Form 8-K Bankwell Financial Group For: Jul 27

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  July 28, 2016

Bankwell Financial Group, Inc.

 (Exact name of registrant as specified in its charter)

220 Elm Street

New Canaan, Connecticut 06840

(Address and Telephone Number)

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

 

 

 

 

EXHIBIT INDEX

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BANKWELL FINANCIAL GROUP REPORTS SECOND QUARTER NET INCOME OF $2.9 MILLION, REACHES RECORD ASSET LEVELS AT $1.5 BILLION AND DECLARES THIRD QUARTER DIVIDEND

New Canaan, CT – July 27, 2016 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $2.9 million for the second quarter of 2016. In addition, Bankwell Financial Group, Inc. reached record loan levels at $1.3 billion, driven by continued strong organic growth.

The Company's Board of Directors declared a $0.05 per share cash dividend, payable August 26, 2016 to shareholders of record on August 16, 2016.

Second Quarter 2016 Highlights:

Notes Bankwell Financial Group CEO, Christopher R. Gruseke:

"Bankwell continued our exceptional financial performance into the second quarter of 2016. We recorded net income of $2.9 million, or $0.38 per share for the quarter. Organic loan growth continues to be strong, as our portfolio grew by $80 million, or 7%, in the second quarter. This represents a 28% annualized increase in assets, compared to 2015 year-end, as the Bank crossed another milestone surpassing $1.5 billion in assets. Our vigilant focus on expenses resulted in a stand-out efficiency ratio of 57.1% for the quarter, compared to 63.2% for the quarter ended June 30, 2015. We do expect personnel additions during the remainder of 2016 that will result in a more normalized efficiency ratio. Nevertheless, we expect significant improvement for the full year versus our 2015 efficiency ratio. The entire Bankwell team is to be applauded as their efforts generated a tangible book value per common share of $18.12 and a return on average tangible common equity of 8.74%. Further, Bankwell's credit quality remains outstanding with non-performing assets at 0.27% of total assets."

Mr. Gruseke added, "Delivering on our strategic commitment to enhance our deposit franchise, I am pleased to announce an important addition to the management team with the recent hiring of David Dineen to the newly created position of EVP, Head of Community Banking. David brings a wealth of banking experience and a strong understanding of local markets to Bankwell. I am confident that under his leadership Bankwell will further enhance its core funding capacity and strengthen our commitment to the customers and communities we serve."

Earnings

Net income for the quarter ended June 30, 2016 was $2.9 million, an increase of 27% compared to the quarter ended June 30, 2015. Net income for the six months ended June 30, 2016 was $5.9 million, an increase of 42% compared to the six months ended June 30, 2015. Revenues (net interest income plus non-interest income) for the quarter ended June 30, 2016 were $12.7 million, an increase of 10% compared to the quarter ended June 30, 2015. Revenues for the six months ended June 30, 2016 were $24.8 million, an increase of 12% compared to the six months ended June 30, 2015. Net interest income for the quarter ended June 30, 2016 was $11.9 million, an increase of 11% compared to the quarter ended June 30, 2015. Our strong net income, revenues and net interest income was fueled by continued earning asset growth.

Basic and diluted earnings per share for the quarter ended June 30, 2016 was $0.38, compared to $0.31 for the quarter ended June 30, 2015.

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, 2016 and June 30, 2015 were 57.1% and 63.2%, respectively. The Company's efficiency ratio for the six months ended June 30, 2016 and June 30, 2015 were 57.4% and 64.5%, respectively.

Noninterest Income and Expense

Noninterest income remained flat for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and increased $73 thousand to $1.5 million for the six months ended June 30, 2016 compared to the six months ended June 30, 2015. The increase in noninterest income was primarily driven by gains on the sale of foreclosed real estate, net gains on the sale of available for sale securities and increased service charges and fees, offset by a decrease in sales of loans.

Noninterest expense decreased $165 thousand for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and decreased $55 thousand for the six months ended June 30, 2016 compared to the six months ended June 30, 2015. The decrease was primarily driven by a decrease in salaries and employee benefits. Salaries and employee benefits decreased $0.2 million or 5.9% for the three months ended June 30, 2016 compared to the three months ended June 30, 2015 and decreased $0.4 million or 4.9% for the six months ended June 30, 2016 compared to the six months ended June 30, 2015 as a result of an increase in open positions.

