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Press Release

Bankwell Financial Group Reports Record Quarterly Net Income of $4.9 Million or $0.62 Per Share for the Third Quarter and Declares Fourth Quarter Dividend

Company Release - 10/30/2018 4:43 PM ET

NEW CANAAN, Conn.--(BUSINESS WIRE)-- Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $4.9 million or $0.62 per share for the third quarter of 2018, versus $4.3 million or $0.55 per share for the same period in 2017.

The Company's Board of Directors declared a $0.12 per share cash dividend, payable November 26, 2018 to shareholders of record on November 16, 2018.

Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:

“Thanks to the Bankwell team for another strong performance. Our third quarter ROAA and ROATCE were 1.04% and 11.32%, respectively. Loan growth for the third quarter was somewhat muted by payoffs and pre-payments, still, loans have grown year-to-date at an annualized rate of approximately 6%. We look forward to a solid finish to the year.”

Third Quarter 2018 Highlights:

  • Third quarter diluted earnings per share were $0.62, an increase of 13% compared to the third quarter of 2017.
  • Return on average assets reached 1.04% for the quarter ended September 30, 2018 compared to 0.96% for the quarter ended September 30, 2017.
  • Return on average tangible common equity reached 11.32% in the third quarter of 2018 compared to 10.99% for the quarter ended September 30, 2017.
  • The tangible book value per common share at September 30, 2018 was $22.20, a 9% increase over September 30, 2017.
  • Third quarter total revenue (net interest income plus non-interest income) was $15.1 million versus $14.7 million in the same period last year, a 3% increase.
  • The third quarter efficiency ratio totaled 58.6%.
  • The third quarter noninterest income totaled $0.9 million compared to $0.8 million for the third quarter of 2017.
  • Tax equivalent net interest margin was 3.21% for the third quarter of 2018.
  • Total gross loans exceeded $1.6 billion for the third quarter of 2018.
  • Total assets approached $1.9 billion.
  • Total deposits approached $1.5 billion and grew at an annualized rate of 8% during the third quarter of 2018.
  • The allowance for loan losses was $19.3 million and represents 1.20% of total loans.
  • Investment securities totaled $115.9 million and represent 6% of total assets.

Earnings

Net income for the quarter ended September 30, 2018 was $4.9 million, an increase of 14% compared to the quarter ended September 30, 2017. Net income for the nine months ended September 30, 2018 was $14.2 million, an increase of 21% compared to the nine months ended September 30, 2017. Revenues (net interest income plus non-interest income) for the quarter ended September 30, 2018 were $15.1 million, an increase of 3% compared to the quarter ended September 30, 2017. Revenues for the nine months ended September 30, 2018 were $45.2 million, an increase of 4% compared to the nine months ended September 30, 2017. Net interest income for the quarter ended September 30, 2018 was $14.2 million, an increase of 3% compared to the quarter ended September 30, 2017. Net interest income for the nine months ended September 30, 2018 was $41.9 million, an increase of 3% compared to the nine months ended September 30, 2017. The increase in net income was driven by an increase in interest and fees on loans and from a reduction in the corporate tax rate from 35% to 21% resulting from the 2017 tax reform, offset by increases in interest expense and noninterest expense. The increase in interest and fees on loans was a result of commercial real estate and commercial business loan growth as compared to September 30, 2017.

Basic and diluted earnings per share were each $0.62 for the quarter ended September 30, 2018 compared to $0.55 for the quarter ended September 30, 2017. Basic and diluted earnings per share were $1.81 and $1.80, respectively, for the nine months ended September 30, 2018 compared to $1.53 and $1.51, respectively, for the nine months ended September 30, 2017.

The Company’s efficiency ratio for the quarters ended September 30, 2018 and September 30, 2017 was 58.6% and 55.1%, respectively. The Company’s efficiency ratio for the nine months ended September 30, 2018 and September 30, 2017 was 59.6% and 54.8%, respectively. The increase in the efficiency ratio was driven by an increase in noninterest expense associated with the opening of three new branches during the second quarter of 2018 as well as a number of non-recurring expenses previously disclosed in the first quarter 2018 earnings release.

