Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record
GAAP net income for the fourth quarter and year ended 2021. For the
fourth quarter of 2021 net income totaled $7.8 million, or $0.99
per share, versus $0.3 million, or $0.04 per share, for the same
period in 2020. For the year ended 2021 net income totaled $26.6
million, or $3.36 per share, versus $5.9 million, or $0.75 per
share, for the same period in 2020.
The Company's Board of Directors declared a $0.20 per share cash
dividend, payable February 24, 2022 to shareholders of record on
February 14, 2022, representing an 11% increase when compared to
the prior quarter’s dividend.
We recommend reading this earnings release in conjunction with
the Fourth Quarter 2021 Investor Presentation, located at
http://investor.mybankwell.com/Presentations and included as an
exhibit to our January 26, 2022 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R.
Gruseke:
“We are proud to announce record performance for the fourth
quarter and full year of 2021. In addition to generating a Return
on Average Equity of 14% for the year, the Company made significant
strides in all aspects of its business. While originating
approximately $800 million in loans, we also continued to diversify
our asset base. Core deposits grew by 31.7%, year over year, and
non-interest bearing deposits increased by 47.6% over the same
period.
“I offer my heartfelt gratitude and sincere congratulations to
every member of our team. Their hard work and commitment, during a
time of historic disruption, has made these impressive achievements
possible.
“We enter the year ahead with confidence and momentum and look
forward to another outstanding year. Loan and deposit pipelines
remain strong. Inclusive of four expected rate hikes by the Federal
Reserve, we expect net interest income to grow by 12-14% in
2022.”
Fourth Quarter 2021 Highlights:
- Return on average assets was 1.32% and return on average equity
was 15.44% for the quarter ended December 31, 2021.
- The net interest margin improved to 3.43% for the quarter ended
December 31, 2021 and 3.17% for the year ended December 31,
2021.
- Total gross loans were $1.9 billion, growing $303.9 million
excluding Paycheck Protection Program ("PPP") loans, or 19.1%,
compared to December 31, 2020. On a quarterly basis, loans grew
$71.7 million, or 3.9% compared to September 30, 2021.
- Gains from loan sales totaled $0.4 million and $2.7 million for
the quarter and year ended December 31, 2021, respectively.
- Total deposits were $2.1 billion compared to $1.8 billion at
December 31, 2020.
- Noninterest bearing deposits increased by $128.7 million, or
47.6% compared to December 31, 2020.
- The percentage of noninterest bearing deposits to total
deposits increased to 18.8% compared to 14.8% at December 31,
2020.
- The cost of interest bearing deposits decreased approximately
35 basis points to 0.54% for the quarter ended December 31, 2021
when compared to the quarter ended December 31, 2020.
- Investment securities totaled $108.4 million and represent 4.4%
of total assets.
- Tangible book value per share rose to $26.19 compared to $22.43
at December 31, 2020.
- Shares issued and outstanding were 7,803,166, reflecting
repurchases of 59,338 shares of common stock at a weighted average
price of $31.29 during the quarter ended December 31, 2021.
- The Company issued a 3.25% fixed-to-floating rate subordinated
note due 2031 in the principal amount of $35.0 million. Part of the
proceeds were used to repay $15.5 million of previously issued
subordinated notes.
Earnings and Performance
Revenues (net interest income plus noninterest income) for the
quarter ended December 31, 2021 were $19.8 million, versus $14.9
million for the quarter ended December 31, 2020. Revenues for the
year ended December 31, 2021 were $73.5 million, versus $57.7
million for the year ended December 31, 2020. The increase was
primarily attributable to lower interest expense on deposits, an
increase in interest and fees on loans due to loan growth and from
the resumption of loan sales.
Net income for the quarter ended December 31, 2021 was $7.8
million, versus $0.3 million for the quarter ended December 31,
2020. Net income for the year ended December 31, 2021 was $26.6
million, versus $5.9 million for the year ended December 31, 2020.
The increase in net income was primarily impacted by the
aforementioned increases in revenues, a decrease in noninterest
expense, and a decrease in the provision for loan losses resulting
from lower loan loss reserves in 2021 when compared to 2020, which
saw a large increase in reserves due to the COVID-19 Pandemic.
