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0001505732FALSE00015057322023-01-252023-01-25



SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):  January 25, 2023
Bankwell Financial Group, Inc.
(Exact name of registrant as specified in its charter)
Connecticut 001-36448 20-8251355
(State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.)

258 Elm Street
New Canaan, Connecticut 06840
(203) 652-0166
(Address of Principal Executive Officers and Telephone Number)

N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which
Registered
Common Stock, no par value per
share

BWFG
NASDAQ Global Market




Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company
   
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 2.02 Results of Operations and Financial Condition
   
 
On January 25, 2023, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued a press release describing its results of operations for the period ended December 31, 2022.
 
A copy of the press release is included as Exhibit 99.1 to this current report on Form 8-K and is incorporated herein by reference.

The information furnished under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, regardless of any general incorporation language in such filing.
   
Item 7.01 Regulation FD Disclosure
   
 
On January 25, 2023, Bankwell Financial Group, Inc., the holding company for Bankwell Bank, issued slide presentation material, which includes among other things, a review of financial results and trends through the period ended December 31, 2022. A copy of the material will also be available on the Company’s website, http://investor.mybankwell.com/CorporateProfile.
 
A copy of the Presentation Material is included as Exhibit 99.2 to this current report on Form 8-K and is incorporated herein by reference.
The information furnished under this Item 7.01, including Exhibit 99.2, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or subject to the liabilities of that section. The information shall not be deemed incorporated by reference into any other filing with the Securities and Exchange Commission made by the Company, regardless of any general incorporation language in such filing.
   
Item 8.01 Other Events
   
 
On January 25, 2023, Bankwell Financial Group, Inc., parent company of Bankwell Bank, announced its Board of Directors has voted to pay a quarterly dividend in the amount of $0.20 per share on February 23, 2023 to all shareholders of record as of February 13, 2023.
Item 9.01 Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits.
Exhibit Number Description
   
99.1
99.2
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)



SIGNATURES
   
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
   
  BANKWELL FINANCIAL GROUP, INC.
  Registrant
   
   
   
January 25, 2023
By:  /s/ Courtney E. Sacchetti
  Courtney E. Sacchetti
  Executive Vice President
  and Chief Financial Officer




EX-99.1 2 ex991q42022earningsrelease.htm Document






BANKWELL FINANCIAL GROUP REPORTS RECORD LOAN GROWTH FOR THE FOURTH QUARTER AND FULL YEAR 2022; DECLARES FIRST QUARTER DIVIDEND
New Canaan, CT – January 25, 2023 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $8.0 million, or $1.04 per share for the fourth quarter of 2022, versus $7.8 million, or $0.99 per share, for the same period in 2021. For the year ended 2022, net income totaled $37.4 million, or $4.79 per share, versus $26.6 million, or $3.36 per share, for the same period in 2021.
The Company's Board of Directors declared a $0.20 per share cash dividend, payable February 23, 2023 to shareholders of record on February 13, 2023.
We recommend reading this earnings release in conjunction with the Fourth Quarter 2022 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our January 25, 2023 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
"I commend my colleagues at Bankwell for truly exceptional performance in 2022. Our Company posted record results, generating a 16.7% Return on Average Equity and a 1.44% Return on Average Assets. Loan balances grew by over 40%, and we continue to diversify our lending book and bring new commercial relationships to the Bank.

"This year’s growth has positioned the Company well for the expected continued tightening actions by the Federal Reserve. The average yield of loans originated during 2022 was 6.24% while the average yield on fourth quarter originations was 7.23%.

"The historic actions of the Federal Reserve this year are yet to be played out, but based on a peak Federal Funds rate implied by financial markets, and our planning for no Fed rate cuts in 2023, we re-affirm our expectations for 2023’s net interest income to decline by approximately 10% versus 2022.

"Tangible Book Value growth is imperative for value creation to accrue to our shareholders. We are pleased to acknowledge that the Company’s Tangible Book Value per share has compounded at a rate of almost 18% since December 31, 2020.

We are proud of the work we have accomplished in transforming our Bank’s business model in recent years, and thank our customers and clients who have made this success possible."
Fourth Quarter 2022 Highlights:
•Total gross loans were $2.7 billion, growing $780.6 million, or 41.2%, compared to December 31, 2021.
•Average yield on 2022 funded loans was 6.24% compared to 4.56% for 2021.
•Return on average assets was 1.07% for the quarter ended December 31, 2022 and 1.44% for the year ended December 31, 2022.
•Return on average shareholders' equity was 13.38% for the quarter ended December 31, 2022 and 16.72% for the year ended December 31, 2022.
•The net interest margin was 3.70% for the quarter ended December 31, 2022 and 3.78% for the year ended December 31, 2022.
•The efficiency ratio was 45.6% for the quarter ended December 31, 2022 and 45.4% for the year ended December 31, 2022.
•Investment securities totaled $121.6 million and represent 3.7% of total assets.
•Fully diluted tangible book value per share rose to $30.51 compared to $25.55 at December 31, 2021.



1







Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended December 31, 2022 were $27.3 million, versus $19.8 million for the quarter ended December 31, 2021. Revenues for the year ended December 31, 2022 were $97.8 million, versus $73.5 million for the year ended December 31, 2021. The increase in revenues was primarily attributable to an increase in interest and fees on loans due to record loan growth and higher overall loan yields1 for the quarter and year ended December 31, 2022. The increase in revenues was partially offset by the following: an increase in interest expense; a decrease in noninterest income driven by a reduction in loans sales and the absence of rental income in 2022 due to the disposition of the Company's former headquarters building in the fourth quarter of 2021. Revenues in 2021 also included a one-time federal payroll tax credit for COVID-19 of $0.9 million recognized in the quarter ended March 31, 2021 which did not repeat in 2022.
Net income for the quarter ended December 31, 2022 was $8.0 million, versus $7.8 million for the quarter ended December 31, 2021. Net income for the year ended December 31, 2022 was $37.4 million, versus $26.6 million for the year ended December 31, 2021. The increase in net income was a direct result of the aforementioned increases in revenues. In addition, the increase in net income was partially offset by an increase in the provision for loan losses due to loan growth and an increase in noninterest expense for the quarter and year ended December 31, 2022.
Basic and diluted earnings per share were $1.04 and $1.04, respectively, for the quarter ended December 31, 2022 compared to basic and diluted earnings per share of $1.00 and $0.99, respectively, for the quarter ended December 31, 2021. Basic and diluted earnings per share were $4.84 and $4.79, respectively, for the year ended December 31, 2022 compared to basic and diluted earnings per share of $3.38 and $3.36, respectively, for the year ended December 31, 2021.
The net interest margin (fully taxable equivalent basis) for the quarters ended December 31, 2022 and December 31, 2021 was 3.70% and 3.43%, respectively. The net interest margin (fully taxable equivalent basis) for the year ended December 31, 2022 and December 31, 2021 was 3.78% and 3.17%, respectively. The increase in the net interest margin was due to an increase in overall loan yields, aided in part by elevated loan prepayment fees, partially offset by an increase in funding costs.
Provision for Loan Losses
Provision for loan losses was $4.3 million and $5.4 million for the quarter and year ended December 31, 2022, respectively, bringing the total allowance for loan losses to $22.4 million as of December 31, 2022. Provision for loan losses was $0.1 million for the quarter ended December 31, 2021 and a credit for loan losses of $0.1 million for the year ended December 31, 2021. The increase in the Provision for loan losses for both the quarter and year ended December 31, 2022 was attributable to loan growth.
On January 1, 2023, the Company adopted ASC 326 Financial Instruments - Credit Losses ("CECL"). Upon adoption of CECL, the Company will record a one-time cumulative effect, pre-tax adjustment range of $3.4 million to $4.2 million to the Allowance for loan losses and a corresponding net of tax adjustment to beginning retained earnings. This impact will be reflected in the Company's first quarter 2023 financial statements.
Financial Condition
Assets totaled $3.25 billion at December 31, 2022, compared to assets of $2.46 billion at December 31, 2021. The increase in assets was primarily due to loan growth. Gross loans totaled $2.7 billion at December 31, 2022, an increase of $780.6 million or 41.2% compared to December 31, 2021. Deposits totaled $2.8 billion at December 31, 2022, compared to deposits of $2.1 billion at December 31, 2021.



