Bankwell Financial Group, Inc. - FORM 8-K - EX-99.1 - April 28, 2021

Attached files

file filename
8-K - 8-K - Bankwell Financial Group, Inc.bwfg-20210428.htm
EX-99.2 - EX-99.2 - Bankwell Financial Group, Inc.a1q2021bwfginvestorprese.htm






BANKWELL FINANCIAL GROUP REPORTS STRONG OPERATING RESULTS FOR THE FIRST QUARTER; DECLARES SECOND QUARTER DIVIDEND
New Canaan, CT – April 28, 2021 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $5.7 million, or $0.71 per share, for the first quarter of 2021, versus $1.4 million, or $0.17 per share, for the same period in 2020. Pre-tax, pre-provision net revenue ("PPNR")1 grew 48% to $7.0 million compared to the same period in 2020. Results include a $0.9 million one-time federal payroll tax credit for small businesses impacted by COVID-192.
The Company's Board of Directors declared a $0.14 per share cash dividend, payable May 24, 2021 to shareholders of record on May 14, 2021.
We recommend reading this earnings release in conjunction with the First Quarter 2021 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our April 28, 2021 Current Report on Form 8-K.
Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:
"I am pleased to announce Bankwell’s financial results for the first quarter of 2021. Our team made meaningful progress in virtually all aspects of our business. Loans grew by 4% on originations of $158 million and we continue to generate quality C&I business. Core commercial deposits grew by 8.6%, or $63 million as we steadily improve both the mix and the cost of our deposits. We have also successfully implemented many of our previously announced expense reduction initiatives. The cumulative impact of the multiple successes we’ve experienced was to grow pre-tax, pre-provision net revenue by 48% versus the previous year’s first quarter and to deliver a return on average equity of 12.67%. Importantly, we look to further improving profitability as the year proceeds.
"I’d like to thank all of my colleagues who have worked tirelessly to achieve these results amidst such challenging circumstances. On behalf of everyone at Bankwell, I also wish to acknowledge our gratitude for all of our health care workers and scientists who have persevered in an effort to bring our health crisis to an end."
First Quarter 2021 Highlights:
•PPNR of $7.0 million ($6.1 million excluding the one-time payroll tax credit), a 48% increase compared to the same period in 2020.
•Return on average assets was 1.02% and return on average equity was 12.67%.
•Resumption of SBA loan sales with gains of $0.5 million compared to no sales for the quarter ended March 31, 2020.
•Total gross loans were $1.7 billion, growing $63.2 million, or 4%, compared to December 31, 2020, excluding PPP loans.
•Total deposits were $1.9 billion compared to $1.8 billion at December 31, 2020.
•Noninterest bearing deposits increased by $112.5 million to 15% of total deposits compared to 10% at March 31, 2020.
•The cost of deposits decreased approximately 10 basis points to 0.67% when compared to the quarter ended December 31, 2020.
•The Bank's loan-to-deposit ratio was 89.0%, reflecting the above-mentioned increase in deposits.
•Investment securities totaled $101.6 million and represent 5% of total assets.
•Tangible book value per share rose to $23.99 compared to $22.43 at December 31, 2020, benefiting from strong operating performance and favorable marks on interest rate swaps used to hedge interest rate risk.
1 Pre-tax, pre-provision net revenue is a non-GAAP metric and excludes provision for loan losses and income tax expense.
2 The payroll tax credit is part of the Employee Retention Credit (“ERC”) program under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”).
1






•Shares issued and outstanding were 7,908,630, reflecting repurchases of 65,626 shares of common stock at a weighted average price of $21.66 during the quarter ended March 31, 2021.
•Subsequent to March 31, 2021, the Company committed to retire $10 million of existing subordinated debt on May 15, 2021.

