Bankwell Financial Group (BWFG) Q4 2024 earnings summary

Executive summary

• Q4 2024 GAAP fully diluted EPS was $0.32, impacted by $3 million in net charge-offs and $0.7 million in one-time OREO expenses.

• Credit trends remained stable, with no credit deterioration and non-performing assets down $4 million sequentially; further improvement expected in early 2025.

• Core deposits grew by $169 million in Q4, while brokered deposits were reduced by $247 million year-over-year.

• Tangible book value per share increased to $34.03, a 12% CAGR over four years.

• Foundation laid for an SBA lending division, with originations starting in December 2024 and first loans in Q1 2025.

Financial highlights

• Net interest margin for Q4 2024 was 2.60%, down 12 basis points sequentially, mainly due to lower loan fees and higher cash balances.

• Net interest income for Q4 2024 was $20.2 million, impacted by reduced loan fee income.

• Pre-provision net revenue was $7.9 million, with a PPNR return on average assets of 98 basis points.

• Non-interest expense rose to $13.2 million, including $700,000 in one-time OREO expenses.

• Total assets at year-end were $3.3 billion, up 1.7% year-over-year.

Outlook and guidance

• Net interest income projected at $93 million-$95 million for 2025.

• Non-interest income expected to double to $7 million-$8 million in 2025, driven by SBA lending.

• Non-interest expense forecasted at $56 million-$57 million, reflecting ongoing investment in growth initiatives.

• NIM expected to expand to the high 2.70s in Q1 2025 and approach 2.90%-3.00% for the full year, assuming no Fed action.

• $1.3 billion in time deposits to reprice at lower rates in 2025, expected to reduce funding costs by $4.4 million annually.