Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q3 2019 Earnings Presentation
29 slides from Bankwell Financial's earnings presentation, Oct 31, 2019
Slide 1: Bankwell Financial Group 3Q19 Investor Presentation
Bankwell Financial Group 3Q19 Investor Presentation
Slide 2: Safe Harbor
Safe Harbor This presentation may contain certain forward-looking statements about 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 current facts. They often include word
Slide 3: 3Q19 Highlights
3Q19 Highlights
Slide 4: 3Q19 Highlights
3Q19 Highlights • Reported Net Income of $4.1 million, or $0.52 earnings per share • Improved deposit pricing and mix: • Reduced rates on key Consumer and Business deposit products • Realized growth in non-interest bearing accounts from successful Treasury Management efforts • Reduced reliance on Wh
Slide 5: Funding Cost
Funding Cost Bankwell poised to take advantage of favorable landscape • Fed cut target Fed Funds rates three times in 2019, a total reduction of 75 basis points • Bankwell’s liability-sensitive balance sheet well positioned to capture benefits of reduced short-term rates Potential impact of incremen
Slide 6: Funding Mix
Funding Mix 3Q19 Deposit Mix Wholesale Funding Trends 2 $1.9B 30.00% 1.8 12.2% $1.6B 1.6 25.00% 1.4 1.2 24.9% 1 20.00% 0.8 20.9% 0.6 15.00% 87.8% 0.4 0.2 0 10.00% 2016 3Q19 Non Int Bearing Int Bearing Assets Wholesale Ratio 1 • Core Deposits ended at a record high • Successful asset growth while of
Slide 7: Loan Pricing Trends
Loan Pricing Trends Dollars in millions Total Loan Portfolio $1,800 4.61% 5.00% 4.38% 4.48% 4.64% 4.50% $1,700 $1,605 4.00% $1,600 $1,543 $1,564 3.50% $1,500 3.00% $1,400 $1,366 2.50% 2.00% $1,300 1.50% $1,200 1.00% $1,100 0.50% $1,000 0.00% 2016 2017 2018 3Q19 Gross Loan Balance Portfolio Yield 1 •
Slide 8: Impact of Hedging on Tangible Book Value
Impact of Hedging on Tangible Book Value • Bankwell actively manages interest rate risk related to its funding sources with interest rate swaps • The interest rate swaps are marked to market each quarter, with the unrealized gains or losses recognized in other comprehensive income • In 2019, falling
Slide 9: 3Q19 Performance
3Q19 Performance
Slide 10: 3Q19 Results
3Q19 Results Quarter Year to Date • Net Income $4.1 million $14.7 million Profitability • Return on Average Assets 0.87% 1.05% • Return on Average Equity 9.12% 11.06% • $1.6 billion of gross loans Balance Sheet • $1.5 billion of deposits • $12 million of assets per employee • Dividend of $0.13 per s
Slide 11: 3Q Consolidated Statement of Income
3Q Consolidated Statement of Income 1 Dollars in millions 2019 2018 QoQ Notes Total Interest Income $20.5 $20.5 $0.0 Net Interest Income Total Interest Expense $7.5 $6.3 $1.2 • 2019 Interest Income supported by incremental fees from loan Net Interest Income $13.0 $14.2 $(1.2) prepayments Provision f
Slide 12: 3Q YTD Consolidated Statement of Income
3Q YTD Consolidated Statement of Income 1 Dollars in millions 2019 2018 QoQ Notes Total Interest Income $63.0 $58.5 $4.5 Net Interest Income Total Interest Expense $22.1 $16.7 $5.5 • Higher average earning assets year over year along with Net Interest Income $40.9 $41.9 $(1.0) incremental fees from
Slide 13: 3Q Consolidated Balance Sheet
3Q Consolidated Balance Sheet 1 Dollars in millions 3Q19 4Q18 V Notes Cash & Cash Equivalents $83 $78 $5 All Other Assets Investment Securities $106 $117 $(11) • Change in lease accounting standards Loans Receivable, net $1,549 $1,587 $(38) now requires on balance sheet recognition of All Other Asse
Slide 14: Financial Performance Trends
Financial Performance Trends Net Income Revenue • Deposit cost pressure on NIM $59.0 $60.2 subsiding in 3Q given reductions in Retail deposit $51.8 $46.3 pricing as well as lower $45.1 Wholesale balances $34.7 • 2019 NIM is benefitting from approximately $2.2 million in fees associated with elevated
Slide 15: Loan Trends
