x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Connecticut
|
20-8251355
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
Incorporation or organization)
|
Identification No.)
|
Large accelerated filer ¨ | Accelerated filer ¨ | |
Non-accelerated filer þ (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
3
|
|
3
|
|
4
|
|
5
|
|
6
|
|
7
|
|
9
|
|
37 | |
49
|
|
49
|
|
49
|
|
49
|
|
49
|
|
49
|
|
49
|
|
50
|
|
50
|
|
SIGNATURES
|
|
CERTIFICATIONS
|
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
ASSETS
|
||||||||
Cash and due from banks
|
$ | 82,246 | $ | 82,013 | ||||
Held to maturity investment securities, at amortized cost (Note 2)
|
13,780 | 13,816 | ||||||
Available for sale investment securities, at fair value (Note 2)
|
35,557 | 28,597 | ||||||
Loans held for sale
|
- | 100 | ||||||
Loans receivable (net of allowance for loan losses of $8,603 at March 31, 2014 and $8,382 at December 31, 2013) (Note 3)
|
646,583 | 621,830 | ||||||
Foreclosed real estate
|
829 | 829 | ||||||
Accrued interest receivable
|
2,344 | 2,360 | ||||||
Federal Home Loan Bank stock, at cost
|
4,834 | 4,834 | ||||||
Premises and equipment, net
|
8,060 | 7,060 | ||||||
Bank-owned life insurance
|
10,116 | 10,031 | ||||||
Other intangible assets
|
454 | 481 | ||||||
Deferred income taxes, net
|
5,514 | 5,845 | ||||||
Other assets
|
1,738 | 1,822 | ||||||
Total assets
|
$ | 812,055 | $ | 779,618 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Liabilities
|
||||||||
Deposits
|
||||||||
Noninterest bearing deposits
|
$ | 119,656 | $ | 118,618 | ||||
Interest bearing deposits
|
559,567 | 542,927 | ||||||
Total deposits
|
679,223 | 661,545 | ||||||
Advances from the Federal Home Loan Bank
|
59,000 | 44,000 | ||||||
Accrued expenses and other liabilities
|
2,726 | 4,588 | ||||||
Total liabilities
|
740,949 | 710,133 | ||||||
Commitments and contingencies
|
||||||||
Shareholders’ equity (Notes 4, 5 and 7)
|
||||||||
Preferred stock, senior noncumulative perpetual, Series C, no par; 10,980 shares issued at March 31, 2014 and December 31, 2013, respectively; liquidation value of $1,000 per share
|
10,980 | 10,980 | ||||||
Common stock, no par value; 10,000,000 shares authorized, 3,891,690 and 3,876,393 shares issued at March 31, 2014 and December 31, 2013, respectively
|
52,446 | 52,105 | ||||||
Retained earnings
|
7,072 | 5,976 | ||||||
Accumulated other comprehensive income
|
608 | 424 | ||||||
Total shareholders’ equity
|
71,106 | 69,485 | ||||||
Total liabilities and shareholders’ equity
|
$ | 812,055 | $ | 779,618 |
3 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2014
|
2013
|
|||||||
Interest income
|
||||||||
Interest and fees on loans
|
$ | 7,428 | $ | 6,299 | ||||
Interest and dividends on securities
|
411 | 367 | ||||||
Interest on cash and cash equivalents
|
22 | 10 | ||||||
Total interest income
|
7,861 | 6,676 | ||||||
Interest expense
|
||||||||
Interest expense on deposits
|
622 | 439 | ||||||
Interest on Federal Home Loan Bank advances
|
93 | 152 | ||||||
Total interest expense
|
715 | 591 | ||||||
Net interest income
|
7,146 | 6,085 | ||||||
Provision for loan losses
|
211 | 190 | ||||||
Net interest income after provision for loan losses
|
6,935 | 5,895 | ||||||
Noninterest income
|
||||||||
Gains and fees from sales of loans
|
428 | 8 | ||||||
Service charges and fees
|
132 | 101 | ||||||
Bank owned life insurance
|
85 | - | ||||||
Gain on sale of foreclosed real estate, net
|
- | 71 | ||||||
Other
|
124 | 104 | ||||||
Total noninterest income
|
769 | 284 | ||||||
Noninterest expense
|
||||||||
Salaries and employee benefits
|
3,337 | 2,492 | ||||||
Occupancy and equipment
|
1,068 | 772 | ||||||
Professional services
|
369 | 369 | ||||||
Data processing
|
337 | 256 | ||||||
Marketing
|
110 | 128 | ||||||
Merger and acquisition related expenses
|
141 | - | ||||||
FDIC insurance
|
118 | 130 | ||||||
Director fees
|
138 | 139 | ||||||
Amortization of intangibles
|
27 | - | ||||||
Foreclosed real estate
|
14 | - | ||||||
Other
|
382 | 312 | ||||||
Total noninterest expense
|
6,041 | 4,598 | ||||||
Income before income tax expense
|
1,663 | 1,581 | ||||||
Income tax expense
|
540 | 569 | ||||||
Net income
|
$ | 1,123 | $ | 1,012 | ||||
Preferred stock dividends
|
(27 | ) | (27 | ) | ||||
Net income attributable to common stockholders
|
$ | 1,096 | $ | 985 | ||||
Earnings per common share - basic
|
$ | 0.28 | $ | 0.31 | ||||
Earnings per common share - diluted
|
0.28 | 0.30 |
4 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2014
|
2013
|
|||||||
Net income
|
$ | 1,123 | $ | 1,012 | ||||
Other comprehensive income (loss):
|
||||||||
Unrealized gains (losses) on securities:
|
||||||||
Unrealized holding gains (losses) on available for sale securities
|
245 | (190 | ) | |||||
Reclassification adjustment for (gain) loss realized in net income
|
- | - | ||||||
Net
change in unrealized gain (loss)
|
245 | (190 | ) | |||||
Tax effect - (expense) benefit
|
(95 | ) | 74 | |||||
Unrealized gains (losses) on securities, net of tax
|
150 | (116 | ) | |||||
Unrealized gains on interest rate swap:
|
||||||||
Unrealized gains on interest rate swaps designated as cash flow hedge
|
87 | - | ||||||
Tax effect - (expense)
|
(53 | ) | - | |||||
Unrealized gains on interest rate swap
|
34 | - | ||||||
Total other comprehensive income (loss)
|
184 | (116 | ) | |||||
Comprehensive income
|
$ | 1,307 | $ | 896 |
5 |
Accumulated
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
Preferred
|
Common
|
Retained
|
Comprehensive
|
|||||||||||||||||
Stock |
Stock
|
Earnings |
Income (Loss)
|
Total
|
||||||||||||||||
Balance at December 31, 2012
|
$ | 10,980 | $ | 38,117 | $ | 926 | $ | 1,511 | $ | 51,534 | ||||||||||
Net income
|
- | - | 1,012 | - | 1,012 | |||||||||||||||
Other comprehensive loss, net of tax
|
- | - | - | (116 | ) | (116 | ) | |||||||||||||
Preferred stock dividends
|
- | - | (27 | ) | - | (27 | ) | |||||||||||||
Stock based compensation expense
|
- | 68 | - | - | 68 | |||||||||||||||
Capital from exercise of stock options
|
- | 21 | - | - | 21 | |||||||||||||||
Capital from private placement
|
- | 7,325 | - | - | 7,325 | |||||||||||||||
Balance at March 31, 2013
|
$ | 10,980 | $ | 45,531 | $ | 1,911 | $ | 1,395 | $ | 59,817 |
Accumulated
|
||||||||||||||||||||
Other
|
||||||||||||||||||||
Preferred |
Common
|
Retained |
Comprehensive
|
|||||||||||||||||
Stock |
Stock
|
Earnings |
Income (Loss)
|
Total
|
||||||||||||||||
Balance at December 31, 2013
|
$ | 10,980 | $ | 52,105 | $ | 5,976 | $ | 424 | $ | 69,485 | ||||||||||
Net income
|
- | - | 1,123 | - | 1,123 | |||||||||||||||
Other comprehensive income, net of tax
|
- | - | - | 184 | 184 | |||||||||||||||
Preferred stock dividends
|
- | - | (27 | ) | - | (27 | ) | |||||||||||||
Stock based compensation expense
|
- | 150 | - | - | 150 | |||||||||||||||
Capital from exercise of stock options
|
- | 191 | - | - | 191 | |||||||||||||||
Balance at March 31, 2014
|
$ | 10,980 | $ | 52,446 | $ | 7,072 | $ | 608 | $ | 71,106 |
6 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2014
|
2013
|
|||||||
Cash flows from operating activities
|
||||||||
Net income
|
$ | 1,123 | $ | 1,012 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Net amortization of premiums and discounts on investment securities
|
24 | 27 | ||||||
Provision for loan losses
|
211 | 190 | ||||||
Benefit from deferred taxes
|
89 | - | ||||||
Depreciation and amortization
|
206 | 156 | ||||||
Increase in cash surrender value of bank-owned life insurance
|
(85 | ) | - | |||||
Loan principal sold
|
(16,040 | ) | (443 | ) | ||||
Proceeds from sales of loans
|
16,569 | 451 | ||||||
Net gain on sales of loans
|
(428 | ) | (8 | ) | ||||
Equity-based compensation
|
150 | 68 | ||||||
Net accretion of purchase accounting adjustments
|
(204 | ) | - | |||||
Gain on sale of foreclosed real estate
|
- | (71 | ) | |||||
Net change in:
|
||||||||
Deferred loan fees
