Bankwell Financial Group, Inc. (NASDAQ:BWFG) reported GAAP net income of $1.1 million, or $0.14 per share for the second quarter of 2024, versus $8.0 million, or $1.02 per share, for the same period in 2023. Pre-tax, pre-provision net revenue ("PPNR") was $9.7 million, or $1.25 per share, for the second quarter of 2024, versus $12.8 million, or $1.68 per share for the same period in 2023.

The Company's Board of Directors declared a $0.20 per share cash dividend, payable August 23, 2024 to shareholders of record on August 12, 2024.

We recommend reading this earnings release in conjunction with the Second Quarter 2024 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our July 24, 2024 Current Report on Form 8-K.

Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:

"The Company's core profitability has begun to expand; PPNR Return on Average Assets grew to 1.22% for the quarter, while the Net interest margin ("NIM") has expanded to 2.75%. We continue to achieve peer-leading operational efficiency with a Noninterest Expense to Average Assets ratio of 1.55% for the quarter. Going forward, the Company's liability sensitive balance sheet is well positioned for any potential Federal Reserve rate cuts.

Earnings per share for the second quarter were reduced by approximately $0.66 due to a specific reserve taken on a non-real estate related commercial credit. The Company announced this addition to its Allowance for Credit Losses in its 8-K filed on July 2, 2024. Notwithstanding this idiosyncratic credit event, other areas of the loan portfolio have experienced improving credit trends. A significant portion of criticized and classified loans have demonstrated improved operating results and may be subject to future credit upgrades if these trends continue. Additional details regarding the specific reserve as well as other credit metrics can be found in the accompanying Investor Presentation.

We are also pleased to announce that the Company will host its first earnings call after third quarter financial results are released in October 2024. The date and time of that call will be announced in the coming weeks."

Second Quarter 2024 Highlights:

PPNR was $9.7 million and PPNR return on average assets was 1.22% for the quarter ended June 30, 2024.
Net income of $1.1 million for the quarter reflects the impact of an $8.2 million provision for credit losses.
- $6.6 million of the provision for credit losses is related to a specific reserve taken against an $8.7 million commercial business credit¹_.
The net interest margin was 2.75% and 2.73% for the quarter and six months ended June 30, 2024, respectively.
Noninterest expense to average assets was 1.55% and 1.60% for the quarter and six months ended June 30, 2024, respectively.
Total gross loans were $2.7 billion, decreasing $61.4 million, or 2.3%, compared to December 31, 2023.
Average yield on total loans was 6.37% for the six months ended June 30, 2024.
Deposits were $2.7 billion, decreasing $74.4 million, or 2.7%, compared to December 31, 2023.
Brokered deposits decreased $144.2 million compared to December 31, 2023.
FDIC-insured deposits totaled $1.9 billion and represent 72.9% of total deposits as of June 30, 2024.
Return on average assets was 0.14% and 0.31% for the quarter and six months ended June 30, 2024, respectively.
Return on average tangible common equity was 1.67% and 3.65% for the quarter and six months ended June 30, 2024, respectively.
Investment securities totaled $138.0 million and represent 4.4% of total assets.
The Company repurchased 40,140 shares and 76,320 at the weighted average prices of $24.55 and $24.94 per share for the quarter and six months ended June 30, 2024, respectively.

^{1 - 8-K was filed on July 2, 2024.}

Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended June 30, 2024 were $21.9 million, versus $25.4 million for the quarter ended June 30, 2023. Revenues for the six months ended June 30, 2024 were $44.0 million, versus $52.5 million for the six months ended June 30, 2023. The decrease in revenues for the quarter and six months ended June 30, 2024 was attributable to an increase in interest expense on deposits and lower gains from loan sales partially offset by an increase in interest and fees on loans, given higher loan yields²and prepayment fees.

Net income for the quarter ended June 30, 2024 was $1.1 million, versus $8.0 million for the quarter ended June 30, 2023. Net income for the six months ended June 30, 2024 was $4.9 million, versus $18.4 million for the six months ended June 30, 2023. The decrease in net income for the quarter and six months ended 2024 was primarily due to the aforementioned decrease in revenues and an increase in provision for credit losses.

