846 |
| | 1,097,354 |
| | 1,094,066 |
| | (1.5 | )% | | (1.2 | )% |
| Construction | 89,236 |
| | 88,653 |
| | 73,191 |
| | 0.7 | % | | 21.9 | % |
| Total Real Estate Loans | 1,334,148 |
| | 1,360,061 |
| | 1,345,336 |
| | (1.9 | )% | | (0.8 | )% |
| | | | | | | | | | |
| Commercial Business | 233,364 |
| | 236,110 |
| | 258,978 |
| | (1.2 | )% | | (9.9 | )% |
| | | | | | | | | | |
| Consumer | 297 |
| | 248 |
| | 412 |
| | 19.8 | % | | (27.9 | )% |
| Total Loans | $ | 1,567,809 |
| | $ | 1,596,419 |
| | $ | 1,604,726 |
| | (1.8 | )% | | (2.3 | )% |
| | | | | | | | | | |
| (1) Includes owner occupied commercial real estate. | | |
|
| | | | | | | | | | | | | | | | | |
| Period End Deposit Composition | June 30, 2019 | | March 31, 2019 | | December 31,
2018 | | Current QTD % Change | | YTD % Change |
| Noninterest bearing demand | $ | 161,704 |
| | $ | 161,844 |
| | $ | 173,198 |
| | (0.1 | )% | | (6.6 | )% |
| NOW | 67,793 |
| | 61,719 |
| | 61,869 |
| | 9.8 | % | | 9.6 | % |
| Money Market | 434,385 |
| | 469,095 |
| | 471,968 |
| | (7.4 | )% | | (8.0 | )% |
| Savings | 174,319 |
| | 178,960 |
| | 180,487 |
| | (2.6 | )% | | (3.4 | )% |
| Time | 639,530 |
| | 649,747 |
| | 614,722 |
| | (1.6 | )% | | 4.0 | % |
| Total Deposits | $ | 1,477,731 |
| | $ | 1,521,365 |
| | $ | 1,502,244 |
| | (2.9 | )% | | (1.6 | )% |
BANKWELLFINANCIALGROUP, INC.
NONINTEREST INCOME & EXPENSE - QTD (unaudited)
(Dollars in thousands)
|
| | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | | | |
| Noninterest income | June 30, 2019 | | March 31,
2019 | | June 30,
2018 | | June 19 vs. March 19 % Change | | June 19 vs. June 18 % Change |
| Gains and fees from sales of loans | $ | 617 |
| | $ | 89 |
| | $ | 315 |
| | 593.3 | % | | 95.9 | % |
| Service charges and fees | 263 |
| | 249 |
| | 265 |
| | 5.6 | % | | (0.8 | )% |
| Bank owned life insurance | 254 |
| | 249 |
| | 265 |
| | 2.0 | % | | (4.2 | )% |
| Net gain on sale of available for sale securities | 76 |
| | — |
| | — |
| | 100.0 | % | | 100.0 | % |
| Other | 126 |
| | 721 |
| | 262 |
| | (82.5 | )% | | (51.9 | )% |
| Total noninterest income | $ | 1,336 |
| | $ | 1,308 |
| | $ | 1,107 |
| | 2.1 | % | | 20.7 | % |
|
| | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | | | |
| Noninterest expense | June 30, 2019 | | March 31,
2019 | | June 30,
2018 | | June 19 vs. March 19 % Change | | June 19 vs. June 18 % Change |
| Salaries and employee benefits | $ | 4,555 |
| | $ | 4,836 |
| | $ | 4,539 |
| | (5.8 | )% | | 0.4 | % |
| Occupancy and equipment | 1,833 |
| | 1,887 |
| | 1,731 |
| | (2.9 | )% | | 5.9 | % |
| Data processing | 551 |
| | 512 |
| | 509 |
| | 7.6 | % | | 8.3 | % |
| Professional services | 519 |
| | 590 |
| | 424 |
| | (12.0 | )% | | 22.4 | % |
| Marketing | 348 |
| | 193 |
| | 479 |
| | 80.3 | % | | (27.3 | )% |
| Director fees | 215 |
| | 189 |
| | 274 |
| | 13.8 | % | | (21.5 | )% |
| FDIC insurance | 76 |
| | 123 |
| | 203 |
| | (38.2 | )% | | (62.6 | )% |
| Amortization of intangibles | 19 |
| | 19 |
| | 24 |
| | — | % | | (20.8 | )% |
| Other | 639 |
| | 626 |
| | 581 |
| | 2.1 | % | | 10.0 | % |
| Total noninterest expense | $ | 8,755 |
| | $ | 8,975 |
| | $ | 8,764 |
| | (2.5 | )% | | (0.1 | )% |
BANKWELLFINANCIALGROUP, INC.
