NEW CANAAN, Conn.--(BUSINESS WIRE)--July 23, 2026--
Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $12.4 million, or $1.52 per share for the second quarter of 2026, versus $11.3 million, or $1.41 per share, for the first quarter of 2026. The Company's Board of Directors declared a $0.20 per share cash dividend, payable August 21, 2026 to shareholders of record on August 10, 2026.
Discussion of Outlook; Bankwell Financial Group Chief Executive Officer, Christopher R. Gruseke:
"I'd like to congratulate our team for another outstanding quarter. Profitability continues to increase as we achieved a 1.46% Return on Average Assets and a 15.61% Return on Average Tangible Common Equity. We continue to execute key strategic objectives by meaningfully growing and improving our deposit base, accelerating loan growth, and establishing a more rate neutral balance sheet. We are particularly proud to note that as we continue to invest in our future, we have achieved a peer-leading 47.5% Efficiency Ratio this quarter.
Given our year-to-date results, we are updating prior full year guidance for 2026. We are increasing our Net Interest Income guidance to a range of $115 to $117 million while raising our outlook for loan growth to a range of 5% to 7%. We reiterate our previous guide to Non-interest Income of $12 to $13 million. Reflecting on our momentum this year, we will continue to make targeted investments in talent and infrastructure to support continued growth, and to compensate appropriately our teams for the strong performance they've delivered. Accordingly, we are raising our full-year non-interest expense guide to $65 to $67 million. Given our updated outlook for revenue, we would not expect our increased expense guidance to have a negative impact on our 2026 Efficiency Ratio."
Key Points for Second Quarter and Bankwell's Outlook
Core Deposit Growth Funds Robust Loan Production, Reduces Wholesale Funding.
-- Core deposit growth of $128 million during the quarter ended June 30,
2026, including $72.0 million growth in noninterest bearing and NOW
deposits, when compared to March 31, 2026.
-- Gross loans grew $93.1 million, or 3.2% compared to March 31, 2026,
reaching $3.0 billion at June 30, 2026, as $268.2 million of funded
originations, including $26.0 million of SBA originations, outpaced
portfolio runoff.
-- Wholesale funding decreased $43.7 million during the quarter ended June
30, 2026, lowering the Wholesale Ratio to 16.3%(1), from 21.2% at year
end.
-- As of June 30, 2026, continued core deposit growth has enabled the
Company to reduce brokered deposits by 50.6%, or $519.9 million, from
their $1,026.6 million peak at December 31, 2022.
Net Interest Margin Expands on Favorable Repricing Dynamics.
-- Reported Net Interest Margin expanded 30 basis points to 3.58% for the
second quarter of 2026, compared to 3.28% for the quarter ended March 31,
2026.
-- Total deposit costs improved 16 basis points to 2.94% for the quarter
ended June 30, 2026, compared to the quarter ended March 31, 2026.
-- Earning asset yields expanded 11 basis points to 6.26% for the quarter
ended June 30, 2026, compared to the linked quarter, as the average yield
on new loan production of 7.00% continued to exceed the runoff yield.
Revenue Growth and Expense Management Drive Positive Operating Leverage.
-- Pre-provision net revenue rose 31.4% to $17.5 million, or 2.07% of
average assets, for the quarter ended June 30, 2026, driven by revenue
growth and improved efficiency.
-- Net interest income increased to $29.5 million for the quarter ended
June 30, 2026, from $26.9 million for the quarter ended March 31, 2026,
as net interest margin expanded 30 basis points to 3.58% on favorable
repricing dynamics.
-- SBA loan sale gains contributed $2.4 million of the Company's $3.3
million in total noninterest income for the quarter ended June 30, 2026,
bringing first-half gains to $4.8 million, compared to $1.5 million in
the first half of 2025.
-- Noninterest expense declined to $15.3 million for the quarter ended
June 30, 2026, from $16.9 million for the quarter ended March 31, 2026,
primarily reflecting lower salaries and employee benefits following
seasonal first-quarter compensation costs.
