Market Overview

Bankwell Financial Group Reports Second Quarter Net Income of $2.9 Million, Reaches Record Asset Levels at $1.5 Billion and Declares Third Quarter Dividend

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NEW CANAAN, Conn.--(BUSINESS WIRE)--

Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $2.9 million for the second quarter of 2016. In addition, Bankwell Financial Group, Inc. reached record loan levels at $1.3 billion, driven by continued strong organic growth.

The Company's Board of Directors declared a $0.05 per share cash dividend, payable August 26, 2016 to shareholders of record on August 16, 2016.

Second Quarter 2016 Highlights:

  • Total revenue (net interest income plus non-interest income) reached $12.7 million.
  • Diluted earnings per share were $0.38, an increase of 23% compared to the second quarter of 2015.
  • Tax equivalent net interest margin was 3.50% for the second quarter of 2016.
  • Total non-interest income was $0.9 million, which is 7% of total revenue.
  • The efficiency ratio was 57.1%, compared to 63.2% in the second quarter of 2015.
  • Total assets surpass $1.5 billion.
  • The tangible common equity ratio and tangible book value per share were 8.85% and $18.12, respectively.
  • Total gross loans were $1.3 billion.
  • The allowance for loan losses was $16.1 million and represented 1.34% of total loans, excluding acquired loans.
  • Investment securities totaled $100.8 million and represented 7% of total assets.
  • Total deposits ended the quarter at $1.2 billion.

Notes Bankwell Financial Group CEO, Christopher R. Gruseke:

"Bankwell continued our exceptional financial performance into the second quarter of 2016. We recorded net income of $2.9 million, or $0.38 per share for the quarter. Organic loan growth continues to be strong, as our portfolio grew by $80 million, or 7%, in the second quarter. This represents a 28% annualized increase in assets, compared to 2015 year-end, as the Bank crossed another milestone surpassing $1.5 billion in assets. Our vigilant focus on expenses resulted in a stand-out efficiency ratio of 57.1% for the quarter, compared to 63.2% for the quarter ended June 30, 2015. We do expect personnel additions during the remainder of 2016 that will result in a more normalized efficiency ratio. Nevertheless, we expect significant improvement for the full year versus our 2015 efficiency ratio. The entire Bankwell team is to be applauded as their efforts generated a tangible book value per common share of $18.12 and a return on average tangible common equity of 8.74%. Further, Bankwell's credit quality remains outstanding with non-performing assets at 0.27% of total assets."

Mr. Gruseke added, "Delivering on our strategic commitment to enhance our deposit franchise, I am pleased to announce an important addition to the management team with the recent hiring of David Dineen to the newly created position of EVP, Head of Community Banking. David brings a wealth of banking experience and a strong understanding of local markets to Bankwell. I am confident that under his leadership Bankwell will further enhance its core funding capacity and strengthen our commitment to the customers and communities we serve."

Earnings

Net income for the quarter ended June 30, 2016 was $2.9 million, an increase of 27% compared to the quarter ended June 30, 2015. Net income for the six months ended June 30, 2016 was $5.9 million, an increase of 42% compared to the six months ended June 30, 2015. Revenues (net interest income plus non-interest income) for the quarter ended June 30, 2016 were $12.7 million, an increase of 10% compared to the quarter ended June 30, 2015. Revenues for the six months ended June 30, 2016 were $24.8 million, an increase of 12% compared to the six months ended June 30, 2015. Net interest income for the quarter ended June 30, 2016 was $11.9 million, an increase of 11% compared to the quarter ended June 30, 2015. Our strong net income, revenues and net interest income was fueled by continued earning asset growth.

Basic and diluted earnings per share for the quarter ended June 30, 2016 was $0.38, compared to $0.31 for the quarter ended June 30, 2015.

The Company continues to focus on expense control as indicated by our improving efficiency ratio. The Company's efficiency ratio for the quarters ended June 30, 2016 and June 30, 2015 were 57.1% and 63.2%, respectively. The Company's efficiency ratio for the six months ended June 30, 2016 and June 30, 2015 were 57.4% and 64.5%, respectively.