Basic and diluted earnings per share were $1.00 and $0.99,
respectively, for the quarter ended December 31, 2021 compared to
basic and diluted earnings per share of $0.04 each for the quarter
ended December 31, 2020. Basic and diluted earnings per share were
$3.38 and $3.36, respectively, for the year ended December 31, 2021
compared to basic and diluted earnings per share of $0.75 each for
the year ended December 31, 2020.
The net interest margin (fully taxable equivalent basis) for the
quarters ended December 31, 2021 and December 31, 2020 was 3.43%
and 2.66%, respectively. The net interest margin (fully taxable
equivalent basis) for the years ended December 31, 2021 and
December 31, 2020 was 3.17% and 2.77%, respectively. The increase
in the net interest margin was due to lower interest expense from a
decrease in rates on interest bearing deposits and a greater
proportion of noninterest bearing deposits.
Financial Condition
Assets totaled $2.46 billion at December 31, 2021, compared to
assets of $2.25 billion at December 31, 2020. The increase in
assets was primarily due to loan growth, partially offset by a
decrease in excess liquidity. Gross loans totaled $1.9 billion at
December 31, 2021, an increase of $269.3 million compared to
December 31, 2020. Excluding PPP loans, gross loans increased by
$303.9 million at December 31, 2021 when compared to December 31,
2020. Deposits totaled $2.1 billion at December 31, 2021, compared
to deposits of $1.8 billion at December 31, 2020.
Capital
Shareholders’ equity totaled $202.0 million as of December 31,
2021, an increase of $25.4 million compared to December 31, 2020,
primarily a result of (i) net income of $26.6 million for the year
ended December 31, 2021 and (ii) a $7.0 million favorable impact to
accumulated other comprehensive income driven by fair value marks
related to hedge positions involving interest rate swaps. The
Company's interest rate swaps are 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.
The increase in Shareholders’ equity was partially offset by
dividends paid of $5.0 million and common stock repurchases of $5.1
million.
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, tangible book value per
share, and return on average tangible common equity are useful to
evaluate the relative strength of the Company's performance and
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)
December 31,
2021
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
ASSETS
Cash and due from banks
$
291,598
$
169,417
$
297,851
$
351,194
$
405,340
Federal funds sold
53,084
8,097
4,036
10,811
4,258
Cash and cash equivalents
344,682
177,514
301,887
362,005
409,598
Investment securities
Marketable equity securities, at fair
value
2,168
2,185
2,192
2,178
2,207
Available for sale investment securities,
at fair value
90,198
87,565
90,983
83,218
88,605
Held to maturity investment securities, at
amortized cost
16,043
16,107
16,166
16,225
16,078
Total investment securities
108,409
105,857
109,341
101,621
106,890
Loans receivable (net of allowance for
loan losses of $16,902, $16,803, $16,672, $20,545, and $21,009 at
December 31, 2021, September 30, 2021, June 30, 2021, March 31,
2021, and December 31, 2020, respectively)
1,875,167
1,805,217
1,719,274
1,650,127
1,601,672
Accrued interest receivable
7,512
6,911
6,661
7,306
6,579
Federal Home Loan Bank stock, at cost
2,814
3,632
3,844
6,446
7,860
Premises and equipment, net
25,588
35,118
33,916
33,386
21,762
Bank-owned life insurance
49,174
48,903
48,632
42,881
42,651
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangible assets
—
48
58
67
76
Deferred income taxes, net
7,621
7,718
8,208
8,908
11,300
Other assets
32,708
33,181
35,415
29,131
42,770
Total assets
$
2,456,264
$
2,226,688
$
2,269,825
$
2,244,467
$
2,253,747
LIABILITIES AND SHAREHOLDERS’
EQUITY
Liabilities
Deposits
Noninterest bearing deposits
$
398,956
$
338,705
$
328,473
$
280,947
$
270,235
Interest bearing deposits
1,725,042
1,544,118
1,610,829
1,578,861
1,557,081
Total deposits
2,123,998
1,882,823
1,939,302
1,859,808
1,827,316
Advances from the Federal Home Loan
Bank
50,000
80,000
75,000
125,000
175,000
Subordinated debentures
