Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q4 2024 Earnings Presentation
24 slides from Bankwell Financial's earnings presentation, Jan 23, 2025
Slide 1: Fourth Quarter 2024 Investor Presentation
Fourth Quarter 2024 Investor Presentation January 22, 2025
Slide 2: Forward Looking Statement
Forward Looking Statement Important note regarding forward-looking statements: Statements made in this presentation which are not purely historical are forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. This includes any statements regarding management’s
Slide 3: Fourth Quarter 2024 Results
Fourth Quarter 2024 Results Reported net interest margin of 2.60%, down -12 bps LQ driven by lower loan fees & asset mix; 3.72% cost of deposits down -9 bps LQ Credit trends stable, with non-performing assets down $4 million to LQ; material improvement expected in early 2025 Net deposit growth of $9
Slide 4: Fourth Quarter 2024 Financial Summary
Fourth Quarter 2024 Financial Summary • Fully diluted EPS of $0.32 includes $0.29 from charge offs, $0.07 from one-time EPS OREO expenses • PPNR of $7.9 million, or $1.02 per share, declined -12% LQ PPNR • Net interest income of $20.2 million adversely impacted by reduced loan fee income • Non-inter
Slide 5: Fourth Quarter 2024 GAAP Results
Fourth Quarter 2024 GAAP Results Bankwell Financial Group, Inc. ($ in millions, except per share data) Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Net Interest Income $ 20.2 $ 20.7 $ 21.2 $ 21.1 $ 22.2 $ 22.7 $ 24.0 $ 25.5 $ 26.8 Provision for Credit Losses 4.5 6.3 8.2 3.
Slide 6: Maintaining our Strong Balance Sheet
Maintaining our Strong Balance Sheet Dollars in millions 2.3X Liquidity Coverage Abundant Excess Liquidity $1,505 Unencumbered Securities $110 • $2,125 million total insured deposits includes: Unencumbered Cash $307 ‒ $2,008 million FDIC-insured deposits ‒ $117 million deposits secured by FHLB LOCs
Slide 7: Reduced Reliance on Brokered Deposits
Reduced Reliance on Brokered Deposits Dollars in millions Brokered Deposits Peaked in 4Q22 $2,801 $2,737 $2,788 • Brokered deposit balances $705 have fallen $247 million in $1,027 $952 2024, with total deposits stable between approximately $2.7 and $2.8 billion • Notable growth in Bankwell $2,083 Di
Slide 8: Well Positioned Balance Sheet For Lower Rates
Well Positioned Balance Sheet For Lower Rates Dollars in millions • Liability sensitive, with $1.3 billion of time deposits maturing in next twelve months: ‒ $714 million Retail time repricing an average ~22 basis points lower based on current rates; annualized savings of $1.6 million of interest ex
Slide 9: Managing CRE Concentration Lower
Managing CRE Concentration Lower Dollars in millions • No single relationship greater than 4% • Expansion into Residential Care diversifying loan portfolio CRE Investor CRE Owner Occupied C&I $2,675 $2,719 $2,706 500% Construction $77 $87 $118 Residential / Other 2,500 $155 $183 $174 480% CRE Concen
Slide 10: Credit Trends
Credit Trends Dollars in millions 4Q23 1Q24 2Q24 3Q24 4Q24 Risk Rating Balance % Balance % Balance % Balance % Balance % 1-5 “Pass” $2,570 94.5% $2,527 94.3% $2,497 94.0% $2,458 93.7% $2,557 94.5% 6 “Special Mention” $67 2.5% $72 2.7% $71 2.7% $97 3.7% $93 3.4% 7 “Substandard” $76 2.8% $68 2.5% $80
Slide 11: 4Q24 Non-Performing Asset Update
4Q24 Non-Performing Asset Update Dollars in millions Activity During the Quarter • Disposition of $1.7 million C&I loan (pediatric dental practice); $0.7 million charged off • Remaining 4Q24 Non-performing assets comprised of: Loan Segment Balance % Total Assets Additional Update • CRE Multifamily p
Slide 12: CRE Office Portfolio
CRE Office Portfolio1 Dollars in millions Composition Geography $160 million Office exposure 6% of total loan portfolio FL • 41 loans with $3.9 million average balance $2.2 CT - Fairfield County • One $5.5 million non-performing loan GA $48.8 $12.4 CT - All Other ‒ Class A suburban NJ office park $8
Slide 13: Strategic Initiatives Update
Strategic Initiatives Update Continue to grow recently established SBA Lending Division New Chief Technology Officer joined Bankwell in 1Q25 Bankwell Direct (online deposit platform) added $39 million in 4Q Launched enhanced business checking and dedicated Online Banking for small businesses
Slide 14: Financial Outlook
Financial Outlook Stable total assets near-term NIM expansion as short-term rates lower Dedicated to Reduced credit costs in 2025 making a Additional reductions in difference. brokered deposit and CRE concentrations Growing regulatory capital Unchanged focus on efficiency 14
Slide 15: Questions?
