FinWise Bancorp (NasdaqGM:FINW) Q3 2025 Earnings Call October 29, 2025 05:00 PM ET Speaker3Greetings, and welcome to the FinWise Bancorp Third Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. Please note this conference is being recorded. I would now like to turn the conference over to ...

FINWISE BANCORP REPORTS THIRD QUARTER 2025 RESULTS - Loan Originations of $1.8 Billion - - Net Income of $4.9 Million - - Diluted Earnings Per Share of $0.34 - MURRAY, UTAH — October 29, 2025 (GLOBE NEWSWIRE) — FinWise Bancorp (NASDAQ: FINW) ("FinWise", the "Company", "we", "our", or "us"), parent company of FinWise Bank (the "Bank"), today announced results for the quarter ended September 30, 2025. Exhibit 99.1 Third Quarter 2025 Highlights "Our strong third quarter results reflect the positive impact of t ...

- Loan Originations of $1.8 Billion -- Net Income of $4.9 Million -- Diluted Earnings Per Share of $0.34 - MURRAY, Utah, Oct. 29, 2025 (GLOBE NEWSWIRE) -- FinWise Bancorp (NASDAQ: FINW) (“FinWise”, the “Company”, “we”, “our”, or “us”), parent company of FinWise Bank (the “Bank”), today announced results for the quarter ended September 30, 2025. Third Quarter 2025 Highlights Loan originations totaled $1.8 billion, compared to $1.5 billion for the quarter ended June 30, 2025, and $1.4 billion for the third qu ...

October 2025 Disclaimers "Safe Harbor" Statement Under the Private Securities Litigation Reform Act of 1995 This presentation may contain forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect the Company's current views with respect to, among other things, the Company's strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and resul ...

MURRAY, Utah, Oct. 27, 2025 (GLOBE NEWSWIRE) -- FinWise Bancorp (NASDAQ: FINW) (“FinWise” or the “Company”), the parent company of FinWise Bank (the “Bank”), today announced that it has entered into program management, network issuer processor and servicer agreement with Tallied Technologies, Inc. (“Tallied”) by which the parties intend to deliver credit card products and card processing solutions to Fintechs, their businesses, and their customers. Tallied, through its cloud-native and API-first platform, h ...

Core Insights - FinWise Bancorp has entered a strategic program agreement with DreamFi, a fintech company focused on serving underserved communities through financial wellness initiatives [1][2] - The partnership aims to provide essential financial products and services, including a DreamFi Debit Card, checking accounts, and access to over 40,000 surcharge-free ATMs in the U.S. [2] - Both companies emphasize their commitment to improving financial access and literacy, aligning their missions to empower individuals and families [3][4] Company Overview - FinWise Bancorp provides banking and payments solutions to fintech brands, with a focus on scalable API-driven infrastructure for deposit, lending, and payments programs [5] - The company is expanding its business model to include Payments (MoneyRails™) and BIN Sponsorship offerings, enhancing its ability to support fintechs in regulatory compliance [5] DreamFi Overview - DreamFi, co-founded by civil rights attorney Ben Crump, aims to transform financial access and empower users to build financial stability and generational wealth [4] - The company plans to leverage mobile banking and financial literacy tools to help users take control of their financial futures [4]

Core Viewpoint - FinWise Bancorp will report its third quarter 2025 financial results and host a conference call on October 29, 2025 [1] Conference Call Information - The conference call is scheduled for 5:00 p.m. ET on October 29, 2025, with a toll-free dial-in number of 1-877-423-9813 and an international number of 1-201-689-8573 [2] - Participants are advised to dial in 10 minutes prior to the start time [2] Webcast Information - The webcast will be available on the Company's website and a replay will be accessible for six months following the call [3] Submission of Conference Call Questions - The Company will accept questions submitted via email prior to the call, in addition to live questions from analysts [4] About FinWise Bancorp - FinWise provides Banking and Payments solutions to fintech brands, with a focus on Strategic Program Lending through API-driven infrastructure [5] - The Company offers a Credit Enhanced Balance Sheet Program to help diversify funding sources and manage capital efficiency [5] - FinWise also manages various Lending programs, including SBA 7(a), Owner Occupied Commercial Real Estate, and Leasing, while expanding its business model with Payments and BIN Sponsorship offerings [5] - The Company emphasizes compliance oversight and risk management to assist fintechs in regulatory compliance [5]

