BANKWELL FINANCIAL GROUP REPORTS OPERATING RESULTS FOR THE THIRD QUARTER AND DECLARES FOURTH QUARTER DIVIDEND

New Canaan, CT –October 25, 2023 – Bankwell Financial Group, Inc. (NASDAQ: BWFG) reported GAAP net income of $9.8 million, or $1.25 per share for the third quarter of 2023, versus $9.2 million, or $1.18 per share, for the same period in 2022.

The Company's Board of Directors declared a $0.20 per share cash dividend, payable November 20, 2023 to shareholders of record on November 10, 2023.

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

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

"We continue to generate quality returns for our shareholders in a complex interest rate environment. Despite the compression of our Net Interest Margin during the current tightening cycle, our team has delivered a 1.16% Return on Average Assets and a 15.16% Return on Average Equity thus far this year. Our commitment to rigorous expense management lays a solid foundation for our financial success. Non-Interest Expense as a percentage Average Assets stands at 1.54% year-to date, putting Bankwell well ahead of industry peers on this key metric. I applaud the efforts and hard work of our team who enable the Company to perform at this level of efficiency."

Third Quarter 2023 Highlights:

•Total gross loans were $2.8 billion, growing $94.7 million, or 3.5%, compared to December 31, 2022.

•Deposits were $2.8 billion, decreasing $32.2 million, or 1.1%, compared to December 31, 2022.

•Brokered deposits decreased $75.3 million, when compared to December 31, 2022.

•FDIC-insured deposits totaled $2.0 billion and represent 71.2% of total deposits as of September 30, 2023.

•As of September 30, 2023, the Bank has $1.7 billion immediately available liquidity, more than two times coverage of uninsured deposits.

•Average yield on 2023 funded loans was 7.23% as of September 30, 2023.

•Return on average assets was 1.19% for the quarter ended September 30, 2023.

•Return on average shareholders' equity was 15.19% for the quarter ended September 30, 2023.

•The net interest margin was 2.85% for the quarter ended September 30, 2023.

•Noninterest expense to average assets was 1.48% for the quarter ended September 30, 2023.

•Investment securities totaled $115.8 million and represent 3.6% of total assets, with HTM securities totaling $15.9 million, or 0.5% of total assets.

•Allowance for credit losses (ACL)-Loans to total loans was 1.06% as of September 30, 2023.

Earnings and Performance

Revenues (net interest income plus noninterest income) for the quarter ended September 30, 2023 were $23.5 million, versus $25.0 million for the quarter ended September 30, 2022. Revenues for the nine months ended September 30, 2023 were $75.9 million, versus $70.4 million for the nine months ended September 30, 2022. The decrease in revenues for the quarter was primarily attributable to an increase in interest expense partially offset by an increase in interest on loans due to higher overall loan yields1. The increase in revenues for the nine months ended 2023 was primarily attributable to an increase in interest and fees on loans due to loan growth and higher overall loan yields1 partially offset by an increase in interest expense.

1 - The increase in overall loan yields was 100 bps and 114 bps for the quarter and nine months ended September 30, 2023, respectively.

1

Net income for the quarter ended September 30, 2023 was $9.8 million, versus $9.2 million for the quarter ended September 30, 2022. Net income for the nine months ended September 30, 2023 was $28.1 million, versus $29.4 million for the nine months ended September 30, 2022. The increase in net income for the quarter ended 2023 was primarily due to the credit for credit losses, partially offset by an increase in noninterest expense, and the aforementioned decrease in revenues. The decrease in net income for nine months ended 2023 was due to an increase in noninterest expense partially offset by the aforementioned increase in revenues.

Basic and diluted earnings per share were $1.25 and $1.25, respectively, for the quarter ended September 30, 2023 compared to basic and diluted earnings per share of $1.19 and $1.18, respectively, for the quarter ended September 30, 2022. Basic and diluted earnings per share were $3.61 and $3.58, respectively, for the nine months ended September 30, 2023 compared to basic and diluted earnings per share of $3.80 and $3.75, respectively, for the nine months ended September 30, 2022.

