NEW CANAAN, Conn.--(BUSINESS WIRE)--Bankwell Financial Group, Inc. (NASDAQ:BWFG) reported GAAP net income of $1.5 million for the quarter ended September 30, 2014, resulting primarily from record loan growth of $59 million since June 30, 2014.
Blake S. Drexler, Executive Chairman of Bankwell Financial Group, Inc., stated, “Our record performance reflected a continuation of strong momentum as we continue to execute against our strategic plan, which centers on growing the Company, diversifying revenue streams and investing in new and profitable lines of business.” He added, “We have successfully utilized a portion of the capital raised from our IPO with continued loan growth and the acquisition of Quinnipiac Bank & Trust on October 1st. This latest acquisition underscores our strategy to grow both organically and through acquisitions.”
In a recent report, the U.S. Treasury Department ranked Bankwell Financial Group first in the nation for growth in qualified small business lending in its Small Business Lending Fund at June 30, 2014.
Earnings
Revenues (net interest income plus non-interest income) for the three months ended September 30, 2014 were $8.4 million, an increase of 12% compared to September 30, 2013. Revenues (net interest income plus non-interest income) for the nine months ended September 30, 2014 were $24.1 million, an increase of 12% compared to September 30, 2013. Total net interest income for the three months ended September 30, 2014 was $7.6 million, an increase of 19% compared to the same period in the prior year. The strong improvement in net interest income was fueled by record loans outstanding and a year-to-date net interest margin of 3.78%. The increased loan loss provision to $566 thousand for the quarter ended September 30, 2014 is directly a result of growth in our loan portfolio.
Net income for the third quarter of 2014 was $1.5 million, representing a 13% increase compared to the same period in the prior year. The Company continues to focus on expense control as indicated by our improving efficiency ratios. The Company’s efficiency ratio for the three months ended September 30, 2014 was 64.37% and for the nine months ended September 30, 2014 was 70.71%.
Financial Condition
On the balance sheet, assets totaled $896 million at September 30, 2014, a 31% increase over total assets of $684 million for the same period in the prior year. This increase reflects strong loan growth, proceeds from the IPO and, to a lesser extent, The Wilton Bank acquisition in the fourth quarter of 2013. Total loans were $744 million, a 27% increase compared to September 30, 2013. Deposits increased to $695 million, a 28% increase over September 30, 2013, with core deposits showing a 29% increase to $459 million for the same period.
Asset Quality
Asset quality remained exceptionally strong at September 30, 2014. Non-performing assets as a percentage of total assets was 0.23% at September 30, 2014, up slightly from 0.21% at September 30, 2013. The allowance for loan losses as of September 30, 2014 was $9.6 million, representing 1.28% of total loans.
Capital
Shareholders’ equity was strong at $118.5 million as of September 30, 2014, an increase of $49 million compared to December 31, 2013, primarily a result of the approximately $45 million net raised in the IPO. As of September 30, 2014, the Tangible Common Equity Ratio and Tangible Book Value per share were 11.97% and $16.52, 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 can contact Blake S. Drexler, Executive Chairman or Ernest J. Verrico, CFO of Bankwell Financial Group at (203) 972-3838.
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.