Company Overview - FinWise Bancorp (FINW) shares increased by 9% in the last trading session, closing at $22.49, with notable trading volume compared to typical sessions [1] - The stock has gained 11.7% over the past four weeks [1] Index Inclusion - FinWise is now included in the S&P Global BMI Index, which is expected to enhance the company's visibility among institutional and global investors, leading to increased liquidity and shareholder engagement [2] Earnings Expectations - The company is projected to report quarterly earnings of $0.30 per share, reflecting a year-over-year increase of 20% [2] - Expected revenues for the upcoming report are $30.2 million, representing a 45.1% increase from the same quarter last year [2] Earnings Estimate Trends - The consensus EPS estimate for FinWise has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 2 (Buy), suggesting positive sentiment in the market [4] Industry Context - FinWise Bancorp is part of the Zacks Banks - Southwest industry, where Cullen/Frost Bankers (CFR) is another player, having closed 1.2% lower at $127.17 in the last trading session [4] - Cullen/Frost's consensus EPS estimate has changed by +0.1% over the past month to $2.35, which is a 4.9% increase compared to the previous year [5]

Core Viewpoint - FinWise Bancorp is a financial institution that provides a range of banking services, focusing on commercial and consumer loans, as well as deposit products, competing with various financial entities in the market [1] Financial Performance - FinWise Bancorp has a Return on Invested Capital (ROIC) of 10.56% and a Weighted Average Cost of Capital (WACC) of 11.63%, resulting in a ROIC to WACC ratio of 0.91, indicating a need for improvement in capital utilization [2][5] - Comparatively, Third Coast Bancshares has a negative ROIC of -1.53% and a high WACC of 22.25%, leading to a ROIC to WACC ratio of -0.07, indicating inefficiency [3] - Primis Financial Corp also shows inefficiency with a ROIC of -6.83% and a WACC of 25.66%, resulting in a ROIC to WACC ratio of -0.27 [3] - In contrast, Five Star Bancorp excels with a ROIC of 32.96% and a WACC of 14.67%, achieving a ROIC to WACC ratio of 2.25, highlighting its superior ability to generate returns above its cost of capital [4][5]