The net interest margin (fully taxable equivalent basis) for the quarters ended September 30, 2023 and September 30, 2022 was 2.85% and 4.12%, respectively. The net interest margin (fully taxable equivalent basis) for the nine months ended September 30, 2023 and September 30, 2022 was 3.04% and 3.81%, respectively. The decrease in the net interest margin was due to an increase in funding costs partially offset by an increase in earning assets.

ACL-Loans

The ACL-Loans was $29.3 million as of September 30, 2023 compared to $30.7 million as of June 30, 2023, for a release of $1.4 million for the quarter ended September 30, 2023. The ACL-Loans as a percentage of total loans was 1.06% as of September 30, 2023 compared to 1.11% as of June 30, 2023. The reduction for the quarter was primarily due to a revision in the CECL methodology given further refinement of the Company's loan portfolio segmentation.

The ACL-Loans was $29.3 million as of September 30, 2023 compared to $22.4 million as of December 31, 2022, an increase of $6.9 millionyear to date, of which $5.1 million being the CECL transition adjustment to retained earnings. The ACL-Loans as a percentage of total loans was 1.06% as of September 30, 2023 compared to 0.84% as of December 31, 2022. The increase in the ACL-Loans provision for credit losses was primarily driven by loan growth and forward looking CECL macroeconomic factors.

Financial Condition

Assets totaled $3.2 billion at September 30, 2023, a decrease of $2.7 million or 0.1% compared to December 31, 2022. Gross loans totaled $2.8 billion at September 30, 2023, an increase of $94.7 million, or 3.5% compared to December 31, 2022. Deposits totaled $2.8 billion at September 30, 2023, a decrease of $32.2 million, or 1.1% compared to December 31, 2022.

Capital

Shareholders’ equity totaled $257.9 million as of September 30, 2023, an increase of $19.4 million compared to December 31, 2022, primarily a result of net income of $28.1 million for the nine months ended September 30, 2023. The increase was partially offset by the Day 1 CECL adoption of $4.9 million, dividends paid of $4.7 million, and a $1.3 million unfavorable impact to accumulated other comprehensive income. The unfavorable impact to accumulated other comprehensive income was driven by fair value marks on the Company's available for sale investment securities portfolio of $1.4 million partially offset by fair value marks related to hedge positions involving interest rate swaps of $0.1 million. The Company's interest rate swaps are used to hedge interest rate risk.

2

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.

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 banking industry or securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiaries are engaged.

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 noninterest 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.

3

BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED BALANCE SHEETS (unaudited)

(Dollars in thousands)

