Business Wire | Jan 26, 2022 04:26PM EST

Bankwell Financial Group Reports Record Net Income for the Fourth Quarter and Full Year 2021; Increases Dividend by 11%; Provides Guidance For 2022

Jan. 26, 2022

NEW CANAAN, Conn.--(BUSINESS WIRE)--Jan. 26, 2022--Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported record GAAP net income for the fourth quarter and year ended 2021. For the fourth quarter of 2021 net income totaled $7.8 million, or $0.99 per share, versus $0.3 million, or $0.04 per share, for the same period in 2020. For the year ended 2021 net income totaled $26.6 million, or $3.36 per share, versus $5.9 million, or $0.75 per share, for the same period in 2020.

The Company's Board of Directors declared a $0.20 per share cash dividend, payable February 24, 2022 to shareholders of record on February 14, 2022, representing an 11% increase when compared to the prior quarter's dividend.

We recommend reading this earnings release in conjunction with the Fourth Quarter 2021 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our January 26, 2022 Current Report on Form 8-K.

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

"We are proud to announce record performance for the fourth quarter and full year of 2021. In addition to generating a Return on Average Equity of 14% for the year, the Company made significant strides in all aspects of its business. While originating approximately $800 million in loans, we also continued to diversify our asset base. Core deposits grew by 31.7%, year over year, and non-interest bearing deposits increased by 47.6% over the same period.

"I offer my heartfelt gratitude and sincere congratulations to every member of our team. Their hard work and commitment, during a time of historic disruption, has made these impressive achievements possible.

"We enter the year ahead with confidence and momentum and look forward to another outstanding year. Loan and deposit pipelines remain strong. Inclusive of four expected rate hikes by the Federal Reserve, we expect net interest income to grow by 12-14% in 2022."

Fourth Quarter 2021 Highlights:

* Return on average assets was 1.32% and return on average equity was 15.44% for the quarter ended December 31, 2021. * The net interest margin improved to 3.43% for the quarter ended December 31, 2021 and 3.17% for the year ended December 31, 2021. * Total gross loans were $1.9 billion, growing $303.9 million excluding Paycheck Protection Program ("PPP") loans, or 19.1%, compared to December 31, 2020. On a quarterly basis, loans grew $71.7 million, or 3.9% compared to September 30, 2021. * Gains from loan sales totaled $0.4 million and $2.7 million for the quarter and year ended December 31, 2021, respectively. * Total deposits were $2.1 billion compared to $1.8 billion at December 31, 2020. * Noninterest bearing deposits increased by $128.7 million, or 47.6% compared to December 31, 2020. * The percentage of noninterest bearing deposits to total deposits increased to 18.8% compared to 14.8% at December 31, 2020. * The cost of interest bearing deposits decreased approximately 35 basis points to 0.54% for the quarter ended December 31, 2021 when compared to the quarter ended December 31, 2020. * Investment securities totaled $108.4 million and represent 4.4% of total assets. * Tangible book value per share rose to $26.19 compared to $22.43 at December 31, 2020. * Shares issued and outstanding were 7,803,166, reflecting repurchases of 59,338 shares of common stock at a weighted average price of $31.29 during the quarter ended December 31, 2021. * The Company issued a 3.25% fixed-to-floating rate subordinated note due 2031 in the principal amount of $35.0 million. Part of the proceeds were used to repay $15.5 million of previously issued subordinated notes.

Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended December 31, 2021 were $19.8 million, versus $14.9 million for the quarter ended December 31, 2020. Revenues for the year ended December 31, 2021 were $73.5 million, versus $57.7 million for the year ended December 31, 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.

Net income for the quarter ended December 31, 2021 was $7.8 million, versus $0.3 million for the quarter ended December 31, 2020. Net income for the year ended December 31, 2021 was $26.6 million, versus $5.9 million for the year ended December 31, 2020. The increase in net income was primarily impacted by the aforementioned increases in revenues, a decrease in noninterest expense, 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 $1.00 and $0.99, respectively, for the quarter ended December 31, 2021 compared to basic and diluted earnings per share of $0.04 each for the quarter ended December 31, 2020. Basic and diluted earnings per share were $3.38 and $3.36, respectively, for the year ended December 31, 2021 compared to basic and diluted earnings per share of $0.75 each for the year ended December 31, 2020.

The net interest margin (fully taxable equivalent basis) for the quarters ended December 31, 2021 and December 31, 2020 was 3.43% and 2.66%, respectively. The net interest margin (fully taxable equivalent basis) for the years ended December 31, 2021 and December 31, 2020 was 3.17% and 2.77%, respectively. The increase in the net interest margin was due to lower interest expense from a decrease in rates on interest bearing deposits and a greater proportion of noninterest bearing deposits.

Financial Condition

Assets totaled $2.46 billion at December 31, 2021, compared to assets of $2.25 billion at December 31, 2020. The increase in assets was primarily due to loan growth, partially offset by a decrease in excess liquidity. Gross loans totaled $1.9 billion at December 31, 2021, an increase of $269.3 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $303.9 million at December 31, 2021 when compared to December 31, 2020. Deposits totaled $2.1 billion at December 31, 2021, compared to deposits of $1.8 billion at December 31, 2020.

Capital

Shareholders' equity totaled $202.0 million as of December 31, 2021, an increase of $25.4 million compared to December 31, 2020, primarily a result of (i) net income of $26.6 million for the year ended December 31, 2021 and (ii) a $7.0 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 $5.0 million and common stock repurchases of $5.1 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.

BANKWELLFINANCIALGROUP, INC.