1 - The increase in overall loan yields were 122 bps and 68 bps, respectively, for the quarter and year ended December 31, 2022.
2







Capital
Shareholders’ equity totaled $238.5 million as of December 31, 2022, an increase of $36.5 million compared to December 31, 2021, primarily a result of (i) net income of $37.4 million for the year ended December 31, 2022 and (ii) an $8.4 million favorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps of $16.8 million, partially offset by fair value marks on the Company's investment portfolio of $8.4 million. The Company's interest rate swaps are used to hedge interest rate risk. The increase in Shareholders’ equity was partially offset by dividends paid of $6.2 million and common stock repurchases of $5.5 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 Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer of Bankwell Financial Group at (203) 652-0166.
For more information, visit www.mybankwell.com.


3







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. The COVID-19 pandemic continues to affect Bankwell Financial Group, its customers, counterparties, employees, and third party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is unknown.

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 assets, tangible common equity to tangible assets, tangible common shareholders' equity, fully diluted tangible book value per common share, adjusted non interest expense, operating revenue, efficiency ratio, average tangible common equity, annualized return on average tangible common equity, return on average assets, return on average shareholders' equity, and the dividend payout ratio 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.
4







BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
ASSETS
Cash and due from banks $ 344,925  $ 212,175  $ 149,522  $ 280,471  $ 291,598 
Federal funds sold 10,754  10,947  21,505  19,022  53,084 
Cash and cash equivalents 355,679  223,122  171,027  299,493  344,682 
Investment securities
Marketable equity securities, at fair value 1,988  1,973  2,126  2,090  2,168 
Available for sale investment securities, at fair value 103,663  95,095  94,907  98,733  90,198 
Held to maturity investment securities, at amortized cost 15,983  16,027  15,917  15,979  16,043 
Total investment securities 121,634  113,095  112,950  116,802  108,409 
Loans receivable (net of allowance for loan losses of $22,431, $18,167, $15,773, $17,141 and $16,902 at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively) 2,646,384  2,263,432  2,036,626  1,964,567  1,875,167 
Accrued interest receivable 13,070  9,552  8,047  7,733  7,512 
Federal Home Loan Bank stock, at cost 5,216  5,039  5,064  2,870  2,814 
Premises and equipment, net 27,199  27,510  27,768  25,661  25,588 
Bank-owned life insurance 50,243  49,970  49,699  49,434  49,174 
Goodwill 2,589  2,589  2,589  2,589  2,589 
Deferred income taxes, net 7,422  5,952  4,768  6,879  7,621 
Other assets 23,013  22,734  17,014  20,849  32,708 
Total assets $ 3,252,449  $ 2,722,995  $ 2,435,552  $ 2,496,877  $ 2,456,264 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits $ 404,559  $ 380,365  $ 372,584  $ 412,985  $ 398,956 
Interest bearing deposits 2,396,259  1,906,337  1,660,941  1,753,219  1,725,042 
Total deposits 2,800,818  2,286,702  2,033,525  2,166,204  2,123,998 
Advances from the Federal Home Loan Bank 90,000  90,000  105,000  50,000  50,000 
Subordinated debentures 68,959  68,897  34,500  34,471  34,441 
Accrued expenses and other liabilities 54,203  45,896  37,060  35,982  45,838 
Total liabilities 3,013,980  2,491,495  2,210,085  2,286,657  2,254,277 
Shareholders’ equity
Common stock, no par value 115,018  114,548  115,599  114,882  118,148 
Retained earnings 123,640  117,152  109,523  99,047  92,400 
Accumulated other comprehensive (loss) income (189) (200) 345  (3,709) (8,561)
Total shareholders’ equity 238,469  231,500  225,467  210,220  201,987 
Total liabilities and shareholders’ equity $ 3,252,449  $ 2,722,995  $ 2,435,552  $ 2,496,877  $ 2,456,264 
5







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,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Interest and dividend income
Interest and fees on loans $ 36,545  $ 28,128  $ 25,141  $ 21,428  $ 21,081  $ 111,242  $ 78,042 
Interest and dividends on securities 898  811  774  720  722  3,203  2,958 
Interest on cash and cash equivalents 2,150  747  449  154  90  3,500  376 
Total interest and dividend income 39,593  29,686  26,364  22,302  21,893  117,945  81,376 
Interest expense
Interest expense on deposits 11,083  4,092  1,983  2,206  2,198  19,364  10,443 
Interest expense on borrowings 1,701  993  558  586  767  3,838  3,047 
Total interest expense 12,784  5,085  2,541  2,792  2,965  23,202  13,490 
Net interest income 26,809  24,601  23,823  19,510  18,928  94,743  67,886 
Provision (credit) for loan losses 4,272  2,381  (1,445) 229  125  5,437  (57)
Net interest income after provision (credit) for loan losses 22,537  22,220  25,268  19,281  18,803  89,306  67,943 
Noninterest income
Bank owned life insurance 273  271  265  260  270  1,069  1,023 
Service charges and fees 343  240  249  240  257  1,072  872 
Gains (losses) and fees from sales of loans 12  (15) 608  631  441  1,236  2,692 
Other (100) (94) 30  (173) (143) (337) 1,070 
Total noninterest income 528  402  1,152  958  825  3,040  5,657 
Noninterest expense
Salaries and employee benefits 5,988  5,876  5,433  4,940  4,806  22,237  18,317 
Occupancy and equipment 1,919  2,035  2,193  2,150  2,411  8,297  10,682 
Professional services 912  994  1,000  981  628  3,887  2,260 
Data processing 663  626  689  654  432  2,632  2,409 
Director fees 378  325  339  352  335  1,394  1,303 
FDIC insurance 898  255  262  223  231  1,638  1,232 
Marketing 112  102  107  45  87  366  404 
Other 1,601  818  913  580  749  3,912  3,132 
Total noninterest expense 12,471  11,031  10,936  9,925  9,679  44,363  39,739 
Income before income tax expense 10,594  11,591  15,484  10,314  9,949  47,983  33,861 
Income tax expense 2,573  2,417  3,462  2,102  2,135  10,554  7,275 
Net income $ 8,021  $ 9,174  $ 12,022  $ 8,212  $ 7,814  $ 37,429  $ 26,586 
Earnings Per Common Share:
Basic $ 1.04  $ 1.19  $ 1.56  $ 1.05  $ 1.00  $ 4.84  $ 3.38 
Diluted $ 1.04  $ 1.18  $ 1.55  $ 1.04  $ 0.99  $ 4.79  $ 3.36 
Weighted Average Common Shares Outstanding:
Basic 7,507,540  7,553,718  7,556,645  7,637,077  7,660,307  7,563,363  7,706,407 
Diluted 7,563,116  7,612,421  7,614,243  7,719,405  7,726,420  7,640,218  7,761,811 
Dividends per common share $ 0.20  $ 0.20  $ 0.20  $ 0.20  $ 0.18  $ 0.80  $ 0.64 
6







BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

For the Quarter Ended For the Year Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Performance ratios:
Return on average assets 1.07  % 1.47  % 1.96  % 1.35  % 1.32  % 1.44  % 1.17  %
Return on average shareholders' equity 13.38  % 15.73  % 22.09  % 16.05  % 15.44  % 16.72  % 13.86  %
Return on average tangible common equity 13.52  % 15.91  % 22.36  % 16.25  % 15.65  % 16.91  % 14.05  %
Net interest margin 3.70  % 4.12  % 4.01  % 3.30  % 3.43  % 3.78  % 3.17  %
Efficiency ratio(1)
45.6  % 44.1  % 43.8  % 48.5  % 48.8  % 45.4  % 53.9  %
Net loan charge-offs as a % of average loans —  % —  % —  % —  % —  % —  % 0.23  %
Dividend payout ratio(2)
19.23  % 16.95  % 12.90  % 19.23  % 18.18  % 16.70  % 19.05  %
(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 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.
(2)The dividend payout ratio is calculated by dividing dividends per share by earnings per share.