	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
ASSETS
Cash and due from banks	$	256,973	$	207,345	$	249,812	$	344,925	$	212,175
Federal funds sold	1,122		54,706		27,370		10,754		10,947
Cash and cash equivalents	258,095		262,051		277,182		355,679		223,122
Investment securities
Marketable equity securities, at fair value	1,975		2,017		2,028		1,988		1,973
Available for sale investment securities, at fair value	97,907		99,938		103,171		103,663		95,095
Held to maturity investment securities, at amortized cost	15,885		15,884		15,931		15,983		16,027
Total investment securities	115,767		117,839		121,130		121,634		113,095
Loans receivable (net of ACL-Loans of $29,284, $30,694, $27,998, $22,431, and $18,167 at September 30, 2023, June 30, 2023, March 31, 2023, December 31, 2022, and September 30, 2022, respectively)	2,735,242		2,736,607		2,724,514		2,646,384		2,263,432
Accrued interest receivable	15,648		14,208		14,261		13,070		9,552
Federal Home Loan Bank stock, at cost	5,696		5,696		5,234		5,216		5,039
Premises and equipment, net	26,899		27,658		27,619		27,199		27,510
Bank-owned life insurance	51,119		50,816		50,524		50,243		49,970
Goodwill	2,589		2,589		2,589		2,589		2,589
Deferred income taxes, net	9,395		10,014		8,692		7,422		5,952
Other assets	29,326		25,229		20,573		23,013		22,734
Total assets	$	3,249,776	$	3,252,707	$	3,252,318	$	3,252,449	$	2,722,995
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest bearing deposits	$	345,433	$	367,635	$	377,667	$	404,559	$	380,365
Interest bearing deposits	2,423,193		2,421,228		2,420,641		2,396,259		1,906,337
Total deposits	2,768,626		2,788,863		2,798,308		2,800,818		2,286,702
Advances from the Federal Home Loan Bank	90,000		90,000		90,000		90,000		90,000
Subordinated debentures	69,143		69,082		69,020		68,959		68,897
Accrued expenses and other liabilities	64,145		55,949		52,683		54,203		45,896
Total liabilities	2,991,914		3,003,894		3,010,011		3,013,980		2,491,495
Shareholders’ equity
Common stock, no par value	117,181		116,541		115,875		115,018		114,548
Retained earnings	142,205		133,988		127,566		123,640		117,152
Accumulated other comprehensive (loss)	(1,524)		(1,716)		(1,134)		(189)		(200)
Total shareholders’ equity	257,862		248,813		242,307		238,469		231,500
Total liabilities and shareholders’ equity	$	3,249,776	$	3,252,707	$	3,252,318	$	3,252,449	$	2,722,995

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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 Nine Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		September 30, 2023		September 30, 2022
Interest and dividend income
Interest and fees on loans	$	43,854	$	42,482	$	39,723	$	36,545	$	28,128	$	126,059	$	74,697
Interest and dividends on securities	1,016		1,002		1,000		898		811		3,018		2,305
Interest on cash and cash equivalents	3,393		3,022		3,568		2,150		747		9,983		1,350
Total interest and dividend income	48,263		46,506		44,291		39,593		29,686		139,060		78,352
Interest expense
Interest expense on deposits	23,789		20,777		17,033		11,083		4,092		61,599		8,281
Interest expense on borrowings	1,783		1,738		1,717		1,701		993		5,238		2,137
Total interest expense	25,572		22,515		18,750		12,784		5,085		66,837		10,418
Net interest income	22,691		23,991		25,541		26,809		24,601		72,223		67,934
(Credit) provision for credit losses	(1,579)		2,579		826		4,272		2,381		1,826		1,165
Net interest income after provision for credit losses	24,270		21,412		24,715		22,537		22,220		70,397		66,769
Noninterest income
Bank owned life insurance	303		292		281		273		271		876		796
Service charges and fees	294		361		286		343		240		941		729
Gains and fees from sales of loans	237		725		931		12		(15)		1,893		1,224
Other	(48)		23		28		(100)		(94)		3		(237)
Total noninterest income	786		1,401		1,526		528		402		3,713		2,512
Noninterest expense
Salaries and employee benefits	6,036		6,390		6,081		5,988		5,876		18,507		16,249
Occupancy and equipment	2,146		2,204		2,084		1,919		2,035		6,434		6,378
Professional services	491		692		1,322		912		994		2,505		2,975
Data processing	741		729		671		663		626		2,141		1,969
Director fees	362		453		392		378		325		1,207		1,016
FDIC insurance	1,026		1,050		1,062		898		255		3,138		740
Marketing	184		177		151		112		102		512		254
Other	1,219		946		928		1,601		818		3,093		2,311
Total noninterest expense	12,205		12,641		12,691		12,471		11,031		37,537		31,892
Income before income tax expense	12,851		10,172		13,550		10,594		11,591		36,573		37,389
Income tax expense	3,074		2,189		3,171		2,573		2,417		8,434		7,981
Net income	$	9,777	$	7,983	$	10,379	$	8,021	$	9,174	$	28,139	$	29,408
Earnings Per Common Share:
Basic	$	1.25	$	1.02	$	1.34	$	1.04	$	1.19	$	3.61	$	3.80
Diluted	$	1.25	$	1.02	$	1.33	$	1.04	$	1.18	$	3.58	$	3.75
Weighted Average Common Shares Outstanding:
Basic	7,598,230		7,593,417		7,554,689		7,507,540		7,553,718		7,582,272		7,582,175
Diluted	7,633,934		7,601,562		7,616,671		7,563,116		7,612,421		7,646,837		7,664,123
Dividends per common share	$	0.20	$	0.20	$	0.20	$	0.20	$	0.20	$	0.60	$	0.60

