Bankwell Financial Group, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 PRESS RELEASE

Attached files

file	filename
8-K - BANKWELL FINANCIAL GROUP, INC. 8-K 7 27 15 - Bankwell Financial Group, Inc.	bwfg8k-72715.htm

BANKWELL FINANCIAL GROUP REPORTS RECORD SECOND QUARTER NET INCOME OF $2.3 MILLION AND LOANS GROW TO OVER $1 BILLION

New Canaan, CT – July 27, 2015 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $2.3 million for the second quarter of 2015. In addition, Bankwell Financial Group, Inc. reached record loan levels at $1.0 billion, driven by strong organic growth.

"I am very pleased to announce another quarter of outstanding performance at Bankwell. We had strong revenue growth, achieved record earnings that surpassed $2 million for the quarter, and continued to set new records for loan growth, with loans outstanding exceeding $1 billion," noted Bankwell Financial Group President and CEO Christopher R. Gruseke.

He added, "Key metrics for the quarter include a 63.6% efficiency ratio and a 0.80% return on average assets. With a 7.7% return on average tangible common equity, we continue our steady progress toward delivering double digit returns for our shareholders."

Earnings

Revenues (net interest income plus non-interest income) for the quarter ended June 30, 2015 were $11.6 million, an increase of 48.1% compared to the quarter ended June 30, 2014. Revenues for the six months ended June 30, 2015 were $22.1 million, an increase of 40.3% compared to the six months ended June 30, 2014. Net interest income for the quarter ended June 30, 2015 was $10.7 million, an increase of 50.3% compared to the quarter ended June 30, 2014. Our strong net interest income was fueled by record earning asset growth and a net interest margin of 3.97% for the quarter.

The Company continues to focus on expense control as indicated by our improving efficiency ratio. The Company's efficiency ratio for the quarters ended June 30, 2015 and June 30, 2014 were 63.6% and 73.8%, respectively. The Company's efficiency ratio for the six months ended June 30, 2015 and June 30, 2014 were 65.0% and 74.1%, respectively.

Financial Condition

Assets totaled $1.2 billion at June 30, 2015, an annualized increase of 20.9% compared to assets of $1.1 billion at December 31, 2014. This increase reflects strong organic loan growth in the first and second quarter of 2015. Total gross loans were $1.0 billion at June 30, 2015, an annualized increase of 23.1% compared to December 31, 2014. Deposits increased to $951.6 million, an annualized increase of 27.8% over December 31, 2014, with core deposits (total deposits less time deposits) showing an annualized increase of 29.1% over December 31, 2014 to $603.6 million.

Asset Quality

Asset quality remained exceptionally strong at June 30, 2015. Non-performing assets as a percentage of total assets was 0.25% at June 30, 2015, down from 0.39% at December 31, 2014. The allowance for loan losses at June 30, 2015 was $12.2 million, representing 1.30% of total loans, excluding acquired loans.

Capital

Shareholders' equity continued to remain strong at $133.7 million as of June 30, 2015, an increase of $4.5 million compared to December 31, 2014, primarily a result of net income for the six months ended June 30, 2015 of $4.2 million. As of June 30, 2015, the tangible common equity ratio and tangible book value per share were 9.85% and $16.95, 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 Ernest J. Verrico Sr., 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.

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands, except share data)
	June 30,		March 31,		December 31,		June 30,
	2015		2015		2014		2014
Assets
Cash and due from banks	$	75,550	$	19,428	$	48,559	$	130,535
Held to maturity investment securities, at amortized cost		11,341		11,398		11,454		13,742
Available for sale investment securities, at fair value		46,883		50,736		65,009		49,114
Loans held for sale		-		-		586		325
Loans receivable (net of allowance for loan losses of $12,230, $11,596,
$10,860, $8,985 at June 30, 2015, March 31, 2015, December 31, 2014
and June 30, 2014, respectively)		1,021,693		964,034		915,981		671,500
Foreclosed real estate		830		830		950		829
Accrued interest receivable		3,575		3,342		3,323		2,464
Federal Home Loan Bank stock, at cost		6,918		6,794		6,109		4,834
Premises and equipment, net		11,868		12,120		11,910		8,078
Bank-owned life insurance		23,395		23,211		23,028		10,202
Goodwill		2,589		2,589		2,589		-
Other intangible assets		745		797		848		427
Deferred income taxes, net		7,869		7,436		7,156		5,479
Other assets		1,418		1,748		2,029		4,258
Total assets	$	1,214,674	$	1,104,463	$	1,099,531	$	901,787

Liabilities & Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing	$	162,546	$	142,920	$	166,030	$	146,596
Interest-bearing		789,035		691,783		669,409		583,590
Total deposits		951,581		834,703		835,439		730,186

Advances from the Federal Home Loan Bank		124,000		133,000		129,000		47,000
Accrued expenses and other liabilities		5,424		5,352		5,882		7,431
Total liabilities		1,081,005		973,055		970,321		784,617

