Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record
GAAP net income of $12.0 million, or $1.55 per share, for the
second quarter of 2022, versus $6.2 million, or $0.79 per share,
for the same period in 2021. During the quarter ended June 30, 2022
the Company experienced several non-recurring items that positively
impacted reported earnings. Adjusting for these items, operating
earnings per share totaled $1.15 for the second quarter of 2022.
Please reference the table below for a reconciliation of reported
earnings per share to operating earnings per share.
Earnings Per Common Share
2Q'22 QTD Reported EPS
$ 1.55
Elevated Loan Prepayments(1)
(0.15
)
Release of Specific Reserves(2)
(0.16
)
Historical Loss Update to Peer
Group(3)
(0.09
)
2Q'22 QTD Operating EPS(4)
$ 1.15
(1) 2Q'22 loan prepayments exceeded
historical quarterly averages and are not reflective of run
rate.
(2) Specific reserve reduction as impaired
loans exhibited improved performance or paid off.
(3) Bankwell is not yet subject to CECL;
reduction in general reserves due to annual update to historical
loss data in our peer group-based, “incurred loss” model.
(4) Non-gaap measure.
The Company's Board of Directors declared a $0.20 per share cash
dividend, payable August 25, 2022 to shareholders of record on
August 15, 2022.
We recommend reading this earnings release in conjunction
with the Second Quarter 2022 Investor Presentation, located at
http://investor.mybankwell.com/Presentations and included as an
exhibit to our July 27, 2022 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R.
Gruseke:
"I offer my thanks and congratulations to our entire team for
their commitment to excellence. Even after discounting favorable
one-time items, our Company has delivered outstanding results,
including an operating ROAA of 1.45%, an ROAE of 16.4%, and an
efficiency ratio of 46.6%. Several years ago we put forth a
strategic plan to diversify and transform our business model. With
careful planning and execution, we are now reaping the benefits of
investing in that plan.
"As we look ahead, despite the backdrop of macroeconomic
uncertainty, our third quarter loan pipeline remains at record
levels. It is likely that the economy will experience further
volatility in the coming quarters. Nevertheless, we are confident
that the business we have built will enable us to continue to
deliver above-peer group performance."
Second Quarter 2022 Highlights (performance metrics are
impacted by the above mentioned one-time items - please refer to
the table following the below highlights for adjusted performance
metrics):
- Return on average assets was 1.96% and return on average equity
was 22.09% for the quarter ended June 30, 2022.
- The net interest margin was 4.01% for the quarter ended June
30, 2022.
- The efficiency ratio was 43.8% for the quarter ended June 30,
2022.
- Total gross loans were $2.1 billion, growing $161.7 million, or
8.5%, compared to December 31, 2021.
- Average yield on 2022 funded loans was 4.88%.
- Gains from loan sales totaled $0.6 million for the quarter
ended June 30, 2022.
- Total deposits decreased by 4.3% to $2.0 billion compared to
$2.1 billion at December 31, 2021 as a result of seasonal
fluctuations in several municipal and commercial deposit
relationships.
- Investment securities totaled $113.0 million and represent 4.6%
of total assets.
- Fully diluted tangible book value per share rose to $28.75
compared to $25.55 at December 31, 2021.
- Wilton branch closure announced July 8, 2022 (effective October
7, 2022).
- Shares issued and outstanding were 7,752,389 for the quarter
ended June 30, 2022.
Quarter Ended June 30, 2022
Six Months Ended June 30,
2022
Key metrics
Reported
Operating(1)
Variance
Reported
Operating(1)
Variance
Net interest margin
4.01 %
3.75 %
0.26 %
3.65 %
3.53 %
0.12 %
Efficiency ratio
43.8 %
46.6 %
(2.8) %
45.9 %
47.5 %
(1.6) %
Return on average assets
1.96 %
1.45 %
0.51 %
1.65 %
1.40 %
0.25 %
Return on average stockholders' equity
22.09 %
16.39 %
5.70 %
19.16 %
16.22 %
2.94 %
(1) Operating metrics are non-gaap
measures and have been adjusted for elevated loan prepayments,
release of specific reserves, and the historical loss update to the
Company's peer group as noted in the above EPS table.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the
quarter ended June 30, 2022 were $25.0 million, versus $18.0
million for the quarter ended June 30, 2021. Revenues for the six
months ended June 30, 2022 were $45.4 million, versus $34.6 million
for the six months ended June 30, 2021. The increase in revenues
was primarily attributable to an increase in interest and fees on
loans due to loan growth and higher overall loan yields and from
lower interest expense on deposits. The increase in loan yields was
aided by elevated loan prepayment fees, which totaled $1.8 million
for the quarter ended June 30, 2022, compared to $0.8 million for
the quarter ended June 30, 2021. The increase in revenues was
partially offset by a decrease in noninterest income driven by the
absence of rental income recognized during the quarter and six
months ended June 30, 2021, as a result of the disposition of the
Company's former headquarters building. In addition, the increase
in revenues for the six months ended June 30, 2022 was also
partially offset by a one-time federal payroll tax credit for
COVID-19 of $0.9 million recognized in the quarter ended March 31,
2021.