Noninterest Income and Expense

Noninterest income increased $35 thousand or 4% to $0.9 million for the three months ended September 30, 2018 compared to the three months ended September 30, 2017. Noninterest income increased $211 thousand or 7% to $3.3 million for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. The increase in noninterest income was primarily driven by an increase in gains and fees from the sales of loans. Gains and fees from the sales of loans totaled $150 thousand for the quarter ended September 30, 2018 compared to $36 thousand for the same period in 2017, an increase of $114 thousand. Gains and fees from the sales of loans totaled $835 thousand for the nine months ended September 30, 2018 compared to $559 thousand for the same period in 2017, an increase of $276 thousand.

Noninterest expense increased $0.7 million or 9% for the three months ended September 30, 2018 compared to the three months ended September 30, 2017. Noninterest expense increased $2.9 million or 12% for the nine months ended September 30, 2018 compared to the nine months ended September 30, 2017. The increase was primarily driven by an increase in salaries and employee benefits and an increase in occupancy and equipment expense. Salaries and employee benefits totaled $4.9 million for the quarter ended September 30, 2018 compared to $4.0 million for the same period in 2017, an increase of $0.9 million. Salaries and employee benefits totaled $14.5 million for the nine months ended September 30, 2018 compared to $11.7 million for the same period in 2017, an increase of $2.8 million. The increase in salaries and employee benefits was primarily driven by an increase in full time equivalent employees and a reduction in deferred loan origination costs as a result of lower loan volume. The increase in full time equivalent employees is in line with year over year business growth and driven by staffing for the three new branch locations, opened during the second quarter of 2018. Average full time equivalent employees totaled 144 at September 30, 2018 compared to 132 at September 30, 2017. Occupancy and equipment expense totaled $1.8 million for the quarter ended September 30, 2018 compared to $1.4 million for the same period in 2017, an increase of $0.4 million. Occupancy and equipment expense totaled $5.1 million for the nine months ended September 30, 2018 compared to $4.6 million for the same period in 2017, an increase of $0.5 million. The increase in occupancy and equipment expense was primarily driven by expenditures associated with the opening of the new branch locations and improvements of existing infrastructure.

Financial Condition

Assets totaled $1.9 billion at September 30, 2018, an annualized increase of 7% compared to assets of $1.8 billion at December 31, 2017. Total gross loans were $1.6 billion at September 30, 2018, an increase of $64.6 million compared to December 31, 2017, driven by disciplined growth in commercial loans. Deposits increased to $1.5 billion, an annualized increase of 9% over December 31, 2017.

Asset Quality

Non-performing assets as a percentage of total assets was 1.17% at September 30, 2018, up from 0.31% at December 31, 2017. The increase in non-performing assets is primarily driven by one impaired commercial loan relationship, previously discussed in the second quarter 2018 Earnings Release. The allowance for loan losses was $19.3 million, representing 1.20% of total loans and $18.9 million, representing 1.23% of total loans at September 30, 2018 and December 31, 2017, respectively. The Bank’s general allowance for loan losses provides a 288% coverage of non-performing assets for which there is no specific reserve as of September 30, 2018.

Capital

Shareholders’ equity totaled $174.8 million as of September 30, 2018, an increase of $13.7 million compared to December 31, 2017, primarily a result of net income for the nine months ended September 30, 2018 of $14.2 million and equity from stock transactions totaling $1.9 million, offset by dividends paid of $2.8 million. As of September 30, 2018, the tangible common equity ratio and tangible book value per share were 9.13% and $22.20, respectively.

About Bankwell Financial Group

Bankwell is a commercial bank that serves the banking and lending needs of residents and businesses throughout Fairfield and New Haven Counties, CT. 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 increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, 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 table. 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 non-interest expense control. The Company believes that tangible common equity and tangible book value per share is 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, except share data)
 
September 30, June 30, March 31, December 31, September 30,
  2018   2018   2018   2017   2017
Assets
Cash and due from banks $ 84,437 $ 89,214 $ 81,249 $ 70,545 $ 85,329
Federal funds sold   2,664   105   2,121   186   11,117
Cash and cash equivalents 87,101 89,319 83,370 70,731 96,446
 