Questions? <> Bankwell
Slide 16: Appendix
Appendix Bankwell
Slide 17: Average Deposits & NIM; Recent Trends
Average Deposits & NIM; Recent Trends Dollars in millions Average Interest Bearing Average Non-Interest Bearing IB Deposit Cost Total Deposit Cost NIM $3,000 6.00% $2,781 $2,742 $2,723 $2,692 $2,668 $351 $322 $337 $368 5.50% $303 $2,500 $2,430 $2,386 $2,420 $2,323 $2,365 5.00% $2,000 4.50% 4.28% 4.2
Slide 18: Loan Composition
Loan Composition Total Loan Portfolio = $2,706 million Other Commercial 2.8% Favorable long-term trends in Investor CRE Residential Const. 1.6% 6.4% CRE Investor CRE O/O + C&I C&I 19.1% 27.3% 34.9% 45.5% 44.9% 45.8% CRE Investor 43.4% CRE Owner Occupied 26.8% 60.4% 55.2% 45.8% 45.2% 43.4% 4Q20 4Q21
Slide 19: Favorable Loan Yield Growth
Favorable Loan Yield Growth Dollars in millions 4,000 7.00% Loan portfolio yields increased 191 bps since 2020 December 2024 Yield2 by Vintage 6.09% 75% of balances are 2021-2024 vintages 3,500 5.99% 6.00% 5.56% 7.41% 2024 3,000 5.26% Pre 2021 $2,719 7.40% 5.00% $2,675 $2,706 2023 4.30% 2,500 4.18%
Slide 20: CRE Loan Portfolio
CRE Loan Portfolio 1 Dollars in millions Total CRE Portfolio = $1,899 million By Property Type Loans Maturing or Repricing in 2025 - 20263 Excluding floating rate loans Residential Care 35% Owner Special Use Property Type Investor Occupied Total 2% Other Residential Care $31 $384 $415 4% Medical Off
Slide 21: C&I Loan Portfolio
C&I Loan Portfolio 1 By Industry Type Total Portfolio = $515 million • 98% of C&I portfolio has recourse Health Care & Social • 97% of Healthcare loans have recourse Assistance 36% − Primarily consists of working capital lines Other secured by government accounts receivable 6% Manufacturing 2% Arts,
Slide 22: Combined Healthcare
Combined Healthcare Dollars in millions CRE Skilled Nursing Facility By State IL $830 million combined Healthcare portfolio TN 2% IA 2% All Other AL • Consists primarily of skilled nursing facilities located across 2% 2% 10% the US IN 3% FL • Healthcare lending team has more than 15 years of industr
Slide 23: Bankwell Financial Group (Nasdaq: BWFG)
Bankwell Financial Group (Nasdaq: BWFG) $3.3B $2.7B Total Assets Loans $0.27B $2.8B Equity Deposits Deposits Loans 1.62% ~147 Non-interest Exp / Assets Employees All Other Brokered 11% 25% C&I & Time > CREOO 1 $250k Core CRE Inv 46% 8.19% 9.57% 8% 67% 43% TCE Ratio CET1 Ratio 1 Estimate, pending FRY
Slide 24: “TEA EEREEEGY
“TEA EEREEEGY
Bankwell Financial Group — Q4 2024 Earnings Presentation on 6ix