Market Overview

Bankwell Financial Group Reports Record Third Quarter Net Income of $4.3 Million or $0.55 Per Share and Declares Fourth Quarter Dividend

Share:

Bankwell Financial Group, Inc. (NASDAQ:BWFG) reported net income of
$4.3 million or $0.55 per share for the third quarter of 2017, versus
$3.1 million or $0.41 per share for the same period in 2016.

The Company's Board of Directors declared a $0.07 per share cash
dividend, payable November 27, 2017 to shareholders of record on
November 17, 2017.

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

"I am pleased to announce that Bankwell has reached many milestones this
quarter. Bankwell has realized record earnings of $4.3 million, making
it the first time we have exceeded $4.0 million of net income in a
single quarter. Total assets and loans also reached new highs,
surpassing $1.8 billion and $1.5 billion, respectively. Our performance
driven culture has resulted in a year to date annualized ROAA of 0.92%
and a year to date annualized ROAE of 10.27%. In addition, our tangible
book value per common share stood at $20.41 as of quarter-end."

"I'm also happy to announce that as Bankwell continues to execute on our
strategic growth plan, we have received regulatory approval for two new
branch locations with an additional branch application underway."

"We anticipate another increase to our quarterly dividend in the first
quarter of 2018 as we seek to align dividend increases with the calendar
year."

"Finally, I am proud to note that our exceptional performance has been
recognized by Sandler O' Neill + Partners, L.P. as a 2017 ‘Sm-All Star',
naming Bankwell as one of the top performing community banks in the
country."

Third Quarter 2017 Highlights:

  • Third quarter diluted earnings per share were $0.55, an increase of
    34% compared to the third quarter of 2016.
  • Third quarter total revenue (net interest income plus non-interest
    income) reached $14.7 million versus $13.3 million in the same period
    last year, an 11% increase.
  • Return on average assets reached 0.96% for the quarter ended September
    30, 2017 compared to 0.85% for the quarter ended September 30, 2016.
  • Return on average tangible common equity reached 10.99% in the third
    quarter of 2017 compared to 9.16% for the quarter ended September 30,
    2016.
  • The tangible book value per common share at September 30, 2017 was
    $20.41, a 10% increase over September 30, 2016.
  • Tax equivalent net interest margin was 3.30% for the third quarter of
    2017.
  • The efficiency ratio was 55.1% and 55.7% for the third quarter of 2017
    and 2016, respectively and 54.8% and 56.8% for the nine months ended
    September 30, 2017 and 2016, respectively.
  • Total gross loans exceeded $1.5 billion and grew at an annualized rate
    of 10% during the third quarter of 2017 and 15% for the nine months
    ended September 30, 2017.
  • Total assets exceeded $1.8 billion and grew at an annualized rate of
    11% during the third quarter of 2017 and 14% for the nine months ended
    September 30, 2017.
  • Deposits totaled $1.4 billion and grew at an annualized rate of 12%
    for the nine months ended September 30, 2017.
  • The allowance for loan losses was $19.6 million and represents 1.28%
    of total loans.
  • Nonperforming assets represented 0.25% of total assets as of September
    30, 2017.
  • Investment securities totaled $109.8 million and represent 6% of total
    assets.

Earnings

Net income for the quarter ended September 30, 2017 was $4.3 million, an
increase of 36% compared to the quarter ended September 30, 2016. Net
income for the nine months ended September 30, 2017 was $11.7 million,
an increase of 30% compared to the nine months ended September 30, 2016.
Revenues (net interest income plus non-interest income) for the quarter
ended September 30, 2017 were $14.7 million, an increase of 11% compared
to the quarter ended September 30, 2016. Revenues for the nine months
ended September 30, 2017 were $43.5 million, an increase of 14% compared
to the nine months ended September 30, 2016. Net interest income for the
quarter ended September 30, 2017 was $13.9 million, an increase of 11%
compared to the quarter ended September 30, 2016. Net interest income
for the nine months ended September 30, 2017 was $40.5 million, an
increase of 13% compared to the nine months ended September 30, 2016.
Our strong net income, revenues and net interest income growth were
fueled by continued earning asset growth.

Basic and diluted earnings per share for the quarter ended September 30,
2017 were $0.55 compared to $0.42 and $0.41 basic and diluted for the
quarter ended September 30, 2016.