34,441
15,374
15,366
25,271
25,258
Accrued expenses and other liabilities
45,838
52,314
49,362
46,445
49,571
Total liabilities
2,254,277
2,030,511
2,079,030
2,056,524
2,077,145
Shareholders’ equity
Common stock, no par value
118,148
119,588
120,451
120,398
121,338
Retained earnings
92,400
85,992
80,543
75,418
70,839
Accumulated other comprehensive loss
(8,561
)
(9,403
)
(10,199
)
(7,873
)
(15,575
)
Total shareholders’ equity
201,987
196,177
190,795
187,943
176,602
Total liabilities and shareholders’
equity
$
2,456,264
$
2,226,688
$
2,269,825
$
2,244,467
$
2,253,747
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
(Dollars in thousands, except share
data)
For the Quarter Ended
For the Year Ended
December 31,
2021
September 30,
2021
June 30, 2021
March 31, 2021
December 31,
2020
December 31,
2021
December 31,
2020
Interest and dividend income
Interest and fees on loans
$
21,081
$
19,795
$
19,266
$
17,900
$
18,194
$
78,042
$
73,665
Interest and dividends on securities
722
731
736
769
835
2,958
3,237
Interest on cash and cash equivalents
90
88
90
108
117
376
585
Total interest and dividend income
21,893
20,614
20,092
18,777
19,146
81,376
77,487
Interest expense
Interest expense on deposits
2,198
2,387
2,744
3,114
3,557
10,443
18,180
Interest expense on borrowings
767
503
769
1,008
1,285
3,047
4,472
Total interest expense
2,965
2,890
3,513
4,122
4,842
13,490
22,652
Net interest income
18,928
17,724
16,579
14,655
14,304
67,886
54,835
Provision (credit) for loan
losses
125
134
(20
)
(296
)
709
(57
)
7,605
Net interest income after provision
(credit) for loan losses
18,803
17,590
16,599
14,951
13,595
67,943
47,230
Noninterest income
Gains and fees from sales of loans
441
924
814
513
16
2,692
43
Bank owned life insurance
270
271
251
231
241
1,023
967
Service charges and fees
257
199
217
199
210
872
788
Gain on sale of other real estate owned,
net
—
—
—
—
—
—
19
Other
(143
)
43
158
1,013
154
1,070
1,067
Total noninterest income
825
1,437
1,440
1,956
621
5,657
2,884
Noninterest expense
Salaries and employee benefits
4,806
4,782
3,960
4,769
5,453
18,317
21,355
Occupancy and equipment
2,411
2,615
3,250
2,406
4,516
10,682
10,926
Professional services
628
498
547
587
591
2,260
2,110
Data processing
432
632
833
512
1,658
2,409
3,216
Director fees
335
324
327
317
331
1,303
1,214
FDIC insurance
231
298
300
403
262
1,232
791
Marketing
87
186
140
(9
)
118
404
630
Other
749
1,035
695
653
774
3,132
2,571
Total noninterest expense
9,679
10,370
10,052
9,638
13,703
39,739
42,813
Income before income tax
expense
9,949
8,657
7,987
7,269
513
33,861
7,301
Income tax expense
2,135
1,802
1,759
1,579
177
7,275
1,397
Net income
$
7,814
$
6,855
$
6,228
$
5,690
$
336
$
26,586
$
5,904
Earnings Per Common Share:
Basic
$
1.00
$
0.88
$
0.79
$
0.72
$
0.04
$
3.38
$
0.75
Diluted
$
0.99
$
0.87
$
0.79
$
0.71
$
0.04
$
3.36
$
0.75
Weighted Average Common Shares
Outstanding:
Basic
7,660,307
7,677,822
7,722,481
7,758,540
7,726,926
7,706,407
7,728,328
Diluted
7,726,420
7,738,758
7,768,026
7,800,777
7,728,206
7,761,811
7,748,453
Dividends per common share
$
0.18
$
0.18
$
0.14
$
0.14
$
0.14
$
0.64
$
0.56
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS
(unaudited)
For the Quarter Ended
For the Year Ended
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
December 31, 2021
December 31,
2020
Performance ratios:
Return on average assets(1)
1.32
%
1.22
%
1.11
%
1.02
%
0.06
%
1.17
%
0.28
%
Return on average stockholders'
equity(1)
15.44
%
14.09
%
13.06
%
12.67
%
0.75
%
13.86
%
3.35
%
Return on average tangible common
equity(1)
15.65
%
14.29
%
13.25
%
12.86
%
0.76
%
14.05
%
3.40
%
Net interest margin
3.43
%
3.39
%
3.12
%
2.74
%
2.66
%
3.17
%
2.77
%
Efficiency ratio(2)
48.8
%
54.1
%
55.7
%
58.0
%
91.2
%
53.9
%
73.9
%
Net loan charge-offs as a % of average
loans
—
%
—
%
0.23
%
0.01
%
—
%
0.23
%
0.01
%
Dividend payout ratio(3)
18.18
%
20.69
%
17.72
%
19.72
%
350.00
%
19.05
%
74.67
%
(1)
2020 performance ratios were
negatively impacted by COVID-19 pandemic related loan loss reserves
and $3.9 million in one-time charges related to office
consolidation, contract termination and employee severance costs
recognized in the fourth quarter of 2020.