NONINTEREST INCOME & EXPENSE - YTD (unaudited)
(Dollars in thousands)
|
| | | | | | | | | | |
| | For the Six Months Ended | | |
| Noninterest income | June 30, 2019 | | June 30,
2018 | | % Change |
| Gains and fees from sales of loans | $ | 706 |
| | $ | 685 |
| | 3.1 | % |
| Service charges and fees | 512 |
| | 521 |
| | (1.7 | )% |
| Bank owned life insurance | 503 |
| | 528 |
| | (4.7 | )% |
| Net gain on sale of available for sale securities | 76 |
| | 222 |
| | (65.8 | )% |
| Other | 847 |
| | 484 |
| | 75.0 | % |
| Total noninterest income | $ | 2,644 |
| | $ | 2,440 |
| | 8.4 | % |
|
| | | | | | | | | | |
| | For the Six Months Ended | | |
| Noninterest expense | June 30, 2019 | | June 30,
2018 | | % Change |
| Salaries and employee benefits | $ | 9,391 |
| | $ | 9,567 |
| | (1.8 | )% |
| Occupancy and equipment | 3,720 |
| | 3,348 |
| | 11.1 | % |
| Professional services | 1,109 |
| | 1,199 |
| | (7.5 | )% |
| Data processing | 1,063 |
| | 1,034 |
| | 2.8 | % |
| Marketing | 541 |
| | 776 |
| | (30.3 | )% |
| Director fees | 404 |
| | 489 |
| | (17.4 | )% |
| FDIC insurance | 199 |
| | 417 |
| | (52.3 | )% |
| Amortization of intangibles | 38 |
| | 48 |
| | (20.8 | )% |
| Other | 1,265 |
| | 1,089 |
| | 16.2 | % |
| Total noninterest expense | $ | 17,730 |
| | $ | 17,967 |
| | (1.3 | )% |
BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)
(Dollars in thousands)
|
| | | | | | | | | | | | | | | |
| | As of |
| Computation of Tangible Common Equity to Tangible Assets | June 30, 2019 | | March 31, 2019 | | December 31, 2018 | | June 30, 2018 |
| Total Equity | $ | 176,940 |
| | $ | 176,841 |
| | $ | 174,196 |
| | $ | 169,573 |
|
| Less: | | | | | | | |
| Goodwill | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
|
| Other intangibles | 251 |
| | 270 |
| | 290 |
| | 334 |
|
| Tangible Common Equity | $ | 174,100 |
| | $ | 173,982 |
| | $ | 171,317 |
| | $ | 166,650 |
|
| | | | | | | | |
| Total Assets | $ | 1,859,665 |
| | $ | 1,897,758 |
| | $ | 1,873,665 |
| | $ | 1,870,802 |
|
| Less: | | | | | | | |
| Goodwill | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
|
| Other intangibles | 251 |
| | 270 |
| | 290 |
| | 334 |
|
| Tangible Assets | $ | 1,856,825 |
| | $ | 1,894,899 |
| | $ | 1,870,786 |
| | $ | 1,867,879 |
|
| | | | | | | | |
| Tangible Common Equity to Tangible Assets | 9.38 | % | | 9.18 | % | | 9.16 | % | | 8.92 | % |
|
| | | | | | | | | | | | | | | |
| | As of |
| Computation of Tangible Book Value per Common Share | June 30, 2019 | | March 31, 2019 | | December 31, 2018 | | June 30, 2018 |
| Total shareholders' equity | $ | 176,940 |
| | $ | 176,841 |
| | $ | 174,196 |
| | $ | 169,573 |
|
| Less: | | | | | | | |
| Preferred stock | — |
| | — |
| | — |
| | — |
|
| Common shareholders' equity | 176,940 |
| | 176,841 |
| | 174,196 |
| | 169,573 |
|
| Less: | | | | | | | |
| Goodwill | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
|
| Other intangibles | 251 |
| | 270 |
| | 290 |
| | 334 |
|
| Tangible common shareholders' equity | 174,100 |
| | 173,982 |
| | 171,317 |
| | 166,650 |
