NEW CANAAN, Conn.--(BUSINESS WIRE)--April 22, 2026--
Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $11.3 million, or $1.41 per share for the first quarter of 2026, versus $9.1 million, or $1.15 per share, for the fourth quarter of 2025. The Company's Board of Directors declared a $0.20 per share cash dividend, payable May 19, 2026 to shareholders of record on May 8, 2026.
Discussion of Outlook; Bankwell Financial Group Chief Executive Officer, Christopher R. Gruseke:
"We generated outstanding first quarter results while advancing our strategic priorities. Profitability increased during the quarter, reflected in a return on average assets of 1.35%, and the Company grew core deposits by $113 million sequentially. Our SBA division continues to execute measured, profitable growth, with originations this quarter of $34 million, and we have continued to improve our asset and liability mix as floating rate loans now comprise 42% of the loan portfolio.
Results for the quarter include a sequential increase to the Company's non-interest expense of approximately $1.4 million. This increase reflects the timing of some expense recognition, and we believe current trends support our non-interest expense guidance previously provided of $64 to $65 million for the full year. We also affirm prior guidance regarding Net Interest Income and loan growth for 2026. Due to an improved outlook for SBA gains on sale and other commercial fees, however, we are increasing our guidance for Non-Interest Income to a range of $12 to $13 million.
As we enter the remainder of the year, we are confident in our credit quality and are well positioned to reduce NPAs in the quarters ahead."
Key Points for First Quarter and Bankwell's Outlook
Core Deposit Growth Funds Loan Growth and Reduces Wholesale Reliance.
-- Core deposit growth of $113 million during the quarter ended March 31,
2026, including $39.0 million growth in low--cost deposits, when compared
to December 31, 2025.
-- Brokered deposits and FHLB borrowings declined by $44.5 million and
$50.0 million, respectively, lowering the Wholesale Ratio to 18.1%(1) as
of March 31, 2026.
-- Since the peak brokered deposit balance of $1,026.6 million at December
31, 2022, the Company has successfully reduced brokered deposits by
$512.4 million, or 49.9%, as of March 31, 2026.
-- $27.1 million net loan growth during the quarter ended March 31, 2026,
driven by $190 million of originations, including $34 million of SBA
originations.
Funding Improvements Partially Offset Lower Portfolio Yields in Net Interest Margin.
-- Reported Net Interest Margin was 3.28% for the first quarter of 2026,
compared to 3.40% for the quarter ended December 31, 2025. Of the 12
basis-point decline versus the fourth quarter of 2025 Net Interest Margin,
approximately 7 basis points relate to the previous quarter's longer day
count.
-- Total deposit costs of 3.10% for the quarter ended March 31, 2026,
represent a 5 basis point improvement compared to the quarter ended
December 31, 2025. During the quarter, $270 million of time deposits
repriced 44 basis points lower.
-- Approximately $1,128 million of time deposits are scheduled to mature
over the next 12 months at a weighted average rate of 3.99%; assuming
repricing at current market levels and with no additional Fed action,
these maturities represent an estimated annualized funding cost savings
opportunity of approximately $1.6 million.
-- Yield on new loan production averaged 7.53% for the quarter ended March
31, 2026; however, the overall portfolio yield declined 7 basis points
from the previous quarter, to 6.56%.
Advancing Strategic Priorities.
-- SBA loan sale gains increased to $2.4 million in the first quarter of
2025, compared to $2.2 million in the fourth quarter of 2025.
-- On February 20, 2026, the Company opened its first full service branch
in New York State, located in Bay Ridge, Brooklyn. This addition supports
the Bank's continued focus on serving closely held businesses, their
owners, and professionals in key markets. The Brooklyn office is home to
an experienced private client banking team and provides businesses and
individuals with a dedicated single point of contact, along with tailored
commercial banking, lending, and treasury management services.
(1) Wholesale Ratio is a Non-GAAP Financial Measure and is calculated as
brokered deposits and FHLB borrowings divided by total assets. Refer to the
"Non-GAAP Financial Measures" section of this document for additional detail.
First Quarter 2026 Financial Highlights and Key Performance Indicators (KPIs):
March 31, December 31, September 30, June 30, March 31,
2026 2025 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Return on
average
assets(1)(6) 1.35% 1.11% 1.24% 1.14% 0.86%
Pre-tax,
pre-provision
net revenue
return on
average
assets(1)(6) 1.60% 1.80% 1.70% 1.43% 1.18%
Return on
average
shareholders'
equity(1)(6) 14.88% 12.20% 13.84% 12.98% 10.16%
Return on
average
tangible
shareholders'
equity(1)(6) 15.00% 12.31% 13.96% 13.10% 10.25%
Net Interest
Margin(1)(6)(7) 3.28% 3.40% 3.34% 3.10% 2.81%
Efficiency
Ratio(1)(3) 55.8% 50.8% 51.4% 56.1% 59.9%
Noninterest
expense to
average
assets(1)(6) 2.03% 1.87% 1.80% 1.83% 1.76%
Net loan
(recoveries)
charge-offs as
a percentage of
average
loans(1)(6) 0.01% 0.00% (0.01)% 0.00% 0.00%
Dividend
payout(1)(4) 14.18% 17.39% 15.75% 17.39% 22.99%
Fully diluted
tangible book
value per
common
share(1)(2) $ 38.79 $ 37.84 $ 36.84 $ 35.65 $ 34.56
Total capital to
risk-weighted
assets(1)(5) 12.99% 12.94% 13.48% 13.28% 13.22%
Total common
equity tier 1
capital to
risk-weighted
assets(1)(5) 11.96% 11.87% 12.39% 12.20% 12.11%
Tier I Capital
to Average
Assets(1)(5) 10.31% 10.55% 10.71% 10.57% 10.13%
Tangible common
equity to
tangible
assets(1)(2) 9.17% 8.90% 8.95% 8.68% 8.57%
Earnings per
common share -
diluted $ 1.41 $ 1.15 $ 1.27 $ 1.15 $ 0.87
Common shares
issued and
outstanding 7,973,180 7,899,943 7,877,443 7,873,387 7,888,013
(1) Non-GAAP Financial Measure, refer to the "Non-GAAP Financial Measures"
section of this document for additional detail.
(2) Refer to the "Reconciliation of GAAP to Non-GAAP Measures" section of
this document for additional detail.
(3) 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.
(4) The dividend payout ratio is calculated by dividing dividends per share
by earnings per share.
(5) Represents Bank ratios. Current period capital ratios are preliminary
subject to finalization of the FDIC Call Report.
(6) Return on average assets is calculated by dividing annualized net income
by average assets. Pre-tax, pre-provision net revenue return on average
is calculated by dividing PPNR (calculated as set forth in the "Pre-Tax,
Pre-Provision Net Revenue (PPNR)" section of this document) by average
assets. Return on average shareholders' equity is calculated by dividing
annualized net income by average shareholders' equity. Return on average
tangible shareholders' equity is calculated by dividing annualized net
income by average shareholders' equity less average intangible assets.
Net Interest Margin is calculated by dividing average annualized net
interest income by average total earning assets. Noninterest expense to
average assets is calculated by dividing annualized noninterest expense
by average total assets. Net loan charge-offs as a percentage of average
loans is calculated by dividing net loan (charge offs) recoveries by
average total loans.
(7) Based on a fully tax equivalent basis.
Pre-Tax, Pre-Provision Net Revenue(1) ("PPNR")
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