-- The efficiency ratio improved to 47.5% for the quarter ended June 30,
2026, compared to 55.8% for the quarter ended March 31, 2026, resulting
in a year-to-date efficiency ratio of 51.4%.
(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.
Second Quarter 2026 Financial Highlights and Key Performance Indicators (KPIs):
June 30, March 31, December 31, September 30, June 30,
2026 2026 2025 2025 2025
-------------- -------------- -------------- -------------- --------------
Return on
average
assets(1)(6) 1.46% 1.35% 1.11% 1.24% 1.14%
Pre-tax,
pre-provision
net revenue
return on
average
assets(1)(6) 2.07% 1.60% 1.80% 1.70% 1.43%
Return on
average
shareholders'
equity(1)(6) 15.49% 14.88% 12.20% 13.84% 12.98%
Return on
average
tangible
shareholders'
equity(1)(6) 15.61% 15.00% 12.31% 13.96% 13.10%
Net Interest
Margin(1)(6)(7) 3.58% 3.28% 3.40% 3.34% 3.10%
Efficiency
Ratio(1)(3) 47.5% 55.8% 50.8% 51.4% 56.1%
Noninterest
expense to
average
assets(1)(6) 1.80% 2.03% 1.87% 1.80% 1.83%
Net loan
(recoveries)
charge-offs as
a percentage of
average
loans(1)(6) 0.00% 0.01% 0.00% (0.01)% 0.00%
Dividend payout
ratio(1)(4) 13.16% 14.18% 17.39% 15.75% 17.39%
Fully diluted
tangible book
value per
common
share(1)(2) $ 40.25 $ 38.79 $ 37.84 $ 36.84 $ 35.65
Total capital to
risk-weighted
assets(1)(5) 12.70% 13.00% 12.94% 13.48% 13.28%
Total common
equity tier 1
capital to
risk-weighted
assets(1)(5) 11.66% 11.97% 11.87% 12.39% 12.20%
Tier I Capital
to Average
Assets(1)(5) 10.36% 10.32% 10.56% 10.71% 10.57%
Tangible common
equity to
tangible
assets(1)(2) 9.24% 9.17% 8.90% 8.95% 8.68%
Earnings per
common share -
diluted $ 1.52 $ 1.41 $ 1.15 $ 1.27 $ 1.15
Common shares
issued and
outstanding 7,973,180 7,973,180 7,899,943 7,877,443 7,873,387
(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
assets 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
(recoveries) charge-offs as a percentage of average loans is calculated
by dividing net loan (recoveries) charge offs recoveries by average
total loans.
(7) Based on a fully tax equivalent basis.
Pre-Tax, Pre-Provision Net Revenue(1) ("PPNR")
PPNR for the second quarter ended June 30, 2026 was $17.5 million, an increase of 31.4% from $13.3 million recognized for the first quarter ended March 31, 2026.
For the Quarter Ended
-------------------------------------------------
June March
30, 31, December September June 30,
(Dollars in thousands) 2026 2026 31, 2025 30, 2025 2025
------- ------- --------- ---------- --------
Net interest income $29,503 $26,886 $ 26,946 $ 25,987 $ 23,936
Total noninterest
income 3,280 3,343 3,376 2,495 2,012
------ ------ -------- --------- -------
Total revenues 32,783 30,229 30,322 28,482 25,948
Total noninterest
expense 15,255 16,889 15,470 14,631 14,546
------ ------ -------- --------- -------
PPNR $17,528 $13,340 $ 14,852 $ 13,851 $ 11,402
(1) Non-GAAP Financial Measure, refer to the "Non-GAAP Financial Measures"
section of this document for additional detail.
-- Revenues (net interest income plus noninterest income) for the quarter
ended June 30, 2026 were $32.8 million, compared with $30.2 million in
the previous quarter. The increase in revenues was primarily due to
higher interest income.
