Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q4 2023 Earnings Presentation
35 slides from Bankwell Financial's earnings presentation, Jan 24, 2024
Slide 1: 4Q23 Investor Presentation
BWFG | LISTED | NASDAQ 4Q23 Investor Presentation January 24th, 2024
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 • 4Q23 & 2023 Performance • Deposits & Liquidity • Loans • Credit Quality & Capital • Bankwell History & Overview
Slide 4: 4Q23 & 2023 Performance
BWFG | LISTED | NASDAQ 4Q23 & 2023 Performance
Slide 5: 2023 Overview
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin (NIM) 2.81% 2.98% Total Risk Based Capital 12.15% Tangible Book Value Per Share $33.39 2023 Overview Net Income $8.5 $36.7 Earnings Per Share (EPS) $1.09 $4.67 Return on Average Assets 1.03% 1.13% Return on Average Equity 12.82% 14.55% Non-
Slide 6: Income Statement 4Q23 vs 3Q23
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 4Q23 3Q23 Var1 Total Interest Income $49.4 $48.3 $1.1 Total Interest Expense $27.1 $25.6 $(1.6) Net Interest Income $22.2 $22.7 $(0.5) Non-Interest Income $1.1 $0.8 $0.3 Non-Interest Expense $12.9 $12.2 $(0.7) Pre-Tax, Pre-Provision Net Revenu
Slide 7: YTD Consolidated Income Statement
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2023 2022 Var1 Total Interest Income $188.4 $117.9 $70.5 Total Interest Expense $94.0 $23.2 $(70.8) Net Interest Income $94.5 $94.7 $(0.2) Non-Interest Income $4.8 $3.0 $1.8 Non-Interest Expense $50.4 $44.4 $(6.0) Pre-Tax, Pre-Provision Net Re
Slide 8: Performance Trends
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $2.31 $0.75 $3.36 $4.79 $4.67 2019 2020 2021 2022 2023 Diluted EPS 0.97% 0.28% 1.17% 1.44% 1.13% 2019 2020 2021 2022 2023 Return on Average Assets 10.20% 3.35% 13.86% 16.72% 14.55% 2019 2020 2021 2022 2023 Return on Average Equity $23.4 $14.
Slide 9: Building Book Value
9 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Building Book Value $21.96 $25.55 $30.51 $33.39 2020 2021 2022 2023 Consistently building book value Fully Diluted Tangible Book Value
Slide 10: Efficiency Trends
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 60.2% 73.9% 53.9% 45.4% 50.8% 1.90% 2.03% 1.75% 1.71% 1.55% 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% 2019 2020 2021 2022 2023 Efficiency Ratio Non-interest Expense / Average Assets 1 A non-GAAP metri
Slide 11: Deposits & Liquidity
BWFG | LISTED | NASDAQ Deposits & Liquidity
Slide 12: Deposit Balances
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Balances 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts, and retail CD under $250k 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings to total assets Dollars in millions 20.6% 19.8
Slide 13: Net Interest Margin
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ • NIM declining with inverted yield curve: • December 2023 NIM of 2.54% • 12/31/2023 ‘exit rates’ of 6.20% on loans & 3.65% on deposits Net Interest Margin 3.03% 2.77% 3.17% 3.78% 2.98% 4.85% 4.48% 4.42% 5.10% 6.10% 1.66% 1.07% 0.54% 0.87% 3.12% 0.00% 0.50% 1
Slide 14: Liquidity and Coverage of Uninsured Deposits
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ FDIC Insured Deposits 71% Uninsured Deposits 25% FHLB SBLOC 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 • $2,056 million total insured depos
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 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 Balance Trends
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Balance Trends Dollars in millions $1,046 $1,051 $1,032 $1,147 $1,224 $1,225 $1,215 $1,240 $1,228 $310 $375 $467 $501 $697 $736 $716 $716 $720 $351 $370 $372 $443 $522 $543 $531 $509 $501 $98 $116 $111 $117 $155 $177 $220 $200 $183 $89 $73 $74 $79 $77 $7