Commitments and Contingencies		-		-		-		-

Shareholders' equity
Preferred stock, senior noncumulative perpetual, Series C, no par;
10,980 shares issued and outstanding at June 30, 2015,
March 31, 2015, December 31, 2014 and June 30, 2014, 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,
7,240,704, 7,243,252, 7,185,482 and 6,593,485 shares issued at
June 30, 2015, March 31, 2015, December 31, 2014
and June 30, 2014, respectively.		108,038		107,765		107,265		97,296
Retained earnings		14,538		12,280		10,434		8,271
Accumulated other comprehensive income		113		383		531		623
Total shareholders' equity		133,669		131,408		129,210		117,170

Total liabilities and shareholders' equity	$	1,214,674	$	1,104,463	$	1,099,531	$	901,787

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
	Three Months Ended June 30,				Six Months Ended June 30,
	2015		2014		2015		2014
Interest and dividend income
Interest and fees on loans	$	11,897	$	7,558	$	22,653	$	14,986
Interest and dividends on securities		474		437		978		848
Interest on cash and cash equivalents		17		49		29		71
Total interest income		12,388		8,044		23,660		15,905

Interest expense
Interest expense on deposits		1,231		730		2,269		1,352
Interest on borrowings		416		166		757		259
Total interest expense		1,647		896		3,026		1,611

Net interest income		10,741		7,148		20,634		14,294

Provision for loan losses		654		70		1,387		282

Net interest income after provision for loan losses		10,087		7,078		19,247		14,012

Noninterest income
Gains and fees from sales of loans		349		213		438		642
Service charges and fees		233		143		441		267
Bank owned life insurance		185		86		368		171
Gain on sale of foreclosed real estate, net		-		-		18		-
Other		87		240		187		372
Total noninterest income		854		682		1,452		1,452

Noninterest expense
Salaries and employee benefits		4,057		3,284		8,019		6,625
Occupancy and equipment		1,310		1,030		2,659		2,096
Data processing		405		300		741		639
Professional services		369		272		694		641
Marketing		271		218		418		328
FDIC insurance		163		107		321		225
Director fees		141		143		289		282
Amortization of intangibles		51		27		102		54
Foreclosed real estate		6		-		10		12
Merger and acquisition related expenses		-		122		-		263
Other		607		394		1,097		774
Total noninterest expense		7,380		5,897		14,350		11,939

Income before income tax expense		3,561		1,863		6,349		3,525

Income tax expense		1,275		636		2,190		1,175

Net income	$	2,286	$	1,227	$	4,159	$	2,350


Net income attributable to common shareholders	$	2,259	$	1,200	$	4,104	$	2,295

Earnings Per Common Share:
Basic	$	0.31	$	0.23	$	0.57	$	0.51
Diluted		0.31		0.23		0.57		0.51

Weighted Average Common Shares Outstanding:
Basic		7,042,290		5,022,836		7,035,432		4,395,914
Diluted		7,056,916		5,045,003		7,056,566		4,423,931

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)

	Three Months Ended June 30,						Six Months Ended June 30,
	2015			2014			2015			2014
Performance ratios:
Return on average assets		0.80	%		0.58	%		0.75	%		0.59	%
Return on average stockholders' equity		6.91	%		5.46	%		6.36	%		5.93	%
Return on average tangible common equity		7.65	%		6.12	%		7.05	%		6.76	%
Net interest margin		3.97	%		3.68	%		3.93	%		3.82	%
Efficiency ratio (1)		63.6	%		73.8	%		65.0	%		74.1	%

Net loan recoveries (charge-offs) as a % of average loans		0.00	%		0.05	%		0.00	%		0.05	%

	As of
	June 30, 2015			March 31, 2015			December 31, 2014			June 30, 2014
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2)		11.44	%		12.08	%		N/	A		N/	A
Total Capital to Risk-Weighted Assets (2)		12.59	%		13.26	%		13.55	%		16.48	%
Tier I Capital to Risk-Weighted Assets (2)		11.44	%		12.08	%		12.47	%		15.23	%
Tier I Capital to Average Assets (2)		10.71	%		10.99	%		11.12	%		12.49	%
Tangible common equity to tangible assets		9.85	%		10.63	%		10.47	%		11.73	%

Tangible book value per common share (3)	$	16.95		$	16.62		$	16.35		$	16.32

Asset quality:
Nonaccrual loans	$	2,205		$	2,451		$	3,362		$	1,111
Other real estate owned		830			830			950			829
Total non-performing assets	$	3,035		$	3,281		$	4,312		$	1,940

Loans past due 90 days and still accruing	$	1,479		$	1,671		$	1,872		$	1,294

Nonperforming loans as a % of total loans		0.21	%		0.25	%		0.36	%		0.16	%

Nonperforming assets as a % of total assets		0.25	%		0.30	%		0.39	%		0.22	%

Allowance for loan losses as a % of total loans		1.18	%		1.18	%		1.17	%		1.32	%

Allowance for loan losses as a % of nonperforming loans		554.65	%		473.11	%		323.02	%		808.73	%



(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 198,414, 200,962, 165,862 and 111,324 as of June 30, 2015, March 31, 2015, December 31, 2014 and June 30, 2014, respectively.

BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS
(Dollars in thousands)

	For the Three Months Ended
	June 30, 2015							June 30, 2014
	Average				Yield/			Average				Yield/
	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Cash and Fed funds sold	$	29,339	$	16		0.22	%	$	78,646	$	49		0.25	%
Securities (1)		60,049		559		3.68	%		51,755		529		4.05	%
Loans:
Commercial real estate		583,036		7,333		4.98	%		335,263		4,086		4.82	%
Residential real estate		174,021		1,578		3.59	%		160,899		1,467		3.61	%
Construction (2)		68,073		803		4.66	%		42,377		515		4.80	%
Commercial business		149,067		1,935		5.13	%		98,113		1,239		4.99	%
Home equity		18,176		169		3.73	%		13,124		122		3.74	%
Consumer		2,478		30		4.84	%		714		15		8.17	%
Acquired loan portfolio non accrual loans (net of mark)		2,968		50		6.81	%		3,220		116		14.49	%
Total loans		997,819		11,898		4.72	%		653,710		7,560		4.57	%
Federal Home Loan Bank stock		6,859		27		1.57	%		4,881		18		1.47	%
Total earning assets		1,094,066	$	12,500		4.52	%		788,992	$	8,156		4.09	%
Other assets		53,120							57,416
Total assets	$	1,147,186						$	846,408

Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW	$	62,331		17		0.11	%	$	52,605		15		0.11	%
Money market		241,183		324		0.54	%		173,202		167		0.39	%
Savings		101,903		192		0.76	%		92,501		68		0.30	%
Time		315,820		698		0.89	%		233,044		481		0.83	%
Total interest-bearing deposits		721,237		1,231		0.68	%		551,352		731		0.53	%
Borrowed Money		133,744		416		1.25	%		48,089		166		1.39	%
Total interest bearing liabilities		854,981	$	1,647		0.77	%		599,441	$	897		0.60	%
Noninterest-bearing deposits		149,418							127,051
Other liabilities		10,049							29,799
Total liabilities		1,014,448							756,291
Shareholders' equity		132,738							90,117
Total liabilities and shareholders' equity	$	1,147,186						$	846,408
Net interest income (3)			$	10,853						$	7,259
Interest rate spread						3.75	%						3.49	%
Net interest margin (4)						3.97	%						3.68	%


(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 $112 thousand and $111 thousand, respectively for the three months ended June 30, 2015, and 2014.
(4) 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 Six Months Ended
	June 30, 2015							June 30, 2014
	Average				Yield/			Average				Yield/
	Balance		Interest		Rate			Balance		Interest		Rate
Assets:
Cash and Fed funds sold	$	24,131	$	28		0.24	%	$	55,672	$	71		0.26	%
Securities (1)		63,262		1,150		3.64	%		49,751		1,031		4.14	%
Loans:
Commercial real estate		555,277		13,603		4.87	%		329,700		8,051		4.86	%
Residential real estate		173,665		3,158		3.64	%		158,508		2,863		3.61	%
Construction (2)		67,979		1,596		4.67	%		45,854		1,045		4.53	%
Commercial business		147,568		3,791		5.11	%		98,087		2,408		4.88	%
Home equity		18,124		339		3.77	%		13,666		249		3.68	%
Consumer		2,641		64		4.85	%		610		27		8.80	%
Acquired loan portfolio non accrual loans (net of mark)		3,037		104		6.93	%		3,466		344		20.03	%
Total loans		968,291		22,655		4.65	%		649,891		14,987		4.59	%
Federal Home Loan Bank stock		6,651		54		1.61	%		4,834		36		1.49	%
Total earning assets		1,062,335	$	23,887		4.47	%		760,148	$	16,125		4.22	%
Other assets		49,358							47,324
Total assets	$	1,111,693						$	807,472

Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW	$	57,458		32		0.11	%	$	52,668		28		0.11	%
Money market		235,595		605		0.52	%		172,859		346		0.40	%
Savings		91,003		278		0.62	%		100,240		151		0.30	%
Time		310,931		1,353		0.88	%		208,151		827		0.80	%
Total interest-bearing deposits		694,987		2,268		0.66	%		533,918		1,352		0.51	%
Borrowed Money		127,053		757		1.20	%		48,901		259		1.07	%
Total interest bearing liabilities		822,040	$	3,025		0.74	%		582,819	$	1,611		0.56	%
Noninterest-bearing deposits		151,516							124,475
Other liabilities		6,355							20,265
Total liabilities		979,911							727,559
Shareholders' equity		131,782							79,913
Total liabilities and shareholders' equity	$	1,111,693						$	807,472
Net interest income (3)			$	20,862						$	14,514
Interest rate spread						3.73	%						3.66	%
Net interest margin (4)						3.93	%						3.82	%


(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 $228 thousand and $220 thousand, respectively for the six months ended June 30, 2015, and 2014.
(4) Net interest income as a percentage of earning assets.

Bankwell Financial Group, Inc. - FORM 8-K - EX-99.1 - EXHIBIT 99.1 PRESS RELEASE - July 27, 2015

Attached files

Bankwell Financial Group, Inc. Reports