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Compared to Estimates, FinWise Bancorp (FINW) Q1 Earnings: A Look at Key Metrics
ZACKS· 2025-05-01 00:05
Financial Performance - FinWise Bancorp reported revenue of $22.09 million for the quarter ended March 2025, marking a year-over-year increase of 13.5% [1] - The earnings per share (EPS) for the same period was $0.23, compared to $0.25 a year ago, indicating a decline [1] - The reported revenue was a surprise of -2.21% compared to the Zacks Consensus Estimate of $22.59 million [1] - The EPS surprise was -8.00% against the consensus estimate of $0.25 [1] Key Metrics - The efficiency ratio was reported at 64.8%, slightly above the two-analyst average estimate of 64.3% [4] - The net interest margin was 8.3%, lower than the average estimate of 9.8% based on two analysts [4] - Total interest-earning assets amounted to $700.50 million, exceeding the average estimate of $656.54 million [4] - Non-performing loans were reported at $29.88 million, significantly lower than the average estimate of $46.24 million [4] - The net charge-offs to average loans ratio was 1.9%, better than the average estimate of 2.6% [4] - Total non-interest income was $7.81 million, surpassing the average estimate of $6.57 million [4] - Net interest income was reported at $14.28 million, below the average estimate of $15.98 million [4] Stock Performance - Shares of FinWise Bancorp have returned -9.4% over the past month, compared to a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), suggesting potential outperformance against the broader market in the near term [3]
FinWise Bancorp (FINW) Q1 Earnings and Revenues Lag Estimates
ZACKS· 2025-04-30 23:30
Company Performance - FinWise Bancorp reported quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.25 per share, and down from $0.25 per share a year ago, representing an earnings surprise of -8% [1] - The company posted revenues of $22.09 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 2.21%, compared to year-ago revenues of $19.47 million [2] - Over the last four quarters, FinWise Bancorp has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.23 on revenues of $23.88 million, and for the current fiscal year, it is $1.12 on revenues of $101.19 million [7] - The estimate revisions trend for FinWise Bancorp is currently favorable, leading to a Zacks Rank 1 (Strong Buy) for the stock, indicating expected outperformance in the near future [6] - The sustainability of the stock's price movement will depend on management's commentary during the earnings call [3] Industry Context - The Banks - Southwest industry, to which FinWise Bancorp belongs, is currently in the top 5% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]
FinWise Bancorp(FINW) - 2025 Q1 - Earnings Call Presentation
2025-04-30 22:45
Business Model & Strategy - FinWise operates a resilient and profitable business model focused on providing banking and payment solutions to fintechs[10] - The company emphasizes a compliance-first and risk management-focused culture[10] - A key strategy involves Strategic Program Lending (SPL) with credit enhancement features to generate lower-risk asset growth and interest income[10] - FinWise aims to diversify its revenue streams by incorporating credit-enhanced products, payments solutions (MoneyRails™), and BIN sponsorship[21] Financial Performance & Portfolio - As of 1Q25, 44% of the loan portfolio consists of SBA Guaranteed loans and Strategic Program Held For Sale (HFS) loans, which are considered lower risk[10, 43] - Strategic Platform Loans on the balance sheet totaled $1387 million as of March 31, 2025, with 856% classified as HFS and 144% as Held For Investment (HFI)[16] - The company's allowance for credit losses (ACL) to total gross loans HFI stood at 29% at the end of 1Q25, reflecting a lower-risk portfolio[40] Operational Efficiency & Capitalization - At the end of 1Q25, 72 out of 196 FTEs (37%) are dedicated to IT, Compliance, Risk Management, and BSA functions[13] - The efficiency ratio for 1Q25 was 648%, compared to 610% in 1Q24[50] - The bank's capital levels remain significantly above the regulatory requirement of 9%[82]
FinWise Bancorp(FINW) - 2025 Q1 - Earnings Call Transcript
2025-04-30 22:32
Financial Data and Key Metrics Changes - The company reported net income of $3,200,000 or $0.23 per diluted common share for Q1 2025, with a decrease in net interest income to $14,300,000 from $15,500,000 in the prior quarter [12][14] - The net interest margin (NIM) declined to 8.27% from 10% in the prior quarter, primarily due to a change in the mix of loan originations and lower rates on variable rate loans [14][15] - Average loan balances increased to $565,000,000 from $522,000,000 in the prior quarter, driven by growth in SBA loans and consumer programs [12][13] Business Line Data and Key Metrics Changes - Loan originations totaled approximately $1,300,000,000 in Q1 2025, with a strong performance from the student lending program, although a seasonal