-- Noninterest expense for the quarter ended June 30, 2026 was $15.3
million, compared with $16.9 million in the previous quarter. The
decrease in noninterest expense was primarily due to a decrease in
salaries and employee benefits resulting from seasonal
compensation-related costs recognized in the first quarter.
Allowance for Credit Losses - Loans ("ACL-Loans")
The ACL-Loans was $30.6 million as of June 30, 2026 compared to $29.6 million as of March 31, 2026. The ACL-Loans as a percentage of total loans was 1.03% as of June 30, 2026 compared to 1.03% as of March 31, 2026. The provision for credit losses - loans was $1.0 million for the quarter ended June 30, 2026 primarily driven by loan volume.
Total nonperforming loans decreased $3.2 million to $15.9 million as of June 30, 2026, when compared to the previous quarter. Nonperforming assets as a percentage of total assets decreased to 0.46% at June 30, 2026, compared to the previous quarter's ratio of 0.56%. As of June 30, 2026, the ACL-Loans provided 193.14% coverage of total nonperforming loans.
BANKWELL FINANCIAL GROUP, INC.
ASSET QUALITY (unaudited)
(Dollars in thousands)
For the Quarter Ended
------------------------------------------------------
March
June 30, 31, December September June 30,
2026 2026 31, 2025 30, 2025 2025
-------- -------- --------- ----------- ----------
ACL-Loans:
Balance at
beginning of
period $29,580 $30,705 $ 29,984 $ 29,256 $29,485
Charge-offs:
Residential
real estate -- -- -- -- --
Commercial real
estate -- -- -- -- --
Commercial
business (13) (148) -- (14) (15)
Consumer (35) (73) -- (46) (5)
Construction -- -- -- -- --
------ ------ -------- ------ ------
Total
charge-offs (48) (221) -- (60) (20)
------ ------ -------- ------ ------
Recoveries:
Residential
real estate -- -- -- -- --
Commercial real
estate 10 5 7 272 --
Commercial
business 8 15 23 92 112
Consumer 31 33 10 4 10
Construction -- -- -- -- --
------ ------ -------- ------ ------
Total
recoveries 49 53 40 368 122
------ ------ -------- ------ ------
Net loan
recoveries
(charge-offs) 1 (168) 40 308 102
------ ------ -------- ------ ------
(Credit) provision
for credit losses
- loans 1,046 (957) 681 420 (331)
------ ------ -------- ------ ------
Balance at end of
period $30,627 $29,580 $ 30,705 $ 29,984 $29,256
====== ====== ======== ====== ======
As of
---------------------------------------------------------------
June 30, March 31, December September June 30,
2026 2026 31, 2025 30, 2025 2025
----------- ----------- ----------- ----------- -----------
Asset quality:
Nonaccrual loans
Residential real
estate $ 530 $ 544 $ 557 $ 570 $ 617
Commercial real
estate 13,923 17,112 14,445 14,667 16,387
Commercial
business 1,404 1,380 1,302 1,729 6,871
Construction -- -- -- -- --
Consumer -- -- -- -- --
------ ------ ------ ------ ------
Total
nonaccrual
loans 15,857 19,036 16,304 16,966 23,875
Other real estate
owned -- -- -- 1,284 1,284
------ ------ ------ ------ ------
Total
nonperforming
assets $15,857 $19,036 $16,304 $18,250 $25,159
====== ====== ====== ====== ======
Nonperforming
loans as a % of
total loans 0.54% 0.66% 0.57% 0.62% 0.89%
Nonperforming
assets as a % of
total assets 0.46% 0.56% 0.49% 0.56% 0.78%
ACL-loans as a %
of total loans 1.03% 1.03% 1.08% 1.10% 1.10%
ACL-loans as a %
of nonperforming
loans 193.14% 155.39% 188.33% 176.73% 122.54%
Total past due
loans to total
loans 0.59% 0.62% 0.31% 0.76% 0.91%
Financial Condition & Capital
Assets totaled $3.5 billion at June 30, 2026, an increase of $115.7 million, or 3.4% compared to December 31, 2025. Gross loans totaled $3.0 billion at June 30, 2026, an increase of $119.6 million, or 4.2% compared to December 31, 2025. Deposits totaled $3.0 billion at June 30, 2026, an increase of $171.0 million, or 6.0% compared to December 31, 2025. Brokered deposits have decreased $52.1 million or 9.3%, when compared to December 31, 2025.
