NEW CANAAN, Conn.--(BUSINESS WIRE)--Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $2.1 million or $0.27 per share for the fourth quarter of 2017, versus $3.3 million or $0.43 per share for the same period in 2016 and GAAP net income of $13.8 million or $1.78 per share for the year ended 2017, versus $12.4 million or $1.62 per share for the year ended 2016.
The Company's Board of Directors declared a $0.12 per share cash dividend, payable March 8, 2018 to shareholders of record on February 26, 2018, representing a 71% increase when compared to the last quarter’s dividend.
The reported GAAP net income for the quarter and the full year was impacted by several one-time, non-recurring items, the most significant of which was the tax reform of 2017. The impact of all items are outlined in the table below and discussed in more detail that follows. The discussion and analysis otherwise contained in our earnings release is entirely based on reported GAAP measures and corresponding GAAP net income unless otherwise noted.
For The Quarter Ended |
For the Year Ended 12/31/2017 |
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Reconciliation of Core Net Income, Net of Tax | $ | EPS | $ | EPS | |||||||||||||||||
Net Income (GAAP) | $ | 2,096 | $ | 0.27 | $ | 13,830 | $ | 1.78 | |||||||||||||
DTA write-off resulting from tax reform | 3,270 | 0.42 | 3,270 | 0.42 | |||||||||||||||||
Charges due to reduction in workforce | 166 | 0.02 | 166 | 0.02 | |||||||||||||||||
Income recognized from servicing assets | (578 | ) | (0.07 | ) | (663 | ) | (0.08 | ) | |||||||||||||
Impact from loan reserve methodology change | (862 | ) | (0.11 | ) | (862 | ) | (0.11 | ) | |||||||||||||
Core Net Income (non-GAAP) | $ | 4,092 | $ | 0.53 | $ | 15,741 | $ | 2.03 | |||||||||||||
As result of the tax law changes enacted in late 2017, the Company recognized a write-down of its deferred tax asset in the amount of $3.3 million or $0.42 per share. In addition, in late 2017 the Company recognized an after tax charge of $0.2 million or $0.02 per share due to a minimal workforce reduction. These charges were partially offset by a reduction in the allowance for loan losses stemming from an update to its methodology and underlying loan loss assumptions, incorporating the most recent industry and product loss trends. This resulted in a non-recurring, after tax $0.9 million or $0.11 per share reduction in the reserve. In addition, the Company recognized an after tax benefit of $0.6 million and $0.7 million or $0.07 per share and $0.08 per share, for the quarter ended and year ended 2017, respectively, as a result of refining the model assumptions used in calculating a servicing asset relating to loans in which the Company retains the servicing rights and liabilities. Adjusting net income for these items would result in core net income (non-GAAP) of $4.1 million or $0.53 for the quarter ended December 31, 2017 and $15.7 million or $2.03 for the year ended December 31, 2017.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
“2017 was another record year for Bankwell. In an increasingly volatile interest rate environment, we continue to improve our operating efficiencies and we vigilantly adhere to disciplined pricing on both sides of the balance sheet. The 2017 tax reform represents a unique opportunity for the bank and its shareholders. It will allow us to reward our shareholders, invest in the company’s growth initiatives and infrastructure, while giving back to the communities we serve.”
Fourth Quarter and Year Ended 2017 Highlights:
- Total revenue (net interest income plus non-interest income) reached $59.0 million for the year ended 2017 compared to $51.8 million for the year ended 2016.
- Tax equivalent net interest margin was 3.30% for the year ended 2017.
- Total non-interest income was $4.6 million for the year ended 2017, which is 8% of total revenue.
- The efficiency ratio was 55.1% and 54.9% for the fourth quarter and year ended 2017, respectively, compared to 55.6% and 56.5% for the fourth quarter and year ended 2016, respectively.
- The tangible common equity ratio and tangible book value per share was 8.81% and $20.59, respectively.
- Total gross loans exceeded $1.5 billion and total assets reached $1.8 billion.
- The allowance for loan losses was $18.9 million and represents 1.23% of total loans.
- Nonperforming assets represented 0.31% of total assets.
- Investment securities totaled $113.8 million and represent 6% of total assets.
- Total deposits reached $1.4 billion for the year ended 2017, an increase of $109.4 million or 8.5% compared to the year ended 2016.
Earnings
Net income for the quarter ended December 31, 2017 was $2.1 million, a decrease of 37% compared to the quarter ended December 31, 2016. Net income for the year ended December 31, 2017 was $13.8 million, an increase of 12% compared to the year ended December 31, 2016. The decline in net income was primarily a result of the aforementioned non-recurring items, the greatest component of which was the DTA write down as a result of the 2017 tax reform.
Revenues (net interest income plus non-interest income) for the quarter ended December 31, 2017 were $15.5 million, an increase of 13% compared to the quarter ended December 31, 2016. Revenues for the year ended December 31, 2017 were $59.0 million, an increase of 14% compared to the year ended December 31, 2016. Net interest income for the quarter ended December 31, 2017 was $13.9 million, an increase of 5% compared to the quarter ended December 31, 2016. Net interest income for the year ended December 31, 2017 was $54.4 million, an increase of 11% compared to the year ended December 31, 2016. The growth in revenues and net interest income were driven by continued earning asset growth.
Basic and diluted earnings per share for the quarter ended December 31, 2017 were both $0.27 compared to $0.44 and $0.43 basic and diluted earnings per share for the quarter ended December 31, 2016. Basic and diluted earnings per share for the year ended December 31, 2017 was $1.80 and $1.78, respectively, compared to $1.64 and $1.62 earnings per share, respectively, for the year ended December 31, 2016.
The Company’s efficiency ratios for the quarters ended December 31, 2017 and December 31, 2016 were 55.1% and 55.6%, respectively. The Company’s efficiency ratios for the year ended December 31, 2017 and December 31, 2016 were 54.9% and 56.5%, respectively.
