Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q2 2022 Earnings Presentation
34 slides from Bankwell Financial's earnings presentation, Jul 27, 2022
Slide 1: 2Q22 Investor Presentation
BWFG | LISTED | NASDAQ 2Q22 Investor Presentation July 27th, 2022
Slide 2: Safe Harbor
2 BWFG LISTED NASDAQ BWFG LISTED NASDAQ This presentation may contain certain forward-looking statements about Bankwell Financial Group, Inc. (the “Company”). Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate s
Slide 3: Table of Contents
3 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Table of Contents • 2Q22 Performance • Trends • Credit Quality & ALLL • Loan Portfolio • Capital • Bankwell History & Overview
Slide 4: 2Q22 Performance
BWFG | LISTED | NASDAQ 2Q22 Performance
Slide 5: 2Q22 Summary
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q22 Summary • Record net income of $12.02 million, or $1.55 earnings per share (EPS) • Operating EPS of $1.15 excludes the following one-time items: ̶ $1.5 million elevated fees associated with loan prepayments ~$0.15 EPS 2Q22 loan prepayments exceeded histor
Slide 6: 2Q22 Summary (continued)
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q22 Summary (continued) • Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were 1.96% and 22.09%, respectively for the quarter, and 1.65% and 19.16% year-to-date ̶ Excluding the one-time items of $0.40 EPS, ROAA and ROAE were 1.45% and 16.3
Slide 7: Impact of One-time Items
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Impact of One-time Items $1.55 $1.15 $0.15 $0.16 $0.09 2Q22 Reported EPS Elevated loan prepayments Release of specific reserves Historical loss update to peer group 2Q22 Operating EPS 2Q22 EPS Walk Key Metrics Reported Operating V bps NIM 3.65% 3.53% (13) Effi
Slide 8: 2Q22 Results
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q22 Results 1 Ratios presented represent Bank ratios; presented ratios are preliminary, subject to finalization of the FDIC Call Report 2 Bankwell meets Adequate + buffer standard, which exceeds Well Capitalized thresholds Profitability Balance Sheet Capital
Slide 9: Income Statement 2Q22 vs 1Q22
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2Q22 1Q22 Var1 Total Interest Income $26.4 $22.3 $4.1 Total Interest Expense $2.5 $2.8 $0.3 Net Interest Income $23.8 $19.5 $4.3 Non-Interest Income $1.2 $1.0 $0.2 Non-Interest Expense $10.9 $9.9 $(1.0) Pre-Tax, Pre-Provision Net Revenue $14.0
Slide 10: YTD Consolidated Income Statements
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2Q 2022 2Q 2021 Var1 Total Interest Income $48.7 $38.9 $9.8 Total Interest Expense $5.3 $7.6 $2.3 Net Interest Income $43.3 $31.2 $12.1 Non-Interest Income2 $2.1 $3.4 $(1.3) Non-Interest Expense $20.9 $19.7 $(1.2) Pre-Tax, Pre-Provision Net R
Slide 11: Trends
3, Bankwell A FINANCIAL GROUP Trends BWFG | LISTED | NASDAQ
Slide 12: Performance Trends
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $1.78 $2.21 $2.31 $0.75 $3.36 $2.58 $2.18 2017 2018 2019 2020 2021 2Q22 YTD Diluted EPS 0.80% 0.94% 0.97% 0.28% 1.17% 1.65% 1.40% 2017 2018 2019 2020 2021 2Q22 YTD Return on Average Assets 8.93% 10.19% 10.20% 3.35% 13.86% 19.16% 16.22% 2017
Slide 13: Net Interest Margin
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin 3.30% 3.18% 3.03% 2.77% 3.17% 3.65% 2017 2018 2019 2020 2021 2Q22 YTD Net Interest Margin 1.08% 1.42% 1.75% 1.20% 0.67% 0.49% 0.93% 1.30% 1.66% 1.07% 0.54% 0.40% 2017 2018 2019 2020 2021 2Q22 YTD Cost of Funds / Deposits Cost of Funds Cost
Slide 14: Loan Trends
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Trends $1,107 $1,168 $1,202 $1,182 $1,235 $1,219 $436 $436 $402 $444 $660 $838 $1,543 $1,605 $1,604 $1,626 $1,895 $2,057 2017 2018 2019 2020 2021 2Q22 Loan Balances All Other C&I + CRE Owner Occupied 2Q22 Loan Mix 2Q22 Portfolio Yield by Vintage1 C&I + C
Slide 15: Deposit Trends
15 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends 18.5% 16.2% 12.4% 14.1% 15.9% 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings to total assets 3 Average cost on 2Q22 NOW de
Slide 16: Credit Quality & ALLL
BWFG | LISTED | NASDAQ Credit Quality & ALLL
Slide 17: Credit Quality
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 0.66% 2.06% 0.88% 0.74% 2019 2020 2021 2Q22 Non Performing Loans / Gross Loans NPLs $10,588 $33,416 $16,587 $15,285 0.46% 0.14% 0.14% 2Q22 Detail 0.74% SBA-guaranteed portion of NPLs All other NPLs Credit quality remains strong COVID-19 related
Slide 18: Allowance for Loan Loss Walk