| BANKWELL FINANCIAL GROUP, INC. | ||||||||||||
| CONSOLIDATED BALANCE SHEETS (unaudited) | ||||||||||||
| (Dollars in thousands, except share data) | ||||||||||||
| September 30, |
June 30, |
December 31, | September 30, | |||||||||
| 2014 | 2014 | 2013 | 2013 | |||||||||
| Assets | ||||||||||||
| Cash and due from banks | $ | 35,566 | $ | 130,535 | $ | 82,013 | $ | 51,029 | ||||
| Held to maturity investment securities, at amortized cost | 11,502 | 13,742 | 13,816 | 12,831 | ||||||||
| Available for sale investment securities, at fair value | 67,537 | 49,114 | 28,597 | 29,235 | ||||||||
| Loans held for sale | - | 325 | 100 | - | ||||||||
| Loans receivable (net of allowance for loan losses of $9,552, $8,985, | ||||||||||||
| $8,382 and $8,277 at September 30, 2014, June 30, 2014, December 31, 2013 | ||||||||||||
| and September 30, 2013 respectively) | 730,148 | 671,500 | 621,830 | 574,340 | ||||||||
| Foreclosed real estate | 829 | 829 | 829 | - | ||||||||
| Accrued interest receivable | 2,670 | 2,464 | 2,360 | 2,165 | ||||||||
| Federal Home Loan Bank stock, at cost | 4,834 | 4,834 | 4,834 | 4,577 | ||||||||
| Premises and equipment, net | 7,787 | 8,078 | 7,060 | 2,528 | ||||||||
| Bank-owned life insurance | 22,837 | 10,202 | 10,031 | - | ||||||||
| Other intangible assets | 401 | 427 | 481 | - | ||||||||
| Deferred income taxes, net | 5,804 | 5,479 | 5,845 | 5,872 | ||||||||
| Other assets | 5,600 | 4,258 | 1,822 | 946 | ||||||||
| Total assets | $ | 895,515 | $ | 901,787 | $ | 779,618 | $ | 683,523 | ||||
| Liabilities & Shareholders' Equity | ||||||||||||
| Liabilities | ||||||||||||
| Deposits | ||||||||||||
| Noninterest-bearing | $ | 151,146 | $ | 146,596 | $ | 118,618 | $ | 100,878 | ||||
| Interest-bearing | 544,117 | 583,590 | 542,927 | 443,246 | ||||||||
| Total deposits | 695,263 | 730,186 | 661,545 | 544,124 | ||||||||
| Advances from the Federal Home Loan Bank | 77,000 | 47,000 | 44,000 | 65,000 | ||||||||
| Accrued expenses and other liabilities | 4,755 | 7,431 | 4,588 | 6,254 | ||||||||
| Total liabilities | 777,018 | 784,617 | 710,133 | 615,378 | ||||||||
| Shareholders' equity | ||||||||||||
| Preferred stock, senior noncumulative perpetual, Series C, no par; | ||||||||||||
| 10,980 shares issued and outstanding at September 30, 2014, | ||||||||||||
| June 30, 2014, December 31, 2013, and September 30, 2013 respectively; | ||||||||||||
| liquidation value of $1,000 per share. | 10,980 | 10,980 | 10,980 | 10,980 | ||||||||
| Common stock, no par value; 10,000,000 shares authorized, | ||||||||||||
| 6,559,995, 6,593,485, 3,876,393 and 3,746,253 shares issued at | ||||||||||||
| September 30, 2014, June 30, 2014, December 31, 2013 and | ||||||||||||
| September 30, 2013 respectively. | 97,180 | 97,296 | 52,105 | 51,971 | ||||||||
| Retained earnings | 9,735 | 8,271 | 5,976 | 4,641 | ||||||||
| Accumulated other comprehensive income | 602 | 623 | 424 | 553 | ||||||||
| Total shareholders' equity | 118,497 | 117,170 | 69,485 | 68,145 | ||||||||
| Total liabilities and shareholders' equity | $ | 895,515 | $ | 901,787 | $ | 779,618 | $ | 683,523 | ||||
| BANKWELL FINANCIAL GROUP, INC. | |||||||||||||
| CONSOLIDATED STATEMENTS OF INCOME (unaudited) | |||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||
|
Three Months Ended
September 30, |
Nine Months Ended
September 30, |
||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| Interest and dividend income | |||||||||||||
| Interest and fees on loans | $ | 8,054 | $ | 6,748 | $ | 23,040 | $ | 19,619 | |||||
| Interest and dividends on securities | 569 | 355 | 1,417 | 1,040 | |||||||||
| Interest on cash and cash equivalents | 45 | 18 | 116 | 39 | |||||||||