CONSOLIDATEDBALANCESHEETS(unaudited)

(Dollars inthousands)

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

ASSETS

Cash and due $ 291,598 $ 169,417 $ 297,851 $ 351,194 $ 405,340 from banks

Federal funds 53,084 8,097 4,036 10,811 4,258 sold

Cash and cash 344,682 177,514 301,887 362,005 409,598 equivalents



Investment securities

Marketableequity 2,168 2,185 2,192 2,178 2,207 securities,at fair value

Available forsaleinvestment 90,198 87,565 90,983 83,218 88,605 securities,at fair value

Held tomaturityinvestment 16,043 16,107 16,166 16,225 16,078 securities,at amortizedcost

Totalinvestment 108,409 105,857 109,341 101,621 106,890 securities

Loansreceivable(net ofallowance forloan lossesof $16,902,$16,803,$16,672,$20,545, and$21,009 at 1,875,167 1,805,217 1,719,274 1,650,127 1,601,672 December 31,2021,September 30,2021, June30, 2021,March 31,2021, andDecember 31,2020,respectively)

Accruedinterest 7,512 6,911 6,661 7,306 6,579 receivable

Federal HomeLoan Bank 2,814 3,632 3,844 6,446 7,860 stock, atcost

Premises andequipment, 25,588 35,118 33,916 33,386 21,762 net

Bank-ownedlife 49,174 48,903 48,632 42,881 42,651 insurance

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

Otherintangible - 48 58 67 76 assets

Deferredincome taxes, 7,621 7,718 8,208 8,908 11,300 net

Other assets 32,708 33,181 35,415 29,131 42,770

Total assets $ 2,456,264 $ 2,226,688 $ 2,269,825 $ 2,244,467 $ 2,253,747



LIABILITIESAND SHAREHOLDERS'EQUITY

Liabilities

Deposits

Noninterestbearing $ 398,956 $ 338,705 $ 328,473 $ 280,947 $ 270,235 deposits

Interestbearing 1,725,042 1,544,118 1,610,829 1,578,861 1,557,081 deposits

Total 2,123,998 1,882,823 1,939,302 1,859,808 1,827,316 deposits



Advances fromthe Federal 50,000 80,000 75,000 125,000 175,000 Home LoanBank

Subordinated 34,441 15,374 15,366 25,271 25,258 debentures

Accruedexpenses and 45,838 52,314 49,362 46,445 49,571 otherliabilities

Total 2,254,277 2,030,511 2,079,030 2,056,524 2,077,145 liabilities



Shareholders' equity

Common stock, 118,148 119,588 120,451 120,398 121,338 no par value

Retained 92,400 85,992 80,543 75,418 70,839 earnings

Accumulatedother (8,561 ) (9,403 ) (10,199 ) (7,873 ) (15,575 )comprehensiveloss

Totalshareholders' 201,987 196,177 190,795 187,943 176,602 equity



Totalliabilitiesand $ 2,456,264 $ 2,226,688 $ 2,269,825 $ 2,244,467 $ 2,253,747 shareholders'equity

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except share data)

For the Quarter Ended

For the Year Ended

December 31,2021

September 30,2021

June 30,2021

March 31,2021

December 31,2020

December 31,2021

December 31,2020

Interest and dividend income

Interest and fees on loans

$

21,081

$

19,795

$

19,266

$

17,900

$

18,194

$

78,042

$

73,665

Interest and dividends on securities

722

731

736

769

835

2,958

3,237

Interest on cash and cash equivalents

90

88

90

108

117

376

585

Total interest and dividend income

21,893

20,614

20,092

18,777

19,146

81,376

77,487

Interest expense

Interest expense on deposits

2,198

2,387

2,744

3,114

3,557

10,443

18,180

Interest expense on borrowings

767

503

769

1,008

1,285

3,047

4,472

Total interest expense

2,965

2,890

3,513

4,122

4,842

13,490

22,652

Net interest income

18,928

17,724

16,579

14,655

14,304

67,886

54,835

Provision (credit) for loan losses

125

134

(20

)

(296

)

709

(57

)

7,605

Net interest income after provision (credit) for loan losses

18,803

17,590

16,599

14,951

13,595

67,943

47,230

Noninterest income

Gains and fees from sales of loans

441

924

814

513

16

2,692

43

Bank owned life insurance

270

271

251

231

241

1,023

967

Service charges and fees

257

199

217

199

210

872

788

Gain on sale of other real estate owned, net

-

-

-

-

-

-

19

Other

(143

)

43

158

1,013

154

1,070

1,067

Total noninterest income

825

1,437

1,440

1,956

621

5,657

2,884

Noninterest expense

Salaries and employee benefits

4,806

4,782

3,960

4,769

5,453

18,317

21,355

Occupancy and equipment

2,411

2,615

3,250

2,406

4,516

10,682

10,926

Professional services

628

498

547

587

591

2,260

2,110

Data processing

432

632

833

512

1,658

2,409

3,216

Director fees

335

324

327

317

331

1,303

1,214

FDIC insurance

231

298

300

403

262

1,232

791

Marketing

87

186

140

(9

)

118

404

630

Other

749

1,035

695

653

774

3,132

2,571

Total noninterest expense

9,679

10,370

10,052

9,638

13,703

39,739

42,813

Income before income tax expense

9,949

8,657

7,987

7,269

513

33,861

7,301

Income tax expense

2,135

1,802

1,759

1,579

177

7,275

1,397

Net income

$

7,814

$

6,855

$

6,228

$

5,690

$

336

$

26,586

$

5,904

Earnings Per Common Share:

Basic

$

1.00

$

0.88

$

0.79

$

0.72

$

0.04

$

3.38

$

0.75

Diluted

$

0.99

$

0.87

$

0.79

$

0.71

$

0.04

$

3.36

$

0.75

Weighted Average Common Shares Outstanding:

Basic

7,660,307

7,677,822

7,722,481

7,758,540

7,726,926

7,706,407

7,728,328

Diluted

7,726,420

7,738,758

7,768,026

7,800,777

7,728,206

7,761,811

7,748,453

Dividends per common share

$

0.18

$

0.18

$

0.14

$

0.14

$

0.14

$

0.64

$

0.56

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except share data)

For the Quarter Ended For the Year Ended

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

Interest anddividend income

Interest andfees on $ 21,081 $ 19,795 $ 19,266 $ 17,900 $ 18,194 $ 78,042 $ 73,665loans

Interest anddividends on 722 731 736 769 835 2,958 3,237securities

Interest oncash and 90 88 90 108 117 376 585cashequivalents

Totalinterest and 21,893 20,614 20,092 18,777 19,146 81,376 77,487dividendincome



Interest expense

Interestexpense on 2,198 2,387 2,744 3,114 3,557 10,443 18,180deposits

Interestexpense on 767 503 769 1,008 1,285 3,047 4,472borrowings

Totalinterest 2,965 2,890 3,513 4,122 4,842 13,490 22,652expense



Net interest 18,928 17,724 16,579 14,655 14,304 67,886 54,835income

Provision(credit) for 125 134 (20 ) (296 ) 709 (57 ) 7,605loan losses

Net interestincome afterprovision 18,803 17,590 16,599 14,951 13,595 67,943 47,230(credit) forloan losses



