Business Wire | Oct 27, 2021 04:30PM EDT

Bankwell Financial Group Reports Record Net Income for the Third Quarter; Declares Fourth Quarter Dividend; and Authorizes an Additional 200 Thousand Shares for Its Share Repurchase Program

Oct. 27, 2021

NEW CANAAN, Conn.--(BUSINESS WIRE)--Oct. 27, 2021--Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record GAAP net income of $6.9 million, or $0.87 per share, for the third quarter of 2021, versus $3.0 million, or $0.38 per share, for the same period in 2020.

The Company's Board of Directors declared an $0.18 per share cash dividend, payable November 22, 2021 to shareholders of record on November 12, 2021.

We recommend reading this earnings release in conjunction with the Third Quarter 2021 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our October 27, 2021 Current Report on Form 8-K.

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

"On behalf of all of my colleagues at Bankwell, I am proud to announce our results for the most recent quarter. The Company achieved record levels in most performance categories of our business. Loan originations for the quarter totaled $200 million, with net loan growth of $92 million, excluding Paycheck Protection Program ("PPP") loans. Year to date, gross loan balances excluding PPP loans have grown by $232 million for an annualized growth rate of 19%. The Company's ROAE and ROAA were 14.09% and 1.22%, respectively, for the quarter. Loan demand remains brisk; our healthy pipeline positions us for a strong finish to the year and lays the foundation for increased profitability in 2022.

"Confident in the strength of our balance sheet and the prospect of growing earnings, the Company's Board of Directors today authorized the repurchase of an additional 200,000 shares of its common stock."

Third Quarter 2021 Highlights:

* Return on average assets was 1.22% and return on average equity was 14.09% for the quarter ended September 30, 2021. * The net interest margin improved to 3.39% for the quarter ended September 30, 2021. * The efficiency ratio improved to 54.1% for the quarter ended September 30, 2021. * Excluding Paycheck Protection Program ("PPP") loans, total gross loans were $1.8 billion, growing $232.1 million, or 14.6%, compared to December 31, 2020. On a quarterly basis loans grew $92.3 million, or 5.3% compared to June 30, 2021. * Gains from loan sales totaled $0.9 million and $2.3 million for the quarter and nine months ended September 30, 2021, respectively, compared to $27 thousand for the quarter and nine months ended September 30, 2020. * Total deposits were $1.9 billion compared to $1.8 billion at December 31, 2020. * Noninterest bearing deposits increased by $68.5 million, or 25.3% compared to December 31, 2020. * The percentage of noninterest bearing deposits to total deposits increased to 18.0% compared to 14.8% at December 31, 2020. * The cost of interest bearing deposits decreased approximately 47 basis points to 0.60% for the quarter ended September 30, 2021 when compared to the quarter ended September 30, 2020. * Investment securities totaled $105.9 million and represent 4.8% of total assets. * Tangible book value per share rose to $25.25 compared to $22.43 at December 31, 2020. * Shares issued and outstanding were 7,842,824, reflecting repurchases of 52,277 shares of common stock at a weighted average price of $27.26 during the quarter ended September 30, 2021.

Post Third Quarter 2021 Highlights:

* Subsequent to September 30, 2021, the Company issued a 3.25% fixed-to-floating rate subordinated note due 2031 in the principal amount of $35.0 million. The proceeds will be used for repayment of $15.5 million of existing subordinated notes and general corporate purposes. * The Company's Board of Directors authorized an additional 200,000 shares for its existing share repurchase program.

Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended September 30, 2021 were $19.2 million, versus $14.2 million for the quarter ended September 30, 2020. Revenues for the nine months ended September 30, 2021 were $53.8 million, versus $42.8 million for the nine months ended September 30, 2020. The increase was primarily attributable to lower interest expense on deposits, an increase in interest and fees on loans due to loan growth and from the resumption of loan sales. Revenues for the nine months ended September 30, 2021 also benefited from a one-time federal payroll tax credit for COVID-19 of $0.9 million.

Net income for the quarter ended September 30, 2021 was $6.9 million, versus $3.0 million for the quarter ended September 30, 2020. Net income for the nine months ended September 30, 2021 was $18.8 million, versus $5.6 million for the nine months ended September 30, 2020. The increase in net income was primarily impacted by the aforementioned increases in revenues and a decrease in the provision for loan losses resulting from lower loan loss reserves in 2021 when compared to 2020, which saw a large increase in reserves due to the COVID-19 Pandemic.

Basic and diluted earnings per share were $0.88 and $0.87, respectively, for the quarter ended September 30, 2021 compared to basic and diluted earnings per share of $0.38 each for the quarter ended September 30, 2020. Basic and diluted earnings per share were $2.38 and $2.37, respectively, for the nine months ended September 30, 2021 compared to basic and diluted earnings per share of $0.71 each for the nine months ended September 30, 2020.

The net interest margin (fully taxable equivalent basis) for the quarters ended September 30, 2021 and September 30, 2020 was 3.39% and 2.67%, respectively. The net interest margin (fully taxable equivalent basis) for the nine months ended September 30, 2021 and September 30, 2020 was 3.08% and 2.81%, respectively. The increase in the net interest margin was due to a decrease in rates on interest bearing deposits and a greater percentage of noninterest bearing deposits. In addition, the increase in the net interest margin for the quarter ended September 30, 2021 was positively impacted by a reduction in excess liquidity when compared to the quarter ended September 30, 2020.

Financial Condition

Assets totaled $2.23 billion at September 30, 2021, compared to assets of $2.25 billion at December 31, 2020. The change in assets remained relatively flat as the decrease in excess liquidity was offset by an increase in loans. Gross loans totaled $1.8 billion at September 30, 2021, an increase of $198.9 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $232.1 million at September 30, 2021 when compared to December 31, 2020. Deposits totaled $1.9 billion at September 30, 2021, compared to deposits of $1.8 billion at December 31, 2020.