| Total interest income | 8,668 | 7,121 | 24,573 | 20,698 | |||||||||
| Interest expense | |||||||||||||
| Interest expense on deposits | 905 | 600 | 2,257 | 1,553 | |||||||||
| Interest on borrowings | 168 | 127 | 427 | 417 | |||||||||
| Total interest expense | 1,073 | 727 | 2,684 | 1,970 | |||||||||
| Net interest income | 7,595 | 6,394 | 21,889 | 18,728 | |||||||||
| Provision for loan losses | 566 | 47 | 847 | 489 | |||||||||
| Net interest income after provision for loan losses | 7,029 | 6,347 | 21,042 | 18,239 | |||||||||
| Noninterest income | |||||||||||||
| Gains and fees from sales of loans | 366 | 972 | 1,008 | 1,737 | |||||||||
| Service charges and fees | 153 | 100 | 420 | 297 | |||||||||
| Bank owned life insurance | 135 | - | 305 | - | |||||||||
| Net gain on sale of available for sale securities | - | - | - | 648 | |||||||||
| Gain (loss) on sale of foreclosed real estate, net | - | (16 | ) | - | 49 | ||||||||
| Other | 103 | 27 | 475 | 141 | |||||||||
| Total noninterest income | 757 | 1,083 | 2,208 | 2,872 | |||||||||
| Noninterest expense | |||||||||||||
| Salaries and employee benefits | 2,786 | 2,894 | 9,412 | 8,146 | |||||||||
| Occupancy and equipment | 1,066 | 836 | 3,162 | 2,410 | |||||||||
| Professional services | 394 | 422 | 1,035 | 1,212 | |||||||||
| Data processing | 314 | 280 | 949 | 787 | |||||||||
| Director fees | 177 | 142 | 460 | 426 | |||||||||
| Merger and acquisition related expenses | 145 | - | 408 | 64 | |||||||||
| Marketing | 135 | 378 | 463 | 776 | |||||||||
| FDIC insurance | 120 | 36 | 345 | 267 | |||||||||
| Amortization of intangibles | 27 | - | 80 | - | |||||||||
| Foreclosed real estate | 9 | 1 | 21 | 4 | |||||||||
| Other | 357 | 342 | 1,134 | 950 | |||||||||
| Total noninterest expense | 5,530 | 5,331 | 17,469 | 15,042 | |||||||||
| Income before income tax expense | 2,256 | 2,099 | 5,781 | 6,069 | |||||||||
| Income tax expense | 765 | 780 | 1,940 | 2,270 | |||||||||
| Net income | $ | 1,491 | $ | 1,319 | $ | 3,841 | $ | 3,799 | |||||
| Net income attributable to common shareholders | $ | 1,441 | $ | 1,271 | $ | 3,677 | $ | 3,660 | |||||
| Earnings per common share - basic | $ | 0.22 | $ | 0.38 | $ | 0.72 | $ | 1.12 | |||||
| Earnings per common share - diluted | 0.22 | 0.37 | 0.72 | 1.10 | |||||||||
| BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||
| CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | ||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||
|
Three Months Ended
September 30, |
Nine Months Ended,
September 30, |
|||||||||||||
|
2014 |
2013 | 2014 |
2013 |
|||||||||||
| Performance ratios: | ||||||||||||||
| Return on average assets | 0.67 | % | 0.75 | % | 0.62 | % | 0.78 | % | ||||||
| Return on average stockholders' equity | 5.02 | % | 8.23 | % | 5.84 | % | 8.30 | % | ||||||
| Net interest margin | 3.69 | % | 4.00 | % | 3.78 | % | 4.04 | % | ||||||
| Efficiency ratio (1) | 64.37 | % | 71.13 | % | 70.71 | % | 71.64 | % | ||||||
| As of | ||||||||||||||
|
September 30,
2014 |
September 30,
2013 |
|||||||||||||
| Capital ratios: | ||||||||||||||
| Total Capital to Risk-Weighted Assets (2) | 15.27 | % | 10.79 | % | ||||||||||
| Tier I Capital to Risk-Weighted Assets (2) | 14.02 | % | 9.54 | % | ||||||||||
| Tier I Capital to Average Assets (2) | 11.93 | % | 7.84 | % | ||||||||||
| Tangible common equity to tangible assets | 11.97 | % | 8.36 | % | ||||||||||
| Tangible book value per common share (3) | $ | 16.52 | $ | 15.46 | ||||||||||
| Asset quality: | ||||||||||||||
| Nonaccrual loans | $ | 1,246 | $ | 1,423 | ||||||||||
| Other real estate owned | 829 | - | ||||||||||||
| Total non-performing assets | $ | 2,075 | $ | 1,423 | ||||||||||