Noninterest income

Gains andfees from 441 924 814 513 16 2,692 43sales ofloans

Bank ownedlife 270 271 251 231 241 1,023 967insurance

Servicecharges and 257 199 217 199 210 872 788fees

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

Other (143 ) 43 158 1,013 154 1,070 1,067

Totalnoninterest 825 1,437 1,440 1,956 621 5,657 2,884income



Noninterest expense

Salaries andemployee 4,806 4,782 3,960 4,769 5,453 18,317 21,355benefits

Occupancyand 2,411 2,615 3,250 2,406 4,516 10,682 10,926equipment

Professional 628 498 547 587 591 2,260 2,110services

Data 432 632 833 512 1,658 2,409 3,216processing

Director 335 324 327 317 331 1,303 1,214fees

FDIC 231 298 300 403 262 1,232 791insurance

Marketing 87 186 140 (9 ) 118 404 630

Other 749 1,035 695 653 774 3,132 2,571

Totalnoninterest 9,679 10,370 10,052 9,638 13,703 39,739 42,813expense



Incomebefore 9,949 8,657 7,987 7,269 513 33,861 7,301income taxexpense

Income tax 2,135 1,802 1,759 1,579 177 7,275 1,397expense

Net income $ 7,814 $ 6,855 $ 6,228 $ 5,690 $ 336 $ 26,586 $ 5,904



Earnings PerCommon Share:

Basic $ 1.00 $ 0.88 $ 0.79 $ 0.72 $ 0.04 $ 3.38 $ 0.75

Diluted $ 0.99 $ 0.87 $ 0.79 $ 0.71 $ 0.04 $ 3.36 $ 0.75



WeightedAverageCommon SharesOutstanding:

Basic 7,660,307 7,677,822 7,722,481 7,758,540 7,726,926 7,706,407 7,728,328

Diluted 7,726,420 7,738,758 7,768,026 7,800,777 7,728,206 7,761,811 7,748,453

Dividendsper common $ 0.18 $ 0.18 $ 0.14 $ 0.14 $ 0.14 $ 0.64 $ 0.56share

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

For the Quarter Ended

For the Year Ended

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

December 31, 2021

December 31,2020

Performance ratios:

Return on average assets(1)

1.32

%

1.22

%

1.11

%

1.02

%

0.06

%

1.17

%

0.28

%

Return on average stockholders' equity(1)

15.44

%

14.09

%

13.06

%

12.67

%

0.75

%

13.86

%

3.35

%

Return on average tangible common equity(1)

15.65

%

14.29

%

13.25

%

12.86

%

0.76

%

14.05

%

3.40

%

Net interest margin

3.43

%

3.39

%

3.12

%

2.74

%

2.66

%

3.17

%

2.77

%

Efficiency ratio(2)

48.8

%

54.1

%

55.7

%

58.0

%

91.2

%

53.9

%

73.9

%

Net loan charge-offs as a % of average loans

-

%

-

%

0.23

%

0.01

%

-

%

0.23

%

0.01

%

Dividend payout ratio(3)

18.18

%

20.69

%

17.72

%

19.72

%

350.00

%

19.05

%

74.67

%

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

For the Quarter Ended For the Year Ended

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

Performance ratios:

Return onaverage 1.32 % 1.22 % 1.11 % 1.02 % 0.06 % 1.17 % 0.28 %assets^(1)

Return onaverage 15.44 % 14.09 % 13.06 % 12.67 % 0.75 % 13.86 % 3.35 %stockholders'equity^(1)

Return onaveragetangible 15.65 % 14.29 % 13.25 % 12.86 % 0.76 % 14.05 % 3.40 %common equity^(1)

Net interest 3.43 % 3.39 % 3.12 % 2.74 % 2.66 % 3.17 % 2.77 %margin

Efficiency 48.8 % 54.1 % 55.7 % 58.0 % 91.2 % 53.9 % 73.9 %ratio^(2)

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

Dividendpayout ratio^ 18.18 % 20.69 % 17.72 % 19.72 % 350.00 % 19.05 % 74.67 %(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.

2020 performance ratios were negatively impacted by COVID-19 pandemic(1) 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.

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(2) 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

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

Capital ratios:

Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)

11.18

%

10.59

%

10.95

%

11.02

%

11.06

%

Total Capital to Risk-Weighted Assets(1)

12.00

%

11.44

%

11.84

%

12.17

%

12.28

%

Tier I Capital to Risk-Weighted Assets(1)

11.18

%

10.59

%

10.95

%

11.02

%

11.06

%

Tier I Capital to Average Assets(1)

9.94

%

9.61

%

9.19

%

8.82

%

8.44

%

Tangible common equity to tangible assets

8.13

%

8.70

%

8.30

%

8.27

%

7.73

%

Tangible book value per common share(2)

$

26.19

$

25.25

$

24.40

$

23.99

$

22.43

As of

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

Capital ratios:

Total Common EquityTier 1 Capital to 11.18 % 10.59 % 10.95 % 11.02 % 11.06 %Risk-Weighted Assets^(1)

Total Capital toRisk-Weighted Assets^ 12.00 % 11.44 % 11.84 % 12.17 % 12.28 %(1)

Tier I Capital toRisk-Weighted Assets^ 11.18 % 10.59 % 10.95 % 11.02 % 11.06 %(1)

Tier I Capital to 9.94 % 9.61 % 9.19 % 8.82 % 8.44 %Average Assets^(1)

Tangible commonequity to tangible 8.13 % 8.70 % 8.30 % 8.27 % 7.73 %assets

Tangible book value $ 26.19 $ 25.25 $ 24.40 $ 23.99 $ 22.43 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 190,359, 178,797, 184,548, 186,485, and 163,369 as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

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

Excludes unvested restricted shares of 190,359, 178,797, 184,548, 186,485,(2) and 163,369 as of December 31, 2021, September 30, 2021, June 30, 2021, March 31, 2021, and December 31, 2020, respectively.

BANKWELL FINANCIAL GROUP, INC.

