Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q4 2020 Earnings Presentation
32 slides from Bankwell Financial's earnings presentation, Jan 27, 2021
Slide 1: Bankwell Financial Group 4Q20 Investor Presentation
Bankwell Financial Group 4Q20 Investor Presentation
Slide 2: Safe Harbor
2 Safe Harbor 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 strictly to historical or c
Slide 3: Table of Contents
3 Table of Contents • 4Q20 Performance & One-time Charges • 2021 Outlook • COVID-19 Deferral & PPP Updates • ALLL & Non-Performing Loans • Capital • Bankwell History & Overview
Slide 4: 4Q20 Performance & One-Time Charges
4Q20 Performance & One-Time Charges
Slide 5: 4Q20 Summary
5 4Q20 Summary 1 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense • $336 thousand reported net income, or $0.04 earnings per share, versus a core earnings per share of $0.51: ̶ ($0.39) EPS due to one time charges of $3.9 mi
Slide 6: 4Q20 Results
6 4Q20 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 4Q20 FY20 • Net Income $336 thousand $
Slide 7: 4Q20 Consolidated Financial Statements
7 4Q20 Consolidated Financial Statements Linked Quarter Income Statement 4Q20 3Q20 Var1 Total Interest Income $19.1 $18.9 $0.2 Total Interest Expense $4.8 $5.3 $0.5 Net Interest Income $14.3 $13.6 $0.7 Non-Interest Income $0.6 $0.6 $0.0 Non-Interest Expense $13.7 $9.7 $(4.0) Pre-Tax, Pre-Provision N
Slide 8: 2020 Consolidated Financial Statements
8 2020 Consolidated Financial Statements Income Statement 2020 2019 Var1 Total Interest Income $77.5 $82.9 $(5.5) Total Interest Expense $22.7 $29.2 $6.5 Net Interest Income $54.8 $53.8 $1.0 Non-Interest Income $2.9 $5.2 $(2.4) Non-Interest Expense $42.8 $35.6 $(7.2) Pre-Tax, Pre-Provision Net Reven
Slide 9: Summary of One-time Charges
9 Summary of One-time Charges • One-time charges taken in December: ̶ Office Consolidation costs (including headcount) $2.0 million ̶ Voluntary Early Retirement Incentive Plan (“VERIP”) and other 4Q reduction in force actions $0.8 million Sub-total $2.8 million ̶ Online Banking contract termination
Slide 10: 2021 Outlook
2021 Outlook
Slide 11: 2021 Outlook
11 2021 Outlook • Entering 2021 with a strong balance sheet and 1.29% ALLL reserve • Provision expense in 2021 to be well below 2020 • Expected loan growth excluding PPP of ~5% • Steady loan yields • Continued decrease in funding costs • Full year 2021 NIM expected to be 3.00% - 3.15% • Growth in no
Slide 12: Positive Outlook For Cost of Deposits
12 Positive Outlook For Cost of Deposits Dollars in millions Low yield environment + strategic actions = interest expense savings <0.70% Dec-20 – Jun-21 Deposits Quarterly Cost of Deposits • ~$70 million wholesale deposits maturing, at an average rate of 0.89% • ~$150 million retail CDs maturing, at
Slide 13: Recent Trends Steadily Improving Deposit Mix
13 Recent Trends Steadily Improving Deposit Mix 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0% 2018 2019 2020 2Q21 Est 18.5% 16.2% 12.4% 14.7% 28.1% 28.6% 20.7% 16.2% 53.4% 55.3% 66.9% 69.1% Brokered Deposits Retail CDs Core Deposits $1,502 $1,492 Dollars in millions $1,827 ~$1,70
Slide 14: Expanding Commercial Relationships
14 Expanding Commercial Relationships 1 Core deposits exclude all brokered deposits and all time deposits Strategic efforts on Commercial Banking yielding positive results Commercial deposits grew ~$317 million YTD, including $77 million (~43%) in non- interest bearing deposits: • $255 million comme
Slide 15: Liquidity
15 Liquidity • On-balance sheet liquidity ~22% as of 12/31/20, attributable to: ̶ Temporary liquidity increases due to the COVID-19 pandemic ̶ Investments in commercial channels generating quality organic core deposit growth Liquidity Walk ~22% ~11% ~11% 12/31/20 Time Deposit Runoff End of '21 • Mat
Slide 16: Loan Portfolio Composition
