Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q2 2023 Earnings Presentation
35 slides from Bankwell Financial's earnings presentation, Jul 26, 2023
Slide 1: 2Q23 Investor Presentation
BWFG | LISTED | NASDAQ 2Q23 Investor Presentation July 26th, 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 • 2Q23 Performance • Deposits & Liquidity • Loans • Credit Quality & Capital • Bankwell History & Overview
Slide 4: 2Q23 Performance
BWFG | LISTED | NASDAQ 2Q23 Performance
Slide 5: 2Q23 Summary
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q23 Summary • Net Income of $7.98 million, or $1.02 earnings per share (“EPS”) • Return on Average Assets (“ROAA”) and Return on Average Equity (“ROAE”) were 0.99% and 12.91%, respectively for the quarter, and 1.14% and 15.15% year-to-date • Pre-tax, Pre-prov
Slide 6: 2Q23 Results
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 2Q23 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 2Q23 vs 1Q23
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2Q23 1Q23 Var1 Total Interest Income $46.5 $44.3 $2.2 Total Interest Expense $22.5 $18.7 $(3.8) Net Interest Income $24.0 $25.5 $(1.5) Non-Interest Income $1.4 $1.5 $(0.1) Non-Interest Expense $12.7 $12.7 $0.0 Pre-Tax, Pre-Provision Net Revenu
Slide 8: YTD Consolidated Income Statement Prior Year
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2Q 2023 2Q 2022 Var1 Total Interest Income $90.8 $48.7 $42.1 Total Interest Expense $41.3 $5.3 $(36.0) Net Interest Income $49.5 $43.3 $6.2 Non-Interest Income $3.0 $2.1 $0.9 Non-Interest Expense $25.3 $20.9 $(4.4) Pre-Tax, Pre-Provision Net R
Slide 9: Performance Trends
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $2.21 $2.31 $0.75 $3.36 $4.79 $2.34 2018 2019 2020 2021 2022 2Q23 YTD Diluted EPS 0.94% 0.97% 0.28% 1.17% 1.44% 1.14% 2018 2019 2020 2021 2022 2Q23 YTD Return on Average Assets 10.19% 10.20% 3.35% 13.86% 16.72% 15.15% 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% 48.3% 1.93% 1.90% 2.03% 1.75% 1.71% 1.58% 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 2Q23 YTD Efficiency Ratio Non-interest Expense / Average Asse
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% 36.7% 34.7% 8.4% 6.1% 2.6% 2.7% 3.9% 4.8% 75.5% 78.9% 80.6% 60.5% 59.4% 60.5% $1,492 $1,827 $2,124 $2,801 $2,798 $2,789 4Q19 4Q20 4Q21 4Q22 1Q23 2Q23 Deposit Balances Core Deposits Retail CDs >$250k Brokered Deposits 2Q23: Non-Brokered
Slide 13: Net Interest Margin
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • NIM declining with inverted yield curve: • 6/30/2023 ‘exit rates’ of 6.04% on loans & 3.09% on deposits Net Interest Margin 3.03% 2.77% 3.17% 3.78% 3.24% 3.15% 4.85% 4.48% 4.42% 5.10% 5.87% 5.96% 1.66% 1.07% 0.54% 0.87% 2.47% 2.73% 0.00% 0.50% 1.00% 1.50% 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 • $2,105 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 $86K1 • Long-term mix shift into Business deposits Consumer 40.3% Professional, Sci & Tech Services 11.5% Real Estate and Rent
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% 45.0% $981 $976 $1,023 $1,042 $1,046 $1,051 $1,032 $1,147 $1,224 $1,225 $1,215 $167 $207 $244 $296 $310 $375 $467 $501
Slide 18: Loan Yields Steadily Increasing
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $1,626 $1,673 $1,738 $1,825 $1,895 $1,985 $2,057 $2,287 $2,675 $2,759 $2,774 4.18% 4.22% 4.23% 4.28% 4.30% 4.34% 4.55% 4.99% 5.56% 5.75% 5.87% 0.10% 1.10% 2.10% 3.10% 4.10% 5.10% - 500 1,000 1,500 2,000 2,500 3,000 3,500 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q2
Slide 19: Loan Portfolio Composition
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • No single relationship represents more than ~3% of total loans, as of June 30, 2023 • Investor CRE continues to shrink as an overall percentage of the loan portfolio: Total Loan Portfolio = $2,774 million Loan Portfolio Composition 60.4% 55.2% 45.8% 43.8% 2
Slide 20: CRE Loan Portfolio
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Total CRE Portfolio = $1,931 million 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs based on original LTV values, at origination 3 Consists primarily of skilled nursing and/or assisted living facilities CRE Loan Portfolio • Portfolio weig
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: CRE Loan Portfolio: Office
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs based on original LTV values and actual amortized loan balance CRE Loan Portfolio: Office 1 Recourse 65.5% Non- Recourse 34.5% GSA 8% Owner Occupied 11% Credit Tenants 7% Geography CT - Fairf
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 = $531 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 24: Healthcare Portfolio
24 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 25: Commercial Construction Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~7% of total loan portfolio ($220 million) • $130 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of wor
Slide 26: Credit Quality & Capital
BWFG | LISTED | NASDAQ Credit Quality & Capital
Slide 27: Credit Quality: NPLs and Allowance for Credit Losses
27 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality $15,285 $16,793 $16,441 $14,265 $15,531 0.74% 0.73% 0.61% 0.52% 0.56% 0.00% 0.50% 1.00% 1.50% 2.00% $0 $5,000 $10,000 $15,000 $20,000 $25,000 2Q22 3Q22 4Q22 1Q23 2Q23 NPLs NPL to gross loans Non Performing Loans (“NPL”) Dollars in thousands NPL
Slide 28: Credit Quality: Risk Ratings
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality Dollars in millions 2Q22 3Q22 4Q22 1Q23 2Q23 Risk Rating Balance % Balance % Balance % Balance % Balance % 1-5 “Pass” $1,994 97.0% $2,242 98.0% $2,632 98.4% $2,714 98.4% $2,710 97.7% 6 “Special Mention” $20 1.0% $2 0.1% $1 0.0% $1 0.1% $28 1.0%
Slide 29: Fully Diluted Tangible Book Value
29 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 $(7.6) millio
Slide 30: Capital Position
30 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 7.38% 9.22% 10.17% 11.16% 7.58% 9.41% 10.34% 11.41% 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% T C E T ie r 1 Le ve ra g e T ie r 1 / C E T 1 T o ta l C a p it a l 2Q23 1Q23 Well Capi
Slide 31: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 32: Bankwell Operates in an Attractive Core Market
32 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 33: Financial Snapshot
33 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2018 2019 2020 2021 2022 2Q23 YTD Total assets $1,873,665 $1,882,182 $2,253,747 $2,456,264 $3,252,449 $3,252,707 Net loans $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,646,384 $2,736,607 Loan-to-deposit ratio 106.4% 107.1% 87.9% 88.8% 95.
Slide 34: Management Team
34 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 35: Thank You & Questions
BWFG | LISTED | NASDAQ Thank You & Questions
Bankwell Financial Group — Q2 2023 Earnings Presentation on 6ix