ASSET QUALITY (unaudited)

(Dollars in thousands)

For the Quarter Ended

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

Allowance for loan losses:

Balance at beginning of period

$

16,803

$

16,672

$

20,545

$

21,009

$

20,372

Charge-offs:

Commercial real estate

-

-

(3,814

)

(163

)

-

Commercial business

(26

)

-

(51

)

-

(75

)

Consumer

(5

)

(15

)

(4

)

(14

)

(11

)

Total charge-offs

(31

)

(15

)

(3,869

)

(177

)

(86

)

Recoveries:

Commercial business

2

11

16

-

14

Consumer

3

1

-

9

-

Total recoveries

5

12

16

9

14

Net loan charge-offs

(26

)

(3

)

(3,853

)

(168

)

(72

)

Provision (credit) for loan losses

125

134

(20

)

(296

)

709

Balance at end of period

$

16,902

$

16,803

$

16,672

$

20,545

$

21,009

BANKWELL FINANCIAL GROUP, INC.

ASSET QUALITY (unaudited)

(Dollars in thousands)

For the Quarter Ended

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

Allowance for loan losses:

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

Charge-offs:

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

Commercial (26 ) - (51 ) - (75 )business

Consumer (5 ) (15 ) (4 ) (14 ) (11 )

Total (31 ) (15 ) (3,869 ) (177 ) (86 )charge-offs

Recoveries:

Commercial 2 11 16 - 14 business

Consumer 3 1 - 9 -

Total recoveries 5 12 16 9 14

Net loan (26 ) (3 ) (3,853 ) (168 ) (72 )charge-offs

Provision(credit) for 125 134 (20 ) (296 ) 709 loan losses

Balance at end $ 16,902 $ 16,803 $ 16,672 $ 20,545 $ 21,009 of period



As of

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

Asset quality:

Nonaccrual loans

Residential real estate

$

2,380

$

1,849

$

1,160

$

1,289

$

1,492

Commercial real estate

3,482

16,314

15,392

19,277

21,093

Commercial business

1,728

1,754

1,780

1,803

1,834

Construction

8,997

8,997

8,997

8,997

8,997

Total nonaccrual loans

16,587

28,914

27,329

31,366

33,416

Other real estate owned

-

-

-

-

-

Total nonperforming assets

$

16,587

$

28,914

$

27,329

$

31,366

$

33,416

Nonperforming loans as a % of total loans

0.88

%

1.58

%

1.57

%

1.87

%

2.06

%

Nonperforming assets as a % of total assets

0.68

%

1.30

%

1.20

%

1.40

%

1.48

%

Allowance for loan losses as a % of total loans

0.89

%

0.92

%

0.96

%

1.23

%

1.29

%

Allowance for loan losses as a % of nonperforming loans

101.90

%

58.11

%

61.00

%

65.50

%

62.87

%

Total nonaccrual loans declined $16.8 million to $16.6 million as of December 31, 2021 when compared to December 31, 2020, primarily a result of $11.0 million of previously reported nonaccrual loans becoming performing loans during the fourth quarter of 2021. Nonperforming assets as a percentage of total assets was 0.68% at December 31, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at December 31, 2021 was $16.9 million, representing 0.89% of total loans.

As of

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

Asset quality:

Nonaccrual loans

Residential real $ 2,380 $ 1,849 $ 1,160 $ 1,289 $ 1,492 estate

Commercial real 3,482 16,314 15,392 19,277 21,093 estate

Commercial 1,728 1,754 1,780 1,803 1,834 business

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

Total nonaccrual 16,587 28,914 27,329 31,366 33,416 loans

Other real - - - - - estate owned

Totalnonperforming $ 16,587 $ 28,914 $ 27,329 $ 31,366 $ 33,416 assets



Nonperformingloans as a % of 0.88 % 1.58 % 1.57 % 1.87 % 2.06 %total loans

Nonperformingassets as a % of 0.68 % 1.30 % 1.20 % 1.40 % 1.48 %total assets

Allowance forloan losses as a 0.89 % 0.92 % 0.96 % 1.23 % 1.29 %% of total loans

Allowance forloan losses as a% of 101.90 % 58.11 % 61.00 % 65.50 % 62.87 %nonperformingloans

Total nonaccrual loans declined $16.8 million to $16.6 million as of December 31, 2021 when compared to December 31, 2020, primarily a result of $11.0 million of previously reported nonaccrual loans becoming performing loans during the fourth quarter of 2021. Nonperforming assets as a percentage of total assets was 0.68% at December 31, 2021, down from 1.48% at December 31, 2020. The allowance for loan losses at December 31, 2021 was $16.9 million, representing 0.89% of total loans.

BANKWELL FINANCIAL GROUP, INC.

LOAN & DEPOSIT PORTFOLIO(unaudited)

(Dollars in thousands)

December September December CurrentPeriod End Loan 31, 30, 31, QTD YTDComposition 2021 2021 2020 % % Change Change

Residential Real $ 79,987 $ 90,110 $ 113,557 (11.2 ) (29.6 )Estate % %

Commercial Real 1,356,709 1,337,896 1,148,383 1.4 18.1 Estate^(1)

Construction 98,341 94,665 87,007 3.9 13.0

Total Real Estate 1,535,037 1,522,671 1,348,947 0.8 13.8 Loans



Commercial Business 350,975 292,825 276,601 19.9 26.9 ^(2)



Consumer 8,869 9,050 79 (2.0 ) N/M^(3)

Total Loans $ 1,894,881 $ 1,824,546 $ 1,625,627 3.9 % 16.6 %



(1)

Includes owner occupied commercial real estate.

(2)

Includes $0.2 million, $1.6 million, and $34.8 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

(3)

Metric not meaningful.

Gross loans totaled $1.9 billion at December 31, 2021, an increase of $269.3 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $303.9 million, or 19.1%, at December 31, 2021 when compared to December 31, 2020.

(1) Includes owner occupied commercial real estate.

(2) Includes $0.2 million, $1.6 million, and $34.8 million of PPP loans at December 31, 2021, September 30, 2021 and December 31, 2020, respectively.

(3) Metric not meaningful.

Gross loans totaled $1.9 billion at December 31, 2021, an increase of $269.3 million compared to December 31, 2020. Excluding PPP loans, gross loans increased by $303.9 million, or 19.1%, at December 31, 2021 when compared to December 31, 2020.

