Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q1 2024 Earnings Presentation
37 slides from Bankwell Financial's earnings presentation, Apr 24, 2024
Slide 1: 1Q24 Investor Presentation
BWFG | LISTED | NASDAQ 1Q24 Investor Presentation April 24th, 2024
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 • 1Q24 Performance • Deposits & Liquidity • Loans • Credit Quality & Capital • Bankwell History & Overview
Slide 4: 1Q24 Performance
BWFG | LISTED | NASDAQ 1Q24 Performance
Slide 5: 1Q24 Overview and Highlights
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Return on Average Tangible Common Equity 5.65% Total Risk Based Capital (Bank) 12.63% Tangible Book Value Per Share $33.57 1Q24 Overview Net Income $3.8 Earnings Per Share (EPS) $0.48 PPNR1 Return on Average Assets 1.10% Return on Average Assets 0.47% Non-Inte
Slide 6: Income Statement and Balance Sheet
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 1Q24 4Q23 Var1 Total Interest Income $48.3 $49.4 $(1.1) Total Interest Expense $27.1 $27.1 $0.0 Net Interest Income $21.1 $22.2 $(1.1) Non-Interest Income $0.9 $1.1 $(0.2) Non-Interest Expense $13.3 $12.9 $(0.4) Pre-Tax, Pre-Provision Net Reve
Slide 7: Performance Trends
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.70% 1.49% 2.05% 1.50% 1.10% 2020 2021 2022 2023 1Q24 PPNR Return on Average Assets Performance Trends $0.75 $3.36 $4.79 $4.67 $0.48 2020 2021 2022 2023 1Q24 Diluted EPS 0.28% 1.17% 1.44% 1.13% 0.47% 2020 2021 2022 2023 1Q24 Return on Average Assets 3.40% 14.
Slide 8: Building Book Value
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Building Book Value $21.96 $25.55 $30.51 $33.39 $33.57 2020 2021 2022 2023 1Q24 Consistently building book value Fully Diluted Tangible Book Value
Slide 9: Efficiency Trends
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 73.9% 53.9% 45.4% 50.8% 60.3% 2.03% 1.75% 1.71% 1.55% 1.66% 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% 2020 2021 2022 2023 1Q24 Efficiency Ratio Non-interest Expense / Average Assets 1 A non-GAAP metric
Slide 10: Deposits & Liquidity
BWFG | LISTED | NASDAQ Deposits & Liquidity
Slide 11: Deposit Balances
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Balances 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts, and Retail CDs under $250k 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings as a percentage of total assets Dollars in mi
Slide 12: Net Interest Margin
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2.77% 3.17% 3.78% 2.98% 2.71% 4.48% 4.42% 5.10% 6.10% 6.37% 1.07% 0.54% 0.87% 3.12% 3.75% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 2020 2021 2022 2023 1Q24 Net Interest Margin Loan Yield Cost of Deposits • NIM conti
Slide 13: Available Liquidity
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Available Liquidity $1,167 $241 $110 Liquidity Uninsured Deposits 1Q24 Liquidity Coverage = 2.3X $1,518 $655 Borrowing Capacity1 Unencumbered Cash Unencumbered Securities Available Liquidity Covers Uninsured Deposits 2.3X 1 Bank lines, including FHLB & FRB 71
Slide 14: Deposit Composition
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Consumer 43.0% Finance & Insurance 18.2% Real Estate and Rental/Leasing 13.7% Professional, Sci & Tech Services 5.2% Health Care & Social Assistance 4.8% Public Administration 4.6% All Other 10.4% Deposit Composition • No digital currency deposits • No single
Slide 15: Loans
9,6 Bankwell FINANCIAL GROUP Loans BWFG | LISTED | NASDAQ
Slide 16: Loan Balance Trends
16 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $981 $1,046 $1,224 $1,228 $1,231 $167 $310 $697 $720 $696 $277 $351 $522 $501 $509 $87 $98 $155 $183 $152 $114 $89 $77 $87 $91 $1,626 $1,895 $2,675 $2,719 $2,680 4Q20 4Q21 4Q22 4Q23 1Q24 CRE Investor CRE Owner Occupied C&I Construction Residential / Other Loa
Slide 17: Loan Yields Steadily Increasing
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 5.21% Pre 2021 5.59% 2021 6.36% 2022 7.74% 2023 8.65% 2024 Loan Yields Steadily Increasing 1 Weighted average yield based on active loans as of each date, an “exit" rate 2 Weighted average yield based on active loans as of 3-31-2024, an “exit" rate 1 Dollars
Slide 18: Loan Portfolio Composition
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • No single relationship represents more than ~4% of total loans, as of March 31, 2024 • Favorable trend in Investor CRE: Total Loan Portfolio = $2,680 million Loan Portfolio Composition 60.4% 55.2% 45.8% 45.2% 45.9% 27.3% 34.9% 45.5% 44.9% 45.0% 4Q20 4Q21 4Q
Slide 19: Healthcare Portfolio Composition
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Skilled Nursing Facilities 75% Assisted Living 14% Recovery 5% Other 6% Combined Healthcare Exposure (CRE and C&I) Healthcare Portfolio Composition CRE Skilled Nursing Facility By State $786 million combined Healthcare portfolio • Consists primarily of skille