The Company's efficiency ratios for the quarters ended September 30,
2017 and September 30, 2016 were 55.1% and 55.7%, respectively. The
Company's efficiency ratio for the nine months ended September 30, 2017
and September 30, 2016 were 54.8% and 56.8%, respectively.

Noninterest Income and Expense

Noninterest income increased $74 thousand or 10% to $824 thousand for
the three months ended September 30, 2017 compared to the three months
ended September 30, 2016. Noninterest income increased $813 thousand or
36% to $3.1 million for the nine months ended September 30, 2017
compared to the nine months ended September 30, 2016. The increase in
noninterest income was primarily driven by income earned from our
additional purchases of Bank Owned Life Insurance and rental income
earned from the headquarters building acquired in the fourth quarter of
2016.

Noninterest expense increased $648 thousand or 9% for the three months
ended September 30, 2017 compared to the three months ended September
30, 2016. The increase was primarily driven by an increase in
professional services due to increased fees paid for internal and
external audit, and consulting services and increases in data processing
to support the overall growth of the business.

Noninterest expense increased $2.2 million or 10% for the nine months
ended September 30, 2017 compared to the nine months ended September 30,
2016. The increase was primarily driven by an increase in salaries and
employee benefits, occupancy and equipment expenses and professional
services. The increase in salaries and employee benefits was driven by
an increase in full time equivalent employees. Average full time
equivalent employees totaled 132 at September 30, 2017 compared to 124
at September 30, 2016. The increase in occupancy and equipment expenses
was driven by increases in IT related expenses, one time charges
relating to back office consolidation activity and maintenance costs for
our headquarters building acquired in the fourth quarter of 2016. The
increase in professional services was driven by increased fees paid for
internal and external audit, and consulting services to support the
overall growth of the business.

Financial Condition

Assets exceeded $1.8 billion at September 30, 2017, an annualized
increase of 14% compared to assets of $1.6 billion at December 31, 2016.
This increase reflects strong organic loan growth. Total gross loans
exceeded $1.5 billion at September 30, 2017, an annualized increase of
15% compared to December 31, 2016, driven by growth in commercial real
estate loans of $97.6 million and commercial business loans of $56.6
million. Deposits increased to $1.4 billion compared to $1.3 billion at
December 31, 2016, an annualized increase of 12% over December 31, 2016.

Asset Quality

Asset quality remained exceptionally strong at September 30, 2017.
Non-performing assets as a percentage of total assets was 0.25% at
September 30, 2017, up slightly from 0.20% at December 31, 2016. The
allowance for loan losses at September 30, 2017 was $19.6 million,
representing 1.28% of total loans.

Capital

Shareholders' equity totaled $158.3 million as of September 30, 2017, an
increase of $12.4 million compared to December 31, 2016, primarily a
result of net income for the nine months ended September 30, 2017 of
$11.7 million. As of September 30, 2017, the tangible common equity
ratio and tangible book value per share were 8.62% and $20.41,
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 Penko Ivanov, Executive Vice President and Chief Financial
Officer of Bankwell Financial Group at (203) 652-0166.

For more information, visit www.mybankwell.com.

This press release may contain certain forward-looking statements
about the Company. Forward-looking statements include statements
regarding anticipated future events and can be identified by the fact
that they do not relate strictly to historical or current facts. They
often include words such as "believe," "expect," "anticipate,"
"estimate," and "intend" or future or conditional verbs such as "will,"
"would," "should," "could," or "may." Forward-looking statements, by
their nature, are subject to risks and uncertainties. Certain factors
that could cause actual results to differ materially from expected
results include 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 table. 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 non-interest expense
control. The Company believes that tangible common equity and tangible
book value per share is 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)
 
September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
Assets
Cash and due from banks $ 85,329 $ 84,802 $ 63,675 $ 96,026 $ 94,731
Federal funds sold   11,117   1,185   10,280   329   1,357
Cash and cash equivalents 96,446 85,987 73,955 96,355 96,088
 
