Bankwell Financial Group, Inc.

All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number one on your telephone keypad. I would now like to turn the call over to BankWell's Chief Financial Officer, Courtney Sacchetti. Courtney, please go ahead.

Thank you. Good morning, everyone. Welcome to BankWell's second quarter 2025 earnings conference call. To access the call over the internet and review the presentation materials that we will reference on the call, please visit our website at investor.mybankwell.com and go to the events and presentations tab for supporting materials. Our second quarter earnings release is also available on our website. Our remarks today may contain forward-looking statements and may refer to non-GAAP financial measures. All participants should refer to our SEC filings including those found on Forms 8-K, 10-Q, and 10-K, for a complete discussion of forward-looking statements and any factors that could cause actual results to differ from those statements. And now I will turn the call over to Chris Persecchi, BankWell's Chief Executive Officer.

Thanks, Courtney. Welcome and thanks to everyone for joining our second quarter earnings call. This morning I'm joined by Courtney Cicchetti, our Chief Financial Officer, and Matt McNeil, our President and Chief Banking Officer. I'm happy to announce our second quarter results, which demonstrate improved performance trends in virtually every aspect of our business, as our investments in people and technology have continued to bear fruit. The company's net interest margin continues to expand. Our SBA business is on pace to deliver material growth to non-interest income, and credit trends continue to improve, with further improvement expected in the quarters ahead. Additionally, with our first quarter results, we have previously announced the addition of two deposit teams in the New York City metro area. We've added two more teams during the second quarter and another team in July, bringing our growth in private client teams to five during this fiscal year. We look forward to the potential improvements to our deposit base as we welcome these talented professionals to the bankroll team. Our financial results for the second quarter include GAAP fully diluted earnings of $1.15 per share which were up 32% relative to the first quarter, a result of significant net interest margin expansion and increased contributions from SBA loan sales. Banquo had another robust quarter of originations, funding $170 million in new loans, resulting in $24 million in linked quarter growth. Loan payoffs were $150 million during the second quarter, down from the first quarter's $200 million, but still elevated to where we'd expect them to be on a normalized basis. We funded $12 million in SBA loans during the quarter, bringing our year-to-date SBA originations to $22 million. Our pipeline for both commercial and SBA loans remains strong, and although total loan balances are down slightly compared to year-end 2024, we reiterate our original guidance of low single-digit loan growth for the full year. The bank's funding profile continues to improve as we've grown our non-interest-bearing deposits and repriced our time deposits meaningfully lower. Non-interest-bearing deposits grew by $48 million during the quarter, for a year-to-date increase of $75 million, or 23%, since year-end. It's noteworthy that this increase in non-interest-bearing balances does not yet reflect the impact of our new team's expected contributions as they begin to open accounts on behalf of new customers. As these teams bring in low and no-cost deposits and our balance sheet remains liability-sensitive, We anticipate continued margin expansion into 2026. We are constructive on the direction of credit. Positive migration trends continue, and we expect continued progress toward reduction in NPAs in the quarters ahead. Further details regarding NPAs can be found on slide 21 of our investor presentation. Now, to discuss our financial results in greater detail, I'll turn it over to Courtney, our Chief Financial Officer.