Available for sale investment securities, at fair value 94,438 92,608 99,050 92,188 86,272
Held to maturity investment securities, at amortized cost 21,464 21,505 21,546 21,579 23,573
Loans held for sale - - - - 785
Loans receivable (net of allowance for loan losses of $19,311, $19,006,
$18,801, $18,904 and $19,564 at September 30, 2018, June 30, 2018,
March 31, 2018, December 31, 2017 and September 30, 2017, respectively) 1,585,465 1,572,591 1,534,565 1,520,879 1,500,574
Foreclosed real estate - - 487 - 222
Accrued interest receivable 6,055 5,522 5,331 5,910 5,344
Federal Home Loan Bank stock, at cost 9,210 9,333 9,310 9,183 9,351
Premises and equipment, net 20,245 20,313 19,207 18,196 17,509
Bank-owned life insurance 40,413 40,146 39,880 39,618 39,329
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangible assets 309 334 358 382 407
Deferred income taxes, net 4,583 4,683 4,716 4,904 8,834
Other assets   13,164   11,859   10,834   10,448   13,703
Total assets $ 1,885,036 $ 1,870,802 $ 1,831,243 $ 1,796,607 $ 1,804,938
 
Liabilities & Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing deposits $ 162,473 $ 168,295 $ 161,641 $ 172,638 $ 162,790
Interest-bearing deposits   1,330,696   1,297,343   1,264,886   1,225,767   1,247,001
Total deposits 1,493,169 1,465,638 1,426,527 1,398,405 1,409,791
 
Advances from the Federal Home Loan Bank 180,000 199,000 199,000 199,000 195,000
Subordinated debentures 25,142 25,129 25,116 25,103 25,090
Accrued expenses and other liabilities   11,971   11,462   14,653   13,072   16,740
Total liabilities   1,710,282   1,701,229   1,665,296   1,635,580   1,646,621
 
 
Shareholders' equity
Common stock, no par value; 10,000,000 shares authorized, 7,842,996, 7,841,720,
7,831,804, 7,751,424 and 7,705,975 shares issued and outstanding at
September 30, 2018, June 30, 2018, March 31, 2018,
December 31, 2017 and September 30, 2017, respectively 120,188 119,824 119,363 118,301 117,289
Retained earnings 52,386 48,470 44,695 41,032 39,777
Accumulated other comprehensive income   2,180   1,279   1,889   1,694   1,251
Total shareholders' equity   174,754   169,573   165,947   161,027   158,317
 
Total liabilities and shareholders' equity $ 1,885,036 $ 1,870,802 $ 1,831,243 $ 1,796,607 $ 1,804,938
 
                           
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
 
For the Quarter Ended For the Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
  2018   2018   2018   2017     2017   2018   2017
Interest and dividend income
Interest and fees on loans $ 19,153 $ 18,114 $ 17,418 $ 17,493 $ 17,175 $ 54,685 $ 49,348
Interest and dividends on securities 1,002 975 935 947 934 2,912 2,623
Interest on cash and cash equivalents   345   325   254   289     239   924   501
Total interest income   20,500   19,414   18,607   18,729     18,348   58,521   52,472
 
Interest expense
Interest expense on deposits 5,044 4,309 3,656 3,602 3,416 13,009 9,092
Interest on borrowings   1,210   1,197   1,246   1,213     1,071   3,653   2,930
Total interest expense   6,254   5,506   4,902   4,815     4,487   16,662   12,022
 
Net interest income 14,246 13,908 13,705 13,914 13,861 41,859 40,450
 
Provision (Credit) for loan losses   322   310   13   (495 )   398   645   1,836
 
Net interest income after provision (credit) for loan losses   13,924   13,598   13,692   14,409     13,463   41,214   38,614
 
Noninterest income
Service charges and fees 285 265 256 252 254 806 755
Bank owned life insurance 267 265 263 289 295 795 881
Gains and fees from sales of loans 150 315 370 868 36 835 559
Net gain on sale of available for sale securities - - 222 - - 222 165
Other   157   262   222   210     239   641   728
Total noninterest income   859   1,107   1,333   1,541     824   3,299   3,088
 
Noninterest expense
Salaries and employee benefits 4,903 4,539 5,028 4,603 3,952 14,470 11,681
Occupancy and equipment 1,771 1,731 1,617 1,585 1,449 5,119 4,580
Data processing 512 509 525 399 621 1,546 1,467
Marketing 395 479 297 321 295 1,171 872
Professional services 321 424 775 457 680 1,520 1,615
Director fees 260 274 215 229 207 749 683
FDIC insurance 203 203 214 225 265 620 891
Amortization of intangibles 24 24 24 25 31 72 93
Other   481   581   508   735     629   1,570   2,062
Total noninterest expense   8,870   8,764   9,203   8,579     8,129   26,837   23,944
 
