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Bankwell Financial Group (BWFG)
NASDAQ:BWFG
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Bankwell Financial Group
(NASDAQ:BWFG)
Rating:77Outperform
Price Target:
$40.00
▲(6.98%Upside)
Bankwell Financial Group (BWFG) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$290.69M
Dividend Yield2.14%
Average Volume (3M)22.61K
Price to Earnings (P/E)23.5
Beta (1Y)0.91
Revenue Growth-0.04%
EPS Growth-58.92%
CountryUS
Employees145
SectorFinancial
Sector Strength73
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.87
Shares Outstanding7,873,387
10 Day Avg. Volume26,846
30 Day Avg. Volume22,607
Financial Highlights & Ratios
PEG Ratio0.62
Price to Book (P/B)0.98
Price to Sales (P/S)0.00
P/FCF Ratio11.44
Enterprise Value/Market Cap0.33
Enterprise Value/Revenue0.12
Enterprise Value/Gross Profit1.37
Enterprise Value/Ebitda0.97
Forecast
1Y Price Target
$40.25Price Target Upside7.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Bankwell Financial Group Business Overview & Revenue Model
Company DescriptionBankwell Financial Group, Inc. operates as the bank holding company for Bankwell Bank that provides various banking services for individual and commercial customers. It offers various traditional depository products, including checking, savings, money market, and certificates of deposit. The company also provides first mortgage loans secured by one-to-four family owner occupied residential properties for personal use; home equity loans and home equity lines of credit secured by owner occupied one-to-four family residential properties; loans secured by commercial real estate, multi-family dwellings, and investor-owned one-to-four family dwellings; commercial construction loans for commercial development projects, including apartment buildings and condominiums, as well as office buildings, retail, and other income producing properties; land loans; commercial business loans secured by assignments of corporate assets and personal guarantees of the business owners; loans secured by savings or certificate accounts and automobiles; and unsecured personal loans and overdraft lines of credit. It operates branches in New Canaan, Stamford, Fairfield, Wilton, Westport, Darien, Norwalk, and Hamden, Connecticut. The company was formerly known as BNC Financial Group, Inc. and changed its name to Bankwell Financial Group, Inc. in September 2013. Bankwell Financial Group, Inc. was founded in 2002 and is headquartered in New Canaan, Connecticut.
How the Company Makes MoneyBankwell Financial Group makes money primarily through its interest income, which is generated by the loans it provides to its customers, such as commercial real estate loans, commercial business loans, and residential mortgages. The interest rate difference between the loans it extends and the deposits it holds, known as the net interest margin, is a critical component of its revenue. Additionally, the company earns non-interest income through various fees and service charges, including fees associated with deposit accounts, loan servicing, and other financial services. Bankwell may also have strategic partnerships with financial service providers that can offer complementary products, enhancing its revenue stream. The company's earnings are influenced by factors such as interest rate environments, economic conditions, and regulatory changes.
Bankwell Financial Group Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 23.73%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Positive
The earnings call presented a strong performance with significant increases in earnings per share, successful reduction of nonperforming assets, and growth in core deposits. However, challenges such as a modest reduction in net loan balances and an increase in noninterest expenses were noted. Overall, the highlights significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
Significant Increase in Earnings Per Share
GAAP fully diluted earnings per share of $0.87, up 135% relative to the fourth quarter and 81% year-over-year.
Successful Disposition of Nonperforming Assets
Disposed of nonperforming credits including an $8.3 million OREO asset and a $27.1 million multifamily loan, reducing nonperforming assets as a percentage of total assets by 105 basis points to 83 basis points.
Net Interest Margin Expansion
Reported net interest margin for the quarter of 281 basis points, a 21 basis point increase relative to the linked quarter.
Growth in Core Deposits
Core deposits grew by $43 million, including $28 million growth in noninterest-bearing deposits.
Reduction in Broker Deposits
Broker deposits declined $81 million relative to the fourth quarter, with a total reduction of $207 million over the last twelve months.
Increase in SBA Originations
SBA originations grew to $10 million in the first quarter, with gain on sale margins over 10%.
Improved Efficiency Ratio
Efficiency ratio for the quarter was 59.9%, with expectations of further improvement as net interest margin expands.
Negative Updates
Modest Reduction in Net Loan Balances
Elevated payoff activity of $200 million offset strong origination activity of $130 million, resulting in a modest reduction in net balances.
Increase in Noninterest Expense
Total noninterest expense increased to $14.1 million, driven by higher salaries and benefits, initiative-related costs, and professional service fees.
Slow Start to Loan Growth
Despite expectations for low single-digit loan growth for the full year, the first quarter saw a slower start due to higher-than-anticipated payoffs.
Increase in Special Mention Loans
Risk rating migration saw an increase in special mention loans, primarily from past credit due to health care loans not hitting their pro formas.
