Is Bankwell Financial Group a Buy After Its Latest Earnings Report?

Bankwell Financial Group reported record earnings per share of $1.58 and total revenue of $35.3 million in Q3, a 25% and 24% growth year-over-year respectively. Adjusting for core conversion costs, diluted EPS would have been $1.86. The bank's commercial real estate, commercial and industrial, and construction loan portfolios have collectively grown to over $2.9 billion.

ROAA and ROATCE metrics, crucial for evaluating bank performance, stood at 1.45% and 15.3% respectively in the quarter, surpassing the 1% and 10% thresholds for solid performance, according to CEO Chris Gruseke. Net interest margin expanded to 3.71%, and credit quality improved significantly, with non-performing and past-due loans falling.

Despite a $27 million increase in special mention loans, all borrowers are currently current on payments. At 1.69x tangible book value, Bankwell appears slightly undervalued, potentially benefiting from its recent investments, which could further enhance its earnings power.