Net income for the quarter ended June 30, 2022 was $12.0
million, versus $6.2 million for the quarter ended June 30, 2021.
Net income for the six months ended June 30, 2022 was $20.2
million, versus $11.9 million for the six months ended June 30,
2021. The increase in net income was primarily impacted by the
aforementioned increases in revenues and by a decrease in the
provision for loan losses primarily driven by the release of
specific reserves on impaired loans that showed improved
performance or paid off.
Basic and diluted earnings per share were $1.56 and $1.55,
respectively, for the quarter ended June 30, 2022 compared to basic
and diluted earnings per share of $0.79 each for the quarter ended
June 30, 2021. Basic and diluted earnings per share were $2.61 and
$2.58, respectively, for the six months ended June 30, 2022
compared to basic and diluted earnings per share of $1.51 and
$1.50, respectively, for the six months ended June 30, 2021.
The net interest margin (fully taxable equivalent basis) for the
quarters ended June 30, 2022 and June 30, 2021 was 4.01% and 3.12%,
respectively. The net interest margin (fully taxable equivalent
basis) for the six months ended June 30, 2022 and June 30, 2021 was
3.65% and 2.93%, respectively. The increase in the net interest
margin was due to lower interest expense from a decrease in rates
on interest bearing deposits, elevated loan prepayment fees, and an
increase in overall loan yields.
Financial Condition
Assets totaled $2.44 billion at June 30, 2022, compared to
assets of $2.46 billion at December 31, 2021. The decrease in
assets was primarily due to a decrease in deposits while excess
liquidity funded additional loan growth. Gross loans totaled $2.1
billion at June 30, 2022, an increase of $161.7 million compared to
December 31, 2021. Deposits totaled $2.0 billion at June 30, 2022,
compared to deposits of $2.1 billion at December 31, 2021.
Capital
Shareholders’ equity totaled $225.5 million as of June 30, 2022,
an increase of $23.5 million compared to December 31, 2021,
primarily a result of (i) net income of $20.2 million for the six
months ended June 30, 2022 and (ii) an $8.9 million favorable
impact to accumulated other comprehensive income driven by fair
value marks related to hedge positions involving interest rate
swaps, partially offset by fair value marks on the Company's
investment portfolio. The Company's interest rate swaps are used to
hedge interest rate risk. The increase in Shareholders’ equity was
partially offset by dividends paid of $3.1 million and common stock
repurchases of $3.8 million.
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.
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, but are not limited to, increased competitive pressures,
changes in the interest rate environment, general economic
conditions or conditions within the securities markets, uncertain
impacts of, or additional changes in, monetary, fiscal or tax
policy to address the impact of COVID-19, which could further
exacerbate the effects on the Company’s business and results of
operations, and legislative and regulatory changes that could
adversely affect the business in which the Company and its
subsidiaries are engaged.
Non-GAAP Financial Measures
In addition to evaluating the Company's financial performance in
accordance with U.S. generally accepted accounting principles
("GAAP"), management may evaluate certain non-GAAP financial
measures, such as the efficiency ratio. A computation and
reconciliation of certain non-GAAP financial measures used for
these purposes is contained in the accompanying Reconciliation of
GAAP to Non-GAAP Measures tables. We believe that providing certain
non-GAAP financial measures provides investors with information
useful in understanding our financial performance, our performance
trends and financial position. For example, the Company believes
that the efficiency ratio is useful in the assessment of financial
performance, including noninterest expense control. The Company
believes that tangible common equity, tangible book value per
share, and return on average tangible common equity are useful to
evaluate the relative strength of the Company's performance and
capital position. We utilize these measures for internal planning
and forecasting purposes. These non-GAAP financial measures should
not be considered a substitute for GAAP basis measures and results,
and we strongly encourage investors to review our consolidated
financial statements in their entirety and not to rely on any
single financial measure.
BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED BALANCE
SHEETS (unaudited) (Dollars in thousands)
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
ASSETS
Cash and due from banks
$
149,522
$
280,471
$
291,598
$
297,851
Federal funds sold
21,505
19,022
53,084
4,036
Cash and cash equivalents
171,027
299,493
344,682
301,887
Investment securities
Marketable equity securities, at fair
value
2,126
2,090
2,168
2,192
Available for sale investment securities,
at fair value
94,907
98,733
90,198
90,983
Held to maturity investment securities, at
amortized cost
15,917
15,979
16,043
16,166
Total investment securities
112,950
116,802
108,409
109,341
Loans receivable (net of allowance for
loan losses of $15,773, $17,141, $16,902 and $16,672 at June 30,
2022, March 31, 2022, December 31, 2021 and June 30, 2021,
respectively)
2,036,626
1,964,567
1,875,167
1,719,274
Accrued interest receivable
8,047
7,733
7,512
6,661
Federal Home Loan Bank stock, at cost
5,064
2,870
2,814
3,844
Premises and equipment, net
27,768
25,661
25,588
33,916
Bank-owned life insurance
49,699
49,434
49,174
48,632
Goodwill
2,589
2,589
2,589
2,589
Other intangible assets
—
—
—
58
Deferred income taxes, net
4,768
6,879
7,621
8,208
Other assets
17,014
20,849
32,708
35,415
Total assets
$
2,435,552
$
2,496,877
$
2,456,264
$
2,269,825
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
372,584
$
412,985
$
398,956
$
328,473
Interest bearing deposits
1,660,941
1,753,219
1,725,042
1,610,829
Total deposits
2,033,525
2,166,204
2,123,998
1,939,302
Advances from the Federal Home Loan
Bank
105,000
50,000
50,000
75,000
Subordinated debentures
34,500
34,471
34,441
15,366
Accrued expenses and other liabilities
37,060
35,982
45,838
49,362
Total liabilities
2,210,085
2,286,657
2,254,277
2,079,030
Shareholders’ equity
Common stock, no par value
115,599
114,882
118,148
120,451
Retained earnings
109,523
99,047
92,400
80,543
Accumulated other comprehensive income
(loss)
345
(3,709
)
(8,561
)
(10,199
)
Total shareholders’ equity
225,467
210,220
201,987
190,795
Total liabilities and shareholders’
equity
$
2,435,552
$
2,496,877
$
2,456,264
$
2,269,825
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, 2022
March 31, 2022
December 31,
2021
June 30, 2021
June 30, 2022
June 30, 2021
Interest and dividend income
Interest and fees on loans
$
25,141
$
21,428
$
21,081
$
19,266
$
46,569
$
37,166
Interest and dividends on securities
774
720
722
736
1,494
1,505
Interest on cash and cash equivalents
449
154
90
90
603
198
Total interest and dividend income
26,364
22,302
21,893
20,092
48,666
38,869
Interest expense
Interest expense on deposits
1,983
2,206
2,198
2,744
4,189
5,858
Interest expense on borrowings
558
586
767
769
1,144
1,777
Total interest expense
2,541
2,792
2,965
3,513
5,333
7,635
Net interest income
23,823
19,510
18,928
16,579
43,333
31,234
(Credit) provision for loan
losses
(1,445
)
229
125
(20
)
(1,216
)
(316
)
Net interest income after (credit)
provision for loan losses
25,268
19,281
18,803
16,599
44,549
31,550
Noninterest income
Gains and fees from sales of loans
608
631
441
814
1,239
1,327
Bank owned life insurance
265
260
270
251
525
482
Service charges and fees
249
240
257
217
489
416
Other
30
(173
)
(143
)
158
(143
)
1,170
Total noninterest income
1,152
958
825
1,440
2,110
3,395
Noninterest expense
Salaries and employee benefits
5,433
4,940
4,806
3,960
10,373
8,729
Occupancy and equipment
2,193
2,150
2,411
3,250
4,343
5,656
Professional services
1,000
981
628
547
1,981
1,134
Data processing
689
654
432
833
1,343
1,345
Director fees
339
352
335
327
691
644
FDIC insurance
262
223
231
300
485
703
Marketing
107
45
87
140
152
131
Other
913
580
749
695
1,493
1,348
Total noninterest expense
10,936
9,925
9,679
10,052
20,861
19,690
Income before income tax
expense
15,484
10,314
9,949
7,987
25,798
15,255
Income tax expense
3,462
