Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q2 2024 Earnings Presentation
31 slides from Bankwell Financial's earnings presentation, Jul 24, 2024
Slide 1: 2Q24 Investor Presentation
BWFG | LISTED | NASDAQ 2Q24 Investor Presentation July 24, 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 • 2Q24 Results • Credit Quality • Loans • Bankwell History & Overview
Slide 4: 2Q24 Results
BWFG | LISTED | NASDAQ 2Q24 Results
Slide 5: 2Q24 Results
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Return on Average Tangible Common Equity 1.67% 3.65% Total Risk Based Capital (Bank)3 12.98% Tangible Book Value Per Share $33.61 2Q24 Results Net Income $1.1 $4.9 Earnings Per Share (EPS) $0.14 $0.62 PPNR1 Return on Average Assets 1.22% 1.16% Return on Averag
Slide 6: Income Statement and Balance Sheet
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2Q24 1Q24 Var1 Total Interest Income $47.7 $ 48.3 $(0.6) Total Interest Expense $26.5 $ 27.1 $0.7 Net Interest Income $21.2 $ 21.1 $0.1 Non-Interest Income $0.7 $ 0.9 $(0.2) Non-Interest Expense $12.2 $ 13.3 $1.1 Pre-Tax, Pre-Provision Net Rev
Slide 7: Net Interest Income and Net Interest Margin
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $24.0 $22.7 $22.2 $21.1 $21.2 6.05% 6.15% 6.33% 6.37% 6.37% 2.99% 3.37% 3.61% 3.75% 3.69% $5.0 $7.0 $9.0 $11.0 $13.0 $15.0 $17.0 $19.0 $21.0 $23.0 $25.0 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 2Q23 3Q23 4Q23 1Q24 2Q24 Net Interest Income Loan Yield Cost of D
Slide 8: Deposit Costs and Average Deposits
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $2,411 $2,452 $2,430 $2,386 $2,323 $376 $346 $351 $337 $368 $2,787 $2,798 $2,781 $2,723 $2,692 2Q23 3Q23 4Q23 1Q24 2Q24 2.99% 3.37% 3.61% 3.75% 3.69% 3.46% 3.85% 4.13% 4.28% 4.27% Total Deposit Cost IB Deposit Cost Average Deposits • 2Q24 total deposit costs 6
Slide 9: Liquidity Coverage of 2.5X
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Liquidity Coverage of 2.5X $1,221 $251 $110 Liquidity Uninsured Deposits 2Q24 Liquidity Coverage = 2.5X $1,582 $633 Borrowing Capacity1 Unencumbered Cash Unencumbered Securities 1 Bank lines, including FHLB & FRB 71% 71% 71% 73% 4% 4% 4% 3% 2.4X 2.4X 2.3X 2.5X
Slide 10: History of Efficiency
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 49.8% 52.0% 55.0% 60.3% 55.9% 1.56% 1.48% 1.56% 1.66% 1.55% 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% 2Q23 3Q23 4Q23 1Q24 2Q24 Efficiency Ratio Non-interest Expense / Average Assets 1 A non-GAAP metric 2 So
Slide 11: Bank is Well Capitalized
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bank is Well Capitalized 9.41% 9.60% 9.81% 10.09% 10.17% 5% 2Q23 3Q23 4Q23 1Q24 2Q24 Tier 1 Leverage Ratio Bankwell Bank Well Capitalized 1 Current period ratios are estimates, pending FDIC call report filing 2 Consolidated ratio 10.18% 10.65% 11.30% 11.60% 1
Slide 12: Credit Quality
BWFG | LISTED | NASDAQ Credit Quality
Slide 13: Credit Quality Trends
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality Trends 2Q23 3Q23 4Q23 1Q24 2Q24 Risk Rating Balance % Balance % Balance % Balance % Balance % 1-5 “Pass” $2,710 97.7% $2,694 97.2% $2,570 94.5% $2,527 94.3% $2,497 94.0% 6 “Special Mention” $28 1.0% $22 0.8% $67 2.5% $72 2.7% $71 2.7% 7 “Substa
Slide 14: 2Q24 Criticized & Classified Loans
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q24 Criticized & Classified Loans Risk Rating Performing CRE C&I Construction 1-4 Family Residential Total 6 Yes $62 $8 $0 $0 $71 7 Yes $27 $3 $0 $2 $32 7 No $22 $16 $9 $1 $48 8 No $6 $2 $0 $0 $8 Total $117 $29 $9 $4 $160 • $103 million of criticized and cla
Slide 15: 2Q24 Non-Performing Loans
15 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q24 Non-Performing Loans Segment Balance % Total Loans 2Q24 Actions (See next slide for additional details) Loan 1 CRE - Office $13.9 0.52% • Downgraded to non-performing status Loan 2 CRE - Retail $9.8 0.37% • $0.5 million charged off (life to date charged
Slide 16: Non-Performing Loan Details