Capital

Shareholders' equity totaled $196.2 million as of September 30, 2021, an increase of $19.6 million compared to December 31, 2020, primarily a result of (i) net income of $18.8 million for the nine months ended September 30, 2021 and (ii) a $6.2 million favorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps. The Company's interest rate swaps are used to hedge interest rate risk. The Company's current interest rate swap positions will cause a decrease to other comprehensive income in a falling interest rate environment and an increase in a rising interest rate environment. The increase in Shareholders' equity was partially offset by dividends paid of $3.6 million and common stock repurchases 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 Penko Ivanov, 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, but are not limited to, increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, uncertain impacts of, or additional changes in, monetary, fiscal or tax policy to address the impact of COVID-19, prolonged measures to contain the spread of COVID-19 or premature easing of such containment measures, either of which could further exacerbate the effects on the Company's business and results of operations, 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 book value per share, and return on average tangible common equity 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)

September 30, June 30, March 31, December 31, September 30, 2021 2021 2021 2020 2020

ASSETS

Cash and due $ 169,417 $ 297,851 $ 351,194 $ 405,340 $ 333,103 from banks

Federal funds 8,097 4,036 10,811 4,258 6,380 sold

Cash and cash 177,514 301,887 362,005 409,598 339,483 equivalents



Investment securities

Marketableequity 2,185 2,192 2,178 2,207 2,203 securities,at fair value

Available forsaleinvestment 87,565 90,983 83,218 88,605 90,563 securities,at fair value

Held tomaturityinvestment 16,107 16,166 16,225 16,078 16,138 securities,at amortizedcost

Totalinvestment 105,857 109,341 101,621 106,890 108,904 securities

Loansreceivable(net ofallowance forloan lossesof $16,803,$16,672,$20,545,$21,009, and$20,372 at 1,805,217 1,719,274 1,650,127 1,601,672 1,600,776 September 30,2021, June30, 2021,March 31,2021,December 31,2020,and September30, 2020,respectively)

Accruedinterest 6,911 6,661 7,306 6,579 7,294 receivable

Federal HomeLoan Bank 3,632 3,844 6,446 7,860 7,860 stock, atcost

Premises andequipment, 35,118 33,916 33,386 21,762 26,616 net

Bank-ownedlife 48,903 48,632 42,881 42,651 42,409 insurance

Goodwill 2,589 2,589 2,589 2,589 2,589

Otherintangible 48 58 67 76 160 assets

Deferredincome taxes, 7,718 8,208 8,908 11,300 11,149 net

Other assets 33,181 35,415 29,131 42,770 45,782

Total assets $ 2,226,688 $ 2,269,825 $ 2,244,467 $ 2,253,747 $ 2,193,022



LIABILITIESAND SHAREHOLDERS'EQUITY

Liabilities

Deposits

Noninterestbearing $ 338,705 $ 328,473 $ 280,947 $ 270,235 $ 234,848 deposits

Interestbearing 1,544,118 1,610,829 1,578,861 1,557,081 1,532,680 deposits

Total 1,882,823 1,939,302 1,859,808 1,827,316 1,767,528 deposits



Advances fromthe Federal 80,000 75,000 125,000 175,000 175,000 Home LoanBank

Subordinated 15,374 15,366 25,271 25,258 25,245 debentures

Accruedexpenses and 52,314 49,362 46,445 49,571 50,982 otherliabilities

Total 2,030,511 2,079,030 2,056,524 2,077,145 2,018,755 liabilities



Shareholders' equity

Common stock, 119,588 120,451 120,398 121,338 120,854 no par value

Retained 85,992 80,543 75,418 70,839 71,603 earnings

Accumulatedother (9,403) (10,199) (7,873) (15,575) (18,190) comprehensiveloss

Totalshareholders' 196,177 190,795 187,943 176,602 174,267 equity



Totalliabilitiesand $ 2,226,688 $ 2,269,825 $ 2,244,467 $ 2,253,747 $ 2,193,022 shareholders'equity

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except share data)

For the Quarter Ended

For the Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Interest and dividend income

Interest and fees on loans

$

19,795

$

19,266

$

17,900

$

18,194

$

18,027

$

56,961

$

55,471

Interest and dividends on securities

731

736

769

835

799

2,236

2,402

Interest on cash and cash equivalents

88

90

108

117

96

286

468

Total interest and dividend income

20,614

20,092

18,777

19,146

18,922

59,483

58,341

Interest expense

Interest expense on deposits

2,387

2,744

3,114

3,557

4,104

8,245

14,623

Interest expense on borrowings

503

769

1,008

1,285

1,210

2,280

3,187

Total interest expense

2,890

3,513

4,122

4,842

5,314

10,525

17,810

Net interest income

17,724

16,579

14,655

14,304

13,608

48,958

40,531

Provision (credit) for loan losses

134

(20)

(296)

709

712

(182)

6,896

Net interest income after provision (credit) for loan losses

17,590

16,599

14,951

13,595

12,896

49,140

33,635

Noninterest income

Gains and fees from sales of loans

924

814

513

16

27

2,251

27

Bank owned life insurance

271

251

231

241

242

753

726

Service charges and fees

199

217

199

210

190

615

578

Gain on sale of other real estate owned, net

-

-

-

-

19

-

19

Other

43

158

1,013

154

136

1,213

913

Total noninterest income

1,437

1,440

1,956

621

614

4,832

2,263

Noninterest expense

Salaries and employee benefits

4,782

3,960

4,769

5,453

5,295

13,511

15,902

Occupancy and equipment

2,615

3,250

2,406

4,516

2,266

8,271

6,410

Data processing

632

833

512

1,658

529

1,977

1,558

Professional services

498

547

587

591

374

1,632

1,519

Director fees

324

327

317

331

301

968

883

FDIC insurance

298

300

403

262

176

1,001

529

Marketing

186

140

(9)

118

151

317

512

Other

1,035

695

653

774

637

2,383

1,797

Total noninterest expense

10,370

10,052

9,638

13,703

9,729

30,060

29,110

Income before income tax expense

8,657

7,987

7,269

513

3,781

23,912

6,788

Income tax expense

1,802

1,759

1,579

177

790

5,140

1,220

Net income

$

6,855

$

6,228

$

5,690

$

336

$

2,991

$

18,772

$

5,568

Earnings Per Common Share:

Basic

$

0.88

$

0.79

$

0.72

$

0.04

$

0.38

$

2.38

$

0.71

Diluted

$

0.87

$

0.79

$

0.71

$

0.04

$

0.38

$

2.37

$

0.71

Weighted Average Common Shares Outstanding:

Basic

7,677,822

7,722,481

7,758,540

7,726,926

7,721,247

7,721,943

7,728,798

Diluted

7,738,758

7,768,026

7,800,777

7,728,206

7,721,459

7,779,632

7,749,199

Dividends per common share

$

0.18

$

0.14

$

0.14

$

0.14

$

0.14

$

0.46

$

0.42

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except share data)