(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
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Capital ratios:
Total Common Equity Tier 1 Capital to
Risk-Weighted Assets(1)
11.18
%
10.59
%
10.95
%
11.02
%
11.06
%
Total Capital to Risk-Weighted
Assets(1)
12.00
%
11.44
%
11.84
%
12.17
%
12.28
%
Tier I Capital to Risk-Weighted
Assets(1)
11.18
%
10.59
%
10.95
%
11.02
%
11.06
%
Tier I Capital to Average Assets(1)
9.94
%
9.61
%
9.19
%
8.82
%
8.44
%
Tangible common equity to tangible
assets
8.13
%
8.70
%
8.30
%
8.27
%
7.73
%
Tangible book value per common
share(2)
$
26.19
$
25.25
$
24.40
$
23.99
$
22.43
(1)
Represents Bank ratios. Current
period capital ratios are preliminary subject to finalization of
the FDIC Call Report.
(2)
Excludes unvested restricted
shares of 190,359, 178,797, 184,548, 186,485, and 163,369 as of
December 31, 2021, September 30, 2021, June 30, 2021, March 31,
2021, and December 31, 2020, respectively.
BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
For the Quarter Ended
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Allowance for loan losses:
Balance at beginning of period
$
16,803
$
16,672
$
20,545
$
21,009
$
20,372
Charge-offs:
Commercial real estate
—
—
(3,814
)
(163
)
—
Commercial business
(26
)
—
(51
)
—
(75
)
Consumer
(5
)
(15
)
(4
)
(14
)
(11
)
Total charge-offs
(31
)
(15
)
(3,869
)
(177
)
(86
)
Recoveries:
Commercial business
2
11
16
—
14
Consumer
3
1
—
9
—
Total recoveries
5
12
16
9
14
Net loan charge-offs
(26
)
(3
)
(3,853
)
(168
)
(72
)
Provision (credit) for loan losses
125
134
(20
)
(296
)
709
Balance at end of period
$
16,902
$
16,803
$
16,672
$
20,545
$
21,009
As of
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Asset quality:
Nonaccrual loans
Residential real estate
$
2,380
$
1,849
$
1,160
$
1,289
$
1,492
Commercial real estate
3,482
16,314
15,392
19,277
21,093
Commercial business
1,728
1,754
1,780
1,803
1,834
Construction
8,997
8,997
8,997
8,997
8,997
Total nonaccrual loans
16,587
28,914
27,329
31,366
33,416
Other real estate owned
—
—
—
—
—
Total nonperforming assets
$
16,587
$
28,914
$
27,329
$
31,366
$
33,416
Nonperforming loans as a % of total
loans
0.88
%
1.58
%
1.57
%
1.87
%
2.06
%
Nonperforming assets as a % of total
assets
0.68
%
1.30
%
1.20
%
1.40
%
1.48
%
Allowance for loan losses as a % of total
loans
0.89
%
0.92
%
0.96
%
1.23
%
1.29
%
Allowance for loan losses as a % of
nonperforming loans
101.90
%
58.11
%
61.00
%
65.50
%
62.87
%
Total nonaccrual loans declined $16.8 million to $16.6 million
as of December 31, 2021 when compared to December 31, 2020,
primarily a result of $11.0 million of previously reported
nonaccrual loans becoming performing loans during the fourth
quarter of 2021. Nonperforming assets as a percentage of total
assets was 0.68% at December 31, 2021, down from 1.48% at December
31, 2020. The allowance for loan losses at December 31, 2021 was
$16.9 million, representing 0.89% of total loans.
