Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q3 2023 Earnings Presentation
34 slides from Bankwell Financial's earnings presentation, Oct 25, 2023
Slide 1: 3Q23 Investor Presentation
BWFG | LISTED | NASDAQ 3Q23 Investor Presentation October 25th, 2023
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 • 3Q23 Performance • Deposits & Liquidity • Loans • Credit Quality & Capital • Bankwell History & Overview
Slide 4: 3Q23 Performance
BWFG | LISTED | NASDAQ 3Q23 Performance
Slide 5: 3Q23 Summary
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 3Q23 Summary • 3Q23 Net Income of $9.8 million, or $1.25 earnings per share (“EPS”) • Return on Average Assets (“ROAA”) and Return on Average Equity (“ROAE”) were 1.19% and 15.19%, respectively for the quarter, and 1.16% and 15.16% year-to-date • Pre-tax, Pre-
Slide 6: 3Q23 Results
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 3Q23 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 7: Income Statement and Balance Sheet
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 3Q23 2Q23 Var1 Total Interest Income $48.3 $46.5 $1.8 Total Interest Expense $25.6 $22.5 $(3.1) Net Interest Income $22.7 $24.0 $(1.3) Non-Interest Income $0.8 $1.4 $(0.6) Non-Interest Expense $12.2 $12.7 $0.5 Pre-Tax, Pre-Provision Net Revenu
Slide 8: YTD Consolidated Income Statement
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 3Q 2023 3Q 2022 Var1 Total Interest Income $139.1 $78.4 $60.7 Total Interest Expense $66.8 $10.4 $(56.4) Net Interest Income $72.2 $67.9 $4.3 Non-Interest Income $3.7 $2.5 $1.2 Non-Interest Expense $37.5 $31.9 $(5.6) Pre-Tax, Pre-Provision Net
Slide 9: Performance Trends
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $2.21 $2.31 $0.75 $3.36 $4.79 $3.58 2018 2019 2020 2021 2022 3Q23 YTD Diluted EPS 0.94% 0.97% 0.28% 1.17% 1.44% 1.16% 2018 2019 2020 2021 2022 3Q23 YTD Return on Average Assets 10.19% 10.20% 3.35% 13.86% 16.72% 15.16% 2018 2019 2020 2021 202
Slide 10: Efficiency Trends
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 59.2% 60.2% 73.9% 53.9% 45.4% 49.4%1.93% 1.90% 2.03% 1.75% 1.71% 1.54% 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% 2018 2019 2020 2021 2022 3Q23 YTD Efficiency Ratio Non-interest Expense / Average Asset
Slide 11: Deposits & Liquidity
BWFG | LISTED | NASDAQ Deposits & Liquidity
Slide 12: Deposit Balances
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 16.2% 15.0% 16.7% 36.7% 34.7% 8.4% 6.1% 2.6% 2.7% 4.8% 75.5% 78.9% 80.6% 60.5% 60.5% $1,492 $1,827 $2,124 $2,801 $2,769 4Q19 4Q20 4Q21 4Q22 3Q23 Core Deposits Retail CDs >$250k Brokered Deposits Brokered deposits decreased $75 million since 4Q22; Wholesale ra
Slide 13: Net Interest Margin
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • NIM declining with inverted yield curve: • September 2023 NIM of 2.68% • 9/30/2023 ‘exit rates’ of 6.08% on loans & 3.47% on deposits Net Interest Margin 2.77% 3.17% 3.78% 3.24% 3.15% 3.04% 4.48% 4.42% 5.10% 5.87% 5.96% 6.02% 1.07% 0.54% 0.87% 2.47% 2.73% 2
Slide 14: Liquidity
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ FDIC Insured Deposits 71% Uninsured Deposits 25% FHLB Insured Deposits 4% Liquidity 1 Bank lines, including FHLB & FRB 2 Cash held with right of offset as collateral against loans Ample coverage of uninsured deposits • $2,089 million total insured deposits, i
Slide 15: Deposit Composition
15 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Composition • No digital currency deposits • No single depositor greater than 3% of total deposits • Average account size of $84K1 • Long-term mix shift into Business deposits Deposits by Industry 1 Excluding Brokered deposits 1 Well diversified depos
Slide 16: Loans
9,6 Bankwell FINANCIAL GROUP Loans BWFG | LISTED | NASDAQ
Slide 17: Loan Balances
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Balances Increased reliance on C&I and CRE Owner Occupied Dollars in millions C&I + CRE Owner Occupied / Total Loans 27.3% 34.9% 45.5% 44.3% $981 $976 $1,023 $1,042 $1,046 $1,051 $1,032 $1,147 $1,224 $1,225 $1,215 $1,240 $167 $207 $244 $296 $310 $375 $46
