third quarter of 2026
Filed Oct 29, 2026BANKWELL FINANCIAL GROUP REPORTS RECORD EARNINGS FOR THE THIRD QUARTER, DECLARES FOURTH QUARTER DIVIDEND
Third-quarter GAAP net income reached $12.7 million and diluted EPS was $1.58, while net interest income increased to $31.4 million, net interest margin expanded to 3.71%, SBA loan sale gains lifted noninterest income, and nonperforming assets declined to 0.20% of total assets. Results included $3.0 million of core conversion costs.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, third quarter of 2026non-GAAP | $35.33M | – | – |
| Net interest income, third quarter of 2026GAAP | $31.37M | – | – |
| Total noninterest income, third quarter of 2026GAAP | $3.96M | – | – |
| Gains and fees from sales of loans, third quarter of 2026GAAP | $2.81M | – | – |
| Total noninterest expense, third quarter of 2026GAAP | $19.83M | – | – |
| Salaries and employee benefits, third quarter of 2026GAAP | $10.36M | – | – |
| Income before income tax expense, third quarter of 2026GAAP | $16.77M | – | – |
| Income tax expense, third quarter of 2026GAAP | $4.03M | – | – |
| Net income, third quarter of 2026GAAP | $12.73M | – | – |
| Operating net income, third quarter of 2026non-GAAP | $15.02M | – | – |
| Diluted earnings per common share, third quarter of 2026GAAP | $ 1.58 | – | – |
| Basic earnings per common share, third quarter of 2026GAAP | $ 1.60 | – | – |
| Operating earnings per common share - diluted, third quarter of 2026non-GAAP | $ 1.86 | – | – |
| Pre-tax, pre-provision net revenue, third quarter of 2026non-GAAP | $15.50M | a decrease of 11.6% | – |
| Operating PPNR, third quarter of 2026non-GAAP | $18.54M | – | – |
| Return on average assets, third quarter of 2026non-GAAP | 1.45 % | – | – |
| Return on average tangible shareholders' equity, third quarter of 2026non-GAAP | 15.28 % | – | – |
| Operating return on average assets, third quarter of 2026non-GAAP | 1.71 % | – | – |
| Operating return on average tangible shareholders' equity, third quarter of 2026non-GAAP | 18.02 % | – | – |
| Net interest margin, third quarter of 2026non-GAAP | 3.71 % | expanded 13 basis points | – |
| Efficiency ratio, third quarter of 2026non-GAAP | 56.1 % | – | – |
| Operating efficiency ratio, third quarter of 2026non-GAAP | 47.5 % | – | – |
| Earning asset yields, third quarter of 2026other | 6.34% | expanded 8 basis points | – |
| Net recoveries, third quarter of 2026GAAP | $1.4M | – | – |
| (Credit) provision for credit losses - loans, third quarter of 2026GAAP | −$1.36M | – | – |
| ACL-Loans, September 30, 2026GAAP | $30.71M | – | – |
| Nonperforming loans, September 30, 2026other | $7.13M | decreased $8.7 million | – |
| Nonperforming assets as a % of total assets, September 30, 2026other | 0.20 % | – | – |
| ACL-loans as a % of nonperforming loans, September 30, 2026other | 430.65 % | – | – |
| Total assets, September 30, 2026GAAP | $3.56B | – | – |
| Total loans, September 30, 2026other | $2.98B | – | 9.7 % |
| Total deposits, September 30, 2026GAAP | $2.97B | – | 7.6 % |
| Cash and cash equivalents, September 30, 2026GAAP | $255.5M | – | – |
| Advances from the Federal Home Loan Bank, September 30, 2026GAAP | $ 125,000 | – | – |
| Subordinated debentures, September 30, 2026GAAP | $69.88M | – | – |
| Total shareholders' equity, September 30, 2026GAAP | $334.1M | – | – |
| Tangible common equity to tangible assets, September 30, 2026non-GAAP | 9.33 % | – | – |
| Fully diluted tangible book value per common share, September 30, 2026non-GAAP | $ 41.59 | – | – |
| Total capital to risk-weighted assets, September 30, 2026other | 12.67 % | – | – |
| Total common equity tier 1 capital to risk-weighted assets, September 30, 2026other | 11.64 % | – | – |
| Tier I Capital to Average Assets, September 30, 2026other | 10.25 % | – | – |
| Net interest income, nine months ended September 30, 2026GAAP | $87.76M | – | – |
| Total noninterest income, nine months ended September 30, 2026GAAP | $10.58M | – | – |
| Total noninterest expense, nine months ended September 30, 2026GAAP | $51.97M | – | – |
| Net income, nine months ended September 30, 2026GAAP | $36.38M | – | – |
| Diluted earnings per common share, nine months ended September 30, 2026GAAP | $ 4.52 | – | – |
full-year 2026 outlook
- Operating expenses$65 to $67 million, excluding conversion costs
- NoteNet interest income of $119 to $121 million
- NoteNon-interest income of $14 to $15 million
- NoteLoan growth of 5% to 7%
Capital returns
- The Board of Directors declared a $0.20 per share cash dividend, payable November 20, 2026 to shareholders of record on November 9, 2026.
- Dividends per common share were $ 0.20 for the third quarter of 2026.
- Dividends paid were $4.7 million year-to-date as of September 30, 2026.
What drove it
- Higher interest income resulting from increased earning-asset yields and higher average earning-asset balances drove revenue growth.