Company Guidance
During the Bankwell Financial Group's first quarter 2025 earnings call, the company provided comprehensive guidance on various financial metrics. The GAAP fully diluted earnings per share reached $0.87, marking a 135% increase from the previous quarter and an 81% rise year-over-year. The net interest margin improved by 21 basis points to 281 basis points, with a core net interest margin expansion of 12 basis points due to a decline in the total cost of funds to 3.6%. Noninterest income saw a 56% increase compared to the previous quarter, driven by $424,000 in SBA gain on sale income. The company reported a pre-provision net revenue of $9.4 million, up 11% from the fourth quarter, and an efficiency ratio of 59.9%. Bankwell reaffirmed its net interest income guidance for 2025, targeting $93 million to $95 million, with anticipated continued margin expansion. The company reduced broker deposits by $81 million while core deposits grew by $43 million. The full year guidance for noninterest income and expense remains at $7 million to $8 million and $56 million to $57 million, respectively.Bankwell Financial Group Financial Statement Overview
Summary
Bankwell Financial Group shows strong revenue growth, highlighted by a significant increase in overall income. However, declining net profit margins and negative cash flows indicate challenges in managing costs and generating consistent cash flow. The company's debt-free position strengthens its financial stability.Income Statement
Bankwell Financial Group has demonstrated strong revenue growth with a notable increase from $99.31M in 2023 to $191.99M in 2024, representing a significant growth trajectory. The gross profit margin remains stable at 100% due to the nature of banking revenue recognition. However, the net profit margin decreased from 36.90% in 2023 to 4.85% in 2024, indicating potential cost management concerns. The EBIT margin improved from 48.37% in 2023 to 99.76% in 2024, reflecting efficient operational performance. The absence of EBITDA data for 2024 limits the comprehensive margin analysis.72
Positive
Balance Sheet
Bankwell Financial Group exhibits a strong equity position with a debt-to-equity ratio of 0, indicating no reliance on debt financing in 2024. The return on equity decreased to 3.44% in 2024 from 13.80% in 2023, reflecting reduced profitability relative to shareholder equity. The equity ratio remains strong at 8.28%, showing financial stability. However, the low ROE may indicate less efficient use of equity capital.68
Positive
Cash Flow
The company's cash flow performance shows volatility. Operating cash flow turned negative in 2024, declining from $31.93M in 2023 to -$5.39M, which raises concerns about cash generation from core operations. Free cash flow also turned negative, indicating capital allocation challenges. The operating cash flow to net income ratio and free cash flow to net income ratio both reflect these challenges, suggesting potential liquidity constraints.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 196.50M | 195.71M | 193.30M | 120.98M | 87.03M | 80.37M |
| Gross Profit | 69.11M | 64.38M | 98.44M | 92.35M | 73.60M | 50.11M |
| EBITDA | 21.02M | 17.10M | 51.67M | 51.35M | 37.44M | 10.58M |
| Net Income | 12.89M | 9.77M | 36.66M | 37.43M | 26.59M | 5.90M |
Balance Sheet | ||||||
| Total Assets | 3.18B | 3.27B | 3.22B | 3.25B | 2.46B | 2.25B |
| Cash, Cash Equivalents and Short-Term Investments | 313.80M | 325.27M | 277.31M | 448.59M | 381.80M | 493.94M |
| Total Debt | 109.51M | 159.45M | 159.21M | 158.96M | 84.44M | 200.26M |
| Total Liabilities | 2.91B | 3.00B | 2.95B | 3.01B | 2.25B | 2.08B |
| Stockholders Equity | 275.21M | 270.52M | 265.75M | 238.47M | 201.99M | 176.60M |
Cash Flow | ||||||
| Free Cash Flow | 24.20M | 29.32M | 29.88M | 77.71M | 38.81M | 1.82M |
| Operating Cash Flow | 24.83M | 29.94M | 31.93M | 82.67M | 34.56M | -1.51M |
| Investing Cash Flow | 13.95M | -33.96M | -48.30M | -811.16M | -270.02M | -21.94M |
| Financing Cash Flow | 18.52M | 42.39M | -70.15M | 739.49M | 170.55M | 355.00M |
Bankwell Financial Group Technical Analysis
Neutral
37.39
Price Trends
36.06
Positive
33.29
Positive
31.91
Positive
Market Momentum
0.51
Positive
54.23
Neutral
29.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWFG, the sentiment is Neutral. The current price of 37.39 is below the 20-day moving average (MA) of 37.50, above the 50-day MA of 36.06, and above the 200-day MA of 31.91, indicating a neutral trend. The MACD of 0.51 indicates Positive momentum. The RSI at 54.23 is Neutral, neither overbought nor oversold. The STOCH value of 29.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BWFG.
Bankwell Financial Group Risk Analysis
Bankwell Financial Group disclosed 35 risk factors in its most recent earnings report. Bankwell Financial Group reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Bankwell Financial Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (70)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $278.71M | 9.60 | 11.76% | 5.65% | 12.08% | 9.69% | |
77 Outperform | $290.69M | 23.49 | 4.48% | 2.14% | -0.04% | -58.92% | |
76 Outperform | $297.19M | 11.02 | 9.74% | 5.83% | 8.59% | 14.56% | |
74 Outperform | $300.82M | 13.07 | 7.50% | 2.18% | 1.75% | 2.76% | |
70 Outperform | S$32.72B | 14.77 | 11.69% | 4.38% | 8.28% | 16.42% | |
66 Neutral | $289.01M | 32.26 | 2.36% | 3.41% | 1.75% | ― | |
| ― | $298.06M | 9.17 | 13.07% | ― | ― | ― |
* Financial Sector Average
Performance Comparison
BWFG
Bankwell Financial Group
37.39
11.41
43.92%
CZNC
Citizens & Northern
19.22
-0.41
-2.09%
FNLC
First Bancorp
25.66
-0.89
-3.35%
FRST
Primis Financial
11.72
-0.86
-6.84%
BCML
BayCom
27.51
4.20
18.02%
COSO
CoastalSouth Bancshares
21.30
3.30
18.33%
Bankwell Financial Group Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Bankwell Financial Group Reports Strong Q1 2025 Results
Positive
Apr 23, 2025
On April 23, 2025, Bankwell Financial Group announced its financial results for the first quarter of 2025, reporting a GAAP net income of $6.9 million, a significant increase from the previous quarter. The company declared a quarterly dividend of $0.20 per share, payable on May 20, 2025. Bankwell’s net interest margin improved, and asset quality saw notable enhancements due to the resolution of non-performing credits. The company also expanded its presence in the New York City metro market by hiring new deposit teams, indicating a strategic focus on growth despite macroeconomic volatility.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.