Available for sale investment securities, at fair value 86,272 90,951 87,434 87,751 82,752
Held to maturity investment securities, at amortized cost 23,573 23,615 16,808 16,859 16,909
Loans held for sale 785 - - 254 400
Loans receivable (net of allowance for loan losses of $19,564,
$19,536, $18,511,
$17,982 and $17,250 at September 30, 2017, June 30, 2017, March 31,
2017,
December 31, 2016 and September 30, 2016, respectively) 1,500,574 1,463,240 1,406,407 1,343,895 1,305,065
Foreclosed real estate 222 222 272 272 272
Accrued interest receivable 5,344 5,239 5,180 4,958 4,499
Federal Home Loan Bank stock, at cost 9,351 8,033 8,033 7,943 7,943
Premises and equipment, net 17,509 17,366 17,618 17,835 10,314
Bank-owned life insurance 39,329 39,034 38,740 33,448 24,277
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangible assets 407 438 469 501 532
Deferred income taxes, net 8,834 8,957 8,954 9,085 9,874
Other assets   13,703   10,133   5,783   7,174   4,072
Total assets $ 1,804,938 $ 1,755,804 $ 1,672,242 $ 1,628,919 $ 1,565,586
 
Liabilities & Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing $ 162,790 $ 176,495 $ 170,572 $ 187,593 $ 176,405
Interest-bearing   1,247,001   1,237,790   1,156,888   1,101,444   1,040,537
Total deposits 1,409,791 1,414,285 1,327,460 1,289,037 1,216,942
 
Advances from the Federal Home Loan Bank 195,000 150,000 160,000 160,000 175,000
Subordinated debentures 25,090 25,077 25,064 25,051 25,038
Accrued expenses and other liabilities   16,740   12,865   10,046   8,936   8,034
Total liabilities   1,646,621   1,602,227   1,522,570   1,483,024   1,425,014
 
 
Shareholders' equity
Common stock, no par value; 10,000,000 shares authorized,
7,705,975, 7,673,850, 7,638,706, 7,620,663 and 7,562,508 shares
issued
and outstanding at September 30, 2017, June 30, 2017, March 31, 2017,
December 31, 2016 and September 30, 2016, respectively 117,289 116,502 115,823 115,353 113,650
Retained earnings 39,777 36,053 32,820 29,652 26,859
Accumulated other comprehensive income   1,251   1,022   1,029   890   63
Total shareholders' equity   158,317   153,577   149,672   145,895   140,572
 
Total liabilities and shareholders' equity $ 1,804,938 $ 1,755,804 $ 1,672,242 $ 1,628,919 $ 1,565,586
 
             
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
 
For the Quarter Ended For the Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2017 2017 2017 2016 2016 2017 2016
Interest and dividend income
Interest and fees on loans $ 17,175 $ 16,660 $ 15,513 $ 15,910 $ 14,914 $ 49,348 $ 42,167
Interest and dividends on securities 934 880 809 657 688 2,623 2,083
Interest on cash and cash equivalents   239   148   114   75     31   501   98
Total interest income   18,348   17,688   16,436   16,642     15,633   52,472   44,348
 
Interest expense
Interest expense on deposits 3,416 3,095 2,581 2,438 2,160 9,092 5,862
Interest on borrowings   1,071   952   907   916     946   2,930   2,682
Total interest expense   4,487   4,047   3,488   3,354     3,106   12,022   8,544
 
Net interest income 13,861 13,641 12,948 13,288 12,527 40,450 35,804
 
Provision for loan losses   398   895   543   748     1,219   1,836   3,166
 
Net interest income after provision for loan losses   13,463   12,746   12,405   12,540     11,308   38,614   32,638
 
Noninterest income
Bank owned life insurance 295 295 291 171 174 881 522
Service charges and fees 254 261 240 242 241 755 721
Gains and fees from sales of loans 36 199 324 79 163 559 387
Gain on sale of foreclosed real estate, net - - - - - - 128
Net gain (loss) on sale of available for sale securities - - 165 (207 ) - 165 92
Other   239   243   246   116     172   728   425
Total noninterest income   824   998   1,266   401     750   3,088   2,275
 
Noninterest expense
Salaries and employee benefits 3,952 3,800 3,929 4,331 3,839 11,681 11,324
Occupancy and equipment 1,449 1,439 1,692 1,576 1,435 4,580 4,235
Professional services 680 523 412 397 521 1,615 1,257
Data processing 621 401 445 402 417 1,467 1,201
Marketing 295 311 266 304 242 872 644
FDIC insurance 265 243 383 146 177 891 514
Director fees 207 243 233 223 198 683 636
Amortization of intangibles 31 31 31 32 39 93 119
Foreclosed real estate 3 60 7 8 47 70 149
Other   626   530   836   349     566   1,992   1,697
Total noninterest expense   8,129   7,581   8,234   7,768     7,481   23,944   21,776
 