|
174 | 35 | ||||||
Accrued interest receivable
|
16 | (55 | ) | |||||
Other assets
|
265 | 435 | ||||||
Accrued expenses and other liabilities
|
(1,864 | ) | (3,214 | ) | ||||
Net cash provided (used) by operating activities
|
206 | (1,417 | ) | |||||
Cash flows from investing activities
|
||||||||
Proceeds from principal repayments on available for sale securities
|
110 | 255 | ||||||
Proceeds from principal repayments on held to maturity securities
|
34 | 60 | ||||||
Net proceeds from sales and calls of available for sale securities
|
400 | - | ||||||
Purchases of available for sale securities
|
(7,247 | ) | - | |||||
Net increase in loans
|
(24,911 | ) | (28,702 | ) | ||||
Purchases of premises and equipment
|
(1,205 | ) | (94 | ) | ||||
Redemption of Federal Home Loan Bank stock
|
- | 102 | ||||||
Proceeds from sale of foreclosed real estate
|
- | 981 | ||||||
Net cash used by investing activities
|
(32,819 | ) | (27,398 | ) |
7 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2014
|
2013
|
|||||||
Cash flows from financing activities
|
||||||||
Net change in time certificates of deposit
|
$ | 13,571 | $ | (19,428 | ) | |||
Net change in other deposits
|
4,111 | 37,369 | ||||||
Net proceeds from short term FHLB advances
|
20,000 | 7,000 | ||||||
Net repayments from long term FHLB advances
|
(5,000 | ) | (11,000 | ) | ||||
Proceeds from issuance of common stock
|
- | 7,325 | ||||||
Proceeds from exercise of options
|
191 | 21 | ||||||
Dividends paid on preferred stock
|
(27 | ) | (27 | ) | ||||
Net cash provided by financing activities
|
32,846 | 21,260 | ||||||
Net increase (decrease) in cash and cash equivalents
|
233 | (7,555 | ) | |||||
Cash and cash equivalents:
|
||||||||
Beginning of year
|
82,013 | 28,927 | ||||||
End of period
|
$ | 82,246 | $ | 21,372 | ||||
Supplemental disclosures of cash flows information:
|
||||||||
Cash paid for:
|
||||||||
Interest
|
$ | 885 | $ | 640 | ||||
Income taxes
|
200 | 128 | ||||||
Noncash investing and financing activities
|
||||||||
Loans transferred to foreclosed real estate
|
- | - |
8 |
9 |
10 |
11 |
March 31, 2014
|
||||||||||||||||
Amortized
|
Gross Unrealized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Available for sale securities:
|
||||||||||||||||
U.S. Government and agency obligations
|
||||||||||||||||
Due from one through five years
|
$ | 1,000 | $ | - | $ | (18 | ) | $ | 982 | |||||||
Due from five through ten years
|
9,984 | 27 | (226 | ) | 9,785 | |||||||||||
10,984 | 27 | (244 | ) | 10,767 | ||||||||||||
State agency and municipal obligations
|
||||||||||||||||
Due from five through ten years
|
4,114 | 191 | - | 4,305 | ||||||||||||
Due after ten years
|
8,263 | 479 | - | 8,742 | ||||||||||||
12,377 | 670 | - | 13,047 | |||||||||||||
Corporate bonds
|
||||||||||||||||
Due from one through five years
|
10,234 | 416 | (14 | ) | 10,636 | |||||||||||
Government-sponsored mortgage-backed securities
|
1,021 | 86 | - | 1,107 | ||||||||||||
Total available for sale securities
|
$ | 34,616 | $ | 1,199 | $ | (258 | ) | $ | 35,557 | |||||||
Held to maturity securities:
|
||||||||||||||||
U.S. Government and agency obligations
|
||||||||||||||||
Due from one through five years
|
$ | 1,018 | $ | - | $ | - | $ | 1,018 | ||||||||
State agency and municipal obligations
|
||||||||||||||||
Due after ten years
|
11,445 | - | - | 11,445 | ||||||||||||
Corporate bonds
|
||||||||||||||||
Due from five through ten years
|
1,000 | 14 | - | 1,014 | ||||||||||||
Government-sponsored mortgage-backed securities
|
317 | 33 | - | 350 | ||||||||||||
Total held to maturity securities
|
$ | 13,780 | $ | 47 | $ | - | $ | 13,827 |
12 |
December 31, 2013
|
||||||||||||||||
Amortized
|
Gross Unrealized
|
Fair
|
||||||||||||||
Cost
|
Gains
|
Losses
|
Value
|
|||||||||||||
(In thousands)
|
||||||||||||||||
Available for sale securities:
|
||||||||||||||||
U.S. Government and agency obligations
|
||||||||||||||||
Due from one through five years
|
$ | 1,000 | $ | - | $ | (17 | ) | $ | 983 | |||||||
Due from five through ten years
|
4,997 | - | (292 | ) | 4,705 | |||||||||||
5,997 | - | (309 | ) | 5,688 | ||||||||||||
State agency and municipal obligations
|
||||||||||||||||
Due from five through ten years
|
3,125 | 152 | - | 3,277 | ||||||||||||
Due after ten years
|
8,480 | 375 | - | 8,855 | ||||||||||||
11,605 | 527 | - | 12,132 | |||||||||||||
Corporate bonds
|
||||||||||||||||
Due from one through five years
|
9,166 | 411 | (11 | ) | 9,566 | |||||||||||
Government-sponsored mortgage-backed securities
|
1,133 | 78 | - | 1,211 | ||||||||||||
Total available for sale securities
|
$ | 27,901 | $ | 1,016 | $ | (320 | ) | $ | 28,597 | |||||||
Held to maturity securities:
|
||||||||||||||||
U.S. Government and agency obligations
|
||||||||||||||||
Due from one through five years
|
$ | 1,021 | $ | - | $ | (2 | ) | $ | 1,019 | |||||||
State agency and municipal obligations
|
||||||||||||||||
Due after ten years
|
11,461 | - | - | 11,461 | ||||||||||||
Corporate bonds
|
||||||||||||||||
Due from five through ten years
|
1,000 | - | (27 | ) | 973 | |||||||||||
Government-sponsored mortgage-backed securities
|
334 | 28 | - | 362 | ||||||||||||
Total held to maturity securities
|
$ | 13,816 | $ | 28 | $ | (29 | ) | $ | 13,815 |
13 |
Length of Time in Continuous Unrealized Loss Position
|
||||||||||||||||||||||||
Less Than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
|
Unrealized
|
Fair
|
Unrealized
|
Fair
|
Unrealized
|
|||||||||||||||||||
Value
|
Loss
|
Value
|
Loss
|
Value
|
Loss
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
March 31, 2014
|
||||||||||||||||||||||||
U.S. Government and agency obligations
|
$ | 4,823 | $ | (175 | ) | $ | 930 | $ | (69 | ) | $ | 5,753 | $ | (244 | ) | |||||||||
Corporate bonds
|
1,078 | (4 | ) | 989 | (10 | ) | 2,067 | (14 | ) | |||||||||||||||
Total investment securities
|
$ | 5,901 | $ | (179 | ) | $ | 1,919 | $ | (79 | ) | $ | 7,820 | $ | (258 | ) | |||||||||
December 31, 2013
|
||||||||||||||||||||||||
U.S. Government and agency obligations
|
$ | 5,797 | $ | (222 | ) | $ | 910 | $ | (89 | ) | $ | 6,707 | $ | (311 | ) | |||||||||
Corporate bonds
|
- | - | 1,961 | (38 | ) | 1,961 | (38 | ) | ||||||||||||||||
Total investment securities
|
$ | 5,797 | $ | (222 | ) | $ | 2,871 | $ | (127 | ) | $ | 8,668 | $ | (349 | ) |
14 |
March 31, 2014
|
December 31, 2013
|
|||||||||||||||||||||||
(In thousands)
|
Originated
|
Acquired
|
Total
|
Originated
|
Acquired
|
Total
|
||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential
|
$ | 158,905 | $ | - | $ | 158,905 | $ | 155,874 | $ | - | $ | 155,874 | ||||||||||||
Commercial
|
323,849 | 8,158 | 332,007 | 305,823 | 9,939 | 315,762 | ||||||||||||||||||
Construction
|
44,158 | 4,838 | 48,996 | 44,187 | 7,308 | 51,495 | ||||||||||||||||||
Home equity
|
9,734 | 3,815 | 13,549 | 9,625 | 3,872 | 13,497 | ||||||||||||||||||
536,646 | 16,811 | 553,457 | 515,509 | 21,119 | 536,628 | |||||||||||||||||||
Commercial business
|
100,701 | 2,453 | 103,154 | 92,173 | 2,374 | 94,547 | ||||||||||||||||||
Consumer
|
67 | 483 | 550 | 225 | 612 | 837 | ||||||||||||||||||
Total loans
|
637,414 | 19,747 | 657,161 | 607,907 | 24,105 | 632,012 | ||||||||||||||||||
Allowance for loan losses
|
(8,603 | ) | - | (8,603 | ) | (8,382 | ) | - | (8,382 | ) | ||||||||||||||
Deferred loan origination fees, net
|
(1,991 | ) | - | (1,991 | ) | (1,785 | ) | (31 | ) | (1,816 | ) | |||||||||||||
Unamortized loan premiums
|
16 | - | 16 | 16 | - | 16 | ||||||||||||||||||
Loans receivable, net
|
$ | 626,836 | $ | 19,747 | $ | 646,583 | $ | 597,756 | $ | 24,074 | $ | 621,830 |
Three Months Ended
|
||||
(In thousands)
|
March 31, 2014
|
|||
Balance at beginning of period
|
$ | 1,418 | ||
Acquisition
|
- | |||
Accretion
|
(140 | ) | ||
Other (a)
|
(50 | ) | ||
Balance at end of period
|
$ | 1,228 |
a)
|
Represents changes in cashflows expected to be collected due to loan sales.