For the Quarter Ended For the Nine Months Ended

September June 30, March 31, December September September September 30, 2021 2021 31, 30, 30, 30, 2021 2020 2020 2021 2020

Interest anddividend income

Interest andfees on $ 19,795 $ 19,266 $ 17,900 $ 18,194 $ 18,027 $ 56,961 $ 55,471 loans

Interest anddividends on 731 736 769 835 799 2,236 2,402 securities

Interest oncash and 88 90 108 117 96 286 468 cashequivalents

Totalinterest and 20,614 20,092 18,777 19,146 18,922 59,483 58,341 dividendincome



Interest expense

Interestexpense on 2,387 2,744 3,114 3,557 4,104 8,245 14,623 deposits

Interestexpense on 503 769 1,008 1,285 1,210 2,280 3,187 borrowings

Totalinterest 2,890 3,513 4,122 4,842 5,314 10,525 17,810 expense



Net interest 17,724 16,579 14,655 14,304 13,608 48,958 40,531 income

Provision(credit) for 134 (20) (296) 709 712 (182) 6,896 loan losses

Net interestincome afterprovision 17,590 16,599 14,951 13,595 12,896 49,140 33,635 (credit) forloan losses



Noninterest income

Gains andfees from 924 814 513 16 27 2,251 27 sales ofloans

Bank ownedlife 271 251 231 241 242 753 726 insurance

Servicecharges and 199 217 199 210 190 615 578 fees

Gain on saleof other - - - - 19 - 19 real estateowned, net

Other 43 158 1,013 154 136 1,213 913

Totalnoninterest 1,437 1,440 1,956 621 614 4,832 2,263 income



Noninterest expense

Salaries andemployee 4,782 3,960 4,769 5,453 5,295 13,511 15,902 benefits

Occupancyand 2,615 3,250 2,406 4,516 2,266 8,271 6,410 equipment

Data 632 833 512 1,658 529 1,977 1,558 processing

Professional 498 547 587 591 374 1,632 1,519 services

Director 324 327 317 331 301 968 883 fees

FDIC 298 300 403 262 176 1,001 529 insurance

Marketing 186 140 (9) 118 151 317 512

Other 1,035 695 653 774 637 2,383 1,797

Totalnoninterest 10,370 10,052 9,638 13,703 9,729 30,060 29,110 expense



Incomebefore 8,657 7,987 7,269 513 3,781 23,912 6,788 income taxexpense

Income tax 1,802 1,759 1,579 177 790 5,140 1,220 expense

Net income $ 6,855 $ 6,228 $ 5,690 $ 336 $ 2,991 $ 18,772 $ 5,568



Earnings PerCommon Share:

Basic $ 0.88 $ 0.79 $ 0.72 $ 0.04 $ 0.38 $ 2.38 $ 0.71

Diluted $ 0.87 $ 0.79 $ 0.71 $ 0.04 $ 0.38 $ 2.37 $ 0.71



WeightedAverageCommon SharesOutstanding:

Basic 7,677,822 7,722,481 7,758,540 7,726,926 7,721,247 7,721,943 7,728,798

Diluted 7,738,758 7,768,026 7,800,777 7,728,206 7,721,459 7,779,632 7,749,199

Dividendsper common $ 0.18 $ 0.14 $ 0.14 $ 0.14 $ 0.14 $ 0.46 $ 0.42 share

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

For the Quarter Ended

For the Nine Months Ended

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Performance ratios:

Return on average assets(1)

1.22

%

1.11

%

1.02

%

0.06

%

0.55

%

1.12

%

0.36

%

Return on average stockholders' equity(1)

14.09

%

13.06

%

12.67

%

0.75

%

6.87

%

13.29

%

4.23

%

Return on average tangible common equity(1)

14.29

%

13.25

%

12.86

%

0.76

%

6.98

%

13.48

%

4.30

%

Net interest margin

3.39

%

3.12

%

2.74

%

2.66

%

2.67

%

3.08

%

2.81

%

Efficiency ratio(2)

54.1

%

55.7

%

58.0

%

91.2

%

68.4

%

55.8

%

67.9

%

Net loan charge-offs as a % of average loans

-

%

0.23

%

0.01

%

-

%

-

%

0.24

%

-

%

Dividend payout ratio(3)

20.69

%

17.72

%

19.72

%

350.00

%

36.84

%

19.41

%

59.15

%

(1) 2020 performance ratios were negatively impacted by COVID-19 pandemic related loan loss reserves and $3.9 million in one-time charges related to office consolidation, contract termination and employee severance costs recognized in the fourth quarter of 2020.

(2) 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.

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

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

For the Quarter Ended For the Nine Months Ended

September June March December September September September 30, 30, 31, 31, 30, 30, 30, 2021 2021 2021 2020 2020 2021 2020

Performance ratios:

Return onaverage assets^ 1.22 % 1.11 % 1.02 % 0.06 % 0.55 % 1.12 % 0.36 %(1)

Return onaverage 14.09 % 13.06 % 12.67 % 0.75 % 6.87 % 13.29 % 4.23 %stockholders'equity^(1)

Return onaveragetangible 14.29 % 13.25 % 12.86 % 0.76 % 6.98 % 13.48 % 4.30 %common equity^(1)

Net interest 3.39 % 3.12 % 2.74 % 2.66 % 2.67 % 3.08 % 2.81 %margin

Efficiency 54.1 % 55.7 % 58.0 % 91.2 % 68.4 % 55.8 % 67.9 %ratio^(2)

Net loancharge-offs as - % 0.23 % 0.01 % - % - % 0.24 % - %a % ofaverage loans

Dividend payout 20.69 % 17.72 % 19.72 % 350.00 % 36.84 % 19.41 % 59.15 %ratio^(3)

(1) 2020 performance ratios were negatively impacted by COVID-19 pandemic related loan loss reserves and $3.9 million in one-time charges related to office consolidation, contract termination and employee severance costs recognized in the fourth quarter of 2020.

(2) 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.