Income before income tax expense 6,158 6,163 5,437 5,173 4,577 17,758 13,137
 
Income tax expense   1,895   2,394   1,735   1,850     1,437   6,024   4,110
 
Net income $ 4,263 $ 3,769 $ 3,702 $ 3,323   $ 3,140 $ 11,734 $ 9,027
 
 
Earnings Per Common Share:
Basic $ 0.55 $ 0.49 $ 0.49 $ 0.44 $ 0.42 $ 1.53 $ 1.20
Diluted 0.55 0.49 0.48 0.43 0.41 1.51 1.19
 
Weighted Average Common Shares Outstanding:
Basic 7,587,471 7,550,734 7,525,268 7,418,820 7,397,067 7,554,739 7,388,364
Diluted 7,670,258 7,645,930 7,632,123 7,560,319 7,488,752 7,652,355 7,459,283
Dividends per common share $ 0.07 $ 0.07 $ 0.07 $ 0.07 $ 0.05 $ 0.21 $ 0.15
 
             
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
 
 
For the Quarter Ended For the Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2017 2017 2017 2016 2016 2017 2016
Performance ratios:
Return on average assets 0.96 % 0.88 % 0.93 % 0.84 % 0.85 % 0.92 % 0.85 %
Return on average stockholders' equity 10.78 % 9.89 % 10.12 % 9.23 % 8.96 % 10.27 % 8.84 %
Return on average tangible common equity 10.99 % 10.09 % 10.33 % 9.44 % 9.16 % 10.48 % 9.04 %
Net interest margin 3.30 % 3.32 % 3.35 % 3.55 % 3.57 % 3.32 % 3.54 %
Efficiency ratio (1) 55.1 % 51.2 % 58.3 % 55.6 % 55.7 % 54.8 % 56.8 %
 
Net loan charge-offs (recoveries) as a % of average loans 0.00

%

 

(0.01) % 0.00

%

 

0.00

%

 

0.01

%

 

0.00

%

 

0.01

%

 
As of                
September 30,

2017

  June 30,

2017

  March 31,

2017

  December 31,

2016

  September 30,

2016

Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2) 10.95 % 10.91 % 11.16 % 11.59 % 11.64 %
Total Capital to Risk-Weighted Assets (2) 12.19 % 12.16 % 12.41 % 12.85 % 12.89 %
Tier I Capital to Risk-Weighted Assets (2) 10.95 % 10.91 % 11.16 % 11.59 % 11.64 %
Tier I Capital to Average Assets (2) 9.78 % 9.75 % 10.06 % 10.10 % 10.45 %
Tangible common equity to tangible assets 8.62 % 8.59 % 8.78 % 8.78 % 8.80 %
 
Tangible book value per common share (3) $ 20.41 $ 19.89 $ 19.44 $ 18.98 $ 18.57
 
Asset quality:
Nonaccrual loans $ 4,241 $ 5,303 $ 4,434 $ 2,937 $ 3,644
Other real estate owned   222     222     272     272     272  
Total non-performing assets $ 4,463   $ 5,525   $ 4,706   $ 3,209   $ 3,916  
 
 
Nonperforming loans as a % of total loans 0.28 % 0.36 % 0.31 % 0.22 % 0.27 %

 

 

Nonperforming assets as a % of total assets 0.25 % 0.31 % 0.28 % 0.20 % 0.25 %
 
Allowance for loan losses as a % of total loans 1.28 % 1.31 % 1.30 % 1.32 % 1.30 %
 
Allowance for loan losses as a % of nonperforming loans 461.31 % 368.40 % 417.48 % 612.26 % 473.38 %
 
 
(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. Current period capital ratios are
preliminary subject to finalization of the FDIC Call Report.
 
(3) Excludes unvested restricted shares of 96,488, 103,220, 98,176,
96,594 and 160,708 as of September 30, 2017, June 30, 2017, March
31, 2017, December 31, 2016 and September 30, 2016, respectively.
 