|
15 |
16 |
Residential Real Estate
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Commercial Business
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2014
|
||||||||||||||||||||||||||||||||
Originated
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,310 | $ | 3,616 | $ | 1,032 | $ | 190 | $ | 2,225 | $ | 9 | $ | - | $ | 8,382 | ||||||||||||||||
Charge-offs
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | 10 | - | 10 | ||||||||||||||||||||||||
Provisions
|
(12 | ) | 151 | (20 | ) | 2 | 106 | (16 | ) | - | 211 | |||||||||||||||||||||
Ending balance
|
$ | 1,298 | $ | 3,767 | $ | 1,012 | $ | 192 | $ | 2,331 | $ | 3 | $ | - | $ | 8,603 | ||||||||||||||||
Acquired
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Charge-offs
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Provisions
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Ending balance
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||||||
Total
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,310 | $ | 3,616 | $ | 1,032 | $ | 190 | $ | 2,225 | $ | 9 | $ | - | $ | 8,382 | ||||||||||||||||
Charge-offs
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | 10 | - | 10 | ||||||||||||||||||||||||
Provisions
|
(12 | ) | 151 | (20 | ) | 2 | 106 | (16 | ) | - | 211 | |||||||||||||||||||||
Ending balance
|
$ | 1,298 | $ | 3,767 | $ | 1,012 | $ | 192 | $ | 2,331 | $ | 3 | $ | - | $ | 8,603 | ||||||||||||||||
Residential Real Estate
|
Commercial Real Estate
|
Construction
|
Home Equity
|
Commercial Business
|
Consumer
|
Unallocated
|
Total
|
|||||||||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||||||||||
Three Months Ended March 31, 2013
|
||||||||||||||||||||||||||||||||
Beginning balance
|
$ | 1,230 | $ | 3,842 | $ | 929 | $ | 220 | $ | 1,718 | $ | 2 | $ | - | $ | 7,941 | ||||||||||||||||
Charge-offs
|
- | - | - | - | - | (2 | ) | - | (2 | ) | ||||||||||||||||||||||
Recoveries
|
- | - | - | - | - | 5 | - | 5 | ||||||||||||||||||||||||
Provisions
|
34 | 45 | 4 | (6 | ) | 103 | 10 | - | 190 | |||||||||||||||||||||||
Ending balance
|
$ | 1,264 | $ | 3,887 | $ | 933 | $ | 214 | $ | 1,821 | $ | 15 | $ | - | $ | 8,134 |
17 |
Originated Loans
|
Acquired Loans
|
Total
|
||||||||||||||||||||||
Portfolio
|
Allowance
|
Portfolio
|
Allowance
|
Portfolio
|
Allowance
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
March 31, 2014
|
||||||||||||||||||||||||
Loans individually evaluated for impairment:
|
||||||||||||||||||||||||
Residential real estate
|
$ | 1,848 | $ | 72 | $ | - | $ | - | $ | 1,848 | $ | 72 | ||||||||||||
Commercial real estate
|
1,117 | 56 | - | - | 1,117 | 56 | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity
|
97 | 4 | - | - | 97 | 4 | ||||||||||||||||||
Commercial business
|
621 | 12 | - | - | 621 | 12 | ||||||||||||||||||
Consumer
|
- | - | - | - | - | - | ||||||||||||||||||
Subtotal
|
$ | 3,683 | $ | 144 | $ | - | $ | - | $ | 3,683 | $ | 144 | ||||||||||||
Loans collectively evaluated for impairment:
|
||||||||||||||||||||||||
Residential real estate
|
$ | 157,057 | $ | 1,226 | $ | - | $ | - | $ | 157,057 | $ | 1,226 | ||||||||||||
Commercial real estate
|
322,732 | 3,711 | 8,158 | - | 330,890 | 3,711 | ||||||||||||||||||
Construction
|
44,158 | 1,012 | 4,838 | - | 48,996 | 1,012 | ||||||||||||||||||
Home equity
|
9,637 | 188 | 3,815 | - | 13,452 | 188 | ||||||||||||||||||
Commercial business
|
100,080 | 2,319 | 2,453 | - | 102,533 | 2,319 | ||||||||||||||||||
Consumer
|
67 | 3 | 483 | - | 550 | 3 | ||||||||||||||||||
Subtotal
|
$ | 633,731 | $ | 8,459 | $ | 19,747 | $ | - | $ | 653,478 | $ | 8,459 | ||||||||||||
Total
|
$ | 637,414 | $ | 8,603 | $ | 19,747 | $ | - | $ | 657,161 | $ | 8,603 | ||||||||||||
Originated Loans
|
Acquired Loans
|
Total
|
||||||||||||||||||||||
Portfolio
|
Allowance
|
Portfolio
|
Allowance
|
Portfolio
|
Allowance
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
December 31, 2013
|
||||||||||||||||||||||||
Loans individually evaluated for impairment:
|
||||||||||||||||||||||||
Residential real estate
|
$ | 1,867 | $ | 73 | $ | - | $ | - | $ | 1,867 | $ | 73 | ||||||||||||
Commercial real estate
|
1,117 | 56 | - | - | 1,117 | 56 | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity
|
97 | 4 | - | - | 97 | 4 | ||||||||||||||||||
Commercial business
|
642 | 12 | - | - | 642 | 12 | ||||||||||||||||||
Consumer
|
- | - | - | - | - | - | ||||||||||||||||||
Subtotal
|
$ | 3,723 | $ | 145 | $ | - | $ | - | $ | 3,723 | $ | 145 | ||||||||||||
Loans collectively evaluated for impairment:
|
||||||||||||||||||||||||
Residential real estate
|
$ | 154,007 | $ | 1,237 | $ | - | $ | - | $ | 154,007 | $ | 1,237 | ||||||||||||
Commercial real estate
|
304,706 | 3,560 | 9,939 | - | 314,645 | 3,560 | ||||||||||||||||||
Construction
|
44,187 | 1,032 | 7,308 | - | 51,495 | 1,032 | ||||||||||||||||||
Home equity
|
9,528 | 187 | 3,872 | - | 13,400 | 187 | ||||||||||||||||||
Commercial business
|
91,531 | 2,212 | 2,374 | - | 93,905 | 2,212 | ||||||||||||||||||
Consumer
|
225 | 9 | 612 | - | 837 | 9 | ||||||||||||||||||
Subtotal
|
$ | 604,184 | $ | 8,237 | $ | 24,105 | $ | - | $ | 628,289 | $ | 8,237 | ||||||||||||
Total
|
$ | 607,907 | $ | 8,382 | $ | 24,105 | $ | - | $ | 632,012 | $ | 8,382 |
18 |
Commercial Credit Quality Indicators
|
||||||||||||||||||||||||
At March 31, 2014
|
At December 31, 2013 | |||||||||||||||||||||||
Commercial
Real Estate |
Construction
|
Commercial Business
|
Commercial
Real Estate |
Construction
|
Commercial Business
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Originated loans:
|
||||||||||||||||||||||||
Pass
|
$ | 322,498 | $ | 44,158 | $ | 99,650 | $ | 304,469 | $ | 44,187 | $ | 91,093 | ||||||||||||
Special mention
|
234 | - | 430 | 237 | - | 438 | ||||||||||||||||||
Substandard
|
1,117 | - | 621 | 1,117 | - | 642 | ||||||||||||||||||
Doubtful
|
- | - | - | - | - | - | ||||||||||||||||||
Loss
|
- | - | - | - | - | - | ||||||||||||||||||
Total originated loans
|
323,849 | 44,158 | 100,701 | 305,823 | 44,187 | 92,173 | ||||||||||||||||||