Noninterest Income and Expense

Noninterest income remained flat for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and increased $73 thousand to $1.5 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015. The increase in noninterest income was primarily driven by gains on the sale of foreclosed real estate, net gains on the sale of available for sale securities and increased service charges and fees, offset by a decrease in sales of loans.

Noninterest expense decreased $165 thousand for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and decreased $55 thousand for the six months ended June 30, 2016 compared to the six months ended June 30, 2015. The decrease was primarily driven by a decrease in salaries and employee benefits. Salaries and employee benefits decreased $0.2 million or 5.9% for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and decreased $0.4 million or 4.9% for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 as a result of an increase in open positions.

Financial Condition

Assets totaled $1.5 billion at June 30, 2016, an annualized increase of 28% compared to assets of $1.3 billion at December 31, 2015. This increase reflects strong organic loan growth. Total gross loans were $1.3 billion at June 30, 2016, an annualized increase of 23% compared to December 31, 2015. Commercial real estate loans have experienced the most significant growth, up by $87.5 million.

Deposits increased to $1.2 billion, an annualized increase of 26% over December 31, 2015, with core deposits (total deposits less time deposits) showing an annualized increase of 9% over December 31, 2015 to $636.9 million primarily reflecting increases in noninterest-bearing deposit, money market and NOW accounts.

Asset Quality

Asset quality remained exceptionally strong at June 30, 2016. Non-performing assets as a percentage of total assets was 0.27% at June 30, 2016, down from 0.38% at December 31, 2015. The allowance for loan losses at June 30, 2016 was $16.1 million, representing 1.34% of total loans, excluding acquired loans.

Capital

Shareholders' equity totaled $137.1 million as of June 30, 2016, an increase of $5.4 million compared to December 31, 2015, primarily a result of net income for the six months ended June 30, 2016 of $5.9 million. As of June 30, 2016, the tangible common equity ratio and tangible book value per share were 8.85% and $18.12, 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.

           
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands, except share data)
 
June 30, March 31, December 31, June 30,
2016 2016 2015 2015
Assets
Cash and due from banks $ 92,745 $ 69,512 $ 49,562 $ 75,550
Federal funds sold   1,932     3,194     39,035   -
Cash and cash equivalents 94,677 72,706 88,597 75,550
 
Held to maturity investment securities, at amortized cost 16,959 17,010 10,226 11,341
Available for sale investment securities, at fair value 83,837 91,528 40,581 46,883
Loans receivable (net of allowance for loan losses of $16,100, $14,810,
$14,169 and $12,230 at June 30, 2016, March 31, 2016, December 31, 2015
and June 30, 2015, respectively) 1,256,949 1,177,905 1,129,748 1,021,693
Foreclosed real estate 492 878 1,248 830
Accrued interest receivable 4,708 4,370 4,071 3,575
Federal Home Loan Bank stock, at cost 7,393 7,158 6,554 6,918
Premises and equipment, net 10,659 10,830 11,163 11,868
Bank-owned life insurance 24,103 23,929 23,755 23,395
Goodwill 2,589 2,589 2,589 2,589
Other intangible assets 572 612 652 745
Deferred income taxes, net 9,487 8,814 8,337 7,869
Other assets   3,695     1,881     2,851   1,418
Total assets $ 1,516,120   $ 1,420,210   $ 1,330,372 $ 1,214,674
 
Liabilities & Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing $ 178,917 $ 165,968 $ 164,553 $ 162,546
Interest-bearing   1,001,674     927,766     882,389   789,035
Total deposits 1,180,591 1,093,734 1,046,942 951,581
 
Advances from the Federal Home Loan Bank 165,000 160,000 120,000 124,000
Subordinated debentures 25,025 25,012 25,000 -
Accrued expenses and other liabilities   8,382     6,856     6,661   5,424
Total liabilities   1,378,998     1,285,602     1,198,603   1,081,005
 