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO
(unaudited)
(Dollars in thousands)
Period End Loan Composition
December 31, 2021
September 30, 2021
December 31, 2020
Current QTD % Change
YTD % Change
Residential Real Estate
$
79,987
$
90,110
$
113,557
(11.2
) %
(29.6
) %
Commercial Real Estate(1)
1,356,709
1,337,896
1,148,383
1.4
18.1
Construction
98,341
94,665
87,007
3.9
13.0
Total Real Estate Loans
1,535,037
1,522,671
1,348,947
0.8
13.8
Commercial Business(2)
350,975
292,825
276,601
19.9
26.9
Consumer
8,869
9,050
79
(2.0
)
N/M(3)
Total Loans
$
1,894,881
$
1,824,546
$
1,625,627
3.9
%
16.6
%
(1)
Includes owner occupied
commercial real estate.
(2)
Includes $0.2 million, $1.6
million, and $34.8 million of PPP loans at December 31, 2021,
September 30, 2021 and December 31, 2020, respectively.
(3)
Metric not meaningful.
Gross loans totaled $1.9 billion at December 31, 2021, an
increase of $269.3 million compared to December 31, 2020. Excluding
PPP loans, gross loans increased by $303.9 million, or 19.1%, at
December 31, 2021 when compared to December 31, 2020.
Period End Deposit Composition
December 31, 2021
September 30, 2021
December 31, 2020
Current QTD % Change
YTD % Change
Noninterest bearing demand
$
398,956
$
338,705
$
270,235
17.8
%
47.6
%
NOW
119,479
103,180
101,737
15.8
17.4
Money Market
954,674
835,210
669,364
14.3
42.6
Savings
193,631
188,581
158,750
2.7
22.0
Time
457,258
417,147
627,230
9.6
(27.1
)
Total Deposits
$
2,123,998
$
1,882,823
$
1,827,316
12.8
%
16.2
%
Total deposits were $2.1 billion at December 31, 2021, compared
to $1.8 billion at December 31, 2020, an increase of $296.7
million, or 16.2%. Noninterest bearing deposits grew by $128.7
million, or 47.6%, as of December 31, 2021, compared to December
31, 2020.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest income
December 31, 2021
September 30, 2021
December 31, 2020
Dec 21 vs. Sep 21 %
Change
Dec 21 vs. Dec 20 %
Change
Gains and fees from sales of loans
$
441
$
924
$
16
(52.3
) %
2,656.3
%
Bank owned life insurance
270
271
241
(0.4
)
12.0
Service charges and fees
257
199
210
29.1
22.4
Other
(143
)
43
154
(432.6
)
(192.9
)
Total noninterest income
$
825
$
1,437
$
621
(42.6
) %
32.9
%
For the Year Ended
Noninterest income
December 31, 2021
December 31, 2020
% Change
Gains and fees from sales of loans
$
2,692
$
43
6,160.5
%
Bank owned life insurance
1,023
967
5.8
Service charges and fees
872
788
10.7
Gain on sale of other real estate owned,
net
—
19
(100.0
)
Other
1,070
1,067
0.3
Total noninterest income
$
5,657
$
2,884
96.2
%
Noninterest income increased by $0.2 million to $0.8 million for
the quarter ended December 31, 2021 compared to the quarter ended
December 31, 2020. Noninterest income increased by $2.8 million to
$5.7 million for the year ended December 31, 2021 compared to the
year ended December 31, 2020.
The increase in noninterest income was driven by resumed loan
sales, totaling $0.4 million and $2.7 million for the quarter and
year ended December 31, 2021, respectively. The increase for the
year was also impacted by a one-time federal payroll tax credit for
COVID-19 of $0.9 million, partially offset by a $0.2 million loss
on the sale of the Company's former headquarters building. In
addition, in 2020 the Company recognized a $0.4 million benefit of
non-recurring interest rate swap fees.