Period End Current Year over
Loan June 30, December June 30, YTD % Year %
Composition 2026 31, 2025 2025 Change Change
---------- ---------- ---------- ---------- -----------
Residential
Real Estate $ 28,464 $ 33,139 $ 34,978 (14.1)% (18.6)%
Commercial
Real
Estate(1) 1,989,747 1,930,979 1,802,224 3.0 10.4
Construction 153,522 153,778 203,758 (0.2) (24.7)
--------- --------- --------- ----- ----- ---
Total Real
Estate
Loans 2,171,733 2,117,896 2,040,960 2.5 6.4
Commercial
Business 715,934 645,321 559,221 10.9 28.0
Consumer 72,026 76,855 68,801 (6.3) 4.7
--------- --------- --------- ----- ----- ----
Total
Loans $2,959,693 $2,840,072 $2,668,982 4.2% 10.9%
========= ========= =========
(1) Includes owner occupied commercial real estate of $0.8 billion at June
30, 2026, $0.8 billion at December 31, 2025, and $0.7 billion at June 30,
2025, respectively.
Period End Current Year over
Deposit June 30, December June 30, YTD % Year %
Composition 2026 31, 2025 2025 Change Change
---------- ---------- ---------- ---------- -----------
Noninterest
bearing
demand $ 472,008 $ 403,652 $ 397,195 16.9% 18.8%
NOW 133,032 90,205 118,019 47.5 12.7
Money Market 1,175,536 1,007,844 875,457 16.6 34.3
Savings 98,626 97,418 91,612 1.2 7.7
Time 1,121,328 1,230,362 1,276,998 (8.9) (12.2)
--------- --------- --------- ----- ----- ---
Total
Deposits $3,000,530 $2,829,481 $2,759,281 6.0% 8.7%
========= ========= =========
Shareholders' equity totaled $323.5 million as of June 30, 2026, an increase of $22.0 million compared to December 31, 2025, primarily a result of year-to-date net income of $23.6 million. The increase was partially offset by dividends paid of $3.2 million.
As of June 30, 2026, the Bank's regulatory capital ratios were all above 'well capitalized' values, with total risk-based capital, common-equity tier 1 capital and leverage ratios at 12.70%, 11.66%, and 10.36%, respectively.
We recommend reading this earnings release in conjunction with the Second Quarter 2026 Investor Presentation, located at https://investor.mybankwell.com/events-and-presentations/ and included as an exhibit to our July 23, 2026 Current Report on Form 8-K.
Conference Call
Bankwell will host a conference call to discuss the Company's financial results and business outlook on July 23, 2026, at 11:00 a.m. E.T. The call will be accessible by telephone and webcast using https://investor.mybankwell.com/events-and-presentations/. A supplementary slide presentation will be posted to the website prior to the event, and a replay will be available for 12 months following the event.
About Bankwell Financial Group
Bankwell Financial Group, Inc. is the holding company for Bankwell Bank ("Bankwell"), a full-service commercial bank headquartered in New Canaan, CT. Bankwell provides businesses and professionals with a range of commercial financing solutions, including working capital lines of credit, SBA loans, acquisition financing, and commercial mortgages, along with treasury management and deposit services. Bankwell emphasizes accessibility, expertise, and responsiveness through experienced local banking teams serving its markets.
For more information about this press release, interested parties may contact Christopher R. Gruseke, Chief Executive Officer or Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer of Bankwell Financial Group, Inc. at (203) 652-0166 or at ir@mybankwell.com.