[PART I. FINANCIAL INFORMATION](index=6&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited statements show asset growth to $842.5 million and a net income increase to $7.3 million for the six months ended June 30, 2025 [Consolidated Balance Sheets](index=6&type=section&id=Consolidated%20Balance%20Sheets) Total assets grew 13.0% to $842.5 million, driven by loan portfolio expansion and funded by a 16.6% increase in deposits - Total assets increased by **13.0%** to **$842.5 million** as of June 30, 2025, from $746.0 million at December 31, 2024, primarily driven by a **60.8% increase in Strategic Program loans held-for-sale** and a **13.1% increase in loans held-for-investment**[16](index=16&type=chunk) - Total deposits grew by **16.6%** to **$635.2 million**, funded mainly by an increase in interest-bearing deposits, while total shareholders' equity rose to **$182.0 million** from $173.7 million[16](index=16&type=chunk) Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$842,488** | **$745,976** | | Total cash and cash equivalents | $90,100 | $109,162 | | Strategic Program loans held-for-sale | $147,282 | $91,588 | | Loans held-for-investment, net | $506,503 | $447,812 | | **Total Liabilities** | **$660,529** | **$572,256** | | Total deposits | $635,174 | $544,952 | | **Total Shareholders' Equity** | **$181,959** | **$173,720** | [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) Net income rose 12.2% year-over-year to $7.3 million, propelled by a 67.6% surge in non-interest income - **Net income** for the six months ended June 30, 2025, increased by **12.2%** year-over-year to **$7.3 million**, driven by a **67.6% surge in non-interest income** that offset higher credit loss provisions and non-interest expenses[18](index=18&type=chunk) - For Q2 2025, **non-interest income more than doubled to $10.3 million** from $5.2 million in Q2 2024, primarily due to a significant increase in credit enhancement income and gain on sale of loans[18](index=18&type=chunk) Key Income Statement Data (in thousands, except EPS) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net Interest Income | $29,008 | $28,621 | | Provision for credit losses | $8,062 | $5,539 | | Total Non-interest Income | $18,147 | $10,828 | | Total Non-interest Expense | $29,230 | $25,223 | | **Net Income** | **$7,286** | **$6,495** | | **Diluted EPS** | **$0.52** | **$0.49** | [Notes to Consolidated Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail business operations through subsidiaries, a stock repurchase program, and a post-quarter data breach with related litigation - The company operates through its subsidiaries, FinWise Bank and FinWise Investment, LLC, with the Bank providing solutions to fintech brands and originating loans through third-party Strategic Programs[33](index=33&type=chunk) - A stock repurchase program was authorized on March 6, 2024, to purchase up to 641,832 shares; as of June 30, 2025, **44,608 shares have been repurchased for $0.5 million**, with no repurchases in Q2 2025[38](index=38&type=chunk) - Subsequent to the quarter end, the company notified approximately **600,000 individuals of a data breach** and is now facing class action lawsuits, though management believes any related losses will not be material[147](index=147&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=41&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Asset and net income growth were driven by Strategic Program loans, though net interest margin compressed and credit loss provisions increased [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Net income grew 12.2% despite a compressed net interest margin, driven by a 67.6% increase in non-interest income - **Net interest margin (NIM) decreased to 8.03%** for the six months ended June 30, 2025, from 10.19% in the prior-year period, due to loan repricing and a strategic shift to higher quality, lower-yielding loans[160](index=160&type=chunk)[161](index=161&type=chunk) - **Non-interest income** for the first six months of 2025 **grew by 67.6% YoY**, primarily due to higher Strategic Program fees, a significant increase in credit enhancement income, and higher gains on the sale of SBA loans[169](index=169&type=chunk) - **Non-interest expense rose 15.9% YoY** for the first six months of 2025, mainly due to a **25.6% increase in salaries and employee benefits** from increased headcount and compensation adjustments[171](index=171&type=chunk) Net Income Components Comparison (in thousands) | Component | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | % Change | | :--- | :--- | :--- | :--- | | Net interest income | $29,008 | $28,621 | 1.4% | | Provision for credit losses | ($8,062) | ($5,539) | 45.5% | | Non-interest income | $18,147 | $10,828 | 67.6% | | Non-interest expense | ($29,230) | ($25,223) | 15.9% | | **Net income** | **$7,286** | **$6,495** | **12.2%** | [Financial Condition](index=47&type=section&id=Financial%20Condition) Total assets grew 12.9% to $842.5 million, led by increases in Strategic Program and held-for-investment loans - **Total assets grew by $96.5 million (12.9%) to $842.5 million** at June 30, 2025, from year-end 2024, led by a **$55.7 million increase in Strategic Program loans