As of
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)
10.28  % 11.42  % 11.10  % 11.20  % 11.18  %
Total Capital to Risk-Weighted Assets(1)
11.07  % 12.16  % 11.80  % 12.00  % 12.00  %
Tier I Capital to Risk-Weighted Assets(1)
10.28  % 11.42  % 11.10  % 11.20  % 11.18  %
Tier I Capital to Average Assets(1)
9.88  % 11.31  % 10.15  % 9.80  % 9.94  %
Tangible common equity to tangible assets 7.26  % 8.41  % 9.16  % 8.32  % 8.13  %
Fully diluted tangible book value per common share $ 30.51  $ 29.68  $ 28.75  $ 26.75  $ 25.55 
(1)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.

7







BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
For the Quarter Ended
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Allowance for loan losses:
Balance at beginning of period $ 18,167  $ 15,773  $ 17,141  $ 16,902  $ 16,803 
Charge-offs:
Commercial business —  —  —  —  (26)
Consumer (11) (8) —  (4) (5)
Total charge-offs (11) (8) —  (4) (31)
Recoveries:
Commercial real estate —  —  77  —  — 
Commercial business —  21  —  13 
Consumer —  — 
Total recoveries 21  77  14 
Net loan (charge-offs) recoveries (8) 13  77  10  (26)
Provision (credit) for loan losses 4,272  2,381  (1,445) 229  125 
Balance at end of period $ 22,431  $ 18,167  $ 15,773  $ 17,141  $ 16,902 


As of
December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Asset quality:
Nonaccrual loans
Residential real estate $ 2,152  $ 2,137  $ 2,161  $ 2,181  $ 2,380 
Commercial real estate 2,781  2,894  2,955  3,365  3,482 
Commercial business 2,126  2,380  787  817  1,728 
Construction 9,382  9,382  9,382  9,382  8,997 
Total nonaccrual loans 16,441  16,793  15,285  15,745  16,587 
Other real estate owned —  —  —  —  — 
Total nonperforming assets $ 16,441  $ 16,793  $ 15,285  $ 15,745  $ 16,587 
Nonperforming loans as a % of total loans 0.61  % 0.73  % 0.74  % 0.79  % 0.88  %
Nonperforming assets as a % of total assets 0.51  % 0.62  % 0.63  % 0.63  % 0.68  %
Allowance for loan losses as a % of total loans 0.84  % 0.79  % 0.77  % 0.86  % 0.89  %
Allowance for loan losses as a % of nonperforming loans 136.43  % 108.18  % 103.19  % 108.87  % 101.90  %
Total past due loans to total loans 0.60  % 0.78  % 1.40  % 0.85  % 1.72  %

Total nonaccrual loans decreased $0.1 million to $16.4 million as of December 31, 2022 when compared to December 31, 2021. Nonperforming assets as a percentage of total assets decreased to 0.51% at December 31, 2022, down from 0.68% at December 31, 2021. The allowance for loan losses at December 31, 2022 was $22.4 million, representing 0.84% of total loans.

Past due loans decreased to $16.1 million, or 0.60% of total loans, as of December 31, 2022, compared to $32.6 million, or 1.72% of total loans, as of December 31, 2021.
8







BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
Period End Loan Composition December 31,
2022
September 30,
2022
December 31,
2021
 
Current QTD
% Change
YTD
% Change
Residential Real Estate $ 60,588  $ 61,664  $ 79,987  (1.7) % (24.3) %
Commercial Real Estate(1)
1,921,252  1,647,928  1,356,709  16.6  41.6 
Construction 155,198  117,355  98,341  32.2  57.8 
Total Real Estate Loans 2,137,038  1,826,947  1,535,037  17.0  39.2 
Commercial Business 520,447  443,288  350,975  17.4  48.3 
Consumer 17,963  16,558  8,869  8.5  102.5 
Total Loans $ 2,675,448  $ 2,286,793  $ 1,894,881  17.0  % 41.2  %
(1) Includes owner occupied commercial real estate.
Gross loans totaled $2.7 billion at December 31, 2022, an increase of $780.6 million or 41.2% compared to December 31, 2021.
Period End Deposit Composition December 31,
2022
September 30,
2022
December 31,
2021
 
Current QTD
% Change
YTD
% Change
Noninterest bearing demand $ 404,559  $ 380,365  $ 398,956  6.4  % 1.4  %
NOW 104,057  115,200  119,479  (9.7) (12.9)
Money Market 913,868  836,564  954,674  9.2  (4.3)
Savings 151,944  183,576  193,631  (17.2) (21.5)
Time 1,226,390  770,997  457,258  59.1  168.2 
Total Deposits $ 2,800,818  $ 2,286,702  $ 2,123,998  22.5  % 31.9  %

Total deposits were $2.8 billion at December 31, 2022, compared to $2.1 billion at December 31, 2021, an increase of $676.8 million, or 31.9%. The increase in deposits is primarily a result of an increase in brokered time deposits to fund the significant loan growth during the second half of 2022, increasing by $727.1 million compared to December 31, 2021.
9







BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest income December 31,
2022
September 30,
2022
December 31,
2021
Dec 22 vs. Sep 22
% Change
Dec 22 vs. Dec 21
% Change
Bank owned life insurance $ 273  $ 271  $ 270  0.7  % 1.1  %
Service charges and fees 343  240  257  42.9  33.5 
Gains (losses) and fees from sales of loans 12  (15) 441  180.0  (97.3)
Other (100) (94) (143) 6.4  30.1 
Total noninterest income $ 528  $ 402  $ 825  31.3  % (36.0) %

For the Year Ended
Noninterest income December 31, 2022 December 31, 2021 % Change
Gains and fees from sales of loans $ 1,236  $ 2,692  (54.1) %
Bank owned life insurance 1,069  1,023  4.5 
Service charges and fees 1,072  872  22.9 
Other (337) 1,070  (131.5)
Total noninterest income $ 3,040  $ 5,657  (46.3) %
Noninterest income decreased by $0.3 million to $0.5 million for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Noninterest income decreased by $2.6 million to $3.0 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.
The decrease in noninterest income was driven by a reduction in loan sales for the quarter and year ended December 31, 2022 compared to the same periods in 2021. Noninterest income also declined for the year ended December 31, 2022 due to a one-time federal payroll tax credit for COVID-19 of $0.9 million recognized in the quarter ended March 31, 2021. The decrease in noninterest income was also due to the absence of $0.7 million of rental income in 2022 due to the disposition of the Company's former headquarters building in the fourth quarter of 2021.