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest expense
December 31, 2021
September 30, 2021
December 31, 2020
Dec 21 vs. Sep 21 %
Change
Dec 21 vs. Dec 20 %
Change
Salaries and employee benefits
$
4,806
$
4,782
$
5,453
0.5
%
(11.9
) %
Occupancy and equipment
2,411
2,615
4,516
(7.8
)
(46.6
)
Professional services
628
498
591
26.1
6.3
Data processing
432
632
1,658
(31.6
)
(73.9
)
Director fees
335
324
331
3.4
1.2
FDIC insurance
231
298
262
(22.5
)
(11.8
)
Marketing
87
186
118
(53.2
)
(26.3
)
Other
749
1,035
774
(27.6
)
(3.2
)
Total noninterest expense
$
9,679
$
10,370
$
13,703
(6.7
) %
(29.4
) %
For the Year Ended
Noninterest expense
December 31, 2021
December 31, 2020
% Change
Salaries and employee benefits
$
18,317
$
21,355
(14.2
) %
Occupancy and equipment
10,682
10,926
(2.2
)
Data processing
2,409
3,216
(25.1
)
Professional services
2,260
2,110
7.1
Director fees
1,303
1,214
7.3
FDIC insurance
1,232
791
55.8
Marketing
404
630
(35.9
)
Other
3,132
2,571
21.8
Total noninterest expense
$
39,739
$
42,813
(7.2
) %
Noninterest expense decreased by $4.0 million to $9.7 million
for the quarter ended December 31, 2021 compared to the quarter
ended December 31, 2020. The decrease in noninterest expense was
primarily driven by a decrease in salaries and employee benefits
expense, occupancy and equipment expense and data processing
expense.
Noninterest expense decreased by $3.1 million to $39.7 million
for the year ended December 31, 2021 compared to the year ended
December 31, 2020. The decrease in noninterest expense was
primarily driven by a decrease in salaries and employee benefits
expense and data processing expense.
Salaries and employee benefits expense totaled $4.8 million for
the quarter ended December 31, 2021, a decrease of $0.6 million
when compared to the same period in 2020. Salaries and employee
benefits expense totaled $18.3 million for the year ended December
31, 2021, a decrease of $3.0 million when compared to the same
period in 2020. The decrease in salaries and employee benefits
expense was primarily driven by a decrease in full time equivalent
employees as a direct result of the Voluntary Early Retirement
Incentive Plan offered to eligible employees and other employee
actions taken during the fourth quarter of 2020. Average full time
equivalent employees totaled 126 for the year ended December 31,
2021 compared to 146 for the same period in 2020. In addition,
salaries and employee benefits expense also benefited by one-time
deferrals of $0.9 million for the year ended December 31, 2021
related to costs associated with the implementation of a new online
banking and other systems. Salaries and employee benefits were also
favorably impacted as higher loan originations enabled the Bank to
defer a greater amount of expenses.
Occupancy and equipment expense totaled $2.4 million for the
quarter ended December 31, 2021, a decrease of $2.1 million when
compared to the same period in 2020. The decrease in occupancy and
equipment expense was primarily due to costs associated with office
and branch consolidation, recognized during the fourth quarter of
2020.
Data processing expense totaled $0.4 million for the quarter
ended December 31, 2021, a decrease of $1.2 million when compared
to the same period in 2020. Data processing expense totaled $2.4
million for the year ended December 31, 2021, a decrease of $0.8
million when compared to the same period in 2020. The decrease in
data processing expense was primarily driven by a $1.1 million
one-time charge related to early termination fees payable to a
legacy technology vendor recognized during the fourth quarter of
2020.
