BANKWELL FINANCIAL GROUP REPORTS RECORD LOAN GROWTH FOR THE FOURTH QUARTER AND FULL YEAR 2022; DECLARES FIRST QUARTER DIVIDEND

New Canaan, CT – January 25, 2023 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $8.0 million, or $1.04 per share for the fourth quarter of 2022, versus $7.8 million, or $0.99 per share, for the same period in 2021. For the year ended 2022, net income totaled $37.4 million, or $4.79 per share, versus $26.6 million, or $3.36 per share, for the same period in 2021.

The Company's Board of Directors declared a $0.20 per share cash dividend, payable February 23, 2023 to shareholders of record on February 13, 2023.

We recommend reading this earnings release in conjunction with the Fourth Quarter 2022 Investor Presentation, located at http://investor.mybankwell.com/Presentations and included as an exhibit to our January 25, 2023 Current Report on Form 8-K.

Notes Bankwell Financial Group President and CEO, Christopher R. Gruseke:

"I commend my colleagues at Bankwell for truly exceptional performance in 2022. Our Company posted record results, generating a 16.7% Return on Average Equity and a 1.44% Return on Average Assets. Loan balances grew by over 40%, and we continue to diversify our lending book and bring new commercial relationships to the Bank.

"This year’s growth has positioned the Company well for the expected continued tightening actions by the Federal Reserve. The average yield of loans originated during 2022 was 6.24% while the average yield on fourth quarter originations was 7.23%.

"The historic actions of the Federal Reserve this year are yet to be played out, but based on a peak Federal Funds rate implied by financial markets, and our planning for no Fed rate cuts in 2023, we re-affirm our expectations for 2023’s net interest income to decline by approximately 10% versus 2022.

"Tangible Book Value growth is imperative for value creation to accrue to our shareholders. We are pleased to acknowledge that the Company’s Tangible Book Value per share has compounded at a rate of almost 18% since December 31, 2020.

We are proud of the work we have accomplished in transforming our Bank’s business model in recent years, and thank our customers and clients who have made this success possible."

Fourth Quarter 2022 Highlights:

•Total gross loans were $2.7 billion, growing $780.6 million, or 41.2%, compared to December 31, 2021.

•Average yield on 2022 funded loans was 6.24% compared to 4.56% for 2021.

•Return on average assets was 1.07% for the quarter ended December 31, 2022 and 1.44% for the year ended December 31, 2022.

•Return on average shareholders' equity was 13.38% for the quarter ended December 31, 2022 and 16.72% for the year ended December 31, 2022.

•The net interest margin was 3.70% for the quarter ended December 31, 2022 and 3.78% for the year ended December 31, 2022.

•The efficiency ratio was 45.6% for the quarter ended December 31, 2022 and 45.4% for the year ended December 31, 2022.

•Investment securities totaled $121.6 million and represent 3.7% of total assets.

•Fully diluted tangible book value per share rose to $30.51 compared to $25.55 at December 31, 2021.

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Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended December 31, 2022 were $27.3 million, versus $19.8 million for the quarter ended December 31, 2021. Revenues for the year ended December 31, 2022 were $97.8 million, versus $73.5 million for the year ended December 31, 2021. The increase in revenues was primarily attributable to an increase in interest and fees on loans due to record loan growth and higher overall loan yields1 for the quarter and year ended December 31, 2022. The increase in revenues was partially offset by the following: an increase in interest expense; a decrease in noninterest income driven by a reduction in loans sales and the absence of rental income in 2022 due to the disposition of the Company's former headquarters building in the fourth quarter of 2021. Revenues in 2021 also included a one-time federal payroll tax credit for COVID-19 of $0.9 million recognized in the quarter ended March 31, 2021 which did not repeat in 2022.

Net income for the quarter ended December 31, 2022 was $8.0 million, versus $7.8 million for the quarter ended December 31, 2021. Net income for the year ended December 31, 2022 was $37.4 million, versus $26.6 million for the year ended December 31, 2021. The increase in net income was a direct result of the aforementioned increases in revenues. In addition, the increase in net income was partially offset by an increase in the provision for loan losses due to loan growth and an increase in noninterest expense for the quarter and year ended December 31, 2022.

Basic and diluted earnings per share were $1.04 and $1.04, respectively, for the quarter ended December 31, 2022 compared to basic and diluted earnings per share of $1.00 and $0.99, respectively, for the quarter ended December 31, 2021. Basic and diluted earnings per share were $4.84 and $4.79, respectively, for the year ended December 31, 2022 compared to basic and diluted earnings per share of $3.38 and $3.36, respectively, for the year ended December 31, 2021.