16 Loan Portfolio Composition Residential 6.52% C&I 17.02% CRE Owner Occupied 10.14% CRE Investor 60.51% Commercial Const. 5.35% Consumer Loans / Other 0.47% Total Loan Portfolio = $1,626 million no single relationship represents more than ~6% of total loans, as of December 31st, 2020 1 1 includes $
Slide 17: Loan Portfolio Trends
17 1 Weighted average yield based on active loans as of 12-31 for each of the respective years 2 Some fixed rate loans have a contractual interest rate reset after 3 or 5 years (as examples), prior to maturity Dollars in millions Loan Portfolio Trends 1 • Robust 1Q21 originations pipeline, with C&I
Slide 18: Net Interest Margin
18 • Excess liquidity temporarily reducing NIM • NIM expanding throughout 2021 as liquidity runs off ̶ Full year 2021 NIM expected to be 3.00% - 3.15% Net Interest Margin 2.77% ~0.47% NIM 2020 Reported NIM Year-end impact of excess liquidity
Slide 19: COVID-19 Deferral & PPP Updates
COVID-19 Deferral & PPP Updates
Slide 20: COVID-19 Deferral Update
20 $218 $340 $51 $29 $17 $10 $9 $1 15% 22% <4% <2% 0% 5% 10% 15% 20% 25% $0 $50 $100 $150 $200 $250 $300 $350 $400 1Q20 2Q20 3Q20 4Q20 COVID-19 Deferral SBA Loans % Total Loans COVID-19 Deferral Update Dollars in millions 1 Excluding PPP loan balances 2 LTVs based on original LTV values, at originat
Slide 21: PPP Update
21 PPP update • $34.8 million of PPP loans remain as of 12/31/20: • ~$1.2 million of PPP fees recognized as income through 4Q20 • Remaining PPP fees to be accreted are ~$1.0 million; ~$183 thousand per quarter until forgiveness or maturity • Forgiveness status as of 1/21/21: ̶ ~$4 million (63 loans)
Slide 22: ALLL & Non-Performing Loans
ALLL & Non-Performing Loans
Slide 23: Non Performing Loans
23 Non Performing Loans 0.88% 0.66% 2.06% 2018 2019 2020 Non Performing Loans / Gross Loans NPLs $14,082 $10,588 $33,416 1.57% 0.32% 0.16% 2020 Detail 2.06% SBA-guaranteed portion of NPLs Dollars in thousands COVID-19 related NPLs All other NPLs The Company performed individual analyses for all exis
Slide 24: 2020 ALLL Coverage
24 0.81% 0.98% 0.03% ($1.6MM) $4.6MM 0.31%$4.5MM 2019 Growth / Mix COVID-19 2020 General Specific 2020 ALLL Coverage $9.0 million total reserves (general & specific) related to COVID-19 General ALLL Reserve Detail YTD Allowance for Loan Loss (“ALLL”) Walk 0.84% Dollars in thousands 1.29% CRE C&I Res
Slide 25: Capital
Capital
Slide 26: Tangible Book Value
26 Tangible Book Value Tangible Book Value (TBV) Per Share Walk 1 All Other includes items such as, but not limited to, changes related to stock grants and share count $0.04 reported EPS 1 • $0.34 increase in OCI primarily from mark-to-market on long-dated interest rate swaps ̶ As of 1/24/21, the ma
Slide 27: Capital Position
27 Capital Position 7.83% 9.58% 12.36% 13.57% 7.73% 8.44% 11.06% 12.28% 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 it al 4Q20 3Q20 ‘Adequate’ + Buffer Min Key Capital Ratios Bankwell’s ca
Slide 28: Bankwell History & Overview
Bankwell History & Overview
Slide 29: Company Overview
29 + 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 • Connecticut-based $2 billion bank, with focus on CRE and C&I lending • 11 existing branches in Fairfield & New Haven Counties (as of 1/1/21) • BWFG has $136 million dep
Slide 30: Financial Snapshot
30 Financial Snapshot Dollars in thousands, except per share data 2016 2017 2018 2019 2020 Total assets $1,628,919 $1,796,607 $1,873,665 $1,882,182 $2,253,747 Net loans $1,343,895 $1,520,879 $1,586,775 $1,588,840 $1,601,672 Loan-to-deposit ratio 105.6% 110.1% 106.4% 107.1% 87.9% Efficiency ratio2 56
Slide 31: Experienced Leadership Team
31 Experienced Leadership Team Name Years Experience Selected Professional Biography Christopher Gruseke President & CEO (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 New Canaan. He brings more
Slide 32: Thank You & Questions
x Thank You & Questions
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