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BANKWELL FINANCIAL GROUP, INC.

CONSOLIDATED FINANCIAL HIGHLIGHTS (unaudited)

	For the Quarter Ended										For the Nine Months Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022		September 30, 2023		September 30, 2022
Performance ratios:
Return on average assets	1.19	%	0.99	%	1.30	%	1.07	%	1.47	%	1.16	%	1.59	%
Return on average shareholders' equity	15.19	%	12.91	%	17.48	%	13.38	%	15.73	%	15.16	%	17.94	%
Return on average tangible common equity	15.35	%	13.05	%	17.67	%	13.52	%	15.91	%	15.32	%	18.16	%
Net interest margin	2.85	%	3.07	%	3.24	%	3.70	%	4.12	%	3.04	%	3.81	%
Efficiency ratio(1)	52.0	%	49.8	%	46.9	%	45.6	%	44.1	%	49.4	%	45.3	%
Net loan charge-offs as a % of average loans	—	%	—	%	0.02	%	—	%	—	%	0.01	%	—	%
Dividend payout ratio(2)	16.00	%	19.61	%	15.04	%	19.23	%	16.95	%	16.76	%	16.00	%

(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
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Capital ratios:
Total Common Equity Tier 1 Capital to Risk-Weighted Assets(1)	10.82		%	10.34		%	10.17		%	10.28		%	11.42		%
Total Capital to Risk-Weighted Assets(1)	11.86		%	11.41		%	11.16		%	11.07		%	12.16		%
Tier I Capital to Risk-Weighted Assets(1)	10.82		%	10.34		%	10.17		%	10.28		%	11.42		%
Tier I Capital to Average Assets(1)	9.60		%	9.41		%	9.22		%	9.88		%	11.31		%
Tangible common equity to tangible assets	7.86		%	7.58		%	7.38		%	7.26		%	8.41		%
Fully diluted tangible book value per common share	$	32.55		$	31.45		$	30.56		$	30.51		$	29.68

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

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BANKWELL FINANCIAL GROUP, INC.

ASSET QUALITY (unaudited)

(Dollars in thousands)

	For the Quarter Ended
	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
ACL-Loans:
Balance at beginning of period	$	30,694	$	27,998	$	22,431	$	18,167	$	15,773
Day 1 CECL Adjustment on January 1, 2023	—		—		5,079		—		—
Beginning balance January 1, 2023	30,694		27,998		27,510		18,167		—
Charge-offs:
Commercial business	—		—		(440)		—		—
Consumer	(31)		(25)		(12)		(11)		(8)
Total charge-offs	(31)		(25)		(452)		(11)		(8)
Recoveries:
Commercial real estate	—		—		—		—		—
Commercial business	35		32		—		—		21
Consumer	19		10		6		3		—
Total recoveries	54		42		6		3		21
Net loan recoveries (charge-offs)	23		17		(446)		(8)		13
(Credit) provision for credit losses - loans	(1,433)		2,679		934		4,272		2,381
Balance at end of period	$	29,284	$	30,694	$	27,998	$	22,431	$	18,167