         
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
 
 
September 30, June 30, December 31, Current QTD YTD
Period End Loan Composition 2017 2017 2016 % Change % Change
Residential Real Estate $ 178,948 $ 181,005 $ 181,310 (1.1 %) (1.3 %)
Commercial Real Estate 942,898 903,080 845,322 4.4 % 11.5 %
Construction 114,571 117,348 107,441 (2.4 %) 6.6 %
Home equity   13,900   14,587   14,419 (4.7 %) (3.6 %)
Total Real Estate Loans 1,250,317 1,216,020 1,148,492 2.8 % 8.9 %
 
Commercial Business 272,505 269,311 215,914 1.2 % 26.2 %
 
Consumer   724   957   1,533 (24.3 %) (52.8 %)
Total Loans $ 1,523,546 $ 1,486,288 $ 1,365,939 2.5 % 11.5 %
 
 
 
 
September 30, June 30, December 31, Current QTD YTD
Period End Deposit Composition 2017 2017 2016 % Change % Change
Noninterest-bearing demand $ 162,790 $ 176,495 $ 187,593 (7.8 %) (13.2 %)
NOW 58,894 68,049 53,950 (13.5 %) 9.2 %
Money Market 453,577 401,107 349,131 13.1 % 29.9 %
Savings 87,469 113,338 96,502 (22.8 %) (9.4 %)
Time   647,061   655,296   601,861 (1.3 %) 7.5 %
Total Deposits $ 1,409,791 $ 1,414,285 $ 1,289,037 (0.3 %) 9.4 %
 
         
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME & EXPENSE - QTD (unaudited)
(Dollars in thousands)
 
For the Quarter Ended
Noninterest income September 30, June 30, September 30, Sep 17 vs. Jun 17 Sep 17 vs. Sep 16
2017 2017 2016 % Change % Change
Bank owned life insurance $ 295 $ 295 $ 174 0.0% 69.5%
Service charges and fees 254 261 241 (2.7%) 5.4%
Gains and fees from sales of loans 36 199 163 (81.9%) (77.9%)
Other 239 243 172 (1.6%) 39.0%
Total noninterest income $ 824 $ 998 $ 750 (17.4%) 9.9%
 
 
 
For the Quarter Ended
Noninterest expense September 30, June 30, September 30, Sep 17 vs. Jun 17 Sep 17 vs. Sep 16
2017 2017 2016 % Change % Change
Salaries and employee benefits $ 3,952 $ 3,800 $ 3,839 4.0% 2.9%
Occupancy and equipment 1,449 1,439 1,435 0.7% 1.0%
Professional services 680 523 521 30.0% 30.5%
Data processing 621 401 417 54.9% 48.9%
Marketing 295 311 242 (5.1%) 21.9%
FDIC insurance 265 243 177 9.1% 49.7%
Director fees 207 243 198 (14.8%) 4.5%
Amortization of intangibles 31 31 39 0.0% (20.5%)
Foreclosed real estate 3 60 47 (95.0%) (93.6%)
Other 626 530 566 18.1% 10.6%
Total noninterest expense $ 8,129 $ 7,581 $ 7,481 7.2% 8.7%
 
     
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME & EXPENSE - YTD (unaudited)
(Dollars in thousands)
 
For the Nine Months Ended
Noninterest income September 30, September 30, Sep 17 vs. Sep 16
2017 2016 % Change
Bank owned life insurance $ 881 $ 522 68.8%
Service charges and fees 755 721 4.7%
Gains and fees from sales of loans 559 387 44.4%
Gain on sale of foreclosed real estate, net - 128 (100.0%)
Net gain on sale of available for sale securities 165 92 79.3%
Other   728   425 71.3%
Total noninterest income $ 3,088 $ 2,275 35.7%
 
 
 
For the Nine Months Ended
Noninterest expense September 30, September 30, Sep 17 vs. Sep 16
2017 2016 % Change
Salaries and employee benefits $ 11,681 $ 11,324 3.2%
Occupancy and equipment 4,580 4,235 8.1%
Professional services 1,615 1,257 28.5%
Data processing 1,467 1,201 22.1%
FDIC insurance 891 514 73.3%
Marketing 872 644 35.4%
Director fees 683 636 7.4%
Amortization of intangibles 93 119 (21.8%)
Foreclosed real estate 70 149 (53.0%)
Other   1,992   1,697 17.4%
Total noninterest expense $ 23,944 $ 21,776 10.0%
 
             
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 9/30/2017 6/30/2017 3/31/2017 12/31/2016 09/30/2016
Total Equity $ 158,317 $ 153,577 $ 149,672 $ 145,895 $ 140,572
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangibles   407   438   469   501   532
Tangible Common Equity $ 155,321 $ 150,550 $ 146,614 $ 142,805 $ 137,451
 