Loan Trends Dollars in millions Loan Volume Prepayments $424 Quarter 2017 2018 2019 $400 $402 1Q $24 $7 $53 2Q $25 $33 $71 $321 $307 $306 $308 3Q $11 $17 $27 4Q $29 $62 Total $89 $119 $151 $220 $211 Avg / Qtr $22 $30 $50 $147 • Healthy 2019 originations in a competitive environment • Elevated prepay
Slide 16: Portfolio Metrics
Portfolio Metrics
Slide 17: Financial Snapshot
Financial Snapshot Dollars in thousands, except per share data 2014 2015 2016 20171 2018 3Q19 YTD Total assets $1,099,531 $1,330,372 $1,628,919 $1,796,607 $1,873,665 $1,858,542 Net loans $915,981 $1,129,748 $1,343,895 $1,520,879 $1,586,775 $1,548,988 Loans to deposits 110.7% 109.1% 105.6% 110.1% 106
Slide 18: Loan Portfolio
Loan Portfolio Dollars in millions $1,605 $1,800 $1,543 $1,564 $65 $1,600 $1,366 $153 $1,400 $1,148 $156 $1,200 $930 $1,000 $800 $941 $600 $400 $90 $159 $200 $0 2014 2015 2016 2017 2018 3Q19 Residential Mortgages/Consumer (CAGR -4%) Construction (CAGR 8%) Commercial Mortgage (CAGR 20%) Commercial Mo
Slide 19: Asset Quality
Asset Quality NPAs to Total Assets 0.75% reported 0.53% reported 0.39% 0.38% 0.31% 0.20% 0.38% 0.43% 2014 2015 2016 2017 2018 3Q19 For the respective reporting periods, values above the dotted boxes include the Quarry Loans, the values in the solid boxes exclude the Quarry Loans • 2018 increase of N
Slide 20: Loan Portfolio
Loan Portfolio Consumer Loans / Other 0.66% Commercial Const. Residential 5.75% • Portfolio oversight 9.53% provided by team of 13 skilled credit analysts and portfolio managers, most C&I with > 20 years’ 13.95% experience • Concentration actively managed, with no single relationship representing CR
Slide 21: CRE Loan Portfolio
CRE Loan Portfolio 1 Dollars in millions Special Use Industrial 3.27% Warehouse Retail Composition $ % 9.71% Retail2 $190 59.27% Mixed Use Grocery $73 22.92% 10.58% Retail Pharmacy $30 9.35% 29.23% Gas / Auto Services $14 4.25% Restaurant $13 4.21% MultiFamily 11.71% Total Retail $321 100.00% • Aver
Slide 22: CRE Loan Portfolio Geography Distribution
CRE Loan Portfolio 1 Geography Distribution CRE to Risk Based Capital Ratio GA MS 480% 1.53% 471% 1.59% 465% NC All Other 1.67% 9.28% 440% PA 1.81% NY 12.59% CT 71.53% 2016 2017 2018 3Q19 • Proven track record as CRE Lender with strong risk management practices in place • Continued focus in primary
Slide 23: Deposits
Deposits Dollars in millions $1,502 $1,470 $1,600 $1,398 $1,289 $1,400 $643 $1,200 $1,047 $1,000 $835 $800 $411 $600 $176 $400 $239 $200 $0 2014 2015 2016 2017 2018 3Q19 Checking Savings Money Market Time Deposits 3Q19 Wholesale Ratio down to 20.9% 23
Slide 24: Bankwell Overview
Bankwell Overview
Slide 25: Bankwell's Milestones
Bankwell’s Milestones Named a “ Top 100 Best $1.9 Performing Community Bank of 2016”1 2016 2019 Founded third bank, 5 Year Stamford First Bank, anniversary of a division of The BWFG on Bank of New Canaan $1.1 2018 NASAQ Opened 3 new Holding Company 2010 branches in formed (BNC 2014 Fairfield Financi
Slide 26: Bankwell Profile
Bankwell Profile Company Overview NASDAQ: BWFG • Connecticut-based $1.9 billion bank, with focus on CRE and C&I lending • 12 existing branches in Fairfield & New Haven Counties • Excluding the 3 branches opened in 2Q18, BWFG has $159 million deposits per branch; highest in Fairfield & New Haven Coun
Slide 27: Why Bankwell?
Why Bankwell? • Proven track record of quality loan originations Growth • Tangible Book Value growth of 37% since 2014 IPO • Operates in premiere markets • Strong credit culture; prudent, conservative credit standards Risk • Historically low NPLs / NPAs with low charge-offs Management • Diverse prod
Slide 28: Management Team
Management Team Years Name Experience Selected Professional Biography Christopher Gruseke 25+ • Founding investor of Bankwell’s precursor, Bank of New Canaan, member of BoD and ALCO President & CEO Committee 2009 to 2012 (since 2015) • 20 year Investment Banking career focused on financial instituti
Slide 29: Thank You & Questions
x Thank You & Questions
Bankwell Financial Group — Q3 2019 Earnings Presentation on 6ix