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
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Total Equity
$
201,987
$
196,177
$
190,795
$
187,943
$
176,602
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
48
58
67
76
Tangible Common Equity
$
199,398
$
193,540
$
188,148
$
185,287
$
173,937
Total Assets
$
2,456,264
$
2,226,688
$
2,269,825
$
2,244,467
$
2,253,747
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
48
58
67
76
Tangible Assets
$
2,453,675
$
2,224,051
$
2,267,178
$
2,241,811
$
2,251,082
Tangible Common Equity to Tangible
Assets
8.13
%
8.70
%
8.30
%
8.27
%
7.73
%
As of
Computation of Tangible Book Value per
Common Share
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
Total shareholders' equity
$
201,987
$
196,177
$
190,795
$
187,943
$
176,602
Less:
Preferred stock
—
—
—
—
—
Common shareholders' equity
$
201,987
$
196,177
$
190,795
$
187,943
$
176,602
Less:
Goodwill
2,589
2,589
2,589
2,589
2,589
Other intangibles
—
48
58
67
76
Tangible common shareholders'
equity
$
199,398
$
193,540
$
188,148
$
185,287
$
173,937
Common shares
7,803,166
7,842,824
7,895,101
7,908,630
7,919,278
Less:
Shares of unvested restricted stock
190,359
178,797
184,548
186,485
163,369
Common shares less unvested restricted
stock
7,612,807
7,664,027
7,710,553
7,722,145
7,755,909
Book value per share
$
26.53
$
25.60
$
24.74
$
24.34
$
22.77
Less:
Effects of intangible assets
$
0.34
$
0.34
$
0.34
$
0.34
$
0.34
Tangible Book Value per Common
Share
$
26.19
$
25.25
$
24.40
$
23.99
$
22.43
BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP
MEASURES (unaudited) - Continued
(Dollars in thousands)
For the Quarter Ended
For the Year Ended
Computation of Efficiency Ratio
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Noninterest expense
$
9,679
$
10,370
$
10,052
$
9,638
$
13,703
$
39,739
$
42,813
Less:
Amortization of intangible assets
48
9
9
9
84
76
138
Other real estate owned expenses
—
—
—
—
—
—
6
Adjusted noninterest expense
$
9,631
$
10,361
$
10,043
$
9,629
$
13,619
$
39,663
$
42,669
Net interest income
$
18,928
$
17,724
$
16,579
$
14,655
$
14,304
$
67,886
$
54,835
Noninterest income
825
1,437
1,440
1,956
621
5,657
2,884
Less:
Net gain on sale of available for sale
securities
—
—
—
—
—
—
—
Gain on sale of other real estate owned,
net
—
—
—
—
—
—
19
Operating revenue
$
19,753
$
19,161
$
18,019
$
16,611
$
14,925
$
73,543
$
57,700
Efficiency ratio
48.8
%
54.1
%
55.7
%
58.0
%
91.2
%
53.9
%
73.9
%
For the Quarter Ended
For the Year Ended
Computation of Return on Average
Tangible Common Equity
December 31, 2021
September 30, 2021
June 30, 2021
March 31, 2021
December 31, 2020
December 31, 2021
December 31, 2020
Net Income Attributable to Common
Shareholders
$
7,814
$
6,855
$
6,228
$
5,690
$
336
$
26,586
$
5,904
Total average shareholders' equity
$
200,752
$
192,993
$
191,224
$
182,058
$
178,439
$
191,808
$
176,489
Less:
Average Goodwill
2,589
2,589
2,589
2,589
2,589
2,589
2,589
Average Other intangibles
45
54
64
73
153
59
180
Average tangible common equity
$
198,118
$
190,350
$
188,571
$
179,396
$
175,697
$
189,160
$
173,720
Annualized Return on Average Tangible
Common Equity
15.65
%
14.29
%
13.25
%
12.86
%
0.76
%
14.05
%
3.40
%
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY
TAX EQUIVALENT BASIS - QTD (unaudited)
(Dollars in thousands)
For the Quarter Ended
December 31, 2021
December 31, 2020
Average Balance
Interest
Yield/ Rate (4)
Average Balance
Interest
Yield/ Rate (4)
Assets:
Cash and Fed funds sold
$
233,196
$
90
0.15
%
$
424,327
$
117
0.11
%
Securities(1)
104,797
756
2.89
105,422
814
3.09
Loans:
Commercial real estate
1,337,147
15,104
4.42
1,096,912
12,753
4.55
Residential real estate
83,763
694
3.31
115,104
1,009
3.51
Construction
95,611
972
3.98
93,909
910
3.79
Commercial business
347,394
4,222
4.75
311,995
3,520
4.41
Consumer
8,904
89
3.97
96
2
7.41
Total loans
1,872,819
21,081
4.40
1,618,016
18,194
4.40
Federal Home Loan Bank stock
2,814
16
2.28
7,859
74
3.75
Total earning assets
2,213,626
$
21,943
3.88
%
2,155,624
$
19,199
3.48
%
Other assets
130,512
123,435
Total assets
$
2,344,138
$
2,279,059
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
114,158
$
51
0.18
%
$
93,126
$
42
0.18
%
Money market
874,352
1,097
0.50
644,685
858
0.53
Savings
190,118
100
0.21
168,307
164
0.39
Time
438,627
950
0.86
686,827
2,493
1.44
Total interest bearing deposits
1,617,255
2,198
0.54
1,592,945
3,557
0.89
Borrowed Money
89,726
767
3.35
200,250
1,285
2.51
Total interest bearing liabilities
1,706,981
$
2,965
0.69
%
1,793,195
$
4,842
1.07
%
Noninterest bearing deposits
383,557
255,843
Other liabilities
52,848
51,582
Total liabilities
2,143,386
2,100,620
Shareholders' equity
200,752
178,439
Total liabilities and shareholders'
equity
$
2,344,138
$
2,279,059
Net interest income(2)
$
18,978
$
14,357
Interest rate spread
3.19
%
2.41
%
Net interest margin(3)
3.43
%
2.66
%
(1)
Average balances and yields for
securities are based on amortized cost.
