Bankwell Financial Group, Inc. · NASDAQ:BWFG
Bankwell Financial — Q4 2022 Earnings Presentation
34 slides from Bankwell Financial's earnings presentation, Jan 25, 2023
Slide 1: 4Q22 Investor Presentation
BWFG | LISTED | NASDAQ 4Q22 Investor Presentation January 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 • 4Q22 & 2022 Performance • Trends • Credit Quality & ALLL • Loan Portfolio • Capital • Bankwell History & Overview
Slide 4: 4Q22 & 2022 Performance
BWFG | LISTED | NASDAQ 4Q22 & 2022 Performance
Slide 5: 4Q22 Summary
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 4Q22 Summary • Reported Net Income of $8.02 million, or $1.04 earnings per share (EPS) for the quarter, and $37.43 million, or $4.79 earnings per share for the full year ‒ Full year Operating EPS of $4.29 excludes previously reported items of elevated fees ass
Slide 6: 4Q22 & Total Year Results
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 4Q22 & Total Year 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 S
Slide 7: Income Statement and Balance Sheet 4Q22 vs 3Q22
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 4Q22 3Q22 Var1 Total Interest Income $39.6 $29.7 $9.9 Total Interest Expense $12.8 $5.1 $(7.7) Net Interest Income $26.8 $24.6 $2.2 Non-Interest Income $0.5 $0.4 $0.1 Non-Interest Expense $12.5 $11.0 $(1.4) Pre-Tax, Pre-Provision Net Revenue $
Slide 8: Income Statement 2022 vs 2021
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2022 2021 Var1 Total Interest Income $117.9 $81.4 $36.6 Total Interest Expense $23.2 $13.5 $(9.7) Net Interest Income $94.7 $67.9 $26.9 Non-Interest Income2 $3.0 $5.7 $(2.6) Non-Interest Expense $44.4 $39.7 $(4.6) Pre-Tax, Pre-Provision Net Re
Slide 9: Trends
9,6 Bankwell FINANCIAL GROUP Trends BWFG | LISTED | NASDAQ
Slide 10: Performance Trends
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $1.78 $2.21 $2.31 $0.75 $3.36 $4.79 $4.29 2017 2018 2019 2020 2021 2022 Diluted EPS 0.80% 0.94% 0.97% 0.28% 1.17% 1.44% 1.29% 2017 2018 2019 2020 2021 2022 Return on Average Assets 8.93% 10.19% 10.20% 3.35% 13.86% 16.72% 14.98% 2017 2018 20
Slide 11: Net Interest Margin
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin 3.30% 3.18% 3.03% 2.77% 3.17% 3.78% 2017 2018 2019 2020 2021 2022 Net Interest Margin 1.08% 1.42% 1.75% 1.20% 0.67% 0.99% 0.93% 1.30% 1.66% 1.07% 0.54% 0.87% 2017 2018 2019 2020 2021 2022 Cost of Funds / Deposits Cost of Funds Cost of Depo
Slide 12: Loan Trends
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Trends $ 1, 2 0 2 $ 1, 2 12 $ 1, 17 6 $ 1, 16 9 $ 1, 18 2 $ 1, 2 0 0 $ 1, 2 17 $ 1, 2 3 7 $ 1, 2 3 5 $ 1, 2 4 1 $ 1, 2 2 0 $ 1, 3 4 4 $ 1, 4 5 9 $ 4 0 2 $ 4 0 9 $ 4 3 9 $ 4 5 5 $ 4 4 4 $ 4 7 3 $ 5 2 2 $ 5 8 7 $ 6 6 0 $ 7 4 4 $ 8 3 8 $ 9 4 3 $ 1, 2 16 $1,
Slide 13: Loan Yield Trend
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Yield Trend 4.30% 4.34% 4.55% 4.99% 5.56% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% - 500 1,000 1,500 2,000 2,500 3,000 3,500 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Loan Balance Portfolio Loan Yield Loan yields increased 126 bps since December 31, 2021 1 Weighted
Slide 14: Deposit Trends
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings to total assets 16 .2 % 2 7 .0 % 2 0 .8 % 19 .9 % 15 .0 % 14 .1 % 15 .9 % 1
Slide 15: Deposit Trends
15 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends 18.5% 16.2% 12.4% 14.1% 15.9% 1 Average cost on 4Q22 NOW deposits less than 15 basis points; these accounts not sensitive to Fed Funds rate changes $213 $231 $471 $611 $637 $156 $178 $255 $383 $373 $369 $409 $725 $994 $1,010 4Q18 4Q19 4Q20 4Q21
Slide 16: Credit Quality & ALLL
BWFG | LISTED | NASDAQ Credit Quality & ALLL
Slide 17: Credit Quality