16 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Non-Performing Loan Details • Class A suburban NJ office park • 80% occupied • Bankwell 17% participant in $84 million multi-bank club deal • 40% recourse • April 2024 appraised value of $105 million ‒ Bankwell continue to monitor collateral on a quarterly ba
Slide 17: Loans
¥,€ Bankwell FINANCIAL GROUP Loans BWFG | LISTED | NASDAQ
Slide 18: Loan Balance Trends
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $1,046 $1,224 $1,228 $1,231 $1,237 $310 $697 $720 $696 $676$351 $522 $501 $509 $503 $98 $155 $183 $152 $150 $89 $77 $87 $91 $91 $1,895 $2,675 $2,719 $2,680 $2,657 4Q21 4Q22 4Q23 1Q24 2Q24 CRE Investor CRE Owner Occupied C&I Construction Residential / Other Lo
Slide 19: Loan Yields Steadily Increasing
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $1,626 $1,895 $2,675 $2,719 $2,657 4.18% 4.30% 5.56% 5.99% 6.05% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% - 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4Q20 4Q21 4Q22 4Q23 2Q24 Loan Balance Portfolio Loan Yield Loan Yields Steadily Increasing 1 Weigh
Slide 20: Loan Portfolio Composition
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • No single relationship represents more than ~4% of total loans, as of June 30, 2024 • Favorable trend in Investor CRE: Total Loan Portfolio = $2,657 million Loan Portfolio Composition Residential 1.7% C&I 18.9% CRE Owner Occupied 25.4% CRE Investor 46.5% Co
Slide 21: CRE Loan Portfolio
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Total CRE Portfolio = $1,913 million 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs based on original LTV values, at origination 3 Loans subject to repricing generally have a floor of not less than the original rate CRE Loan Portfolio • 6
Slide 22: CRE: Office
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $189 million Office exposure 7% of total loan portfolio Composition • No New York City exposure • 67% located in Bankwell’s primary market • Out of primary market loans are generally either GSA- leased, credit tenants, or owner-occupied • $3.9 million average
Slide 23: C&I Loan Portfolio
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ C&I Loan Portfolio Loans by Industry Type Total C&I Portfolio = $503 million 1 Does not Include Owner Occupied CRE 1 • 98% of C&I portfolio has recourse • 93% of Healthcare loans have recourse - Primarily consists of working capital lines secured by governmen
Slide 24: Healthcare Portfolio Composition
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Skilled Nursing Facilities 76% Assisted Living 14% Recovery 5% Other 5% Healthcare Portfolio Composition CRE Skilled Nursing Facility By State 1 Includes Physicians 1 $789 million combined Healthcare portfolio • Consists primarily of skilled nursing facilitie
Slide 25: Commercial Construction Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~6% of total loan portfolio ($150 million) • $56 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of work
Slide 26: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 27: Bankwell Overview and Core Market
27 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • Connecticut-based $3.1 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 28: Performance Trends
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.70% 1.49% 2.05% 1.50% 1.16% 2020 2021 2022 2023 2Q24 YTD PPNR Return on Average Assets Performance Trends $0.75 $3.36 $4.79 $4.67 $0.62 2020 2021 2022 2023 2Q24 YTD Diluted EPS 0.28% 1.17% 1.44% 1.13% 0.31% 2020 2021 2022 2023 2Q24 YTD Return on Average Ass
Slide 29: Financial Snapshot
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2020 2021 2022 2023 2Q24 YTD Total assets $2,253,747 $2,456,264 $3,252,449 $3,215,482 $3,141,654 Net loans $1,601,672 $1,875,167 $2,646,384 $2,685,301 $2,657,185 Loan-to-deposit ratio 87.9% 88.8% 95.2% 98.9% 99.4% Return on average assets 0
Slide 30: Management Team
30 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 31: Thank You & Questions
BWFG | LISTED | NASDAQ Thank You & Questions
Bankwell Financial Group — Q2 2024 Earnings Presentation on 6ix