Total Assets $ 1,804,938 $ 1,755,804 $ 1,672,242 $ 1,628,919 $ 1,565,586
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangibles   407   438   469   501   532
Tangible Assets $ 1,801,942 $ 1,752,777 $ 1,669,184 $ 1,625,829 $ 1,562,465
 
Tangible Common Equity to Tangible Assets 8.62% 8.59% 8.78% 8.78% 8.80%
 
 
As of
Computation of Tangible Book Value per Common Share 9/30/2017 6/30/2017 3/31/2017 12/31/2016 09/30/2016
Total shareholders' equity $ 158,317 $ 153,577 $ 149,672 $ 145,895 $ 140,572
Less:
Preferred stock   -   -   -   -   -
Common shareholders' equity 158,317 153,577 149,672 145,895 140,572
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangibles   407   438   469   501   532
Tangible common shareholders' equity 155,321 150,550 146,614 142,805 137,451
Common shares issued 7,705,975 7,673,850 7,638,706 7,620,663 7,562,508
Less:
Shares of unvested restricted stock   96,488   103,220   98,176   96,594   160,708
Common shares outstanding 7,609,487 7,570,630 7,540,530 7,524,069 7,401,800
Book value per share $ 20.81 $ 20.29 $ 19.85 $ 19.39 $ 18.99
Less:
Effects of intangible assets $ 0.39 $ 0.40 $ 0.41 $ 0.41 $ 0.42
 
Tangible Book Value per Common Share $ 20.41 $ 19.89 $ 19.44 $ 18.98 $ 18.57
 
 
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 Nine Months Ended
Computation of Efficiency Ratio 9/30/2017 6/30/2017 3/31/2017 12/31/2016 09/30/2016 09/30/2017 09/30/2016
Noninterest expense $ 8,129 $ 7,581 $ 8,234 $ 7,768 $ 7,481 $ 23,944 $ 21,776
Less:
Amortization of intangible assets 31 31 31 32 39 93 119
Foreclosed real estate expenses   3   60   7   8   47   70   149
Adjusted noninterest expense $ 8,095 $ 7,490 $ 8,196 $ 7,728 $ 7,395 $ 23,781 $ 21,508
Net interest income $ 13,861 $ 13,641 $ 12,948 $ 13,288 $ 12,527 $ 40,450 $ 35,804
Noninterest income 824 998 1,266 401 750 3,088 2,275
Less:
Gains (losses) on sales of securities - - 165 (207) - 165 92
Gains on sale of foreclosed real estate   -   -   -   -   -   -   128
Adjusted operating revenue $ 14,685 $ 14,639 $ 14,049 $ 13,896 $ 13,277 $ 43,373 $ 37,859
 
Efficiency ratio 55.1% 51.2% 58.3% 55.6% 55.7% 54.8% 56.8%
 
 
For the Quarter Ended For the Nine Months Ended
Computation of Return on Average Tangible Common Equity 9/30/2017 6/30/2017 3/31/2017 12/31/2016 09/30/2016 09/30/2017 09/30/2016
Net Income Attributable to Common Shareholders $ 4,263 $ 3,769 $ 3,702 $ 3,323 $ 3,140 $ 11,734 $ 9,027
Total average shareholders' equity $ 156,852 $ 152,898 $ 148,349 $ 143,152 $ 139,449 $ 152,721 $ 136,445
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589 2,589 2,589
Other intangibles   407   438   469   501   532   407   532
Average tangible common equity $ 153,856 $ 149,871 $ 145,291 $ 140,062 $ 136,328 $ 149,725 $ 133,324
 
Annualized Return on Average Tangible Common Equity 10.99% 10.09% 10.33% 9.44% 9.16% 10.48% 9.04%
 
                       
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS
(Dollars in thousands)
 