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 0.66% 2.06% 0.88% 0.61% 2019 2020 2021 2022 Non Performing Loans / Gross Loans NPLs $10,588 $33,416 $16,587 $16,441 0.35% 0.13% 0.14% 2022 Detail 0.61% SBA-guaranteed portion of NPLs All other NPLs Credit quality remains strong COVID-19 related
Slide 18: Allowance for Loan Loss Walk
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.75% 0.81% 0.04% $4.3 million ($15) thousand 0.03% 3Q22 Asset Growth / Mix Specifics 4Q22 General Specific 4Q22 ALLL Allowance for Loan Loss (“ALLL”) Walk 0.79% 0.84% $18.2 Million $22.4 Million • ALLL coverage of NPLs is 136% • Excluding the COVID-19-relate
Slide 19: Loan Portfolio
BWFG | LISTED | NASDAQ Loan Portfolio
Slide 20: Loan Portfolio Composition
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential 2.09% C&I 19.45% CRE Owner Occupied 26.04% CRE Investor 45.77% Commercial Const. 5.80% Consumer Loans / Other 0.84% • No single relationship represents more than 5% of total loans, as of December 31, 2022 • Increasingly diversified commercial loan
Slide 21: CRE Loan Portfolio
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Total CRE Portfolio = $1,921 million 1 Includes Owner Occupied CRE, does not include Construction CRE Loan Portfolio Retail 22.50% Office 15.95% Residential Care 31.43% MultiFamily 10.19% Industrial Warehouse 9.60% Mixed Use 4.79% Other 3.63% Special Use 1.
Slide 22: Retail and Office Segment Detail
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CT 41% NJ 14% NY 13% All Other 32% 1 Includes Owner Occupied CRE, does not include Construction 2 Comprised primarily of neighborhood and convenience centers, typically characterized by: size up to 125,000 sq. ft.; convenience and service oriented 3 LTVs base
Slide 23: CRE Geography Distribution and Loan to Value
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Geography Distribution 1 Includes Owner Occupied CRE, does not include Construction 2 Based on dollar volume 3 LTVs based on original LTV values, at origination 4 Consists primarily of skilled nursing and/or assisted living facilities 5 Special Use includes C
Slide 24: C&I Loan Portfolio
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Finance 17% Insurance (Primarily Brokers) 29%Health Care & Social Assistance 33% Admin & Support, Waste Mgmt, Remediation Svcs 4% Real Estate and Rental/Leasing 3% Arts, Entertainment & Recreation 3% Manufacturing 3% Retail Trade 2% All Other 6% C&I Loan Port
Slide 25: Commercial Construction Portfolio
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~6% of total loan portfolio (~$155 million) • $157 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of wo
Slide 26: Residential Portfolio
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential Portfolio • $61 million Residential portfolio comprised of: ̶ $56 million residential mortgages, with an average LTV of 67.3%1 and an average size of $483 thousand ̶ $5 million HELOCs • 86% ($48 million) of residential mortgages secured by residen
Slide 27: Capital
BWFG | LISTED | NASDAQ Capital
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 $25.55 $30.51 $4.79 $0.80 $1.07 $0.06 $0.05 2021 Net Income Dividends AOCI Share Buyback Misc 2022 2022 TBV / Share Walk • 19%
Slide 29: Capital Position
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 8.41% 11.31% 11.42% 12.16% 7.26% 9.88% 10.28% 11.07% 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 4Q22 3Q22 ‘Adequat
Slide 30: History & Overview
BWFG | LISTED | NASDAQ History & Overview
Slide 31: Bankwell Core Market
31 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • Third 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 2017 2018 2019 2020 2021 2022 Total assets $1,796,607 $1,873,665 $1,882,182 $2,253,747 $2,456,264 $3,252,449 Net loans $1,520,879 $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,646,384 Loan-to-deposit ratio 110.1% 106.4% 107.1% 87.9% 88.8%
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 — Q4 2022 Earnings Presentation on 6ix