Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q3 2022 Earnings Presentation
34 slides from Bankwell Financial's earnings presentation, Oct 26, 2022
Slide 1: 3Q22 Investor Presentation
BWFG | LISTED | NASDAQ 3Q22 Investor Presentation October 26th, 2022
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 • 3Q22 Performance • Trends • Credit Quality & ALLL • Loan Portfolio • Capital • Bankwell History & Overview
Slide 4: 3Q22 Performance
BWFG | LISTED | NASDAQ 3Q22 Performance
Slide 5: 3Q22 Summary
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 3Q22 Summary • Net income of $9.17 million, or $1.18 earnings per share (EPS) • Operating EPS of $1.08 excludes $1.0 million (~$0.10 EPS) of elevated fees associated with loan prepayments ̶ 3Q22 activity exceeded historical quarterly averages and are not refle
Slide 6: 3Q22 & Year To Date EPS Walk
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $3.75 $3.25 $0.25 $0.16 $0.09 3Q22 YTD Reported EPS Elevated loan prepayments Release of specific reserves Historical loss update to peer group 3Q22 YTD Operating EPS 3Q22 & Year To Date EPS Walk Impact of One-time Items Key Metrics Reported Operating V bps NI
Slide 7: 3Q22 Results
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 3Q22 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 8: Income Statement and Balance Sheet 3Q22 vs 2Q22
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 3Q22 2Q22 Var1 Total Interest Income $29.7 $26.4 $3.3 Total Interest Expense $5.1 $2.5 $(2.5) Net Interest Income $24.6 $23.8 $0.7 Non-Interest Income $0.4 $1.2 $(0.7) Non-Interest Expense $11.0 $10.9 $(0.1) Pre-Tax, Pre-Provision Net Revenue
Slide 9: Year To Date Consolidated Income Statement
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 3Q 2022 3Q 2021 Var1 Total Interest Income $78.4 $59.5 $18.9 Total Interest Expense $10.4 $10.5 $0.1 Net Interest Income $67.9 $49.0 $19.0 Non-Interest Income2 $2.5 $4.8 $(2.3) Non-Interest Expense $31.9 $30.1 $(1.8) Pre-Tax, Pre-Provision Net
Slide 10: Trends
¥,€ Bankwell FINANCIAL GROUP Trends BWFG | LISTED | NASDAQ
Slide 11: Performance Trends
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $1.78 $2.21 $2.31 $0.75 $3.36 $3.75 $3.25 2017 2018 2019 2020 2021 3Q22 YTD Diluted EPS 0.80% 0.94% 0.97% 0.28% 1.17% 1.59% 1.38% 2017 2018 2019 2020 2021 3Q22 YTD Return on Average Assets 8.93% 10.19% 10.20% 3.35% 13.86% 17.94% 15.57% 2017
Slide 12: Net Interest Margin
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin 3.30% 3.18% 3.03% 2.77% 3.17% 3.81% 2017 2018 2019 2020 2021 3Q22 YTD Net Interest Margin 1.08% 1.42% 1.75% 1.20% 0.67% 0.63% 0.93% 1.30% 1.66% 1.07% 0.54% 0.52% 2017 2018 2019 2020 2021 3Q22 YTD Cost of Funds / Deposits Cost of Funds Cost
Slide 13: Deposit Trends
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends 18.5% 16.2% 12.4% 14.1% 15.9% 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings to total assets 3 Average cost on 3Q22 NOW de
Slide 14: Deposit Trends: Core deposits fueling loan growth
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends • 14% CAGR loan growth from year- end 2019 • Supported with core deposit2 growth • Successful Treasury Management efforts continue to strengthen deposit pipeline • Wholesale deposits used to address timing differences between core deposit gener
Slide 15: Loan Trends
15 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Trends $1 ,2 02 $1 ,2 12 $1 ,17 6 $1 ,16 9 $1 ,18 2 $1 ,2 00 $1 ,2 17 $1 ,2 37 $1 ,2 35 $1 ,2 41 $1 ,2 20 $1 ,3 44 $4 02 $4 09 $4 39 $4 55 $4 44 $4 73 $5 22 $5 87 $6 60 $7 44 $8 38 $9 43 $1,604$1,621 $1,615$1,625 $1,626$1,673 $1,738 $1,825 $1,895 $1,985
Slide 16: Credit Quality & ALLL
BWFG | LISTED | NASDAQ Credit Quality & ALLL
Slide 17: Credit Quality
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 0.66% 2.06% 0.88% 0.73% 2019 2020 2021 3Q22 Non Performing Loans / Gross Loans NPLs $10,588 $33,416 $16,587 $16,793 0.41% 0.22% 0.10% 3Q22 Detail 0.73% SBA-guaranteed portion of NPLs All other NPLs Credit quality remains strong COVID-19 related
Slide 18: Allowance for Loan Loss Walk