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

As of

September June 30, March 31, December September 30, 2021 2021 31, 30, 2021 2020 2020

Capital ratios:

Total Common EquityTier 1 Capital to 10.59 % 10.95 % 11.02 % 11.06 % 12.36 %Risk-Weighted Assets^(1)

Total Capital toRisk-Weighted Assets^ 11.44 % 11.84 % 12.17 % 12.28 % 13.57 %(1)

Tier I Capital toRisk-Weighted Assets^ 10.59 % 10.95 % 11.02 % 11.06 % 12.36 %(1)

Tier I Capital to 9.61 % 9.19 % 8.82 % 8.44 % 9.58 %Average Assets^(1)

Tangible commonequity to tangible 8.70 % 8.30 % 8.27 % 7.73 % 7.83 %assets

Tangible book value $ 25.25 $ 24.40 $ 23.99 $ 22.43 $ 22.20 per common share^(2)

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

(2) Excludes unvested restricted shares of 178,797, 184,548, 186,485, 163,369, and 170,083 as of September 30, 2021, June 30, 2021, March 31, 2021, December 31, 2020, and September 30, 2020, respectively.

BANKWELL FINANCIAL GROUP, INC.

ASSET QUALITY (unaudited)

(Dollars in thousands)

For the Quarter Ended

September June 30, March 31, December September 30, 2021 2021 31, 30, 2021 2020 2020

Allowance for loan losses:

Balance atbeginning of $ 16,672 $ 20,545 $ 21,009 $ 20,372 $ 19,662 period

Charge-offs:

Commercial real - (3,814) (163) - - estate

Commercial - (51) - (75) - business

Consumer (15) (4) (14) (11) (4)

Total (15) (3,869) (177) (86) (4) charge-offs

Recoveries:

Commercial 11 16 - 14 - business

Consumer 1 - 9 - 2

Total recoveries 12 16 9 14 2

Net loan (3) (3,853) (168) (72) (2) charge-offs

Provision(credit) for 134 (20) (296) 709 712 loan losses

Balance at end $ 16,803 $ 16,672 $ 20,545 $ 21,009 $ 20,372 of period

As of

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

Asset quality:

Nonaccrual loans

Residential real estate

$

1,849

$

1,160

$

1,289

$

1,492

$

1,596

Commercial real estate

16,314

15,392

19,277

21,093

4,812

Commercial business

1,754

1,780

1,803

1,834

3,760

Construction

8,997

8,997

8,997

8,997

-

Total nonaccrual loans

28,914

27,329

31,366

33,416

10,168

Other real estate owned

-

-

-

-

-

Total nonperforming assets

$

28,914

$

27,329

$

31,366

$

33,416

$

10,168

Nonperforming loans as a % of total loans

1.58

%

1.57

%

1.87

%

2.06

%

0.63

%

Nonperforming assets as a % of total assets

1.30

%

1.20

%

1.40

%

1.48

%

0.46

%

Allowance for loan losses as a % of total loans

0.92

%

0.96

%

1.23

%

1.29

%

1.25

%

Allowance for loan losses as a % of nonperforming loans

58.11

%

61.00

%

65.50

%

62.87

%

200.35

%

Total nonaccrual loans declined $4.5 million to $28.9 million as of September 30, 2021 when compared to December 31, 2020 partially a result of the charge-offs recognized in the second quarter of 2021. The Bank continues work-out activity on its nonaccrual loan population. Nonperforming assets as a percentage of total assets was 1.30% at September 30, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at September 30, 2021 was $16.8 million, representing 0.92% of total loans.

As of

September June 30, March 31, December September 30, 2021 2021 31, 30, 2021 2020 2020

Asset quality:

Nonaccrual loans

Residential real $ 1,849 $ 1,160 $ 1,289 $ 1,492 $ 1,596 estate

Commercial real 16,314 15,392 19,277 21,093 4,812 estate

Commercial 1,754 1,780 1,803 1,834 3,760 business

Construction 8,997 8,997 8,997 8,997 -

Total nonaccrual 28,914 27,329 31,366 33,416 10,168 loans

Other real - - - - - estate owned

Totalnonperforming $ 28,914 $ 27,329 $ 31,366 $ 33,416 $ 10,168 assets



Nonperformingloans as a % of 1.58 % 1.57 % 1.87 % 2.06 % 0.63 %totalloans

Nonperformingassets as a % of 1.30 % 1.20 % 1.40 % 1.48 % 0.46 %totalassets

Allowance forloan losses as a 0.92 % 0.96 % 1.23 % 1.29 % 1.25 %% of totalloans

Allowance forloan losses as a% of 58.11 % 61.00 % 65.50 % 62.87 % 200.35 %nonperformingloans

Total nonaccrual loans declined $4.5 million to $28.9 million as of September 30, 2021 when compared to December 31, 2020 partially a result of the charge-offs recognized in the second quarter of 2021. The Bank continues work-out activity on its nonaccrual loan population. Nonperforming assets as a percentage of total assets was 1.30% at September 30, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at September 30, 2021 was $16.8 million, representing 0.92% of total loans.

BANKWELL FINANCIAL GROUP, INC.

LOAN & DEPOSIT PORTFOLIO (unaudited)

(Dollars in thousands)

Period End September 30, June 30, December 31, Current YTDLoan 2021 2021 2020 QTD % ChangeComposition % Change

Residential $ 90,110 $ 100,260 $ 113,557 (10.1) % (20.6) %Real Estate

CommercialReal Estate^ 1,337,896 1,266,731 1,148,383 5.6 16.5 (1)

Construction 94,665 82,805 87,007 14.3 8.8

Total Real 1,522,671 1,449,796 1,348,947 5.0 12.9 Estate Loans



Commercial 292,825 279,814 276,601 4.6 5.9 Business^(2)



Consumer 9,050 8,883 79 1.9 N/M^(3)

Total Loans $ 1,824,546 $ 1,738,493 $ 1,625,627 4.9 % 12.2 %



(1) Includes owner occupied commercial real estate.

(2) Includes $1.6 million, $7.9 million, and $34.8 million of PPP loans atSeptember 30, 2021, June 30, 2021 and December 31, 2020, respectively.

(3) Metric not meaningful.

Gross loans totaled $1.8 billion at September 30, 2021, an increase of $198.9 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $232.1 million, or 14.6%, at September 30, 2021 when compared to December 31, 2020.