Basic and diluted earnings per share were $0.14 and $0.14, respectively, for the quarter ended June 30, 2024 compared to basic and diluted earnings per share of $1.02 and $1.02, respectively, for the quarter ended June 30, 2023. Basic and diluted earnings per share were $0.62 and $0.62, respectively, for the six months ended June 30, 2024 compared to basic and diluted earnings per share of $2.36 and $2.34, respectively, for the six months ended June 30, 2023.

The net interest margin (fully taxable equivalent basis) for the quarters ended June 30, 2024 and June 30, 2023 was 2.75% and 3.07%, respectively. The net interest margin (fully taxable equivalent basis) for the six months ended June 30, 2024 and June 30, 2023 was 2.73% and 3.15%, respectively. The decrease in the net interest margin was due to an increase in funding costs partially offset by an increase in interest income on earning assets.

^{2 - The increase in overall loan yields was 28 bps and 38 bps for the quarter and six months ended June 30, 2024, respectively.}

Allowance for Credit Losses - Loans ("ACL-Loans")

The ACL-Loans was $36.1 million as of June 30, 2024 compared to $27.9 million as of December 31, 2023. The ACL-Loans as a percentage of total loans was 1.36% as of June 30, 2024 compared to 1.03% as of December 31, 2023. Provision for credit losses was $8.2 million for the quarter ended June 30, 2024. The increase in the provision for credit losses for the quarter was primarily due to an additional $7.4 million for two loans. Of the $7.4 million, $6.6 million is related to a specific reserve taken against an $8.7 million commercial business credit. The credit had been previously reported as a non-performing loan as of the fourth quarter of 2023 and had previously carried a $0.4 million specific reserve. The Company's estimated remaining exposure for the commercial business credit is $1.7 million. The additional $0.8 million specific reserve was related to a construction loan.

Financial Condition

Assets totaled $3.1 billion at June 30, 2024, a decrease of $73.8 million, or 2.3% compared to December 31, 2023. Gross loans totaled $2.7 billion at June 30, 2024, a decrease of $61.4 million, or 2.3% compared to December 31, 2023. Deposits totaled $2.7 billion at June 30, 2024, a decrease of $74.4 million, or 2.7% compared to December 31, 2023.

Capital

Shareholders' equity totaled $267.0 million as of June 30, 2024, an increase of $1.2 million compared to December 31, 2023, primarily a result of net income of $4.9 million for the six months ended June 30, 2024. The increase was partially offset by dividends paid of $3.2 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 Courtney E. Sacchetti, 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 banking industry or securities markets, 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, tangible assets, tangible common equity to tangible assets, tangible common shareholders' equity, fully diluted tangible book value per common share, adjusted noninterest expense, operating revenue, efficiency ratio, average tangible common equity, annualized return on average tangible common equity, return on average assets, return on average shareholders' equity, pre-tax, pre-provision net revenue, pre-tax, pre-provision net revenue on average assets, and the dividend payout ratio are useful to evaluate the relative strength of the Company's performance and 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.


BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED BALANCE SHEETS (unaudited) (Dollars in thousands)

	June 30, 2024			March 31, 2024			December 31, 2023			June 30, 2023
ASSETS
Cash and due from banks	$	234,277		$	245,043		$	267,521		$	207,345
Federal funds sold		17,103			2,584			1,636			54,706
Cash and cash equivalents		251,380			247,627			269,157			262,051