10








BANKWELL FINANCIAL GROUP, INC.
NONINTEREST EXPENSE (unaudited)
(Dollars in thousands)

For the Quarter Ended
Noninterest expense December 31,
2022
September 30,
2022
December 31,
2021
Dec 22 vs. Sep 22
% Change
Dec 22 vs. Dec 21
% Change
Salaries and employee benefits $ 5,988  $ 5,876  $ 4,806  1.9  % 24.6  %
Occupancy and equipment 1,919  2,035  2,411  (5.7) (20.4)
Professional services 912  994  628  (8.2) 45.2 
Data processing 663  626  432  5.9  53.5 
Director fees 378  325  335  16.3  12.8 
FDIC insurance 898  255  231  252.2  288.7 
Marketing 112  102  87  9.8  28.7 
Other 1,601  818  749  95.7  113.8 
Total noninterest expense $ 12,471  $ 11,031  $ 9,679  13.1  % 28.8  %

For the Year Ended
Noninterest expense December 31, 2022 December 31, 2021 % Change
Salaries and employee benefits $ 22,237  $ 18,317  21.4  %
Occupancy and equipment 8,297  10,682  (22.3)
Professional services 3,887  2,260  72.0 
Data processing 2,632  2,409  9.3 
Director fees 1,394  1,303  7.0 
FDIC insurance 1,638  1,232  33.0 
Marketing 366  404  (9.4)
Other 3,912  3,132  24.9 
Total noninterest expense $ 44,363  $ 39,739  11.6  %

Noninterest expense increased by $2.8 million to $12.5 million for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Noninterest expense increased by $4.6 million to $44.4 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits expense, professional services expense, FDIC insurance, and customer fraud reimbursement and deposit account fraud within Other. These increases were partially offset by a decrease in occupancy and equipment expense.
Salaries and employee benefits expense totaled $6.0 million for the quarter ended December 31, 2022, an increase of $1.2 million when compared to the same period in 2021. Salaries and employee benefits expense totaled $22.2 million for the year ended December 31, 2022, an increase of $3.9 million when compared to the same period in 2021. The increase in salaries and employee benefits expense was driven by an increase in full time equivalent employees, as well as an increase in variable compensation as a result of the Bank's overall growth and improved performance. Full time equivalent employees totaled 136 at December 31, 2022 compared to 126 for the same period in 2021. The increase in salaries and employee benefits expense was partially offset by an increase in deferred loan costs due to higher loan originations.

11







Professional services expense totaled $0.9 million for the quarter ended December 31, 2022, an increase of $0.3 million when compared to the same period in 2021. Professional services expense totaled $3.9 million for the year ended December 31, 2022, an increase of $1.6 million when compared to the same period in 2021. The increase in professional services expense was primarily driven by consulting fees associated with various projects, including our core system conversion.
FDIC insurance expense totaled $0.9 million for the quarter ended December 31, 2022, an increase of $0.7 million when compared to the same period in 2021. FDIC insurance expense totaled $1.6 million for the year ended December 31, 2022, an increase of $0.4 million when compared to the same period in 2021. The higher FDIC insurance expense is attributed to the overall balance sheet growth and increased use of brokered deposits.
Other expense totaled $1.6 million for the quarter ended December 31, 2022, an increase of $0.9 million when compared to the same period in 2021. Other expense totaled $3.9 million for the year ended December 31, 2022, an increase of $0.8 million. The increase was mainly attributable to four events of customer reimbursed fraud and deposit account fraud recognized in the quarter ended December 31 2022, the largest of which was a $189 thousand customer reimbursement.
Occupancy and equipment expense totaled $1.9 million for the quarter ended December 31, 2022, a decrease of $0.5 million when compared to the same period in 2021. Occupancy and equipment expense totaled $8.3 million for the year ended December 31, 2022, a decrease of $2.4 million when compared to the same period in 2021. The decrease in occupancy and equipment expense was primarily driven by the curtailment of additional cleaning costs associated with precautions taken to prevent the spread of COVID-19 during the year ended December 31, 2021. In addition, the decrease in occupancy and equipment expense was impacted by a reduction in lease expense as a result of the branch closure in New Canaan, which occurred during the third quarter of 2021.
12







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,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Total Equity $ 238,469  $ 231,500  $ 225,467  $ 210,220  $ 201,987 
Less:
Goodwill 2,589  2,589  2,589  2,589  2,589 
Other intangibles —  —  —  —  — 
Tangible Common Equity $ 235,880  $ 228,911  $ 222,878  $ 207,631  $ 199,398 
Total Assets $ 3,252,449  $ 2,722,995  $ 2,435,552  $ 2,496,877  $ 2,456,264 
Less:
Goodwill 2,589  2,589  2,589  2,589  2,589 
Other intangibles —  —  —  —  — 
Tangible Assets $ 3,249,860  $ 2,720,406  $ 2,432,963  $ 2,494,288  $ 2,453,675 
Tangible Common Equity to Tangible Assets 7.26  % 8.41  % 9.16  % 8.32  % 8.13  %

As of
Computation of Fully Diluted Tangible Book Value per Common Share December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
Total shareholders' equity $ 238,469  $ 231,500  $ 225,467  $ 210,220  $ 201,987 
Less:
Preferred stock —  —  —  —  — 
Common shareholders' equity $ 238,469  $ 231,500  $ 225,467  $ 210,220  $ 201,987 
Less:
Goodwill 2,589  2,589  2,589  2,589  2,589 
Other intangibles —  —  —  —  — 
Tangible common shareholders' equity $ 235,880  $ 228,911  $ 222,878  $ 207,631  $ 199,398 
Common shares issued and outstanding 7,730,699  7,711,843  7,752,389  7,761,338  7,803,166 
Fully Diluted Tangible Book Value per Common Share $ 30.51  $ 29.68  $ 28.75  $ 26.75  $ 25.55 
13







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,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Noninterest expense $ 12,471  $ 11,031  $ 10,936  $ 9,925  $ 9,679  $ 44,363  $ 39,739 
Less:
Amortization of intangible assets —  —  —  —  48  —  76 
Other real estate owned expenses —  —  —  —  —  —  — 
Adjusted noninterest expense $ 12,471  $ 11,031  $ 10,936  $ 9,925  $ 9,631  $ 44,363  $ 39,663 
Net interest income $ 26,809  $ 24,601  $ 23,823  $ 19,510  $ 18,928  $ 94,743  $ 67,886 
Noninterest income 528  402  1,152  958  825  3,040  5,657 
Less:
Net gain on sale of available for sale securities —  —  —  —  —  —  — 
Gain on sale of other real estate owned, net —  —  —  —  —  —  — 
Operating revenue $ 27,337  $ 25,003  $ 24,975  $ 20,468  $ 19,753  $ 97,783  $ 73,543 
Efficiency ratio 45.6  % 44.1  % 43.8  % 48.5  % 48.8  % 45.4  % 53.9  %

For the Quarter Ended For the Year Ended
Computation of Return on Average Tangible Common Equity December 31,
2022
September 30,
2022
June 30,
2022
March 31,
2022
December 31,
2021
December 31,
2022
December 31,
2021
Net Income Attributable to Common Shareholders $ 8,021  $ 9,174  $ 12,022  $ 8,212  $ 7,814  $ 37,429  $ 26,586 
Total average shareholders' equity $ 237,922  $ 231,378  $ 218,250  $ 207,541  $ 200,752  $ 223,874  $ 191,808 
Less:
Average Goodwill 2,589  2,589  2,589  2,589  2,589  2,589  2,589 
Average Other intangibles —  —  —  —  45  —  59 
Average tangible common equity $ 235,333  $ 228,789  $ 215,661  $ 204,952  $ 198,118  $ 221,285  $ 189,160 
Annualized Return on Average Tangible Common Equity 13.52  % 15.91  % 22.36  % 16.25  % 15.65  % 16.91  % 14.05  %
14