The net interest margin (fully taxable equivalent basis) for the quarters ended December 31, 2022 and December 31, 2021 was 3.70% and 3.43%, respectively. The net interest margin (fully taxable equivalent basis) for the year ended December 31, 2022 and December 31, 2021 was 3.78% and 3.17%, respectively. The increase in the net interest margin was due to an increase in overall loan yields, aided in part by elevated loan prepayment fees, partially offset by an increase in funding costs.

Provision for Loan Losses

Provision for loan losses was $4.3 million and $5.4 million for the quarter and year ended December 31, 2022, respectively, bringing the total allowance for loan losses to $22.4 million as of December 31, 2022. Provision for loan losses was $0.1 million for the quarter ended December 31, 2021 and a credit for loan losses of $0.1 million for the year ended December 31, 2021. The increase in the Provision for loan losses for both the quarter and year ended December 31, 2022 was attributable to loan growth.

On January 1, 2023, the Company adopted ASC 326 Financial Instruments - Credit Losses ("CECL"). Upon adoption of CECL, the Company will record a one-time cumulative effect, pre-tax adjustment range of $3.4 million to $4.2 million to the Allowance for loan losses and a corresponding net of tax adjustment to beginning retained earnings. This impact will be reflected in the Company's first quarter 2023 financial statements.

Financial Condition

Assets totaled $3.25 billion at December 31, 2022, compared to assets of $2.46 billion at December 31, 2021. The increase in assets was primarily due to loan growth. Gross loans totaled $2.7 billion at December 31, 2022, an increase of $780.6 million or 41.2% compared to December 31, 2021. Deposits totaled $2.8 billion at December 31, 2022, compared to deposits of $2.1 billion at December 31, 2021.

1 - The increase in overall loan yields were 122 bps and 68 bps, respectively, for the quarter and year ended December 31, 2022.

2

Capital

Shareholders’ equity totaled $238.5 million as of December 31, 2022, an increase of $36.5 million compared to December 31, 2021, primarily a result of (i) net income of $37.4 million for the year ended December 31, 2022 and (ii) an $8.4 million favorable impact to accumulated other comprehensive income driven by fair value marks related to hedge positions involving interest rate swaps of $16.8 million, partially offset by fair value marks on the Company's investment portfolio of $8.4 million. The Company's interest rate swaps are used to hedge interest rate risk. The increase in Shareholders’ equity was partially offset by dividends paid of $6.2 million and common stock repurchases of $5.5 million.

About Bankwell Financial Group

Bankwell is a commercial bank that serves the banking needs of residents and businesses throughout Fairfield and New Haven Counties, Connecticut. For more information about this press release, interested parties may contact Christopher R. Gruseke, President and Chief Executive Officer or Courtney E. Sacchetti, Executive Vice President and Chief Financial Officer of Bankwell Financial Group at (203) 652-0166.

For more information, visit www.mybankwell.com.

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This press release may contain certain forward-looking statements about the Company. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. They often include words such as “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” Forward-looking statements, by their nature, are subject to risks and uncertainties. Certain factors that could cause actual results to differ materially from expected results include increased competitive pressures, changes in the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged. The COVID-19 pandemic continues to affect Bankwell Financial Group, its customers, counterparties, employees, and third party service providers, and the ultimate extent of the impacts on its business, financial position, results of operations, liquidity, and prospects is unknown.

Non-GAAP Financial Measures

In addition to evaluating the Company's financial performance in accordance with U.S. generally accepted accounting principles ("GAAP"), management may evaluate certain non-GAAP financial measures, such as the efficiency ratio. A computation and reconciliation of certain non-GAAP financial measures used for these purposes is contained in the accompanying Reconciliation of GAAP to Non-GAAP Measures tables. We believe that providing certain non-GAAP financial measures provides investors with information useful in understanding our financial performance, our performance trends and financial position. For example, the Company believes that the efficiency ratio is useful in the assessment of financial performance, including noninterest expense control. The Company believes that tangible common equity, tangible assets, tangible common equity to tangible assets, tangible common shareholders' equity, fully diluted tangible book value per common share, adjusted non interest expense, operating revenue, efficiency ratio, average tangible common equity, annualized return on average tangible common equity, return on average assets, return on average shareholders' equity, and the dividend payout ratio are useful to evaluate the relative strength of the Company's performance and capital position. We utilize these measures for internal planning and forecasting purposes. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and results, and we strongly encourage investors to review our consolidated financial statements in their entirety and not to rely on any single financial measure.