Investment securities
Marketable equity securities, at fair value		2,079			2,069			2,070			2,017
Available for sale investment securities, at fair value		107,635			108,417			109,736			99,938
Held to maturity investment securities, at amortized cost		28,286			15,739			15,817			15,884
Total investment securities		138,000			126,225			127,623			117,839
Loans receivable (net of ACL-Loans of $36,083, $27,991, $27,946, and $30,694 at June 30, 2024, March 31, 2024, December 31, 2023, and June 30, 2023, respectively)		2,616,691			2,646,686			2,685,301			2,736,607
Accrued interest receivable		14,675			15,104			14,863			14,208
Federal Home Loan Bank stock, at cost		5,655			5,655			5,696			5,696
Premises and equipment, net		25,599			26,161			27,018			27,658
Bank-owned life insurance		52,097			51,764			51,435			50,816
Goodwill		2,589			2,589			2,589			2,589
Deferred income taxes, net		11,345			9,137			9,383			10,014
Other assets		23,623			24,326			22,417			25,229
Total assets	$	3,141,654		$	3,155,274		$	3,215,482		$	3,252,707

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing deposits	$	328,475		$	376,248		$	346,172		$	367,635
Interest bearing deposits		2,333,900			2,297,274			2,390,585			2,421,228
Total deposits		2,662,375			2,673,522			2,736,757			2,788,863

Advances from the Federal Home Loan Bank		90,000			90,000			90,000			90,000
Subordinated debentures		69,328			69,266			69,205			69,082
Accrued expenses and other liabilities		52,975			54,454			53,768			55,949
Total liabilities		2,874,678			2,887,242			2,949,730			3,003,894

Shareholders' equity
Common stock, no par value		118,037			118,401			118,247			116,541
Retained earnings		150,895			151,350			149,169			133,988
Accumulated other comprehensive (loss)		(1,956	)		(1,719	)		(1,664	)		(1,716	)
Total shareholders' equity		266,976			268,032			265,752			248,813

Total liabilities and shareholders' equity	$	3,141,654		$	3,155,274		$	3,215,482		$	3,252,707


BANKWELL FINANCIAL GROUP, INC. CONSOLIDATED STATEMENTS OF INCOME (unaudited) (Dollars in thousands, except share data)

	For the Quarter Ended											For the Six Months Ended
	June 30, 2024			March 31, 2024			December 31, 2023			June 30, 2023		June 30, 2024			June 30, 2023
Interest and dividend income
Interest and fees on loans	$	43,060		$	43,325		$	44,122		$	42,482	$	86,385		$	82,205
Interest and dividends on securities		1,190			1,130			1,108			1,002		2,320			2,002
Interest on cash and cash equivalents		3,429			3,826			4,164			3,022		7,255			6,590
Total interest and dividend income		47,679			48,281			49,394			46,506		95,960			90,797
Interest expense
Interest expense on deposits		24,677			25,362			25,307			20,777		50,039			37,810
Interest expense on borrowings		1,783			1,772			1,842			1,738		3,555			3,455
Total interest expense		26,460			27,134			27,149			22,515		53,594			41,265

Net interest income		21,219			21,147			22,245			23,991		42,366			49,532
Provision (credit) for credit losses		8,183			3,683			(960	)		2,579		11,866			3,405
Net interest income after provision for credit losses		13,036			17,464			23,205			21,412		30,500			46,127
Noninterest income
Bank owned life insurance		333			329			316			292		662			573
Service charges and fees		495			304			688			361		799			647
Gains and fees from sales of loans		45			321			79			725		366			1,656
Other		(190	)		(39	)		46			23		(229	)		51
Total noninterest income		683			915			1,129			1,401		1,598			2,927
Noninterest expense
Salaries and employee benefits		6,176			6,291			6,088			6,390		12,467			12,471
Occupancy and equipment		2,238			2,322			2,231			2,204		4,561			4,288
Professional services		989			1,065			1,033			692		2,054			2,014
Data processing		755			740			747			729		1,495			1,400
Director fees		306			900			605			453		1,206			845
FDIC insurance		705			930			1,026			1,050		1,635			2,112
Marketing		90			114			139			177		203			328
Other		986			935			995			946		1,921			1,874
Total noninterest expense		12,245			13,297			12,864			12,641		25,542			25,332
Income before income tax expense		1,474			5,082			11,470			10,172		6,556			23,722
Income tax expense		356			1,319			2,946			2,189		1,675			5,360
Net income	$	1,118		$	3,763		$	8,524		$	7,983	$	4,881		$	18,362
Earnings Per Common Share:
Basic	$	0.14		$	0.48		$	1.09		$	1.02	$	0.62		$	2.36
Diluted	$	0.14		$	0.48		$	1.09		$	1.02	$	0.62		$	2.34
Weighted Average Common Shares Outstanding:
Basic		7,747,675			7,663,521			7,603,938			7,593,417		7,705,598			7,574,160
Diluted		7,723,888			7,687,679			7,650,451			7,601,562		7,721,880			7,639,828
Dividends per common share	$	0.20		$	0.20		$	0.20		$	0.20	$	0.40		$	0.40