- SBA loan sale gains contributed $2.8 million of the Company's $4.0 million in total noninterest income for the quarter ended September 30, 2026.
- The SBA Lending division delivered $30.1 million in originations in the third quarter of 2026, bringing year-to-date originations to $90.2 million.
- Nonperforming loans declined primarily due to the note sale of a suburban retail CRE loan in Westchester County, NY, that had been modified during the COVID-19 pandemic.
- Deposit mix changed as money market deposits increased and time deposits decreased compared with December 31, 2025.
Concerns
- Third-quarter results included $3.0 million of core conversion costs, primarily termination fees.
- The Company expects to incur additional core conversion-related costs in future quarters as implementation activities progress.
- Total noninterest expense was $ 19,829 in the third quarter of 2026, versus $ 15,255 in the prior quarter, reflecting core conversion costs and higher salaries and employee benefits related to talent investments.
- Advances from the Federal Home Loan Bank were $ 125,000 at September 30, 2026, compared with $ 30,000 at June 30, 2026.
What to watch
- Execution and additional costs associated with the core conversion initiative.
- Progress toward full-year 2026 net interest income guidance of $119 to $121 million and non-interest income guidance of $14 to $15 million.
- SBA loan sale gains and SBA Lending originations.
- Loan growth against the maintained outlook for 5% to 7% growth.
- Asset quality following the third-quarter decline in nonperforming loans and nonperforming assets.
Balance sheet and cash flow
- Assets totaled $3.6 billion at September 30, 2026, an increase of $195.4 million, or 5.8% compared to December 31, 2025.
- Gross loans totaled $3.0 billion at September 30, 2026, an increase of $142.6 million, or 5.0% compared to December 31, 2025.
- Deposits totaled $3.0 billion at September 30, 2026, an increase of $138.2 million, or 4.9% compared to December 31, 2025.
- Brokered deposits decreased $52.1 million or 9.3%, when compared to December 31, 2025.
- Cash and cash equivalents were $ 255,549 at September 30, 2026.
- Advances from the Federal Home Loan Bank were $ 125,000 and subordinated debentures were $ 69,882 at September 30, 2026.
- Operating cash flow and free cash flow were not reported.
Analysis
Bankwell reported record third-quarter earnings, with GAAP net income of $12.7 million and diluted earnings per common share of $1.58, compared with $12.4 million and $1.52 in the second quarter. Operating net income was $15.0 million and operating diluted EPS was $1.86 after excluding core conversion costs. The reported result included $3.0 million of core conversion costs, primarily termination fees, which raised total noninterest expense to $19.8 million from $15.3 million in the linked quarter.
Core revenue improved. Net interest income was $31.4 million compared with $29.5 million in the prior quarter, while total revenues were $35.3 million compared with $32.8 million. Management attributed the increase in revenue to higher earning-asset yields and higher average earning-asset balances. Net interest margin expanded 13 basis points to 3.71%, with management citing higher earning-asset yields and flat funding costs. Total noninterest income was $4.0 million, including $2.8 million of SBA loan sale gains.
Balance-sheet growth continued through the first nine months. Assets totaled $3.6 billion, gross loans totaled $3.0 billion, and deposits totaled $3.0 billion at September 30, 2026. Gross loans increased $142.6 million, or 5.0%, from December 31, 2025, while deposits increased $138.2 million, or 4.9%. Deposit composition shifted, with money market deposits increasing 23.1% year-to-date and time deposits declining 12.7% year-to-date. Shareholders' equity totaled $334.1 million, and tangible common equity to tangible assets was 9.33%.
Credit indicators strengthened materially in the quarter. Nonperforming loans decreased $8.7 million to $7.1 million, principally due to the sale of a modified suburban retail CRE loan. Nonperforming assets declined to 0.20% of total assets from 0.46% in the prior quarter. The Company reported net recoveries of $1.4 million and an ACL-Loans coverage ratio of 430.65% of nonperforming loans. Management stated that the Bank's regulatory capital ratios remained above the thresholds for well-capitalized institutions.
Management updated full-year 2026 guidance for net interest income to $119 to $121 million and non-interest income to $14 to $15 million, while maintaining loan growth guidance of 5% to 7% and non-interest expense guidance of $65 to $67 million excluding conversion costs. The principal execution item is the core conversion: management expects additional related costs in future quarters, although it stated that third-quarter termination-related costs are not expected to recur.
Management, verbatim
We delivered record earnings for the third quarter, with GAAP net income of $12.7 million, or $1.58 per share, despite absorbing $3.0 million of costs related to our core conversion.
Christopher R. Gruseke, Chief Executive Officer
Excluding these costs, operating net income was $15.0 million, or $1.86 per share, and our operating efficiency ratio was 47.5%.
Christopher R. Gruseke, Chief Executive Officer
We now expect net interest income of $119 to $121 million and non-interest income of $14 to $15 million, reflecting continued strength in our SBA platform.
Christopher R. Gruseke, Chief Executive Officer
Not in the filing
stated, not guessed- Previous-release outlook was not provided, so comparison of actual results with prior guidance is unavailable.
- Gross margin was not reported and is not applicable to the banking business.
- Forward revenue guidance was not reported.
- Forward gross-margin guidance was not reported.
- Forward tax-rate guidance was not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Share repurchases were not reported.
- A formal business-segment revenue table was not reported.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.