For the Quarter Ended
September 30, 2017 September 30, 2016
Average Yield/ Average Yield/
Balance Interest Rate (5) Balance Interest Rate (5)
Assets:
Cash and Fed funds sold $ 83,086 $ 239 1.14% $ 28,305 $ 29 0.41%
Securities (1) 112,066 1,014 3.62% 98,480 762 3.09%
Loans:
Commercial real estate 927,114 10,613 4.48% 788,911 9,324 4.62%
Residential real estate 179,428 1,597 3.56% 178,106 1,600 3.59%
Construction (2) 106,373 1,305 4.80% 107,197 1,230 4.49%
Commercial business 268,408 3,476 5.07% 195,881 2,584 5.16%
Home equity 14,150 172 4.83% 14,706 156 4.23%
Consumer   1,149   10 3.53%   1,467   20 5.51%
Total loans 1,496,622 17,173 4.49% 1,286,268 14,914 4.54%
Federal Home Loan Bank stock   8,544   85 3.96%   7,400   65 3.51%
Total earning assets 1,700,318   18,511 4.26% 1,420,453   15,770 4.34%
Other assets   69,253   56,762
Total assets $ 1,769,571 $ 1,477,215
 
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW $ 58,625 19 0.13% $ 53,515 16 0.12%
Money market 432,753 992 0.91% 330,263 484 0.58%
Savings 100,197 189 0.75% 62,689 64 0.40%
Time   645,317   2,215 1.36%   540,823   1,597 1.17%
Total interest-bearing deposits 1,236,892 3,415 1.10% 987,290 2,161 0.87%
Borrowed Money   193,734   1,071 2.16%   171,385   946 2.16%
Total interest-bearing liabilities 1,430,626 $ 4,486 1.24% 1,158,675 $ 3,107 1.07%
Noninterest-bearing deposits 164,565 170,500
Other liabilities   17,528   8,591
Total liabilities 1,612,719 1,337,766
Shareholders' equity   156,852   139,449
Total liabilities and shareholders' equity $ 1,769,571 $ 1,477,215
Net interest income (3) $ 14,025 $ 12,663
Interest rate spread 3.02% 3.27%
Net interest margin (4) 3.30% 3.57%
(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 $164 thousand and $136 thousand, respectively for the
three months ended September 30, 2017 and 2016.
(4) 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
(Dollars in thousands)
 
For the Nine Months Ended
September 30, 2017 September 30, 2016
Average Yield/ Average Yield/
Balance Interest Rate (5) Balance Interest Rate (5)
Assets:
Cash and Fed funds sold $ 79,333 $ 502 0.85% $ 30,559 $ 94 0.41%
Securities (1) 106,622 2,822 3.53% 102,107 2,321 3.03%
Loans:
Commercial real estate 893,962 30,527 4.50% 755,026 26,446 4.60%
Residential real estate 180,347 4,835 3.57% 178,699 4,807 3.59%
Construction (2) 107,136 3,853 4.74% 96,635 3,298 4.48%
Commercial business 249,718 9,607 5.07% 178,453 7,082 5.21%
Home equity 14,156 490 4.63% 15,206 468 4.11%
Consumer   1,387   35 3.40%   1,707   66 5.14%
Total loans 1,446,706 49,347 4.50% 1,225,726 42,167 4.52%
Federal Home Loan Bank stock   8,198   244 3.97%   7,173   184 3.43%
Total earning assets 1,640,859   52,915 4.25% 1,365,565   44,766 4.31%
Other assets   63,527   55,145
Total assets $ 1,704,386 $ 1,420,710
 
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW $ 58,096 65 0.15% $ 55,742 87 0.21%
Money market 387,162 2,329 0.80% 319,289 1,331 0.56%
Savings 108,304 591 0.73% 71,243 215 0.40%
Time   628,521   6,107 1.30%   502,177   4,230 1.13%
Total interest-bearing deposits 1,182,083 9,092 1.03% 948,451 5,863 0.83%
Borrowed Money   186,844   2,930 2.07%   158,247   2,682 2.23%
Total interest-bearing liabilities 1,368,927 $ 12,022 1.17% 1,106,698 $ 8,545 1.03%
Noninterest-bearing deposits 168,778 170,088
Other liabilities   13,960   7,479
Total liabilities 1,551,665 1,284,265
Shareholders' equity   152,721   136,445
Total liabilities and shareholders' equity $ 1,704,386 $ 1,420,710
Net interest income (3) $ 40,893 $ 36,221
Interest rate spread 3.08% 3.28%
Net interest margin (4) 3.32% 3.54%
 
(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 $443 thousand and $417 thousand, respectively for the
nine months ended September 30, 2017, and 2016.
(4) Net interest income as a percentage of earning assets.
(5) Yields are calculated using the contractual day count convention
for each respective product type.
 

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