 
Shareholders' equity
Preferred stock, senior noncumulative perpetual, Series C, no par;
10,980 shares issued and outstanding at June 30, 2015
liquidation value of $1,000 per share. - - - 10,980
Common stock, no par value; 10,000,000 shares authorized,
7,544,458, 7,530,791, 7,516,291 and 7,240,704 shares issued at June 30, 2016,
March 31, 2016, December 31, 2015 and June 30, 2015, respectively 113,309 113,052 112,579 108,038
Retained earnings 24,097 21,578 18,963 14,538
Accumulated other comprehensive (loss) income   (284 )   (22 )   227   113
Total shareholders' equity   137,122     134,608     131,769   133,669
 
Total liabilities and shareholders' equity $ 1,516,120   $ 1,420,210   $ 1,330,372 $ 1,214,674
 
                     
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
 
For the Quarter Ended For the Six Months Ended
June 30, March 31, December 31, June 30, June 30, June 30,
2016 2016 2015 2015 2016 2015
Interest and dividend income
Interest and fees on loans $ 13,970 $ 13,283 $ 13,383 $ 11,897 $ 27,253 $ 22,653
Interest and dividends on securities 711 684 489 474 1,395 978
Interest on cash and cash equivalents   30   37   36   17   67   29
Total interest income   14,711   14,004   13,908   12,388   28,715   23,660
 
Interest expense
Interest expense on deposits 1,962 1,740 1,776 1,231 3,702 2,269
Interest on borrowings   870   866   896   416   1,736   757
Total interest expense   2,832   2,606   2,672   1,647   5,438   3,026
 
Net interest income 11,879 11,398 11,236 10,741 23,277 20,634
 
Provision for loan losses   1,301   646   354   654   1,947   1,387
 
Net interest income after provision for loan losses   10,578   10,752   10,882   10,087   21,330   19,247
 
Noninterest income
Service charges and fees 235 245 258 233 480 441
Bank owned life insurance 174 174 178 185 348 368
Gain on sale of foreclosed real estate, net 128 - - - 128 18
Gains and fees from sales of loans 114 110 228 349 224 438
Net gain on sale of available for sale securities 92 - - - 92 -
Other   110   143   176   87   253   187
Total noninterest income   853   672   840   854   1,525   1,452
 
Noninterest expense
Salaries and employee benefits 3,817 3,811 4,248 4,057 7,628 8,019
Occupancy and equipment 1,392 1,408 1,312 1,310 2,800 2,659
Data processing 377 407 366 405 784 741
Professional services 370 366 414 369 736 694
Marketing 263 139 278 271 402 418
FDIC insurance 168 169 185 163 337 321
Director fees 140 155 198 141 295 289
Amortization of intangibles 40 40 43 51 80 102
Foreclosed real estate 30 72 95 6 102 10
Merger and acquisition related expenses - - 2 - - -
Other   618   513   540   607   1,131   1,097
Total noninterest expense   7,215   7,080   7,681   7,380   14,295   14,350
 
Income before income tax expense 4,216 4,344 4,041 3,561 8,560 6,349
 
Income tax expense   1,320   1,353   1,423   1,275   2,673   2,190
 
Net income $ 2,896 $ 2,991 $ 2,618 $ 2,286 $ 5,887 $ 4,159
 
 
Net income attributable to common shareholders $ 2,896 $ 2,991 $ 2,575 $ 2,259 $ 5,887 $ 4,104
 
Earnings Per Common Share:
Basic $ 0.38 $ 0.40 $ 0.35 $ 0.31 $ 0.78 $ 0.57
Diluted 0.38 0.40 0.35 0.31 0.78 0.57
 
Weighted Average Common Shares Outstanding:
Basic 7,387,712 7,380,217 7,169,570 7,042,290 7,383,965 7,035,432
Diluted 7,467,954 7,431,747 7,234,431 7,056,916 7,446,456 7,056,566
Dividends per common share $ 0.05 $ 0.05 $ 0.05 $ - $ 0.10 $ -
 