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

	For the Quarter Ended								For the Six Months Ended
	June 30, 2024		March 31, 2024		December 31, 2023		June 30, 2023		June 30, 2024		June 30, 2023
Performance ratios:
Return on average assets	0.14	%	0.47	%	1.03	%	0.99	%	0.31	%	1.14	%
Return on average shareholders' equity	1.65	%	5.59	%	12.82	%	12.91	%	3.61	%	15.15	%
Return on average tangible common equity	1.67	%	5.65	%	12.95	%	13.05	%	3.65	%	15.31	%
Net interest margin	2.75	%	2.71	%	2.81	%	3.07	%	2.73	%	3.15	%
Efficiency ratio⁽¹⁾	55.9	%	60.3	%	55.0	%	49.8	%	58.1	%	48.3	%
Net loan charge-offs as a % of average loans	0.01	%	0.11	%	0.01	%	—	%	0.13	%	0.02	%
Dividend payout ratio⁽²⁾	142.86	%	41.67	%	18.35	%	19.61	%	64.52	%	17.09	%

(1) 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.

(2) The dividend payout ratio is calculated by dividing dividends per share by earnings per share.

	As of
	June 30, 2024			March 31, 2024			December 31, 2023			June 30, 2023
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets⁽¹⁾		11.73	%		11.60	%		11.30	%		10.34	%
Total Capital to Risk-Weighted Assets⁽¹⁾		12.98	%		12.63	%		12.32	%		11.41	%
Tier I Capital to Risk-Weighted Assets⁽¹⁾		11.73	%		11.60	%		11.30	%		10.34	%
Tier I Capital to Average Assets⁽¹⁾		10.17	%		10.09	%		9.81	%		9.41	%
Tangible common equity to tangible assets		8.42	%		8.42	%		8.19	%		7.58	%
Fully diluted tangible book value per common share	$	33.61		$	33.57		$	33.39		$	31.45

(1) Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.


BANKWELL FINANCIAL GROUP, INC. ASSET QUALITY (unaudited) (Dollars in thousands)

	For the Quarter Ended
	June 30, 2024			March 31, 2024			December 31, 2023			June 30, 2023
ACL-Loans:
Balance at beginning of period	$	27,991		$	27,946		$	29,284		$	27,998
Charge-offs:
Residential real estate		(9	)		(132	)		—			—
Commercial real estate		(522	)		(3,306	)		(824	)		—
Commercial business		—			(197	)		—			—
Consumer		(12	)		(49	)		(15	)		(25	)
Total charge-offs		(543	)		(3,684	)		(839	)		(25	)
Recoveries:
Residential real estate		141			—			—			—
Commercial real estate		113			—			—			—
Commercial business		—			27			464			32
Consumer		13			4			3			10
Total recoveries		267			31			467			42
Net loan (charge-offs) recoveries		(276	)		(3,653	)		(372	)		17
Provision (credit) for credit losses - loans		8,368			3,698			(966	)		2,679
Balance at end of period	$	36,083		$	27,991		$	27,946		$	30,694