Earnings and Performance
Revenues (net interest income plus noninterest income) for the quarter ended March 31, 2021 were $16.6 million, versus $14.4 million for the quarter ended March 31, 2020. The increase was primarily attributable to lower interest expense on deposits, partially offset by a decrease in interest and fees on loans. Revenues also benefited from the aforementioned one-time federal payroll tax credit for COVID-19 and from the resumption of SBA loan sales.
Net income for the quarter ended March 31, 2021 was $5.7 million, versus $1.4 million for the quarter ended March 31, 2020. The increase in net income was impacted by the aforementioned increases in revenues.
Basic and diluted earnings per share were $0.72 and $0.71, respectively, for the quarter ended March 31, 2021 compared to basic and diluted earnings per share of $0.17 each for the quarter ended March 31, 2020.
The net interest margin (fully taxable equivalent basis) for the quarters ended March 31, 2021 and March 31, 2020 was 2.74% and 2.98%, respectively. The decrease in net interest margin was primarily due to excess liquidity.
Financial Condition
Assets totaled $2.2 billion at March 31, 2021, compared to assets of $2.3 billion at December 31, 2020. The decrease in assets is primarily due to a decrease in excess liquidity, partially offset by an increase in loans. Gross loans totaled $1.7 billion at March 31, 2021, an increase of $47.6 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $63.2 million at March 31, 2021 when compared to December 31, 2020. Deposits totaled $1.9 billion at March 31, 2021, compared to deposits of $1.8 billion at December 31, 2020.
Capital
Shareholders’ equity totaled $187.9 million as of March 31, 2021, an increase of $11.3 million compared to December 31, 2020, primarily a result of (i) a $7.7 million favorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps and (ii) net income for the quarter ended March 31, 2021 of $5.7 million. The Company's interest rate swaps are used to hedge interest rate risk. The Company's current interest rate swap positions will cause a decrease to other comprehensive income in a falling interest rate environment and an increase in a rising interest rate environment. The increase in Shareholders’ equity was partially offset by dividends paid of $1.1 million and common stock repurchases of $1.4 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 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, but are not limited to, increased competitive pressures, changes in the interest rate environment, general economic
2






conditions or conditions within the securities markets, uncertain impacts of, or additional changes in, monetary, fiscal or tax policy to address the impact of COVID-19, prolonged measures to contain the spread of COVID-19 or premature easing of such containment measures, either of which could further exacerbate the effects on the Company’s business and results of operations, 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 noninterest expense control. The Company believes that tangible common equity and tangible book value per share are useful to evaluate the relative strength of the Company's capital position. We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.
3






BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)
March 31,
2021		December 31,
2020		March 31,
2020
ASSETS
Cash and due from banks$351,194 $405,340 $203,569 
Federal funds sold10,811 4,258 6,427 
Cash and cash equivalents362,005 409,598 209,996 
Investment securities
Marketable equity securities, at fair value2,178 2,207 2,289 
Available for sale investment securities, at fair value83,218 88,605 82,342 
Held to maturity investment securities, at amortized cost16,225 16,078 16,252 
Total investment securities101,621 106,890 100,883 
Loans receivable (net of allowance for loan losses of $20,545, $21,009, and $16,686 at March 31, 2021, December 31, 2020, and March 31, 2020, respectively)1,650,127 1,601,672 1,602,146 
Accrued interest receivable7,306 6,579 5,867 
Federal Home Loan Bank stock, at cost6,446 7,860 6,507 
Premises and equipment, net33,386 21,762 27,835 
Bank-owned life insurance42,881 42,651 41,926 
Goodwill2,589 2,589 2,589 
Other intangible assets67 76 196 
Deferred income taxes, net8,908 11,300 10,009 
Other assets29,131 42,770 45,671 
Total assets$2,244,467 $2,253,747 $2,053,625 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits$280,947 $270,235 $168,448 
Interest bearing deposits1,578,861 1,557,081 1,512,684 
Total deposits1,859,808 1,827,316 1,681,132 
Advances from the Federal Home Loan Bank125,000 175,000 125,000 
Subordinated debentures25,271 25,258 25,220 
Accrued expenses and other liabilities46,445 49,571 52,059 
Total liabilities2,056,524 2,077,145 1,883,411 
Shareholders’ equity
Common stock, no par value
120,398 121,338 119,953 
Retained earnings75,418 70,839 69,595 
Accumulated other comprehensive loss(7,873)(15,575)(19,334)
Total shareholders’ equity187,943 176,602 170,214 
Total liabilities and shareholders’ equity$2,244,467 $2,253,747 $2,053,625 
4






BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except share data)
For the Quarter Ended
March 31,
2021		December 31,
2020		March 31,
2020
Interest and dividend income
Interest and fees on loans$17,900 $18,194 $18,985 
Interest and dividends on securities769 835 825 
Interest on cash and cash equivalents108 117 286 
Total interest and dividend income18,777 19,146 20,096 
Interest expense
Interest expense on deposits3,114 3,557 5,709 
Interest expense on borrowings1,008 1,285 1,101 
Total interest expense4,122 4,842 6,810 
Net interest income14,655 14,304 13,286 
(Credit) provision for loan losses(296)709 3,185 
Net interest income after provision for loan losses14,951 13,595 10,101 
Noninterest income
Gains and fees from sales of loans513 16 — 
Bank owned life insurance231 241 243 
Service charges and fees199 210 217 
Other1,013 154 612 
Total noninterest income1,956 621 1,072 
Noninterest expense
Salaries and employee benefits4,769 5,453 5,380 
Occupancy and equipment2,406 4,516 1,909 
Professional services587 591 711 
Data processing512 1,658 536 
FDIC insurance403 262 70 
Director fees317 331 295 
Marketing(9)118 162 
Other653 774 596 
Total noninterest expense9,638 13,703 9,659 
Income before income tax expense7,269 513 1,514 
Income tax expense1,579 177 151 
Net income$5,690 $336 $1,363 
Earnings Per Common Share:
Basic$0.72 $0.04 $0.17 
Diluted$0.71 $0.04 $0.17 
Weighted Average Common Shares Outstanding:
Basic7,758,540 7,726,926 7,750,135 
Diluted7,800,777 7,728,206 7,778,762 
Dividends per common share$0.14 $0.14 $0.14 
5






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

For the Quarter Ended
March 31,
2021		December 31,
2020		March 31,
2020
Performance ratios:
Return on average assets(1)
1.02 %0.06 %0.29 %
Return on average stockholders' equity(1)
12.67 %0.75 %3.03 %
Return on average tangible common equity(1)
12.86 %0.76 %3.07 %
Net interest margin2.74 %2.66 %2.98 %
Efficiency ratio(2)
58.0 %91.2 %67.1 %
Net loan charge-offs as a % of average loans0.01 %— %— %
Dividend payout ratio(3)
19.72 %350.00 %82.35 %
(1)2020 performance ratios were negatively impacted by incremental COVID-19 pandemic related loan loss reserves and $3.9 million in one-time charges related to office consolidation, contract termination and employee severance costs recognized in the fourth quarter of 2020.
(2)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.
(3)The dividend payout ratio is calculated by dividing dividends per share by earnings per share.

As of
March 31,
2021		December 31,
2020		March 31,
2020
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)
11.02 %11.06 %12.14 %
Total Capital to Risk-Weighted Assets(1)
12.17 %12.28 %13.13 %
Tier I Capital to Risk-Weighted Assets(1)
11.02 %11.06 %12.14 %
Tier I Capital to Average Assets(1)
8.82 %8.44 %10.84 %
Tangible common equity to tangible assets8.27 %7.73 %8.16 %
Tangible book value per common share(2)
$23.99 $22.43 $21.69 
(1)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.
(2)Excludes unvested restricted shares of 186,485, 163,369, and 154,012 as of March 31, 2021, December 31, 2020, and March 31, 2020, respectively.

