Key Highlights

  • Diluted EPS of USD 1.58 beat the consensus estimate of USD 1.44 and rose from USD 1.26 a year earlier.
  • Revenue of USD 35.33 million topped the consensus estimate of USD 33.33 million, up from USD 28.48 million last year.
  • Net interest margin widened 13 basis points to 3.71%, and net interest income climbed to USD 31.4 million.
  • Nonperforming assets fell to 0.20% of total assets from 0.46% last quarter, with USD 1.4 million of net recoveries.

Bankwell Financial Group, Inc. (NASDAQ:BWFG) reported record third quarter 2026 GAAP net income of USD 12.7 million, or USD 1.58 per diluted share, above the consensus estimate of USD 1.44. The result compared with USD 1.52 per share in the second quarter and USD 1.26 a year earlier. Revenue, defined as net interest income plus non-interest income, was USD 35.33 million against a consensus estimate of USD 33.33 million.

The results absorbed USD 3.0 million of core conversion costs, mainly contract termination fees. Excluding them, non-GAAP operating net income was USD 15.0 million, or USD 1.86 per diluted share, and the operating efficiency ratio was 47.5% versus 56.1% as reported.

Margin, SBA Income and Costs

Net interest income rose to USD 31.4 million from USD 29.5 million in the linked quarter and USD 26.0 million a year earlier. Net interest margin expanded to 3.71% from 3.58%, as earning asset yields rose 8 basis points to 6.34% while funding costs were flat. Total non-interest income was USD 4.0 million, of which SBA loan sale gains were USD 2.8 million. Year to date SBA gains reached USD 7.6 million versus USD 2.9 million in 2025, and SBA originations were USD 30.1 million in the quarter.

Non-interest expense rose to USD 19.8 million from USD 15.3 million, reflecting the conversion costs and higher salaries and benefits. Pre-tax, pre-provision net revenue was USD 15.5 million, down 11.6% from USD 17.5 million in the second quarter. Return on average assets was 1.45% as reported and 1.71% on an operating basis.

Asset Quality, Capital and Guidance

Nonperforming loans fell USD 8.7 million to USD 7.1 million, mainly because of a note sale of a suburban retail commercial real estate loan in Westchester County, New York. The allowance for credit losses on loans was USD 30.7 million, or 1.03% of loans, covering 430.65% of nonperforming loans. Tangible common equity to tangible assets rose to 9.33%, and fully diluted tangible book value per share increased to USD 41.59. Gross loans grew USD 22.9 million in the quarter and 5.0% year to date, to USD 3.0 billion.

The company updated its 2026 guidance, now projecting net interest income of USD 119 million to USD 121 million and non-interest income of USD 14 million to USD 15 million. It maintained loan growth of 5% to 7% and non-interest expense of USD 65 million to USD 67 million excluding conversion costs. The board declared a USD 0.20 quarterly dividend payable November 20, 2026 to holders of record on November 9.

Items to Follow in the Next Report

The core conversion is the main open item, with additional conversion related costs anticipated in future quarters even though the third quarter termination fees were described as non-recurring. Other measures include the 3.71% net interest margin, the USD 65 million to USD 67 million expense range excluding conversion costs, and the 0.20% nonperforming asset ratio. SBA originations, at USD 90.2 million year to date, and the USD 0.20 dividend payment on November 20 are the dated items.