	As of
	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Asset quality:
Nonaccrual loans
Residential real estate	$	1,408		$	1,429		$	1,443		$	2,152		$	2,137
Commercial real estate	1,898			1,905			1,912			2,781			2,894
Commercial business	7,352			2,815			1,528			2,126			2,380
Construction	9,382			9,382			9,382			9,382			9,382
Consumer	7,917			—			—			—			—
Total nonaccrual loans	27,957			15,531			14,265			16,441			16,793
Other real estate owned	—			—			—			—			—
Total nonperforming assets	$	27,957		$	15,531		$	14,265		$	16,441		$	16,793
Nonperforming loans as a % of total loans	1.01		%	0.56		%	0.52		%	0.61		%	0.73		%
Nonperforming assets as a % of total assets	0.86		%	0.48		%	0.44		%	0.51		%	0.62		%
ACL-loans as a % of total loans	1.06		%	1.11		%	1.01		%	0.84		%	0.79		%
ACL-loans as a % of nonperforming loans	104.75		%	197.63		%	196.27		%	136.43		%	108.18		%
Total past due loans to total loans	1.44		%	1.30		%	0.94		%	0.60		%	0.78		%

Total nonaccrual loans increased $11.5 million to $28.0 million as of September 30, 2023 when compared to December 31, 2022. Nonaccrual loans increased primarily due to three distinct loans:

•One Consumer (insurance premium) loan of $7.9 million. As of October 4, 2023, the loan balance has been reduced to $3.9 million. The Bank holds collateral for the remaining balance, worth approximately two times the outstanding amount.

•Two Commercial business loans totaling $5.5 million, of which approximately 82% is guaranteed by the U.S. Government (SBA).

Nonperforming assets as a percentage of total assets increased to 0.86% at September 30, 2023 from 0.51% at December 31, 2022. The ACL-Loans at September 30, 2023 was $29.3 million, representing 1.06% of total loans.

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BANKWELL FINANCIAL GROUP, INC.

LOAN & DEPOSIT PORTFOLIO (unaudited)

(Dollars in thousands)

Period End Loan Composition	September 30, 2023		June 30, 2023		December 31, 2022		Current QTD % Change		YTD % Change
Residential Real Estate	$	52,908	$	54,631	$	60,588	(3.2)	%	(12.7)	%
Commercial Real Estate(1)	1,955,992		1,930,972		1,921,252		1.3		1.8
Construction	199,972		219,615		155,198		(8.9)		28.8
Total Real Estate Loans	2,208,872		2,205,218		2,137,038		0.2		3.4
Commercial Business	508,626		530,913		520,447		(4.2)		(2.3)
Consumer	52,612		37,475		17,963		40.4		192.9
Total Loans	$	2,770,110	$	2,773,606	$	2,675,448	(0.1)	%	3.5	%
(1) Includes owner occupied commercial real estate.

Gross loans totaled $2.8 billion at September 30, 2023, an increase of $94.7 million or 3.5% compared to December 31, 2022.

Period End Deposit Composition	September 30, 2023		June 30, 2023		December 31, 2022		Current QTD % Change		YTD % Change
Noninterest bearing demand	$	345,433	$	367,635	$	404,559	(6.0)	%	(14.6)	%
NOW	101,719		106,189		104,057		(4.2)		(2.2)
Money Market	879,978		879,017		913,868		0.1		(3.7)
Savings	102,207		108,625		151,944		(5.9)		(32.7)
Time	1,339,289		1,327,397		1,226,390		0.9		9.2
Total Deposits	$	2,768,626	$	2,788,863	$	2,800,818	(0.7)	%	(1.1)	%

Total deposits were $2.8 billion at September 30, 2023, a decrease of $32.2 million, or 1.1%, when compared to December 31, 2022. Brokered deposits have decreased $75.3 million, when compared to December 31, 2022.

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BANKWELL FINANCIAL GROUP, INC.