Noninterest Income and Expense
Noninterest income increased $1.1 million to $1.5 million for the three months ended December 31, 2017 compared to the three months ended December 31, 2016. Noninterest income increased $2.0 million to $4.6 million for the year ended December 31, 2017 compared to the year ended December 31, 2016. The increase in noninterest income was primarily driven by income earned from the Company’s additional purchases of Bank Owned Life Insurance, an increase in the gains and fees from the sales of loans and rental income earned from the headquarters building acquired in the fourth quarter of 2016.
Noninterest expense increased $811 thousand or 10% for the three months ended December 31, 2017 compared to the three months ended December 31, 2016. The increase was primarily driven by an increase in salaries and employee benefits and other expenses related to growth and strategic initiatives. The increase in salaries and employee benefits was driven by an increase in full time equivalent employees. Full time equivalent employees totaled 139 at December 31, 2017 compared to 126 at December 31, 2016.
Noninterest expense increased $3.0 million or 10% for the year ended December 31, 2017 compared to the year ended December 31, 2016. The increase was primarily driven by an increase in salaries and employee benefits, occupancy and equipment expenses, professional services and other expenses related to growth and strategic initiatives. The increase in salaries and employee benefits was driven by an increase in full time equivalent employees. Average full time equivalent employees totaled 134 at December 31, 2017 compared to 125 at December 31, 2016. The increase in occupancy and equipment expenses was driven by increases in IT related expenses, one time charges relating to back office consolidation activity and maintenance costs for our headquarters building acquired in the fourth quarter of 2016. The increase in professional services was driven by increased fees paid for internal and external audit, and consulting services to support the overall growth of the business.
Financial Condition
Assets totaled $1.8 billion at December 31, 2017, an increase of 10% compared to assets of $1.6 billion at December 31, 2016. This increase reflects strong organic loan growth. Total gross loans exceeded $1.5 billion at December 31, 2017, an increase of 13% compared to December 31, 2016, driven by growth in commercial real estate loans of $125.8 million and commercial business loans of $60.4 million. Deposits increased to $1.4 billion compared to $1.3 billion at December 31, 2016, an increase of 9% over December 31, 2016.
Asset Quality
Asset quality remained strong at December 31, 2017. Non-performing assets as a percentage of total assets was 0.31% at December 31, 2017, up from 0.20% at December 31, 2016. The allowance for loan losses at December 31, 2017 was $18.9 million, representing 1.23% of total loans.
Capital
Shareholders’ equity totaled $161.0 million as of December 31, 2017, an increase of $15.1 million compared to December 31, 2016, primarily a result of net income for the year ended December 31, 2017 of $13.8 million. As of December 31, 2017, the tangible common equity ratio and tangible book value per share were 8.81% and $20.59, 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 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 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. The Company believes that providing a reconciliation from GAAP net income to core net income is useful for comparative analysis to prior periods given the presence of non-recurring items. 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) | |||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | |||||||||||||||||||||
Assets | |||||||||||||||||||||||||
Cash and due from banks | $ | 70,545 | $ | 85,329 | $ | 84,802 | $ | 63,675 | $ | 96,026 | |||||||||||||||
Federal funds sold | 186 | 11,117 | 1,185 | 10,280 | 329 | ||||||||||||||||||||
Cash and cash equivalents | 70,731 | 96,446 | 85,987 | 73,955 | 96,355 | ||||||||||||||||||||
Available for sale investment securities, at fair value | 92,188 | 86,272 | 90,951 | 87,434 | 87,751 | ||||||||||||||||||||
Held to maturity investment securities, at amortized cost | 21,579 | 23,573 | 23,615 | 16,808 | 16,859 | ||||||||||||||||||||
Loans held for sale | - | 785 | - | - | 254 | ||||||||||||||||||||
Loans receivable (net of allowance for loan losses of $18,904, $19,564, $19,536, | |||||||||||||||||||||||||
$18,511 and $17,982 at December 31, 2017, September 30, 2017, June 30, 2017, | |||||||||||||||||||||||||
March 31, 2017 and December 31, 2016, respectively) | 1,520,879 | 1,500,574 | 1,463,240 | 1,406,407 | 1,343,895 | ||||||||||||||||||||