	As of
	June 30, 2024			March 31, 2024			December 31, 2023			June 30, 2023
Asset quality:
Nonaccrual loans
Residential real estate	$	1,339		$	1,237		$	1,386		$	1,429
Commercial real estate		28,088			19,083			23,009			1,905
Commercial business		17,396			16,841			15,430			2,815
Construction		9,382			9,382			9,382			9,382
Consumer		—			—			—			—
Total nonaccrual loans		56,205			46,543			49,207			15,531
Other real estate owned		—			—			—			—
Total nonperforming assets	$	56,205		$	46,543		$	49,207		$	15,531

Nonperforming loans as a % of total loans		2.12	%		1.74	%		1.81	%		0.56	%
Nonperforming assets as a % of total assets		1.79	%		1.48	%		1.53	%		0.48	%
ACL-loans as a % of total loans		1.36	%		1.04	%		1.03	%		1.11	%
ACL-loans as a % of nonperforming loans		64.20	%		60.14	%		56.79	%		197.63	%
Total past due loans to total loans		0.84	%		1.44	%		0.78	%		1.30	%

Total nonaccrual loans increased $7.0 million to $56.2 million as of June 30, 2024 when compared to December 31, 2023. The increase was primarily due to a $13.9 million commercial real estate non-owner occupied office loan put on nonaccrual during the six months ended June 30, 2024. This loan represents a 16.5% participation in a $84.3 million club transaction. The increase was partially offset by the payoff of two loans totaling $4.4 million and four loans that were partially charged-off for a total of $4.0 million during the six months ended June 30, 2024.

Nonperforming assets as a percentage of total assets increased to 1.79% at June 30, 2024 from 1.53% at December 31, 2023. The ACL-Loans at June 30, 2024 was $36.1 million, representing 1.36% of total loans.


BANKWELL FINANCIAL GROUP, INC. LOAN & DEPOSIT PORTFOLIO (unaudited) (Dollars in thousands)

Period End Loan Composition	June 30, 2024		March 31, 2024		December 31, 2023		Current QTD % Change		YTD % Change
Residential Real Estate	$	47,875	$	49,098	$	50,931	(2.5	)%	(6.0	)%
Commercial Real Estate⁽¹⁾		1,912,701		1,927,636		1,947,648	(0.8	)	(1.8	)
Construction		150,259		151,967		183,414	(1.1	)	(18.1	)
Total Real Estate Loans		2,110,835		2,128,701		2,181,993	(0.8	)	(3.3	)
Commercial Business		503,444		508,912		500,569	(1.1	)	0.6
Consumer		42,906		41,946		36,045	2.3		19.0
Total Loans	$	2,657,185	$	2,679,559	$	2,718,607	(0.8	)%	(2.3	)%
(1) Includes owner occupied commercial real estate of $0.7 billion at June 30, 2024, March 31, 2024, and December 31, 2023, respectively.

Gross loans totaled $2.7 billion at June 30, 2024, a decrease of $61.4 million or 2.3% compared to December 31, 2023.

Period End Deposit Composition	June 30, 2024		March 31, 2024		December 31, 2023		Current QTD % Change		YTD % Change
Noninterest bearing demand	$	328,475	$	376,248	$	346,172	(12.7	)%	(5.1	)%
NOW		122,112		95,227		90,829	28.2		34.4
Money Market		825,599		818,408		887,352	0.9		(7.0	)
Savings		91,870		92,188		97,331	(0.3	)	(5.6	)
Time		1,294,319		1,291,451		1,315,073	0.2		(1.6	)
Total Deposits	$	2,662,375	$	2,673,522	$	2,736,757	(0.4	)%	(2.7	)%

Total deposits were $2.7 billion at June 30, 2024, a decrease of $74.4 million, or 2.7%, when compared to December 31, 2023. Brokered deposits have decreased $144.2 million, when compared to December 31, 2023.


