Bankwell Financial Group Reports Operating Results for the First Quarter, Reserve Build and Maintains Quarterly Dividend

About this update from Bankwell Financial Group, Inc.

NEW CANAAN, Conn. --(BUSINESS WIRE)-- Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $1.4 million , or $0.17 per share, for the first quarter of 2020, versus $5.1 million , or $0.65 per share, for the same period in 2019. The decline in net income is largely driven by an increase in the loan loss provision relating to potential exposure to the coronavirus (COVID-19) pandemic. The Company's Board of Directors declared a $0.14 per share cash dividend, payable May 28, 2020 to shareholders of record on May 18, 2020 . Please reference the First Quarter 2020 Investor Presentation located at http://investor.mybankwell.com/Presentations for further details regarding the impact of the COVID-19 pandemic on our operations and financial results. Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke : "While we take this opportunity to announce our quarterly earnings, we are mindful of the COVID-19 plight which is besieging society, leaving no one unaffected. We are thankful for the dedication of health care workers and first responders, as well as the essential workers who are keeping our communities running." "As a result of our first-rate preparedness, all of our non-branch personnel have been working remotely since mid-March with complete effectiveness. I have been inspired by the efforts and dedication of Bankwell’s team as they have worked tirelessly to service our customers and communities. This was particularly true as they worked around the clock to process approximately $60 million in PPP loans for our small businesses so in need of these funds." "The economic road ahead will challenge all businesses, but Bankwell’s strong capital base, excellent credit culture, and amazing people put us on excellent footing to overcome adversity." First Quarter 2020 Highlights: The allowance for loan losses was $16.7 million and represents 1.03% of total loans as of March 31, 2020 , compared to an allowance for loan losses of $13.5 million , representing 0.84% of total loans as of December 31, 2019 . The increase in the allowance for loan losses is primarily attributable to $3.0 million in incremental loan loss reserves recognized in the first quarter of 2020 relating to potential exposure to the COVID-19 pandemic. Reduced rates on approximately $0.5 billion of non-maturity deposit products by an average of approximately 70 basis points during the quarter ended March 31, 2020 . We expect these rate reductions to drive lower deposit costs for the remainder of the year. Tax equivalent net interest margin was 2.98% for the quarter ended March 31, 2020 , representing a 6 basis point increase compared to the quarter ended December 31, 2019 . The Company repurchased 58,499 shares of common stock at an average price of $17.69 per share, during the quarter ended March 31, 2020 . Total deposits were $1.68 billion at March 31, 2020 compared to $1.49 billion at December 31, 2019 , primarily reflecting increases in brokered deposits to increase on-balance sheet liquidity. The loan-to-deposit ratio was 96.1% at March 31, 2020 , reflecting the above-mentioned increase in brokered deposits. Total gross loans were $1.62 billion at March 31, 2020 , and grew by $16.5 million during the quarter. Investment securities totaled $100.9 million and represent 5% of total assets. Total noninterest income was $1.1 million for the quarter ended March 31, 2020 , or 7% of total revenue. The tangible common equity ratio and tangible book value per share, as of March 31, 2020 , were 8.16% and $21.69 , respectively. The tangible book value per share was primarily impacted by a $1.75 mark to market adjustment reflected in other comprehensive income on the Bank's interest rate swaps, which are used for hedging purposes. Earnings and Performance Revenues (net interest income plus noninterest income) for the quarter ended March 31, 2020 were $14.4 million , versus $15.6 million for the quarter ended March 31, 2019 . The decrease in revenues was attributable to a decline