4

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS (unaudited)

(Dollars in thousands)

	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
ASSETS
Cash and due from banks	$	344,925	$	212,175	$	149,522	$	280,471	$	291,598
Federal funds sold	10,754		10,947		21,505		19,022		53,084
Cash and cash equivalents	355,679		223,122		171,027		299,493		344,682
Investment securities
Marketable equity securities, at fair value	1,988		1,973		2,126		2,090		2,168
Available for sale investment securities, at fair value	103,663		95,095		94,907		98,733		90,198
Held to maturity investment securities, at amortized cost	15,983		16,027		15,917		15,979		16,043
Total investment securities	121,634		113,095		112,950		116,802		108,409
Loans receivable (net of allowance for loan losses of $22,431, $18,167, $15,773, $17,141 and $16,902 at December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022 and December 31, 2021, respectively)	2,646,384		2,263,432		2,036,626		1,964,567		1,875,167
Accrued interest receivable	13,070		9,552		8,047		7,733		7,512
Federal Home Loan Bank stock, at cost	5,216		5,039		5,064		2,870		2,814
Premises and equipment, net	27,199		27,510		27,768		25,661		25,588
Bank-owned life insurance	50,243		49,970		49,699		49,434		49,174
Goodwill	2,589		2,589		2,589		2,589		2,589
Deferred income taxes, net	7,422		5,952		4,768		6,879		7,621
Other assets	23,013		22,734		17,014		20,849		32,708
Total assets	$	3,252,449	$	2,722,995	$	2,435,552	$	2,496,877	$	2,456,264
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits	$	404,559	$	380,365	$	372,584	$	412,985	$	398,956
Interest bearing deposits	2,396,259		1,906,337		1,660,941		1,753,219		1,725,042
Total deposits	2,800,818		2,286,702		2,033,525		2,166,204		2,123,998
Advances from the Federal Home Loan Bank	90,000		90,000		105,000		50,000		50,000
Subordinated debentures	68,959		68,897		34,500		34,471		34,441
Accrued expenses and other liabilities	54,203		45,896		37,060		35,982		45,838
Total liabilities	3,013,980		2,491,495		2,210,085		2,286,657		2,254,277
Shareholders’ equity
Common stock, no par value	115,018		114,548		115,599		114,882		118,148
Retained earnings	123,640		117,152		109,523		99,047		92,400
Accumulated other comprehensive (loss) income	(189)		(200)		345		(3,709)		(8,561)
Total shareholders’ equity	238,469		231,500		225,467		210,220		201,987
Total liabilities and shareholders’ equity	$	3,252,449	$	2,722,995	$	2,435,552	$	2,496,877	$	2,456,264

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BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Dollars in thousands, except share data)

	For the Quarter Ended										For the Year Ended
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Interest and dividend income
Interest and fees on loans	$	36,545	$	28,128	$	25,141	$	21,428	$	21,081	$	111,242	$	78,042
Interest and dividends on securities	898		811		774		720		722		3,203		2,958
Interest on cash and cash equivalents	2,150		747		449		154		90		3,500		376
Total interest and dividend income	39,593		29,686		26,364		22,302		21,893		117,945		81,376
Interest expense
Interest expense on deposits	11,083		4,092		1,983		2,206		2,198		19,364		10,443
Interest expense on borrowings	1,701		993		558		586		767		3,838		3,047
Total interest expense	12,784		5,085		2,541		2,792		2,965		23,202		13,490
Net interest income	26,809		24,601		23,823		19,510		18,928		94,743		67,886
Provision (credit) for loan losses	4,272		2,381		(1,445)		229		125		5,437		(57)
Net interest income after provision (credit) for loan losses	22,537		22,220		25,268		19,281		18,803		89,306		67,943
Noninterest income
Bank owned life insurance	273		271		265		260		270		1,069		1,023
Service charges and fees	343		240		249		240		257		1,072		872
Gains (losses) and fees from sales of loans	12		(15)		608		631		441		1,236		2,692
Other	(100)		(94)		30		(173)		(143)		(337)		1,070
Total noninterest income	528		402		1,152		958		825		3,040		5,657
Noninterest expense
Salaries and employee benefits	5,988		5,876		5,433		4,940		4,806		22,237		18,317
Occupancy and equipment	1,919		2,035		2,193		2,150		2,411		8,297		10,682
Professional services	912		994		1,000		981		628		3,887		2,260
Data processing	663		626		689		654		432		2,632		2,409
Director fees	378		325		339		352		335		1,394		1,303
FDIC insurance	898		255		262		223		231		1,638		1,232
Marketing	112		102		107		45		87		366		404
Other	1,601		818		913		580		749		3,912		3,132
Total noninterest expense	12,471		11,031		10,936		9,925		9,679		44,363		39,739
Income before income tax expense	10,594		11,591		15,484		10,314		9,949		47,983		33,861
Income tax expense	2,573		2,417		3,462		2,102		2,135		10,554		7,275
Net income	$	8,021	$	9,174	$	12,022	$	8,212	$	7,814	$	37,429	$	26,586
Earnings Per Common Share:
Basic	$	1.04	$	1.19	$	1.56	$	1.05	$	1.00	$	4.84	$	3.38
Diluted	$	1.04	$	1.18	$	1.55	$	1.04	$	0.99	$	4.79	$	3.36
Weighted Average Common Shares Outstanding:
Basic	7,507,540		7,553,718		7,556,645		7,637,077		7,660,307		7,563,363		7,706,407
Diluted	7,563,116		7,612,421		7,614,243		7,719,405		7,726,420		7,640,218		7,761,811
Dividends per common share	$	0.20	$	0.20	$	0.20	$	0.20	$	0.18	$	0.80	$	0.64