|
| Common shares issued | 7,875,271 |
| | 7,873,471 |
| | 7,842,271 |
| | 7,841,720 |
|
| Less: | | | | | | | |
| Shares of unvested restricted stock | 94,598 |
| | 99,061 |
| | 77,624 |
| | 112,099 |
|
| Treasury stock | 34,168 |
| | — |
| | — |
| | — |
|
| Common shares outstanding | 7,746,505 |
| | 7,774,410 |
| | 7,764,647 |
| | 7,729,621 |
|
| Book value per share | $ | 22.84 |
| | $ | 22.75 |
| | $ | 22.43 |
| | $ | 21.94 |
|
| Less: | | | | | | | |
| Effects of intangible assets | $ | 0.37 |
| | $ | 0.37 |
| | $ | 0.37 |
| | $ | 0.38 |
|
| | | | | | | | |
| Tangible Book Value per Common Share | $ | 22.47 |
| | $ | 22.38 |
| | $ | 22.06 |
| | $ | 21.56 |
|
BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued
(Dollars in thousands, except share data)
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | For the Six Months Ended |
| Computation of Efficiency Ratio | June 30, 2019 | | March 31, 2019 | | December 31, 2018 | | June 30, 2018 | | June 30, 2019 | | June 30, 2018 |
| Noninterest expense | $ | 8,755 |
| | $ | 8,975 |
| | $ | 8,796 |
| | $ | 8,764 |
| | $ | 17,730 |
| | $ | 17,967 |
|
| Less: | | | | | | | | | | | |
| Amortization of intangible assets | 19 |
| | 19 |
| | 20 |
| | 24 |
| | 38 |
| | 48 |
|
| Other real estate owned expenses | 24 |
| | — |
| | — |
| | — |
| | 24 |
| | — |
|
| Adjusted noninterest expense | $ | 8,712 |
| | $ | 8,956 |
| | $ | 8,776 |
| | $ | 8,740 |
| | $ | 17,668 |
| | $ | 17,919 |
|
| Net interest income | $ | 13,595 |
| | $ | 14,273 |
| | $ | 14,467 |
| | $ | 13,908 |
| | $ | 27,868 |
| | $ | 27,613 |
|
| Noninterest income | 1,336 |
| | 1,308 |
| | 601 |
| | 1,107 |
| | 2,644 |
| | 2,440 |
|
| Less: | | | | | | | | | | | |
| Net gain on sale of available for sale securities | 76 |
| | — |
| | — |
| | — |
| | 76 |
| | 222 |
|
| Adjusted operating revenue | $ | 14,855 |
| | $ | 15,581 |
| | $ | 15,068 |
| | $ | 15,015 |
| | $ | 30,436 |
| | $ | 29,831 |
|
| | | | | | | | | | | | |
| Efficiency ratio | 58.6 | % | | 57.5 | % | | 58.2 | % | | 58.2 | % | | 58.0 | % | | 60.1 | % |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| | For the Quarter Ended | | For the Six Months Ended |
| Computation of Return on Average Tangible Common Equity | June 30, 2019 | | March 31, 2019 | | December 31, 2018 | | June 30, 2018 | | June 30, 2019 | | June 30, 2018 |
| Net Income Attributable to Common Shareholders | $ | 5,576 |
| | $ | 5,080 |
| | $ | 3,261 |
| | $ | 4,715 |
| | $ | 10,656 |
| | $ | 9,315 |
|
| Total average shareholders' equity | $ | 179,217 |
| | $ | 177,532 |
| | $ | 177,685 |
| | $ | 168,684 |
| | $ | 178,387 |
| | $ | 166,540 |
|
| Less: | | | | | | | | | | | |
| Average Goodwill | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
| | 2,589 |
|
| Average Other intangibles | 264 |
| | 283 |
| | 302 |
| | 334 |
| | 273 |
| | 334 |
|
| Average tangible common equity | $ | 176,364 |
| | $ | 174,660 |
| | $ | 174,794 |
| | $ | 165,761 |
| | $ | 175,525 |
| | $ | 163,617 |
|
| | | | | | | | | | | | |
| Annualized Return on Average Tangible Common Equity | 12.68 | % | | 11.80 | % | | 7.40 | % | | 11.41 | % | | 12.24 | % | | 11.48 | % |
