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Bankwell Financial Group (BWFG)
NASDAQ:BWFG
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Bankwell Financial Group
(NASDAQ:BWFG)
64Neutral
Bankwell Financial Group (BWFG) vs. S&P 500 (SPY)
Market Cap
$238.25M
Dividend Yield2.65%
Average Volume (3M)13.63K
Price to Earnings (P/E)24.5
Beta (1Y)0.82
Revenue Growth1.34%
EPS Growth-74.99%
CountryUS
Employees144
SectorFinancial
Sector Strength82
IndustryBanks - Regional
Share Statistics
EPS (TTM)1.18
Shares Outstanding7,907,311
10 Day Avg. Volume14,096
30 Day Avg. Volume13,633
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)3.70
Price to Cash Flow (P/CF)4.20
P/FCF Ratio1.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$40.00Price Target Upside32.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
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 generates revenue primarily through interest income from its loan portfolio, which consists of commercial real estate loans, residential real estate loans, commercial and industrial loans, and consumer loans. The bank earns interest income on these loans and also generates revenue through various fees associated with their banking services, such as account maintenance fees, transaction fees, and service charges. Additionally, the bank invests in securities and earns interest income from these investments. Bankwell Financial Group's profitability is further influenced by its ability to manage interest rate spreads, maintain low-cost deposits, and effectively manage credit risk. The company may also engage in strategic partnerships and community involvement initiatives to enhance its market presence and drive growth.
Bankwell Financial Group Financial Statement Overview
Summary
Bankwell Financial Group shows strong revenue growth but faces profitability challenges and cash flow volatility. The lack of debt enhances financial stability, but declining ROE and negative cash flows highlight areas for improvement.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 | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 87.00M | 99.31M | 97.78M | 73.54M | 57.72M | Gross Profit |
| 191.99M | 98.44M | 97.78M | 73.54M | 57.72M | EBIT |
| 73.78M | 48.04M | 71.19M | 33.86M | 7.30M | EBITDA |
| 0.00 | 51.67M | 51.35M | 37.44M | 10.58M | Net Income Common Stockholders |
| 9.31M | 36.66M | 37.43M | 26.59M | 5.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 295.67M | 269.16M | 448.59M | 381.80M | 493.94M | Total Assets |
| 3.27B | 3.22B | 3.25B | 2.46B | 2.25B | Total Debt |
| 159.45M | 159.21M | 158.96M | 84.44M | 200.26M | Net Debt |
| -134.10M | -108.32M | -185.97M | -207.16M | -205.08M | Total Liabilities |
| 3.00B | 2.95B | 3.01B | 84.44M | 200.26M | Stockholders Equity |
| 270.52M | 265.75M | 238.47M | 201.99M | 176.60M |
| Cash Flow | Free Cash Flow | |||
| -5.39M | 29.88M | 77.71M | 29.06M | -4.85M | Operating Cash Flow |
| -5.39M | 31.93M | 82.67M | 34.56M | -1.51M | Investing Cash Flow |
| -33.96M | -48.30M | -811.16M | -270.02M | -21.94M | Financing Cash Flow |
| 5.08M | -70.15M | 739.49M | 170.55M | 355.00M |
Bankwell Financial Group Technical Analysis
Positive
30.18
Price Trends
30.53
Negative
30.93
Negative
28.97
Positive
Market Momentum
-0.07
Negative
49.64
Neutral
70.00
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BWFG, the sentiment is Positive. The current price of 30.18 is above the 20-day moving average (MA) of 29.86, below the 50-day MA of 30.53, and above the 200-day MA of 28.97, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 49.64 is Neutral, neither overbought nor oversold. The STOCH value of 70.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $244.15M | 9.92 | 10.21% | 3.19% | 14.86% | -2.29% | |
70 Outperform | $231.42M | 18.52 | 7.51% | ― | 14.11% | -28.06% | |
70 Neutral | $232.57M | 15.78 | 7.80% | ― | 1.80% | -39.04% | |
64 Neutral | $238.25M | 24.47 | 3.38% | 2.65% | 1.34% | -74.99% | |
63 Neutral | $14.20B | 10.11 | 9.01% | 4.34% | 16.34% | -11.27% | |
63 Neutral | $243.79M | 14.25 | 7.17% | 1.46% | 31.17% | 231.96% | |
49 Neutral | $242.04M | ― | -2.01% | 4.08% | 8.69% | 38.76% |
* Financial Sector Average
Performance Comparison
BWFG
Bankwell Financial Group
30.18
5.69
23.23%
CIA
Citizens
4.55
2.44
115.64%
FRST
Primis Financial
9.77
-1.68
-14.67%
TSBK
Timberland Bancorp
30.15
4.59
17.96%
JMSB
John Marshall Bancorp
16.52
-0.55
-3.22%
FINW
FinWise
17.51
7.48
74.58%
Bankwell Financial Group Earnings Call Summary
Earnings Call Date: Jan 22, 2025 | % Change Since: 2.13% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced perspective with both positive and negative elements. The bank demonstrated strong deposit growth, a reduction in brokered deposits, and an establishment of a new SBA lending division, indicating optimism for 2025. However, financial performance was impacted by net charge-offs, decreased net interest margin, and elevated non-interest expenses.Highlights
No Credit Deterioration
During the fourth quarter, there was no credit deterioration observed, and there is optimism regarding the performance of the loan portfolio in 2025.