2,102
2,135
1,759
5,564
3,338
Net income
$
12,022
$
8,212
$
7,814
$
6,228
$
20,234
$
11,917
Earnings Per Common Share:
Basic
$
1.56
$
1.05
$
1.00
$
0.79
$
2.61
$
1.51
Diluted
$
1.55
$
1.04
$
0.99
$
0.79
$
2.58
$
1.50
Weighted Average Common Shares
Outstanding:
Basic
7,556,645
7,637,077
7,660,307
7,722,481
7,596,639
7,744,368
Diluted
7,614,243
7,719,405
7,726,420
7,768,026
7,683,305
7,792,600
Dividends per common share
$
0.20
$
0.20
$
0.18
$
0.14
$
0.40
$
0.28
BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED FINANCIAL
HIGHLIGHTS (unaudited)
For the Quarter Ended
For the Six Months
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
June 30, 2022
June 30, 2021
Performance ratios:
Return on average assets
1.96 %
1.35 %
1.32 %
1.11 %
1.65 %
1.07 %
Return on average stockholders' equity
22.09 %
16.05 %
15.44 %
13.06 %
19.16 %
12.87 %
Return on average tangible common
equity
22.36 %
16.25 %
15.65 %
13.25 %
19.40 %
13.06 %
Net interest margin
4.01 %
3.30 %
3.43 %
3.12 %
3.65 %
2.93 %
Efficiency ratio(1)
43.8 %
48.5 %
48.8 %
55.7 %
45.9 %
56.8 %
Net loan charge-offs as a % of average
loans
— %
— %
— %
0.23 %
— %
0.24 %
Dividend payout ratio(2)
12.90 %
19.23 %
18.18 %
17.72 %
15.50 %
18.67 %
- 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.
- The dividend payout ratio is calculated by dividing dividends
per share by earnings per share.
As of
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
Capital ratios:
Total Common Equity Tier 1 Capital to
Risk-Weighted Assets(1)
11.10
%
11.20
%
11.18
%
10.95
%
Total Capital to Risk-Weighted
Assets(1)
11.80
%
12.00
%
12.00
%
11.84
%
Tier I Capital to Risk-Weighted
Assets(1)
11.10
%
11.20
%
11.18
%
10.95
%
Tier I Capital to Average Assets(1)
10.15
%
9.80
%
9.94
%
9.19
%
Tangible common equity to tangible
assets
9.16
%
8.32
%
8.13
%
8.30
%
Fully diluted tangible book value per
common share
$
28.75
$
26.75
$
25.55
$
23.83
- Represents Bank ratios. Current period capital ratios are
preliminary subject to finalization of the FDIC Call Report.
BANKWELL FINANCIAL GROUP, INC. ASSET QUALITY
(unaudited) (Dollars in thousands)
For the Quarter Ended
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
Allowance for loan losses:
Balance at beginning of period
$
17,141
$
16,902
$
16,803
$
20,545
Charge-offs:
Commercial real estate
—
—
—
(3,814
)
Commercial business
—
—
(26
)
(51
)
Consumer
—
(4
)
(5
)
(4
)
Total charge-offs
—
(4
)
(31
)
(3,869
)
Recoveries:
Commercial real estate
77
—
—
—
Commercial business
—
13
2
16
Consumer
—
1
3
—
Total recoveries
77
14
5
16
Net loan recoveries (charge-offs)
77
10
(26
)
(3,853
)
(Credit) provision for loan losses
(1,445
)
229
125
(20
)
Balance at end of period
$
15,773
$
17,141
$
16,902
$
16,672
As of
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
Asset quality:
Nonaccrual loans
Residential real estate
$
2,161
$
2,181
$
2,380
$
1,160
Commercial real estate
2,955
3,365
3,482
15,392
Commercial business
787
817
1,728
1,780
Construction
9,382
9,382
8,997
8,997
Total nonaccrual loans
15,285
15,745
16,587
27,329
Other real estate owned
—
—
—
—
Total nonperforming assets
$
15,285
$
15,745
$
16,587
$
27,329
Nonperforming loans as a % of total
loans
0.74
%
0.79
%
0.88
%
1.57
%
Nonperforming assets as a % of total
assets
0.63
%
0.63
%
0.68
%
1.20
%
Allowance for loan losses as a % of total
loans
0.77
%
0.86
%
0.89
%
0.96
%
Allowance for loan losses as a % of
nonperforming loans
103.19
%
108.87
%
101.90
%
61.00
%
Total past due loans to total loans
1.40
%
0.85
%
1.72
%
1.65
%
Total nonaccrual loans declined $1.3 million to $15.3 million as
of June 30, 2022 when compared to December 31, 2021. Nonperforming
assets as a percentage of total assets was 0.63% at June 30, 2022,
down from 0.68% at December 31, 2021. The allowance for loan losses
at June 30, 2022 was $15.8 million, representing 0.77% of total
loans.
