Aufrufe: 61
Discussion of Outlook; Bankwell Financial Group Chief Executive Officer, Christopher R. Gruseke:
"We generated outstanding first quarter results while advancing our strategic priorities. Profitability increased during the quarter, reflected in a return on average assets of 1.35%, and the Company grew core deposits by $113 million sequentially. Our SBA division continues to execute measured, profitable growth, with originations this quarter of $34 million, and we have continued to improve our asset and liability mix as floating rate loans now comprise 42% of the loan portfolio.
Results for the quarter include a sequential increase to the Company’s non-interest expense of approximately $1.4 million. This increase reflects the timing of some expense recognition, and we believe current trends support our non-interest expense guidance previously provided of $64 to $65 million for the full year. We also affirm prior guidance regarding Net Interest Income and loan growth for 2026. Due to an improved outlook for SBA gains on sale and other commercial fees, however, we are increasing our guidance for Non-Interest Income to a range of $12 to $13 million.
As we enter the remainder of the year, we are confident in our credit quality and are well positioned to reduce NPAs in the quarters ahead."
Key Points for First Quarter and Bankwell’s Outlook
Core Deposit Growth Funds Loan Growth and Reduces Wholesale Reliance.
Funding Improvements Partially Offset Lower Portfolio Yields in Net Interest Margin.
Advancing Strategic Priorities.
| (1) Wholesale Ratio is a Non-GAAP Financial Measure and is calculated as brokered deposits and FHLB borrowings divided by total assets. Refer to the "Non-GAAP Financial Measures" section of this document for additional detail. |
First Quarter 2026 Financial Highlights and Key Performance Indicators (KPIs):
|
| March 31, |
| December 31, |
| September 30, |
| June 30, |
| March 31, | ||||||||||
| Return on average assets(1)(6) |
| 1.35 |
|
| 1.11 |
|
| 1.24 |
|
| 1.14 |
|
| 0.86 | |||||
| Pre-tax, pre-provision net revenue return on average assets(1)(6) |
| 1.60 |
|
| 1.80 |
|
| 1.70 |
|
| 1.43 |
|
| 1.18 | |||||
| Return on average shareholders' equity(1)(6) |
| 14.88 |
|
| 12.20 |
|
| 13.84 |
|
| 12.98 |
|
| 10.16 | |||||
| Return on average tangible shareholders' equity(1)(6) |
| 15.00 |
|
| 12.31 |
|
| 13.96 |
|
| 13.10 |
|
| 10.25 | |||||
| Net Interest Margin(1)(6)(7) |
| 3.28 |
|
| 3.40 |
|
| 3.34 |
|
| 3.10 |
|
| 2.81 | |||||
| Efficiency Ratio(1)(3) |
| 55.8 |
|
| 50.8 |
|
| 51.4 |
|
| 56.1 |
|
| 59.9 | |||||
| Noninterest expense to average assets(1)(6) |
| 2.03 |
|
| 1.87 |
|
| 1.80 |
|
| 1.83 |
|
| 1.76 | |||||
| Net loan (recoveries) charge-offs as a percentage of average loans(1)(6) |
| 0.01 |
|
| 0.00 |
|
| (0.01 |
|
| 0.00 |
|
| 0.00 | |||||
| Dividend payout(1)(4) |
| 14.18 |
|
| 17.39 |
|
| 15.75 |
|
| 17.39 |
|
| 22.99 | |||||
| Fully diluted tangible book value per common share(1)(2) | 38.79 |
|
| 37.84 |
|
| 36.84 |
|
| 35.65 |
|
| 34.56 |
| |||||
| Total capital to risk-weighted assets(1)(5) |
| 12.99 |
|
| 12.94 |
|
| 13.48 |
|
| 13.28 |
|
| 13.22 | |||||
| Total common equity tier 1 capital to risk-weighted assets(1)(5) |
| 11.96 |
|
| 11.87 |
|
| 12.39 |
|
| 12.20 |
|
| 12.11 | |||||
| Tier I Capital to Average Assets(1)(5) |
| 10.31 |
|
| 10.55 |
|
| 10.71 |
|
| 10.57 |
|
| 10.13 | |||||
| Tangible common equity to tangible assets(1)(2) |