Income before income tax expense 5,913 5,941 5,822 7,371 6,158 17,676 17,758
 
Income tax expense   1,056   1,226   1,222   5,275     1,895   3,504   6,024
 
Net income $ 4,857 $ 4,715 $ 4,600 $ 2,096   $ 4,263 $ 14,172 $ 11,734
 
 
Earnings Per Common Share:
Basic $ 0.62 $ 0.60 $ 0.59 $ 0.27 $ 0.55 $ 1.81 $ 1.53
Diluted 0.62 0.60 0.59 0.27 0.55 1.80 1.51
 
Weighted Average Common Shares Outstanding:
Basic 7,738,343 7,722,892 7,676,813 7,624,931 7,587,471 7,712,924 7,554,739
Diluted 7,763,935 7,761,560 7,722,120 7,702,770 7,670,258 7,758,762 7,652,355
Dividends per common share $ 0.12 $ 0.12 $ 0.12 $ 0.07 $ 0.07 $ 0.36 $ 0.21
 
     
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
 
 
    For the Quarter Ended       For the Nine Months Ended
September 30, June 30, March 31, December 31, September 30, September 30, September 30,
2018   2018   2018   2017   2017   2018   2017  
Performance ratios:
Return on average assets* 1.04 % 1.02 % 1.03 % 0.46 % 0.96 % 1.03 % 0.92 %
Return on average stockholders' equity* 11.13 % 11.21 % 11.35 % 5.15 % 10.78 % 11.23 % 10.27 %
Return on average tangible common equity* 11.32 % 11.41 % 11.56 % 5.25 % 10.99 % 11.43 % 10.48 %
Net interest margin 3.21 % 3.14 % 3.15 % 3.23 % 3.30 % 3.17 % 3.32 %
Efficiency ratio (1) 58.6 % 58.2 % 62.0 % 55.1 % 55.1 % 59.6 % 54.8 %
 
Net loan charge-offs as a % of average loans 0.00 % 0.01 % 0.01 % 0.01 % 0.02 % 0.02 % 0.02 %
 
*All metrics, as of December 31, 2017, measuring return were impacted primarily as a result of the Tax Cut and Jobs Act passed in December 2017 along with several other smaller items. Please refer to the Q4'17 Earnings Release for further detail.
        As of
September 30,

2018

    June 30,

2018

  March 31,

2018

  December 31,

2017

    September 30,

2017

Capital ratios:    
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2)

11.43

% 11.31 % 11.18 % 10.99 % 10.95 %
Total Capital to Risk-Weighted Assets (2) 12.61 % 12.47 % 12.35 % 12.19 % 12.19 %
Tier I Capital to Risk-Weighted Assets (2)

11.43

% 11.31 % 11.18 % 10.99 % 10.95 %
Tier I Capital to Average Assets (2) 10.14 % 10.03 % 9.90 % 9.61 % 9.78 %
Tangible common equity to tangible assets 9.13 % 8.92 % 8.92 % 8.81 % 8.62 %
 
Tangible book value per common share (3) $ 22.20 $ 21.56 $ 21.12 $ 20.59 $ 20.41
 
Asset quality:
Nonaccrual loans $ 21,964 $ 23,325 $ 20,374 $ 5,481 $ 4,241
Other real estate owned   -     -     487     -     222  
Total non-performing assets (4) $ 21,964   $ 23,325   $ 20,861   $ 5,481   $ 4,463  
 
 
Nonperforming loans as a % of total loans 1.37 % 1.46 % 1.31 % 0.36 % 0.28 %
 
Nonperforming assets as a % of total assets 1.17 % 1.25 % 1.14 % 0.31 % 0.25 %
 
Allowance for loan losses as a % of total loans 1.20 % 1.19 % 1.21 % 1.23 % 1.28 %
 
Allowance for loan losses as a % of nonperforming loans (5) 87.92 % 81.48 % 92.28 % 344.90 % 461.31 %
 
(1) 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 non-interest 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.
 
(2) Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.
 
(3) Excludes unvested restricted shares of 101,759, 112,099, 114,336, 75,186 and 96,488 as of September 30, 2018, June 30, 2018, March 31, 2018, December 31, 2017 and September 30, 2017, respectively.
 