held-for-sale** and a **$58.7 million increase in loans held-for-investment**[174](index=174&type=chunk) - **Nonperforming assets increased to $39.7 million** as of June 30, 2025, from $36.5 million at year-end 2024; however, **$21.2 million of these are SBA 7(a) loan balances guaranteed by the SBA**[198](index=198&type=chunk) - The **Allowance for Credit Losses (ACL) increased to $16.2 million (3.1% of total loans)** from $13.2 million (2.8% of total loans) at year-end, driven by growth in credit-enhanced Strategic Program loans[216](index=216&type=chunk)[217](index=217&type=chunk) Loan Portfolio Composition (Gross, in thousands) | Loan Category | June 30, 2025 | % of Total | Dec 31, 2024 | % of Total | | :--- | :--- | :--- | :--- | :--- | | SBA | $246,903 | 46.6% | $255,056 | 54.8% | | Commercial leases | $88,957 | 16.8% | $70,153 | 15.1% | | Commercial real estate (Owner occupied) | $77,871 | 14.7% | $41,046 | 8.8% | | Residential real estate | $54,132 | 10.2% | $51,574 | 11.1% | | Strategic Program loans | $30,699 | 5.8% | $20,122 | 4.3% | | Other | $33,482 | 6.3% | $27,281 | 5.9% | | **Total Loans Held-for-Investment** | **$530,044** | **100.0%** | **$465,233** | **100.0%** | [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity and a 'well-capitalized' status, with a leverage ratio of 18.0% - The primary source of funding is deposits, which **increased by $90.2 million** since year-end 2024, mainly through brokered time deposits to fund loan growth[222](index=222&type=chunk)[223](index=223&type=chunk) - The company maintains significant liquidity sources, including **$90.1 million in cash**, a **$257.6 million line with the Federal Reserve Bank**, and a **$24.9 million line with the FHLB**, with no outstanding balances[230](index=230&type=chunk)[231](index=231&type=chunk) - The Bank remains **'well-capitalized'** under the Community Bank Leverage Ratio (CBLR) framework, with a **leverage ratio of 18.0%** as of June 30, 2025, well above the 9.0% requirement[91](index=91&type=chunk)[236](index=236&type=chunk) Key Performance Ratios | Ratio | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | Return on Average Equity | 9.2% | 7.9% | | Return on Average Assets | 2.0% | 2.1% | | Total Equity to Total Assets | 21.6% | 23.3% (as of 12/31/24) | [Quantitative and Qualitative Disclosures About Market Risk](index=65&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is asset-sensitive, with a +100 basis point rate shock projected to increase net interest income by 2.7% - The company's Asset/Liability Management Committee (ALCO) manages interest rate risk by structuring the balance sheet and **does not use leveraged derivatives, options, or futures contracts** for this purpose[254](index=254&type=chunk)[255](index=255&type=chunk) Earnings at Risk (EAR) Analysis as of June 30, 2025 | Interest Rate Shock | Impact on Net Interest Income | | :--- | :--- | | +300 bps | +8.7% | | +200 bps | +5.8% | | +100 bps | +2.7% | | -100 bps | (2.0)% | | -200 bps | (4.5)% | [Controls and Procedures](index=67&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls - The CEO and CFO concluded that **disclosure controls and procedures were effective** as of the end of the period covered by the report[257](index=257&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[258](index=258&type=chunk) [PART II. OTHER INFORMATION](index=68&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Legal Proceedings](index=68&type=section&id=Item%201.%20Legal%20Proceedings) The company is not subject to any material legal proceedings outside the ordinary course of business - The company is not subject to any material legal proceedings, only claims and litigation from the ordinary course of business[260](index=260&type=chunk) [Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor regarding counterparty default in credit enhancement arrangements for Strategic Program loans has been identified - A new risk factor highlights the **counterparty risk from credit enhancement agreements** with Strategic Program service providers; if a provider defaults on its obligation to reimburse for credit or fraud losses, the Bank would assume that risk[263](index=263&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=68&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased in the quarter, with 597,224 shares remaining available under the current program - **No shares of common stock were repurchased** during the three months ended June 30, 2025; there are **597,224 shares remaining for repurchase** under the current program[264](index=264&type=chunk) [Other Information](index=68&type=section&id=Item%205.%20Other%20Information) No directors or officers engaged in changes to Rule 10b5-1(c) trading arrangements during the quarter - No directors or officers adopted, modified, or terminated a Rule 10b5-1(c) trading arrangement during the quarter[267](index=267&type=chunk) [Exhibits](index=69&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including bylaws, stock plans, and officer certifications - Exhibits filed include Amended and Restated Bylaws, the 2019 and 2016 Stock Plans, and certifications from the Principal Executive Officer and Principal Financial Officer[270](index=270&type=chunk)