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BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

	For the Quarter Ended										For the Year Ended
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021		December 31, 2022		December 31, 2021
Performance ratios:
Return on average assets	1.07	%	1.47	%	1.96	%	1.35	%	1.32	%	1.44	%	1.17	%
Return on average shareholders' equity	13.38	%	15.73	%	22.09	%	16.05	%	15.44	%	16.72	%	13.86	%
Return on average tangible common equity	13.52	%	15.91	%	22.36	%	16.25	%	15.65	%	16.91	%	14.05	%
Net interest margin	3.70	%	4.12	%	4.01	%	3.30	%	3.43	%	3.78	%	3.17	%
Efficiency ratio(1)	45.6	%	44.1	%	43.8	%	48.5	%	48.8	%	45.4	%	53.9	%
Net loan charge-offs as a % of average loans	—	%	—	%	—	%	—	%	—	%	—	%	0.23	%
Dividend payout ratio(2)	19.23	%	16.95	%	12.90	%	19.23	%	18.18	%	16.70	%	19.05	%

(1)Efficiency ratio is defined as noninterest expense, less other real estate owned expenses and amortization of intangible assets, divided by our operating revenue, which is equal to net interest income plus noninterest income excluding gains and losses on sales of securities and gains and losses on other real estate owned. In our judgment, the adjustments made to operating revenue allow investors and analysts to better assess our operating expenses in relation to our core operating revenue by removing the volatility that is associated with certain one-time items and other discrete items that are unrelated to our core business.

(2)The dividend payout ratio is calculated by dividing dividends per share by earnings per share.

	As of
	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)	10.28		%	11.42		%	11.10		%	11.20		%	11.18		%
Total Capital to Risk-Weighted Assets(1)	11.07		%	12.16		%	11.80		%	12.00		%	12.00		%
Tier I Capital to Risk-Weighted Assets(1)	10.28		%	11.42		%	11.10		%	11.20		%	11.18		%
Tier I Capital to Average Assets(1)	9.88		%	11.31		%	10.15		%	9.80		%	9.94		%
Tangible common equity to tangible assets	7.26		%	8.41		%	9.16		%	8.32		%	8.13		%
Fully diluted tangible book value per common share	$	30.51		$	29.68		$	28.75		$	26.75		$	25.55

(1)Represents Bank ratios. Current period capital ratios are preliminary subject to finalization of the FDIC Call Report.

7

BANKWELL FINANCIAL GROUP, INC.

ASSET QUALITY (unaudited)

(Dollars in thousands)

	For the Quarter Ended
	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
Allowance for loan losses:
Balance at beginning of period	$	18,167	$	15,773	$	17,141	$	16,902	$	16,803
Charge-offs:
Commercial business	—		—		—		—		(26)
Consumer	(11)		(8)		—		(4)		(5)
Total charge-offs	(11)		(8)		—		(4)		(31)
Recoveries:
Commercial real estate	—		—		77		—		—
Commercial business	—		21		—		13		2
Consumer	3		—		—		1		3
Total recoveries	3		21		77		14		5
Net loan (charge-offs) recoveries	(8)		13		77		10		(26)
Provision (credit) for loan losses	4,272		2,381		(1,445)		229		125
Balance at end of period	$	22,431	$	18,167	$	15,773	$	17,141	$	16,902