in income from loan prepayments during the quarter ended March 31, 2020 when compared to the same period in 2019. The decrease in revenues was partially offset by a decline in interest expense, driven by lower interest rates on deposits when compared to the same period in 2019. Net income for the quarter ended March 31, 2020 was $1.4 million , versus $5.1 million for the quarter ended March 31, 2019 . Basic and diluted earnings per share were each $0.17 for the quarter ended March 31, 2020 compared to basic and diluted earnings per share of $0.65 each for the quarter ended March 31, 2019 . The decrease in net income and earnings per share was largely driven by a $3.0 million , or $0.30 per share, increase in the provision for loan losses, due to the potential exposure as a result of the COVID-19 pandemic, and the absence of approximately $1.0 million , or $0.10 per share, of elevated prepayment fees as compared against the first quarter of 2019. The net interest margin (fully taxable equivalent basis) for the quarters ended March 31, 2020 and December 31, 2019 was 2.98% and 2.92%, respectively. The increase in the net interest margin for the quarter ended March 31, 2020 when compared to the quarter ended December 31, 2019 was due to a decline in interest expense on deposits. The cost of interest bearing deposits declined 10 basis points for the quarter ended March 31, 2020 when compared to the quarter ended December 31, 2019 . Financial Condition Assets totaled $2.1 billion at March 31, 2020 , compared to assets of $1.9 billion at December 31, 2019 . The increase in assets is primarily driven by an increase in cash and cash equivalents in order to maintain a higher level of liquidity during the COVID-19 pandemic. Gross loans totaled $1.62 billion at March 31, 2020 , an increase of $16.5 million compared to December 31, 2019 , reflecting growth in the commercial business loan portfolio. Deposits totaled $1.7 billion at March 31, 2020 , compared to deposits of $1.5 billion at December 31, 2019 . The increase in deposits was a result of an increase in brokered deposits to expand on-balance sheet liquidity. Capital Shareholders’ equity totaled $170.2 million as of March 31, 2020 , a decrease of $12.2 million compared to December 31, 2019 , primarily a result of an $11.8 million unfavorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps, as well as dividends paid of $1.1 million and common stock repurchases of $1.0 million . The decrease was partially offset by net income for the quarter ended March 31, 2020 of $1.4 million . The marks on the interest rate swaps are driven by lower long term market interest rates in 2020 when compared to 2019. The Company's interest rate swaps are primarily used to hedge interest rate risk. The Company's current interest rate swap positions will cause a decrease to other comprehensive income in a falling interest rate environment and an increase in a rising interest rate environment. As of March 31, 2020 , the tangible common equity ratio and tangible book value per share were 8.16% and $21.69 , respectively. About Bankwell Financial Group Bankwell is a commercial bank that serves the banking needs of residents and businesses throughout Fairfield and New Haven Counties, Connecticut . For more information about this press release, interested parties may contact Christopher R. Gruseke , President and Chief Executive Officer or Penko Ivanov , Executive Vice President and Chief Financial Officer of Bankwell Financial Group at (203) 652-0166. For more information, visit www.mybankwell.com . This press release 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 words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include, but are not limited to, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, uncertain impacts of, or additional changes in, monetary, fiscal or tax policy to address the impact of COVID-19, prolonged measures to contain the spread of COVID-19 or premature easing of such containment measures, either of which could further exacerbate the effects on the Company’s business and results of operations, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged. Non-GAAP