BANKWELL FINANCIAL GROUP, INC. NONINTEREST EXPENSE (unaudited) (Dollars in thousands)

	For the Quarter Ended
Noninterest expense	June 30, 2024		March 31, 2024		June 30, 2023		June 24 vs. Mar 24 % Change		Jun 24 vs. Jun 23 % Change
Salaries and employee benefits	$	6,176	$	6,291	$	6,390	(1.8	)%	(3.3	)%
Occupancy and equipment		2,238		2,322		2,204	(3.6	)	1.5
Professional services		989		1,065		692	(7.1	)	42.9
Data processing		755		740		729	2.0		3.6
Director fees		306		900		453	(66.0	)	(32.5	)
FDIC insurance		705		930		1,050	(24.2	)	(32.9	)
Marketing		90		114		177	(21.1	)	(49.2	)
Other		986		935		946	5.5		4.2
Total noninterest expense	$	12,245	$	13,297	$	12,641	(7.9	)%	(3.1	)%

Noninterest expense decreased by $0.4 million to $12.2 million for the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023. The decrease in noninterest expense was primarily driven by a decrease in FDIC insurance costs, mainly driven by a reduction in the Bank's brokered deposits.

	For the Six Months Ended
Noninterest expense	June 30, 2024		June 30, 2023		Jun 24 vs. Jun 23 % Change
Salaries and employee benefits	$	12,467	$	12,471	—	%
Occupancy and equipment		4,561		4,288	6.4
Professional services		2,054		2,014	2.0
Data processing		1,495		1,400	6.8
Director fees		1,206		845	42.7
FDIC insurance		1,635		2,112	(22.6	)
Marketing		203		328	(38.1	)
Other		1,921		1,874	2.5
Total noninterest expense	$	25,542	$	25,332	0.8	%

Noninterest expense increased by $0.2 million to $25.5 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase in noninterest expense was primarily driven by an increase in director fees related to timing of compensation and accelerated vestings in connection with the death of a director. The increase was partially offset by a decrease in FDIC insurance costs, mainly attributable by a reduction in the Bank's brokered deposits.


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 Assets	June 30, 2024			March 31, 2024			December 31, 2023			June 30, 2023
Total Equity	$	266,976		$	268,032		$	265,752		$	248,813
Less:
Goodwill		2,589			2,589			2,589			2,589
Other intangibles		—			—			—			—
Tangible Common Equity	$	264,387		$	265,443		$	263,163		$	246,224

Total Assets	$	3,141,654		$	3,155,274		$	3,215,482		$	3,252,707
Less:
Goodwill		2,589			2,589			2,589			2,589
Other intangibles		—			—			—			—
Tangible Assets	$	3,139,065		$	3,152,685		$	3,212,893		$	3,250,118

Tangible Common Equity to Tangible Assets		8.42	%		8.42	%		8.19	%		7.58	%

	As of
Computation of Fully Diluted Tangible Book Value per Common Share	June 30, 2024		March 31, 2024		December 31, 2023		June 30, 2023
Total shareholders' equity	$	266,976	$	268,032	$	265,752	$	248,813
Less:
Preferred stock		—		—		—		—
Common shareholders' equity	$	266,976	$	268,032	$	265,752	$	248,813
Less:
Goodwill		2,589		2,589		2,589		2,589
Other intangibles		—		—		—		—
Tangible common shareholders' equity	$	264,387	$	265,443	$	263,163	$	246,224

Common shares issued and outstanding		7,866,499		7,908,180		7,882,616		7,829,950

Fully Diluted Tangible Book Value per Common Share	$	33.61	$	33.57	$	33.39	$	31.45


	For the Quarter Ended				For the Six Months Ended
Computation of PPNR	June 30, 2024	March 31, 2024	December 31, 2023	June 30, 2023	June 30, 2024	June 30, 2023
Income before income tax expense	$ 1,474	$ 5,082	$ 11,470	$ 10,172	$ 6,556	$ 23,722
Add:
Provision (credit) for credit losses	8,183	3,683	(960)	2,579	11,866	3,405
PPNR	$ 9,657	$ 8,765	$ 10,510	$ 12,751	$ 18,422	$ 27,127

PPNR return on average assets	1.22 %	1.10 %	1.27 %	1.58 %	1.16 %	1.69 %


BANKWELL FINANCIAL GROUP, INC. EARNINGS PER SHARE ("EPS") (unaudited) (Dollars in thousands, except share data)