| 9.17 |
|
| 8.90 |
|
| 8.95 |
|
| 8.68 |
|
| 8.57 | |||||
| Earnings per common share - diluted | 1.41 |
|
| 1.15 |
|
| 1.27 |
|
| 1.15 |
|
| 0.87 |
| |||||
| Common shares issued and outstanding |
| 7,973,180 |
|
|
| 7,899,943 |
|
|
| 7,877,443 |
|
|
| 7,873,387 |
|
|
| 7,888,013 |
|
| (1) | Non-GAAP Financial Measure, refer to the "Non-GAAP Financial Measures" section of this document for additional detail. |
| (2) | Refer to the "Reconciliation of GAAP to Non-GAAP Measures" section of this document for additional detail. |
| (3) | 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. |
| (4) | The dividend payout ratio is calculated by dividing dividends per share by earnings per share. |
| (5) | Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report. |
| (6) | Return on average assets is calculated by dividing annualized net income by average assets. Pre-tax, pre-provision net revenue return on average is calculated by dividing PPNR (calculated as set forth in the "Pre-Tax, Pre-Provision Net Revenue (PPNR)" section of this document) by average assets. Return on average shareholders' equity is calculated by dividing annualized net income by average shareholders' equity. Return on average tangible shareholders' equity is calculated by dividing annualized net income by average shareholders' equity less average intangible assets. Net Interest Margin is calculated by dividing average annualized net interest income by average total earning assets. Noninterest expense to average assets is calculated by dividing annualized noninterest expense by average total assets. Net loan charge-offs as a percentage of average loans is calculated by dividing net loan (charge offs) recoveries by average total loans. |
| (7) | Based on a fully tax equivalent basis. |
Pre-Tax, Pre-Provision Net Revenue(1) ("PPNR")
PPNR for the fourth quarter ended March 31, 2026 was $13.3 million, a decrease of 10.2% from $14.9 million recognized for the fourth quarter ended December 31, 2025.
|
| For the Quarter Ended | ||||||||||||||
| (Dollars in thousands) | March 31, |
| December 31, |
| September 30, |
| June 30, |
| March 31, |
| |||||
| Net interest income | 26,886 |
| 26,946 |
| 25,987 |
| 23,936 |
| 22,066 |
| |||||
| Total noninterest income |
| 3,343 |
|
| 3,376 |
|
| 2,495 |
|
| 2,012 |
|
| 1,505 |
|
| Total revenues |
| 30,229 |
|
| 30,322 |
|
| 28,482 |
|
| 25,948 |
|
| 23,571 |
|
| Total noninterest expense |
| 16,889 |
|
| 15,470 |
|
| 14,631 |
|
| 14,546 |
|
| 14,141 |
|
| PPNR | 13,340 |
| 14,852 |
| 13,851 |
| 11,402 |
| 9,430 |
| |||||
| (1) Non-GAAP Financial Measure, refer to the "Non-GAAP Financial Measures" section of this document for additional detail. | |||||||||||||||
Allowance for Credit Losses - Loans ("ACL-Loans")
The ACL-Loans was $29.6 million as of March 31, 2026 compared to $30.7 million as of December 31, 2025. The ACL-Loans as a percentage of total loans was 1.03% as of March 31, 2026 compared to 1.08% as of December 31, 2025. The credit for credit losses - loans was $1.0 million for the quarter ended March 31, 2026.
Total nonperforming loans increased $2.7 million to $19.0 million as of March 31, 2026, when compared to the previous quarter. Nonperforming assets as a percentage of total assets increased to 0.56% at March 31, 2026, compared to the previous quarter's ratio of 0.49%. As of March 31, 2026, the ACL-Loans provided 155.39% coverage of total nonperforming loans.