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, 2022 December 31, 2021
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold $ 231,767  $ 2,150  3.68  % $ 233,196  $ 90  0.15  %
Securities(1)
123,274  887  2.88  104,797  756  2.89 
Loans:
Commercial real estate 1,828,306  24,998  5.35  1,337,147  15,104  4.42 
Residential real estate 61,057  599  3.92  83,763  694  3.31 
Construction 138,552  2,185  6.17  95,611  972  3.98 
Commercial business 499,030  8,549  6.70  347,394  4,222  4.75 
Consumer 16,875  214  5.05  8,904  89  3.97 
Total loans 2,543,820  36,545  5.62  1,872,819  21,081  4.40 
Federal Home Loan Bank stock 5,371  64  4.72  2,814  16  2.28 
Total earning assets 2,904,232  $ 39,646  5.34  % 2,213,626  $ 21,943  3.88  %
Other assets 76,703  130,512 
Total assets $ 2,980,935  $ 2,344,138 
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW $ 107,118  $ 45  0.17  % $ 114,158  $ 51  0.18  %
Money market 837,486  4,158  1.97  874,352  1,097  0.50 
Savings 170,903  581  1.35  190,118  100  0.21 
Time 1,002,012  6,299  2.49  438,627  950  0.86 
Total interest bearing deposits 2,117,519  11,083  2.08  1,617,255  2,198  0.54 
Borrowed Money 170,202  1,701  3.91  89,726  767  3.35 
Total interest bearing liabilities 2,287,721  $ 12,784  2.22  % 1,706,981  $ 2,965  0.69  %
Noninterest bearing deposits 407,923  383,557 
Other liabilities 47,369  52,848 
Total liabilities 2,743,013  2,143,386 
Shareholders' equity 237,922  200,752 
Total liabilities and shareholders' equity $ 2,980,935  $ 2,344,138 
Net interest income(2)
$ 26,862  $ 18,978 
Interest rate spread 3.12  % 3.19  %
Net interest margin(3)
3.70  % 3.43  %
(1)Average balances and yields for securities are based on amortized cost.
(2)The adjustment for securities and loans taxable equivalency amounted to $52 thousand and $50 thousand for the quarters ended December 31, 2022 and 2021, 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.

15







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, 2022 December 31, 2021
Average
Balance
Interest
Yield/
Rate (4)
Average
Balance
Interest
Yield/
Rate (4)
Assets:
Cash and Fed funds sold $ 238,233  $ 3,500  1.47  % $ 294,471  $ 376  0.13  %
Securities(1)
118,591  3,280  2.77  103,592  3,071  2.96 
Loans:
Commercial real estate 1,532,971  76,103  4.90  1,225,770  55,995  4.51 
Residential real estate 66,028  2,408  3.65  99,101  3,363  3.39 
Construction 115,902  6,666  5.67  97,163  3,780  3.84 
Commercial business 427,178  25,561  5.90  313,422  14,589  4.59 
Consumer 10,121  504  4.98  7,929  315  3.97 
Total loans 2,152,200  111,242  5.10  1,743,385  78,042  4.42 
Federal Home Loan Bank stock 4,132  124  3.00  4,156  88  2.12 
Total earning assets 2,513,156  $ 118,146  4.64  % 2,145,604  $ 81,577  3.75  %
Other assets 86,485  120,955 
Total assets $ 2,599,641  $ 2,266,559 
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW $ 118,837  $ 203  0.17  % $ 111,515  $ 198  0.18  %
Money market 891,095  8,830  0.99  804,679  4,042  0.50 
Savings 188,186  1,259  0.67  175,629  413  0.23 
Time 617,480  9,072  1.47  508,651  5,790  1.14 
Total interest bearing deposits 1,815,598  19,364  1.07  1,600,474  10,443  0.65 
Borrowed Money 118,960  3,838  3.18  103,919  3,047  2.89 
Total interest bearing liabilities 1,934,558  $ 23,202  1.20  % 1,704,393  $ 13,490  0.79  %
Noninterest bearing deposits 401,005  323,648 
Other liabilities 40,204  46,710 
Total liabilities 2,375,767  2,074,751 
Shareholders' equity 223,874  191,808 
Total liabilities and shareholders' equity $ 2,599,641  $ 2,266,559 
Net interest income(2)
$ 94,944  $ 68,087 
Interest rate spread 3.44  % 2.96  %
Net interest margin(3)
3.78  % 3.17  %
(1)Average balances and yields for securities are based on amortized cost.
(2)The adjustment for securities and loans taxable equivalency amounted to $200 thousand and $201 thousand for the year ended December 31, 2022 and 2021, respectively.
(3)Yields are calculated using the contractual day count convention for each respective product type.

16
EX-99.2 3 a4q2022bwfginvestorprese.htm a4q2022bwfginvestorprese
BWFG | LISTED | NASDAQ 4Q22 Investor Presentation January 25th, 2023


 
2 BWFG LISTED NASDAQ BWFG LISTED NASDAQ This presentation may contain certain forward-looking statements about Bankwell Financial Group, Inc. (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,” “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. The COVID-19 pandemic continues to affect Bankwell Financial Group, its customers, counterparties, employees, and third party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is unknown. Safe Harbor


 
3 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Table of Contents • 4Q22 & 2022 Performance • Trends • Credit Quality & ALLL • Loan Portfolio • Capital • Bankwell History & Overview


 
BWFG | LISTED | NASDAQ 4Q22 & 2022 Performance


 
5 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 4Q22 Summary • Reported Net Income of $8.02 million, or $1.04 earnings per share (EPS) for the quarter, and $37.43 million, or $4.79 earnings per share for the full year ‒ Full year Operating EPS of $4.29 excludes previously reported items of elevated fees associated with loan prepayments ($0.25 EPS) and changes in the allowance for loan loss ($0.25 EPS) • Reported Return on Average Assets (ROAA) and Return on Average Equity (ROAE) were 1.07% and 13.38%, respectively for the quarter, and 1.44% and 16.72% for the full year ̶ Full year Operating ROAA and ROAE were 1.29% and 14.98%, respectively, excluding the previously reported items above • Reported Pre-tax, Pre-provision Net Revenue (“PPNR”)1 of $14.87 million, or 1.98% PPNR ROAA for the quarter, and $53.42 million, or 2.05% PPNR ROAA for the full year ̶ Full year Operating PPNR of $50.92 million, or 1.96% PPNR ROAA, excluding the previously reported elevated fees • Record loan growth of $389 million in the quarter, with year-to-date loan growth of $781 million, or 41% ‒ Loans funded at a weighted average yield of 7.23% during the quarter • Quarterly Net Interest Margin (“NIM”) of 3.70%, year-to-date NIM of 3.78% 1 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense 2 Core deposit (Commercial and Consumer checking, savings and money market accounts) growth from 9/30/2022 through 01/10/2023


 
6 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 4Q22 & Total Year Results 1 Ratios presented represent Bank ratios; presented ratios are preliminary, subject to finalization of the FDIC Call Report 2 Bankwell meets Adequate + buffer standard, which exceeds Well Capitalized thresholds Profitability Balance Sheet Capital • $2.7 billion of gross loans • $2.8 billion of deposits • 0.84% ALLL (non-CECL); CECL adoption in January 2023 • Dividend of $0.20 per share paid • $30.51 Fully Diluted Tangible Book Value • Well Capitalized1,2 Tier 1 Leverage 9.88% Tier1/CET1 / RWA 10.28% Total Capital / RWA 11.07% 4Q22 Total Year 2022 • Net Income $8.0 million $37.4 million • PPNR $14.9 million $53.4 million • Return on Average Assets 1.07% 1.44% • PPNR / Average Assets 1.98% 2.05% • Return on Average Equity 13.38% 16.72%