Strong Deposit Growth
Core deposits grew by $169 million in the fourth quarter, with a reduction in total deposit costs by 9 basis points.
Reduction in Brokered Deposits
Brokered deposits decreased by $247 million year-over-year, highlighting successful strategies to improve deposit quality and diversity.
SBA Lending Division Establishment
The foundation for an SBA lending division was successfully laid, with expectations to double non-interest income in 2025.
Reduction in Commercial Real Estate Concentration
Commercial Real Estate concentration was reduced to 375% of total risk-based capital at year-end 2024 from 397% at year-end 2023.
Optimistic 2025 Outlook
Expectations for modest loan growth of 3% to 5% with net interest income projected to grow to $93 million to $95 million.
Lowlights
Net Charge-offs Impact
Fourth quarter GAAP fully diluted earnings per share of $0.32 were impacted by $3 million of net charge-offs.
Non-Interest Income Decline
Non-interest income of $964,000 was down compared to the linked quarter, mainly due to a reduction in SBA gain on sale fees.
Decreased Net Interest Margin
Reported net interest margin for the fourth quarter was 260 basis points, a 12 basis point reduction relative to the linked quarter.
Elevated Non-Interest Expenses
Increase in total non-interest expense to $13.2 million included one-time OREO expenses of $700,000 and elevated occupancy costs, data processing, and professional services.
Company Guidance
During the Bankwell Financial Group Fourth Quarter 2024 Earnings Call, several important metrics and updates were discussed. The company's GAAP fully diluted earnings per share were reported at $0.32, impacted by $3 million in net charge-offs. Notably, two key non-performing assets were addressed: a $1.7 million C&I loan, which was fully disposed of, and a non-performing construction loan that resulted in a $1.2 million charge-off, leaving a carrying value of $8.3 million. Additionally, the non-performing asset ratio is expected to decrease by 25 and 83 basis points due to signed purchase agreements for these loans. The commercial real estate concentration was reduced to 375% of total risk-based capital, down from 397% the previous year. On the deposit side, Bankwell experienced core deposit growth of $169 million and a 9 basis point reduction in total deposit costs. The pre-provision net revenue was $7.9 million, with a net interest margin of 260 basis points, reflecting a 12 basis point decrease from the previous quarter. Overall, the company is optimistic about improving financial performance in 2025, anticipating modest loan growth of 3% to 5% and net interest income between $93 million to $95 million.Bankwell Financial Group Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Bankwell Financial Group Reports Q4 Results and Strategic Moves
Positive
Jan 22, 2025
On January 22, 2025, Bankwell Financial Group, Inc. reported its financial results for the fourth quarter of 2024, announcing a GAAP net income of $2.5 million, an increase from the previous quarter. The board declared a quarterly dividend of $0.20 per share, payable on February 21, 2025. Despite a decline in pre-tax, pre-provision net revenue, the company executed agreements to sell nonperforming assets, expecting a reduction in nonperforming asset ratios. Bankwell anticipates significant benefits from time deposit repricing and loan maturities in the coming year, contributing to net interest income. The company has also launched a new SBA lending division, expected to drive future growth in noninterest income, and remains focused on reducing CRE exposure and managing its liability-sensitive balance sheet.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.