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, 2019 | | June 30, 2018 |
| | Average Balance | | Interest | | Yield/ Rate (5) | | Average Balance | | Interest | | Yield/ Rate (5) |
| Assets: | | | | | | | | | | | |
| Cash and Fed funds sold | $ | 92,493 |
| | $ | 514 |
| | 2.23 | % | | $ | 81,879 |
| | $ | 325 |
| | 1.59 | % |
Securities(1) | 119,999 |
| | 945 |
| | 3.15 | % | | 119,893 |
| | 921 |
| | 3.07 | % |
| Loans: | | | | | | | | | | | |
| Commercial real estate | 1,052,936 |
| | 13,201 |
| | 4.96 | % | | 996,269 |
| | 11,400 |
| | 4.53 | % |
| Residential real estate | 170,180 |
| | 1,630 |
| | 3.83 | % | | 193,336 |
| | 1,786 |
| | 3.69 | % |
Construction(2) | 85,933 |
| | 1,147 |
| | 5.28 | % | | 92,945 |
| | 1,180 |
| | 5.02 | % |
| Commercial business | 252,814 |
| | 3,558 |
| | 5.57 | % | | 283,865 |
| | 3,740 |
| | 5.21 | % |
| Consumer | 270 |
| | 4 |
| | 6.54 | % | | 536 |
| | 8 |
| | 5.97 | % |
| Total loans | 1,562,133 |
| | 19,540 |
| | 4.95 | % | | 1,566,951 |
| | 18,114 |
| | 4.57 | % |
| Federal Home Loan Bank stock | 7,474 |
| | 116 |
| | 6.23 | % | | 9,330 |
| | 125 |
| | 5.37 | % |
| Total earning assets | 1,782,099 |
| | $ | 21,115 |
| | 4.69 | % | | 1,778,053 |
| | $ | 19,485 |
| | 4.34 | % |
| Other assets | 85,117 |
| | | | | | 68,334 |
| | | | |
| Total assets | $ | 1,867,216 |
| | | | | | $ | 1,846,387 |
| | | | |
| | | | | | | | | | | | |
| Liabilities and shareholders' equity: | | | | | | | | | | | |
| Interest bearing liabilities: | | | | | | | | | | | |
| NOW | $ | 64,316 |
| | $ | 28 |
| | 0.17 | % | | $ | 63,870 |
| | $ | 21 |
| | 0.13 | % |
| Money market | 444,848 |
| | 1,847 |
| | 1.67 | % | | 496,548 |
| | 1,518 |
| | 1.23 | % |
| Savings | 174,626 |
| | 743 |
| | 1.71 | % | | 100,893 |
| | 267 |
| | 1.06 | % |
| Time | 644,723 |
| | 3,701 |
| | 2.30 | % | | 619,262 |
| | 2,503 |
| | 1.62 | % |
| Total interest bearing deposits | 1,328,513 |
| | 6,319 |
| | 1.91 | % | | 1,280,573 |
| | 4,309 |
| | 1.35 | % |
| Borrowed Money | 175,172 |
| | 1,132 |
| | 2.56 | % | | 224,120 |
| | 1,197 |
| | 2.11 | % |
| Total interest bearing liabilities | 1,503,685 |
| | $ | 7,451 |
|
| 1.99 | % | | 1,504,693 |
| | $ | 5,506 |
| | 1.47 | % |
| Noninterest bearing deposits | 159,021 |
| | | | | | 160,275 |
| | | | |
| Other liabilities | 25,293 |
| | | | | | 12,735 |
| | | | |
| Total liabilities | 1,687,999 |
| | | | | | 1,677,703 |
| | | | |
| Shareholders' equity | 179,217 |
| | | | | | 168,684 |
| | | | |
| Total liabilities and shareholders' equity | $ | 1,867,216 |
| | | | | | $ | 1,846,387 |
| | | | |
Net interest income(3) | | | $ | 13,664 |
| | | | | | $ | 13,979 |
| | |
| Interest rate spread | | | | | 2.70 | % | | | | | | 2.87 | % |
Net interest margin(4) | | | | | 3.07 | % | | | | | | 3.14 | % |
(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 $69 thousand and $71 thousand, respectively, for the three months ended June 30, 2019 and 2018.
(4)Annualized net interest income as a percentage of earning assets.