Past due loans decreased to $28.8 million, or 1.40% of total
loans, as of June 30, 2022, compared to $32.6 million, or 1.72% of
total loans, as of December 31, 2021. As of June 30, 2022, past due
loans include one $10.5 million commercial real estate loan,
representing 0.51% of total loans, that had reached maturity and is
in active negotiations to be refinanced.
BANKWELL FINANCIAL GROUP, INC. LOAN & DEPOSIT
PORTFOLIO (unaudited) (Dollars in thousands)
Period End Loan Composition
June 30, 2022
March 31, 2022
December 31,
2021
Current QTD
% Change
YTD
% Change
Residential Real Estate
$
64,253
$
68,617
$
79,987
(6.4
) %
(19.7
) %
Commercial Real Estate(1)
1,499,364
1,425,758
1,356,709
5.2
10.5
Construction
111,422
115,514
98,341
(3.5
)
13.3
Total Real Estate Loans
1,675,039
1,609,889
1,535,037
4.0
9.1
Commercial Business
372,361
370,166
350,975
0.6
6.1
Consumer
9,196
5,275
8,869
74.3
3.7
Total Loans
$
2,056,596
$
1,985,330
$
1,894,881
3.6
%
8.5
%
(1) Includes owner occupied commercial
real estate.
Gross loans totaled $2.1 billion at June 30, 2022, an increase
of $161.7 million compared to December 31, 2021.
Period End Deposit Composition
June 30, 2022
March 31, 2022
December 31,
2021
Current QTD
% Change
YTD
% Change
Noninterest bearing demand
$
372,584
$
412,985
$
398,956
(9.8
) %
(6.6
) %
NOW
155,026
112,567
119,479
37.7
29.8
Money Market
833,730
996,458
954,674
(16.3
)
(12.7
)
Savings
196,075
197,961
193,631
(1.0
)
1.3
Time
476,110
446,233
457,258
6.7
4.1
Total Deposits
$
2,033,525
$
2,166,204
$
2,123,998
(6.1
) %
(4.3
) %
Total deposits were $2.0 billion at June 30, 2022, compared to
$2.1 billion at December 31, 2021, a decrease of $90.5 million, or
4.3%. The decrease in deposits is primarily a result of seasonal
fluctuations in several municipal and commercial deposit
relationships.
BANKWELL FINANCIAL GROUP, INC. NONINTEREST INCOME
(unaudited) (Dollars in thousands)
For the Quarter Ended
Noninterest income
June 30, 2022
March 31, 2022
June 30, 2021
June 22 vs. March 22 %
Change
June 22 vs. June 21 %
Change
Gains and fees from sales of loans
$
608
$
631
$
814
(3.6
) %
(25.3
) %
Bank owned life insurance
265
260
251
1.9
5.6
Service charges and fees
249
240
217
3.8
14.7
Other
30
(173
)
158
(117.3
)
(81.0
)
Total noninterest income
$
1,152
$
958
$
1,440
20.3
%
(20.0
) %
For the Six Months
Ended
Noninterest income
June 30, 2022
June 30, 2021
% Change
Gains and fees from sales of loans
$
1,239
$
1,327
(6.6
) %
Bank owned life insurance
525
482
8.9
Service charges and fees
489
416
17.5
Other
(143
)
1,170
(112.2
)
Total noninterest income
$
2,110
$
3,395
(37.8
) %
Noninterest income decreased by $0.3 million to $1.2 million for
the quarter ended June 30, 2022 compared to the quarter ended June
30, 2021. Noninterest income decreased by $1.3 million to $2.1
million for the six months ended June 30, 2022 compared to the six
months ended June 30, 2021.