	Three Months Ended June 30,						Six Months Ended June 30,
		2024			2023			2024			2023
	*(In thousands, except per share data)*
Net income	$	1,118		$	7,983		$	4,881		$	18,362
Dividends to participating securities⁽¹⁾		(40	)		(41	)		(79	)		(84	)
Undistributed earnings allocated to participating securities⁽¹⁾		14			(172	)		(52	)		(403	)
Net income for earnings per share calculation	$	1,092		$	7,770		$	4,750		$	17,875

Weighted average shares outstanding, basic		7,748			7,593			7,706			7,574
Effect of dilutive equity-based awards⁽²⁾		(24	)		8			16			66
Weighted average shares outstanding, diluted		7,724			7,601			7,722			7,640
Net earnings per common share:
Basic earnings per common share	$	0.14		$	1.02		$	0.62		$	2.36
Diluted earnings per common share	$	0.14		$	1.02		$	0.62		$	2.34

(1)		Represents dividends paid and undistributed earnings allocated to unvested stock-based awards that contain non-forfeitable rights to dividends.
(2)		Represents the effect of the assumed exercise of stock options and the vesting of restricted shares, as applicable, utilizing the treasury stock method.


BANKWELL FINANCIAL GROUP, INC. NONINTEREST INCOME (unaudited) (Dollars in thousands)

	For the Quarter Ended
Noninterest income	June 30, 2024			March 31, 2024			June 30, 2023		Jun 24 vs. Mar 24 % Change		Jun 24 vs. Jun 23 % Change
Bank owned life insurance	$	333		$	329		$	292	1.2	%	14.0	%
Service charges and fees		495			304			361	62.8		37.1
Gains and fees from sales of loans		45			321			725	(86.0	)	(93.8	)
Other		(190	)		(39	)		23	Unfavorable		Unfavorable
Total noninterest income	$	683		$	915		$	1,401	(25.4	)%	(51.2	)%

Noninterest income decreased $0.7 million for the quarter ended June 30, 2024 compared to the quarter ended June 30, 2023. The decrease in noninterest income was driven by lower gains as a result of fewer SBA loan sales for the quarter ended June 30, 2024.

	For the Six Months Ended
Noninterest income	June 30, 2024			June 30, 2023		Jun 24 vs. Jun 23 % Change
Bank owned life insurance	$	662		$	573	15.5	%
Service charges and fees		799			647	23.5	%
Gains and fees from sales of loans		366			1,656	(77.9	)%
Other		(229	)		51	Unfavorable
Total noninterest income	$	1,598		$	2,927	(45.4	)%

Noninterest income decreased $1.3 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The decrease in noninterest income was driven by lower gains as a result of fewer SBA loan sales for the six months ended June 30, 2024.


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

	For the Quarter Ended
	June 30, 2024						June 30, 2023
	Average Balance		Interest		Yield/ Rate ⁽⁴⁾		Average Balance		Interest		Yield/ Rate ⁽⁴⁾
Assets:
Cash and Fed funds sold	$	273,301	$	3,429	5.05	%	$	227,777	$	3,023	5.32	%
Securities⁽¹⁾		137,360		1,139	3.32			128,576		955	2.97
Loans:
Commercial real estate		1,901,189		27,654	5.75			1,935,058		27,099	5.54
Residential real estate		49,046		772	6.30			56,981		643	4.51
Construction		159,184		2,871	7.14			206,844		3,691	7.06
Commercial business		523,382		11,028	8.34			557,482		10,646	7.55
Consumer		42,335		735	6.98			29,326		500	6.84
Total loans		2,675,136		43,060	6.37			2,785,691		42,579	6.05
Federal Home Loan Bank stock		5,655		118	8.42			5,610		98	7.00
Total earning assets		3,091,452	$	47,746	6.11	%		3,147,654	$	46,655	5.86	%
Other assets		95,453						96,603
Total assets	$	3,186,905					$	3,244,257

Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	107,310	$	49	0.18	%	$	98,048	$	42	0.18	%
Money market		833,489		8,552	4.13			902,225		8,083	3.59
Savings		90,987		688	3.04			112,585		860	3.06
Time		1,291,595		15,388	4.79			1,298,170		11,792	3.64
Total interest bearing deposits		2,323,381		24,677	4.27			2,411,028		20,777	3.46
Borrowed Money		159,288		1,783	4.43			163,138		1,738	4.21
Total interest bearing liabilities		2,482,669	$	26,460	4.29	%		2,574,166	$	22,515	3.51	%
Noninterest bearing deposits		368,516						375,514
Other liabilities		63,177						46,565
Total liabilities		2,914,362						2,996,245
Shareholders' equity		272,543						248,012
Total liabilities and shareholders' equity	$	3,186,905					$	3,244,257
Net interest income⁽²⁾			$	21,286					$	24,140
Interest rate spread					1.82	%					2.36	%
Net interest margin⁽³⁾					2.75	%					3.07	%

(1)		Average balances and yields for securities are based on amortized cost.
(2)		The adjustment for securities and loans taxable equivalency amounted to $67 thousand and $51 thousand for the quarters ended June 30, 2024 and 2023, respectively.
(3)		Annualized net interest income as a percentage of earning assets.
(4)		Yields are calculated using the contractual day count convention for each respective product type.


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

	For the Six Months Ended
	June 30, 2024						June 30, 2023
	Average Balance		Interest		Yield/ Rate ⁽⁴⁾		Average Balance		Interest		Yield/ Rate ⁽⁴⁾
Assets:
Cash and Fed funds sold	$	282,981	$	7,255	5.16	%	$	271,328	$	6,590	4.90	%
Securities⁽¹⁾		136,049		2,199	3.23			129,225		1,912	2.96
Loans:
Commercial real estate		1,911,896		56,295	5.82			1,926,852		52,125	5.38
Residential real estate		49,624		1,490	6.01			58,207		1,286	4.42
Construction		160,080		5,844	7.22			186,684		6,651	7.09
Commercial business		520,188		21,314	8.10			549,963		21,394	7.74
Consumer		41,150		1,442	7.05			23,971		749	6.30
Total loans		2,682,938		86,385	6.37			2,745,677		82,205	5.95
Federal Home Loan Bank stock		5,678		239	8.44			5,442		193	7.14
Total earning assets		3,107,646	$	96,078	6.12	%		3,151,672	$	90,900	5.74	%
Other assets		93,179						90,427
Total assets	$	3,200,825					$	3,242,099

Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	99,493	$	88	0.18	%	$	95,494	$	81	0.17	%
Money market		858,670		17,698	4.14			905,021		14,468	3.22
Savings		91,979		1,402	3.06			124,387		1,586	2.57
Time		1,304,332		30,851	4.76			1,275,417		21,675	3.43
Total interest bearing deposits		2,354,474		50,039	4.27			2,400,319		37,810	3.18
Borrowed Money		159,257		3,555	4.42			162,215		3,454	4.24
Total interest bearing liabilities		2,513,731	$	53,594	4.29	%		2,562,534	$	41,264	3.25	%
Noninterest bearing deposits		352,768						389,608
Other liabilities		62,775						45,494
Total liabilities		2,929,274						2,997,636
Shareholders' equity		271,551						244,463
Total liabilities and shareholders' equity	$	3,200,825					$	3,242,099
Net interest income⁽²⁾			$	42,484					$	49,636
Interest rate spread					1.83	%					2.49	%
Net interest margin⁽³⁾					2.73	%					3.15	%

(1)		Average balances and yields for securities are based on amortized cost.
(2)		The adjustment for securities and loans taxable equivalency amounted to $118 thousand and $102 thousand for the six months ended June 30, 2024 and 2023, respectively.
(3)		Annualized net interest income as a percentage of earning assets.
(4)		Yields are calculated using the contractual day count convention for each respective product type.

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Bankwell Financial Group Reports Operating Results for the Second Quarter and Declares Third Quarter Dividend