               
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
     
 
For the Quarter Ended For the Six Months Ended
June 30, March 31, December 31, June 30, June 30, June 30,
2016 2016 2015 2015 2016 2015
Performance ratios:
Return on average assets 0.82% 0.89% 0.78% 0.80% 0.85% 0.75%
Return on average stockholders' equity 8.54% 9.01% 7.68% 6.91% 8.77% 6.36%
Return on average tangible common equity 8.74% 9.23% 7.74% 7.65% 8.98% 7.05%
Net interest margin 3.50% 3.54% 3.63% 3.97% 3.52% 3.93%
Efficiency ratio (1) 57.1% 57.7% 62.4% 63.2% 57.4% 64.5%
 
Net loan charge-offs as a % of average loans 0.00% 0.00% 0.01% 0.00% 0.00% 0.00%
 
        As of
June 30,

2016

  March 31,

2016

  December 31,

2015

  June 30,

2015

Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2) 11.76 % 12.24 % 12.18 % 11.44 %
Total Capital to Risk-Weighted Assets (2) 13.01 % 13.48 % 13.39 % 12.59 %
Tier I Capital to Risk-Weighted Assets (2) 11.76 % 12.24 % 12.18 % 11.44 %
Tier I Capital to Average Assets (2) 10.59 % 10.85 % 10.84 % 10.71 %
Tangible common equity to tangible assets 8.85 % 9.27 % 9.68 % 9.85 %
 
Tangible book value per common share (3) $ 18.12 $ 17.78 $ 17.43 $ 16.95
 
Asset quality:
Nonaccrual loans $ 3,609 $ 3,398 $ 3,791 $ 2,094
Other real estate owned   492     878     1,248     830  
Total non-performing assets $ 4,101   $ 4,276   $ 5,039   $ 2,924  
 
Loans past due 90 days and still accruing $ 105 $ 89 $ 1,105 $ 1,479
 
Nonperforming loans as a % of total loans 0.28 % 0.28 % 0.33 % 0.20 %
 
Nonperforming assets as a % of total assets 0.27 % 0.30 % 0.38 % 0.24 %
 
Allowance for loan losses as a % of total loans 1.26 % 1.24 % 1.23 % 1.18 %
 
Allowance for loan losses as a % of nonperforming loans 446.11 % 435.84 % 373.76 % 584.05 %
 
(1) Efficiency ratio is defined as noninterest expense, less merger and acquisition related expenses, other real estate owned expenses and amortization of intangible assets, 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 152,090, 138,423, 143,323 and 198,414 as of June 30, 2016, March 31, 2016, December 31, 2015 and June 30, 2015, respectively.
       
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)    
 
 
June 30, December 31, June 30, Jun 16 vs. Dec 15 Jun 16 vs. Jun 15
Period End Loan Composition 2016 2015 2015 % Change % Change
Residential Real Estate $ 181,035 $ 177,184 $ 176,350 2.2% 2.7%
Commercial Real Estate 785,041 697,542 626,942 12.5% 25.2%
Construction 98,266 82,273 64,551 19.4% 52.2%
Home equity   15,987   15,926   16,838 0.4% -5.1%
Total Real Estate Loans 1,080,329 972,925 884,681 11.0% 22.1%
 
Commercial Business 194,067 172,853 150,276 12.3% 29.1%
 
Consumer   2,553   1,735   2,235 47.1% 14.2%
Total Loans $ 1,276,949 $ 1,147,513 $ 1,037,192 11.3% 23.1%
 
             
June 30, December 31, June 30, Jun 16 vs. Dec 15 Jun 16 vs. Jun 15
Period End Deposit Composition 2016 2015 2015 % Change % Change
Noninterest-bearing demand $ 178,917 $ 164,553 $ 162,546 8.7% 10.1%
NOW 61,411 51,008 64,035 20.4% -4.1%
Money Market 331,148 296,838 270,526 11.6% 22.4%
Savings 65,444 97,846 106,445 -33.1% -38.5%
Time   543,671   436,697   348,029 24.5% 56.2%
Total Deposits $ 1,180,591 $ 1,046,942 $ 951,581 12.8% 24.1%
 