Period End September 30, June 30, December 31, Current YTDDeposit 2021 2021 2020 QTD % ChangeComposition % Change

Noninterestbearing $ 338,705 $ 328,473 $ 270,235 3.1 % 25.3 %demand

NOW 103,180 136,558 101,737 (24.4) 1.4

Money 835,210 814,083 669,364 2.6 24.8 Market

Savings 188,581 173,943 158,750 8.4 18.8

Time 417,147 486,245 627,230 (14.2) (33.5)

Total $ 1,882,823 $ 1,939,302 $ 1,827,316 (2.9) % 3.0 %Deposits

Total deposits were $1.9 billion at September 30, 2021, compared to $1.8 billion at December 31, 2020, an increase of $55.5 million, or 3.0%.

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST INCOME (unaudited)

(Dollars in thousands)

For the Quarter Ended

September September Sep 21 vs. Sep 21Noninterest income 30, June 30, 30, June 21 vs. Sep 2021 2021 2020 % Change 20 % Change

Gains and fees from $ 924 $ 814 $ 27 13.5 % 3,322.2 %sales of loans

Bank owned life 271 251 242 8.0 12.0 insurance

Service charges and 199 217 190 (8.3) 4.7 fees

Gain on sale ofother real estate - - 19 N/A (100.0) owned, net

Other 43 158 136 (72.8) (68.4)

Total noninterest $ 1,437 $ 1,440 $ 614 (0.2) % 134.0 %income

For the Nine Months Ended

Noninterest income

September 30, 2021

September 30, 2020

% Change

Gains and fees from sales of loans

$

2,251

$

27

8,237.0

%

Bank owned life insurance

753

726

3.7

Service charges and fees

615

578

6.4

Gain on sale of other real estate owned, net

-

19

(100.0)

Other

1,213

913

32.9

Total noninterest income

$

4,832

$

2,263

113.5

%

Noninterest income increased by $0.8 million to $1.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. Noninterest income increased by $2.6 million to $4.8 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The increase in noninterest income was driven by resumed loan sales, totaling $0.9 million and $2.3 million for the quarter and nine months ended September 30, 2021, respectively. In addition, the increase in noninterest income for the nine months ended September 30, 2021 was impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by $0.4 million of non-recurring interest rate swap fees recognized during the nine months ended September 30, 2020.

For the Nine Months Ended

Noninterest income September 30, September 30, % Change 2021 2020

Gains and fees from sales of loans $ 2,251 $ 27 8,237.0 %

Bank owned life insurance 753 726 3.7

Service charges and fees 615 578 6.4

Gain on sale of other real estate - 19 (100.0) owned, net

Other 1,213 913 32.9

Total noninterest income $ 4,832 $ 2,263 113.5 %

Noninterest income increased by $0.8 million to $1.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. Noninterest income increased by $2.6 million to $4.8 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020.

The increase in noninterest income was driven by resumed loan sales, totaling $0.9 million and $2.3 million for the quarter and nine months ended September 30, 2021, respectively. In addition, the increase in noninterest income for the nine months ended September 30, 2021 was impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by $0.4 million of non-recurring interest rate swap fees recognized during the nine months ended September 30, 2020.

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST EXPENSE (unaudited)

(Dollars in thousands)

For the Quarter Ended

Noninterest September June 30, September Sep 21 vs. Sep 21 vs.expense 30, 2021 30, June 21 Sep 20 2021 2020 % Change % Change

Salaries and $ 4,782 $ 3,960 $ 5,295 20.8 % (9.7) %employee benefits

Occupancy and 2,615 3,250 2,266 (19.5) 15.4 equipment

Data processing 632 833 529 (24.1) 19.5

Professional 498 547 374 (9.0) 33.2 services

Director fees 324 327 301 (0.9) 7.6

FDIC insurance 298 300 176 (0.7) 69.3

Marketing 186 140 151 32.9 23.2

Other 1,035 695 637 48.9 62.5

Total noninterest $ 10,370 $ 10,052 $ 9,729 3.2 % 6.6 %expense



For the Nine Months Ended

Noninterest expense

September 30, 2021

September 30, 2020

% Change

Salaries and employee benefits

$

13,511

$

15,902

(15.0)

%

Occupancy and equipment

8,271

6,410

29.0

Data processing

1,977

1,558

26.9

Professional services

1,632

1,519

7.4

FDIC insurance

1,001

529

89.2

Director fees

968

883

9.6

Marketing

317

512

(38.1)

Other

2,383

1,797

32.6

Total noninterest expense

$

30,060

$

29,110

3.3

%

Noninterest expense increased by $0.6 million to $10.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. The increase in noninterest expense was primarily driven by an increase in occupancy and equipment expense and other expense, partially offset by a decrease in salaries and employee benefits expense.

Noninterest expense increased by $1.0 million to $30.1 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in noninterest expense was primarily driven by an increase in occupancy and equipment expense, data processing expense, FDIC insurance expense and other expense, partially offset by a decrease in salaries and employee benefits expense.

Occupancy and equipment expense totaled $2.6 million for the quarter ended September 30, 2021, an increase of $0.3 million when compared to the same period in 2020. Occupancy and equipment expense totaled $8.3 million for the nine months ended September 30, 2021, an increase of $1.9 million when compared to the same period in 2020. The increase in occupancy and equipment expense was primarily due to additional one-time charges associated with office consolidation activity (previously disclosed in the fourth quarter of 2020) and an increase in lease expense resulting from the commencement of the lease on the Company's new headquarters building.

Data processing expense totaled $2.0 million for the nine months ended September 30, 2021, an increase of $0.4 million when compared to the same period in 2020. The increase in data processing expense was primarily due to $0.4 million in costs associated with the conversion to a new online banking system implemented in the second quarter of 2021.

FDIC insurance expense totaled $1.0 million for the nine months ended September 30, 2021, an increase of $0.5 million when compared to the same period in 2020. The increase in FDIC insurance expense was due to the absence of available FDIC insurance credits recognized in the first quarter of 2020 and elevated expense due to liquidity driven balance sheet growth in the first half 2021.