| Loans past due 90 days and still accruing | $ | 1,309 | $ | - | ||||||||||
| Nonperforming loans as a % of total loans | 0.17 | % | 0.24 | % | ||||||||||
| Nonperforming assets as a % of total assets | 0.23 | % | 0.21 | % | ||||||||||
| Allowance for loan losses as a % of total loans | 1.28 | % | 1.42 | % | ||||||||||
| Allowance for loan losses as a % of nonperforming loans | 766.51 | % | 581.47 | % | ||||||||||
| Annualized net loan charge-offs as a % of average loans | 0.00 | % | 0.00 | % | ||||||||||
| (1) Efficiency ratio is defined as non-interest expenses, less merger and acquisition related expenses and other real estate owned expenses, 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. |
| (3) Excludes preferred stock and unvested restricted stock awards of 76,278 and 48,956 as of September 30, 2014 and September 30, 2013, respectively. |
| BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||||||
| NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| For the Three Months Ended | ||||||||||||||||||
| September 30, 2014 | September 30, 2013 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||
| Assets: | ||||||||||||||||||
| Cash and Fed funds sold | $ | 64,752 | $ | 45 | 0.28 | % | $ | 31,569 | $ | 18 | 0.22 | % | ||||||
| Securities (1) | 71,536 | 666 | 3.73 | % | 39,993 | 451 | 4.51 | % | ||||||||||
| Loans: (2) | ||||||||||||||||||
| Commercial real estate | 365,042 | 4,473 | 4.79 | % | 298,085 | 3,789 | 4.97 | % | ||||||||||
| Residential real estate | 166,123 | 1,499 | 3.61 | % | 156,580 | 1,429 | 3.65 | % | ||||||||||
| Construction (3) | 47,261 | 570 | 4.72 | % | 38,018 | 461 | 4.74 | % | ||||||||||
| Commercial business | 101,184 | 1,296 | 5.01 | % | 70,843 | 968 | 5.35 | % | ||||||||||
| Home equity | 12,786 | 121 | 3.75 | % | 10,511 | 100 | 3.80 | % | ||||||||||
| Consumer | 698 | 15 | 8.75 | % | 39 | 2 | 17.98 | % | ||||||||||
| Acquired loan portfolio non accrual loans (net of mark) | 1,327 | 81 | 24.15 | % | - | - | 0.00 | % | ||||||||||
| Total loans | 694,421 | 8,055 | 4.54 | % | 574,076 | 6,749 | 4.60 | % | ||||||||||
| Federal Home Loan Bank stock | 4,834 | 18 | 1.49 | % | 4,587 | 4 | 0.37 | % | ||||||||||
| Total earning assets | 835,543 | $ | 8,784 | 4.11 | % | 650,225 | $ | 7,222 | 4.35 | % | ||||||||
| Other assets | 47,383 | 49,160 | ||||||||||||||||
| Total assets | $ | 882,926 | $ | 699,385 | ||||||||||||||
| Liabilities and shareholders' equity: | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| NOW | $ | 52,298 | 15 | 0.11 | % | $ | 31,933 | 9 | 0.12 | % | ||||||||
| Money market | 175,111 | 218 | 0.49 | % | 118,705 | 138 | 0.46 | % | ||||||||||
| Savings | 79,505 | 65 | 0.33 | % | 110,510 | 128 | 0.46 | % | ||||||||||
| Time | 257,616 | 607 | 0.93 | % | 170,246 | 325 | 0.76 | % | ||||||||||
| Total interest-bearing deposits | 564,530 | 905 | 0.64 | % | 431,394 | 600 | 0.55 | % | ||||||||||
| Borrowed Money | 47,333 | 168 | 1.41 | % | 63,903 | 127 | 0.79 | % | ||||||||||
| Total interest bearing liabilities | 611,863 | $ | 1,073 | 0.70 | % | 495,297 | $ | 727 | 0.58 | % | ||||||||
| Noninterest-bearing deposits | 138,272 | 97,574 | ||||||||||||||||
| Other liabilities | 14,918 | 42,915 | ||||||||||||||||
| Total liabilities | 765,053 | 635,786 | ||||||||||||||||
| Shareholders' equity | 117,873 | 63,599 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 882,926 | $ | 699,385 | ||||||||||||||
| Net interest income (4) | $ | 7,711 | $ | 6,495 | ||||||||||||||
| Interest rate spread | 3.41 | % | 3.77 | % | ||||||||||||||
| Net interest margin (5) | 3.69 | % | 4.00 | % | ||||||||||||||
| (1) Average balances and yields for securities are based on amortized cost. |