Financial Condition

Assets totaled $1.5 billion at June 30, 2016, an annualized increase of 28% compared to assets of $1.3 billion at December 31, 2015. This increase reflects strong organic loan growth. Total gross loans were $1.3 billion at June 30, 2016, an annualized increase of 23% compared to December 31, 2015. Commercial real estate loans have experienced the most significant growth, up by $87.5 million.

Deposits increased to $1.2 billion, an annualized increase of 26% over December 31, 2015, with core deposits (total deposits less time deposits) showing an annualized increase of 9% over December 31, 2015 to $636.9 million primarily reflecting increases in noninterest-bearing deposit, money market and NOW accounts.

Asset Quality

Asset quality remained exceptionally strong at June 30, 2016.  Non-performing assets as a percentage of total assets was 0.27% at June 30, 2016, down from 0.38% at December 31, 2015.  The allowance for loan losses at June 30, 2016 was $16.1 million, representing 1.34% of total loans, excluding acquired loans.

Capital

Shareholders' equity totaled $137.1 million as of June 30, 2016, an increase of $5.4 million compared to December 31, 2015, primarily a result of net income for the six months ended June 30, 2016 of $5.9 million. As of June 30, 2016, the tangible common equity ratio and tangible book value per share were 8.85% and $18.12, 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 FINANCIAL HIGHLIGHTS (unaudited)
(Dollars in thousands, except per share data)
								For the Quarter Ended								For the Six Months Ended
								June 30,		March 31,		December 31,		June 30,		June 30,		June 30,
								2016		2016		2015		2015		2016		2015
Performance ratios:
Return on average assets								0.82%		0.89%		0.78%		0.80%		0.85%		0.75%
Return on average stockholders' equity								8.54%		9.01%		7.68%		6.91%		8.77%		6.36%
Return on average tangible common equity								8.74%		9.23%		7.74%		7.65%		8.98%		7.05%
Net interest margin								3.50%		3.54%		3.63%		3.97%		3.52%		3.93%
Efficiency ratio (1)								57.1%		57.7%		62.4%		63.2%		57.4%		64.5%
Net loan charge-offs as a % of average loans								0.00%		0.00%		0.01%		0.00%		0.00%		0.00%
								As of
								June 30, 2016		March 31, 2016		December 31, 2015		June 30, 2015
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Asset (2)								11.76%		12.24%		12.18%		11.44%
Total Capital to Risk-Weighted Assets (2)								13.01%		13.48%		13.39%		12.59%
Tier I Capital to Risk-Weighted Assets (2)								11.76%		12.24%		12.18%		11.44%
Tier I Capital to Average Assets (2)								10.59%		10.85%		10.84%		10.71%
Tangible common equity to tangible assets								8.85%		9.27%		9.68%		9.85%
Tangible book value per common share (3)								$               18.12		$               17.78		$               17.43		$               16.95
Asset quality:
Nonaccrual loans								$               3,609		$               3,398		$               3,791		$               2,094
Other real estate owned								492		878		1,248		830
Total non-performing assets								$               4,101		$               4,276		$               5,039		$               2,924
Loans past due 90 days and still accruing								$                  105		$                    89		$               1,105		$               1,479
Nonperforming loans as a % of total loans								0.28%		0.28%		0.33%		0.20%
Nonperforming assets as a % of total assets								0.27%		0.30%		0.38%		0.24%
Allowance for loan losses as a % of total loans								1.26%		1.24%		1.23%		1.18%
Allowance for loan losses as a % of nonperforming loans								446.11%		435.84%		373.76%		584.05%
(1) Efficiency ratio is defined as noninterest expense, less merger and acquisition related expenses, other real estate owned expenses and amortization of intangible assets, 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 152,090, 138,423, 143,323 and 198,414 as of June 30, 2016, March 31, 2016, December 31, 2015 and June 30, 2015, respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

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