Foreclosed real estate | - | 222 | 222 | 272 | 272 | ||||||||||||||||||||
Accrued interest receivable | 5,910 | 5,344 | 5,239 | 5,180 | 4,958 | ||||||||||||||||||||
Federal Home Loan Bank stock, at cost | 9,183 | 9,351 | 8,033 | 8,033 | 7,943 | ||||||||||||||||||||
Premises and equipment, net | 18,196 | 17,509 | 17,366 | 17,618 | 17,835 | ||||||||||||||||||||
Bank-owned life insurance | 39,618 | 39,329 | 39,034 | 38,740 | 33,448 | ||||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||||||||
Other intangible assets | 382 | 407 | 438 | 469 | 501 | ||||||||||||||||||||
Deferred income taxes, net | 4,904 | 8,834 | 8,957 | 8,954 | 9,085 | ||||||||||||||||||||
Other assets | 10,448 | 13,703 | 10,133 | 5,783 | 7,174 | ||||||||||||||||||||
Total assets | $ | 1,796,607 | $ | 1,804,938 | $ | 1,755,804 | $ | 1,672,242 | $ | 1,628,919 | |||||||||||||||
Liabilities & Shareholders' Equity | |||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||
Noninterest-bearing | $ | 172,638 | $ | 162,790 | $ | 176,495 | $ | 170,572 | $ | 187,593 | |||||||||||||||
Interest-bearing | 1,225,767 | 1,247,001 | 1,237,790 | 1,156,888 | 1,101,444 | ||||||||||||||||||||
Total deposits | 1,398,405 | 1,409,791 | 1,414,285 | 1,327,460 | 1,289,037 | ||||||||||||||||||||
Advances from the Federal Home Loan Bank | 199,000 | 195,000 | 150,000 | 160,000 | 160,000 | ||||||||||||||||||||
Subordinated debentures | 25,103 | 25,090 | 25,077 | 25,064 | 25,051 | ||||||||||||||||||||
Accrued expenses and other liabilities | 13,072 | 16,740 | 12,865 | 10,046 | 8,936 | ||||||||||||||||||||
Total liabilities | 1,635,580 | 1,646,621 | 1,602,227 | 1,522,570 | 1,483,024 | ||||||||||||||||||||
Shareholders' equity | |||||||||||||||||||||||||
Common stock, no par value; 10,000,000 shares authorized, | |||||||||||||||||||||||||
7,751,424, 7,705,975, 7,673,850, 7,638,706 and 7,620,663 shares issued | |||||||||||||||||||||||||
and outstanding at December 31, 2017, September 30, 2017, June 30, 2017, | |||||||||||||||||||||||||
March 31, 2017 and December 31, 2016, respectively | 118,301 | 117,289 | 116,502 | 115,823 | 115,353 | ||||||||||||||||||||
Retained earnings | 41,332 | 39,777 | 36,053 | 32,820 | 29,652 | ||||||||||||||||||||
Accumulated other comprehensive income | 1,394 | 1,251 | 1,022 | 1,029 | 890 | ||||||||||||||||||||
Total shareholders' equity | 161,027 | 158,317 | 153,577 | 149,672 | 145,895 | ||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,796,607 | $ | 1,804,938 | $ | 1,755,804 | $ | 1,672,242 | $ | 1,628,919 | |||||||||||||||
BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||||||||||||||||||||||||
CONSOLIDATED STATEMENTS OF INCOME (unaudited) | ||||||||||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||||||||||
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||||||||
Interest and dividend income | ||||||||||||||||||||||||||||||||||||
Interest and fees on loans | $ | 17,493 | $ | 17,175 | $ | 16,660 | $ | 15,513 | $ | 15,910 | $ | 66,841 | $ | 58,077 | ||||||||||||||||||||||
Interest and dividends on securities | 947 | 934 | 880 | 809 | 657 | 3,570 | 2,740 | |||||||||||||||||||||||||||||
Interest on cash and cash equivalents | 289 | 239 | 148 | 114 | 75 | 790 | 173 | |||||||||||||||||||||||||||||
Total interest income | 18,729 | 18,348 | 17,688 | 16,436 | 16,642 | 71,201 | 60,990 | |||||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||||||||||||
Interest expense on deposits | 3,602 | 3,416 | 3,095 | 2,581 | 2,438 | 12,694 | 8,300 | |||||||||||||||||||||||||||||
Interest on borrowings | 1,213 | 1,071 | 952 | 907 | 916 | 4,143 | 3,598 | |||||||||||||||||||||||||||||
Total interest expense | 4,815 | 4,487 | 4,047 | 3,488 | 3,354 | 16,837 | 11,898 | |||||||||||||||||||||||||||||
Net interest income | 13,914 | 13,861 | 13,641 | 12,948 | 13,288 | 54,364 | 49,092 | |||||||||||||||||||||||||||||
(Credit) Provision for loan losses | (495 | ) | 398 | 895 | 543 | 748 | 1,341 | 3,914 | ||||||||||||||||||||||||||||
Net interest income after provision for loan losses | 14,409 | 13,463 | 12,746 | 12,405 | 12,540 | 53,023 | 45,178 | |||||||||||||||||||||||||||||
Noninterest income | ||||||||||||||||||||||||||||||||||||
Gains and fees from sales of loans | 868 | 36 | 199 | 324 | 79 | 1,427 | 466 | |||||||||||||||||||||||||||||
Bank owned life insurance | 289 | 295 | 295 | 291 | 171 | 1,170 | 693 | |||||||||||||||||||||||||||||
Service charges and fees | 252 | 254 | 261 | 240 | 242 | 1,007 | 963 | |||||||||||||||||||||||||||||
(Loss) Gain on sale of foreclosed real estate, net | (78 | ) | - | - | - | - | (78 | ) | 128 | |||||||||||||||||||||||||||
Net gain (loss) on sale of available for sale securities | - | - | - | 165 | (207 | ) | 165 | (115 | ) | |||||||||||||||||||||||||||