(4) The Bank's General ALLL provides a 288% coverage of NPAs that are not already covered by a specific reserve as of September 30, 2018.
 
                 
BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
 
 
September 30, June 30, December 31, Current QTD YTD
Period End Loan Composition   2018   2018   2017 % Change   % Change  
Residential Real Estate $ 182,740 $ 188,546 $ 193,524 (3.1 %) (5.6 %)
Commercial Real Estate 1,057,484 1,042,689 987,242 1.4 % 7.1 %
Construction   93,941   100,147   101,636 (6.2 %) (7.6 %)
Total Real Estate Loans 1,334,165 1,331,382 1,282,402 0.2 % 4.0 %
 
Commercial Business 273,065 262,625 259,995 4.0 % 5.0 %
 
Consumer   389   406   619 (4.2 %) (37.2 %)
Total Loans $ 1,607,619 $ 1,594,413 $ 1,543,016 0.8 % 4.2 %
 
 
 
 
September 30, June 30, December 31, Current QTD YTD
Period End Deposit Composition   2018   2018   2017 % Change   % Change  
Noninterest-bearing demand $ 162,473 $ 168,295 $ 172,638 (3.5 %) (5.9 %)
NOW 56,270 66,207 58,942 (15.0 %) (4.5 %)
Money Market 484,048 497,760 451,804 (2.8 %) 7.1 %
Savings 147,940 113,496 83,758 30.3 % 76.6 %
Time   642,438   619,880   631,263 3.6 % 1.8 %
Total Deposits $ 1,493,169 $ 1,465,638 $ 1,398,405 1.9 % 6.8 %
 
                   
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME & EXPENSE - QTD (unaudited)
(Dollars in thousands)
 
For the Quarter Ended
Noninterest income September 30, June 30, September 30, Sep 18 vs. June 18 Sep 18 vs. Sep 17
2018 2018 2017 % Change % Change
Service charges and fees $ 285 $ 265 $ 254 7.5 % 12.2 %
Bank owned life insurance 267 265 295 0.8 % (9.5 %)
Gains and fees from sales of loans 150 315 36 (52.4 %) 316.7 %
Other   157   262   239 (40.1 %) (34.3 %)
Total noninterest income $ 859 $ 1,107 $ 824 (22.4 %) 4.2 %
 
 
 
For the Quarter Ended
Noninterest expense September 30, June 30, September 30, Sep 18 vs. June 18 Sep 18 vs. Sep 17
2018 2018 2017 % Change % Change
Salaries and employee benefits $ 4,903 $ 4,539 $ 3,952 8.0 % 24.1 %
Occupancy and equipment 1,771 1,731 1,449 2.3 % 22.2 %
Data processing 512 509 621 0.6 % (17.6 %)
Marketing 395 479 295 (17.5 %) 33.9 %
Professional services 321 424 680 (24.3 %) (52.8 %)
Director fees 260 274 207 (5.1 %) 25.6 %
FDIC insurance 203 203 265 0.0 % (23.4 %)
Amortization of intangibles 24 24 31 0.0 % (22.6 %)
Other   481   581   629 (17.2 %) (23.5 %)
Total noninterest expense $ 8,870 $ 8,764 $ 8,129 1.2 % 9.1 %
 
           
BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME & EXPENSE - YTD (unaudited)
(Dollars in thousands)
 
For the Nine Months Ended
Noninterest income September 30, September 30, Sep 18 vs. Sep 17
2018 2017 % Change
Gains and fees from sales of loans $ 835 $ 559 49.4 %
Service charges and fees 806 755 6.8 %
Bank owned life insurance 795 881 (9.8 %)
Net gain on sale of available for sale securities 222 165 34.5 %
Other   641   728 (12.0 %)
Total noninterest income $ 3,299 $ 3,088 6.8 %
 
 
 
For the Nine Months Ended
Noninterest expense September 30, September 30, Sep 18 vs. Sep 17
2018 2017 % Change
Salaries and employee benefits $ 14,470 $ 11,681 23.9 %
Occupancy and equipment 5,119 4,580 11.8 %
Data processing 1,546 1,467 5.4 %
Professional services 1,520 1,615 (5.9 %)
Marketing 1,171 872 34.3 %
Director fees 749 683 9.7 %
FDIC insurance 620 891 (30.4 %)
Amortization of intangibles 72 93 (22.6 %)
Other   1,570   2,062 (23.9 %)
Total noninterest expense $ 26,837 $ 23,944 12.1 %
 
