- BWFG
- NVDA
Bankwell Financial Group(NASDAQ:BWFG), a small-cap bank headquartered in Connecticut, delivered record earnings per share (EPS) of $1.58 on total revenue of roughly $35.3 million.
EPS grew over 25% year over year, while revenue grew 24%. Adjusting for core conversion costs for broader investments in technology, Bankwell would have reported $1.86 in diluted EPS.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again.In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia.Continue »
“The third quarter was one of real progress for Bankwell. Margin expansion continued. We resolved our largest legacy problem credit. Our SBA platform had its best quarter yet, and we announced our core conversion, an important step in strengthening the infrastructure and technology that will support our future growth,” Bankwell’s CEO Chris Gruseke said on the company’s third-quarter earnings call.
Is the stock a buy after its latest earnings report?
Bankwell is generating strong returns while managing credit
Bankwell is largely a commercial lender, with over $2 billion in commercial real estate loans, over $726 million in commercial and industrial loans, and also roughly $130 million in construction loans.
The bank has been delivering strong results on return on average assets (ROAA) and return on average tangible common equity (ROATCE), two very important metrics for banks.
In the third quarter, Bankwell generated a 1.45% ROAA and a nearly 15.3% ROATCE. The threshold for solid performance is typically a 1% ROAA and 10% ROATCE. On an operating basis, excluding expenses related to core conversion, the bank would have generated a 1.71% ROAA and an 18% ROATCE.
Meanwhile, the bank’s net interest margin, a measure of the spread banks earn on their loan books after covering the cost of deposits and other funding sources, expanded 0.13% to 3.71%.
Past-due loans also fell, and the bank recorded negative loan charge-offs, meaning it actually recovered loans it had previously written off as losses.
During the quarter, Bankwell sold a legacy problem credit associated with a commercial real estate property in Westchester, New York, that stemmed from the COVID-19 pandemic and had been the bank’s largest non-performing asset. The sale resulted in a $2.5 million recovery.