	As of
	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
Asset quality:
Nonaccrual loans
Residential real estate	$	2,152		$	2,137		$	2,161		$	2,181		$	2,380
Commercial real estate	2,781			2,894			2,955			3,365			3,482
Commercial business	2,126			2,380			787			817			1,728
Construction	9,382			9,382			9,382			9,382			8,997
Total nonaccrual loans	16,441			16,793			15,285			15,745			16,587
Other real estate owned	—			—			—			—			—
Total nonperforming assets	$	16,441		$	16,793		$	15,285		$	15,745		$	16,587
Nonperforming loans as a % of total loans	0.61		%	0.73		%	0.74		%	0.79		%	0.88		%
Nonperforming assets as a % of total assets	0.51		%	0.62		%	0.63		%	0.63		%	0.68		%
Allowance for loan losses as a % of total loans	0.84		%	0.79		%	0.77		%	0.86		%	0.89		%
Allowance for loan losses as a % of nonperforming loans	136.43		%	108.18		%	103.19		%	108.87		%	101.90		%
Total past due loans to total loans	0.60		%	0.78		%	1.40		%	0.85		%	1.72		%

Total nonaccrual loans decreased $0.1 million to $16.4 million as of December 31, 2022 when compared to December 31, 2021. Nonperforming assets as a percentage of total assets decreased to 0.51% at December 31, 2022, down from 0.68% at December 31, 2021. The allowance for loan losses at December 31, 2022 was $22.4 million, representing 0.84% of total loans.

Past due loans decreased to $16.1 million, or 0.60% of total loans, as of December 31, 2022, compared to $32.6 million, or 1.72% of total loans, as of December 31, 2021.

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BANKWELL FINANCIAL GROUP, INC.

LOAN & DEPOSIT PORTFOLIO (unaudited)

(Dollars in thousands)

Period End Loan Composition	December 31, 2022		September 30, 2022		December 31, 2021		Current QTD % Change		YTD % Change
Residential Real Estate	$	60,588	$	61,664	$	79,987	(1.7)	%	(24.3)	%
Commercial Real Estate(1)	1,921,252		1,647,928		1,356,709		16.6		41.6
Construction	155,198		117,355		98,341		32.2		57.8
Total Real Estate Loans	2,137,038		1,826,947		1,535,037		17.0		39.2
Commercial Business	520,447		443,288		350,975		17.4		48.3
Consumer	17,963		16,558		8,869		8.5		102.5
Total Loans	$	2,675,448	$	2,286,793	$	1,894,881	17.0	%	41.2	%
(1) Includes owner occupied commercial real estate.

Gross loans totaled $2.7 billion at December 31, 2022, an increase of $780.6 million or 41.2% compared to December 31, 2021.

Period End Deposit Composition	December 31, 2022		September 30, 2022		December 31, 2021		Current QTD % Change		YTD % Change
Noninterest bearing demand	$	404,559	$	380,365	$	398,956	6.4	%	1.4	%
NOW	104,057		115,200		119,479		(9.7)		(12.9)
Money Market	913,868		836,564		954,674		9.2		(4.3)
Savings	151,944		183,576		193,631		(17.2)		(21.5)
Time	1,226,390		770,997		457,258		59.1		168.2
Total Deposits	$	2,800,818	$	2,286,702	$	2,123,998	22.5	%	31.9	%

Total deposits were $2.8 billion at December 31, 2022, compared to $2.1 billion at December 31, 2021, an increase of $676.8 million, or 31.9%. The increase in deposits is primarily a result of an increase in brokered time deposits to fund the significant loan growth during the second half of 2022, increasing by $727.1 million compared to December 31, 2021.

9

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST INCOME (unaudited)

(Dollars in thousands)

	For the Quarter Ended
Noninterest income	December 31, 2022		September 30, 2022		December 31, 2021		Dec 22 vs. Sep 22 % Change		Dec 22 vs. Dec 21 % Change
Bank owned life insurance	$	273	$	271	$	270	0.7	%	1.1	%
Service charges and fees	343		240		257		42.9		33.5
Gains (losses) and fees from sales of loans	12		(15)		441		180.0		(97.3)
Other	(100)		(94)		(143)		6.4		30.1
Total noninterest income	$	528	$	402	$	825	31.3	%	(36.0)	%

	For the Year Ended
Noninterest income	December 31, 2022		December 31, 2021		% Change
Gains and fees from sales of loans	$	1,236	$	2,692	(54.1)	%
Bank owned life insurance	1,069		1,023		4.5
Service charges and fees	1,072		872		22.9
Other	(337)		1,070		(131.5)
Total noninterest income	$	3,040	$	5,657	(46.3)	%

Noninterest income decreased by $0.3 million to $0.5 million for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Noninterest income decreased by $2.6 million to $3.0 million for the year ended December 31, 2022 compared to the year ended December 31, 2021.