 
7 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 4Q22 3Q22 Var1 Total Interest Income $39.6 $29.7 $9.9 Total Interest Expense $12.8 $5.1 $(7.7) Net Interest Income $26.8 $24.6 $2.2 Non-Interest Income $0.5 $0.4 $0.1 Non-Interest Expense $12.5 $11.0 $(1.4) Pre-Tax, Pre-Provision Net Revenue $14.9 $14.0 $0.9 Provision for Loan Losses $4.3 $2.4 $(1.9) Pre-Tax Income $10.6 $11.6 $(1.0) Income Tax Expense $2.6 $2.4 $(0.2) Reported Net Income $8.0 $9.2 $(1.2) EPS $1.04 $1.18 $(0.14) Pre-Tax, Pre-Provision Net Revenue per share2 $1.97 $1.84 $0.13 1 Variances are rounded based on actual whole dollar amounts 2 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense Dollars in millions, except per share data Balance Sheet 4Q22 3Q22 Var1 Cash & Cash Equivalents $356 $223 $133 Investment Securities $122 $113 $9 Loans Receivable, net $2,646 $2,263 $383 All Other Assets $129 $123 $6 Total Assets $3,252 $2,723 $529 Total Deposits $2,801 $2,287 $514 Total Borrowings $159 $159 $0 Other Liabilities $55 $46 $9 Total Liabilities $3,014 $2,491 $523 Equity $238 $231 $7 Total Liabilities & Equity $3,252 $2,723 $529 4Q22 Consolidated Financial Statements Linked Quarter


 
8 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Income Statement 2022 2021 Var1 Total Interest Income $117.9 $81.4 $36.6 Total Interest Expense $23.2 $13.5 $(9.7) Net Interest Income $94.7 $67.9 $26.9 Non-Interest Income2 $3.0 $5.7 $(2.6) Non-Interest Expense $44.4 $39.7 $(4.6) Pre-Tax, Pre-Provision Net Revenue $53.4 $33.8 $19.6 Provision/(Credit) for Loan Losses $5.4 $(0.1) $(5.5) Pre-Tax Income $48.0 $33.9 $14.1 Income Tax Expense $10.6 $7.3 $(3.3) Reported Net Income $37.4 $26.6 $10.8 EPS $4.79 $3.36 $1.43 Pre-Tax, Pre-Provision Net Revenue per share3 $6.99 $4.36 $2.64 1 Variances are rounded based on actual whole dollar amounts 2 2021 includes the one-time benefit for the federal payroll tax credit for COVID-19-impacted small businesses 3 Pre-tax, pre-provision net revenue per share is a non-GAAP metric & excludes provision for loan losses and income tax expense Dollars in millions, except per share data TY Consolidated Income Statements Prior Year


 
BWFG | LISTED | NASDAQ Trends


 
10 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Performance Trends $1.78 $2.21 $2.31 $0.75 $3.36 $4.79 $4.29 2017 2018 2019 2020 2021 2022 Diluted EPS 0.80% 0.94% 0.97% 0.28% 1.17% 1.44% 1.29% 2017 2018 2019 2020 2021 2022 Return on Average Assets 8.93% 10.19% 10.20% 3.35% 13.86% 16.72% 14.98% 2017 2018 2019 2020 2021 2022 Return on Average Equity $20.39 $21.85 $22.82 $21.96 $25.55 $30.51 2017 2018 2019 2020 2021 2022 Fully Diluted Tangible Book Value Operating result Operating result Operating result Positive performance trends reflect successful strategy execution


 
11 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Net Interest Margin 3.30% 3.18% 3.03% 2.77% 3.17% 3.78% 2017 2018 2019 2020 2021 2022 Net Interest Margin 1.08% 1.42% 1.75% 1.20% 0.67% 0.99% 0.93% 1.30% 1.66% 1.07% 0.54% 0.87% 2017 2018 2019 2020 2021 2022 Cost of Funds / Deposits Cost of Funds Cost of Deposits 4.51% 4.67% 4.85% 4.48% 4.42% 5.10% 4.23% 4.45% 4.61% 3.85% 3.75% 4.64% 2017 2018 2019 2020 2021 2022 Loan & Earning Asset Yields Loan Yield Earning Asset Yield Yields include origination fee amortization • Originated ~$1.5 billion loans with funded volume of ~$1.1 billion at an average 6.24% yield • Given the Federal Reserve actions, NIM contracted in 4Q22; anticipated actions in 2023 will further contract NIM ~10 bps lift from prepayment fees 3.30% 3.75% 3.96% 3.70% 1Q22 2Q22 3Q22 4Q22 2022 by Quarter1 1 2Q22, 3Q22 exclude one-time elevated loan prepayment fees


 
12 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Trends $ 1, 2 0 2 $ 1, 2 12 $ 1, 17 6 $ 1, 16 9 $ 1, 18 2 $ 1, 2 0 0 $ 1, 2 17 $ 1, 2 3 7 $ 1, 2 3 5 $ 1, 2 4 1 $ 1, 2 2 0 $ 1, 3 4 4 $ 1, 4 5 9 $ 4 0 2 $ 4 0 9 $ 4 3 9 $ 4 5 5 $ 4 4 4 $ 4 7 3 $ 5 2 2 $ 5 8 7 $ 6 6 0 $ 7 4 4 $ 8 3 8 $ 9 4 3 $ 1, 2 16 $1,604 $1,621 $1,615 $1,625$1,626 $1,673 $1,738 $1,825 $1,895 $1,985 $2,057 $2,287 $2,675 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Loan Balances All Other C&I + CRE Owner Occupied 4Q22 Loan Mix 4Q22 Portfolio Yield by Vintage1 1 Weighted average yield based on active loans as of 12-31-2022 Dollars in millions Reduced reliance on Investor CRE Residential 2.09% C&I 19.45% CRE Owner Occupied 26.04% CRE Investor 45.77% Commercial Const. 5.80% Consumer Loans / Other 0.84% C&I + CRE Owner Occupied / Total Loans 25% 27% 35% 45% 65% of Loan balances are 2021 / 2022 vintages 4.45% Pre 2019 5.33% 2019 5.72% 2020 5.44% 2021 6.24% 2022


 
13 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Loan Yield Trend 4.30% 4.34% 4.55% 4.99% 5.56% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% - 500 1,000 1,500 2,000 2,500 3,000 3,500 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Loan Balance Portfolio Loan Yield Loan yields increased 126 bps since December 31, 2021 1 Weighted average yield based on active loans as of each date, a "spot" rate 1 2022 Vintage Yields by Quarter 1Q22 5.19% 2Q22 5.55% 3Q22 6.00% 4Q22 7.23% Total 6.24% Dollars in millions


 
14 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends 1 1 Core Deposits include Commercial and Consumer checking, savings and money market accounts 2 Wholesale Funding ratio defined as brokered deposits and FHLB borrowings to total assets 16 .2 % 2 7 .0 % 2 0 .8 % 19 .9 % 15 .0 % 14 .1 % 15 .9 % 16 .3 % 16 .7 % 16 .2 % 17 .2 % 2 7 .1 % 3 6 .7 % 2 8 .6 % 2 5 .7 % 2 5 .2 % 2 2 .2 % 2 0 .1 % 18 .1 % 14 .6 % 11 .4 % 9 .7 % 9 .0 % 8 .6 % 8 .0 % 8 .8 % 5 5 .3 % 4 7 .3 % 5 4 .0 % 5 7 .9 % 6 4 .9 % 6 7 .9 % 6 9 .6 % 7 2 .3 % 7 3 .6 % 7 4 .8 % 7 4 .1 % 6 5 .0 % 5 4 .4 % $1,492 $1,681 $1,620 $1,768 $1,827 $1,860 $1,939 $1,883 $2,124 $2,166 $2,034 $2,287 $2,801 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Deposit Balances Brokered Deposits Retail CDs Core Deposits Dollars in millions 20.6% 19.8% 16.4% 34.4% Wholesale Funding ratio2 FHLB Borrowings 4Q22 increase in Brokered Deposits a result of timing differences between core deposit generation & record 4Q loan growth $150 $175 $50 $90


