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BANKWELL FINANCIAL GROUP REPORTS RECORD FOURTH QUARTER AND FULL YEAR NET INCOME; LOAN ORIGINATIONS FOR THE YEAR EXCEED $400 MILLION

New Canaan, CT – January 27, 2016 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $2.6 million for the fourth quarter of 2015, a 260.1% increase over the same period for 2014, and $9.0 million for the year ended 2015, an increase of 97.7% compared to the year ended 2014.

The Company reported basic and diluted earnings per common share of $0.35 for the quarter ended December 31, 2015 compared to $0.10 for the quarter ended December 2014. Basic and diluted earnings per common share for the year ended December 31, 2015 were $1.23 and $1.21, respectively, compared to $0.78 for the year ended December 31, 2014.

The Company's Board of Directors declared a $0.05 per share cash dividend, payable February 22, 2016 to shareholders of record on February 12, 2016 and redeemed $10.98 million (10,980 shares) of preferred stock issued pursuant to the United States Department of Treasury under the Small Business Lending Fund Program (the "SBLF").

Notes Bankwell Financial Group CEO, Christopher Gruseke:

"This was a record quarter and a strong finish to an outstanding year for Bankwell. In addition to fourth quarter net income of $2.6 million, our loan portfolio surpassed $1.1 billion as our lending team continues to generate high quality assets for the Bank.  At 0.38%, our non-performing asset ratio is a testament to our disciplined growth strategy, as is our improved efficiency ratio of 62.7% for the year ended December 31, 2015, compared to 69.1% for the year ended December 31, 2014. This year, as part of our capital management strategy, which included issuance of $25.5 million in subordinated notes, Bankwell's Board approved and paid our first cash dividend. Looking ahead to 2016, we are enthusiastic about the opportunities to build on our performance and to continue to deliver outstanding value to our shareholders, customers, employees and the communities we serve."

Earnings

Net income for the quarter ended December 31, 2015 was $2.6 million, an increase of 260.1% compared to the quarter ended December 31, 2014. Net income for the year ended December 31, 2015 was $9.0 million, an increase of 97.7% compared to the year ended December 31, 2014. Revenues (net interest income plus non-interest income) for the quarter ended December 31, 2015 were $12.1 million, an increase of 13.9% compared to the quarter ended December 31, 2014. Revenues for the year ended December 31, 2015 were $46.3 million, an increase of 33.3% compared to the year ended December 31, 2014. Net interest income for the quarter ended December 31, 2015 was $11.2 million, an increase of 15.0% compared to the quarter ended December 31, 2014. Our strong net interest income was fueled by record earning asset growth.

The Company continues to focus on expense control as indicated by our improving efficiency ratio. The Company's efficiency ratio for the quarters ended December 31, 2015 and December 31, 2014 were 62.8% and 65.4%, respectively. The Company's efficiency ratio for the year ended December 31, 2015 and December 31, 2014 were 62.7% and 69.1%, respectively.

Financial Condition

Assets totaled $1.3 billion at December 31, 2015, an increase of 21.0% compared to assets of $1.1 billion at December 31, 2014. This increase reflects strong organic loan growth and capital raised as a result of the issuance of $25.5 million in subordinated notes in the third quarter of 2015. Total gross loans were $1.1 billion at December 31, 2015, an increase of 23.4% compared to December 31, 2014. Deposits increased to $1.0 billion, an increase of 25.3% over December 31, 2014, with core deposits (total deposits less time deposits) showing an increase of 15.8% over December 31, 2014 to $610.2 million.

Asset Quality

Asset quality remained exceptionally strong at December 31, 2015.  Non-performing assets as a percentage of total assets was 0.38% at December 31, 2015, down from 0.39% at December 31, 2014.  The allowance for loan losses at December 31, 2015 was $14.2 million, representing 1.33% of total loans, excluding acquired loans.

