Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q1 2023 Earnings Presentation
36 slides from Bankwell Financial's earnings presentation, Apr 26, 2023
Slide 1: 1Q23 Investor Presentation
BWFG | LISTED | NASDAQ 1Q23 Investor Presentation April 26th, 2023
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 • 1Q23 Performance • Deposits & Liquidity • Loans • Credit Quality & ALLL • Capital • Bankwell History & Overview
Slide 4: 1Q23 Performance
BWFG | LISTED | NASDAQ 1Q23 Performance
Slide 5: 1Q23 Summary
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1Q23 Summary • Net Income of $10.38 million, or $1.33 earnings per share (EPS) • Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were 1.30% and 17.48%, respectively • Pre-tax, Pre-provision Net Revenue (“PPNR”)1 of $14.38 million, or 1.80%
Slide 6: 1Q23 Results
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1Q23 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 7: Income Statement and Balance Sheet
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 1Q23 4Q22 Var1 Total Interest Income $44.3 $ 39.6 $4.7 Total Interest Expense $18.7 $ 12.8 $(6.0) Net Interest Income $25.5 $ 26.8 $(1.3) Non-Interest Income $1.5 $ 0.5 $1.0 Non-Interest Expense $12.7 $ 12.5 $(0.2) Pre-Tax, Pre-Provision Net R
Slide 8: Performance Trends
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $2.21 $2.31 $0.75 $3.36 $4.79 $1.33 2018 2019 2020 2021 2022 1Q23 Diluted EPS 0.94% 0.97% 0.28% 1.17% 1.44% 1.30% 2018 2019 2020 2021 2022 1Q23 Return on Average Assets 10.19% 10.20% 3.35% 13.86% 16.72% 17.48% 2018 2019 2020 2021 2022 1Q23 R
Slide 9: Efficiency Trends
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 59.2% 60.2% 73.9% 53.9% 45.4% 46.9% 1.93% 1.90% 2.03% 1.75% 1.71% 1.59% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00% 2.20% 2.40% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2018 2019 2020 2021 2022 1Q23 Efficiency Ratio Non-interest Expense / Average Assets Ef
Slide 10: Deposits & Liquidity
BWFG | LISTED | NASDAQ Deposits & Liquidity
Slide 11: Deposit Balances
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 16.2% 15.0% 16.7% 36.7% 36.7% 8.4% 6.1% 2.6% 2.7% 3.9% 75.5% 78.9% 80.6% 60.5% 59.4% $1,492 $1,827 $2,124 $2,801 $2,798 4Q19 4Q20 4Q21 4Q22 1Q23 Deposit Balances Brokered Deposits Retail CDs >$250k Core Deposits Deposit Balances 1 1 Core Deposits include Comm
Slide 12: Net Interest Margin
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • NIM declining with inverted yield curve: • 3/31/2023 ‘exit rates’ of 5.88% on loans & 2.81% on deposits Net Interest Margin 3.03% 2.77% 3.17% 3.78% 3.24% 4.85% 4.48% 4.42% 5.10% 5.87% 1.66% 1.07% 0.54% 0.87% 2.47% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3
Slide 13: Liquidity
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ FDIC Insured Deposits 70% Uninsured Deposits 27% FHLB SBLOC Insured Deposits 3% Liquidity 1 Bank lines, including FHLB & FRB 2 Cash held with right of offset as collateral against loans Ample coverage of uninsured deposits • $2,051 million total insured depos
Slide 14: Deposit Composition
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Composition • No digital currency deposits • No single depositor greater than 3% of total deposits • Average account size of $81K1 Consumer 40.3% Public Administration 12.1% Real Estate and Rental/ Leasing 11.9% Finance & Insurance 9.9% Professional,
Slide 15: Loans
9,6 Bankwell FINANCIAL GROUP Loans BWFG | LISTED | NASDAQ
Slide 16: Loan Balances
16 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Balances Increased reliance on C&I and CRE Owner Occupied Dollars in millions $981 $976 $1,023 $1,042 $1,046 $1,051 $1,032 $1,147 $1,224 $1,225 $167 $207 $244 $296 $310 $375 $467 $501 $697 $736 $277 $268 $280 $293 $351 $370 $372 $443 $522 $543 $87 $103 $
Slide 17: Loan Yields Steadily Increasing
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 4.18% 4.22% 4.23% 4.28% 4.30% 4.34% 4.55% 4.99% 5.56% 5.75% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% - 500 1,000 1,500 2,000 2,500 3,000 3,500 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Loan Balance Loan Portfolio Yield Loan Yields Stead
Slide 18: Loan Portfolio Composition
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential 2.0% C&I 19.7% CRE Owner Occupied 26.7% CRE Investor 44.4% Commercial Const. 6.4% Other 0.9% • No single relationship represents more than ~3% of total loans, as of March 31, 2023 • Investor CRE continues to shrink as an overall percentage of the
Slide 19: CRE Loan Portfolio
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Total CRE Portfolio = $1,959 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs based on original LTV values, at origination 3 Consists primarily of skilled nursing and/or assisted living facilities CRE Loan Portfolio Retail 21.9% Office 10.1
Slide 20: CRE Loan Portfolio Geography
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CT 29.0% NY 22.3% FL 16.9% NJ 5.4%OH 4.2% PA 3.3% TX 3.3% Other 15.6% 1 Includes Owner Occupied CRE, does not include Construction 2 Consists primarily of skilled nursing and/or assisted living facilities • Greater geographic diversity attributed to growth in
Slide 21: Limited Exposure to NYC CRE
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Limited Exposure to NYC CRE New York State Property Type NYC Property Type by Borough Dollars in millions 1 NYC 46.1% Hudson Valley 35.0% Long Island 16.3% Other 2.7% Property Type Bronx Brooklyn Manhattan Queens Multifamily -- $34.9 $6.4 $4.9 Mixed Use2 $43.
