Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q4 2018 Earnings Presentation
30 slides from Bankwell Financial's earnings presentation, Jan 30, 2019
Slide 1: Bankwell Financial Group 4Q'18 Investor Presentation
Bankwell Financial Group4Q’18 Investor Presentation
Slide 2: Safe Harbor
Safe Harbor This presentation may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include word
Slide 3: 4Q'18 and 2018 Performance
4Q’18 and 2018 Performance
Slide 4: 4Q'18 Results & Highlights
4Q’18 Results & Highlights Reported Net Income of $3.3 million, or $0.41 earnings per share The $0.41 earnings per share includes the following non recurring items:$(0.32) additional loss recognized on NPA relationship previously disclosed in Q1$0.05 benefit from the reversal of a FIN48 tax reserveQ
Slide 5: Credit Update
Credit Update Bankwell disclosed 2 significant NPAs in 1Q’18, of which NPA #1 was fully paid off in 3Q’18 at no loss to the Bank. The status of NPA #2 will be covered here. NPA #2 Relationship Overview 2018 Events Relationship comprised of two loans, the “Quarry Loans”A $10.0 million real estate loa
Slide 6: 2018 Highlights
2018 Highlights Profitability Growth Stability $17.4 million Net Income0.94% Return on Average Assets 10.19% Return on Average Equity$22.06 Tangible Book Value $1.6 billion of gross loans, 4% growth year over year$1.5 billion of deposits, 7% growth year over year$13 million of assets per FTE 2018 di
Slide 7: 4Q Consolidated Statement of Income
4Q Consolidated Statement of Income 2018 20171 QoQ2Total Interest Income $21.5 $18.7 $2.8Total Interest Expense $7.1 $4.8 $2.3Net Interest Income $14.5 $13.9 $0.6Provision/(Credit) for Loan Losses $2.8 $(0.5) $3.3Net Interest Income after Provision $11.7 $14.4 $(2.7)Non Interest Income $0.6 $1.5 $(0
Slide 8: 2018 Consolidated Statement of Income
2018 Consolidated Statement of Income 2018 20171 YoY2Total Interest Income $80.1 $71.2 $8.9Total Interest Expense $23.7 $16.8 $6.9Net Interest Income $56.3 $54.4 $2.0Provision for Loan Losses $3.4 $1.3 $2.1Net Interest Income after Provision $52.9 $53.0 $(0.1)Non Interest Income $3.9 $4.6 $(0.7)Non
Slide 9: 2018 Consolidated Balance Sheet
2018 Consolidated Balance Sheet 2018 2017 YoY1Cash & Cash Equivalents $78 $71 $7AFS & HTM Securities $117 $114 $3Loans Receivable, net $1,587 $1,521 $66All Other Assets $92 $91 $1Total Assets $1,874 $1,797 $77Total Deposits $1,502 $1,398 $104FHLB Advances & Other Borrowings $185 $224 $(39)Other Liab
Slide 10: Bankwell Overview
Bankwell Overview
Slide 11: Bankwell's Story
Bankwell MILESTONESAssets Bankwell’s Story Bankwell is one of the fastest growing and most profitable community banks in Connecticut. Bankwell was named one of the “Top 100 Best Performing Community Banks of 2016” between $1 billion and $10 billion in assets nationwide based on certain metrics for t
Slide 12: Bankwell Profile
Bankwell Profile $1.87B asset Connecticut-based bank with focus on CRE and C&I lending12 existing branches in Fairfield & New Haven Counties Company Overview NASDAQ: BWFG $162MM deposits per branch, excluding the 3 new branches opened in 2Q; highest in Fairfield & New Haven Counties1Attractive core
Slide 13: Why Bankwell?