Other | 210 | 239 | 243 | 246 | 116 | 938 | 541 | |||||||||||||||||||||||||||||
Total noninterest income | 1,541 | 824 | 998 | 1,266 | 401 | 4,629 | 2,676 | |||||||||||||||||||||||||||||
Noninterest expense | ||||||||||||||||||||||||||||||||||||
Salaries and employee benefits | 4,603 | 3,952 | 3,800 | 3,929 | 4,331 | 16,284 | 15,655 | |||||||||||||||||||||||||||||
Occupancy and equipment | 1,585 | 1,449 | 1,439 | 1,692 | 1,576 | 6,165 | 5,811 | |||||||||||||||||||||||||||||
Professional services | 457 | 680 | 523 | 412 | 397 | 2,072 | 1,654 | |||||||||||||||||||||||||||||
Data processing | 399 | 621 | 401 | 445 | 402 | 1,866 | 1,603 | |||||||||||||||||||||||||||||
Marketing | 321 | 295 | 311 | 266 | 304 | 1,193 | 948 | |||||||||||||||||||||||||||||
Director fees | 229 | 207 | 243 | 233 | 223 | 912 | 859 | |||||||||||||||||||||||||||||
FDIC insurance | 225 | 265 | 243 | 383 | 146 | 1,116 | 660 | |||||||||||||||||||||||||||||
Amortization of intangibles | 25 | 31 | 31 | 31 | 32 | 118 | 151 | |||||||||||||||||||||||||||||
Foreclosed real estate | - | 3 | 60 | 7 | 8 | 70 | 157 | |||||||||||||||||||||||||||||
Other | 735 | 626 | 530 | 836 | 349 | 2,727 | 2,046 | |||||||||||||||||||||||||||||
Total noninterest expense | 8,579 | 8,129 | 7,581 | 8,234 | 7,768 | 32,523 | 29,544 | |||||||||||||||||||||||||||||
Income before income tax expense | 7,371 | 6,158 | 6,163 | 5,437 | 5,173 | 25,129 | 18,310 | |||||||||||||||||||||||||||||
Income tax expense | 5,275 | 1,895 | 2,394 | 1,735 | 1,850 | 11,299 | 5,960 | |||||||||||||||||||||||||||||
Net income | $ | 2,096 | $ | 4,263 | $ | 3,769 | $ | 3,702 | $ | 3,323 | $ | 13,830 | $ | 12,350 | ||||||||||||||||||||||
Earnings Per Common Share: | ||||||||||||||||||||||||||||||||||||
Basic | $ | 0.27 | $ | 0.55 | $ | 0.49 | $ | 0.49 | $ | 0.44 | $ | 1.80 | $ | 1.64 | ||||||||||||||||||||||
Diluted | 0.27 | 0.55 | 0.49 | 0.48 | 0.43 | 1.78 | 1.62 | |||||||||||||||||||||||||||||
Weighted Average Common Shares Outstanding: | ||||||||||||||||||||||||||||||||||||
Basic | 7,624,931 | 7,587,471 | 7,550,734 | 7,525,268 | 7,418,820 | 7,572,409 | 7,396,019 | |||||||||||||||||||||||||||||
Diluted | 7,702,770 | 7,670,258 | 7,645,930 | 7,632,123 | 7,560,319 | 7,670,413 | 7,491,052 | |||||||||||||||||||||||||||||
Dividends per common share | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.07 | $ | 0.28 | $ | 0.22 | ||||||||||||||||||||||
BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||||||||||||||||
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited) | ||||||||||||||||||||||||||||
(Dollars in thousands, except per share data) | ||||||||||||||||||||||||||||
For the Quarter Ended | For the Year Ended | |||||||||||||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | December 31, | December 31, | ||||||||||||||||||||||
2017 | 2017 | 2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||
Performance ratios: | ||||||||||||||||||||||||||||
Return on average assets * | 0.46% | 0.96% | 0.88% | 0.93% | 0.84% | 0.80% | 0.85% | |||||||||||||||||||||
Return on average stockholders' equity * | 5.15% | 10.78% | 9.89% | 10.12% | 9.23% | 8.93% | 8.94% | |||||||||||||||||||||
Return on average tangible common equity * | 5.25% | 10.99% | 10.09% | 10.33% | 9.44% | 9.10% | 9.15% | |||||||||||||||||||||
Net interest margin | 3.23% | 3.30% | 3.32% | 3.35% | 3.55% | 3.30% | 3.54% | |||||||||||||||||||||
Efficiency ratio (1) | 55.1% | 55.1% | 51.2% | 58.3% | 55.6% | 54.9% | 56.5% | |||||||||||||||||||||
Net loan charge-offs (recoveries) as a % of average loans | 0.01% | 0.02% | (0.01%) | 0.00% | 0.00% | 0.03% | 0.01% |
* All metrics measuring return are significantly impacted by the non-recurring items previously described in the "Earnings" section. Excluding the non-recurring items, the company's return on average assets, return on average stockholders' equity and return on average tangible common equity would have been approximately 0.90%, 10.05% and 10.24% for the quarter ended December 31, 2017 and 0.91%, 10.16% and 10.36% for the full year ended December 31, 2017, respectively. |
As of | |||||||||||||||||||||||||||||||
December 31,
2017 |
September 30,
2017 |
June 30,
2017 |
March 31,
2017 |
December 31,
2016 |
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Capital ratios: | |||||||||||||||||||||||||||||||
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2) | 10.99 | % | 10.95 | % | 10.91 | % | 11.16 | % | 11.59 | % | |||||||||||||||||||||
Total Capital to Risk-Weighted Assets (2) | 12.19 | % | 12.19 | % | 12.16 | % | 12.41 | % | 12.85 | % | |||||||||||||||||||||
Tier I Capital to Risk-Weighted Assets (2) | 10.99 | % | 10.95 | % | 10.91 | % | 11.16 | % | 11.59 | % | |||||||||||||||||||||