The decrease in noninterest income was driven by a reduction in
loan sales for the quarter and six months ended June 30, 2022 when
compared to the same periods in the prior year. Loan sales
decreased $0.2 million and $0.1 million for the quarter and six
months ended June 30, 2022, respectively. In addition, noninterest
income declined due to the absence of rental income recognized
during the quarter and six months ended June 30, 2021, as a result
of the disposition of the Company's former headquarters building.
Noninterest income also declined for the six months ended June 30,
2022 due to a one-time federal payroll tax credit for COVID-19 of
$0.9 million recognized in the quarter ended March 31, 2021.
BANKWELL FINANCIAL GROUP, INC. NONINTEREST EXPENSE
(unaudited) (Dollars in thousands)
For the Quarter Ended
Noninterest expense
June 30, 2022
March 31, 2022
June 30, 2021
June 22 vs. March 22 %
Change
June 22 vs. June 21 %
Change
Salaries and employee benefits
$
5,433
$
4,940
$
3,960
10.0
%
37.2
%
Occupancy and equipment
2,193
2,150
3,250
2.0
(32.5
)
Professional services
1,000
981
547
1.9
82.8
Data processing
689
654
833
5.4
(17.3
)
Director fees
339
352
327
(3.7
)
3.7
FDIC insurance
262
223
300
17.5
(12.7
)
Marketing
107
45
140
137.8
(23.6
)
Other
913
580
695
57.4
31.4
Total noninterest expense
$
10,936
$
9,925
$
10,052
10.2
%
8.8
%
For the Six Months
Ended
Noninterest expense
June 30, 2022
June 30, 2021
% Change
Salaries and employee benefits
$
10,373
$
8,729
18.8
%
Occupancy and equipment
4,343
5,656
(23.2
)
Professional services
1,981
1,134
74.7
Data processing
1,343
1,345
(0.1
)
Director fees
691
644
7.3
FDIC insurance
485
703
(31.0
)
Marketing
152
131
16.0
Other
1,493
1,348
10.8
Total noninterest expense
$
20,861
$
19,690
5.9
%
Noninterest expense increased by $0.9 million to $10.9 million
for the quarter ended June 30, 2022 compared to the quarter ended
June 30, 2021. Noninterest expense increased by $1.2 million to
$20.9 million for the six months ended June 30, 2022 compared to
the six months ended June 30, 2021. The increase in noninterest
expense was primarily driven by an increase in salaries and
employee benefits expense and professional services expense,
partially offset by a decrease in occupancy and equipment
expense.
Salaries and employee benefits expense totaled $5.4 million for
the quarter ended June 30, 2022, an increase of $1.5 million when
compared to the same period in 2021. Salaries and employee benefits
expense totaled $10.4 million for the six months ended June 30,
2022, an increase of $1.6 million when compared to the same period
in 2021. The increase in salaries and employee benefits expense was
primarily driven by an increase in full time equivalent employees.
Full time equivalent employees totaled 132 at June 30, 2022
compared to 125 for the same period in 2021. Average full time
equivalent employees totaled 128 for the six months ended June 30,
2022 compared to 124 for the same period in 2021. The increase in
salaries and employee benefits expense was also impacted by an
increase in variable compensation accruals as a result of the
Bank's overall improved performance. The increase in salaries and
employee benefits expense was partially offset by higher loan
originations, which enabled the bank to defer a greater amount of
expenses.
Professional services expense totaled $1.0 million for the
quarter ended June 30, 2022, an increase of $0.5 million when
compared to the same period in 2021. Professional services expense
totaled $2.0 million for the six months ended June 30, 2022, an
increase of $0.8 million when compared to the same period in 2021.
The increase in professional services expense was primarily driven
by consulting fees associated with various projects, including our
core system conversion.
Occupancy and equipment expense totaled $2.2 million for the
quarter ended June 30, 2022, a decrease of $1.1 million when
compared to the same period in 2021. Occupancy and equipment
expense totaled $4.3 million for the six months ended June 30,
2022, a decrease of $1.3 million when compared to the same period
in 2021. The decrease in occupancy and equipment expense was
primarily driven by the curtailment of additional cleaning costs
associated with precautions taken to prevent the spread of COVID-19
during the six months ended June 30, 2021.