Slide 22: CRE Loan Portfolio: Office Portfolio details
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs based on original LTV values and actual amortized loan balance CRE Loan Portfolio: Office Portfolio details • ~7% or $199 million, of total loan portfolio • Amortized weighted average LTV2 of
Slide 23: CRE Loan Portfolio: Office
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 CRE Loan Portfolio: Office • No exposure to NYC office • ~68% located in Bankwell’s primary lending area, mostly in suburban area • Out of primary market loans are generally either GSA- leased, credit tenants, or owner-occupied • Top 20 borrowers represent
Slide 24: CRE Loan Portfolio: Retail
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Includes Owner Occupied CRE, does not include Construction 2 Comprised primarily of neighborhood and service-oriented convenience centers, typically characterized by: size up to 125,000 sq. ft. 3 LTVs based on original LTV values, at origination Type Count
Slide 25: C&I Loan Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ C&I Loan Portfolio Loans by Industry Type Total C&I Portfolio = $543 million Finance 20% Insurance (Primarily Brokers) 26%Health Care & Social Assistance 31% Admin & Support, Waste Mgmt, Remediation Svcs 4% Construction 4% Real Estate and Rental/Leasing 3% Ar
Slide 26: Healthcare Portfolio
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Healthcare Portfolio Healthcare Portfolio Composition CRE Skilled Nursing Facility By State • Consists primarily of skilled nursing facilities located across the US • Healthcare lending team has more than 15 years of industry experience • High touch service m
Slide 27: Commercial Construction Portfolio
27 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~7% of total loan portfolio (~$177 million) • $161 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of wo
Slide 28: Credit Quality & Capital
BWFG | LISTED | NASDAQ Credit Quality & Capital
Slide 29: Credit Quality
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 2.06% 0.88% 0.61% 0.52% 2020 2021 2022 1Q23 Non Performing Loans / Gross Loans NPLs $33,416 $16,587 $16,441 $14,265 0.34% 0.08% 0.12% 1Q23 Detail 0.52% SBA-guaranteed portion of NPLs All other NPLs ACL-Loans coverage of NPLs is 196%; excluding
Slide 30: Fully Diluted Tangible Book Value
30 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Fully Diluted Tangible Book Value 1 Misc includes items such as, but not limited to, changes related to stock grants and share count 1Q23 TBV / Share Walk • Existing interest rate swaps hedging impact of unrealized losses in AFS Securities portfolio: ‒ AFS Se
Slide 31: Capital Position
31 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 7.26% 9.88% 10.28% 11.07% 7.38% 9.22% 10.17% 11.16% 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% T C E T ie r 1 Le ve ra g e T ie r 1 / C E T 1 T o ta l C a p it a l 1Q23 4Q22 ‘Adequate
Slide 32: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 33: Attractive Core Market
33 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • Second 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 34: Financial Snapshot
34 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2018 2019 2020 2021 2022 1Q23 Total assets $1,873,665 $1,882,182 $2,253,747 $2,456,264 $3,252,449 $3,252,318 Net loans $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,646,384 $2,724,514 Loan-to-deposit ratio 106.4% 107.1% 87.9% 88.8% 95.2% 9
Slide 35: Management Team
35 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 36: Thank You & Questions
BWFG | LISTED | NASDAQ Thank You & Questions
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