Tier I Capital to Average Assets (2) | 9.61 | % | 9.78 | % | 9.75 | % | 10.06 | % | 10.10 | % | |||||||||||||||||||||
Tangible common equity to tangible assets | 8.81 | % | 8.62 | % | 8.59 | % | 8.78 | % | 8.78 | % | |||||||||||||||||||||
Tangible book value per common share (3) | $ | 20.59 | $ | 20.41 | $ | 19.89 | $ | 19.44 | $ | 18.98 | |||||||||||||||||||||
Asset quality: | |||||||||||||||||||||||||||||||
Nonaccrual loans | $ | 5,481 | $ | 4,241 | $ | 5,303 | $ | 4,434 | $ | 2,937 | |||||||||||||||||||||
Other real estate owned | - | 222 | 222 | 272 | 272 | ||||||||||||||||||||||||||
Total non-performing assets | $ | 5,481 | $ | 4,463 | $ | 5,525 | $ | 4,706 | $ | 3,209 | |||||||||||||||||||||
Nonperforming loans as a % of total loans | 0.36 | % | 0.28 | % | 0.36 | % | 0.31 | % | 0.22 | % | |||||||||||||||||||||
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Nonperforming assets as a % of total assets | 0.31 | % | 0.25 | % | 0.31 | % | 0.28 | % | 0.20 | % | |||||||||||||||||||||
Allowance for loan losses as a % of total loans | 1.23 | % | 1.28 | % | 1.31 | % | 1.30 | % | 1.32 | % | |||||||||||||||||||||
Allowance for loan losses as a % of nonperforming loans | 344.90 | % | 461.31 | % | 368.40 | % | 417.48 | % | 612.26 | % |
(1) Efficiency ratio is defined as noninterest expense, less merger and acquisition related expenses, 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. |
(3) Excludes unvested restricted shares of 75,186, 96,488, 103,220, 98,176, and 96,594 as of December 31, 2017, September 30, 2017, June 30, 2017, March 31, 2017, and December 31, 2016, respectively. |
BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||||||||
LOAN & DEPOSIT PORTFOLIO (unaudited) | ||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
December 31, | September 30, | December 31, | Current QTD | YTD | ||||||||||||||||
Period End Loan Composition | 2017 | 2017 | 2016 | % Change | % Change | |||||||||||||||
Residential Real Estate | $ | 193,609 | $ | 192,848 | $ | 195,729 | 0.4 | % | (1.1 | %) | ||||||||||
Commercial Real Estate | 971,151 | 942,898 | 845,322 | 3.0 | % | 14.9 | % | |||||||||||||
Construction | 101,636 | 114,571 | 107,441 | (11.3 | %) | (5.4 | %) | |||||||||||||
Total Real Estate Loans | 1,266,396 | 1,250,317 | 1,148,492 | 1.3 | % | 10.3 | % | |||||||||||||
Commercial Business | 276,285 | 272,505 | 215,914 | 1.4 | % | 28.0 | % | |||||||||||||
Consumer | 335 | 724 | 1,533 | (53.7 | %) | (78.1 | %) | |||||||||||||
Total Loans | $ | 1,543,016 | $ | 1,523,546 | $ | 1,365,939 | 1.3 | % | 13.0 | % | ||||||||||
December 31, | September 30, | December 31, | Current QTD | YTD | ||||||||||||||||
Period End Deposit Composition | 2017 | 2017 | 2016 | % Change | % Change | |||||||||||||||
Noninterest-bearing demand | $ | 172,638 | $ | 162,790 | $ | 187,593 | 6.0 | % | (8.0 | %) | ||||||||||
NOW | 58,942 | 58,894 | 53,950 | 0.1 | % | 9.3 | % | |||||||||||||
Money Market | 451,804 | 453,577 | 349,131 | (0.4 | %) | 29.4 | % | |||||||||||||
Savings | 83,758 | 87,469 | 96,502 | (4.2 | %) | (13.2 | %) | |||||||||||||
Time | 631,263 | 647,061 | 601,861 | (2.4 | %) | 4.9 | % | |||||||||||||
Total Deposits | $ | 1,398,405 | $ | 1,409,791 | $ | 1,289,037 | (0.8 | %) | 8.5 | % | ||||||||||
BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||||||||||
NONINTEREST INCOME & EXPENSE - QTD (unaudited) | ||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||
For the Quarter Ended | ||||||||||||||||||||||
Noninterest income | December 31, | September 30, | December 31 | Dec 17 vs. Sep 17 | Dec 17 vs. Dec 16 | |||||||||||||||||
2017 | 2017 | 2016 | % Change | % Change | ||||||||||||||||||
Gains and fees from sales of loans | $ | 868 | $ | 36 | 79 | 2311.1 | % | 998.7 | % | |||||||||||||
Bank owned life insurance | 289 | 295 | $ | 171 | (2.0 | %) | 69.0 | % | ||||||||||||||
Service charges and fees | 252 | 254 | 242 | (0.8 | %) | 4.1 | % | |||||||||||||||
Loss on sale of foreclosed real estate, net | (78 | ) | - | - | 100.0 | % | 100.0 | % | ||||||||||||||
Net loss on sale of available for sale securities | - | - | (207 | ) | 0.0 | % | (100.0 | %) | ||||||||||||||
Other | 210 | 239 | 116 | (12.1 | %) | 81.0 | % | |||||||||||||||
Total noninterest income | $ | 1,541 | $ | 824 | $ | 401 | 87.0 | % | 284.3 | % | ||||||||||||
For the Quarter Ended | ||||||||||||||||||||||
Noninterest expense | December 31, | September 30, | December 31 | Dec 17 vs. Sep 17 | Dec 17 vs. Dec 16 | |||||||||||||||||
2017 | 2017 | 2016 | % Change | % Change | ||||||||||||||||||
Salaries and employee benefits | $ | 4,603 | $ | 3,952 | $ | 4,331 | 16.5 | % | 6.3 | % | ||||||||||||
Occupancy and equipment | 1,585 | 1,449 | 1,576 | 9.4 | % | 0.6 | % | |||||||||||||||