(2)
The adjustment for securities and
loans taxable equivalency amounted to $50 thousand and $53 thousand
for the quarters ended December 31, 2021 and 2020,
respectively.
(3)
Annualized net interest income as
a percentage of earning assets.
(4)
Yields are calculated using the
contractual day count convention for each respective product
type.
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY
TAX EQUIVALENT BASIS - YTD (unaudited)
(Dollars in thousands)
For the Year Ended
December 31, 2021
December 31, 2020
Average Balance
Interest
Yield/ Rate (3)
Average Balance
Interest
Yield/ Rate (3)
Assets:
Cash and Fed funds sold
$
294,471
$
376
0.13
%
$
261,689
$
585
0.22
%
Securities(1)
103,592
3,071
2.96
98,938
3,103
3.14
Loans:
Commercial real estate
1,225,770
55,995
4.51
1,095,367
51,218
4.60
Residential real estate
99,101
3,363
3.39
129,585
4,645
3.58
Construction
97,163
3,780
3.84
97,230
4,262
4.31
Commercial business
313,422
14,589
4.59
295,662
13,530
4.50
Consumer
7,929
315
3.97
121
10
8.00
Total loans
1,743,385
78,042
4.42
1,617,965
73,665
4.48
Federal Home Loan Bank stock
4,156
88
2.12
7,625
346
4.53
Total earning assets
2,145,604
$
81,577
3.75
%
1,986,217
$
77,699
3.85
%
Other assets
120,955
125,261
Total assets
$
2,266,559
$
2,111,478
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW
$
111,515
$
198
0.18
%
$
80,805
$
141
0.17
%
Money market
804,679
4,042
0.50
516,527
4,071
0.79
Savings
175,629
413
0.23
169,763
1,368
0.81
Time
508,651
5,790
1.14
712,461
12,600
1.77
Total interest bearing deposits
1,600,474
10,443
0.65
1,479,556
18,180
1.23
Borrowed Money
103,919
3,047
2.89
190,463
4,472
2.31
Total interest bearing liabilities
1,704,393
$
13,490
0.79
%
1,670,019
$
22,652
1.36
%
Noninterest bearing deposits
323,648
215,073
Other liabilities
46,710
49,897
Total liabilities
2,074,751
1,934,989
Shareholders' equity
191,808
176,489
Total liabilities and shareholders'
equity
$
2,266,559
$
2,111,478
Net interest income(2)
$
68,087
$
55,047
Interest rate spread
2.96
%
2.49
%
Net interest margin
3.17
%
2.77
%
(1)
Average balances and yields for
securities are based on amortized cost.
(2)
The adjustment for securities and
loans taxable equivalency amounted to $201 thousand and $212
thousand for the years ended December 31, 2021 and 2020,
respectively.
(3)
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/20220126005957/en/
Bankwell Financial Group, Inc. Christopher R. Gruseke, President
and Chief Executive Officer or Penko Ivanov, Executive Vice
President and Chief Financial Officer (203) 652-0166
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