December September December Current YTDPeriod End Deposit 31, 30, 31, QTD %Composition 2021 2021 2020 % Change Change

Noninterest bearing $ 398,956 $ 338,705 $ 270,235 17.8 % 47.6 %demand

NOW 119,479 103,180 101,737 15.8 17.4

Money Market 954,674 835,210 669,364 14.3 42.6

Savings 193,631 188,581 158,750 2.7 22.0

Time 457,258 417,147 627,230 9.6 (27.1 )

Total Deposits $ 2,123,998 $ 1,882,823 $ 1,827,316 12.8 % 16.2 %

Total deposits were $2.1 billion at December 31, 2021, compared to $1.8 billion at December 31, 2020, an increase of $296.7 million, or 16.2%. Noninterest bearing deposits grew by $128.7 million, or 47.6%, as of December 31, 2021, compared to December 31, 2020.

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST INCOME (unaudited)

(Dollars in thousands)

For the Quarter Ended

December September December Dec 21 vs. Dec 21 vs.Noninterest income 31, 30, 31, Sep 21 Dec 20 2021 2021 2020 % Change % Change

Gains and fees from $ 441 $ 924 $ 16 (52.3 ) % 2,656.3 %sales of loans

Bank owned life 270 271 241 (0.4 ) 12.0 insurance

Service charges and 257 199 210 29.1 22.4 fees

Other (143 ) 43 154 (432.6 ) (192.9 )

Total noninterest $ 825 $ 1,437 $ 621 (42.6 ) % 32.9 %income

For the Year Ended

Noninterest income

December 31, 2021

December 31, 2020

% Change

Gains and fees from sales of loans

$

2,692

$

43

6,160.5

%

Bank owned life insurance

1,023

967

5.8

Service charges and fees

872

788

10.7

Gain on sale of other real estate owned, net

-

19

(100.0

)

Other

1,070

1,067

0.3

Total noninterest income

$

5,657

$

2,884

96.2

%

Noninterest income increased by $0.2 million to $0.8 million for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. Noninterest income increased by $2.8 million to $5.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020.

The increase in noninterest income was driven by resumed loan sales, totaling $0.4 million and $2.7 million for the quarter and year ended December 31, 2021, respectively. The increase for the year was also impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by a $0.2 million loss on the sale of the Company's former headquarters building. In addition, in 2020 the Company recognized a $0.4 million benefit of non-recurring interest rate swap fees.

For the Year Ended

December DecemberNoninterest income 31, 31, % Change 2021 2020

Gains and fees from sales of loans $ 2,692 $ 43 6,160.5 %

Bank owned life insurance 1,023 967 5.8

Service charges and fees 872 788 10.7

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

Other 1,070 1,067 0.3

Total noninterest income $ 5,657 $ 2,884 96.2 %

Noninterest income increased by $0.2 million to $0.8 million for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. Noninterest income increased by $2.8 million to $5.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020.

The increase in noninterest income was driven by resumed loan sales, totaling $0.4 million and $2.7 million for the quarter and year ended December 31, 2021, respectively. The increase for the year was also impacted by a one-time federal payroll tax credit for COVID-19 of $0.9 million, partially offset by a $0.2 million loss on the sale of the Company's former headquarters building. In addition, in 2020 the Company recognized a $0.4 million benefit of non-recurring interest rate swap fees.

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST EXPENSE (unaudited)

(Dollars in thousands)

For the Quarter Ended

December September December Dec 21 vs. Dec 21 vs.Noninterest expense 31, 30, 31, Sep 21 Dec 20 2021 2021 2020 % Change % Change

Salaries and $ 4,806 $ 4,782 $ 5,453 0.5 % (11.9 ) %employee benefits

Occupancy and 2,411 2,615 4,516 (7.8 ) (46.6 )equipment

Professional 628 498 591 26.1 6.3 services

Data processing 432 632 1,658 (31.6 ) (73.9 )

Director fees 335 324 331 3.4 1.2

FDIC insurance 231 298 262 (22.5 ) (11.8 )

Marketing 87 186 118 (53.2 ) (26.3 )

Other 749 1,035 774 (27.6 ) (3.2 )

Total noninterest $ 9,679 $ 10,370 $ 13,703 (6.7 ) % (29.4 ) %expense



For the Year Ended

Noninterest expense

December 31, 2021

December 31, 2020

% Change

Salaries and employee benefits

$

18,317

$

21,355

(14.2

) %

Occupancy and equipment

10,682

10,926

(2.2

)

Data processing

2,409

3,216

(25.1

)

Professional services

2,260

2,110

7.1

Director fees

1,303

1,214

7.3

FDIC insurance

1,232

791

55.8

Marketing

404

630

(35.9

)

Other

3,132

2,571

21.8

Total noninterest expense

$

39,739

$

42,813

(7.2

) %

Noninterest expense decreased by $4.0 million to $9.7 million for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. The decrease in noninterest expense was primarily driven by a decrease in salaries and employee benefits expense, occupancy and equipment expense and data processing expense.

Noninterest expense decreased by $3.1 million to $39.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The decrease in noninterest expense was primarily driven by a decrease in salaries and employee benefits expense and data processing expense.

Salaries and employee benefits expense totaled $4.8 million for the quarter ended December 31, 2021, a decrease of $0.6 million when compared to the same period in 2020. Salaries and employee benefits expense totaled $18.3 million for the year ended December 31, 2021, a decrease of $3.0 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. Average full time equivalent employees totaled 126 for the year ended December 31, 2021 compared to 146 for the same period in 2020. In addition, salaries and employee benefits expense also benefited by one-time deferrals of $0.9 million for the year ended December 31, 2021 related to costs associated with the implementation of a new online banking and other systems. Salaries and employee benefits were also favorably impacted as higher loan originations enabled the Bank to defer a greater amount of expenses.

Occupancy and equipment expense totaled $2.4 million for the quarter ended December 31, 2021, a decrease of $2.1 million when compared to the same period in 2020. The decrease in occupancy and equipment expense was primarily due to costs associated with office and branch consolidation, recognized during the fourth quarter of 2020.

Data processing expense totaled $0.4 million for the quarter ended December 31, 2021, a decrease of $1.2 million when compared to the same period in 2020. Data processing expense totaled $2.4 million for the year ended December 31, 2021, a decrease of $0.8 million when compared to the same period in 2020. The decrease in data processing expense was primarily driven by a $1.1 million one-time charge related to early termination fees payable to a legacy technology vendor recognized during the fourth quarter of 2020.

