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Two of Connecticut’s stock banks continued to show improvements in COVID-related loan deferrals.
New Canaan-based Bankwell Bank and Lakeville-based Salisbury Bank and Trust Co. each had about $30 million worth of loans receiving deferrals at the end of 2020, according to their fourth quarter earnings presentations.
For Bankwell Bank, the $30.2 million of loans receiving deferrals represented less than 2 percent of its portfolio. The bank at the end of the third quarter had loans totaling $60 million receiving deferrals, and in June, the bank saw deferrals on $350 million of its portfolio. Bankwell had gross loans totaling $1.6 billion at the end of 2020.
More than 90 percent of the remaining deferrals are for commercial real estate loans. About 2 percent are for residential loans. The bank said in its investor presentation that it expects at least $18 million to come off deferrals during the first three months of 2021.
Bankwell had net income of $300,000, or $0.04 diluted earnings per share, in the fourth quarter, compared to $3.5 million, or $0.44 diluted earnings per share, in the fourth quarter of 2019. Net income for the full-year 2020 was $5.9 million, or $0.75 diluted earnings per share, compared to $18.2 million, or $2.31 diluted earnings per share, for 2019.
Bankwell had previously announced that earnings would be affected by a $3.9 million one-time charge for office consolidation, contract termination and employee severance costs in the fourth quarter. Full-year earnings were further affected by an increase in the provision for loan losses due to the COVID-19 pandemic, the bank said, with the provision for loan losses totaling $7.6 million in 2020.
Bankwell had total assets of $2.3 billion at the end of 2020 compared to $1.9 billion on Dec. 31, 2019.
“The company made excellent progress this year despite the adversities presented by the pandemic,” Bankwell Financial Group president and CEO, Christopher R. Gruseke, said in a statement. He added: “The Company’s outlook for the coming year is increasingly optimistic. Our recently disclosed efficiency initiatives will bolster profitability in 2021 and beyond, and loan originations for the first quarter are tracking to be one our strongest efforts ever.”
Salisbury Bank had record earnings in 2020. The bank had net income of $11.8 million, or $4.21 per basic common share, compared to $11 million, or $3.95 per basic common share, in 2019. Fourth quarter net income was $2.8 million, or $0.99 per basic common share, compared to $3.0 million, or $1.06 per basic common share, in the fourth quarter of 2019.
Results for fourth quarter 2020 included a loan loss provision of $840,000 compared to $686,000 in the third quarter and $417,000 in the fourth quarter of 2019. The provision for loan losses totaled $5 million in 2020.
Salisbury had total assets of $1.29 billion at the end of 2020 compared to $1.1 billion on Dec. 31, 2019.
Salisbury Bank had deferrals on 15 commercial loans with a total balance of $30 million at the end of 2020, 3.1 percent of its portfolio. Salisbury had gross loans of $1 billion in 2020.
No residential or consumer loan deferrals remained at the end of the fourth quarter, the bank said in its investor presentation. In the third quarter, Salisbury had deferrals on 21 residential or consumer loans totaling $7 million and 58 commercial loans totaling $63 million.
The hospitality industry made up 60 percent of Salisbury’s fourth quarter loan deferrals.
“I am pleased that as of year-end, there are no outstanding residential or consumer loans on deferral and only fifteen commercial loans remain in some sort of deferral,” Salisbury’s president and CEO, Richard J. Cantele Jr. said in a statement. “We reported record earnings for the year as a result of the dedication and hard work of our employees as we experienced record volume in our residential lending business. Unfortunately, COVID-19 will continue to challenge us in 2021. As we enter the new year, we remain focused on providing outstanding customer service and supporting our local communities while prudently growing the bank and enhancing profitability.”