Professional services | 457 | 680 | 397 | (32.8 | %) | 15.1 | % | |||||||||||||||
Data processing | 399 | 621 | 402 | (35.7 | %) | (0.7 | %) | |||||||||||||||
Marketing | 321 | 295 | 304 | 8.8 | % | 5.6 | % | |||||||||||||||
Director fees | 229 | 207 | 223 | 10.6 | % | 2.7 | % | |||||||||||||||
FDIC insurance | 225 | 265 | 146 | (15.1 | %) | 54.1 | % | |||||||||||||||
Amortization of intangibles | 25 | 31 | 32 | (19.4 | %) | (21.9 | %) | |||||||||||||||
Foreclosed real estate | - | 3 | 8 | (100.0 | %) | (100.0 | %) | |||||||||||||||
Other | 735 | 626 | 349 | 17.4 | % | 110.6 | % | |||||||||||||||
Total noninterest expense | $ | 8,579 | $ | 8,129 | $ | 7,768 | 5.5 | % | 10.4 | % | ||||||||||||
BANKWELL FINANCIAL GROUP, INC. | ||||||||||||||
NONINTEREST INCOME & EXPENSE - YTD (unaudited) | ||||||||||||||
(Dollars in thousands) | ||||||||||||||
For the Year Ended | ||||||||||||||
Noninterest income | December 31, | December 31, | Dec 17 vs. Dec 16 | |||||||||||
2017 | 2016 | % Change | ||||||||||||
Gains and fees from sales of loans | $ | 1,427 | $ | 466 | 206.2 | % | ||||||||
Bank owned life insurance | 1,170 | 693 | 68.8 | % | ||||||||||
Service charges and fees | 1,007 | 963 | 4.6 | % | ||||||||||
Net gain (loss) on sale of available for sale securities | 165 | (115 | ) | (243.5 | %) | |||||||||
(Loss) Gain on sale of foreclosed real estate, net | (78 | ) | 128 | (160.9 | %) | |||||||||
Other | 938 | 541 | 73.4 | % | ||||||||||
Total noninterest income | $ | 4,629 | $ | 2,676 | 73.0 | % | ||||||||
For the Year Ended | ||||||||||||||
Noninterest expense | December 31, | December 31, | Dec 17 vs. Dec 16 | |||||||||||
2017 | 2016 | % Change | ||||||||||||
Salaries and employee benefits | $ | 16,284 | $ | 15,655 | 4.0 | % | ||||||||
Occupancy and equipment | 6,165 | 5,811 | 6.1 | % | ||||||||||
Professional services | 2,072 | 1,654 | 25.3 | % | ||||||||||
Data processing | 1,866 | 1,603 | 16.4 | % | ||||||||||
Marketing | 1,193 | 948 | 25.8 | % | ||||||||||
FDIC insurance | 1,116 | 660 | 69.1 | % | ||||||||||
Director fees | 912 | 859 | 6.2 | % | ||||||||||
Amortization of intangibles | 118 | 151 | (21.9 | %) | ||||||||||
Foreclosed real estate | 70 | 157 | (55.4 | %) | ||||||||||
Other | 2,727 | 2,046 | 33.3 | % | ||||||||||
Total noninterest expense | $ | 32,523 | $ | 29,544 | 10.1 | % | ||||||||
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 | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | ||||||||||||||||||||
Total Equity | $ | 161,027 | $ | 158,317 | $ | 153,577 | $ | 149,672 | $ | 145,895 | |||||||||||||||
Less: | |||||||||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||||||||
Other intangibles | 382 | 407 | 438 | 469 | 501 | ||||||||||||||||||||
Tangible Common Equity | $ | 158,056 | $ | 155,321 | $ | 150,550 | $ | 146,614 | $ | 142,805 | |||||||||||||||
Total Assets | $ | 1,796,607 | $ | 1,804,938 | $ | 1,755,804 | $ | 1,672,242 | $ | 1,628,919 | |||||||||||||||
Less: | |||||||||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||||||||
Other intangibles | 382 | 407 | 438 | 469 | 501 | ||||||||||||||||||||
Tangible Assets | $ | 1,793,636 | $ | 1,801,942 | $ | 1,752,777 | $ | 1,669,184 | $ | 1,625,829 | |||||||||||||||
Tangible Common Equity to Tangible Assets | 8.81 | % | 8.62 | % | 8.59 | % | 8.78 | % | 8.78 | % | |||||||||||||||
As of | |||||||||||||||||||||||||
Computation of Tangible Book Value per Common Share | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | ||||||||||||||||||||
Total shareholders' equity | $ | 161,027 | $ | 158,317 | $ | 153,577 | $ | 149,672 | $ | 145,895 | |||||||||||||||
Less: | |||||||||||||||||||||||||
Preferred stock | - | - | - | - | - | ||||||||||||||||||||
Common shareholders' equity | 161,027 | 158,317 | 153,577 | 149,672 | 145,895 | ||||||||||||||||||||
Less: | |||||||||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||||||||
Other intangibles | 382 | 407 | 438 | 469 | 501 | ||||||||||||||||||||
Tangible common shareholders' equity | 158,056 | 155,321 | 150,550 | 146,614 | 142,805 | ||||||||||||||||||||
Common shares issued | 7,751,424 | 7,705,975 | 7,673,850 | 7,638,706 | 7,620,663 | ||||||||||||||||||||
Less: | |||||||||||||||||||||||||
Shares of unvested restricted stock | 75,186 | 96,488 | 103,220 | 98,176 | 96,594 | ||||||||||||||||||||
Common shares outstanding | 7,676,238 | 7,609,487 | 7,570,630 | 7,540,530 | 7,524,069 | ||||||||||||||||||||
Book value per share | $ | 20.98 | $ | 20.81 | $ | 20.29 | $ | 19.85 | $ | 19.39 | |||||||||||||||
Less: | |||||||||||||||||||||||||
Effects of intangible assets | $ | 0.39 | $ | 0.39 | $ | 0.40 | $ | 0.41 | $ | 0.41 | |||||||||||||||
Tangible Book Value per Common Share | $ | 20.59 | $ | 20.41 | $ | 19.89 | $ | 19.44 | $ | 18.98 | |||||||||||||||