Acquired loans:
|
||||||||||||||||||||||||
Pass
|
7,417 | 1,755 | 1,886 | 9,580 | 4,639 | 1,806 | ||||||||||||||||||
Special mention
|
13 | 175 | 215 | 24 | 161 | 252 | ||||||||||||||||||
Substandard
|
728 | 2,908 | 352 | 335 | 2,508 | 316 | ||||||||||||||||||
Doubtful
|
- | - | - | - | - | - | ||||||||||||||||||
Loss
|
- | - | - | - | - | - | ||||||||||||||||||
Total acquired loans
|
8,158 | 4,838 | 2,453 | 9,939 | 7,308 | 2,374 | ||||||||||||||||||
Total
|
$ | 332,007 | $ | 48,996 | $ | 103,154 | $ | 315,762 | $ | 51,495 | $ | 94,547 |
19 |
Residential and Consumer Credit Quality Indicators
|
||||||||||||||||||||||||
At March 31, 2014
|
At December 31, 2013
|
|||||||||||||||||||||||
Residential
Real Estate |
Home Equity
|
Consumer
|
Residential
Real Estate |
Home Equity
|
Consumer
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Originated loans:
|
||||||||||||||||||||||||
Pass
|
$ | 157,057 | $ | 9,560 | $ | 67 | $ | 153,443 | $ | 9,447 | $ | 225 | ||||||||||||
Special mention
|
1,848 | 174 | - | 2,431 | 178 | - | ||||||||||||||||||
Substandard
|
- | - | - | - | - | - | ||||||||||||||||||
Doubtful
|
- | - | - | - | - | - | ||||||||||||||||||
Loss
|
- | - | - | - | - | - | ||||||||||||||||||
Total originated loans
|
158,905 | 9,734 | 67 | 155,874 | 9,625 | 225 | ||||||||||||||||||
Acquired loans:
|
||||||||||||||||||||||||
Pass
|
- | 3,778 | 345 | - | 3,826 | 469 | ||||||||||||||||||
Special mention
|
- | - | 138 | - | - | 143 | ||||||||||||||||||
Substandard
|
- | 37 | - | - | 46 | - | ||||||||||||||||||
Doubtful
|
- | - | - | - | - | - | ||||||||||||||||||
Loss
|
- | - | - | - | - | - | ||||||||||||||||||
Total acquired loans
|
- | 3,815 | 483 | - | 3,872 | 612 | ||||||||||||||||||
Total
|
$ | 158,905 | $ | 13,549 | $ | 550 | $ | 155,874 | $ | 13,497 | $ | 837 |
20 |
As of March 31, 2014
|
||||||||||||||||||||||||
31-60 Days Past Due |
61-90 Days Past Due |
Greater Than 90 Days |
Total Past Due |
Current |
Carrying
Amount > 90 Days and Accruing |
|||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Originated Loans
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential real estate
|
$ | - | $ | - | $ | 984 | $ | 984 | $ | 157,921 | $ | - | ||||||||||||
Commercial real estate
|
- | - | 1,117 | 1,117 | 322,732 | - | ||||||||||||||||||
Construction
|
- | - | - | - | 44,158 | - | ||||||||||||||||||
Home equity
|
- | - | - | - | 9,734 | - | ||||||||||||||||||
Commercial business
|
131 | - | - | 131 | 100,570 | - | ||||||||||||||||||
Consumer
|
1 | - | - | 1 | 66 | - | ||||||||||||||||||
Total originated loans
|
132 | - | 2,101 | 2,233 | 635,181 | - | ||||||||||||||||||
Acquired Loans
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential real estate
|
- | - | - | - | - | - | ||||||||||||||||||
Commercial real estate
|
- | - | 635 | 635 | 7,523 | 635 | ||||||||||||||||||
Construction
|
1,805 | - | 1,112 | 2,917 | 1,921 | 1,112 | ||||||||||||||||||
Home equity
|
- | - | - | - | 3,815 | - | ||||||||||||||||||
Commercial business
|
- | - | - | - | 2,453 | - | ||||||||||||||||||
Consumer
|
5 | - | - | 5 | 478 | - | ||||||||||||||||||
Total acquired loans
|
1,810 | - | 1,747 | 3,557 | 16,190 | 1,747 | ||||||||||||||||||
Total loans
|
$ | 1,942 | $ | - | $ | 3,848 | $ | 5,790 | $ | 651,371 | $ | 1,747 | ||||||||||||
As of December 31, 2013
|
||||||||||||||||||||||||
31-60 Days
Past Due |
61-90 Days
Past Due |
Greater Than
90 Days
|
Total Past
Due |
Current
|
Carrying
Amount > 90 Days and Accruing |
|||||||||||||||||||
(In thousands) | ||||||||||||||||||||||||
Originated Loans
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential real estate
|
$ | - | $ | - | $ | 1,003 | $ | 1,003 | $ | 154,871 | $ | - | ||||||||||||
Commercial real estate
|
- | - | - | - | 305,823 | - | ||||||||||||||||||
Construction
|
- | - | - | - | 44,187 | - | ||||||||||||||||||
Home equity
|
- | - | - | - | 9,625 | - | ||||||||||||||||||
Commercial business
|
- | - | - | - | 92,173 | - | ||||||||||||||||||
Consumer
|
- | - | - | - | 225 | - | ||||||||||||||||||
Total originated loans
|
- | - | 1,003 | 1,003 | 606,904 | - | ||||||||||||||||||
Acquired Loans
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential real estate
|
- | - | - | - | - | - | ||||||||||||||||||
Commercial real estate
|
- | - | 797 | 797 | 9,142 | 797 | ||||||||||||||||||
Construction
|
- | - | 2,508 | 2,508 | 4,800 | 2,508 | ||||||||||||||||||
Home equity
|
- | - | - | - | 3,872 | - | ||||||||||||||||||
Commercial business
|
- | - | 315 | 315 | 2,059 | 315 | ||||||||||||||||||
Consumer
|
- | - | - | - | 612 | - | ||||||||||||||||||
Total acquired loans
|
- | - | 3,620 | 3,620 | 20,485 | 3,620 | ||||||||||||||||||
Total loans
|
$ | - | $ | - | $ | 4,623 | $ | 4,623 | $ | 627,389 | $ | 3,620 |
21 |
March 31,
|
December 31,
|
|||||||
2014
|
2013
|
|||||||
(In thousands)
|
||||||||
Residential real estate
|
$ | 984 | $ | 1,003 | ||||
Commercial real estate
|
1,117 | - | ||||||
Total
|
$ | 2,101 | $ | 1,003 |
22 |
Carrying
|
Unpaid Principal
|
Associated
|
||||||||||||||||||||||
Amount
|
Balance
|
Allowance
|
||||||||||||||||||||||
Mar 31,
|
Dec 31,
|
Mar 31,
|
Dec 31,
|
Mar 31,
|
Dec 31,
|
|||||||||||||||||||
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
|||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||
Originated
|
||||||||||||||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||||||||||||||
Total impaired loans without a valuation allowance
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Impaired loans with a valuation allowance:
|
||||||||||||||||||||||||
Residential real estate
|
$ | 1,848 | $ | 1,867 | $ | 1,870 | $ | 1,880 | $ | 72 | $ | 73 | ||||||||||||
Commercial real estate
|
1,117 | 1,117 | 1,117 | 1,117 | 56 | 56 | ||||||||||||||||||
Home equity
|
96 | 97 | 96 | 97 | 4 | 4 | ||||||||||||||||||
Commercial business
|
621 | 642 | 621 | 642 | 12 | 12 | ||||||||||||||||||
Total impaired loans with a valuation allowance
|
$ | 3,682 | $ | 3,723 | $ | 3,704 | $ | 3,736 | $ | 144 | $ | 145 | ||||||||||||