             
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME & EXPENSE - QTD (unaudited)
(Dollars in thousands)
 
For the Quarter Ended
Noninterest income June 30, December 31, June 30, Jun 16 vs. Dec 15 Jun 16 vs. Jun 15
2016 2015 2015 % Change % Change
Service charges and fees $ 235 $ 258 $ 233 -8.9% 0.9%
Bank owned life insurance 174 178 185 -2.2% -5.9%
Gain on sale of foreclosed real estate, net 128 - - 100.0% 100.0%
Gains and fees from sales of loans 114 228 349 -50.0% -67.3%
Net gain on sale of available for sale securities 92 - - 100.0% 100.0%
Other   110   176   87 -37.5% 26.4%
Total noninterest income $ 853 $ 840 $ 854 1.5% -0.1%
 
       
For the Quarter Ended
Noninterest expense June 30, December 31, June 30, Jun 16 vs. Dec 15 Jun 16 vs. Jun 15
2016 2015 2015 % Change % Change
Salaries and employee benefits $ 3,817 $ 4,248 $ 4,057 -10.1% -5.9%
Occupancy and equipment 1,392 1,312 1,310 6.1% 6.3%
Data processing 377 366 405 3.0% -6.9%
Professional services 370 414 369 -10.6% 0.3%
Marketing 263 278 271 -5.4% -3.0%
FDIC insurance 168 185 163 -9.2% 3.1%
Director fees 140 198 141 -29.3% -0.7%
Amortization of intangibles 40 43 51 -7.0% -21.6%
Foreclosed real estate 30 95 6 -68.4% 400.0%
Merger and acquisition related expenses - 2 - -100.0% 0.0%
Other   618   540   607 14.4% 1.8%
Total noninterest expense $ 7,215 $ 7,681 $ 7,380 -6.1% -2.2%
 
           
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME & EXPENSE - YTD (unaudited)
(Dollars in thousands)
 
For the Six Months Ended
Noninterest income June 30, June 30, Jun 16 vs. Jun 15
2016 2015 % Change
Service charges and fees $ 480 $ 441 8.8%
Bank owned life insurance 348 368 -5.4%
Gains and fees from sales of loans 224 438 -48.9%
Gain on sale of foreclosed real estate, net 128 18 611.1%
Net gain on sale of available for sale securities 92 - 100.0%
Other   253   187 35.3%
Total noninterest income $ 1,525 $ 1,452 5.0%
 
      For the Six Months Ended  
Noninterest expense June 30,   June 30, Jun 16 vs. Jun 15
2016 2015 % Change
Salaries and employee benefits $ 7,628 $ 8,019 -4.9%
Occupancy and equipment 2,800 2,659 5.3%
Data processing 784 741 5.8%
Professional services 736 694 6.1%
Marketing 402 418 -3.8%
FDIC insurance 337 321 5.0%
Director fees 295 289 2.1%
Foreclosed real estate 102 10 920.0%
Amortization of intangibles 80 102 -21.6%
Other   1,131   1,097 3.1%
Total noninterest expense $ 14,295 $ 14,350 -0.4%
 
           
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 06/30/2016 03/31/2016 12/31/2015 06/30/2015
Total Equity $ 137,122 $ 134,608 $ 131,769 $ 133,669
Less:
Preferred stock - - - 10,980
Goodwill 2,589 2,589 2,589 2,589
Other intangibles   572   612   652   745
Tangible Common Equity $ 133,961 $ 131,407 $ 128,528 $ 119,355
 
Total Assets $ 1,516,120 $ 1,420,210 $ 1,330,372 $ 1,214,674
Less:
Goodwill 2,589 2,589 2,589 2,589
Other intangibles   572   612   652   745
Tangible Assets $ 1,512,959 $ 1,417,009 $ 1,327,131 $ 1,211,340
 