NONINTEREST EXPENSE (unaudited)

(Dollars in thousands)

	For the Quarter Ended
Noninterest expense	September 30, 2023		June 30, 2023		September 30, 2022		Sep 23 vs. June 23 % Change		Sep 23 vs. Sep 22 % Change
Salaries and employee benefits	$	6,036	$	6,390	$	5,876	(5.5)	%	2.7	%
Occupancy and equipment	2,146		2,204		2,035		(2.6)		5.5
Professional services	491		692		994		(29.0)		(50.6)
Data processing	741		729		626		1.6		18.4
Director fees	362		453		325		(20.1)		11.4
FDIC insurance	1,026		1,050		255		(2.3)		302.4
Marketing	184		177		102		4.0		80.4
Other	1,219		946		818		28.9		49.0
Total noninterest expense	$	12,205	$	12,641	$	11,031	(3.4)	%	10.6	%

	For the Nine Months Ended
Noninterest expense	September 30, 2023		September 30, 2022		% Change
Salaries and employee benefits	$	18,507	$	16,249	13.9	%
Occupancy and equipment	6,434		6,378		0.9	%
Professional services	2,505		2,975		(15.8)	%
Data processing	2,141		1,969		8.7	%
Director fees	1,207		1,016		18.8	%
FDIC insurance	3,138		740		324.1	%
Marketing	512		254		101.6	%
Other	3,093		2,311		33.8	%
Total noninterest expense	$	37,537	$	31,892	17.7	%

Noninterest expense increased by $1.2 million to $12.2 million for the quarter ended September 30, 2023 compared to the quarter ended September 30, 2022. Noninterest expense increased by $5.6 million to $37.5 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The increase in noninterest expense was primarily driven by an increase in FDIC insurance expense and salaries and employee benefits expense.

FDIC insurance expense totaled $1.0 million for the quarter ended September 30, 2023, an increase of $0.8 million when compared to the same period in 2022. FDIC insurance expense totaled $3.1 million for the nine months ended September 30, 2023, an increase of $2.4 million when compared to the same period in 2022. The increase in FDIC insurance expense is attributed to balance sheet growth and composition, as well as an increase in FDIC insurance rates.

Salaries and employee benefits expense totaled $18.5 million for the nine months ended September 30, 2023, an increase of $2.3 million when compared to the same period in 2022. The increase in salaries and employee benefits expense was driven by an increase in average full time equivalent employees from 139 at September 30, 2023 compared to 131 for the same period in 2022. In addition, salaries and employee benefits expense increased due to one-time severance costs.

9

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	September 30, 2023			June 30, 2023			March 31, 2023			December 31, 2022			September 30, 2022
Total Equity	$	257,862		$	248,813		$	242,307		$	238,469		$	231,500
Less:
Goodwill	2,589			2,589			2,589			2,589			2,589
Other intangibles	—			—			—			—			—
Tangible Common Equity	$	255,273		$	246,224		$	239,718		$	235,880		$	228,911
Total Assets	$	3,249,776		$	3,252,707		$	3,252,318		$	3,252,449		$	2,722,995
Less:
Goodwill	2,589			2,589			2,589			2,589			2,589
Other intangibles	—			—			—			—			—
Tangible Assets	$	3,247,187		$	3,250,118		$	3,249,729		$	3,249,860		$	2,720,406
Tangible Common Equity to Tangible Assets	7.86		%	7.58		%	7.38		%	7.26		%	8.41		%

	As of
Computation of Fully Diluted Tangible Book Value per Common Share	September 30, 2023		June 30, 2023		March 31, 2023		December 31, 2022		September 30, 2022
Total shareholders' equity	$	257,862	$	248,813	$	242,307	$	238,469	$	231,500
Less:
Preferred stock	—		—		—		—		—
Common shareholders' equity	$	257,862	$	248,813	$	242,307	$	238,469	$	231,500
Less:
Goodwill	2,589		2,589		2,589		2,589		2,589
Other intangibles	—		—		—		—		—
Tangible common shareholders' equity	$	255,273	$	246,224	$	239,718	$	235,880	$	228,911
Common shares issued and outstanding	7,841,616		7,829,950		7,843,438		7,730,699		7,711,843
Fully Diluted Tangible Book Value per Common Share	$	32.55	$	31.45	$	30.56	$	30.51	$	29.68

10

BANKWELL FINANCIAL GROUP, INC.