Financial Measures In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management may evaluate certain non-GAAP financial measures, such as the efficiency ratio. A computation and reconciliation of certain non-GAAP financial measures used for these purposes is contained in the accompanying Reconciliation of GAAP to Non-GAAP Measures tables. We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. For example, the Company believes that the efficiency ratio is useful in the assessment of financial performance, including noninterest expense control. The Company believes that tangible common equity and tangible book value per share are useful to evaluate the relative strength of the Company's capital position. We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure. BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED BALANCE SHEETS (unaudited) (Dollars in thousands) March 31 , 2020 December 31 , 2019 March 31 , 2019 ASSETS Cash and due from banks $ 203,569 $ 78,051 $ 88,827 Federal funds sold 6,427 — 4,764 Cash and cash equivalents 209,996 78,051 93,591 Investment securities Marketable equity securities, at fair value 2,289 2,118 2,049 Available for sale investment securities, at fair value 82,342 82,439 96,423 Held to maturity investment securities, at amortized cost 16,252 16,308 21,364 Total investment securities 100,883 100,865 119,836 Loans receivable (net of allowance for loan losses of $16,686 , $13,509 , and $15,430 at March 31, 2020 , December 31, 2019 , and March 31, 2019 , respectively) 1,602,146 1,588,840 1,578,609 Accrued interest receivable 5,867 5,959 6,534 Federal Home Loan Bank stock, at cost 6,507 7,475 7,475 Premises and equipment, net 27,835 28,522 29,629 Bank-owned life insurance 41,926 41,683 40,925 Goodwill 2,589 2,589 2,589 Other intangible assets 196 214 270 Deferred income taxes, net 10,009 5,788 4,835 Other assets 45,671 22,196 13,465 Total assets $ 2,053,625 $ 1,882,182 $ 1,897,758 LIABILITIES AND SHAREHOLDERS’ EQUITY Liabilities Deposits Noninterest bearing deposits $ 168,448 $ 191,518 $ 161,844 Interest bearing deposits 1,512,684 1,300,385 1,359,521 Total deposits 1,681,132 1,491,903 1,521,365 Advances from the Federal Home Loan Bank 125,000 150,000 150,000 Subordinated debentures 25,220 25,207 25,168 Accrued expenses and other liabilities 52,059 32,675 24,384 Total liabilities 1,883,411 1,699,785 1,720,917 Shareholders’ equity Common stock, no par value 119,953 120,589 120,750 Retained earnings 69,595 69,324 59,247 Accumulated other comprehensive loss (19,334 ) (7,516 ) (3,156 ) Total shareholders’ equity 170,214 182,397 176,841 Total liabilities and shareholders’ equity $ 2,053,625 $ 1,882,182 $ 1,897,758 BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) (Dollars in thousands, except share data) For the Quarter Ended March 31 , 2020 December 31 , 2019 March 31 , 2019 Interest and dividend income Interest and fees on loans $ 18,985 $ 18,648 $ 20,096 Interest and dividends on securities 825 858 997 Interest on cash and cash equivalents 286 427 383 Total interest and dividend income 20,096 19,933 21,476 Interest expense Interest expense on deposits 5,709 5,948 6,100 Interest expense on borrowings 1,101 1,103 1,103 Total interest expense 6,810 7,051 7,203 Net interest income 13,286 12,882 14,273 Provision for loan losses 3,185 310 195 Net interest income after provision for loan losses 10,101 12,572 14,078 Noninterest income Bank owned life insurance 243 250 249 Service charges and fees 217 247 249 Gains and fees from sales of loans — 382 89 Other 612 169 721 Total noninterest income 1,072 1,048 1,308 Noninterest expense Salaries and employee benefits 5,380 5,162 4,836 Occupancy and equipment 1,909 1,928 1,887 Professional services 711 402 590 Data processing 536 499 512 Director fees 295 224 189 Marketing 162 220 193 FDIC insurance 70 — 123 Amortization of intangibles 18 18 19 Other 578 771 626 Total noninterest expense 9,659 9,224 8,975 Income before income tax expense 1,514 4,396 6,411 Income tax expense 151 924 1,331 Net income $ 1,363 $ 3,472 $ 5,080 Earnings Per Common Share: Basic $ 0.17 $ 0.44 $ 0.65 Diluted $ 0.17 $ 