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 Year Ended | ||||||||||||||||||||||||||||||||||
Computation of Efficiency Ratio | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||||||||||||
Noninterest expense | $ | 8,579 | $ | 8,129 | $ | 7,581 | $ | 8,234 | $ | 7,768 | $ | 32,523 | $ | 29,544 | |||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Amortization of intangible assets | 25 | 31 | 31 | 31 | 32 | 118 | 151 | ||||||||||||||||||||||||||||
Foreclosed real estate expenses | - | 3 | 60 | 7 | 8 | 70 | 157 | ||||||||||||||||||||||||||||
Adjusted noninterest expense | $ | 8,554 | $ | 8,095 | $ | 7,490 | $ | 8,196 | $ | 7,728 | $ | 32,335 | $ | 29,236 | |||||||||||||||||||||
Net interest income | $ | 13,914 | $ | 13,861 | $ | 13,641 | $ | 12,948 | $ | 13,288 | $ | 54,364 | $ | 49,092 | |||||||||||||||||||||
Noninterest income | 1,541 | 824 | 998 | 1,266 | 401 | 4,629 | 2,676 | ||||||||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Gains (losses) on sales of securities | - | - | - | 165 | (207 | ) | 165 | (115 | ) | ||||||||||||||||||||||||||
(Loss) Gains on sale of foreclosed real estate | (78 | ) | - | - | - | - | (78 | ) | 128 | ||||||||||||||||||||||||||
Adjusted operating revenue | $ | 15,533 | $ | 14,685 | $ | 14,639 | $ | 14,049 | $ | 13,896 | $ | 58,906 | $ | 51,755 | |||||||||||||||||||||
Efficiency ratio | 55.1 | % | 55.1 | % | 51.2 | % | 58.3 | % | 55.6 | % | 54.9 | % | 56.5 | % | |||||||||||||||||||||
For the Quarter Ended | For the Year Ended | ||||||||||||||||||||||||||||||||||
Computation of Return on Average Tangible Common Equity | 12/31/2017 | 9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | 12/31/2017 | 12/31/2016 | ||||||||||||||||||||||||||||
Net Income Attributable to Common Shareholders | $ | 2,096 | $ | 4,263 | $ | 3,769 | $ | 3,702 | $ | 3,323 | $ | 13,830 | $ | 12,350 | |||||||||||||||||||||
Total average shareholders' equity | $ | 161,477 | $ | 156,852 | $ | 152,898 | $ | 148,349 | $ | 143,152 | $ | 154,929 | 138,131 | ||||||||||||||||||||||
Less: | |||||||||||||||||||||||||||||||||||
Goodwill | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | 2,589 | ||||||||||||||||||||||||||||
Other intangibles | 382 | 407 | 438 | 469 | 501 | 382 | 501 | ||||||||||||||||||||||||||||
Average tangible common equity | $ | 158,506 | $ | 153,856 | $ | 149,871 | $ | 145,291 | $ | 140,062 | $ | 151,958 | 135,041 | ||||||||||||||||||||||
Annualized Return on Average Tangible Common Equity | 5.25 | % | 10.99 | % | 10.09 | % | 10.33 | % | 9.44 | % | 9.10 | % | 9.15 | % | |||||||||||||||||||||
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 Year Ended 12/31/2017 |
|||||||||||||||||
Reconciliation of Core Net Income, Net of Tax | $ | EPS | $ | EPS | ||||||||||||||
Net Income (GAAP) | $ | 2,096 | $ | 0.27 | $ | 13,830 | $ | 1.78 | ||||||||||
DTA write-off resulting from tax reform | 3,270 | 0.42 | 3,270 | 0.42 | ||||||||||||||
Charges due to reduction in workforce | 166 | 0.02 | 166 | 0.02 | ||||||||||||||
Income recognized from servicing assets | (578 | ) | (0.07 | ) | (663 | ) | (0.08 | ) | ||||||||||
Impact from loan reserve methodology change | (862 | ) | (0.11 | ) | (862 | ) | (0.11 | ) | ||||||||||
Core Net Income (non-GAAP) | $ | 4,092 | $ | 0.53 | $ | 15,741 | $ | 2.03 | ||||||||||
BANKWELL FINANCIAL GROUP, INC. | |||||||||||||||||||||||||||
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS | |||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||
For the Quarter Ended | |||||||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||||
Balance | Interest | Rate (5) | Balance | Interest | Rate (5) | ||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||
Cash and Fed funds sold | $ | 103,129 | $ | 289 | 1.11 | % | $ | 70,313 | $ | 75 | 0.42 | % | |||||||||||||||
Securities (1) | 115,194 | 1,008 | 3.50 | % | 93,375 | 725 | 3.11 | % | |||||||||||||||||||
Loans: | |||||||||||||||||||||||||||
Commercial real estate | 946,213 | 11,034 | 4.56 | % | 826,095 | 10,125 | 4.80 | % | |||||||||||||||||||
Residential real estate | 180,078 | 1,592 | 3.54 | % | 180,294 | 1,603 | 3.56 | % | |||||||||||||||||||
Construction (2) | 109,594 | 1,333 | 4.76 | % | 112,456 | 1,304 | 4.54 | % | |||||||||||||||||||
Commercial business | 266,235 | 3,353 | 4.93 | % | 206,587 | 2,709 | 5.13 | % | |||||||||||||||||||
Home equity | 13,892 | 171 | 4.86 | % | 14,193 | 154 | 4.31 | % | |||||||||||||||||||
Consumer | 970 | 10 | 3.76 | % | 1,121 | 15 | 5.33 | % | |||||||||||||||||||
Total loans | 1,516,982 | 17,493 | 4.51 | % | 1,340,746 | 15,910 | 4.64 | % | |||||||||||||||||||
Federal Home Loan Bank stock | 9,340 | 93 | 3.99 | % | 7,943 | 70 | 3.52 | % | |||||||||||||||||||