The decrease in noninterest income was driven by a reduction in loan sales for the quarter and year ended December 31, 2022 compared to the same periods in 2021. Noninterest income also declined for the year ended December 31, 2022 due to a one-time federal payroll tax credit for COVID-19 of $0.9 million recognized in the quarter ended March 31, 2021. The decrease in noninterest income was also due to the absence of $0.7 million of rental income in 2022 due to the disposition of the Company's former headquarters building in the fourth quarter of 2021.

10

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST EXPENSE (unaudited)

(Dollars in thousands)

	For the Quarter Ended
Noninterest expense	December 31, 2022		September 30, 2022		December 31, 2021		Dec 22 vs. Sep 22 % Change		Dec 22 vs. Dec 21 % Change
Salaries and employee benefits	$	5,988	$	5,876	$	4,806	1.9	%	24.6	%
Occupancy and equipment	1,919		2,035		2,411		(5.7)		(20.4)
Professional services	912		994		628		(8.2)		45.2
Data processing	663		626		432		5.9		53.5
Director fees	378		325		335		16.3		12.8
FDIC insurance	898		255		231		252.2		288.7
Marketing	112		102		87		9.8		28.7
Other	1,601		818		749		95.7		113.8
Total noninterest expense	$	12,471	$	11,031	$	9,679	13.1	%	28.8	%

	For the Year Ended
Noninterest expense	December 31, 2022		December 31, 2021		% Change
Salaries and employee benefits	$	22,237	$	18,317	21.4	%
Occupancy and equipment	8,297		10,682		(22.3)
Professional services	3,887		2,260		72.0
Data processing	2,632		2,409		9.3
Director fees	1,394		1,303		7.0
FDIC insurance	1,638		1,232		33.0
Marketing	366		404		(9.4)
Other	3,912		3,132		24.9
Total noninterest expense	$	44,363	$	39,739	11.6	%

Noninterest expense increased by $2.8 million to $12.5 million for the quarter ended December 31, 2022 compared to the quarter ended December 31, 2021. Noninterest expense increased by $4.6 million to $44.4 million for the year ended December 31, 2022 compared to the year ended December 31, 2021. The increase in noninterest expense was primarily driven by an increase in salaries and employee benefits expense, professional services expense, FDIC insurance, and customer fraud reimbursement and deposit account fraud within Other. These increases were partially offset by a decrease in occupancy and equipment expense.

Salaries and employee benefits expense totaled $6.0 million for the quarter ended December 31, 2022, an increase of $1.2 million when compared to the same period in 2021. Salaries and employee benefits expense totaled $22.2 million for the year ended December 31, 2022, an increase of $3.9 million when compared to the same period in 2021. The increase in salaries and employee benefits expense was driven by an increase in full time equivalent employees, as well as an increase in variable compensation as a result of the Bank's overall growth and improved performance. Full time equivalent employees totaled 136 at December 31, 2022 compared to 126 for the same period in 2021. The increase in salaries and employee benefits expense was partially offset by an increase in deferred loan costs due to higher loan originations.

11

Professional services expense totaled $0.9 million for the quarter ended December 31, 2022, an increase of $0.3 million when compared to the same period in 2021. Professional services expense totaled $3.9 million for the year ended December 31, 2022, an increase of $1.6 million when compared to the same period in 2021. The increase in professional services expense was primarily driven by consulting fees associated with various projects, including our core system conversion.

FDIC insurance expense totaled $0.9 million for the quarter ended December 31, 2022, an increase of $0.7 million when compared to the same period in 2021. FDIC insurance expense totaled $1.6 million for the year ended December 31, 2022, an increase of $0.4 million when compared to the same period in 2021. The higher FDIC insurance expense is attributed to the overall balance sheet growth and increased use of brokered deposits.

Other expense totaled $1.6 million for the quarter ended December 31, 2022, an increase of $0.9 million when compared to the same period in 2021. Other expense totaled $3.9 million for the year ended December 31, 2022, an increase of $0.8 million. The increase was mainly attributable to four events of customer reimbursed fraud and deposit account fraud recognized in the quarter ended December 31 2022, the largest of which was a $189 thousand customer reimbursement.

Occupancy and equipment expense totaled $1.9 million for the quarter ended December 31, 2022, a decrease of $0.5 million when compared to the same period in 2021. Occupancy and equipment expense totaled $8.3 million for the year ended December 31, 2022, a decrease of $2.4 million when compared to the same period in 2021. The decrease in occupancy and equipment expense was primarily driven by the curtailment of additional cleaning costs associated with precautions taken to prevent the spread of COVID-19 during the year ended December 31, 2021. In addition, the decrease in occupancy and equipment expense was impacted by a reduction in lease expense as a result of the branch closure in New Canaan, which occurred during the third quarter of 2021.