Total originated impaired loans
|
$ | 3,682 | $ | 3,723 | $ | 3,704 | $ | 3,736 | $ | 144 | $ | 145 | ||||||||||||
Acquired
|
||||||||||||||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||||||||||||||
Total impaired loans without a valuation allowance
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Impaired loans with a valuation allowance:
|
||||||||||||||||||||||||
Total impaired loans with a valuation allowance
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Total acquired impaired loans
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - |
Average Recorded Investment
|
Interest Income Recognized
|
|||||||||||||||
Three months ended March 31,
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Originated
|
(In thousands)
|
|||||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||||||
Total impaired loans without a valuation allowance
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Impaired loans with a valuation allowance:
|
||||||||||||||||
Residential real estate
|
$ | 1,856 | $ | 1,903 | $ | 7 | $ | 15 | ||||||||
Commercial real estate
|
1,117 | 1,593 | - | - | ||||||||||||
Home equity
|
96 | 246 | 1 | 2 | ||||||||||||
Commercial business
|
628 | 903 | 8 | 13 | ||||||||||||
Total impaired loans with a valuation allowance
|
$ | 3,697 | $ | 4,645 | $ | 16 | $ | 30 | ||||||||
Total originated impaired loans
|
$ | 3,697 | $ | 4,645 | $ | 16 | $ | 30 | ||||||||
Acquired
|
||||||||||||||||
Impaired loans without a valuation allowance:
|
||||||||||||||||
Total impaired loans without a valuation allowance
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Impaired loans with a valuation allowance:
|
||||||||||||||||
Total impaired loans with a valuation allowance
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Total acquired impaired loans
|
$ | - | $ | - | $ | - | $ | - |
23 |
Outstanding Recorded Investment
|
||||||||||||||||||||||||
Number of Loans
|
Pre-Modification
|
Post-Modification
|
||||||||||||||||||||||
(Dollars in thousands)
|
2014
|
2013
|
2014
|
2013
|
2014
|
2013
|
||||||||||||||||||
Three months ended March 31,
|
||||||||||||||||||||||||
Home equity
|
- | 1 | $ | - | $ | 97 | $ | - | $ | 97 | ||||||||||||||
Total
|
- | 1 | $ | - | $ | 97 | $ | - | $ | 97 |
Three months
|
||||||||
Periods ended March 31,
|
2014
|
2013
|
||||||
(In thousands)
|
||||||||
Maturity/amortization concession
|
$ | - | $ | 97 | ||||
Total
|
$ | - | $ | 97 |
24 |
25 |
Net Unrealized Gain
|
||||
(Loss) on Available
|
||||
for Sale Securities
|
||||
(In thousands)
|
||||
Balance at December 31, 2012
|
$ | 1,511 | ||
Other
comprehensive loss before reclassifications
|
(116 | ) | ||
Amounts reclassified from accumulated other comprehensive income
|
- | |||
Net other comprehensive loss
|
(116 | ) | ||
Balance at March 31, 2013
|
$ | 1,395 |
Net Unrealized Gain
|
Net Unrealized
|
|||||||||||
(Loss) on Available
|
Gain on Interest
|
|||||||||||
for Sale Securities
|
Rate Swap
|
Total
|
||||||||||
(In thousands)
|
||||||||||||
Balance at December 31, 2013
|
$ | 424 | $ | - | $ | 424 | ||||||
Other comprehensive income before reclassifications
|
150 | 34 | 184 | |||||||||
Amounts reclassified from accumulated other comprehensive income
|
- | - | - | |||||||||
Net other comprehensive income
|
150 | 34 | 184 | |||||||||
Balance at March 31, 2014
|
$ | 574 | $ | 34 | $ | 608 |
26 |
|
Three Months Ended
|
|||||||
March 31,
|
||||||||
2014
|
2013
|
|||||||
(In thousands, except per share data)
|
||||||||
Net income
|
$ | 1,123 | $ | 1,012 | ||||
Preferred stock dividends and net accretion
|
(27 | ) | (27 | ) | ||||
Dividends and undistributed earnings allocated to participating securities
|
(34 | ) | (16 | ) | ||||
Net income available to common shareholders
|
$ | 1,062 | $ | 969 | ||||
Weighted average shares outstanding, basic
|
3,762 | 3,149 | ||||||
Effect of dilutive equity-based awards
|
34 | 48 | ||||||
Weighted average shares outstanding, diluted
|
3,796 | 3,197 | ||||||
Net earnings per common share:
|
||||||||
Basic earnings per common share
|
$ | 0.28 | $ | 0.31 | ||||
Diluted earnings per common share
|
0.28 | 0.30 |
27 |
To be Well
|
||||||||||||||||||||||||
Capitalized Under
|
||||||||||||||||||||||||
For Capital
|
Prompt Corrective
|
|||||||||||||||||||||||
Actual Capital
|
Adequacy Purposes
|
Action Provisions
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Bankwell Bank
|
||||||||||||||||||||||||
March 31, 2014
|
||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets
|
$ | 68,460 | 10.74 | % | $ | 50,983 | 8.00 | % | $ | 63,729 | 10.00 | % | ||||||||||||
Tier I Capital to Risk-Weighted Assets
|
60,488 | 9.49 | % | 25,492 | 4.00 | % | 38,238 | 6.00 | % | |||||||||||||||
Tier I Capital to Average Assets
|
60,488 | 7.90 | % | 30,638 | 4.00 | % | 38,297 | 5.00 | % | |||||||||||||||
Bankwell Financial Group, Inc.
|
||||||||||||||||||||||||
March 31, 2014
|
||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets
|
$ | 78,232 | 12.22 | % | $ | 51,220 | 8.00 | % | $ | N/A | N/A | |||||||||||||
Tier I Capital to Risk-Weighted Assets
|
70,221 | 10.97 | % | 25,610 | 4.00 | % | N/A | N/A | ||||||||||||||||
Tier I Capital to Average Assets
|
70,221 | 9.06 | % | 31,012 | 4.00 | % | N/A | N/A | ||||||||||||||||
To be Well
|
||||||||||||||||||||||||
Capitalized Under
|
||||||||||||||||||||||||
For Capital
|
Prompt Corrective
|
|||||||||||||||||||||||
Actual Capital
|
Adequacy Purposes
|
Action Provisions
|
||||||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
||||||||||||||||||
Bankwell Bank
|
||||||||||||||||||||||||
December 31, 2013
|
||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets
|
$ | 66,674 | 10.74 | % | $ | 49,682 | 8.00 | % | $ | 62,103 | 10.00 | % | ||||||||||||
Tier I Capital to Risk-Weighted Assets
|
58,908 | 9.49 | % | 24,841 | 4.00 | % | 37,262 | 6.00 | % | |||||||||||||||
Tier I Capital to Average Assets
|
58,908 | 7.91 | % | 29,772 | 4.00 | % | 37,215 | 5.00 | % | |||||||||||||||
Bankwell Financial Group, Inc.