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.72% 0.71% 0.14% ($0.9) million $1.1 million ($1.6) million 0.06% 1Q22 Historical Loss Update to Peer Group Asset Growth / Mix Specifics 2Q22 General Specific 2Q22 ALLL Allowance for Loan Loss (“ALLL”) Walk 0.86% 0.77% $17.1 Million $15.8 Million 1 2 1 Bankw
Slide 19: Loan Portfolio
BWFG | LISTED | NASDAQ Loan Portfolio
Slide 20: Loan Portfolio Composition
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential 2.89% C&I 18.13% CRE Owner Occupied 22.73% CRE Investor 50.28% Commercial Const. 5.43% Consumer Loans / Other 0.54% • No single relationship represents more than ~5% of total loans, as of June 30, 2022 • Increasingly diversified commercial loan po
Slide 21: Total CRE Portfolio by Property Type
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Retail 27.21% Office 18.45%Healthcare 24.40% MultiFamily 9.71% Industrial Warehouse 7.76% Mixed Use 6.37% Other 3.41% Special Use 2.70% 1 • Property Type mix continues to show well diversified exposure • Healthcare consists primarily of skilled nursing and/or
Slide 22: Retail and Office Segment Detail
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Includes Owner Occupied CRE, does not include Construction 2 Comprised primarily of neighborhood and convenience centers, typically characterized by: size up to 125,000 sq. ft.; convenience and service oriented 3 LTVs based on original LTV values, at origin
Slide 23: Geography Distribution
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Geography Distribution 1 Includes Owner Occupied CRE, does not include Construction 2 Based on dollar volume 3 LTVs based on original LTV values, at origination 4 Consists primarily of skilled nursing and/or assisted living facilities 5 Special Use includes C
Slide 24: C&I Loan Portfolio
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Finance 25% Insurance (Primarily Brokers) 36% Health Care & Social Assistance 20% Arts, Entertainment & Recreation 4% Wholesale 4% Retail Trade 3% Real Estate and Rental/Leasing 3% Information 1% All Other 4% C&I Loan Portfolio Loans by Industry Type Total C&
Slide 25: Commercial Construction Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~5% of total loan portfolio (~$111 million) • $141 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of wo
Slide 26: Residential Portfolio
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential Portfolio • $64 million Residential portfolio comprised of: ̶ $59 million residential mortgages, with an average LTV of 67.1%1 and an average size of $494 thousand ̶ $5 million HELOCs • 87% ($51 million) of residential mortgages secured by residen
Slide 27: Capital
BWFG | LISTED | NASDAQ Capital
Slide 28: Tangible Book Value
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Tangible Book Value • AOCI: $0.71 favorable change from mark-to-market primarily on long-dated interest rate swaps offset by ($0.19) unfavorable change from AFS investment portfolio • $50 million of $75 million of long-dated interest rate swaps were terminate
Slide 29: Capital Position
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 8.32% 9.80% 11.20% 12.00% 9.16% 10.15% 11.10% 11.80% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% TC E Ti er 1 Le ve ra ge Ti er 1 / CE T1 To ta l C ap ita l 2Q22 1Q22 ‘Adequate’ + Buff
Slide 30: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 31: Attractive Core Market
31 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • Third most affluent MSA in the Nation in per capita personal income (PCPI)2 • 4 of the top 25 wealthiest towns in the U.S.3 • MSA ranked 11th most educated overall, tied for 5th with the highest percentage of
Slide 32: Financial Snapshot
32 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2017 2018 2019 2020 2021 2Q22 Total assets $1,796,607 $1,873,665 $1,882,182 $2,253,747 $2,456,264 $2,435,552 Net loans $1,520,879 $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,036,626 Loan-to-deposit ratio 110.1% 106.4% 107.1% 87.9% 88.8%
Slide 33: Management Team
33 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Name Years Experience Selected Professional Biography Christopher Gruseke Chief Executive Officer Director (since 2015) 30+ Mr. Gruseke was a founding investor and director of Bankwell Financial Group’s predecessors, BNC Financial Group, Inc., and The Bank of
Slide 34: Thank You & Questions
BWFG | LISTED | NASDAQ Thank You & Questions
Bankwell Financial Group — Q2 2022 Earnings Presentation on 6ix