EARNINGS PER SHARE ("EPS") (unaudited)

(Dollars in thousands, except share data)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
	(In thousands, except per share data)
Net income	$	9,777	$	9,174	$	28,140	$	29,408
Dividends to participating securities(1)	(41)		(33)		(125)		(101)
Undistributed earnings allocated to participating securities(1)	(209)		(159)		(613)		(529)
Net income for earnings per share calculation	$	9,527	$	8,982	$	27,402	$	28,778
Weighted average shares outstanding, basic	7,598		7,554		7,582		7,582
Effect of dilutive equity-based awards(2)	36		58		65		82
Weighted average shares outstanding, diluted	7,634		7,612		7,647		7,664
Net earnings per common share:
Basic earnings per common share	$	1.25	$	1.19	$	3.61	$	3.80
Diluted earnings per common share	$	1.25	$	1.18	$	3.58	$	3.75

(1)    Represents dividends paid and undistributed earnings allocated to unvested stock-based awards that contain non-forfeitable rights to dividends.

(2)    Represents the effect of the assumed exercise of stock options and the vesting of restricted shares, as applicable, utilizing the treasury stock method.

11

BANKWELL FINANCIAL GROUP, INC.

NONINTEREST INCOME (unaudited)

(Dollars in thousands)

	For the Quarter Ended
Noninterest income	September 30, 2023		June 30, 2023		September 30, 2022		Sep 23 vs. June 23 % Change		Sep 23 vs. Sep 22 % Change
Bank owned life insurance	$	303	$	292	$	271	3.8	%	11.8	%
Service charges and fees	294		361		240		(18.6)		22.5
Gains and fees from sales of loans	237		725		(15)		(67.3)		Favorable
Other	(48)		23		(94)		Unfavorable		Favorable
Total noninterest income	$	786	$	1,401	$	402	(43.9)	%	95.5	%

	For the Nine Months Ended
Noninterest income	September 30, 2023		September 30, 2022		% Change
Bank owned life insurance	$	876	$	796	10.1	%
Service charges and fees	941		729		29.1
Gains and fees from sales of loans	1,893		1,224		54.7
Other	3		(237)		Favorable
Total noninterest income	$	3,713	$	2,512	47.8	%

Noninterest income increased by $0.4 million to $0.8 million for the quarter ended September 30, 2023 compared to the quarter ended September 30, 2022. Noninterest income increased by $1.2 million to $3.7 million for the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022. The increase in noninterest income was driven by an increase in gains on SBA loan sales and service charges and fees for the quarter and nine months ended 2023.

