Bankwell Financial Group(BWFG) - 2023 Q4 - Annual Report

Financial Performance - Total assets as of December 31, 2023, were $3,215,482, a decrease from $3,252,449 in 2022[336] - Net interest income for the year ended December 31, 2023, was $94.5 million, a decrease of $0.3 million compared to 2022[347] - The net interest margin decreased by 80 basis points to 2.98% for the year ended December 31, 2023[347] - Total revenue for the year ended December 31, 2023, was $99,310, compared to $97,783 in 2022[336] - Net income for the year ended December 31, 2023, was $36,663, a decrease from $37,429 in 2022[336] - The Bank's net income for the year ended December 31, 2023, was $36.663 million, a decrease of 2.05% from $37.429 million in 2022[501] - The Bank's total other comprehensive income for the year ended December 31, 2023, was $(1.475) million, compared to $8.372 million in 2022[501] Equity and Assets - Total equity increased to $265,752 as of December 31, 2023, compared to $238,469 in 2022[336] - Commitments to extend credit totaled $333.5 million as of December 31, 2023, down from $561.0 million in 2022[506] - The Bank's loan commitments as of December 31, 2023, amounted to $236.878 million, with $169.358 million due in less than one year[507] Risk Management and Strategy - The company aims for organic growth and strategic acquisitions to enhance its market position[335] - The company has a disciplined focus on risk management as part of its operational strategy[335] - The allowance for credit losses is determined using multiple economic scenarios, incorporating variables such as GDP and interest rates[493] - The Bank's liquidity position is monitored daily, with a detailed liquidity funding policy and contingency funding plan in place[503] - The economic value of equity at risk simulation indicates a sensitivity to interest rate changes, with key assumptions subject to periodic review[512] Interest Rates and Economic Impact - The average yield on total earning assets was 5.86% for the year ended December 31, 2023, compared to 4.64% in 2022[349] - The estimated percent change in net interest income at December 31, 2023, under a 100 basis point rate change is 3.60%[482] - The estimated percent change in economic value at December 31, 2023, under a 200 basis point rate change is (9.40)%[483] - Inflation increases costs of funds and operating overhead, impacting financial performance[515] - Interest rates have a significant effect on the performance of financial institutions compared to general inflation levels[515] - Rising interest rates may decrease the market value of investments and loans held[515] - Increased inflation and interest rates can adversely affect liquidity, earnings, and shareholders' equity[515] - Inflation affects costs related to goods, services, salaries, and occupancy expenses[515]