6






BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
For the Quarter Ended
March 31,
2021		December 31,
2020		March 31,
2020
Allowance for loan losses:
Balance at beginning of period$21,009 $20,372 $13,509 
Charge-offs:
Commercial real estate(163)— — 
Commercial business— (75)(8)
Consumer(14)(11)(2)
Total charge-offs(177)(86)(10)
Recoveries:
Commercial business— 14 1 
Consumer9 — 1 
Total recoveries9 14 2 
Net loan charge-offs(168)(72)(8)
(Credit) provision for loan losses(296)709 3,185 
Balance at end of period$20,545 $21,009 $16,686 
As of
March 31,
2021		December 31,
2020		March 31,
2020
Asset quality:
Nonaccrual loans
Residential real estate$1,289 $1,492 $1,532 
Commercial real estate19,277 21,093 5,339 
Commercial business1,803 1,834 3,783 
Construction8,997 8,997 — 
Total nonaccrual loans31,366 33,416 10,654 
Other real estate owned— — — 
Total nonperforming assets$31,366 $33,416 $10,654 
Nonperforming loans as a % of total loans1.87 %2.06 %0.66 %
Nonperforming assets as a % of total assets1.40 %1.48 %0.52 %
Allowance for loan losses as a % of total loans1.23 %1.29 %1.03 %
Allowance for loan losses as a % of nonperforming loans65.50 %62.87 %156.62 %

Total nonaccrual loans declined $2.1 million to $31.4 million as of March 31, 2021 when compared to December 31, 2020. The Company individually analyzed all existing COVID-19 deferrals and COVID-19 impacted loans for collectability and impairment as of March 31, 2021. Nonperforming assets as a percentage of total assets was 1.40% at March 31, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at March 31, 2021 was $20.5 million, representing 1.23% of total loans.
7






BANKWELL FINANCIAL GROUP, INC.
LOAN & DEPOSIT PORTFOLIO (unaudited)
(Dollars in thousands)
Period End Loan CompositionMarch 31,
2021		December 31,
2020		% Change
Residential Real Estate$109,752 $113,557 (3.4)%
Commercial Real Estate(1)
1,183,848 1,148,383 3.1 
Construction103,099 87,007 18.5 
Total Real Estate Loans1,396,699 1,348,947 3.5 
Commercial Business(2)
267,698 276,601 (3.2)
Consumer8,818 79 
N/M(3)
Total Loans$1,673,215 $1,625,627 2.9 %
(1) Includes owner occupied commercial real estate.
(2) Includes $19.2 million and $34.8 million of PPP loans at March 31, 2021 and December 31, 2020, respectively.
(3) Metric not meaningful.
Gross loans totaled $1.7 billion at March 31, 2021, an increase of $47.6 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $63.2 million, or 4%, at March 31, 2021 when compared to December 31, 2020.
Period End Deposit CompositionMarch 31,
2021		December 31,
2020		% Change
Noninterest bearing demand$280,947 $270,235 4.0 %
NOW118,489 101,737 16.5 
Money Market751,852 669,364 12.3 
Savings164,559 158,750 3.7 
Time543,961 627,230 (13.3)
Total Deposits$1,859,808 $1,827,316 1.8 %

Total deposits were $1.9 billion at March 31, 2021, compared to $1.8 billion at December 31, 2020, an increase of $32.5 million, or 1.8%.
8