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, efficiency ratio, noninterest expense to average assets, return on average shareholders' equity, return on average tangible shareholders' equity, pre-tax, pre-provision net revenue, net interest margin, net loan (recoveries) charge-offs as a percentage of average loans, pre-tax, pre-provision net revenue on average assets, wholesale ratio, 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. See "Reconciliation of GAAP to Non-GAAP Measures (unaudited)".
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED BALANCE SHEETS (unaudited)
(Dollars in thousands)
June 30, March 31, December September June 30,
2026 2026 31, 2025 30, 2025 2025
----------- ----------- ----------- ----------- -------------
ASSETS
Cash and due from banks $ 191,378 $ 208,904 $ 214,567 $ 289,628 $ 313,998
Federal funds sold 12,018 8,997 10,354 5,732 8,466
--------- --------- --------- --------- ---------
Cash and cash equivalents 203,396 217,901 224,921 295,360 322,464
Investment securities
Marketable equity securities, at
fair value 2,263 2,254 2,248 2,223 2,188
Available for sale investment
securities, at fair value 174,036 155,934 160,409 96,473 103,930
Held to maturity investment
securities, at amortized cost 29,314 29,386 29,465 29,538 36,434
--------- --------- --------- --------- ---------
Total investment securities 205,613 187,574 192,122 128,234 142,552
Loans receivable (net of ACL-Loans of
$30,627, $29,580, $30,705, $29,984,
and $29,256, at June 30, 2026, March
31, 2026, December 31, 2025, September
30, 2025, and June 30, 2025,
respectively) 2,924,890 2,832,678 2,804,441 2,684,016 2,635,742
Accrued interest receivable 16,270 16,029 16,143 15,633 14,741
Federal Home Loan Bank stock, at
cost 3,143 4,207 6,207 4,951 5,051
Premises and equipment, net 20,068 20,947 21,582 22,387 23,020
Bank-owned life insurance 54,931 54,566 54,207 53,846 53,488
Goodwill 2,589 2,589 2,589 2,589 2,589
Deferred income taxes, net 9,992 11,436 11,356 9,027 9,684
Other real estate owned -- -- -- 1,284 1,284
Other assets 34,678 25,932 26,291 26,636 25,978
--------- --------- --------- --------- ---------
Total assets $3,475,570 $3,373,859 $3,359,859 $3,243,963 $3,236,593
========= ========= ========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Deposits
Noninterest bearing deposits $ 472,008 $ 428,384 $ 403,652 $ 397,408 $ 397,195
Interest bearing deposits 2,528,522 2,456,865 2,425,829 2,360,007 2,362,086
--------- --------- --------- --------- ---------
Total deposits 3,000,530 2,885,249 2,829,481 2,757,415 2,759,281
Advances from the Federal Home Loan
Bank 30,000 60,000 110,000 75,000 75,000
Subordinated debentures 69,820 69,759 69,697 69,636 69,574
Accrued expenses and other
liabilities 51,720 46,985 49,192 49,121 49,448
--------- --------- --------- --------- ---------
Total liabilities 3,152,070 3,061,993 3,058,370 2,951,172 2,953,303
--------- --------- --------- --------- ---------
Shareholders' equity
Common stock, no par value 121,997 121,060 120,118 119,353 118,698
Retained earnings 202,073 191,281 181,587 174,008 165,495
Accumulated other comprehensive
(loss) (570) (475) (216) (570) (903)
--------- --------- --------- --------- ---------
Total shareholders' equity 323,500 311,866 301,489 292,791 283,290
--------- --------- --------- --------- ---------
Total liabilities and
shareholders' equity $3,475,570 $3,373,859 $3,359,859 $3,243,963 $3,236,593
========= ========= ========= ========= =========
BANKWELL FINANCIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Dollars in thousands, except share data)
For the Quarter Ended For the Six Months Ended
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