Capital

Shareholders' equity continued to remain strong at $131.8 million as of December 31, 2015, an increase of $2.6 million compared to December 31, 2014, primarily a result of net income for the year ended December 31, 2015 of $9.0 million and capital raised from the exercise of warrants in the fourth quarter of 2015 of $3.8 million, offset by the redemption of the SBLF preferred stock of $11.0 million. As of December 31, 2015, the tangible common equity ratio and tangible book value per share were 9.68% and $17.43, 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)
							December 31,		September 30,		June 30,		March 31,		December 31,
							2015		2015		2015		2015		2014
Assets
Cash and due from banks							$             49,562		$             86,830		$             75,550		$             19,428		$             48,559
Federal funds sold							39,035		-		-		-		-
Cash and cash equivalents							88,597		86,830		75,550		19,428		48,559
Held to maturity investment securities, at amortized cost							10,226		11,282		11,341		11,398		11,454
Available for sale investment securities, at fair value							40,581		45,023		46,883		50,736		65,009
Loans held for sale							-		252		-		-		586
Loans receivable (net of allowance for loan losses of $14,169, $13,720,
$12,230, $11,596, $10,860 at December 31, 2015, September 30, 2015,
June 30, 2015, March 31, 2015 and December 31, 2014, respectively)							1,129,748		1,108,439		1,021,693		964,034		915,981
Foreclosed real estate							1,248		1,328		830		830		950
Accrued interest receivable							4,071		3,831		3,575		3,342		3,323
Federal Home Loan Bank stock, at cost							6,554		6,918		6,918		6,794		6,109
Premises and equipment, net							11,163		11,505		11,868		12,120		11,910
Bank-owned life insurance							23,755		23,578		23,395		23,211		23,028
Goodwill							2,589		2,589		2,589		2,589		2,589
Other intangible assets							652		694		745		797		848
Deferred income taxes, net							8,337		8,604		7,869		7,436		7,156
Other assets							2,851		2,472		1,418		1,748		2,029
Total assets							$        1,330,372		$        1,313,345		$        1,214,674		$        1,104,463		$        1,099,531
Liabilities & Shareholders' Equity
Liabilities
Deposits
Noninterest-bearing							$           164,553		$           148,732		$           162,546		$           142,920		$           166,030
Interest-bearing							882,389		876,957		789,035		691,783		669,409
Total deposits							1,046,942		1,025,689		951,581		834,703		835,439
Advances from the Federal Home Loan Bank							120,000		120,000		124,000		133,000		129,000
Subordinated debentures							25,000		25,037		-		-		-
Accrued expenses and other liabilities							6,661		6,831		5,424		5,352		5,882
Total liabilities							1,198,603		1,177,557		1,081,005		973,055		970,321
Commitments and Contingencies							-		-		-		-		-
Shareholders' equity
Preferred stock, senior noncumulative perpetual, Series C, no par;
10,980 shares issued and outstanding at September 30, 2015, June 30, 2015,
March 31, 2015 and December 31, 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,
7,516,291, 7,252,429, 7,240,704, 7,243,252 and 7,185,482 shares issued at
December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015
and December 31, 2014, respectively.							112,579		108,319		108,038		107,765		107,265
Retained earnings							18,963		16,764		14,538		12,280		10,434
Accumulated other comprehensive income							227		(275)		113		383		531
Total shareholders' equity							131,769		135,788		133,669		131,408		129,210
Total liabilities and shareholders' equity							$        1,330,372		$        1,313,345		$        1,214,674		$        1,104,463		$        1,099,531

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except per share data)
						Three Months Ended December 31,				Twelve Months Ended December 31,
						2015		2014		2015		2014
Interest and dividend income
Interest and fees on loans						$         13,383		$         10,369		$         48,698		$         33,409
Interest and dividends on securities						489		635		1,958		2,052
Interest on cash and cash equivalents						36		12		98		128
Total interest income						13,908		11,016		50,754		35,589
Interest expense
Interest expense on deposits						1,776		1,038		5,681		3,295
Interest on borrowings						896		207		2,285		634
Total interest expense						2,672		1,245		7,966		3,929
Net interest income						11,236		9,771		42,788		31,660
Provision for loan losses						354		1,305		3,230		2,152
Net interest income after provision for loan losses						10,882		8,466		39,558		29,508
Noninterest income
Service charges and fees						258		223		933		643
Gains and fees from sales of loans						228		305		1,113		1,313
Bank owned life insurance						178		192		727		497
Other						176		113		711		588
Total noninterest income						840		833		3,484		3,041
Noninterest expense
Salaries and employee benefits						4,248		4,122		16,065		13,534
Occupancy and equipment						1,312		1,260		5,341		4,422
Professional services						414		159		1,447		1,194
Data processing						366		340		1,523		1,289
Marketing						278		211		985		674
Director fees						198		190		622		650
FDIC insurance						185		143		672		488
Foreclosed real estate						95		15		168		36
Amortization of intangibles						43		53		196		133
Merger and acquisition related expenses						2		1,393		2		1,801
Other						540		457		2,150		1,591
Total noninterest expense						7,681		8,343		29,171		25,812
Income before income tax expense						4,041		956		13,871		6,737
Income tax expense						1,423		229		4,841		2,169
Net income						$           2,618		$              727		$           9,030		$           4,568
Net income attributable to common shareholders						$           2,575		$              700		$           8,905		$           4,458
Earnings Per Common Share:
Basic						$             0.35		$             0.10		$             1.23		$             0.78
Diluted						0.35		0.10		1.21		0.78
Weighted Average Common Shares Outstanding:
Basic						7,169,570		6,998,188		7,071,550		5,577,942
Diluted						7,234,431		7,033,660		7,140,558		5,605,512
Dividends per common share						$             0.05		$                 -		$             0.05		$                 -

 

BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
										Three Months Ended December 31,				Twelve Months Ended December 31,
										2015		2014		2015		2014
Performance ratios:
Return on average assets										0.78%		0.28%		0.75%		0.52%
Return on average shareholders' equity										7.68%		2.26%		6.76%		4.66%
Return on average tangible common equity										7.74%		2.45%		6.83%		5.34%
Net interest margin										3.63%		3.99%		3.77%		3.84%
Efficiency ratio (1)										62.8%		65.4%		62.7%		69.1%
Net loan recoveries (charge-offs) as a % of average loans										0.01%		0.00%		0.01%		0.05%
								As of
								December 31, 2015		September 30, 2015		June 30, 2015		March 31, 2015		December 31, 2014
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets (2)								12.18%		10.75%		11.44%		12.08%		N/A
Total Capital to Risk-Weighted Assets (2)								13.39%		11.94%		12.59%		13.26%		13.55%
Tier I Capital to Risk-Weighted Assets (2)								12.18%		10.75%		11.44%		12.08%		12.47%
Tier I Capital to Average Assets (2)								10.84%		9.84%		10.71%		10.99%		11.12%
Tangible common equity to tangible assets								9.68%		9.28%		9.85%		10.63%		10.47%
Tangible book value per common share (3)								$               17.43		$               17.25		$               16.95		$               16.62		$               16.35
Asset quality:
Nonaccrual loans								$               3,791		$               2,367		$               2,205		$               2,451		$               3,362
Other real estate owned								1,248		1,328		830		830		950
Total non-performing assets								$               5,039		$               3,695		$               3,035		$               3,281		$               4,312
Loans past due 90 days and still accruing								$               1,105		$               1,082		$               1,479		$               1,671		$               1,872
Nonperforming loans as a % of total loans								0.33%		0.21%		0.21%		0.25%		0.36%
Nonperforming assets as a % of total assets								0.38%		0.28%		0.25%		0.30%		0.39%
Allowance for loan losses as a % of total loans								1.23%		1.22%		1.18%		1.18%		1.17%
Allowance for loan losses as a % of nonperforming loans								373.76%		579.64%		554.65%		473.11%		323.02%
(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 143,323, 206,732, 198,414, 200,962, and 165,862 as of December 31, 2015, September 30, 2015, June 30, 2015, March 31, 2015 and December 31, 2014, respectively.

 

BANKWELL FINANCIAL GROUP, INC.
NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS
(Dollars in thousands)
				For the Three Months Ended
				December 31, 2015						December 31, 2014
				Average				Yield/		Average				Yield/
				Balance		Interest		Rate		Balance		Interest		Rate
Assets:
Cash and Fed funds sold				$          47,162		$             36		0.31%		$        20,518		$             11		0.22%
Securities (1)				52,405		544		4.15%		84,676		727		3.43%
Loans:
Commercial real estate				687,447		8,358		4.76%		486,311		5,992		4.82%
Residential real estate				174,815		1,556		3.56%		173,841		1,550		3.57%
Construction (2)				89,338		996		4.36%		57,886		685		4.63%
Commercial business				170,954		2,224		5.09%		139,068		1,791		5.04%
Home equity				16,011		155		3.83%		17,997		194		4.28%
Consumer				1,943		24		4.98%		3,160		38		4.78%
Acquired loans (net of mark)				2,058		70		13.43%		2,345		120		20.35%
Total loans				1,142,566		13,383		4.58%		880,608		10,370		4.61%
Federal Home Loan Bank stock				6,640		57		3.45%		5,808		19		1.32%
Total earning assets				1,248,773		$      14,020		4.39%		991,610		$      11,127		4.39%
Other assets				76,443						54,306
Total assets				$     1,325,216						$   1,045,916
Liabilities and shareholders' equity:
Interest-bearing liabilities:
NOW				$          51,778		15		0.11%		$        54,532		15		0.11%
Money market				294,219		404		0.54%		211,219		272		0.51%
Savings				101,590		201		0.78%		84,238		86		0.41%
Time				434,976		1,156		1.05%		280,329		665		0.94%
Total interest-bearing deposits				882,563		1,776		0.80%		630,318		1,038		0.65%
Borrowed Money				145,015		896		2.45%		118,301		207		0.69%
Total interest bearing liabilities				1,027,578		$        2,672		1.03%		748,619		$        1,245		0.66%
Noninterest-bearing deposits				155,276						159,772
Other liabilities				7,051						9,785
Total liabilities				1,189,905						918,176
Shareholders' equity				135,311						127,740
Total liabilities and shareholders'  equity				$     1,325,216						$   1,045,916
Net interest income (3)						$      11,348						$        9,882
Interest rate spread								3.36%						3.73%
Net interest margin (4)								3.63%						3.99%
(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 December 31, 2015, and 2014.
(4) Net interest income as a percentage of earning assets.

 

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