Why Bankwell? Outperformed KBW Regional Banking Index by 28% since ‘14 IPO1 1 as of December 31st, 2018
Slide 14: Financial Trends and Portfolio Metrics
Financial Trends and Portfolio Metrics
Slide 15: Financial Snapshot
Financial Snapshot Dollars in thousands, except per share data 2014 2015 2016 2017 2018 Total assets $1,099,531 $1,330,372 $1,628,919 $1,796,607 $1,873,665 Net loans $915,981 $1,129,748 $1,343,895 $1,520,879 $1,586,775 Loans to deposits 110.7% 109.1% 105.6% 110.1% 106.4% Efficiency ratio 68.7% 62.3%
Slide 16: Financial Performance Trends
Financial Performance Trends CAGR 40% 1 4Q’17 EPS reduced by $0.26 due to the impact of the Tax Cut and Jobs Act passed in December 2017 along with several other smaller items; on a “core” basis, 2017 EPS is $2.03, please refer to BWFG’s 4Q’17 Earnings Release for further detail NIM relatively stabl
Slide 17: Loan Pricing Trends
Loan Pricing Trends Total Loan Portfolio 1 Weighted average yield based on active loans as of 12-31-16, 12-31-17 & 12-31-18, respectively Dollars in millions Rates on 2018 originations helped drive total portfolio yield up Current market rates imply further portfolio yield increases for 2019 1
Slide 18: Loan Volume Trends
Loan Volume Trends Dollars in millions Loan Volume 2018 volume includes 1Q originations of $55 million, with $28 million of fundings, reflecting pricing discipline during a period of disproportionate competitionBy 4Q, originations rebounded to $94 million, with $77 million of fundings
Slide 19: Loan Portfolio
Loan Portfolio CAGR 15% $1,543 $1,366 $1,148 $930 Dollars in millions $1,605 2018 originations tempered by elevated prepayments
Slide 20: Loan Portfolio
Loan Portfolio Portfolio oversight provided by team of 15 skilled credit analysts and portfolio managers, most with > 20 years’ experienceConcentration actively managed, with no single relationship representing more than 5.3% of total loan volume at year-end 2018
Slide 21: CRE Loan Portfolio
CRE Loan Portfolio Retail Composition $ % Retail2 $176 56.21% Grocery $80 25.58% Pharmacy $27 8.72% Gas / Auto Services $16 4.96% Restaurant $14 4.54% Total Retail $313 100.00% Average deal size is $2.2MM Office Composition $ % Office (primarily suburban) $216 70.05% Medical $91 29.43% Condo $2 0.52
Slide 22: Geography Distribution
Geography Distribution Continued focus in home base state but maintaining diversification by following strongest customers to growth markets CRE to Risk Based Capital Ratio Proven track record as CRE Lender with strong risk management practices in placeCRE Retail loans have an average LTV of 57% and
Slide 23: Credit Update
Credit Update Bankwell disclosed 2 significant NPAs in 1Q’18, of which NPA #1 was fully paid off in 3Q’18 at no loss to the Bank. The status of NPA #2 will be covered here. NPA #2 Relationship Overview 2018 Events Relationship comprised of two loans, the “Quarry Loans”A $10.0 million real estate loa
Slide 24: Asset Quality excluding Quarry Loans
Asset Quality excluding Quarry Loans NPAs to Total Assets 2018 increase of NPAs primarily attributable to the Quarry LoansNPAs ended 2018 at $14.1 million, down from a high of $23.3 million in 2Q’18$6.9 million of NPAs pertain to the Quarry Loans$2.7 million of the Quarry Loans carries an SBA guaran
Slide 25: Asset Quality
Asset Quality Excluding the Quarry Loans, Bankwell has only 0.73% of all loans rated “Sub-Standard” or belowBankwell has a comprehensive framework supported by strong procedures to ensure appropriate and timely issue identification, including:Centralized, formal early delinquency monitoring practice
Slide 26: Adequacy of Reserves
Adequacy of Reserves At year end, the total allowance for loan loss (“ALLL”) reserve is $15.5 million and represents 0.96% of total loansThe general ALLL reserve provides 132% coverage of NPAs that do not carry a specific reserveBankwell’s ALLL reserve is in line with the 97 basis point average1 res
Slide 27: Deposits
Deposits CAGR 16% $835 $1,047 $1,289 $1,398 Dollars in millions $1,502
Slide 28: Deposit Market Share
Deposit Market Share Deposit Market Share Location 2013 2014 2015 2016 2017 2018 New Canaan 19.77% 22.71% 24.40% 29.59% 31.10% 32.44% Wilton 6.26% 6.87% 7.76% 9.85% 13.81% 15.18% Fairfield 5.95% 7.65% 6.38% 7.58% 9.18% 9.14% Norwalk not applicable 1.44% 1.97% 2.92% 3.62% Stamford 1.99% 2.84% 2.00% 1
Slide 29: Management Team
Management Team Name Years Experience Selected Professional Biography Christopher GrusekePresident & CEO(since 2015) 25+ Founding investor of Bankwell’s precursor, Bank of New Canaan, member of BoD and ALCO Committee 2009 to 201220 year Investment Banking career focused on financial institutions, se
Slide 30: Thank You & Questions
Ke Thank You & Questions
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