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 12-31-2023, an “exit" rate 1 Dollars in millions Loan portfolio yields increased 169 bps since
Slide 19: Loan Portfolio Composition
19 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential 1.7% C&I 18.4% CRE Owner Occupied 26.5% CRE Investor 45.2% Commercial Const. 6.7% Other 1.5% • No single relationship represents more than ~4% of total loans, as of December 31, 2023 • Investor CRE continues to shrink as an overall percentage of t
Slide 20: CRE Loan Portfolio
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Total CRE Portfolio = $1,947 million 1 Includes Owner Occupied CRE, does not include Construction 2 LTVs based on original LTV values, at origination CRE Loan Portfolio • Portfolio weighted average LTV2 of 64.4% • ~67% of all CRE loan balances have recourse;
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 = $500 million 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 r
Slide 23: CRE Concentration
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CRE Concentration 1 1 Per regulatory definition for CRE Concentration; current period value is an estimate, pending FDIC call report filing $1,604 $1,626 $1,895 $2,675 $2,719 473% 494% 454% 425% 396% 0% 100% 200% 300% 400% 500% 600% $500 $1,000 $1,500 $2,000
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 Multifamily 45% Mixed Use 26% Land 18% Self Storage 8% Retail 3% Commercial Construction Portfolio • Commercial construction loans comprise ~7% of total loan portfolio ($183 million) • $97 million of unfunded commitments, committed construction draws are subj
Slide 26: Credit Quality & Capital
BWFG | LISTED | NASDAQ Credit Quality & Capital
Slide 27: Credit Quality
27 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 4Q22 1Q23 2Q23 3Q23 4Q23 Risk Rating Balance % Balance % Balance % Balance % Balance % 1-5 “Pass” $2,632 98.4% $2,714 98.4% $2,710 97.7% $2,694 97.2% $2,622 96.4% 6 “Special Mention” $1 0.0% $1 0.1% $28 1.0% $22 0.8% $15 0.6% 7 “Substandard” $4
Slide 28: Credit Quality: Allowance for Credit Losses Walk
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality • $5.5 million addition to ACL-Loans in 2023 • 0.03% net charge-offs to average loans in 2023 0.84% 1.03% $22.4 million $27.9 million 0.81% 0.99% 0.03% $5.1 million ($0.9 million) $1.3 million 0.04% 2022 1/1 CECL Asset Growth/ Mix Macroeconomic
Slide 29: 2023 TBV / Share Walk
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ $30.51 $33.39 $4.67 $0.80 $0.19 $0.63 $0.17 2022 Net Income Dividends AOCI CECL 1/1 Misc 2023 Fully Diluted Tangible Book Value 1 $4.9 million 1/1/23 CECL adjustment 2 Misc includes items such as, but not limited to, changes related to stock grants and share
Slide 30: Capital Ratios
30 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Ratios 9.88% 9.22% 9.41% 9.60% 9.81% 5% 4Q22 1Q23 2Q23 3Q23 4Q23 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% 11.15% Tier 1
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 • Connecticut-based $3.2 billion commercial bank • 9 branches in Fairfield & New Haven Counties • $311 million deposits per branch; one of the highest in Fairfield & New Haven Counties1 Bankwell operates in an attractive core market: • 4th most affluent MSA i
Slide 33: Financial Snapshot
33 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2019 2020 2021 2022 2023 Total assets $1,882,182 $2,253,747 $2,456,264 $3,252,449 $3,215,482 Net loans $1,588,840 $1,601,672 $1,875,167 $2,646,384 $2,685,301 Loan-to-deposit ratio 107.1% 87.9% 88.8% 95.2% 98.9% Return on average assets 0.97
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 — Q4 2023 Earnings Presentation on 6ix