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.71% 0.75% 0.06% $2.7 million ($0.3 million) 0.04% 2Q22 Asset Growth / Mix Specifics 3Q22 General Specific 3Q22 ALLL Allowance for Loan Loss (“ALLL”) Walk 0.77% 0.79% $15.8 Million $18.2 Million Bankwell is not yet subject to CECL • ALLL coverage of NPLs is
Slide 19: Loan Portfolio
BWFG | LISTED | NASDAQ Loan Portfolio
Slide 20: Loan Portfolio Composition
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • No single relationship represents more than 4% of total loans, as of September 30th, 2022 • Increasingly diversified commercial loan portfolio mix: Total Loan Portfolio = $2,287 million Loan Portfolio Composition Diversifying portfolio, reducing reliance on
Slide 21: CRE Loan Portfolio
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Total CRE Portfolio = $1,648 million 1 Includes Owner Occupied CRE, does not include Construction CRE Loan Portfolio Retail 25.88% Office 17.80% Residential Care 24.40% MultiFamily 11.26% Industrial Warehouse 9.36% Mixed Use 4.98% Other 4.08% Special Use 2.
Slide 22: Retail and Office Segment Detail
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Includes Owner Occupied CRE, does not include Construction 2 Comprised primarily of neighborhood and convenience centers, typically characterized by: size up to 125,000 sq. ft.; convenience and service oriented 3 LTVs based on original LTV values, at origin
Slide 23: Geography Distribution
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Geography Distribution 1 Includes Owner Occupied CRE, does not include Construction 2 Based on dollar volume 3 LTVs based on original LTV values, at origination 4 Consists primarily of skilled nursing and/or assisted living facilities 5 Special Use includes C
Slide 24: C&I Loan Portfolio
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Finance 23% Insurance (Primarily Brokers) 27% Health Care & Social Assistance 30% Real Estate and Rental/Leasing 2% Arts, Entertainment & Recreation 4% Wholesale 3% Retail Trade 3% Manufacturing 2% All Other 6% C&I Loan Portfolio Loans by Industry Type Total
Slide 25: Commercial Construction Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~5% of total loan portfolio (~$117 million) • $134 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of wo
Slide 26: Residential Portfolio
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential Portfolio • $62 million Residential portfolio comprised of: ̶ $57 million residential mortgages, with an average LTV of 67.4%1 and an average size of $486 thousand ̶ $5 million HELOCs • 86% ($49 million) of residential mortgages secured by residen
Slide 27: Capital
BWFG | LISTED | NASDAQ Capital
Slide 28: Tangible Book Value
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Tangible Book Value • AOCI: $0.44 unfavorable change from AFS investment portfolio partially offset by $0.37 favorable change from mark-to-market on long-dated interest rate swaps • Mark-to-market as of October 21st, 2022 : Swaps ~$0.15 incremental TBV, offse
Slide 29: Capital Position
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 9.16% 10.15% 11.10% 11.80% 8.41% 11.31% 11.42% 12.16% 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% TC E Ti er 1 Le ve ra ge Ti er 1 / CE T1 To ta l C ap ita l 3Q22 2Q22 ‘Adequate’ + Buf
Slide 30: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 31: Bankwell's Attractive Core Market
31 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • Third 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 32: Financial Snapshot
32 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2017 2018 2019 2020 2021 3Q22 Total assets $1,796,607 $1,873,665 $1,882,182 $2,253,747 $2,456,264 $2,722,995 Net loans $1,520,879 $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,263,432 Loan-to-deposit ratio 110.1% 106.4% 107.1% 87.9% 88.8%
Slide 33: Management Team
33 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 34: Thank You & Questions
BWFG | LISTED | NASDAQ Thank You & Questions
Bankwell Financial Group — Q3 2022 Earnings Presentation on 6ix