|
||||||||||||||||||||||||
December 31, 2013
|
||||||||||||||||||||||||
Total Capital to Risk-Weighted Assets
|
$ | 76,537 | 12.32 | % | $ | 49,683 | 8.00 | % | $ | N/A | N/A | |||||||||||||
Tier I Capital to Risk-Weighted Assets
|
68,766 | 11.07 | % | 24,841 | 4.00 | % | N/A | N/A | ||||||||||||||||
Tier I Capital to Average Assets
|
68,766 | 9.15 | % | 30,068 | 4.00 | % | N/A | N/A |
28 |
Three Months Ended
|
||||||||
March 31, 2014
|
||||||||
Weighted
|
||||||||
Number
|
Average
|
|||||||
of
|
Exercise
|
|||||||
Shares
|
Price
|
|||||||
Options outstanding at beginning of period
|
208,568 | $ | 16.67 | |||||
Granted
|
- | - | ||||||
Forfeited
|
(1,770 | ) | 15.59 | |||||
Exercised
|
(18,905 | ) | 10.07 | |||||
Expired
|
(480 | ) | 10.00 | |||||
Options outstanding at end of period
|
187,413 | 17.37 | ||||||
Options exercisable at end of period
|
175,262 | 17.52 | ||||||
Weighted-average fair value of options granted during the period
|
N/A |
29 |
Three Months Ended
|
||||||||
March 31, 2014
|
||||||||
Weighted
|
||||||||
Number
|
Average
|
|||||||
of
|
Grant Date
|
|||||||
Shares
|
Fair Value
|
|||||||
Unvested at beginning of period
|
122,140 | $ | 15.98 | |||||
Granted
|
- | - | ||||||
Vested
|
- | - | ||||||
Forfeited
|
(3,608 | ) | 16.61 | |||||
Unvested at end of period
|
118,532 | 15.96 |
Notional
|
Fair
|
||||||||||||||||||
(Dollars in thousands)
|
Amount
|
Maturity
|
Received
|
Paid
|
Value
|
||||||||||||||
Cash flow hedge:
|
|||||||||||||||||||
Interest rate swap on FHLB advance
|
$ | 25,000 | 4.7 years | 0.20 | % | 1.62 | % | $ | 87 |
Notional
|
Effective Date of
|
Duration of
|
|||||
(Dollars in thousands)
|
Amount
|
Hedged Borrowing
|
Borrowing
|
Counterparty
|
|||
Type of borrowing:
|
|||||||
FHLB 90-day advance
|
$ | 25,000 |
April 1, 2014
|
4.7 years
|
Bank of Montreal
|
30 |
Three months ended
|
||||
(In thousands)
|
March 31, 2014
|
|||
Interest rate swap on FHLB advance:
|
||||
Unrealized gain recognized in accumulated other comprehensive income
|
$ | 87 | ||
Income tax expense on items recognized in accumulated other comprehensive income
|
(53 | ) | ||
Other comprehensive income recorded in other comprehensive income
|
$ | 34 | ||
Interest expense recognized on hedged FHLB advance
|
$ | - |
March 31, 2014
|
||||||||||||||||||||
Carrying
|
Fair
|
|||||||||||||||||||
Value
|
Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and due from banks
|
$ | 82,246 | $ | 82,246 | $ | 82,246 | $ | - | $ | - | ||||||||||
Available for sale securities
|
35,557 | 35,557 | - | 35,557 | - | |||||||||||||||
Held to maturity securities
|
13,780 | 13,827 | - | 13,827 | - | |||||||||||||||
Loans receivable, net
|
646,583 | 650,038 | - | - | 650,038 | |||||||||||||||
Accrued interest receivable
|
2,344 | 2,344 | - | - | 2,344 | |||||||||||||||
FHLB stock
|
4,834 | 4,834 | - | - | 4,834 | |||||||||||||||
Derivative asset
|
87 | 87 | - | 87 | - | |||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Demand deposits
|
119,656 | 119,656 | - | - | 119,656 | |||||||||||||||
NOW and money market
|
244,179 | 244,179 | - | - | 244,179 | |||||||||||||||
Savings
|
104,813 | 104,813 | - | - | 104,813 | |||||||||||||||
Time deposits
|
210,575 | 211,286 | - | - | 211,286 | |||||||||||||||
Advances from the FHLB
|
59,000 | 58,940 | - | - | 58,940 |
31 |
December 31, 2013
|
||||||||||||||||||||
Carrying
|
Fair
|
|||||||||||||||||||
Value
|
Value
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||||||
(In thousands)
|
||||||||||||||||||||
Financial Assets:
|
||||||||||||||||||||
Cash and due from banks
|
$ | 82,013 | $ | 82,013 | $ | 82,013 | $ | - | $ | - | ||||||||||
Available for sale securities
|
28,597 | 28,597 | - | 28,597 | - | |||||||||||||||
Held to maturity securities
|
13,816 | 13,815 | - | 13,815 | - | |||||||||||||||
Loans held for sale
|
100 | 100 | - | 100 | - | |||||||||||||||
Loans receivable, net
|
621,830 | 623,876 | - | - | 623,876 | |||||||||||||||
Accrued interest receivable
|
2,360 | 2,360 | - | - | 2,360 | |||||||||||||||
FHLB stock
|
4,834 | 4,834 | - | - | 4,834 | |||||||||||||||
Financial Liabilities:
|
||||||||||||||||||||
Demand deposits
|
118,618 | 118,618 | - | - | 118,618 | |||||||||||||||
NOW and money market
|
238,231 | 238,231 | - | - | 238,231 | |||||||||||||||
Savings
|
107,692 | 107,692 | - | - | 107,692 | |||||||||||||||
Time deposits
|
197,004 | 197,762 | - | - | 197,762 | |||||||||||||||
Advances from the FHLB
|
44,000 | 43,902 | - | - | 43,902 |
|
Level 1 —
|
Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.
|
|
Level 2 —
|
Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.
|
|
Level 3 —
|
Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.
|
32 |
Fair Value
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
March 31, 2014:
|
(In thousands)
|
|||||||||||
Available-for-sale investment securities:
|
||||||||||||
U.S. Government and agency obligations
|
$ | - | $ | 10,767 | $ | - | ||||||
State agency and municipal obligations
|
- | 13,047 | - | |||||||||
Corporate bonds
|
- | 10,636 | - | |||||||||
Mortgage backed securities
|
- | 1,107 | - | |||||||||
Derivative asset
|
- | 87 | - | |||||||||
December 31, 2013:
|
||||||||||||
Available-for-sale investment securities:
|
||||||||||||
U.S. Government and agency obligations
|
$ | - | $ | 5,688 | $ | - | ||||||
State agency and municipal obligations
|
- | 12,132 | - | |||||||||
Corporate bonds
|
- | 9,566 | - | |||||||||
Mortgage backed securities
|
- | 1,211 | - |
Fair Value
|
||||||||||||
Level 1
|
Level 2
|
Level 3
|
||||||||||
March 31, 2014:
|
(In thousands)
|
|||||||||||
Impaired loans
|
$ | - | $ | - | $ | 3,682 | ||||||
Foreclosed real estate
|
- | - | 829 | |||||||||
December 31, 2013:
|
||||||||||||
Impaired loans
|
$ | - | $ | - | $ | 3,723 | ||||||
Foreclosed real estate
|
- | - | 829 |
33 |
Fair
|
Valuation
|
Unobservable
|
Range
|
|||||||
(Dollars in thousands)
|
Value
|
Methodology
|
Input
|
(Weighted Average)
|
||||||
March 31, 2014:
|
||||||||||
Impaired loans
|
$ | 3,682 |
Appraisals
|
Discount for dated appraisals
|
3.5% to 5.0%
|
|||||
Discounted cash flows
|
Discount rate
|
1.9% | ||||||||
Foreclosed real estate
|
$ | 829 |
Appraisals
|
Discount for dated appraisals
|
29.4% to 46.0%
|
|||||
December 31, 2013:
|
||||||||||
Impaired loans
|
$ | 3,723 |
Appraisals
|
Discount for dated appraisals
|
3.5% to 5.0%
|
|||||
Discounted cash flows
|
Discount rate
|
1.9% | ||||||||
Foreclosed real estate
|
$ | 829 |
Appraisals
|
Discount for dated appraisals
|
29.4% to 46.0%
|
34 |
Consideration paid: (In thousands)
|
Amount
|
|||||||||||
Cash consideration paid to Wilton shareholders
|
$ | 5,035 |
Recognized amounts of identifiable assets acquired
|
Fair Value
|
As Recorded
|
||||||||||
and (liabilities) assumed: (In thousands)
|
As Acquired
|
Adjustments
|
at Acquisition
|
|||||||||
Cash
|
$ | 35,919 | $ | - | $ | 35,919 | ||||||
Held to maturity investments securities
|
1,022 | - | 1,022 | |||||||||
Loans
|
27,097 | (2,008 | ) | a | 25,089 | |||||||
Premises and equipment
|
4,303 | - | 4,303 | |||||||||
Other real estate owned
|
1,895 | (450 | ) | b | 1,445 | |||||||
Core deposit intangibles
|
- | 499 | c | 499 | ||||||||
Deferred tax assets, net
|
- | 1,997 | d | 1,997 | ||||||||
Other assets
|
587 | - | 587 | |||||||||
Deposits
|
(64,145 | ) | (12 | ) | e | (64,157 | ) | |||||
Other liabilities
|
(336 | ) | - | (336 | ) | |||||||
Total identifiable net assets
|
$ | 6,342 | $ | 26 | $ | 6,368 | ||||||
Gain on purchase
|
$ | (1,333 | ) |
a)
|
The adjustment represents the write down of the book value of loans to their estimated fair value based on current interest rates and expected cash flows, which includes an estimate of expected loan loss inherent in the portfolio.