Tangible Common Equity to Tangible Assets 8.85% 9.27% 9.68% 9.85%
 
     
As of
Computation of Tangible Book Value per Common Share 06/30/2016   03/31/2016   12/31/2015   06/30/2015
Total shareholders' equity $ 137,122 $ 134,608 $ 131,769 $ 133,669
Less:
Preferred stock   -   -   -   10,980
Common shareholders' equity 137,122 134,608 131,769 122,689
Less:
Goodwill 2,589 2,589 2,589 2,589
Other intangibles   572   612   652   745
Tangible common shareholders' equity 133,961 131,407 128,528 119,355
Common shares issued 7,544,458 7,530,791 7,516,291 7,240,704
Less:
Shares of unvested restricted stock   152,090   138,423   143,323   198,414
Common shares outstanding 7,392,368 7,392,368 7,372,968 7,042,290
Book value per share $ 18.55 $ 18.21 $ 17.87 $ 17.42
Less:
Effects of intangible assets $ 0.43 $ 0.43 $ 0.44 $ 0.47
 
Tangible Book Value per Common Share $ 18.12 $ 17.78 $ 17.43 $ 16.95
 
                 
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 06/30/2016 03/31/2016 12/31/2015 06/30/2015 06/30/2016 06/30/2015
Noninterest expense $ 7,215 $ 7,080 $ 7,681 $ 7,380 $ 14,295 $ 14,350
Less:
Amortization of intangible assets 40 40 43 51 80 102
Foreclosed real estate expenses 30 72 95 6 102 10
Merger and acquisition expense   -   -   2   -   -   -
Adjusted noninterest expense $ 7,145 $ 6,968 $ 7,541 $ 7,323 $ 14,113 $ 14,238
Net interest income $ 11,879 $ 11,398 $ 11,236 $ 10,741 $ 23,277 $ 20,634
Noninterest income 853 672 840 854 1,525 1,452
Less:
Gains (losses) on sales of securities 92 - - - 92
Gains on sale of foreclosed real estate   128   -   -   -   128   18
Adjusted operating revenue $ 12,512 $ 12,070 $ 12,076 $ 11,595 $ 24,582 $ 22,068
 
Efficiency ratio 57.1% 57.7% 62.4% 63.2% 57.4% 64.5%
 
                   
For the Quarter Ended For the Six Months Ended
Computation of Return on Average Tangible Common Equity 06/30/2016   03/31/2016   12/31/2015 06/30/2015 06/30/2016   06/30/2015
Net Income Attributable to Common Shareholders $ 2,896 $ 2,991 $ 2,575 $ 2,259 $ 5,887 $ 4,104
Total average shareholders' equity 136,389 133,474 135,311 132,738 134,933 131,782
Less:
Preferred stock - - - 10,980 - 10,980
Goodwill 2,589 2,589 2,589 2,589 2,589 2,589
Other intangibles 572 612 652 745 572 745
Average tangible common equity 133,228 130,273 132,070 118,424 131,772 117,468
 
Annualized Return on Average Tangible Common Equity 8.74% 9.23% 7.74% 7.65% 8.98% 7.05%
 
                 
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS
(Dollars in thousands)
 
For the Quarter Ended
June 30, 2016 June 30, 2015
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
Assets:
Cash and Fed funds sold $ 30,728 $ 28 0.37% $ 29,339 $ 16 0.22%
Securities (1) 105,886 795 3.00% 60,049 559 3.68%
Loans:
Commercial real estate 761,113 8,755 4.55% 583,036 7,333 4.98%
Residential real estate 180,649 1,612 3.57% 174,021 1,578 3.59%
Construction (2) 96,122 1,099 4.52% 68,073 803 4.66%
Commercial business 173,235 2,309 5.27% 149,067 1,935 5.13%
Home equity 15,313 155 4.08% 18,176 169 3.73%
Consumer 1,918 24 5.10% 2,478 30 4.84%
Acquired loans (net of mark)   683   17 9.85%   2,968   50 6.81%
Total loans 1,229,033 13,971 4.50% 997,819 11,898 4.72%
Federal Home Loan Bank stock   7,556   58 3.09%   6,859   27 1.57%
Total earning assets 1,373,203 $ 14,852 4.28% 1,094,066 $ 12,500 4.52%
Other assets   53,637   53,120
Total assets $ 1,426,840 $ 1,147,186
 