Slide 18: Loan Yields Steadily Increasing
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 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 9-30-2023, an “exit" rate 1 Dollars in millions Loan portfolio yields increased 173 bps since D
Slide 19: Loan Portfolio Composition
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • No single relationship represents more than ~3% of total loans, as of September 30, 2023 • Investor CRE continues to shrink as an overall percentage of the loan portfolio: Total Loan Portfolio = $2,770 million Loan Portfolio Composition Residential 1.8% C&I
Slide 20: CRE Loan Portfolio
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Retail 21.1% Office 10.1% Residential Care 32.3% MultiFamily 11.6% Industrial Warehouse 8.8% Mixed Use 5.6% Medical Office 4.4% Other 4.5% Special Use 1.6% Total CRE Portfolio = $1,956 million 1 Includes Owner Occupied CRE, does not include Construction 2 LTV
Slide 21: CRE Loan Portfolio Geography
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Includes Owner Occupied CRE, does not include Construction 2 Consists primarily of skilled nursing and/or assisted living facilities • Greater geographic diversity attributed to growth in Residential Care2 sector • Continued diversification by following str
Slide 22: C&I Loan Portfolio
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ C&I Loan Portfolio Loans by Industry Type Total C&I Portfolio = $509 million 1 1 Does not Include Owner Occupied CRE • 87% of C&I portfolio has recourse • 93% of Health Care loans have recourse - Primarily consists of working capital lines secured by accounts
Slide 23: Healthcare Portfolio
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Healthcare Portfolio Healthcare Portfolio Composition CRE Skilled Nursing Facility By State • Consists primarily of skilled nursing facilities located across the US • Healthcare lending team has more than 15 years of industry experience • High touch service m
Slide 24: Commercial Construction Portfolio
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~7% of total loan portfolio ($200 million) • $115 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of wor
Slide 25: Credit Quality & Capital
BWFG | LISTED | NASDAQ Credit Quality & Capital
Slide 26: Credit Quality
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality $16,793 $16,441 $14,265 $15,531 $27,957 0.73% 0.61% 0.52% 0.56% 1.01% 0.00% 0.50% 1.00% 1.50% 2.00% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 3Q22 4Q22 1Q23 2Q23 3Q23 NPLs NPL to gross loans Non Performing Loans (“NPL”) Dollars in thous
Slide 27: Credit Quality: Risk Ratings
27 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality Dollars in millions 3Q22 4Q22 1Q23 2Q23 3Q23 Risk Rating Balance % Balance % Balance % Balance % Balance % 1-5 “Pass” $2,242 98.0% $2,632 98.4% $2,714 98.4% $2,710 97.7% $2,694 97.2% 6 “Special Mention” $2 0.1% $1 0.0% $1 0.1% $28 1.0% $22 0.8%
Slide 28: Fully Diluted Tangible Book Value
28 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 • Existing interest rate swaps hedging impact of unrealized losses in AFS Securities portfolio: ‒ AFS Securities $(8.2) millio
Slide 29: Capital Ratios
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Ratios1 9.88% 9.22% 9.41% 9.60% 5% 4Q22 1Q23 2Q23 3Q23 Tier 1 Leverage Ratio Bankwell Bank Well Capitalized 1 Current period ratios are estimates pending FDIC call report filing 2 Consolidated ratio 10.28% 10.17% 10.34% 10.82% CET1 6.5% Tier 1 8% 4.0%
Slide 30: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 31: Attractive core market
31 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • 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 • 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 2018 2019 2020 2021 2022 3Q23 YTD Total assets $1,873,665 $1,882,182 $2,253,747 $2,456,264 $3,252,449 $3,249,776 Net loans $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,646,384 $2,735,242 Loan-to-deposit ratio 106.4% 107.1% 87.9% 88.8% 95.
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 2023 Earnings Presentation on 6ix