Bankwell Lifts 2026 Net Interest Income Outlook

The Tip Desk · November 10, 2026 · 4 min read

GAAP net income was $12.7 million, or $1.58 a share, after $3.0 million of core conversion costs, with net interest margin at 3.71%.

Bankwell Financial Group (BWFG), the New Canaan, Connecticut commercial bank, reported GAAP net income of $12.7 million, or $1.58 a share, for the third quarter of 2026, versus $12.4 million, or $1.52 a share, in the second quarter. Results included $3.0 million of core conversion costs, primarily termination fees. Excluding those costs, operating net income was $15.0 million, or $1.86 a share, and the operating efficiency ratio was 47.5%.

Chief Executive Officer Christopher R. Gruseke said the company delivered record earnings despite absorbing the conversion costs. The board declared a $0.20 a share cash dividend, payable November 20, 2026.

Net interest margin expanded 13 basis points to 3.71% from 3.58% in the second quarter, after a 30 basis point expansion to 3.58% in the prior quarter. The company attributed the latest move to higher earning-asset yields and flat funding costs. Earning-asset yields rose 8 basis points to 6.34%. Net interest income increased to $31.4 million from $29.5 million in the linked quarter, following a $2.6 million sequential rise from $26.9 million in the first quarter.

Gross loans increased $22.9 million during the quarter and $142.6 million, or 5.0%, year-to-date, after $93.1 million, or 3.2%, of sequential growth in the second quarter. Total loans were $2.98 billion, up 5.0% year-to-date and 9.7% year over year. Commercial business loans were $726.6 million, up 12.6% year-to-date and 31.5% year over year. Commercial real estate was $2.03 billion, up 5.0% year-to-date.

Deposits totaled $3.0 billion, up 4.9% year-to-date. Money market deposits were up 23.1% and noninterest-bearing demand up 12.2% year-to-date, while time deposits declined 12.7% year-to-date. Brokered deposits decreased $52.1 million, or 9.3%, versus December 31, 2025. Assets totaled $3.6 billion.

SBA loan sale gains contributed $2.8 million of the company’s $4.0 million in total noninterest income for the quarter, bringing 2026 year-to-date gains to $7.6 million versus $2.9 million in 2025 year-to-date. Noninterest income as a percentage of revenue was 11.20%, compared with 8.76% a year earlier. The SBA Lending division delivered $30.1 million in originations in the third quarter, bringing year-to-date originations to $90.2 million.

Nonperforming loans decreased $8.7 million to $7.1 million, primarily reflecting the note sale of a suburban retail CRE loan in Westchester County, New York, that had been modified during the COVID-19 pandemic. Nonperforming assets declined to 0.20% of total assets from 0.46% at June 30, 2026. The ACL-Loans provided 430.65% coverage of total nonperforming loans at September 30, 2026, compared with 193.14% at June 30, 2026. The ACL-Loans balance was $30.7 million versus $30.6 million. The credit for credit losses on loans was $1.4 million, versus a $1.0 million provision in the second quarter. Net loan recoveries were $1.4 million.

Noninterest expense was $19.8 million, compared with $15.3 million in the previous quarter. The company attributed the increase to the $3.0 million of core conversion costs, primarily contract termination fees, as well as an increase in salaries and employee benefits due to ongoing investments in talent. Pre-tax, pre-provision net revenue was $15.5 million. The company expects to incur additional core conversion-related costs in future quarters as implementation activities progress; third-quarter costs were elevated by termination-related costs that are not expected to recur.

Tangible common equity to tangible assets increased to 9.33%, and fully diluted tangible book value per common share increased to $41.59. CET1 was 11.64% and total capital 12.67%.

Given year-to-date performance, the company is updating full-year 2026 guidance. It now expects net interest income of $119 to $121 million and non-interest income of $14 to $15 million, reflecting continued strength in the SBA platform. It maintains its outlook for loan growth of 5% to 7% and now expects non-interest expense of $65 million to $67 million, excluding conversion costs.