                   
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   9/30/2018     6/30/2018     3/31/2018     12/31/2017     9/30/2017  
Total Equity $ 174,754 $ 169,573 $ 165,947 $ 161,027 $ 158,317
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangibles   309     334     358     382     407  
Tangible Common Equity $ 171,856   $ 166,650   $ 163,000   $ 158,056   $ 155,321  
 
Total Assets $ 1,885,036 $ 1,870,802 $ 1,831,243 $ 1,796,607 $ 1,804,938
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangibles   309     334     358     382     407  
Tangible Assets $ 1,882,138   $ 1,867,879   $ 1,828,296   $ 1,793,636   $ 1,801,942  
 
Tangible Common Equity to Tangible Assets 9.13 % 8.92 % 8.92 % 8.81 % 8.62 %
 
 
As of
Computation of Tangible Book Value per Common Share   9/30/2018     6/30/2018     3/31/2018     12/31/2017     9/30/2017  
Total shareholders' equity $ 174,754 $ 169,573 $ 165,947 $ 161,027 $ 158,317
Less:
Preferred stock   -     -     -     -     -  
Common shareholders' equity $ 174,754 $ 169,573 $ 165,947 $ 161,027 $ 158,317
Less:
Goodwill 2,589 2,589 2,589 2,589 2,589
Other intangibles   309     334     358     382     407  
Tangible common shareholders' equity $ 171,856 $ 166,650 $ 163,000 $ 158,056 $ 155,321
Common shares issued 7,842,996 7,841,720 7,831,804 7,751,424 7,705,975
Less:
Shares of unvested restricted stock   101,759     112,099     114,336     75,186     96,488  
Common shares outstanding 7,741,237 7,729,621 7,717,468 7,676,238 7,609,487
Book value per share $ 22.57 $ 21.94 $ 21.50 $ 20.98 $ 20.81
Less:
Effects of intangible assets $ 0.37 $ 0.38 $ 0.38 $ 0.39 $ 0.39
 
Tangible Book Value per Common Share $ 22.20 $ 21.56 $ 21.12 $ 20.59 $ 20.41
 
                           
BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued
(Dollars in thousands, except share data)
 
 
For the Quarter Ended For the Nine Months Ended
Computation of Efficiency Ratio   9/30/2018     6/30/2018     3/31/2018     12/31/2017     9/30/2017     9/30/2018     9/30/2017  
Noninterest expense $ 8,870 $ 8,764 $ 9,203 $ 8,579 $ 8,129 $ 26,837 $ 23,944
Less:
Amortization of intangible assets 24 24 24 25 31 72 93
Foreclosed real estate expenses   -     -     -     -     3     -     70  
Adjusted noninterest expense $ 8,846   $ 8,740   $ 9,179   $ 8,554   $ 8,095   $ 26,765   $ 23,781  
Net interest income $ 14,246 $ 13,908 $ 13,705 $ 13,914 $ 13,861 $ 41,859 $ 40,450
Noninterest income 859 1,107 1,333 1,541 824 3,299 3,088
Less:
Gain on sales of securities - - 222 - - 222 165
Loss on sale of foreclosed real estate   -     -     -     (78 )   -     -     -  
Adjusted operating revenue $ 15,105   $ 15,015   $ 14,816   $ 15,533   $ 14,685   $ 44,936   $ 43,373  
 
Efficiency ratio 58.6 % 58.2 % 62.0 % 55.1 % 55.1 % 59.6 % 54.8 %
 
 
For the Quarter Ended For the Nine Months Ended
Computation of Return on Average Tangible Common Equity   9/30/2018     6/30/2018     3/31/2018     12/31/2017     9/30/2017     9/30/2018     9/30/2017  
Net Income Attributable to Common Shareholders $ 4,857   $ 4,715   $ 4,600   $ 2,096   $ 4,263   $ 14,172   $ 11,734  
Total average shareholders' equity $ 173,199 $ 168,684 $ 164,369 $ 161,477 $ 156,852 $ 168,780 $ 152,721
Less:
Average Goodwill 2,589 2,589 2,589 2,589 2,589 2,589 2,589
Average Other intangibles   325     350     374     398     428     349     458  
Average tangible common equity $ 170,285   $ 165,745   $ 161,406   $ 158,490   $ 153,835   $ 165,842   $ 149,674  
 
