A Bankwell Bank branch at 156 Cherry St. in New Canaan. Photo courtesy of Bankwell Bank

New Canaan-based Bankwell Bank said its third-quarter net income improved from the same quarter a year ago mainly on the reduction of its provision of credit losses, freeing up money to contribute to profitability.

The bank’s third-quarter net income ended at $9.8 million, or $1.25 per share, which was higher than the $9.2 million, or $1.18 per share, it recorded the same quarter in 2022.

The bank said the increase in non-interest expense and margin compression on higher funding costs partially offset the gains from lower provisions.

Non-interest expenses increased to $12.2 billion from $11 billion in July to September of 2022.

Net interest income from loans and deposits decreased to $22.7 billion compared to $24.6 billion in the same quarter a year ago. Net interest margin declined to 2.85 percent from 3.04 percent in the same quarter of 2022. This was primarily due to the higher cost of deposits amid a fairly flat yield on loans.

Total deposits were flat quarter-on-quarter at $2.8 billion, but higher than the $2.3 billion recorded at the same time last year.

Total loans improved to $2.8 billion from $2.1 billion in July to September of 2022 due to growth in commercial real estate and C&I loans.

The bank’s assets were mainly unchanged from a quarter ago at $3.2 billion. The commercial bank has a total of nine branches in Fairfield and New Haven counties.