Salaries and employee benefits expense totaled $4.8 million for the quarter ended September 30, 2021, a decrease of $0.5 million when compared to the same period in 2020. Salaries and employee benefits expense totaled $13.5 million for the nine months ended September 30, 2021, a decrease of $2.4 million when compared to the same period in 2020. The decrease in salaries and employee benefits expense was primarily driven by a decrease in full time equivalent employees as a direct result of the Voluntary Early Retirement Incentive Plan offered to eligible employees and other employee actions taken during the fourth quarter of 2020. Full time equivalent employees totaled 134 at September 30, 2021 compared to 142 for the same period in 2020. Average full time equivalent employees totaled 127 for the nine months ended September 30, 2021 compared to 151 for the same period in 2020. In addition, salaries and employee benefits expense also benefited by one-time deferrals of $0.6 million for the nine months ended September 30, 2021 in costs associated with a new online banking and other systems.

For the Nine Months Ended

Noninterest expense September 30, September 30, % Change 2021 2020

Salaries and employee benefits $ 13,511 $ 15,902 (15.0) %

Occupancy and equipment 8,271 6,410 29.0

Data processing 1,977 1,558 26.9

Professional services 1,632 1,519 7.4

FDIC insurance 1,001 529 89.2

Director fees 968 883 9.6

Marketing 317 512 (38.1)

Other 2,383 1,797 32.6

Total noninterest expense $ 30,060 $ 29,110 3.3 %

Noninterest expense increased by $0.6 million to $10.4 million for the quarter ended September 30, 2021 compared to the quarter ended September 30, 2020. The increase in noninterest expense was primarily driven by an increase in occupancy and equipment expense and other expense, partially offset by a decrease in salaries and employee benefits expense.

Noninterest expense increased by $1.0 million to $30.1 million for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020. The increase in noninterest expense was primarily driven by an increase in occupancy and equipment expense, data processing expense, FDIC insurance expense and other expense, partially offset by a decrease in salaries and employee benefits expense.

Occupancy and equipment expense totaled $2.6 million for the quarter ended September 30, 2021, an increase of $0.3 million when compared to the same period in 2020. Occupancy and equipment expense totaled $8.3 million for the nine months ended September 30, 2021, an increase of $1.9 million when compared to the same period in 2020. The increase in occupancy and equipment expense was primarily due to additional one-time charges associated with office consolidation activity (previously disclosed in the fourth quarter of 2020) and an increase in lease expense resulting from the commencement of the lease on the Company's new headquarters building.

Data processing expense totaled $2.0 million for the nine months ended September 30, 2021, an increase of $0.4 million when compared to the same period in 2020. The increase in data processing expense was primarily due to $0.4 million in costs associated with the conversion to a new online banking system implemented in the second quarter of 2021.

FDIC insurance expense totaled $1.0 million for the nine months ended September 30, 2021, an increase of $0.5 million when compared to the same period in 2020. The increase in FDIC insurance expense was due to the absence of available FDIC insurance credits recognized in the first quarter of 2020 and elevated expense due to liquidity driven balance sheet growth in the first half 2021.

Salaries and employee benefits expense totaled $4.8 million for the quarter ended September 30, 2021, a decrease of $0.5 million when compared to the same period in 2020. Salaries and employee benefits expense totaled $13.5 million for the nine months ended September 30, 2021, a decrease of $2.4 million when compared to the same period in 2020. The decrease in salaries and employee benefits expense was primarily driven by a decrease in full time equivalent employees as a direct result of the Voluntary Early Retirement Incentive Plan offered to eligible employees and other employee actions taken during the fourth quarter of 2020. Full time equivalent employees totaled 134 at September 30, 2021 compared to 142 for the same period in 2020. Average full time equivalent employees totaled 127 for the nine months ended September 30, 2021 compared to 151 for the same period in 2020. In addition, salaries and employee benefits expense also benefited by one-time deferrals of $0.6 million for the nine months ended September 30, 2021 in costs associated with a new online banking and other systems.

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)

(Dollars in thousands, except share data)

As of

Computationof TangibleCommon September 30, June 30, March 31, December 31, September 30,Equity to 2021 2021 2021 2020 2020TangibleAssets

Total $ 196,177 $ 190,795 $ 187,943 $ 176,602 $ 174,267 Equity

Less:

Goodwill 2,589 2,589 2,589 2,589 2,589

Other 48 58 67 76 160 intangibles

TangibleCommon $ 193,540 $ 188,148 $ 185,287 $ 173,937 $ 171,518 Equity



Total $ 2,226,688 $ 2,269,825 $ 2,244,467 $ 2,253,747 $ 2,193,022 Assets

Less:

Goodwill 2,589 2,589 2,589 2,589 2,589

Other 48 58 67 76 160 intangibles

Tangible $ 2,224,051 $ 2,267,178 $ 2,241,811 $ 2,251,082 $ 2,190,273 Assets



TangibleCommonEquity to 8.70 % 8.30 % 8.27 % 7.73 % 7.83 %TangibleAssets

As of

Computation of Tangible Book Value per Common Share

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

Total shareholders' equity

$

196,177

$

190,795

$

187,943

$

176,602

$

174,267

Less:

Preferred stock

-

-

-

-

-

Common shareholders' equity

$

196,177

$

190,795

$

187,943

$

176,602

$

174,267

Less:

Goodwill

2,589

2,589

2,589

2,589

2,589

Other intangibles

48

58

67

76

160

Tangible common shareholders' equity

$

193,540

$

188,148

$

185,287

$

173,937

$

171,518

Common shares

7,842,824

7,895,101

7,908,630

7,919,278

7,896,503

Less:

Shares of unvested restricted stock

178,797

184,548

186,485

163,369

170,083

Common shares less unvested restricted stock

7,664,027

7,710,553

7,722,145

7,755,909

7,726,420

Book value per share

$

25.60

$

24.74

$

24.34

$

22.77

$

22.55

Less:

Effects of intangible assets

$

0.34

$

0.34

$

0.34

$

0.34

$

0.36

Tangible Book Value per Common Share

$

25.25

$

24.40

$

23.99

$

22.43

$

22.20

As of

Computationof Tangible September June 30, March 31, December SeptemberBook Value 30, 2021 2021 31, 30,per 2021 2020 2020Common Share

Totalshareholders' $ 196,177 $ 190,795 $ 187,943 $ 176,602 $ 174,267 equity

Less:

Preferred - - - - - stock

Commonshareholders' $ 196,177 $ 190,795 $ 187,943 $ 176,602 $ 174,267 equity

Less:

Goodwill 2,589 2,589 2,589 2,589 2,589

Other 48 58 67 76 160 intangibles

Tangiblecommon $ 193,540 $ 188,148 $ 185,287 $ 173,937 $ 171,518 shareholders'equity