Slide 20: CRE Loan Portfolio
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Retail 20.6% Office 9.8% Residential Care 31.8% MultiFamily 13.7% Industrial Warehouse 7.9% Mixed Use 5.4% Medical Office 4.2% Other 5.0% Special Use 1.6% Total CRE Portfolio = $1,928 million 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs
Slide 21: CRE: Residential Care
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ FL $281.8 NY $104.3 OH $80.0 PA $23.6 AL $23.5 NJ $22.3 All Other $78.3 CRE: Residential Care 1 1 Includes Owner Occupied CRE 2 LTVs based on original LTV values, at origination Geography $614 million Residential Care exposure 23% of total loan portfolio • 10
Slide 22: CRE: Retail
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Retail $222.2 Grocery $100.7 Restaurant $35.5 Gas/Auto Service $24.9 Pharmacy $13.6 CRE: Retail 1 1 Includes Owner Occupied CRE 2 LTVs based on original LTV values, at origination Type Geography CT $130.9 NY $93.8 PA $34.8 TX $22.6NJ $19.6 FL $17.1 MA $16.9 N
Slide 23: CRE: Office
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $190 million Office exposure 7% of total loan portfolio • No New York City exposure • 98% loans are pass-rated • $4.0 million average size; 64% weighted average LTV2 • $83 million (~44%) repricing or maturing in 2024- 2025 • 67% located in Bankwell’s primary
Slide 24: CRE: Multifamily
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CRE: Multifamily CT - Fairfield County $60.1 CT - All Other $114.5 NY - NYC $52.2NY - Westchester County $8.2 NY - Rockland County $22.9 NJ $7.2 Brooklyn $41.0 Manhattan $6.3 Queens $4.9 Geography$265 million Multifamily exposure 10% of total loan portfolio •
Slide 25: C&I Loan Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Finance 14% Insurance (Primarily Brokers) 20% Health Care & Social Assistance 39% Real Estate and Rental/Leasing 9% Admin & Support, Waste Mgmt, Remediation Svcs 4% Retail Trade 3% Construction 3% Manufacturing 2% Other 6% C&I Loan Portfolio Loans by Industry
Slide 26: Commercial Construction Portfolio
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~6% of total loan portfolio ($152 million) • $88 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of work
Slide 27: Credit Quality & Capital
BWFG | LISTED | NASDAQ Credit Quality & Capital
Slide 28: Credit Quality
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 1Q23 2Q23 3Q23 4Q23 1Q24 Risk Rating Balance % Balance % Balance % Balance % Balance % 1-5 “Pass” $2,714 98.4% $2,710 98.4% $2,694 97.7% $2,570 94.5% $2,527 94.3% 6 “Special Mention” $1 0.0% $28 0.1% $22 1.0% $67 2.5% $72 2.7% 7 “Substandard” $
Slide 29: 1Q24 Non-Performing Loans
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1Q24 Non-Performing Loans Segment Balance % Total Gross Loans Comments Loan 1 CRE $10.4 0.39% • Retail loan modified during COVID • Borrower paying according to terms of restructure • $4.0 million charged off ($3.8 million in 2Q21 and $0.2 million in 4Q23) Lo
Slide 30: Credit Quality: Allowance for Credit Losses
30 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality Dollars in thousands $27,998 $30,694 $29,284 $27,946 $27,991 1.01% 1.11% 1.06% 1.03% 1.04% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 1Q23 2Q23 3Q23 4Q23 1Q24 Allowance for credit losses ACL /
Slide 31: Fully Diluted Tangible Book Value
31 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 • Repurchased 36,180 shares at an average price of $25.42 in 1Q24 1 1Q24 TBV / Share Walk $33.39 $33.57 $0.48 $0.20 $0.01 $0.0
Slide 32: Bank Capital Ratios
32 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bank Capital Ratios 9.22% 9.41% 9.60% 9.81% 10.09% 5% 1Q23 2Q23 3Q23 4Q23 1Q24 Tier 1 Leverage Ratio Bankwell Bank Well Capitalized 1 Current period ratios are estimates pending FDIC call report filing 2 Consolidated ratio 10.00% 10.18% 10.65% 11.30% 11.60% T
Slide 33: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 34: Bankwell Overview and Core Market
34 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • Connecticut-based $3.2 billion commercial bank • 9 branches in Fairfield & New Haven Counties • $311 million deposits per branch; one of the highest in Fairfield & New Haven Counties1 Bankwell operates in an attractive core market: • 4th most affluent MSA i
Slide 35: Financial Snapshot
35 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2020 2021 2022 2023 1Q24 Total assets $2,253,747 $2,456,264 $3,252,449 $3,215,482 $3,155,274 Net loans $1,601,672 $1,875,167 $2,646,384 $2,685,301 $2,646,686 Loan-to-deposit ratio 87.9% 88.8% 95.2% 98.9% 99.7% Return on average assets 0.28%
Slide 36: Management Team
36 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 37: Thank You & Questions
BWFG | LISTED | NASDAQ Thank You & Questions
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