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW $ 57,123 32 0.23% $ 62,331 17 0.11%
Money market 321,354 449 0.56% 241,183 324 0.54%
Savings 69,069 66 0.38% 101,903 192 0.76%
Time   511,086   1,415 1.11%   315,820   698 0.89%
Total interest-bearing deposits 958,632 1,962 0.82% 721,237 1,231 0.68%
Borrowed Money   157,732   870 2.22%   133,744   416 1.25%
Total interest-bearing liabilities 1,116,364 $ 2,832 1.02% 854,981 $ 1,647 0.77%
Noninterest-bearing deposits 167,190 149,418
Other liabilities   6,897   10,049
Total liabilities 1,290,451 1,014,448
Shareholders' equity   136,389   132,738
Total liabilities and shareholders' equity $ 1,426,840 $ 1,147,186
Net interest income (3) $ 12,020 $ 10,853
Interest rate spread 3.26% 3.75%
Net interest margin (4) 3.50% 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 $141 thousand and $112 thousand, respectively for the three months ended June 30, 2016, and 2015.
(4) Net interest income as a percentage of earning assets.
                 
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS
(Dollars in thousands)
 
For the Six Months Ended
June 30, 2016 June 30, 2015
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
Assets:
Cash and Fed funds sold $ 31,704 $ 64 0.41% $ 24,131 $ 28 0.24%
Securities (1) 103,939 1,559 3.00% 63,262 1,150 3.64%
Loans:
Commercial real estate 736,869 17,080 4.58% 555,277 13,603 4.87%
Residential real estate 178,998 3,208 3.58% 173,665 3,158 3.64%
Construction (2) 91,305 2,067 4.48% 67,979 1,596 4.67%
Commercial business 169,639 4,499 5.25% 147,568 3,791 5.11%
Home equity 15,458 312 4.05% 18,124 339 3.77%
Consumer 1,738 21 2.44% 2,641 64 4.85%
Acquired loans (net of mark)   1,055   42 8.04%   3,037   104 6.93%
Total loans 1,195,062 27,229 4.51% 968,291 22,655 4.65%
Federal Home Loan Bank stock   7,058   116 3.28%   6,651   54 1.61%
Total earning assets 1,337,763 $ 28,968 4.28% 1,062,335 $ 23,887 4.47%
Other assets   54,403   49,358
Total assets $ 1,392,166 $ 1,111,693
 
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW $ 56,855 70 0.25% $ 57,458 32 0.11%
Money market 313,727 847 0.54% 235,595 605 0.52%
Savings 75,565 151 0.40% 91,003 278 0.62%
Time   482,715   2,634 1.10%   310,931   1,353 0.88%
Total interest-bearing deposits 928,862 3,702 0.80% 694,987 2,268 0.66%
Borrowed Money   151,604   1,736 2.30%   127,053   757 1.20%
Total interest-bearing liabilities 1,080,466 $ 5,438 1.01% 822,040 $ 3,025 0.74%
Noninterest-bearing deposits 169,853 151,516
Other liabilities   6,914   6,355
Total liabilities 1,257,233 979,911
Shareholders' equity   134,933   131,782
Total liabilities and shareholders' equity $ 1,392,166 $ 1,111,693
Net interest income (3) $ 23,530 $ 20,862
Interest rate spread 3.27% 3.73%
Net interest margin (4) 3.52% 3.93%
 
(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 $253 thousand and $228 thousand, respectively for the six months ended June 30, 2016, and 2015.
(4) Net interest income as a percentage of earning assets.

Bankwell Financial Group
Christopher R. Gruseke, 203-652-0166
President and Chief Executive Officer
or
Ernest J. Verrico Sr., 203-652-0166
Executive Vice President and Chief Financial Officer

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