BANKWELL FINANCIAL GROUP, INC. RECONCILIATION OF GAAP
TO NON-GAAP MEASURES (unaudited) (Dollars in thousands,
except share data)
As of
Computation of Tangible Common Equity
to Tangible Assets
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
Total Equity
$
225,467
$
210,220
$
201,987
$
190,795
Less:
Goodwill
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
58
Tangible Common Equity
$
222,878
$
207,631
$
199,398
$
188,148
Total Assets
$
2,435,552
$
2,496,877
$
2,456,264
$
2,269,825
Less:
Goodwill
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
58
Tangible Assets
$
2,432,963
$
2,494,288
$
2,453,675
$
2,267,178
Tangible Common Equity to Tangible
Assets
9.16
%
8.32
%
8.13
%
8.30
%
As of
Computation of Fully Diluted Tangible
Book Value per Common Share
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
Total shareholders' equity
$
225,467
$
210,220
$
201,987
$
190,795
Less:
Preferred stock
—
—
—
—
Common shareholders' equity
$
225,467
$
210,220
$
201,987
$
190,795
Less:
Goodwill
2,589
2,589
2,589
2,589
Other intangibles
—
—
—
58
Tangible common shareholders'
equity
$
222,878
$
207,631
$
199,398
$
188,148
Common shares issued and outstanding
7,752,389
7,761,338
7,803,166
7,895,101
Fully Diluted Tangible Book Value per
Common Share
$
28.75
$
26.75
$
25.55
$
23.83
BANKWELL FINANCIAL GROUP, INC. RECONCILIATION OF GAAP
TO NON-GAAP MEASURES (unaudited) - Continued (Dollars in
thousands)
For the Quarter Ended
For the Six Months
Ended
Computation of Efficiency Ratio
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
June 30, 2022
June 30, 2021
Noninterest expense
$
10,936
$
9,925
$
9,679
$
10,052
$
20,861
$
19,690
Less:
Amortization of intangible assets
—
—
48
9
—
19
Other real estate owned expenses
—
—
—
—
—
—
Adjusted noninterest expense
$
10,936
$
9,925
$
9,631
$
10,043
$
20,861
$
19,671
Net interest income
$
23,823
$
19,510
$
18,928
$
16,579
$
43,333
$
31,234
Noninterest income
1,152
958
825
1,440
2,110
3,395
Less:
Net gain on sale of available for sale
securities
—
—
—
—
—
—
Gain on sale of other real estate owned,
net
—
—
—
—
—
—
Operating revenue
$
24,975
$
20,468
$
19,753
$
18,019
$
45,443
$
34,629
Efficiency ratio
43.8
%
48.5
%
48.8
%
55.7
%
45.9
%
56.8
%
For the Quarter Ended
For the Six Months
Ended
Computation of Return on Average
Tangible Common Equity
June 30, 2022
March 31, 2022
December 31,
2021
June 30, 2021
June 30, 2022
June 30, 2021
Net Income Attributable to Common
Shareholders
$
12,022
$
8,212
$
7,814
$
6,228
$
20,234
$
11,917
Total average shareholders' equity
$
218,250
$
207,541
$
200,752
$
191,224
$
212,932
$
186,664
Less:
Average Goodwill
2,589
2,589
2,589
2,589
2,589
2,589
Average Other intangibles
—
—
45
64
—
68
Average tangible common equity
$
215,661
$
204,952
$
198,118
$
188,571
$
210,343
$
184,007
Annualized Return on Average Tangible
Common Equity
22.36
%
16.25
%
15.65
%
13.25
%
19.40
%
13.06
%
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, 2022
June 30, 2021
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
247,013
$
449
0.73
%
$
336,073
$
90
0.11
%
Securities(1)
118,534
809
2.73
103,297
761
2.95
Loans:
Commercial real estate
1,443,239
17,278
4.74
1,163,134
13,678
4.65
Residential real estate
66,460
553
3.33
105,975
958
3.62
Construction
106,285
1,938
7.21
110,780
1,036
3.70
Commercial business
393,318
5,327
5.36
296,613
3,506
4.68
Consumer
5,298
45
3.43
8,851
88
3.98
Total loans
2,014,600
25,141
4.94
1,685,353
19,266
4.52
Federal Home Loan Bank stock
3,263
15
1.79
4,219
25
2.34
Total earning assets
2,383,410
$
26,414
4.38
%