Annualized Return on Average Tangible Common Equity 11.32 % 11.41 % 11.56 % 5.25 % 10.99 % 11.43 % 10.48 %
 
                         
BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS
(Dollars in thousands)
 
For the Quarter Ended
September 30, 2018 September 30, 2017
Average Yield/ Average Yield/
Balance Interest Rate (5) Balance Interest Rate (5)
Assets:
Cash and Fed funds sold $ 70,111 $ 345 1.95 % $ 83,086 $ 239 1.14 %
Securities (1) 118,311 937 3.17 % 112,066 1,014 3.62 %
Loans:
Commercial real estate 1,030,336 12,445 4.73 % 927,114 10,614 4.48 %
Residential real estate 185,625 1,724 3.71 % 193,578 1,770 3.66 %
Construction (2) 92,537 1,225 5.18 % 106,373 1,305 4.80 %
Commercial business 279,454 3,752 5.25 % 268,408 3,476 5.07 %
Consumer   393   7 6.79 %   1,149   10 3.53 %
Total loans 1,588,345 19,153 4.72 % 1,496,622 17,175 4.49 %
Federal Home Loan Bank stock   9,297   137 5.88 %   8,544   85 3.96 %
Total earning assets 1,786,064   20,572 4.51 % 1,700,318   18,513 4.26 %
Other assets   68,838   69,253
Total assets $ 1,854,902 $ 1,769,571
 
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW $ 59,618 $ 54 0.36 % $ 58,625

$

19 0.13 %
Money market 483,105 1,741 1.43 % 432,753 993 0.91 %
Savings 136,683 502 1.46 % 100,197 189 0.75 %
Time   607,044   2,747 1.80 %   645,317   2,215 1.36 %
Total interest-bearing deposits 1,286,450 5,044 1.56 % 1,236,892 3,416 1.10 %
Borrowed money   216,483   1,210 2.19 %   193,734   1,071 2.16 %
Total interest-bearing liabilities 1,502,933 $ 6,254 1.65 % 1,430,626 $ 4,487 1.24 %
Noninterest-bearing deposits 167,198 164,565
Other liabilities   11,572   17,528
Total liabilities 1,681,703 1,612,719
Shareholders' equity   173,199   156,852
Total liabilities and shareholders' equity $ 1,854,902 $ 1,769,571
Net interest income (3) $ 14,318 $ 14,026
Interest rate spread 2.86 % 3.02 %
Net interest margin (4) 3.21 % 3.30 %
 
(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 $72 thousand and $165 thousand, respectively for the three months ended September 30, 2018 and 2017.
(4) Net interest income as a percentage of earning assets.
(5) 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
(Dollars in thousands)
 
For the Nine Months Ended
September 30, 2018 September 30, 2017
Average Yield/ Average Yield/
Balance Interest Rate (5) Balance Interest Rate (5)
Assets:
Cash and Fed funds sold $ 73,823 $ 924 1.67 % $ 79,333 $ 501 0.85 %
Securities (1) 118,434 2,746 3.09 % 106,622 2,822 3.53 %
Loans:
Commercial real estate 1,001,058 34,714 4.57 % 893,962 30,528 4.50 %
Residential real estate 192,254 5,309 3.68 % 194,503 5,325 3.65 %
Construction (2) 93,617 3,551 5.00 % 107,136 3,853 4.74 %
Commercial business 281,348 11,088 5.20 % 249,718 9,607 5.07 %
Consumer   521   23 5.77 %   1,387   35 3.40 %
Total loans 1,568,798 54,685 4.60 % 1,446,706 49,348 4.50 %
Federal Home Loan Bank stock   9,311   379 5.43 %   8,198   244 3.97 %
Total earning assets 1,770,366   58,734 4.38 % 1,640,859   52,915 4.25 %
Other assets   68,141   63,527
Total assets $ 1,838,507 $ 1,704,386
 
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW $ 60,616 $ 93 0.21 % $ 58,096

$

65 0.15 %
Money market 482,204 4,422 1.23 %