0.44 $ 0.65 Weighted Average Common Shares Outstanding: Basic 7,750,135 7,745,227 7,760,460 Diluted 7,778,762 7,773,780 7,776,378 Dividends per common share $ 0.14 $ 0.13 $ 0.13 BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) For the Quarter Ended March 31 , 2020 December 31 , 2019 March 31 , 2019 Performance ratios: Return on average assets(1) 0.29 % 0.73 % 1.10 % Return on average stockholders' equity(1) 3.03 % 7.68 % 11.60 % Return on average tangible common equity(1) 3.07 % 7.80 % 11.80 % Net interest margin 2.98 % 2.92 % 3.19 % Efficiency ratio(2) 67.1 % 66.1 % 57.5 % Net loan charge-offs as a % of average loans — % — % 0.01 % Dividend payout ratio(3) 82.35 % 29.55 % 20.00 % (1) March 31, 2020 performance ratios are negatively impacted by incremental COVID-19 related loan loss reserves totaling approximately $3.0 million . Please refer to the First Quarter 2020 Investor Presentation for more detailed information of the impact of the incremental loan loss reserve related to COVID-19 exposure on the Company’s performance ratios. (2) Efficiency ratio is defined as noninterest expense, less other real estate owned expenses and amortization of intangible assets, divided by our operating revenue, which is equal to net interest income plus noninterest income excluding gains and losses on sales of securities and gains and losses on other real estate owned. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business. (3) The dividend payout ratio is calculated by dividing dividends per share by earnings per share. As of March 31 , 2020 December 31 , 2019 March 31 , 2019 Capital ratios: Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1) 12.14 % 12.53 % 12.00 % Total Capital to Risk-Weighted Assets(1) 13.13 % 13.35 % 12.94 % Tier I Capital to Risk-Weighted Assets(1) 12.14 % 12.53 % 12.00 % Tier I Capital to Average Assets(1) 10.84 % 10.99 % 10.53 % Tangible common equity to tangible assets 8.16 % 9.56 % 9.18 % Tangible book value per common share(2) $ 21.69 $ 23.15 $ 22.38 (1) Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report. (2) Excludes unvested restricted shares of 154,012, 110,975, and 99,061 as of March 31, 2020 , December 31, 2019 , and March 31, 2019 , respectively. BANKWELL FINANCIAL GROUP, INC. ASSET QUALITY (unaudited) (Dollars in thousands) For the Quarter Ended March 31 , 2020 December 31 , 2019 March 31 , 2019 Allowance for loan losses: Balance at beginning of period $ 13,509 $ 13,212 $ 15,462 Charge-offs: Residential real estate — — (233 ) Commercial business (8 ) (13 ) (3 ) Consumer (2 ) (5 ) (2 ) Total charge-offs (10 ) (18 ) (238 ) Recoveries: Commercial business 1 1 10 Consumer 1 4 1 Total recoveries 2 5 11 Net loan charge-offs (8 ) (13 ) (227 ) Provision for loan losses 3,185 310 195 Balance at end of period $ 16,686 $ 13,509 $ 15,430 As of March 31 , 2020 December 31 , 2019 March 31 , 2019 Asset quality: Nonaccrual loans Residential real estate $ 1,532 $ 1,560 $ 3,516 Commercial real estate 5,339 5,222 5,880 Commercial business 3,783 3,806 3,837 Total nonaccrual loans 10,654 10,588 13,233 Other real estate owned — — — Total nonperforming assets $ 10,654 $ 10,588 $ 13,233 Nonperforming loans as a % of total loans 0.66 % 0.66 % 0.83 % Nonperforming assets as a % of total assets 0.52 % 0.56 % 0.70 % Allowance for loan losses as a % of total loans 1.03 % 0.84 % 0.97 % Allowance for loan losses as a % of nonperforming loans 156.62 % 127.59 % 116.60 % Total nonaccrual loans were $10.7 million as of March 31, 2020 , of which $4.6 million is guaranteed by the Small Business Administration (SBA). Nonperforming assets as a percentage of total assets was 0.52% at March 31, 2020 , down from 0.56% at December 31, 2019 . The allowance for loan losses at March 31, 2020 was $16.7 million , representing 1.03% of total loans. The $3.2 million increase in the allowance for loan losses at March 31, 2020 when compared to December 31, 2019 was primarily due to incremental loan loss reserves for potential COVID-19 exposure. BANKWELL FINANCIAL GROUP, INC. LOAN & DEPOSIT PORTFOLIO (unaudited) (Dollars in thousands) Period End Loan Composition March 31 , 2020 December 31 , 2019 % Change Residential Real Estate $ 139,353 $ 147,109 (5.3 )% Commercial Real Estate (1) 1,131,206 1,128,614 0.2 Construction 107,594 98,583 9.1 Total Real Estate Loans 1,378,153 1,374,306 0.3 Commercial Business 242,705 230,028 5.5 Consumer 113 150 (24.7 ) Total Loans $ 1,620,971 $ 1,604,484 1.0 % (1) Includes owner occupied commercial real estate. Period End Deposit Composition March 31 , 2020 December 31 , 2019 % Change Noninterest bearing demand $ 168,448 $ 191,518 (12.0 )% NOW 69,562 70,020 (0.7 ) Money Market 455,634 419,495 8.6 Savings 164,673 183,729 (10.4 ) Time 822,815 627,141 31.2 Total Deposits $ 1,681,132 $ 1,491,903 12.7 % Total deposits were $1.7 billion at March 31, 2020 compared to $1.5 billion at December 31, 2019 , an increase of $0.2 billion or 12.7%. The increase in total deposits was primarily a result of an increase in brokered deposits to expand on-balance sheet liquidity. BANKWELL FINANCIAL GROUP, INC. NONINTEREST INCOME & EXPENSE - QTD (unaudited) (Dollars in thousands) For the Quarter Ended Noninterest income March 31 , 2020 December 31 , 2019 March 31 , 2019 Mar 20 vs. Dec 19 % Change Mar 20 vs. Mar 19 % Change Bank owned life insurance $ 243 $ 250 $ 249 (2.8 )% (2.4 )% Service charges and fees 217 247 249 (12.1 ) (12.9 ) Gains and fees from sales of loans — 382 89 (100.0 ) (100.0 ) Other 612 169 721 262.1 (15.1 ) Total noninterest income $ 1,072 $ 1,048 $ 1,308 2.3 % (18.0 )% Noninterest income decreased by $0.2 million , or 18%, to $1.1 million for the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019 . The decrease in noninterest income was primarily a result of the absence of gains and fees from the sales of loans and a decrease of $0.2 million in income recognized from interest rate swap fees for the quarter ended March 31, 2020 compared to the same period in 2019. For the Quarter Ended Noninterest expense March 31 , 2020 December 31 , 2019 March 31 , 2019 Mar 20 vs. Dec 19 % Change Mar 20 vs. Mar 19 % Change Salaries and employee benefits $ 5,380 $ 5,162 $ 4,836 4.2 % 11.2 % Occupancy and equipment 1,909 1,928 1,887 (1.0 ) 1.2 Professional services 711 402 590 76.9 20.5 Data processing 536 499 512 7.4 4.7 Director fees 295 224 189 31.7 56.1 Marketing 162 220 193 (26.4 ) (16.1 ) FDIC insurance 70 — 123 N/A (43.1 ) Amortization of intangibles 18 18 19 — (5.3 ) Other 578 771 626 (25.0 ) (7.7 ) Total noninterest expense $ 9,659 $ 9,224 $ 8,975 4.7 % 7.6 % Noninterest expense increased by $0.7 million , or 8%, to $9.7 million for the quarter ended March 31, 2020 compared to the quarter ended March 31, 2019 . The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits and professional services. Salaries and employee benefits totaled $5.4 million for the quarter ended March 31, 2020 , an increase of $0.5 million when compared to the same period in 2019. The increase in salaries and employee benefits was primarily driven by an increase in full time equivalent employees. Full time equivalent employees totaled 154 at March 31, 2020 compared to 140 at March 31, 2019 . Professional services totaled $0.7 million for the quarter ended March 31, 2020 , an increase of $0.1 million when compared to the same period in 2019. The increase in professional services was due to one-time consulting and recruiting costs of $0.2 million associated with the transition from our Chief Lending Officer's retirement to the on-boarding of our Chief Banking Officer. BANKWELL FINANCIAL GROUP, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) (Dollars in thousands, except share data) As of Computation of Tangible Common Equity to Tangible Assets March 31 , 2020 December 31 , 2019 March 31 , 2019 Total Equity $ 170,214 $ 182,397 $ 176,841 Less: Goodwill 2,589 2,589 2,589 Other intangibles 196 214 270 Tangible Common Equity $ 167,429 $ 179,594 $ 173,982 Total Assets $ 2,053,625 $ 1,882,182 $ 1,897,758 Less: Goodwill 2,589 2,589 2,589 Other intangibles 196 214 270 Tangible Assets $ 2,050,840 $ 1,879,379 $ 1,894,899 Tangible Common Equity to Tangible Assets 8.16 % 9.56 % 9.18 % As of Computation of Tangible Book Value per Common Share March 31 , 2020 December 31 , 2019 March 31 , 2019 Total