2,128,942
$
20,142
3.74
%
Other assets
79,380
117,334
Total assets
$
2,462,790
$
2,246,276
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
136,414
$
59
0.17
%
$
118,806
$
54
0.18
%
Money market
931,101
1,146
0.49
782,079
941
0.48
Savings
198,304
103
0.21
168,870
92
0.22
Time
451,508
675
0.60
538,915
1,657
1.23
Total interest bearing deposits
1,717,327
1,983
0.46
1,608,670
2,744
0.68
Borrowed Money
85,092
558
2.59
101,586
769
3.00
Total interest bearing liabilities
1,802,419
$
2,541
0.57
%
1,710,256
$
3,513
0.82
%
Noninterest bearing deposits
407,890
298,467
Other liabilities
34,231
46,329
Total liabilities
2,244,540
2,055,052
Shareholders' equity
218,250
191,224
Total liabilities and shareholders'
equity
$
2,462,790
$
2,246,276
Net interest income(2)
$
23,873
$
16,629
Interest rate spread
3.81
%
2.92
%
Net interest margin(3)
4.01
%
3.12
%
- Average balances and yields for securities are based on
amortized cost.
- The adjustment for securities and loans taxable equivalency
amounted to $50 thousand and $50 thousand for the quarters ended
June 30, 2022 and 2021, respectively.
- Annualized net interest income as a percentage of earning
assets.
- 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, 2022
June 30, 2021
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold
$
296,239
$
603
0.41
%
$
368,779
$
198
0.11
%
Securities(1)
115,452
1,563
2.71
%
102,252
1,549
3.03
%
Loans:
Commercial real estate
1,393,836
32,273
4.61
%
1,146,258
26,354
4.57
%
Residential real estate
70,125
1,224
3.49
%
109,003
1,996
3.66
%
Construction
104,176
2,971
5.67
%
102,459
1,916
3.72
%
Commercial business
388,249
9,954
5.10
%
295,682
6,763
4.55
%
Consumer
5,666
147
5.25
%
6,956
137
3.96
%
Total loans
1,962,052
46,569
4.72
%
1,660,358
37,166
4.45
%
Federal Home Loan Bank stock
3,051
29
1.94
%
5,356
56
2.11
%
Total earning assets
2,376,794
$
48,764
4.08
%
2,136,745
$
38,969
3.64
%
Other assets
89,866
115,718
Total assets
$
2,466,660
$
2,252,463
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
124,361
$
106
0.17
%
$
109,990
$
97
0.18
%
Money market
950,131
2,326
0.49
%
759,435
1,891
0.50
%
Savings
196,400
204
0.21
%
164,630
217
0.27
%
Time
452,676
1,553
0.69
%
574,876
3,653
1.28
%
Total interest bearing deposits
1,723,568
4,189
0.49
%
1,608,931
5,858
0.73
%
Borrowed Money
84,770
1,144
2.68
%
126,886
1,777
2.79
%
Total interest bearing liabilities
1,808,338
$
5,333
0.59
%
1,735,817
$
7,635
0.89
%
Noninterest bearing deposits
406,707
284,226
Other liabilities
38,683
45,756
Total liabilities
2,253,728
2,065,799
Shareholders' equity
212,932
186,664
Total liabilities and shareholders'
equity
$
2,466,660
$
2,252,463
Net interest income(2)
$
43,431
$
31,334
Interest rate spread
3.49
%
2.75
%
Net interest margin(3)
3.65
%
2.93
%
- Average balances and yields for securities are based on
amortized cost.
- The adjustment for securities and loans taxable equivalency
amounted to $98 thousand and $100 thousand for the six months ended
June 30, 2022 and 2021, respectively.
- Annualized net interest income as a percentage of earning
assets.
- Yields are calculated using the contractual day count
convention for each respective product type.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220727006003/en/
Christopher R. Gruseke President and Chief Executive Officer
Penko Ivanov Executive Vice President and Chief Financial
Officer
(203) 652-0166
Bankwell Financial (NASDAQ:BWFG)
Historical Stock Chart
From Apr 2024 to May 2024
Bankwell Financial (NASDAQ:BWFG)
Historical Stock Chart
From May 2023 to May 2024