BANKWELL FINANCIAL GROUP, INC.
NONINTEREST INCOME AND EXPENSE (unaudited)
(Dollars in thousands)
For the Quarter Ended
Noninterest incomeMarch 31,
2021		December 31,
2020		March 31,
2020		Mar 21 vs. Dec 20 % ChangeMar 21 vs. Mar 20 % Change
Gains and fees from sales of loans$513 $16 $— 
N/M(1)
N/A
Bank owned life insurance231 241 243 (4.1)(4.9)
Service charges and fees199 210 217 (5.2)(8.3)
Other1,013 154 612 557.8 65.5 
Total noninterest income$1,956 $621 $1,072 215.0 %82.5 %
(1) Metric not meaningful.
Noninterest income increased by $0.9 million to $2.0 million for the quarter ended March 31, 2021 compared to the quarter ended March 31, 2020.
The increase in noninterest income was driven by resumed SBA loan sales, totaling $0.5 million for the quarter ended March 31, 2021. In addition, the increase was impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by $0.4 million of non-recurring interest rate swap fees recognized in the quarter ended March 31, 2020.
For the Quarter Ended
Noninterest expenseMarch 31,
2021		December 31,
2020		March 31,
2020		Mar 21 vs. Dec 20 % ChangeMar 21 vs. Mar 20 % Change
Salaries and employee benefits$4,769 $5,453 $5,380 (12.5)%(11.4)%
Occupancy and equipment2,406 4,516 1,909 (46.7)26.0 
Professional services587 591 711 (0.7)(17.4)
Data processing512 1,658 536 (69.1)(4.5)
FDIC insurance403 262 70 53.8 475.7 
Director fees317 331 295 (4.2)7.5 
Marketing(9)118 162 (107.6)(105.6)
Other653 774 596 (15.6)9.6 
Total noninterest expense$9,638 $13,703 $9,659 (29.7)%(0.2)%
Noninterest expense declined slightly, from $9.7 million for the quarter ended March 31, 2020, to $9.6 million for the quarter ended March 31, 2021. The decrease in noninterest expense was primarily driven by a decline in salaries and employee benefits and marketing expense, partially offset by an increase in occupancy and equipment expense and FDIC insurance expense. The decrease in noninterest expense for the quarter ended March 31, 2021 when compared to the quarter ended December 31, 2020 was primarily due to $3.9 million in one-time charges recognized during the fourth quarter of 2020. These one-time charges impacted salaries and employee benefits, occupancy and equipment expense and data processing expense.
Salaries and employee benefits totaled $4.8 million for the quarter ended March 31, 2021, a decrease of $0.6 million when compared to the same period in 2020. The decrease in salaries and employee benefits was primarily driven by a decrease in full time equivalent employees as a direct result of the Voluntary Early Retirement Incentive Plan offered to eligible employees and other employee actions taken during the fourth quarter of 2020. Full time equivalent employees totaled 123 at March 31, 2021 compared to 154 for the same period in 2020. Salaries and employee benefits were also favorably impacted as higher loan originations enabled the bank to defer a greater amount of expenses.
9






Occupancy and equipment expense totaled $2.4 million for the quarter ended March 31, 2021, an increase of $0.5 million when compared to the same period in 2020. The increase in occupancy and equipment expense was primarily due to additional cleaning costs associated with precautions taken to prevent the spread of COVID-19.
FDIC insurance expense totaled $0.4 million for the quarter ended March 31, 2021, an increase of $0.3 million when compared to the same period in 2020. The increase in FDIC insurance expense was due to the application of available FDIC insurance credits in the first quarter of 2020.
10






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 AssetsMarch 31,
2021		December 31,
2020		March 31,
2020
Total Equity$187,943 $176,602 $170,214 
Less:
Goodwill2,589 2,589 2,589 
Other intangibles67 76 196 
Tangible Common Equity$185,287 $173,937 $167,429 
Total Assets$2,244,467 $2,253,747 $2,053,625 
Less:
Goodwill2,589 2,589 2,589 
Other intangibles67 76 196 
Tangible Assets$2,241,811 $2,251,082 $2,050,840 
Tangible Common Equity to Tangible Assets8.27 %7.73 %8.16 %

As of
Computation of Tangible Book Value per Common ShareMarch 31,
2021		December 31,
2020		March 31,
2020
Total shareholders' equity$187,943 $176,602 $170,214 
Less:
Preferred stock— — — 
Common shareholders' equity$187,943 $176,602 $170,214 
Less:
Goodwill2,589 2,589 2,589 
Other intangibles67 76 196 
Tangible common shareholders' equity$185,287 $173,937 $167,429 
Common shares7,908,630 7,919,278 7,871,419 
Less:
Shares of unvested restricted stock186,485 163,369 154,012 
Common shares less unvested restricted stock7,722,145 7,755,909 7,717,407 
Book value per share$24.34 $22.77 $22.06 
Less:
Effects of intangible assets$0.34 $0.34 $0.36 
Tangible Book Value per Common Share$23.99 $22.43 $21.69 
11