shareholders' equity $ 170,214 $ 182,397 $ 176,841 Less: Preferred stock — — — Common shareholders' equity $ 170,214 $ 182,397 $ 176,841 Less: Goodwill 2,589 2,589 2,589 Other intangibles 196 214 270 Tangible common shareholders' equity $ 167,429 $ 179,594 $ 173,982 Common shares 7,871,419 7,868,803 7,873,471 Less: Shares of unvested restricted stock 154,012 110,975 99,061 Common shares less unvested restricted stock 7,717,407 7,757,828 7,774,410 Book value per share $ 22.06 $ 23.51 $ 22.75 Less: Effects of intangible assets $ 0.36 $ 0.36 $ 0.37 Tangible Book Value per Common Share $ 21.69 $ 23.15 $ 22.38 BANKWELL FINANCIAL GROUP, INC. RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued (Dollars in thousands) For the Quarter Ended Computation of Efficiency Ratio March 31 , 2020 December 31 , 2019 March 31 , 2019 Noninterest expense $ 9,659 $ 9,224 $ 8,975 Less: Amortization of intangible assets 18 18 19 Adjusted noninterest expense $ 9,641 $ 9,206 $ 8,956 Net interest income $ 13,286 $ 12,882 $ 14,273 Noninterest income 1,072 1,048 1,308 Operating revenue $ 14,358 $ 13,930 $ 15,581 Efficiency ratio 67.1 % 66.1 % 57.5 % For the Quarter Ended Computation of Return on Average Tangible Common Equity March 31 , 2020 December 31 , 2019 March 31 , 2019 Net Income Attributable to Common Shareholders $ 1,363 $ 3,472 $ 5,080 Total average shareholders' equity $ 181,127 $ 179,312 $ 177,532 Less: Average Goodwill 2,589 2,589 2,589 Average Other intangibles 208 226 283 Average tangible common equity $ 178,330 $ 176,497 $ 174,660 Annualized Return on Average Tangible Common Equity 3.07 % 7.80 % 11.80 % BANKWELL FINANCIAL GROUP, INC. NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited) (Dollars in thousands) For the Quarter Ended March 31, 2020 March 31, 2019 Average Balance Interest Yield/ Rate (5) Average Balance Interest Yield/ Rate (5) Assets: Cash and Fed funds sold $ 73,497 $ 286 1.56 % $ 73,128 $ 383 2.12 % Securities(1) 98,566 775 3.15 117,575 932 3.17 Loans: Commercial real estate 1,108,709 13,024 4.65 1,065,636 12,426 4.66 Residential real estate 143,826 1,357 3.77 176,490 1,703 3.86 Construction(2) 100,437 1,215 4.78 81,136 1,124 5.54 Commercial business 258,848 3,386 5.18 276,744 4,838 6.99 Consumer 156 3 8.37 323 5 6.42 Total loans 1,611,976 18,985 4.66 1,600,329 20,096 5.02 Federal Home Loan Bank stock 7,325 103 5.65 7,587 137 7.30 Total earning assets 1,791,364 $ 20,149 4.45 % 1,798,619 $ 21,548 4.79 % Other assets 111,585 78,903 Total assets $ 1,902,949 $ 1,877,522 Liabilities and shareholders' equity: Interest bearing liabilities: NOW $ 67,925 $ 28 0.17 % $ 58,812 $ 47 0.33 % Money market 438,588 1,492 1.37 473,084 1,981 1.70 Savings 185,478 672 1.46 180,367 769 1.73 Time 640,580 3,517 2.21 627,510 3,303 2.13 Total interest bearing deposits 1,332,571 5,709 1.72 1,339,773 6,100 1.85 Borrowed Money 172,464 1,101 2.53 175,515 1,103 2.51 Total interest bearing liabilities 1,505,035 $ 6,810 1.82 % 1,515,288 $ 7,203 1.93 % Noninterest bearing deposits 179,066 163,558 Other liabilities 37,721 21,144 Total liabilities 1,721,822 1,699,990 Shareholders' equity 181,127 177,532 Total liabilities and shareholders' equity $ 1,902,949 $ 1,877,522 Net interest income(3) $ 13,339 $ 14,345 Interest rate spread 2.63 % 2.86 % Net interest margin(4) 2.98 % 3.19 % (1) Average balances and yields for securities are based on amortized cost. (2) Includes commercial and residential real estate construction. (3) The adjustment for securities and loans taxable equivalency amounted to $53 thousand and $72 thousand for the quarters ended March 31, 2020 and 2019, respectively. (4) Annualized net interest income as a percentage of earning assets. (5) Yields are calculated using the contractual day count convention for each respective product type. View source version on businesswire.com : https://www.businesswire.com/news/home/20200429005939/en/ Christopher R. Gruseke , President and Chief Executive Officer or Penko Ivanov , Executive Vice President and Chief Financial Officer of Bankwell Financial Group (203) 652-0166 Source: Bankwell Financial Group, Inc.

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