12

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

	For the Quarter Ended
	September 30, 2023						September 30, 2022
	Average Balance		Interest		Yield/ Rate (4)		Average Balance		Interest		Yield/ Rate (4)
Assets:
Cash and Fed funds sold	$	265,115	$	3,393	5.08	%	$	130,440	$	747	2.27	%
Securities(1)	127,229		953		3.00		120,092		829		2.76
Loans:
Commercial real estate	1,943,725		28,140		5.67		1,512,381		18,830		4.87
Residential real estate	53,966		671		4.97		62,915		586		3.72
Construction	209,154		3,908		7.31		116,256		1,512		5.09
Commercial business	539,185		10,394		7.54		431,917		7,058		6.39
Consumer	44,020		740		6.66		12,145		142		4.65
Total loans	2,790,050		43,853		6.15		2,135,614		28,128		5.15
Federal Home Loan Bank stock	5,696		116		8.13		5,021		31		2.51
Total earning assets	3,188,090		$	48,315	5.93	%	2,391,167		$	29,735	4.87	%
Other assets	78,089						89,173
Total assets	$	3,266,179					$	2,480,340
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	102,149	$	47	0.18	%	$	119,593	$	52	0.17	%
Money market	922,036		9,064		3.90		828,541		2,346		1.12
Savings	105,366		817		3.08		189,279		474		0.99
Time	1,322,074		13,860		4.16		557,243		1,220		0.87
Total interest bearing deposits	2,451,625		23,788		3.85		1,694,656		4,092		0.96
Borrowed Money	159,103		1,784		4.39		135,221		993		2.87
Total interest bearing liabilities	2,610,728		$	25,572	3.89	%	1,829,877		$	5,085	1.10	%
Noninterest bearing deposits	345,988						383,048
Other liabilities	54,136						36,037
Total liabilities	3,010,852						2,248,962
Shareholders' equity	255,327						231,378
Total liabilities and shareholders' equity	$	3,266,179					$	2,480,340
Net interest income(2)			$	22,743					$	24,650
Interest rate spread					2.04	%					3.77	%
Net interest margin(3)					2.85	%					4.12	%

(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 $49 thousand for the quarters

ended September 30, 2023 and 2022, 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.

13

BANKWELL FINANCIAL GROUP, INC.

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

(Dollars in thousands)

	For the Nine Months Ended
	September 30, 2023						September 30, 2022
	Average Balance		Interest		Yield/ Rate (4)		Average Balance		Interest		Yield/ Rate (4)
Assets:
Cash and Fed funds sold	$	281,033	$	9,983	4.75	%	$	240,252	$	1,350	0.75	%
Securities(1)	128,554		2,864		2.97	%	117,008		2,392		2.73	%
Loans:
Commercial real estate	1,932,549		79,958		5.46	%	1,433,642		51,104		4.70	%
Residential real estate	56,798		1,957		4.59	%	67,705		1,810		3.56	%
Construction	194,396		10,582		7.18	%	108,249		4,482		5.46	%
Commercial business	546,329		32,073		7.74	%	402,876		17,011		5.57	%
Consumer	30,571		1,489		6.51	%	7,844		290		4.94	%
Total loans	2,760,643		126,059		6.02	%	2,020,316		74,697		4.88	%
Federal Home Loan Bank stock	5,527		308		7.46	%	3,715		61		2.19	%
Total earning assets	3,175,757		$	139,214	5.78	%	2,381,291		$	78,500	4.35	%
Other assets	66,342						89,747
Total assets	$	3,242,099					$	2,471,038
Liabilities and shareholders' equity:
Interest bearing liabilities:
NOW	$	97,741	$	127	0.17	%	$	122,792	$	158	0.17	%
Money market	910,840		23,532		3.45	%	909,106		4,672		0.69	%
Savings	117,984		2,404		2.72	%	194,013		678		0.47	%
Time	1,291,124		35,536		3.68	%	487,792		2,773		0.76	%
Total interest bearing deposits	2,417,689		61,599		3.41	%	1,713,703		8,281		0.65	%
Borrowed Money	161,166		5,238		4.29	%	101,685		2,137		2.77	%
Total interest bearing liabilities	2,578,855		$	66,837	3.47	%	1,815,388		$	10,418	0.77	%
Noninterest bearing deposits	374,943						398,728
Other liabilities	40,192						37,784
Total liabilities	2,993,990						2,251,900
Shareholders' equity	248,109						219,138
Total liabilities and shareholders' equity	$	3,242,099					$	2,471,038
Net interest income(2)			$	72,377					$	68,082
Interest rate spread					2.31	%					3.58	%
Net interest margin(3)					3.04	%					3.81	%

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

(2)The adjustment for securities and loans taxable equivalency amounted to $154 thousand and $148 thousand for the nine     months ended September 30, 2023 and 2022, 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.

14