Common shares 7,842,824 7,895,101 7,908,630 7,919,278 7,896,503

Less:

Shares ofunvested 178,797 184,548 186,485 163,369 170,083 restrictedstock

Common sharesless unvested 7,664,027 7,710,553 7,722,145 7,755,909 7,726,420 restrictedstock

Book value $ 25.60 $ 24.74 $ 24.34 $ 22.77 $ 22.55 per share

Less:

Effects ofintangible $ 0.34 $ 0.34 $ 0.34 $ 0.34 $ 0.36 assets



Tangible BookValue per $ 25.25 $ 24.40 $ 23.99 $ 22.43 $ 22.20 Common Share

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued

(Dollars in thousands)

For the Quarter Ended

For the Nine Months Ended

Computation of Efficiency Ratio

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Noninterest expense

$

10,370

$

10,052

$

9,638

$

13,703

$

9,729

$

30,060

$

29,110

Less:

Amortization of intangible assets

9

9

9

84

18

28

54

Other real estate owned expenses

-

-

-

-

-

-

6

Adjusted noninterest expense

$

10,361

$

10,043

$

9,629

$

13,619

$

9,711

$

30,032

$

29,050

Net interest income

$

17,724

$

16,579

$

14,655

$

14,304

$

13,608

$

48,958

$

40,531

Noninterest income

1,437

1,440

1,956

621

614

4,832

2,263

Less:

Net gain on sale of available for sale securities

-

-

-

-

-

-

-

Gain on sale of other real estate owned, net

-

-

-

-

19

-

19

Operating revenue

$

19,161

$

18,019

$

16,611

$

14,925

$

14,203

$

53,790

$

42,775

Efficiency ratio

54.1

%

55.7

%

58.0

%

91.2

%

68.4

%

55.8

%

67.9

%

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued

(Dollars in thousands)

For the Quarter Ended For the Nine Months Ended

Computation of September June 30, March 31, December September September SeptemberEfficiency Ratio 30, 2021 2021 31, 30, 30, 30, 2021 2020 2020 2021 2020

Noninterest expense $ 10,370 $ 10,052 $ 9,638 $ 13,703 $ 9,729 $ 30,060 $ 29,110

Less:

Amortization of 9 9 9 84 18 28 54 intangible assets

Other real estate - - - - - - 6 owned expenses

Adjusted $ 10,361 $ 10,043 $ 9,629 $ 13,619 $ 9,711 $ 30,032 $ 29,050 noninterest expense

Net interest income $ 17,724 $ 16,579 $ 14,655 $ 14,304 $ 13,608 $ 48,958 $ 40,531

Noninterest income 1,437 1,440 1,956 621 614 4,832 2,263

Less:

Net gain on sale ofavailable for sale - - - - - - - securities

Gain on sale ofother - - - - 19 - 19 real estate owned,net

Operating revenue $ 19,161 $ 18,019 $ 16,611 $ 14,925 $ 14,203 $ 53,790 $ 42,775



Efficiency ratio 54.1 % 55.7 % 58.0 % 91.2 % 68.4 % 55.8 % 67.9 %

For the Quarter Ended

For the Nine Months Ended

Computation of Return on Average Tangible Common Equity

September 30,2021

June 30,2021

March 31,2021

December 31,2020

September 30,2020

September 30,2021

September 30,2020

Net Income Attributable to Common Shareholders

$

6,855

$

6,228

$

5,690

$

336

$

2,991

$

18,772

$

5,568

Total average shareholders' equity

$

192,993

$

191,224

$

182,058

$

178,439

$

173,162

$

188,794

$

175,838

Less:

Average Goodwill

2,589

2,589

2,589

2,589

2,589

2,589

2,589

Average Other intangibles

54

64

73

153

172

64

190

Average tangible common equity

$

190,350

$

188,571

$

179,396

$

175,697

$

170,401

$

186,141

$

173,059

Annualized Return on Average Tangible Common Equity

14.29

%

13.25

%

12.86

%

0.76

%

6.98

%

13.48

%

4.30

%

For the Quarter Ended For the Nine Months Ended

Computation of September December September September SeptemberReturn on Average 30, June 30, March 31, 31, 30, 30, 30,Tangible Common 2021 2021 2021 2020 2020 2021 2020Equity

Net IncomeAttributable to $ 6,855 $ 6,228 $ 5,690 $ 336 $ 2,991 $ 18,772 $ 5,568 Common Shareholders

Total averageshareholders' $ 192,993 $ 191,224 $ 182,058 $ 178,439 $ 173,162 $ 188,794 $ 175,838 equity

Less:

Average Goodwill 2,589 2,589 2,589 2,589 2,589 2,589 2,589

Average Other 54 64 73 153 172 64 190 intangibles

Average tangible $ 190,350 $ 188,571 $ 179,396 $ 175,697 $ 170,401 $ 186,141 $ 173,059 common equity



Annualized Returnon Average Tangible 14.29 % 13.25 % 12.86 % 0.76 % 6.98 % 13.48 % 4.30 %Common Equity

BANKWELL FINANCIAL GROUP, INC.

NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited)

(Dollars in thousands)

For the Quarter Ended

September 30, 2021

September 30, 2020

AverageBalance

Interest

Yield/Rate (4)

AverageBalance

Interest

Yield/Rate (4)

Assets:

Cash and Fed funds sold

$

209,500

$

88

0.17

%

$

312,078

$

96

0.12

%

Securities(1)

105,030

766

2.92

96,448

776

3.22

Loans:

Commercial real estate

1,270,375

14,345

4.42

1,087,765

12,570

4.52

Residential real estate

95,100

809

3.40

125,069

1,097

3.51

Construction

88,728

845

3.73

94,984

1,029

4.24

Commercial business

314,484

3,707

4.61

322,066

3,329

4.04

Consumer

8,870

89

3.99

121

2

7.37

Total loans

1,777,557

19,795

4.36

1,630,005

18,027

4.33

Federal Home Loan Bank stock

3,133

16

2.04

7,835

77

3.91

Total earning assets

2,095,220

$

20,665

3.86

%

2,046,366

$

18,976

3.63

%

Other assets

131,670

132,617

Total assets

$

2,226,890

$

2,178,983

Liabilities and shareholders' equity:

Interest bearing liabilities:

NOW

$

111,813

$

51

0.18

%

$

87,890

$

40

0.18

%

Money market

824,203

1,053

0.51

517,638

859

0.66

Savings

182,848

96

0.21

163,135

237

0.58

Time

448,218

1,187

1.05

757,176

2,968

1.56

Total interest bearing deposits

1,567,082

2,387

0.60

1,525,839

4,104

1.07

Borrowed Money

72,960

503

2.70

200,237

1,210

2.36

Total interest bearing liabilities

1,640,042

$

2,890

0.70

%

1,726,076

$

5,314

1.22

%

Noninterest bearing deposits

341,303

226,473

Other liabilities

52,552

53,272

Total liabilities

2,033,897

2,005,821

Shareholders' equity

192,993

173,162

Total liabilities and shareholders' equity

$

2,226,890

$

2,178,983

Net interest income(2)

$

17,775

$

13,662

Interest rate spread

3.16

%

2.41

%

Net interest margin(3)

3.39

%

2.67

%

(1) Average balances and yields for securities are based on amortized cost. (2) The adjustment for securities and loans taxable equivalency amounted to $51 thousand and $54 thousand for the quarters ended September 30, 2021 and 2020, 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 - QTD (unaudited)

(Dollars in thousands)

For the Quarter Ended

September 30, 2021 September 30, 2020

Average Yield/ Average Yield/ Balance Interest Rate ^ Balance Interest Rate ^ (4) (4)

Assets:

Cash and Fed $ 209,500 $ 88 0.17 % $ 312,078 $ 96 0.12 %funds sold

Securities^ 105,030 766 2.92 96,448 776 3.22 (1)

Loans:

Commercial 1,270,375 14,345 4.42 1,087,765 12,570 4.52 real estate

Residential 95,100 809 3.40 125,069 1,097 3.51 real estate

Construction 88,728 845 3.73 94,984 1,029 4.24

Commercial 314,484 3,707 4.61 322,066 3,329 4.04 business

Consumer 8,870 89 3.99 121 2 7.37

Total loans 1,777,557 19,795 4.36 1,630,005 18,027 4.33

Federal HomeLoan Bank 3,133 16 2.04 7,835 77 3.91 stock

Total earning 2,095,220 $ 20,665 3.86 % 2,046,366 $ 18,976 3.63 %assets

Other assets 131,670 132,617

Total assets $ 2,226,890 $ 2,178,983



Liabilitiesand shareholders'equity:

Interestbearing liabilities:

NOW $ 111,813 $ 51 0.18 % $ 87,890 $ 40 0.18 %

Money market 824,203 1,053 0.51 517,638 859 0.66

Savings 182,848 96 0.21 163,135 237 0.58

Time 448,218 1,187 1.05 757,176 2,968 1.56

Totalinterest 1,567,082 2,387 0.60 1,525,839 4,104 1.07 bearingdeposits

Borrowed 72,960 503 2.70 200,237 1,210 2.36 Money

Totalinterest 1,640,042 $ 2,890 0.70 % 1,726,076 $ 5,314 1.22 %bearingliabilities

Noninterestbearing 341,303 226,473 deposits

Other 52,552 53,272 liabilities

Total 2,033,897 2,005,821 liabilities

Shareholders' 192,993 173,162 equity

Totalliabilitiesand $ 2,226,890 $ 2,178,983 shareholders'equity

Net interest $ 17,775 $ 13,662 income^(2)

Interest rate 3.16 % 2.41 %spread

Net interest 3.39 % 2.67 %margin^(3)

(1) Average balances and yields for securities are based on amortized cost. (2) The adjustment for securities and loans taxable equivalency amounted to $51 thousand and $54 thousand for the quarters ended September 30, 2021 and 2020, 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 Nine Months Ended

September 30, 2021 September 30, 2020

Average Yield/ Average Yield/ Balance Interest Rate ^ Balance Interest Rate ^ (4) (4)

Assets:

Cash and Fed $ 315,102 $ 286 0.12 % $ 207,058 $ 468 0.30 %funds sold

Securities^ 103,192 2,315 2.99 96,761 2,289 3.15 (1)

Loans:

Commercial 1,188,049 40,802 4.53 1,094,956 38,460 4.61 real estate

Residential 104,320 2,669 3.41 134,369 3,636 3.61 real estate

Construction 97,828 2,769 3.73 98,539 3,350 4.47

Commercial 302,019 10,495 4.58 289,959 10,017 4.54 business

Consumer 7,601 226 3.97 130 8 8.15

Total loans 1,699,817 56,961 4.42 1,617,953 55,471 4.50

Federal HomeLoan Bank 4,608 72 2.09 7,547 272 4.81 stock

Total earning 2,122,719 $ 59,634 3.70 % 1,929,319 $ 58,500 3.98 %assets

Other assets 119,098 125,957

Total assets $ 2,241,817 $ 2,055,276



Liabilitiesand shareholders'equity:

Interestbearing liabilities:

NOW $ 110,637 $ 148 0.18 % $ 76,661 $ 99 0.17 %

Money market 781,178 2,944 0.50 473,485 3,213 0.91

Savings 170,749 313 0.24 170,262 1,204 0.94

Time 532,278 4,840 1.22 721,051 10,107 1.87

Totalinterest 1,594,842 8,245 0.69 1,441,459 14,623 1.36 bearingdeposits

Borrowed 108,737 2,280 2.77 187,177 3,187 2.24 Money

Totalinterest 1,703,579 $ 10,525 0.83 % 1,628,636 $ 17,810 1.46 %bearingliabilities

Noninterestbearing 303,421 201,384 deposits

Other 46,023 49,418 liabilities

Total 2,053,023 1,879,438 liabilities

Shareholders' 188,794 175,838 equity

Totalliabilitiesand $ 2,241,817 $ 2,055,276 shareholders'equity

Net interest $ 49,109 $ 40,690 income^(2)

Interest rate 2.87 % 2.52 %spread

Net interest 3.08 % 2.81 %margin^(3)

(1) Average balances and yields for securities are based on amortized cost. (2) The adjustment for securities and loans taxable equivalency amounted to $151 thousand and $159 thousand for the nine months ended September 30, 2021 and 2020, 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211027006126/en/

CONTACT: Bankwell Financial Group Christopher R. Gruseke, President and Chief Executive Officer Penko Ivanov, Executive Vice President and Chief Financial Officer (203) 652-0166