Total earning assets | 1,744,645 | 18,883 | 4.23 | % | 1,512,377 | 16,780 | 4.34 | % | |||||||||||||||||||
Other assets | 66,505 | 57,850 | |||||||||||||||||||||||||
Total assets | $ | 1,811,150 | $ | 1,570,227 | |||||||||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
NOW | $ | 56,567 | 28 | 0.20 | % | $ | 57,271 | 23 | 0.15 | % | |||||||||||||||||
Money market | 457,351 | 1,098 | 0.95 | % | 331,623 | 504 | 0.60 | % | |||||||||||||||||||
Savings | 86,932 | 172 | 0.78 | % | 77,428 | 101 | 0.52 | % | |||||||||||||||||||
Time | 647,325 | 2,304 | 1.41 | % | 589,871 | 1,810 | 1.22 | % | |||||||||||||||||||
Total interest-bearing deposits | 1,248,175 | 3,602 | 1.14 | % | 1,056,193 | 2,438 | 0.92 | % | |||||||||||||||||||
Borrowed Money | 218,718 | 1,213 | 2.17 | % | 182,947 | 916 | 1.99 | % | |||||||||||||||||||
Total interest-bearing liabilities | 1,466,893 | $ | 4,815 | 1.30 | % | 1,239,140 | $ | 3,354 | 1.08 | % | |||||||||||||||||
Noninterest-bearing deposits | 170,642 | 178,106 | |||||||||||||||||||||||||
Other liabilities | 12,138 | 9,829 | |||||||||||||||||||||||||
Total liabilities | 1,649,673 | 1,427,075 | |||||||||||||||||||||||||
Shareholders' equity | 161,477 | 143,152 | |||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,811,150 | $ | 1,570,227 | |||||||||||||||||||||||
Net interest income (3) | $ | 14,068 | $ | 13,426 | |||||||||||||||||||||||
Interest rate spread | 2.93 | % | 3.26 | % | |||||||||||||||||||||||
Net interest margin (4) | 3.23 | % | 3.55 | % |
(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 $154 thousand and $138 thousand, respectively for the three months ended December 31, 2017 and 2016. |
(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 Year Ended | |||||||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | ||||||||||||||||||||||||
Balance | Interest | Rate (5) | Balance | Interest | Rate (5) | ||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||
Cash and Fed funds sold | $ | 85,308 | $ | 790 | 0.93 | % | $ | 41,838 | $ | 173 | 0.41 | % | |||||||||||||||
Securities (1) | 108,775 | 3,830 | 3.52 | % | 99,905 | 3,046 | 3.05 | % | |||||||||||||||||||
Loans: | |||||||||||||||||||||||||||
Commercial real estate | 907,223 | 41,638 | 4.53 | % | 772,890 | 36,572 | 4.65 | % | |||||||||||||||||||
Residential real estate | 180,287 | 6,323 | 3.51 | % | 179,096 | 6,410 | 3.58 | % | |||||||||||||||||||
Construction (2) | 107,752 | 5,195 | 4.75 | % | 100,611 | 4,602 | 4.50 | % | |||||||||||||||||||
Commercial business | 253,868 | 12,981 | 5.04 | % | 185,523 | 9,791 | 5.19 | % | |||||||||||||||||||
Home equity | 14,057 | 660 | 4.70 | % | 14,951 | 621 | 4.16 | % | |||||||||||||||||||
Consumer | 1,227 | 44 | 3.62 | % | 1,560 | 81 | 5.17 | % | |||||||||||||||||||
Total loans | 1,464,414 | 66,841 | 4.50 | % | 1,254,631 | 58,077 | 4.55 | % | |||||||||||||||||||
Federal Home Loan Bank stock | 8,486 | 337 | 3.97 | % | 7,366 | 255 | 3.46 | % | |||||||||||||||||||
Total earning assets | 1,666,983 | 71,798 | 4.25 | % | 1,403,740 | 61,551 | 4.31 | % | |||||||||||||||||||
Other assets | 60,904 | 54,580 | |||||||||||||||||||||||||
Total assets | $ | 1,727,887 | $ | 1,458,320 | |||||||||||||||||||||||
Liabilities and shareholders' equity: | |||||||||||||||||||||||||||
Interest-bearing liabilities: | |||||||||||||||||||||||||||
NOW | $ | 57,712 | 93 | 0.16 | % | $ | 56,123 | 109 | 0.19 | % | |||||||||||||||||
Money market | 404,848 | 3,427 | 0.85 | % | 317,210 | 1,836 | 0.58 | % | |||||||||||||||||||
Savings | 102,915 | 763 | 0.74 | % | 72,800 | 315 | 0.43 | % | |||||||||||||||||||
Time | 633,260 | 8,411 | 1.33 | % | 524,237 | 6,040 | 1.15 | % | |||||||||||||||||||
Total interest-bearing deposits | 1,198,735 | 12,694 | 1.06 | % | 970,370 | 8,300 | 0.86 | % | |||||||||||||||||||
Borrowed Money | 194,875 | 4,143 | 2.10 | % | 164,450 | 3,598 | 2.19 | % | |||||||||||||||||||
Total interest-bearing liabilities | 1,393,610 | $ | 16,837 | 1.21 | % | 1,134,820 | $ | 11,898 | 1.05 | % | |||||||||||||||||
Noninterest-bearing deposits | 169,250 | 172,098 | |||||||||||||||||||||||||
Other liabilities | 10,098 | 13,271 | |||||||||||||||||||||||||
Total liabilities | 1,572,958 | 1,320,189 | |||||||||||||||||||||||||
Shareholders' equity | 154,929 | 138,131 | |||||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 1,727,887 | $ | 1,458,320 | |||||||||||||||||||||||
Net interest income (3) | $ | 54,961 | $ | 49,653 | |||||||||||||||||||||||
Interest rate spread | 3.04 | % | 3.26 | % | |||||||||||||||||||||||
Net interest margin (4) | 3.30 | % | 3.54 | % |
(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 $597 thousand and $561 thousand, respectively for the year ended December 31, 2017 and 2016. | |
(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. |