 
15 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Deposit Trends 18.5% 16.2% 12.4% 14.1% 15.9% 1 Average cost on 4Q22 NOW deposits less than 15 basis points; these accounts not sensitive to Fed Funds rate changes $213 $231 $471 $611 $637 $156 $178 $255 $383 $373 $369 $409 $725 $994 $1,010 4Q18 4Q19 4Q20 4Q21 4Q22 Commercial Deposits Trend Interest Bearing Non-Interest Bearing Dollars in millions $48 $52 $72 $87 $86 $173 $192 $270 $399 $405 $221 $244 $343 $486 $491 4Q18 4Q19 4Q20 4Q21 4Q22 DDA Trend NOW Non-Interest Bearing 14.7% 16.3% 18.7% 22.9% 17.5% % Total Deposits 1 24.6% 27.4% 39.7% 46.8% 36.1% % Total Deposits • From year-end 2018 to 12/31/2022, total Non-Interest Bearing deposits CAGR of 24% • $641 million growth in Commercial Deposits since year-end 2018, a CAGR of 29% ‒ Within Core deposits, Commercial mix at ~70%, vs. 45% at year-end 2018 Investment in Treasury Management improving Core deposit mix


 
BWFG | LISTED | NASDAQ Credit Quality & ALLL


 
17 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Credit Quality 0.66% 2.06% 0.88% 0.61% 2019 2020 2021 2022 Non Performing Loans / Gross Loans NPLs $10,588 $33,416 $16,587 $16,441 0.35% 0.13% 0.14% 2022 Detail 0.61% SBA-guaranteed portion of NPLs All other NPLs Credit quality remains strong COVID-19 related NPL Dollars in thousands • Single loan - 57% LTV • Full recourse • High net worth guarantors • Full repayment expected 1-5 $1,555 96.9% $1,563 96.1% $1,827 96.4% $2,632 98.4% 6 $27 1.7% $15 0.9% $21 1.1% $1 0.0% 7 $19 1.2% $46 2.8% $45 2.4% $43 1.6% 8 $4 0.2% $2 0.1% $2 0.1% $0 0.0% Total $1,604 $1,626 $1,895 $2,675 R is k R a ti n g ( R R ) Rated Asset Balances – Total Loans Risk Rating Meanings 1 Secured by Cash 2 Superior 3 Desirable 4 Pass 5 Bankable with Care 6 Special Mention 7 Substandard 8 Doubtful 9 Loss NR Not Rated Dollars in millions


 
18 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 0.75% 0.81% 0.04% $4.3 million ($15) thousand 0.03% 3Q22 Asset Growth / Mix Specifics 4Q22 General Specific 4Q22 ALLL Allowance for Loan Loss (“ALLL”) Walk 0.79% 0.84% $18.2 Million $22.4 Million • ALLL coverage of NPLs is 136% • Excluding the COVID-19-related NPL, coverage would be 318% • CECL adoption in Jan-23; ~ range of $3.4 million to $4.2 million increase to ALLL


 
BWFG | LISTED | NASDAQ Loan Portfolio


 
20 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential 2.09% C&I 19.45% CRE Owner Occupied 26.04% CRE Investor 45.77% Commercial Const. 5.80% Consumer Loans / Other 0.84% • No single relationship represents more than 5% of total loans, as of December 31, 2022 • Increasingly diversified commercial loan portfolio mix: Total Loan Portfolio = $2,675 million Loan Portfolio Composition Diversifying portfolio, reducing reliance on Investor CRE 4Q19 4Q20 4Q21 4Q22 CRE Investor 59.8% 60.5% 55.2% 45.8% CRE O/O + C&I 24.9% 27.1% 34.9% 45.5%


 
21 BWFG LISTED NASDAQ BWFG LISTED NASDAQ 1 Total CRE Portfolio = $1,921 million 1 Includes Owner Occupied CRE, does not include Construction CRE Loan Portfolio Retail 22.50% Office 15.95% Residential Care 31.43% MultiFamily 10.19% Industrial Warehouse 9.60% Mixed Use 4.79% Other 3.63% Special Use 1.90% • Property Type mix continues to show well diversified exposure • Residential Care consists primarily of skilled nursing and/or assisted living facilities located across eastern US • ~ 64% of all CRE loan balances have recourse ̶ Non recourse loans require lower LTV and higher DSCR


 
22 BWFG LISTED NASDAQ BWFG LISTED NASDAQ CT 41% NJ 14% NY 13% All Other 32% 1 Includes Owner Occupied CRE, does not include Construction 2 Comprised primarily of neighborhood and convenience centers, typically characterized by: size up to 125,000 sq. ft.; convenience and service oriented 3 LTVs based on original LTV values, at origination Type Count $ % LTV3 Retail2 75 $243 56% 69.5% Grocery 12 $106 25% 64.0% Restaurant 25 $36 8% 60.0% Gas / Auto Services 16 $27 6% 75.8% Pharmacy 7 $21 5% 65.1% Total Retail 135 $432 100% 67.5% Retail Segment Detail • No significant exposure to any one retailer • No exposure to bankrupt retailers Office Segment Detail Type Count $ % LTV3 Office (primarily suburban) 69 $220 72% 59.1% Medical 37 $86 28% 64.3% Condo 4 $1 0% 66.0% Total Office 110 $306 100% 60.6% 1 CRE Loan Portfolio Dollars in millions • ~68% Office loans located in Bankwell’s primary lending area, mostly in suburban area, not NYC • Out of primary market loans are generally either GSA-leased, credit tenants, owner-occupied or medical office


 
23 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Geography Distribution 1 Includes Owner Occupied CRE, does not include Construction 2 Based on dollar volume 3 LTVs based on original LTV values, at origination 4 Consists primarily of skilled nursing and/or assisted living facilities 5 Special Use includes Country Clubs, Tennis Facilities, Catering 6 Other includes Hotel, NFP/Social, Mobile Home & Worship Loan To Value Property Type $ LTV3 Residential Care4 $603.9 64.5% Retail $432.3 67.5% Office $306.5 60.6% Multifamily $195.9 61.6% Industrial/Warehouse $184.5 60.8% Mixed Use $92.0 45.1% Special Use5 $36.6 66.7% 1 - 4 Family Investment $35.7 57.7% Other6 $28.9 48.9% Land $5.1 30.2% Self Storage $0.0 55.0% Total $1,921.3 62.6% Vintage Year $ Distribution Pre 2019 $509.9 27% 2019 $142.2 7% 2020 $102.2 5% 2021 $374.5 19% 2022 $792.5 41% Total $1,921.3 100% • Greater geographic diversity attributed to growth in Residential Care4 sector • Continued diversification by following strongest customers to growth or stable markets • Of the CT-based loans, 50% are in Fairfield County2 Dollars in millions 1 CRE Loan Portfolio CT 29.79% NY 22.57% FL 17.29% NJ 5.47% OH 3.59% PA 3.36% All Other 17.94%


 
24 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Finance 17% Insurance (Primarily Brokers) 29%Health Care & Social Assistance 33% Admin & Support, Waste Mgmt, Remediation Svcs 4% Real Estate and Rental/Leasing 3% Arts, Entertainment & Recreation 3% Manufacturing 3% Retail Trade 2% All Other 6% C&I Loan Portfolio Loans by Industry Type Total C&I Portfolio = $520 million • Limited leverage loan exposure of $6 million as of 12/31/22, less than 1% of total loans 1 1 Includes luxury auto leasing and financing


 
25 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Commercial Construction Portfolio • Commercial construction loans comprise ~6% of total loan portfolio (~$155 million) • $157 million of unfunded commitments, committed construction draws are subject to various terms and conditions, including completion of work verified by third party professional inspection Dollars in millions By Property Type # Loans $ Committed % Unfunded $ Unfunded 3Q22 Balance 32 $242 55% $134 Closures in 4Q22 (2) ($21) 3Q22 Loans @ 4Q22 30 $221 50% $110 New 4Q22 Loans 5 $86 4Q22 Balance 32 $306 51% $157 Multifamily 54% Mixed Use 30% Land 7% Self Storage 5% Retail 3% Residential 1%


