Bankwell Financial Group(US:BWFG)2023-05-09 16:00Financial Performance - For the three months ended March 31, 2023, net interest income increased by $6.0 million, or 30.9%, to $25.5 million compared to the same period in 2022[258]. - FTE interest income for the three months ended March 31, 2023 rose by $22.0 million, or 98.4%, to $44.3 million compared to the same period in 2022[234]. - Loan interest income totaled $39.7 million for the three months ended March 31, 2023, compared to $21.4 million for the same period in 2022[258]. - Net interest income for the three months ended March 31, 2023, was $25.59 million, up from $19.56 million in the same period of 2022[270]. - Net income available to common shareholders increased to $10.4 million, or $1.33 per diluted share, for the three months ended March 31, 2023, compared to $8.2 million, or $1.04 per diluted share, for the same period in 2022[284]. Noninterest Income and Expenses - Noninterest income increased by $0.6 million to $1.5 million for the three months ended March 31, 2023, driven by SBA loan sales[232]. - Noninterest income rose to $1.526 million, a 59.3% increase from $958,000 in the same period of 2022[294]. - Noninterest expense increased by $2.8 million to $12.7 million for Q1 2023, primarily due to higher salaries and employee benefits[267]. - Total noninterest expense increased to $12.691 million, a rise of 27.9% from $9.925 million in the prior year[295]. - Salaries and employee benefits expense totaled $6.1 million, reflecting a 23.1% increase compared to $4.94 million in the same period in 2022[295]. Asset and Liability Management - Total assets increased to $3,239.97 million as of March 31, 2023, compared to $2,470.57 million at the end of 2022[262]. - Total loans amounted to $2,705.18 million, with a yield of 5.87% for Q1 2023, compared to $1,908.75 million and a yield of 4.49% in Q1 2022[262]. - Total deposits remained flat at $2.8 billion at March 31, 2023, compared to December 31, 2022[310]. - The allowance for credit losses (ACL-Loans) was $28.0 million, representing 1.01% of total gross loans at March 31, 2023, up from $22.4 million, or 0.84%, at December 31, 2022[305]. - The Bank has pledged $898.2 million of eligible loans as collateral to support borrowing capacity at the FHLB, with immediate availability to borrow an additional $362.3 million[312]. Risk Management and Capital - The company maintains a disciplined focus on risk management and aims to be the banking provider of choice against larger competitors[230][257]. - The Bank's Common Equity Tier 1 capital ratio is 10.17%, and total capital to risk-weighted assets is 11.16%, indicating compliance with regulatory capital requirements[315]. - The Bank remains liability sensitive, with more liabilities than assets subject to repricing as market rates change[320]. - The Bank has met all minimum regulatory capital requirements to be considered "well capitalized" as of March 31, 2023[318]. - The Asset Liability Committee (ALCO) monitors liquidity positions daily and establishes guidelines for maintaining prudent liquidity levels[314]. Economic Indicators - Returns on average shareholders' equity and average assets for the three months ended March 31, 2023 were 17.48% and 1.30%, respectively, compared to 16.05% and 1.35% for the same period in 2022[259]. - The effective tax rate for Q1 2023 was 23.4%, up from 20.4% in Q1 2022[270]. - Nonperforming assets to total assets ratio improved to 0.44% as of March 31, 2023, down from 0.51% in the previous year[276]. - Nonperforming assets decreased to $14.3 million, or 0.44% of total assets, down from $16.4 million, or 0.51%, at December 31, 2022[301]. - The estimated net interest income at risk shows a 2.00% increase for a -100 basis point shift and a decrease of 3.80% for a +200 basis point shift as of March 31, 2023[319]. Strategic Outlook - The company plans to pursue organic growth and strategic acquisitions as market opportunities arise[282]. - The primary source of liquidity is deposits, with additional funding from purchased liabilities, cash flows from investment securities, and loan repayments[313]. - The Bank's internal policy limits the decline in estimated net interest income at risk to 6% for a 100 basis point shift, 12% for a 200 basis point shift, and 18% for a 300 basis point shift[318]. - The base case economic value of equity at risk is calculated using current interest rates, assuming no changes in future interest rates[321].