(5)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, 2019 | | June 30, 2018 |
| | Average Balance | | Interest | | Yield/ Rate (5) | | Average Balance | | Interest | | Yield/ Rate (5) |
| Assets: | | | | | | | | | | | |
| Cash and Fed funds sold | $ | 82,854 |
| | $ | 897 |
| | 2.18 | % | | $ | 75,634 |
| | $ | 579 |
| | 1.54 | % |
Securities(1) | 118,792 |
| | 1,877 |
| | 3.16 | % | | 118,502 |
| | 1,809 |
| | 3.05 | % |
| Loans: | | | | | | | | | | | |
| Commercial real estate | 1,059,247 |
| | 25,586 |
| | 4.80 | % | | 986,204 |
| | 22,269 |
| | 4.49 | % |
| Residential real estate | 173,353 |
| | 3,333 |
| | 3.85 | % | | 195,628 |
| | 3,585 |
| | 3.67 | % |
Construction(2) | 83,549 |
| | 2,271 |
| | 5.41 | % | | 94,161 |
| | 2,326 |
| | 4.91 | % |
| Commercial business | 264,648 |
| | 8,436 |
| | 6.34 | % | | 282,324 |
| | 7,336 |
| | 5.17 | % |
| Consumer | 296 |
| | 10 |
| | 6.48 | % | | 586 |
| | 16 |
| | 5.43 | % |
| Total loans | 1,581,093 |
| | 39,636 |
| | 4.99 | % | | 1,558,903 |
| | 35,532 |
| | 4.53 | % |
| Federal Home Loan Bank stock | 7,531 |
| | 253 |
| | 6.72 | % | | 9,318 |
| | 243 |
| | 5.21 | % |
| Total earning assets | 1,790,270 |
| | $ | 42,663 |
| | 4.74 | % | | 1,762,357 |
| | $ | 38,163 |
| | 4.31 | % |
| Other assets | 82,023 |
| | | | | | 67,571 |
| | | | |
| Total assets | $ | 1,872,293 |
| | | | | | $ | 1,829,928 |
| | | | |
| | | | | | | | | | | | |
| Liabilities and shareholders' equity: | | | | | | | | | | | |
| Interest bearing liabilities: | | | | | | | | | | | |
| NOW | $ | 61,579 |
| | $ | 75 |
| | 0.25 | % | | $ | 61,117 |
| | $ | 39 |
| | 0.13 | % |
| Money market | 458,884 |
| | 3,829 |
| | 1.68 | % | | 481,723 |
| | 2,680 |
| | 1.12 | % |
| Savings | 177,482 |
| | 1,512 |
| | 1.72 | % | | 97,429 |
| | 463 |
| | 0.96 | % |
| Time | 636,156 |
| | 7,003 |
| | 2.22 | % | | 622,508 |
| | 4,783 |
| | 1.55 | % |
| Total interest bearing deposits | 1,334,101 |
| | 12,419 |
| | 1.88 | % | | 1,262,777 |
| | 7,965 |
| | 1.27 | % |
| Borrowed Money | 175,343 |
| | 2,235 |
| | 2.54 | % | | 224,114 |
| | 2,443 |
| | 2.17 | % |
| Total interest bearing liabilities | 1,509,444 |
| | $ | 14,654 |
| | 1.96 | % | | 1,486,891 |
| | $ | 10,408 |
| | 1.41 | % |
| Noninterest bearing deposits | 161,239 |
| | | | | | 163,256 |
| | | | |
| Other liabilities | 23,223 |
| | | | | | 13,241 |
| | | | |
| Total liabilities | 1,693,906 |
| | | | | | 1,663,388 |
| | | | |
| Shareholders' equity | 178,387 |
| | | | | | 166,540 |
| | | | |
| Total liabilities and shareholders' equity | $ | 1,872,293 |
| | | | | | $ | 1,829,928 |
| | | | |
Net interest income(3) | | | $ | 28,009 |
| | | | | | $ | 27,755 |
| | |
| Interest rate spread | | | | | 2.78 | % | | | | | | 2.90 | % |
Net interest margin(4) | | | | | 3.13 | % | | | | | | 3.15 | % |
(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 $141 thousand and $142 thousand, respectively, for the six months ended June 30, 2019 and 2018.
(4)Annualized net interest income as a percentage of earning assets.
(5)Yields are calculated using the contractual day count convention for each respective product type.
