Bankwell Financial Group, Inc. (BWFG) Q4 2025 Earnings Call

Investor webinar replay

Replay transcript excerpt

We appreciate your interest in our performance and this opportunity to discuss our results with you. Our fourth quarter gap net income was $9.1 million, or $1.15 per share, which includes a $1.5 million one-time adjustment to the income tax provision associated with various state tax filings and changes in estimated tax positions. This adjustment relates to both current and prior year tax estimates. Including this one-time adjustment, operating income for the quarter was $10.7 million, or $1.36 per share on an operating basis. A reconciliation of GAAP and operating results is included in our materials, and we encourage you to review both metrics together. Courtney will walk you through these results in more detail in a moment. Pre-provision net revenue return on average assets was 180 basis points for the quarter. an increase of 10 basis points from the prior quarter and a 75 basis point increase over Q4 of 2024. This improvement reflects continued expansion of our net interest margin as well as strong growth in non-interest income driven primarily by our SBA division. We also made further progress in reducing our non-performing asset balances during the quarter and maintain a constructive outlook on credit quality heading into 2026. While our net interest margin has continued to expand this quarter, as we've previously signaled, the pace of that expansion has moderated. This is a result of our intentional increased exposure to floating rate loans. We ended 2025 with floating rate loans comprising 38% of our total loan portfolio, compared to 23% at the end of 24. On the funding side, we've taken advantage of the lower rate environment to reprice $1.2 billion of time deposits this year, and have also reduced rates on key non-maturity interest-bearing deposits. In addi...