BANKWELL FINANCIAL GROUP, INC.
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued
(Dollars in thousands)
For the Quarter Ended
Computation of Efficiency RatioMarch 31,
2021		December 31,
2020		March 31,
2020
Noninterest expense$9,638 $13,703 $9,659 
Less:
Amortization of intangible assets9 84 18 
Other real estate owned expenses— — — 
Adjusted noninterest expense$9,629 $13,619 $9,641 
Net interest income$14,655 $14,304 $13,286 
Noninterest income1,956 621 1,072 
Less:
Net gain on sale of available for sale securities— — — 
Gain (loss) on sale of other real estate owned, net— — — 
Operating revenue$16,611 $14,925 $14,358 
Efficiency ratio58.0 %91.2 %67.1 %

For the Quarter Ended
Computation of Return on Average Tangible Common EquityMarch 31,
2021		December 31,
2020		March 31,
2020
Net Income Attributable to Common Shareholders$5,690 $336 $1,363 
Total average shareholders' equity$182,058 $178,439 $181,127 
Less:
Average Goodwill2,589 2,589 2,589 
Average Other intangibles73 153 208 
Average tangible common equity$179,396 $175,697 $178,330 
Annualized Return on Average Tangible Common Equity12.86 %0.76 %3.07 %
12






BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited)
(Dollars in thousands)
For the Quarter Ended
March 31, 2021March 31, 2020
Average
Balance		Interest
Yield/
Rate (5)
Average
Balance		Interest
Yield/
Rate (5)
Assets:
Cash and Fed funds sold$401,900 $108 0.11 %$73,497 $286 1.56 %
Securities(1)
101,176 788 3.11 98,566 775 3.15 
Loans:
Commercial real estate1,129,224 12,731 4.51 1,108,709 13,024 4.65 
Residential real estate112,053 964 3.44 143,826 1,357 3.77 
Construction(2)
94,075 885 3.76 100,437 1,215 4.78 
Commercial business294,756 3,271 4.44 258,848 3,386 5.18 
Consumer5,039 49 3.94 156 3 8.37 
Total loans1,635,147 17,900 4.38 1,611,976 18,985 4.66 
Federal Home Loan Bank stock6,508 31 1.96 7,325 103 5.65 
Total earning assets2,144,731 $18,827 3.51 %1,791,364 $20,149 4.45 %
Other assets113,561 111,585 
Total assets$2,258,292 $1,902,949 
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW$101,057 $43 0.17 %$67,925 $28 0.17 %
Money market736,659 950 0.52 438,588 1,492 1.37 
Savings160,347 125 0.32 185,478 672 1.46 
Time611,153 1,996 1.32 640,580 3,517 2.21 
Total interest bearing deposits1,609,216 3,114 0.78 1,332,571 5,709 1.72 
Borrowed Money152,485 1,008 2.64 172,464 1,101 2.53 
Total interest bearing liabilities1,761,701 $4,122 0.95 %1,505,035 $6,810 1.82 %
Noninterest bearing deposits269,863 179,066 
Other liabilities44,670 37,721 
Total liabilities2,076,234 1,721,822 
Shareholders' equity182,058 181,127 
Total liabilities and shareholders' equity$2,258,292 $1,902,949 
Net interest income(3)
$14,705 $13,339 
Interest rate spread2.56 %2.63 %
Net interest margin(4)
2.74 %2.98 %
(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 $50 thousand and $53 thousand for the quarters ended March 31, 2021 and 2020, respectively.
(4)Annualized net interest income as a percentage of earning assets.
(5)Yields are calculated using the contractual day count convention for each respective product type.

13

Bankwell Financial Group, Inc. Reports