For the Year Ended

Noninterest expense December 31, 2021 December 31, 2020 % Change

Salaries and employee $ 18,317 $ 21,355 (14.2 ) %benefits

Occupancy and equipment 10,682 10,926 (2.2 )

Data processing 2,409 3,216 (25.1 )

Professional services 2,260 2,110 7.1

Director fees 1,303 1,214 7.3

FDIC insurance 1,232 791 55.8

Marketing 404 630 (35.9 )

Other 3,132 2,571 21.8

Total noninterest expense $ 39,739 $ 42,813 (7.2 ) %

Noninterest expense decreased by $4.0 million to $9.7 million for the quarter ended December 31, 2021 compared to the quarter ended December 31, 2020. The decrease in noninterest expense was primarily driven by a decrease in salaries and employee benefits expense, occupancy and equipment expense and data processing expense.

Noninterest expense decreased by $3.1 million to $39.7 million for the year ended December 31, 2021 compared to the year ended December 31, 2020. The decrease in noninterest expense was primarily driven by a decrease in salaries and employee benefits expense and data processing expense.

Salaries and employee benefits expense totaled $4.8 million for the quarter ended December 31, 2021, a decrease of $0.6 million when compared to the same period in 2020. Salaries and employee benefits expense totaled $18.3 million for the year ended December 31, 2021, a decrease of $3.0 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. Average full time equivalent employees totaled 126 for the year ended December 31, 2021 compared to 146 for the same period in 2020. In addition, salaries and employee benefits expense also benefited by one-time deferrals of $0.9 million for the year ended December 31, 2021 related to costs associated with the implementation of a new online banking and other systems. Salaries and employee benefits were also favorably impacted as higher loan originations enabled the Bank to defer a greater amount of expenses.

Occupancy and equipment expense totaled $2.4 million for the quarter ended December 31, 2021, a decrease of $2.1 million when compared to the same period in 2020. The decrease in occupancy and equipment expense was primarily due to costs associated with office and branch consolidation, recognized during the fourth quarter of 2020.

Data processing expense totaled $0.4 million for the quarter ended December 31, 2021, a decrease of $1.2 million when compared to the same period in 2020. Data processing expense totaled $2.4 million for the year ended December 31, 2021, a decrease of $0.8 million when compared to the same period in 2020. The decrease in data processing expense was primarily driven by a $1.1 million one-time charge related to early termination fees payable to a legacy technology vendor recognized during the fourth quarter of 2020.

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)

(Dollars in thousands, except share data)

As of

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

Total $ 201,987 $ 196,177 $ 190,795 $ 187,943 $ 176,602 Equity

Less:

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

Other - 48 58 67 76 intangibles

TangibleCommon $ 199,398 $ 193,540 $ 188,148 $ 185,287 $ 173,937 Equity



Total $ 2,456,264 $ 2,226,688 $ 2,269,825 $ 2,244,467 $ 2,253,747 Assets

Less:

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

Other - 48 58 67 76 intangibles

Tangible $ 2,453,675 $ 2,224,051 $ 2,267,178 $ 2,241,811 $ 2,251,082 Assets



TangibleCommonEquity to 8.13 % 8.70 % 8.30 % 8.27 % 7.73 %TangibleAssets

As of

Computation of Tangible Book Value per Common Share

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

Total shareholders' equity

$

201,987

$

196,177

$

190,795

$

187,943

$

176,602

Less:

Preferred stock

-

-

-

-

-

Common shareholders' equity

$

201,987

$

196,177

$

190,795

$

187,943

$

176,602

Less:

Goodwill

2,589

2,589

2,589

2,589

2,589

Other intangibles

-

48

58

67

76

Tangible common shareholders' equity

$

199,398

$

193,540

$

188,148

$

185,287

$

173,937

Common shares

7,803,166

7,842,824

7,895,101

7,908,630

7,919,278

Less:

Shares of unvested restricted stock

190,359

178,797

184,548

186,485

163,369

Common shares less unvested restricted stock

7,612,807

7,664,027

7,710,553

7,722,145

7,755,909

Book value per share

$

26.53

$

25.60

$

24.74

$

24.34

$

22.77

Less:

Effects of intangible assets

$

0.34

$

0.34

$

0.34

$

0.34

$

0.34

Tangible Book Value per Common Share

$

26.19

$

25.25

$

24.40

$

23.99

$

22.43

As of

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

Totalshareholders' $ 201,987 $ 196,177 $ 190,795 $ 187,943 $ 176,602equity

Less:

Preferred - - - - -stock

Commonshareholders' $ 201,987 $ 196,177 $ 190,795 $ 187,943 $ 176,602equity

Less:

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

Other - 48 58 67 76intangibles

Tangiblecommon $ 199,398 $ 193,540 $ 188,148 $ 185,287 $ 173,937shareholders'equity

Common shares 7,803,166 7,842,824 7,895,101 7,908,630 7,919,278

Less:

Shares ofunvested 190,359 178,797 184,548 186,485 163,369restrictedstock

Common sharesless unvested 7,612,807 7,664,027 7,710,553 7,722,145 7,755,909restrictedstock

Book value $ 26.53 $ 25.60 $ 24.74 $ 24.34 $ 22.77per share

Less:

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



Tangible BookValue per $ 26.19 $ 25.25 $ 24.40 $ 23.99 $ 22.43Common Share

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

For the Quarter Ended

For the Year Ended

Computation of Efficiency Ratio

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

December 31, 2021

December 31, 2020

Noninterest expense

$

9,679

$

10,370

$

10,052

$

9,638

$

13,703

$

39,739

$

42,813

Less:

Amortization of intangible assets

48

9

9

9

84

76

138

Other real estate owned expenses

-

-

-

-

-

-

6

Adjusted noninterest expense

$

9,631

$

10,361

$

10,043

$

9,629

$

13,619

$

39,663

$

42,669

Net interest income

$

18,928

$

17,724

$

16,579

$

14,655

$

14,304

$

67,886

$

54,835

Noninterest income

825

1,437

1,440

1,956

621

5,657

2,884

Less:

Net gain on sale of available for sale securities

-

-

-

-

-

-

-

Gain on sale of other real estate owned, net

-

-

-

-

-

-

19

Operating revenue

$

19,753

$

19,161

$

18,019

$

16,611

$

14,925

$

73,543

$

57,700

Efficiency ratio

48.8

%

54.1

%

55.7

%

58.0

%

91.2

%

53.9

%

73.9

%

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

For the Quarter Ended For the Year Ended

Computation December September December December Decemberof 31, 30, June 30, March 31, 31, 31, 31,Efficiency 2021 2021 2021 2021 2020 2021 2020Ratio

Noninterest $ 9,679 $ 10,370 $ 10,052 $ 9,638 $ 13,703 $ 39,739 $ 42,813 expense

Less:

Amortizationof 48 9 9 9 84 76 138 intangibleassets

Other realestate owned - - - - - - 6 expenses

Adjustednoninterest $ 9,631 $ 10,361 $ 10,043 $ 9,629 $ 13,619 $ 39,663 $ 42,669 expense

Net interest $ 18,928 $ 17,724 $ 16,579 $ 14,655 $ 14,304 $ 67,886 $ 54,835 income

Noninterest 825 1,437 1,440 1,956 621 5,657 2,884 income

Less:

Net gain onsale ofavailable - - - - - - - for salesecurities

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

Operating $ 19,753 $ 19,161 $ 18,019 $ 16,611 $ 14,925 $ 73,543 $ 57,700 revenue



Efficiency 48.8 % 54.1 % 55.7 % 58.0 % 91.2 % 53.9 % 73.9 %ratio

For the Quarter Ended

For the Year Ended

Computation of Return on Average Tangible Common Equity

December 31, 2021

September 30, 2021

June 30, 2021

March 31, 2021

December 31, 2020

December 31, 2021

December 31, 2020

Net Income Attributable to Common Shareholders

$

7,814

$

6,855

$

6,228

$

5,690

$

336

$

26,586

$

5,904

Total average shareholders' equity

$

200,752

$

192,993

$

191,224

$

182,058

$

178,439

$

191,808

$

176,489

Less:

Average Goodwill

2,589

2,589

2,589

2,589

2,589

2,589

2,589

Average Other intangibles

45

54

64

73

153

59

180

Average tangible common equity

$

198,118

$

190,350

$

188,571

$

179,396

$

175,697

$

189,160

$

173,720

Annualized Return on Average Tangible Common Equity

15.65

%

14.29

%

13.25

%

12.86

%

0.76

%

14.05

%

3.40

%

For the Quarter Ended For the Year Ended

Computationof Return on December September June 30, March 31, December December DecemberAverage 31, 30, 2021 2021 31, 31, 31,Tangible 2021 2021 2020 2021 2020Common Equity

Net IncomeAttributable $ 7,814 $ 6,855 $ 6,228 $ 5,690 $ 336 $ 26,586 $ 5,904 to CommonShareholders

Total averageshareholders' $ 200,752 $ 192,993 $ 191,224 $ 182,058 $ 178,439 $ 191,808 $ 176,489 equity

Less:

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

Average Other 45 54 64 73 153 59 180 intangibles

Averagetangible $ 198,118 $ 190,350 $ 188,571 $ 179,396 $ 175,697 $ 189,160 $ 173,720 common equity



AnnualizedReturn onAverage 15.65 % 14.29 % 13.25 % 12.86 % 0.76 % 14.05 % 3.40 %TangibleCommon Equity

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

For the Quarter Ended

December 31, 2021

December 31, 2020

Average Balance

Interest

Yield/ Rate (4)

Average Balance

Interest

Yield/ Rate (4)

Assets:

Cash and Fed funds sold

$

233,196

$

90

0.15

%

$

424,327

$

117

0.11

%

Securities(1)

104,797

756

2.89

105,422

814

3.09

Loans:

Commercial real estate

1,337,147

15,104

4.42

1,096,912

12,753

4.55

Residential real estate

83,763

694

3.31

115,104

1,009

3.51

Construction

95,611

972

3.98

93,909

910

3.79

Commercial business

347,394

4,222

4.75

311,995

3,520

4.41

Consumer

8,904

89

3.97

96

2

7.41

Total loans

1,872,819

21,081

4.40

1,618,016

18,194

4.40

Federal Home Loan Bank stock

2,814

16

2.28

7,859

74

3.75

Total earning assets

2,213,626

$

21,943

3.88

%

2,155,624

$

19,199

3.48

%

Other assets

130,512

123,435

Total assets

$

2,344,138

$

2,279,059

Liabilities and shareholders' equity:

Interest bearing liabilities:

NOW

$

114,158

$

51

0.18

%

$

93,126

$

42

0.18

%

Money market

874,352

1,097

0.50

644,685

858

0.53

Savings

190,118

100

0.21

168,307

164

0.39

Time

438,627

950

0.86

686,827

2,493

1.44

Total interest bearing deposits

1,617,255

2,198

0.54

1,592,945

3,557

0.89

Borrowed Money

89,726

767

3.35

200,250

1,285

2.51

Total interest bearing liabilities

1,706,981

$

2,965

0.69

%

1,793,195

$

4,842

1.07

%

Noninterest bearing deposits

383,557

255,843

Other liabilities

52,848

51,582

Total liabilities

2,143,386

2,100,620

Shareholders' equity

200,752

178,439

Total liabilities and shareholders' equity

$

2,344,138

$

2,279,059

Net interest income(2)

$

18,978

$

14,357

Interest rate spread

3.19

%

2.41

%

Net interest margin(3)

3.43

%

2.66

%

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

For the Quarter Ended

December 31, 2021 December 31, 2020

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

Assets:

Cash and Fed $ 233,196 $ 90 0.15 % $ 424,327 $ 117 0.11 %funds sold

Securities^ 104,797 756 2.89 105,422 814 3.09 (1)

Loans:

Commercial 1,337,147 15,104 4.42 1,096,912 12,753 4.55 real estate

Residential 83,763 694 3.31 115,104 1,009 3.51 real estate

Construction 95,611 972 3.98 93,909 910 3.79

Commercial 347,394 4,222 4.75 311,995 3,520 4.41 business

Consumer 8,904 89 3.97 96 2 7.41

Total loans 1,872,819 21,081 4.40 1,618,016 18,194 4.40

Federal HomeLoan Bank 2,814 16 2.28 7,859 74 3.75 stock

Total earning 2,213,626 $ 21,943 3.88 % 2,155,624 $ 19,199 3.48 %assets

Other assets 130,512 123,435

Total assets $ 2,344,138 $ 2,279,059



Liabilitiesand shareholders'equity:

Interestbearing liabilities:

NOW $ 114,158 $ 51 0.18 % $ 93,126 $ 42 0.18 %

Money market 874,352 1,097 0.50 644,685 858 0.53

Savings 190,118 100 0.21 168,307 164 0.39

Time 438,627 950 0.86 686,827 2,493 1.44

Totalinterest 1,617,255 2,198 0.54 1,592,945 3,557 0.89 bearingdeposits

Borrowed 89,726 767 3.35 200,250 1,285 2.51 Money

Totalinterest 1,706,981 $ 2,965 0.69 % 1,793,195 $ 4,842 1.07 %bearingliabilities

Noninterestbearing 383,557 255,843 deposits

Other 52,848 51,582 liabilities

Total 2,143,386 2,100,620 liabilities

Shareholders' 200,752 178,439 equity

Totalliabilitiesand $ 2,344,138 $ 2,279,059 shareholders'equity

Net interest $ 18,978 $ 14,357 income^(2)

Interest rate 3.19 % 2.41 %spread

Net interest 3.43 % 2.66 %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 $50 thousand and $53 thousand for the quarters ended December 31, 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.

(1) Average balances and yields for securities are based on amortized cost.

The adjustment for securities and loans taxable equivalency amounted to(2) $50 thousand and $53 thousand for the quarters ended December 31, 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 Year Ended

December 31, 2021

December 31, 2020

Average Balance

Interest

Yield/ Rate (3)

Average Balance

Interest

Yield/ Rate (3)

Assets:

Cash and Fed funds sold

$

294,471

$

376

0.13

%

$

261,689

$

585

0.22

%

Securities(1)

103,592

3,071

2.96

98,938

3,103

3.14

Loans:

Commercial real estate

1,225,770

55,995

4.51

1,095,367

51,218

4.60

Residential real estate

99,101

3,363

3.39

129,585

4,645

3.58

Construction

97,163

3,780

3.84

97,230

4,262

4.31

Commercial business

313,422

14,589

4.59

295,662

13,530

4.50

Consumer

7,929

315

3.97

121

10

8.00

Total loans

1,743,385

78,042

4.42

1,617,965

73,665

4.48

Federal Home Loan Bank stock

4,156

88

2.12

7,625

346

4.53

Total earning assets

2,145,604

$

81,577

3.75

%

1,986,217

$

77,699

3.85

%

Other assets

120,955

125,261

Total assets

$

2,266,559

$

2,111,478

Liabilities and shareholders' equity:

Interest bearing liabilities:

NOW

$

111,515

$

198

0.18

%

$

80,805

$

141

0.17

%

Money market

804,679

4,042

0.50

516,527

4,071

0.79

Savings

175,629

413

0.23

169,763

1,368

0.81

Time

508,651

5,790

1.14

712,461

12,600

1.77

Total interest bearing deposits

1,600,474

10,443

0.65

1,479,556

18,180

1.23

Borrowed Money

103,919

3,047

2.89

190,463

4,472

2.31

Total interest bearing liabilities

1,704,393

$

13,490

0.79

%

1,670,019

$

22,652

1.36

%

Noninterest bearing deposits

323,648

215,073

Other liabilities

46,710

49,897

Total liabilities

2,074,751

1,934,989

Shareholders' equity

191,808

176,489

Total liabilities and shareholders' equity

$

2,266,559

$

2,111,478

Net interest income(2)

$

68,087

$

55,047

Interest rate spread

2.96

%

2.49

%

Net interest margin

3.17

%

2.77

%

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

For the Year Ended

December 31, 2021 December 31, 2020

Average Yield/ Average Yield/ Balance Interest Rate ^ Balance Interest Rate ^ (3) (3)

Assets:

Cash and Fed $ 294,471 $ 376 0.13 % $ 261,689 $ 585 0.22 %funds sold

Securities^ 103,592 3,071 2.96 98,938 3,103 3.14 (1)

Loans:

Commercial 1,225,770 55,995 4.51 1,095,367 51,218 4.60 real estate

Residential 99,101 3,363 3.39 129,585 4,645 3.58 real estate

Construction 97,163 3,780 3.84 97,230 4,262 4.31

Commercial 313,422 14,589 4.59 295,662 13,530 4.50 business

Consumer 7,929 315 3.97 121 10 8.00

Total loans 1,743,385 78,042 4.42 1,617,965 73,665 4.48

Federal HomeLoan Bank 4,156 88 2.12 7,625 346 4.53 stock

Total earning 2,145,604 $ 81,577 3.75 % 1,986,217 $ 77,699 3.85 %assets

Other assets 120,955 125,261

Total assets $ 2,266,559 $ 2,111,478



Liabilitiesand shareholders'equity:

Interestbearing liabilities:

NOW $ 111,515 $ 198 0.18 % $ 80,805 $ 141 0.17 %

Money market 804,679 4,042 0.50 516,527 4,071 0.79

Savings 175,629 413 0.23 169,763 1,368 0.81

Time 508,651 5,790 1.14 712,461 12,600 1.77

Totalinterest 1,600,474 10,443 0.65 1,479,556 18,180 1.23 bearingdeposits

Borrowed 103,919 3,047 2.89 190,463 4,472 2.31 Money

Totalinterest 1,704,393 $ 13,490 0.79 % 1,670,019 $ 22,652 1.36 %bearingliabilities

Noninterestbearing 323,648 215,073 deposits

Other 46,710 49,897 liabilities

Total 2,074,751 1,934,989 liabilities

Shareholders' 191,808 176,489 equity

Totalliabilitiesand $ 2,266,559 $ 2,111,478 shareholders'equity

Net interest $ 68,087 $ 55,047 income^(2)

Interest rate 2.96 % 2.49 %spread

Net interest 3.17 % 2.77 %margin

(1)

Average balances and yields for securities are based on amortized cost.

(2)

The adjustment for securities and loans taxable equivalency amounted to $201 thousand and $212 thousand for the years ended December 31, 2021 and 2020, respectively.

(3)

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/20220126005957/en/

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