Bankwell Financial Group(BWFG) - 2024 Q4 - Annual Report

Financial Performance - Net income for 2024 was $9,770 thousand, significantly lower than$36,663 thousand in 2023, resulting in basic earnings per share of $1.24 compared to$4.71[218]. - Total revenue for 2024 was $87,000,000, a decrease of 12.3$99,310,000 in 2023[229]. - Net income for the year ended December 31, 2024 was $9.8 million, a decrease of$26.9 million, or 73.4%, compared to $36.7 million for the year ended December 31, 2023[254][256]. - Revenues for the year ended December 31, 2024 were$87.0 million, down from $99.3 million in 2023, primarily due to increased interest expense on deposits and lower gains from loan sales[255]. - Net interest income for 2024 was$83,282,000, down from $94,468,000 in 2023, reflecting a decline of 11.8$83.3 million, a decrease of $11.2 million compared to the previous year, with a net interest margin decrease of 28 basis points to 2.70$83.7 million, down from $94.7 million in 2023[268]. - Noninterest income decreased by$1.1 million to $3.7 million in 2024, driven by a decline in gains on SBA loan sales[271]. Asset Quality - Nonperforming loans to total loans increased to 1.97$44.1 million as of December 31, 2024, an increase of $22.8 million from$21.3 million in 2023, representing 1.63% of total loans[308]. - The Allowance for Credit Losses on Loans (ACL-Loans) was $29.0 million at December 31, 2024, representing 1.07$3,268,476 thousand, up from $3,215,482 thousand in 2023, while total equity increased to$270,520 thousand from $265,752 thousand[218]. - Shareholders' equity grew to$270.5 million as of December 31, 2024, an increase of $4.8 million from the previous year[277]. - The Bank's shareholders' equity rose to$270.5 million as of December 31, 2024, an increase of $4.8 million from the previous year, driven by a net income of$9.8 million[353]. - The Bank's ratio of total common equity tier 1 capital to risk-weighted assets was 11.64% as of December 31, 2024, exceeding the regulatory minimum[354]. Efficiency and Ratios - The efficiency ratio increased to 57.9% in 2024 from 50.8% in 2023, indicating a rise in non-interest expenses relative to operating revenue[218]. - The return on average assets decreased to 0.31% in 2024 from 1.13% in 2023, and return on average common shareholders' equity fell to 3.60% from 14.55%[218]. - Return on average common shareholders' equity for 2024 was 3.60%, significantly lower than 14.55% in 2023[231]. - Efficiency ratio increased to 57.9% in 2024 from 50.8% in 2023, indicating a decline in operational efficiency[231]. Loans and Deposits - Total assets increased to $3.3 billion as of December 31, 2024, compared to$3.2 billion in 2023[276]. - Gross loans remained stable at $2.7 billion for both December 31, 2024, and December 31, 2023[276]. - Deposits rose to$2.8 billion as of December 31, 2024, up from $2.7 billion in 2023[276]. - Total deposits reached$2.79 billion at December 31, 2024, with a weighted average rate of 4.27%, compared to $2.74 billion and 3.59$100 thousand or more totaled $1.2 billion for both 2024 and 2023, with maturing amounts within 3 months increasing from$317.5 million in 2023 to $421.8 million in 2024[336]. Interest Income and Expense - Interest income for 2024 was$191,994 thousand, an increase from $188,454 thousand in 2023, while interest expense rose to$108,712 thousand from $93,986 thousand[218]. - Interest expense for the year ended December 31, 2024 increased by$14.7 million, or 15.7%, due to higher rates paid on interest-bearing deposits[261]. - The total yield on earning assets increased to 6.09% at December 31, 2024, compared to 5.86% at December 31, 2023, driven by higher yields on loans and securities[260]. Regulatory and Compliance - The company has met all minimum regulatory capital requirements to be considered "well capitalized" as of December 31, 2024[367]. - The Company adopted new credit loss measurement guidance in January 2023, resulting in a $6.4 million increase in the allowance for credit losses[235]. - The Company adopted ASU 2022-02 effective January 1, 2023, which had an immaterial impact on financial reporting[244]. Risk Management - The company remains liability sensitive, indicating more liabilities than assets subject to repricing as market rates change[370]. - The company manages liquidity to ensure adequate sources to fund commitments and honor drafts under standby letters of credit[361]. - The simulation analyses for interest rate risk are updated quarterly to reflect changes in market conditions[365].