| BANKWELL FINANCIAL GROUP, INC. ASSET QUALITY (unaudited) (Dollars in thousands) | ||||||||||||||||||
|
| For the Quarter Ended | |||||||||||||||||
|
| March 31, 2026 |
| December 31, 2025 |
| September 30, 2025 |
| June 30, 2025 |
| March 31, 2025 | |||||||||
| ACL-Loans: |
|
|
|
|
|
|
|
|
| |||||||||
| Balance at beginning of period | 30,705 |
|
| 29,984 |
| 29,256 |
|
| 29,485 |
|
| 29,007 |
| |||||
| Charge-offs: |
|
|
|
|
|
|
|
|
| |||||||||
| Residential real estate |
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| — |
|
| Commercial real estate |
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| (67 | |
| Commercial business |
| (148 |
|
| — |
|
| (14 |
|
| (15 |
|
| — |
| |||
| Consumer |
| (73 |
|
| — |
|
| (46 |
|
| (5 |
|
| (33 | ||||
| Construction |
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| — |
|
| Total charge-offs |
| (221 |
|
| — |
|
| (60 |
|
| (20 |
|
| (100 | ||||
| Recoveries: |
|
|
|
|
|
|
|
|
| |||||||||
| Residential real estate |
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| — |
|
| Commercial real estate |
| 5 |
|
|
| 7 |
|
| 272 |
|
|
| — |
|
|
| — |
|
| Commercial business |
| 15 |
|
|
| 23 |
|
| 92 |
|
|
| 112 |
|
|
| 4 |
|
| Consumer |
| 33 |
|
|
| 10 |
|
| 4 |
|
|
| 10 |
|
|
| 36 |
|
| Construction |
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| — |
|
| Total recoveries |
| 53 |
|
|
| 40 |
|
| 368 |
|
|
| 122 |
|
|
| 40 |
|
| Net loan recoveries (charge-offs) |
| (168 |
|
| 40 |
|
| 308 |
|
|
| 102 |
|
|
| (60 | ||
| (Credit) provision for credit losses - loans |
| (957 |
|
| 681 |
|
| 420 |
|
|
| (331 |
|
| 538 |
| ||
| Balance at end of period | 29,580 |
|
| 30,705 |
| 29,984 |
|
| 29,256 |
|
| 29,485 |
| |||||
|
| As of | ||||||||||||||||||
|
| March 31, 2026 |
| December 31, 2025 |
| September 30, 2025 |
| June 30, 2025 |
| March 31, 2025 | ||||||||||
| Asset quality: |
|
|
|
|
|
|
|
|
| ||||||||||
| Nonaccrual loans |
|
|
|
|
|
|
|
|
| ||||||||||
| Residential real estate | 544 |
|
| 557 |
|
| 570 |
|
| 617 |
|
| 811 |
| |||||
| Commercial real estate |
| 17,112 |
|
|
| 14,445 |
|
|
| 14,667 |
|
|
| 16,387 |
|
|
| 17,946 |
|
| Commercial business |
| 1,380 |
|
|
| 1,302 |
|
|
| 1,729 |
|
|
| 6,871 |
|
|
| 7,626 |
|
| Construction |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
| Consumer |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
| Total nonaccrual loans |
| 19,036 |
|
|
| 16,304 |
|
|
| 16,966 |
|
|
| 23,875 |
|
|
| 26,383 |
|
| Other real estate owned |
| — |
|
|
| — |
|
|
| 1,284 |
|
|
| 1,284 |
|
|
| — |
|
| Total nonperforming assets | 19,036 |
|
| 16,304 |
|
| 18,250 |
|
| 25,159 |
|
| 26,383 |
| |||||
|
|
|
|
|
|
|
|
|
|
| ||||||||||
| Nonperforming loans as a % of total loans |
| 0.66 |
|
| 0.57 |
|
| 0.62 |
|
| 0.89 |
|
| 1.00 | |||||
| Nonperforming assets as a % of total assets |
| 0.56 |
|
| 0.49 |
|
| 0.56 |
|
| 0.78 |
|
| 0.83 | |||||
| ACL-loans as a % of total loans |
| 1.03 |
|
| 1.08 |
|
| 1.10 |
|
| 1.10 |
|
| 1.11 | |||||
| ACL-loans as a % of nonperforming loans |
| 155.39 |
|
| 188.33 |
|
| 176.73 |
|
| 122.54 |
|
| 111.76 | |||||
| Total past due loans to total loans |
| 0.62 |
|
| 0.31 |
|
| 0.76 |
|
| 0.91 |
|
| 1.08 | |||||
Financial Condition & Capital
Assets totaled $3.4 billion at March 31, 2026, an increase of $14.0 million, or 0.4% compared to December 31, 2025. Gross loans totaled $2.9 billion at March 31, 2026, an increase of $26.5 million, or 0.9% compared to December 31, 2025. Deposits totaled $2.9 billion at March 31, 2026, an increase of $55.8 million, or 2.0% compared to December 31, 2025. Brokered deposits have decreased $44.5 million or 8.0%, when compared to December 31, 2025.
| Period End Loan Composition | March 31, 2026 |
| December 31, 2025 |
| March 31, 2025 |
| Current QTD % Change |
| Year over Year % Change | |||||
| Residential Real Estate | 30,128 |
| 33,139 |
| 40,089 |
| (9.1 |
| (24.8 | |||||
| Commercial Real Estate(1) |
| 1,896,565 |
|
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