|
b)
|
The adjustment represents the write down of the book value of foreclosed real estate to their estimated fair value based on current appraisals.
|
c)
|
Represents the economic value of the acquired core deposit base (total deposits less jumbo time deposits). The core deposit intangible will be amortized over an estimated life of 9.3 years based on the double declining balance method of amortization.
|
d)
|
Represents net deferred tax assets resulting from the fair value adjustments related to the acquired assets and liabilities, identifiable intangibles and other purchase accounting adjustments.
|
e)
|
The adjustment represents the fair value of time deposits, which were valued at a premium of 0.11% as they bore slightly higher rates than the prevailing market.
|
35 |
November 5,
2013 |
||||
(In thousands)
|
||||
Contractually required principal and interest at acquisition
|
$ | 14,528 | ||
Contractual cash flows not expected to be collected (nonaccretable discount)
|
(1,412 | ) | ||
Expected cash flows at acquisition
|
13,116 | |||
Interest component of expected cash flows (accretable discount)
|
(1,513 | ) | ||
Fair value of acquired loans
|
$ | 11,603 |
36 |
● |
Responsive, customer-centric products and services and a community focus;
|
|
● |
Strategic acquisitions;
|
37 |
● |
Utilization of efficient and scalable infrastructure; and
|
|
● |
Disciplined focus on risk management.
|
38 |
39 |
Three Months Ended March 31, | ||||||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||||||
Average
|
Yield /
|
Average
|
Yield /
|
|||||||||||||||||||||
(Dollars in thousands)
|
Balance
|
Interest
|
Rate
|
Balance
|
Interest
|
Rate
|
||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Cash and Fed funds sold
|
$ | 32,699 | $ | 22 | 0.27 | % | $ | 16,986 | $ | 10 | 0.25 | % | ||||||||||||
Securities (1)
|
47,782 | 501 | 4.20 | 43,815 | 451 | 4.12 | ||||||||||||||||||
Loans: (2)
|
||||||||||||||||||||||||
Commercial real estate
|
327,512 | 4,193 | 5.12 | 280,043 | 3,600 | 5.14 | ||||||||||||||||||
Residential real estate
|
156,069 | 1,395 | 3.58 | 143,814 | 1,405 | 3.91 | ||||||||||||||||||
Construction (3)
|
49,318 | 531 | 4.30 | 33,443 | 409 | 4.89 | ||||||||||||||||||
Commercial business
|
98,061 | 1,170 | 4.77 | 60,103 | 791 | 5.26 | ||||||||||||||||||
Home equity
|
14,207 | 127 | 3.62 | 10,531 | 96 | 3.70 | ||||||||||||||||||
Consumer
|
545 | 13 | 9.32 | 66 | 2 | 10.78 | ||||||||||||||||||
Total loans
|
645,712 | 7,429 | 4.60 | 528,000 | 6,303 | 4.77 | ||||||||||||||||||
Federal Home Loan Bank stock
|
4,834 | 18 | 1.50 | 4,450 | 4 | 0.36 | ||||||||||||||||||
Total earning assets
|
731,027 | $ | 7,970 | 4.36 | % | 593,251 | $ | 6,768 | 4.56 | % | ||||||||||||||
Other assets
|
38,273 | 13,590 | ||||||||||||||||||||||
Total assets
|
$ | 769,300 | $ | 606,841 | ||||||||||||||||||||
Liabilities and shareholders' equity:
|
||||||||||||||||||||||||
Deposits:
|
||||||||||||||||||||||||
Noninterest-bearing
|
$ | 123,232 | $ | - | - | % | $ | 78,457 | $ | - | - | % | ||||||||||||
NOW
|
52,596 | 13 | 0.10 | 33,542 | 12 | 0.14 | ||||||||||||||||||
Money market
|
170,901 | 180 | 0.43 | 95,315 | 91 | 0.39 | ||||||||||||||||||
Savings
|
107,971 | 82 | 0.31 | 132,599 | 154 | 0.47 | ||||||||||||||||||
Time
|
183,664 | 347 | 0.77 | 121,821 | 182 | 0.61 | ||||||||||||||||||
Total deposits
|
638,364 | 622 | 0.40 | 461,734 | 439 | 0.39 | ||||||||||||||||||
Federal Home Loan Bank advances
|
49,733 | 93 | 0.76 | 79,989 | 152 | 0.77 | ||||||||||||||||||
Total funding liabilities
|
688,097 | $ | 715 | 0.42 | % | 541,723 | $ | 591 | 0.44 | % | ||||||||||||||
Other liabilities
|
10,887 | 5,831 | ||||||||||||||||||||||
Shareholders' equity
|
70,316 | 59,287 | ||||||||||||||||||||||
Total liabilities and shareholders' equity
|
$ | 769,300 | $ | 606,841 | ||||||||||||||||||||
Net interest income (4)
|
$ | 7,255 | $ | 6,177 | ||||||||||||||||||||
Interest rate spread
|
3.94 | % | 4.12 | % | ||||||||||||||||||||
Net interest margin (5)
|
3.97 | % | 4.16 | % |
(1)
|
Average balances and yields for securities are based on amortized cost.
|
(2)
|
Average balances and yields for loans exclude nonperforming loans.
|
(3)
|
Includes commercial and residential real estate construction.
|
(4)
|
The adjustment for securities and loans taxable equivalency amounted to $109 thousand and $92 thousand, respectively, for the three months ended March 31, 2014 and 2013.
|
(5)
|
Annualized net interest income as a percentage of earning assets.
|
40 |
Three Months Ended
|
||||||||||||
March 31, 2014 vs 2013
|
||||||||||||
Increase (Decrease)
|
||||||||||||
(In thousands)
|
Volume
|
Rate
|
Total
|
|||||||||
Interest and dividend income:
|
||||||||||||
Cash and Fed funds sold
|
$ | 11 | $ | 1 | $ | 12 | ||||||
Securities
|
41 | 9 | 50 | |||||||||
Loans:
|
||||||||||||
Commercial real estate
|
608 | (15 | ) | 593 | ||||||||
Residential real estate
|
114 | (124 | ) | (10 | ) | |||||||
Construction
|
176 | (54 | ) | 122 | ||||||||
Commercial business
|
459 | (80 | ) | 379 | ||||||||
Home equity
|
33 | (2 | ) | 31 | ||||||||
Consumer
|
11 | - | 11 | |||||||||
Total loans
|
1,401 | (275 | ) | 1,126 | ||||||||
Federal Home Loan Bank stock
|
1 | 13 | 14 | |||||||||
Total change in interest and dividend income
|
1,454 | (252 | ) | 1,202 | ||||||||
Interest expense:
|
||||||||||||
Deposits:
|
||||||||||||
NOW
|
5 | (4 | ) | 1 | ||||||||
Money market
|
79 | 10 | 89 | |||||||||
Savings
|
(25 | ) | (47 | ) | (72 | ) | ||||||
Time
|
109 | 56 | 165 | |||||||||
Total deposits
|
168 | 15 | 183 | |||||||||
Federal Home Loan Bank advances
|
(56 | ) | (3 | ) | (59 | ) | ||||||
Total change in interest expense
|
112 | 12 | 124 | |||||||||
Change in net interest income
|
$ | 1,342 | $ | (264 | ) | $ | 1,078 |
41 |
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Dollars in thousands)
|
2014
|
2013
|
$ | % | ||||||||||||
Service charges and fees
|
$ | 132 | $ | 101 | $ | 31 | 31 | % | ||||||||
Gains and fees from sales and referrals of loans
|
428 | 8 | 420 | 5,250 | ||||||||||||
Bank owned life insurance
|
85 | - | 85 | 100 | ||||||||||||
Gain on sale of foreclosed real estate
|
- | 71 | (71 | ) | 100 | |||||||||||
Other
|
124 | 104 | 20 | 19 | ||||||||||||
Total noninterest income
|
$ | 769 | $ | 284 | $ | 485 | 171 | % |
Three Months Ended
|
||||||||||||||||
March 31,
|
Change
|
|||||||||||||||
(Dollars in thousands)
|
2014
|
2013
|
$ | % | ||||||||||||
Salaries and employee benefits
|
