Bankwell Financial Group Reports Mixed Q3 Results, Decline in Profitability and Asset Values

Bankwell Financial Group, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting significant changes in revenue, profitability, and strategic initiatives compared to the previous fiscal period.

For the three months ended September 30, 2024, total interest and dividend income was $48.2 million, slightly down from $48.3 million in the same period of 2023. However, for the nine months, interest and dividend income increased to $144.2 million from $139.1 million year-over-year. Net interest income for the third quarter decreased to $20.7 million, an 8.7% decline from $22.7 million in 2023, while for the nine months, it fell to $63.1 million from $72.2 million, a decrease of 12.7%. The net interest income after provision for credit losses also saw a significant drop, with Q3 2024 reporting $14.4 million compared to $24.3 million in Q3 2023.

Net income for the third quarter of 2024 was $1.9 million, down from $9.8 million in the same quarter of 2023. For the nine months, net income decreased to $6.8 million from $28.1 million, leading to a basic earnings per share of $0.24 for Q3 2024, compared to $1.25 in Q3 2023. The decline in profitability was attributed to increased provisions for credit losses, which rose to $6.5 million in Q3 2024 from a credit of $1.4 million in Q3 2023, primarily due to a significant charge-off of $8.2 million.

Total assets as of September 30, 2024, were $3.2 billion, a decrease of $54.4 million from December 31, 2023. Total loans also decreased by $95.4 million to $2.6 billion, with notable declines in commercial and construction loans. Total deposits fell to $2.7 billion, down $48.6 million from the end of 2023.

Strategically, Bankwell Financial Group has initiated a new share repurchase plan, allowing for the buyback of up to 250,000 shares, replacing a previous plan that had authorized the repurchase of 600,000 shares. The company has repurchased a total of 535,802 shares under the prior plan. Additionally, the company declared a cash dividend of $0.20 per share, payable on November 22, 2024.

The company’s capital ratios remain strong, with the Common Equity Tier 1 Capital to Risk-Weighted Assets at 6.50%, although it is below the minimum required ratio of 7.00%. The bank continues to focus on maintaining a well-capitalized status while navigating the challenges posed by market conditions and credit quality.