12

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited)

(Dollars in thousands, except share data)

	As of
Computation of Tangible Common Equity to Tangible Assets	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021
Total Equity	$	238,469		$	231,500		$	225,467		$	210,220		$	201,987
Less:
Goodwill	2,589			2,589			2,589			2,589			2,589
Other intangibles	—			—			—			—			—
Tangible Common Equity	$	235,880		$	228,911		$	222,878		$	207,631		$	199,398
Total Assets	$	3,252,449		$	2,722,995		$	2,435,552		$	2,496,877		$	2,456,264
Less:
Goodwill	2,589			2,589			2,589			2,589			2,589
Other intangibles	—			—			—			—			—
Tangible Assets	$	3,249,860		$	2,720,406		$	2,432,963		$	2,494,288		$	2,453,675
Tangible Common Equity to Tangible Assets	7.26		%	8.41		%	9.16		%	8.32		%	8.13		%

	As of
Computation of Fully Diluted Tangible Book Value per Common Share	December 31, 2022		September 30, 2022		June 30, 2022		March 31, 2022		December 31, 2021
Total shareholders' equity	$	238,469	$	231,500	$	225,467	$	210,220	$	201,987
Less:
Preferred stock	—		—		—		—		—
Common shareholders' equity	$	238,469	$	231,500	$	225,467	$	210,220	$	201,987
Less:
Goodwill	2,589		2,589		2,589		2,589		2,589
Other intangibles	—		—		—		—		—
Tangible common shareholders' equity	$	235,880	$	228,911	$	222,878	$	207,631	$	199,398
Common shares issued and outstanding	7,730,699		7,711,843		7,752,389		7,761,338		7,803,166
Fully Diluted Tangible Book Value per Common Share	$	30.51	$	29.68	$	28.75	$	26.75	$	25.55

13

BANKWELL FINANCIAL GROUP, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES (unaudited) - Continued

(Dollars in thousands)

	For the Quarter Ended															For the Year Ended
Computation of Efficiency Ratio	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021
Noninterest expense	$	12,471		$	11,031		$	10,936		$	9,925		$	9,679		$	44,363		$	39,739
Less:
Amortization of intangible assets	—			—			—			—			48			—			76
Other real estate owned expenses	—			—			—			—			—			—			—
Adjusted noninterest expense	$	12,471		$	11,031		$	10,936		$	9,925		$	9,631		$	44,363		$	39,663
Net interest income	$	26,809		$	24,601		$	23,823		$	19,510		$	18,928		$	94,743		$	67,886
Noninterest income	528			402			1,152			958			825			3,040			5,657
Less:
Net gain on sale of available for sale securities	—			—			—			—			—			—			—
Gain on sale of other real estate owned, net	—			—			—			—			—			—			—
Operating revenue	$	27,337		$	25,003		$	24,975		$	20,468		$	19,753		$	97,783		$	73,543
Efficiency ratio	45.6		%	44.1		%	43.8		%	48.5		%	48.8		%	45.4		%	53.9		%

	For the Quarter Ended															For the Year Ended
Computation of Return on Average Tangible Common Equity	December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022			December 31, 2021			December 31, 2022			December 31, 2021
Net Income Attributable to Common Shareholders	$	8,021		$	9,174		$	12,022		$	8,212		$	7,814		$	37,429		$	26,586
Total average shareholders' equity	$	237,922		$	231,378		$	218,250		$	207,541		$	200,752		$	223,874		$	191,808
Less:
Average Goodwill	2,589			2,589			2,589			2,589			2,589			2,589			2,589
Average Other intangibles	—			—			—			—			45			—			59
Average tangible common equity	$	235,333		$	228,789		$	215,661		$	204,952		$	198,118		$	221,285		$	189,160
Annualized Return on Average Tangible Common Equity	13.52		%	15.91		%	22.36		%	16.25		%	15.65		%	16.91		%	14.05		%

14

BANKWELL FINANCIAL GROUP, INC.

NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - QTD (unaudited)

(Dollars in thousands)

	For the Quarter Ended
	December 31, 2022						December 31, 2021
	Average Balance		Interest		Yield/ Rate (4)		Average Balance		Interest		Yield/ Rate (4)
Assets:
Cash and Fed funds sold	$	231,767	$	2,150	3.68	%	$	233,196	$	90	0.15	%
Securities(1)	123,274		887		2.88		104,797		756		2.89
Loans:
Commercial real estate	1,828,306		24,998		5.35		1,337,147		15,104		4.42
Residential real estate	61,057		599		3.92		83,763		694		3.31
Construction	138,552		2,185		6.17		95,611		972		3.98
Commercial business	499,030		8,549		6.70		347,394		4,222		4.75
Consumer	16,875		214		5.05		8,904		89		3.97
Total loans	2,543,820		36,545		5.62		1,872,819		21,081		4.40
Federal Home Loan Bank stock	5,371		64		4.72		2,814		16		2.28
Total earning assets	2,904,232		$	39,646	5.34	%	2,213,626		$	21,943	3.88	%
Other assets	76,703						130,512
Total assets	$	2,980,935					$	2,344,138
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	107,118	$	45	0.17	%	$	114,158	$	51	0.18	%
Money market	837,486		4,158		1.97		874,352		1,097		0.50
Savings	170,903		581		1.35		190,118		100		0.21
Time	1,002,012		6,299		2.49		438,627		950		0.86
Total interest bearing deposits	2,117,519		11,083		2.08		1,617,255		2,198		0.54
Borrowed Money	170,202		1,701		3.91		89,726		767		3.35
Total interest bearing liabilities	2,287,721		$	12,784	2.22	%	1,706,981		$	2,965	0.69	%
Noninterest bearing deposits	407,923						383,557
Other liabilities	47,369						52,848
Total liabilities	2,743,013						2,143,386
Shareholders' equity	237,922						200,752
Total liabilities and shareholders' equity	$	2,980,935					$	2,344,138
Net interest income(2)			$	26,862					$	18,978
Interest rate spread					3.12	%					3.19	%
Net interest margin(3)					3.70	%					3.43	%

(1)Average balances and yields for securities are based on amortized cost.

(2)The adjustment for securities and loans taxable equivalency amounted to $52 thousand and $50 thousand for the quarters ended December 31, 2022 and 2021, respectively.

(3)Annualized net interest income as a percentage of earning assets.

(4)Yields are calculated using the contractual day count convention for each respective product type.

15

BANKWELL FINANCIAL GROUP, INC.

NET INTEREST MARGIN ANALYSIS ON A FULLY TAX EQUIVALENT BASIS - YTD (unaudited)

(Dollars in thousands)

	For the Year Ended
	December 31, 2022						December 31, 2021
	Average Balance		Interest		Yield/ Rate (4)		Average Balance		Interest		Yield/ Rate (4)
Assets:
Cash and Fed funds sold	$	238,233	$	3,500	1.47	%	$	294,471	$	376	0.13	%
Securities(1)	118,591		3,280		2.77		103,592		3,071		2.96
Loans:
Commercial real estate	1,532,971		76,103		4.90		1,225,770		55,995		4.51
Residential real estate	66,028		2,408		3.65		99,101		3,363		3.39
Construction	115,902		6,666		5.67		97,163		3,780		3.84
Commercial business	427,178		25,561		5.90		313,422		14,589		4.59
Consumer	10,121		504		4.98		7,929		315		3.97
Total loans	2,152,200		111,242		5.10		1,743,385		78,042		4.42
Federal Home Loan Bank stock	4,132		124		3.00		4,156		88		2.12
Total earning assets	2,513,156		$	118,146	4.64	%	2,145,604		$	81,577	3.75	%
Other assets	86,485						120,955
Total assets	$	2,599,641					$	2,266,559
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	118,837	$	203	0.17	%	$	111,515	$	198	0.18	%
Money market	891,095		8,830		0.99		804,679		4,042		0.50
Savings	188,186		1,259		0.67		175,629		413		0.23
Time	617,480		9,072		1.47		508,651		5,790		1.14
Total interest bearing deposits	1,815,598		19,364		1.07		1,600,474		10,443		0.65
Borrowed Money	118,960		3,838		3.18		103,919		3,047		2.89
Total interest bearing liabilities	1,934,558		$	23,202	1.20	%	1,704,393		$	13,490	0.79	%
Noninterest bearing deposits	401,005						323,648
Other liabilities	40,204						46,710
Total liabilities	2,375,767						2,074,751
Shareholders' equity	223,874						191,808
Total liabilities and shareholders' equity	$	2,599,641					$	2,266,559
Net interest income(2)			$	94,944					$	68,087
Interest rate spread					3.44	%					2.96	%
Net interest margin(3)					3.78	%					3.17	%

(1)Average balances and yields for securities are based on amortized cost.

(2)The adjustment for securities and loans taxable equivalency amounted to $200 thousand and $201 thousand for the year ended December 31, 2022 and 2021, respectively.

(3)Yields are calculated using the contractual day count convention for each respective product type.

16