| (2) Average balances and yields for loans exclude nonperforming loans. |
| (3) Includes commercial and residential real estate construction. |
| (4) The adjustment for securities and loans taxable equivalency amounted to $116 thousand and $101 thousand, respectively for the three months ended September 30, 2014, and 2013. |
| (5) Net interest income as a percentage of earning assets. |
| BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||||||
| NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||
| For the Nine Months Ended | ||||||||||||||||||
| September 30, 2014 | September 30, 2013 | |||||||||||||||||
| Average | Yield/ | Average | Yield/ | |||||||||||||||
| Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||
| Assets: | ||||||||||||||||||
| Cash and Fed funds sold | $ | 58,699 | $ | 116 | 0.26 | % | $ | 23,547 | $ | 39 | 0.22 | % | ||||||
| Securities (1) | 53,723 | 1,697 | 4.21 | % | 40,654 | 1,294 | 4.25 | % | ||||||||||
| Loans: (2) | ||||||||||||||||||
| Commercial real estate | 341,480 | 12,523 | 4.84 | % | 295,752 | 11,206 | 5.00 | % | ||||||||||
| Residential real estate | 161,049 | 4,362 | 3.61 | % | 150,957 | 4,214 | 3.72 | % | ||||||||||
| Construction (3) | 46,317 | 1,615 | 4.60 | % | 36,149 | 1,317 | 4.80 | % | ||||||||||
| Commercial business | 99,113 | 3,705 | 4.93 | % | 64,576 | 2,576 | 5.26 | % | ||||||||||
| Home equity | 13,373 | 370 | 3.70 | % | 10,624 | 298 | 3.75 | % | ||||||||||
| Consumer | 640 | 42 | 8.88 | % | 282 | 13 | 6.14 | % | ||||||||||
| Acquired loan portfolio non accrual loans (net of mark) | 2,753 | 425 | 20.64 | % | - | - | 0.00 | % | ||||||||||
| Total loans | 664,725 | 23,042 | 4.57 | % | 558,340 | 19,624 | 4.63 | % | ||||||||||
| Federal Home Loan Bank stock | 4,834 | 54 | 1.48 | % | 4,516 | 13 | 0.37 | % | ||||||||||
| Total earning assets | 781,981 | $ | 24,909 | 4.20 | % | 627,057 | $ | 20,970 | 4.41 | % | ||||||||
| Other assets | 39,993 | 20,134 | ||||||||||||||||
| Total assets | $ | 821,974 | $ | 647,191 | ||||||||||||||
| Liabilities and shareholders' equity: | ||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| NOW | $ | 52,544 | 43 | 0.11 | % | 34,030 | $ | 33 | 0.13 | % | ||||||||
| Money market | 173,104 | 564 | 0.44 | % | 106,279 | 338 | 0.43 | % | ||||||||||
| Savings | 93,328 | 216 | 0.31 | % | 121,088 | 421 | 0.47 | % | ||||||||||
| Time | 224,765 | 1,434 | 0.85 | % | 147,138 | 761 | 0.69 | % | ||||||||||
| Total interest-bearing deposits | 543,741 | 2,257 | 0.55 | % | 408,535 | 1,553 | 0.51 | % | ||||||||||
| Borrowed Money | 48,370 | 427 | 1.18 | % | 76,612 | 418 | 0.73 | % | ||||||||||
| Total interest bearing liabilities | 592,111 | $ | 2,684 | 0.61 | % | 485,147 | $ | 1,971 | 0.54 | % | ||||||||
| Noninterest-bearing deposits | 129,074 | 87,312 | ||||||||||||||||
| Other liabilities | 12,808 | 13,546 | ||||||||||||||||
| Total liabilities | 733,993 | 586,005 | ||||||||||||||||
| Shareholders' equity | 87,981 | 61,186 | ||||||||||||||||
| Total liabilities and shareholders' equity | $ | 821,974 | $ | 647,191 | ||||||||||||||
| Net interest income (4) | $ | 22,225 | $ | 18,999 | ||||||||||||||
| Interest rate spread | 3.59 | % | 3.87 | % | ||||||||||||||
| Net interest margin (5) | 3.78 | % | 4.04 | % | ||||||||||||||
| (1) Average balances and yields for securities are based on amortized cost. |
| (2) Average balances and yields for loans exclude nonperforming loans. |
| (3) Includes commercial and residential real estate construction. |
| (4) The adjustment for securities and loans taxable equivalency amounted to $336 thousand and $271 thousand, respectively for the nine months ended September 30, 2014, and 2013. |
| (5) Net interest income as a percentage of earning assets. |