$ | 3,337 | $ | 2,492 | $ | 845 | 34 | % | ||||||||
Occupancy and equipment
|
1,068 | 772 | 296 | 38 | ||||||||||||
Professional services
|
369 | 369 | - | - | ||||||||||||
Data Processing
|
337 | 256 | 81 | 32 | ||||||||||||
Marketing
|
110 | 128 | (18 | ) | (14 | ) | ||||||||||
Merger and acquisition related expenses
|
141 | - | 141 | 100 | ||||||||||||
FDIC insurance
|
118 | 130 | (12 | ) | (9 | ) | ||||||||||
Director fees
|
138 | 139 | (1 | ) | (1 | ) | ||||||||||
Foreclosed real estate
|
14 | - | 14 | 100 | ||||||||||||
Amortization of intangibles
|
27 | - | 27 | 100 | ||||||||||||
Other
|
382 | 312 | 70 | 22 | ||||||||||||
Total noninterest expense
|
$ | 6,041 | $ | 4,598 | $ | 1,443 | 31 | % |
42 |
(In thousands)
|
March 31, 2014
|
December 31, 2013
|
Change
|
|||||||||||||||||||||||||
Originated
|
Acquired
|
Total
|
Originated
|
Acquired
|
Total
|
Total
|
||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||||||
Residential
|
$ | 158,905 | $ | - | $ | 158,905 | $ | 155,874 | $ | - | $ | 155,874 | $ | 3,031 | ||||||||||||||
Commercial
|
323,849 | 8,158 | 332,007 | 305,823 | 9,939 | 315,762 | 16,245 | |||||||||||||||||||||
Construction
|
44,158 | 4,838 | 48,996 | 44,187 | 7,308 | 51,495 | (2,499 | ) | ||||||||||||||||||||
Home equity
|
9,734 | 3,815 | 13,549 | 9,625 | 3,872 | 13,497 | 52 | |||||||||||||||||||||
536,646 | 16,811 | 553,457 | 515,509 | 21,119 | 536,628 | 16,829 | ||||||||||||||||||||||
Commercial business
|
100,701 | 2,453 | 103,154 | 92,173 | 2,374 | 94,547 | 8,607 | |||||||||||||||||||||
Consumer
|
67 | 483 | 550 | 225 | 612 | 837 | (287 | ) | ||||||||||||||||||||
Total loans
|
$ | 637,414 | $ | 19,747 | $ | 657,161 | $ | 607,907 | $ | 24,105 | $ | 632,012 | $ | 25,149 |
43 |
At March 31, 2014
|
At December 31, 2013
|
|||||||||||||||||||||||
(In thousands)
|
Originated
|
Acquired
|
Total
|
Originated
|
Acquired
|
Total
|
||||||||||||||||||
Nonaccrual loans:
|
||||||||||||||||||||||||
Real estate loans:
|
||||||||||||||||||||||||
Residential
|
$ | 984 | $ | - | $ | 984 | $ | 1,003 | $ | - | $ | 1,003 | ||||||||||||
Commercial
|
1,117 | - | 1,117 | - | - | - | ||||||||||||||||||
Construction
|
- | - | - | - | - | - | ||||||||||||||||||
Home equity
|
- | - | - | - | - | - | ||||||||||||||||||
Commercial business
|
- | - | - | - | - | - | ||||||||||||||||||
Consumer
|
- | - | - | - | - | - | ||||||||||||||||||
Total non accrual loans
|
$ | 2,101 | $ | - | $ | 2,101 | $ | 1,003 | $ | - | $ | 1,003 | ||||||||||||
Property acquired through foreclosure or repossession, net
|
- | 829 | 829 | - | 829 | 829 | ||||||||||||||||||
Total nonperforming assets
|
$ | 2,101 | $ | 829 | $ | 2,930 | $ | 1,003 | $ | 829 | $ | 1,832 | ||||||||||||
Nonperforming assets to total assets
|
0.26 | % | 0.10 | % | 0.36 | % | 0.13 | % | 0.11 | % | 0.23 | % | ||||||||||||
Nonaccrual loans to total loans
|
0.33 | % | 0.00 | % | 0.32 | % | 0.16 | % | 0.00 | % | 0.16 | % | ||||||||||||
Total past due loans to total loans
|
0.35 | % | 18.01 | % | 0.88 | % | 0.16 | % | 15.02 | % | 0.73 | % | ||||||||||||
Accruing loans 90 days or more past due
|
$ | - | $ | 1,747 | $ | 1,747 | $ | - | $ | 3,620 | $ | 3,620 |
44 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
(Dollars in thousands)
|
2014
|
2013
|
||||||
Balance at beginning of period
|
$ | 8,382 | $ | 7,941 | ||||
Charge-offs:
|
||||||||
Consumer
|
- | (2 | ) | |||||
Total charge-offs
|
- | (2 | ) | |||||
Recoveries:
|
||||||||
Consumer
|
10 | 5 | ||||||
Total recoveries
|
10 | 5 | ||||||
Net recoveries (charge-offs)
|
10 | 3 | ||||||
Provision charged to earnings
|
211 | 190 | ||||||
Balance at end of period
|
$ | 8,603 | $ | 8,134 | ||||
Net recoveries (charge-offs) to average loans
|
0.01 | % | 0.00 | % | ||||
Allowance for loan losses to total loans
|
1.31 | % | 1.46 | % |
At March 31,
|
At December 31,
|
|||||||||||||||
2014
|
2013
|
|||||||||||||||
(Dollars in thousands)
|
Amount
|
Percent of
Loan
Portfolio
|
Amount
|
Percent of
Loan
Portfolio
|
||||||||||||
Residential real estate
|
$ | 1,298 | 24.18 | % | $ | 1,310 | 24.66 | % | ||||||||
Commercial real estate
|
3,767 | 50.52 | 3,616 | 50.08 | ||||||||||||
Construction
|
1,012 | 7.46 | 1,032 | 8.16 | ||||||||||||
Home equity
|
192 | 2.06 | 190 | 2.20 | ||||||||||||
Commercial business
|
2,331 | 15.70 | 2,225 | 14.80 | ||||||||||||
Consumer
|
3 | 0.08 | 9 | 0.10 | ||||||||||||
Unallocated
|
- | - | - | - | ||||||||||||
Total allowance for loan losses
|
$ | 8,603 | 100.00 | % | $ | 8,382 | 100.00 | % |
45 |
46 |
Parallel Ramp
|
Estimated Percent Change
|
|||||||
in Net Interest Income
|
||||||||
March 31,
|
December 31,
|
|||||||
Rate Changes (basis points)
|
2014
|
2013
|
||||||
-100
|
(0.82 | )% | (0.73 | )% | ||||
+200
|
(4.40 | ) | (3.63 | ) |
Parallel Shock
|
Estimated Percent Change
|
|||||||
in Net Interest Income
|
||||||||
March 31,
|
December 31,
|
|||||||
Rate Changes (basis points)
|
2014
|
2013
|
||||||
-100
|
(2.13 | )% | (1.97 | )% | ||||
+100
|
(4.25 | ) | (3.18 | ) | ||||
+200
|
(7.20 | ) | (5.93 | ) | ||||
+300
|
(11.57 | ) | (10.20 | ) |
47 |
Parallel Shock
|
Estimated Percent Change
|
|||||||
in Economic Value of Equity
|
||||||||
March 31,
|
December 31,
|
|||||||
Rate Changes (basis points)
|
2014
|
2013
|
||||||
-100
|
(4.00 | )% | (4.30 | )% | ||||
+100
|
(8.20 | ) | (9.30 | ) | ||||
+200
|
(15.90 | ) | (20.10 | ) | ||||
+300
|
(22.70 | ) | (29.20 | ) |
48 |
(a)
|
Evaluation of disclosure controls and procedures:
|
(b)
|
Change in internal controls
|
49 |
31.1
|
Certification of Peyton R. Patterson pursuant to Rule 13a-14(a)
|
|
31.2
|
Certification of Ernest J. Verrico, Sr. pursuant to Rule 13a-14(a)
|
|
32
|
Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
101
|
The following materials from Bankwell Financial Group, Inc.’s Quarterly Report on Form 10-Q for the period ended March 31, 2014, formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Financial Condition; (ii) Consolidated Statement of Income; (iii) Consolidated Statements of Comprehensive Income; (iv) Consolidated Statements of Shareholders’ Equity; (v) Consolidated Statements of Cash Flows; and (vi) Notes to Consolidated Financial Statements.
|
50 |
Bankwell Financial Group, Inc.
|
|||
Date: June 4, 2014
|
/s/ Peyton R. Patterson
|
||
Peyton R. Patterson
|
|||
President and Chief Executive Officer
|
Date: June 4, 2014
|
/s/ Ernest J. Verrico, Sr.
|
||
Ernest J. Verrico, Sr.
|
|||
Executive Vice President and Chief
|
|||
Financial Officer
|
51 |