 
26 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Residential Portfolio • $61 million Residential portfolio comprised of: ̶ $56 million residential mortgages, with an average LTV of 67.3%1 and an average size of $483 thousand ̶ $5 million HELOCs • 86% ($48 million) of residential mortgages secured by residences in Fairfield County, CT ̶ Of the Fairfield County mortgages, 65% are secured by residences in New Canaan, Westport & Fairfield Loan Vintage Year $ Millions Distribution Pre 2014 $25.3 42% 2014 $6.2 10% 2015 $9.9 16% 2016 $7.8 13% 2017 $11.2 19% 2018 $0.2 0% Total $60.6 100% 1 LTVs based on original LTV values, at origination Bankwell stopped originating residential mortgages at the end of 2017


 
BWFG | LISTED | NASDAQ Capital


 
28 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Fully Diluted Tangible Book Value 1 Misc includes items such as, but not limited to, changes related to stock grants and share count $25.55 $30.51 $4.79 $0.80 $1.07 $0.06 $0.05 2021 Net Income Dividends AOCI Share Buyback Misc 2022 2022 TBV / Share Walk • 19% TBV growth in 2022 • $1.08 unfavorable change from AFS investment portfolio more than offset by $2.15 favorable change from mark-to-market on long-dated interest rate swaps • Repurchased 166,375 shares at an average price of $33.30 in 2022 1


 
29 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Capital Position 8.41% 11.31% 11.42% 12.16% 7.26% 9.88% 10.28% 11.07% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% 15.00% T C E T ie r 1 Le ve ra g e T ie r 1 / C E T 1 T o ta l C a p it a l 4Q22 3Q22 ‘Adequate’ + Buffer Min Capital ratios reflect strong earnings and double-digit loan growth 2 Tier 1CET1 CRE concentration of 425%1 1 Current period Bank capital ratios are preliminary, subject to finalization of the FDIC Call Report 2 TCE calculation is a consolidated BWFG ratio Key Bank Capital Ratios1


 
BWFG | LISTED | NASDAQ History & Overview


 
31 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Bankwell operates in an attractive core market: • Third most affluent MSA in the Nation in per capita personal income (PCPI)2 • 4 of the top 25 wealthiest towns in the U.S.3 • MSA ranked 11th most educated overall, tied for 5th with the highest percentage of bachelors degree holders4 • Headquarters of 9 Fortune 500 companies5 • Home to two of the largest hedge funds in the U.S. • $27 billion total AUM managed by 68 firms with $1 billion or less in AUM6 • 381 thousand housing units with a median value of owner-occupied units of $433 thousand7 ̶ In addition, New Haven County has 371 thousand housing units with a median value of owner-occupied units of $252 thousand7 1 Source: S&P Global Market Intelligence’s Branch Competitors & Pricing Report as of 6/30/22, excluding global money center banks (tickers BAC, WFC, JPM, TD & C) 2 Source: Bureau of Economic Analysis’ Metropolitan Area Table, contained within the Personal Income by County & Metropolitan Area, 2020 news release 11/16/21 3 Source: Bloomberg: 2020 Richest Places 4 Source: WalletHub: Most & Least Educated Cities in America, 7/18/22 5 Source: Fortune.com: 2022 Fortune 500 6 Source: US News and World Report 7 Source: US Census Bureau QuickFacts (2021 data) Branches (9) Branch Closure 4Q22 (1) Fairfield County Profile • Connecticut-based $3.3 billion commercial bank • 9 branches in Fairfield & New Haven Counties • $204 million deposits per branch; one of the highest in Fairfield & New Haven Counties1


 
32 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Financial Snapshot 2017 2018 2019 2020 2021 2022 Total assets $1,796,607 $1,873,665 $1,882,182 $2,253,747 $2,456,264 $3,252,449 Net loans $1,520,879 $1,586,775 $1,588,840 $1,601,672 $1,875,167 $2,646,384 Loan-to-deposit ratio 110.1% 106.4% 107.1% 87.9% 88.8% 95.2% Efficiency ratio2 54.9% 59.2% 60.2% 73.9% 53.9% 45.4% Non-interest expense / avg. assets 1.88% 1.93% 1.90% 2.03% 1.75% 1.71% Net interest margin 3.30% 3.18% 3.03% 2.77% 3.17% 3.78% Total capital to risk weighted assets 12.19% 12.50% 13.35% 12.28% 12.00% 11.07% Tangible common equity ratio2 8.81% 9.16% 9.56% 7.73% 8.13% 7.26% Return on average equity 8.93% 10.19% 10.20% 3.35% 13.86% 16.72% Fully diluted tangible book value per share2 $20.39 $21.85 $22.82 $21.96 $25.55 $30.51 Net interest income $54,364 $56,326 $53,761 $54,835 $67,886 $94,743 Pre-tax, pre-provision net revenue2 $26,470 $24,593 $23,379 $14,907 $33,803 $53,420 Net income $13,830 $17,433 $18,216 $5,904 $26,586 $37,429 EPS (fully diluted) $1.78 $2.21 $2.31 $0.75 $3.36 $4.79 1 1 Values are based on reported earnings / performance, which 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 BWFG’s 4Q’17 Earnings Release for further detail 2 A non-GAAP metric Dollars in thousands, except per share data


 
33 BWFG LISTED NASDAQ BWFG LISTED NASDAQ Name Years Experience Selected Professional Biography Christopher Gruseke Chief Executive Officer Director (since 2015) 30+ Mr. Gruseke was a founding investor and director of Bankwell Financial Group’s predecessors, BNC Financial Group, Inc., and The Bank of New Canaan. He brings more than 25 years of capital markets, operations, sales and finance experience to his role at the Company. Most recently, he was a member of the Executive Committee at CRT Capital, a Stamford, Connecticut-based broker/dealer. He also served as Co-Chief Operating Officer and a member of the Board of Greenwich Capital Markets. Mr. Gruseke earned a B.A. from Williams College and an M.S. from the Stern School of Business at New York University. Christine A. Chivily Chief Credit Officer (since 2013) 40+ Ms. Chivily has over 40 years of experience in banking and real estate finance. She previously served in a risk management role for the CRE and C&I loan portfolios at People's United Bank. Her prior experience also includes five years as Director of Freddie Mac’s New England region for multifamily properties and 11 years as Senior Credit Officer at RBS Greenwich Capital. She also has over 10 years of combined experience in lending, loan administration and workouts at other various banking institutions. Ms. Chivily received her B.A. from Mt. Holyoke College. Matthew McNeill Chief Banking Officer (since 2020) 20+ Mr. McNeill has more than 20 years of experience in Commercial Banking. He most recently served as Head of Commercial Lending at Metropolitan Commercial Bank. During his 8 years at Metropolitan Commercial Bank the bank grew its lending assets from $400 million to over $3 billion. Mr. McNeill has additionally held lending roles at HSBC Bank US and Banco Santander. Mr. McNeill has also served as Managing Partner at American Real Estate Lending; a Commercial Real Estate finance company. Courtney E. Sacchetti Chief Financial Officer (since 2023) 20+ Ms. Sacchetti has more than 20 years experience in Financial Services. She most recently served as Director of Financial Planning & Analysis for the Company for 6 years. She began her career at GE Capital in the Financial Management Program (FMP) and held various finance and regulatory positions of increasing responsibility over her 18-year career at GE Capital. Ms. Sacchetti earned a B.A. and an M.B.A. from Union College. Laura J. Waitz Chief Operating Officer (since 2017) 35+ Ms. Waitz has over 35 years of experience for various businesses and previously was Senior Managing Director, Global Head of Human Resources at The Blackstone Group. She also served as Managing Director and Global Head of Compensation at Citi Alternative Investments and as Head of Compensation (Americas) for Deutsche Bank. Prior to that she served as Global Compensation Manager for private equity and investment banks. Ms. Waitz received her B.S. from Penn State University. Experienced Leadership Team


 
BWFG | LISTED | NASDAQ Thank You & Questions