softening in demand was noted [4][8] - The provision for credit losses decreased to $3,300,000 from $3,900,000 in the prior quarter, reflecting lower charge-offs [10] - Non-performing assets (NPAs) decreased to $29,900,000 from $36,500,000 in the prior quarter, attributed to effective collection efforts [11] Market Data and Key Metrics Changes - The company remains well-capitalized with a tangible shareholders' equity to assets ratio of 22%, down from 23.3% at year-end 2024 [5] - Average interest-bearing deposits increased to $430,000,000 from $355,000,000 in the prior quarter, driven by an increase in interest-bearing demand deposits [13] Company Strategy and Development Direction - The company is focused on executing its business strategy, including a new strategic program agreement with Fintech partner BACT to provide business installment loans [5][6] - The long-term outlook remains positive, with expectations for gradual growth driven by existing and new programs [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook for originations for the year, despite some seasonal fluctuations [8][9] - Concerns were raised about potential macroeconomic risks, particularly a slowdown in consumer spending, but no immediate issues were identified with strategic partners [39] Other Important Information - The effective tax rate for Q1 was 28.1%, up from 24.3% in the prior quarter, primarily due to permanent differences related to executive compensation [17] - The company expects credit enhanced balances to increase by $50,000,000 to $100,000,000 by year-end 2025 [17][18] Q&A Session Summary Question: What is the current expense run rate and expectations for future expenses? - The efficiency ratio is currently at 64.8%, and expenses are expected to remain relatively flat as revenues increase [21][22] Question: What is the outlook for net interest income (NII) growth? - NII is expected to grow from seasonal recovery in originations and increased loan portfolio growth, despite a decline in NIM [24][26] Question: What are the current credit enhanced loan balances? - The credit enhanced portfolio balance was slightly under $2,000,000 at the end of the quarter, with expectations to reach $50,000,000 to $100,000,000 by year-end [33][34] Question: How does the company view the health of its strategic partners? - Management is comfortable with origination levels and does not have concerns about specific partners at this time [38] Question: What is the yield on owner-occupied commercial real estate loans? - The gross yield on owner-occupied commercial real estate is likely around prime minus 100 basis points [65]
FinWise Bancorp(FINW) - 2025 Q1 - Earnings Call Transcript
2025-04-30 22:32
Financial Data and Key Metrics Changes - The company reported net income of $3,200,000 or $0.23 per diluted common share for Q1 2025, with a decrease in net interest income to $14,300,000 from $15,500,000 in the prior quarter [12][14] - The net interest margin (NIM) declined to 8.27% from 10% in the prior quarter, primarily due to a change in the mix of loan originations and lower rates on variable rate loans [14][15] - Average loan balances increased to $565,000,000 from $522,000,000 in the prior quarter, driven by growth in SBA loans and consumer programs [12][13] Business Line Data and Key Metrics Changes - Loan originations totaled approximately $1,300,000,000 in Q1 2025, with a strong contribution from strategic programs initiated in 2024 [4][8] - The company experienced a seasonal softening in demand from higher yielding partners in the second half of the quarter, which is consistent with historical trends [8] - The provision for credit losses decreased to $3,300,000 from $3,900,000 in the prior quarter, reflecting lower charge-offs [10] Market Data and Key Metrics Changes - The company’s tangible shareholders' equity to assets ratio was 22%, down from 23.3% at year-end 2024, indicating a planned growth in assets [5] - The company expects to see a gradual progression and growth throughout 2025, driven by originations from existing programs and new partnerships [6][7] Company Strategy and Development Direction - The company announced a new strategic program agreement with Fintech partner BACT, focusing on providing business installment loans to small and medium-sized businesses [5] - The company aims to continue migrating its loan portfolio to a lower risk profile while maintaining profitability and increasing tangible book value [4][6] - The management remains optimistic about long-term growth, particularly as strategic partners express enthusiasm for the company's banking and payments platform [6] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain macroeconomic environment but expressed confidence in the long-term outlook for the business [6] - The company anticipates that credit enhanced balance sheet programs will significantly contribute to earnings in 2025, particularly in the second half of the year [7] - Management is closely monitoring economic conditions, particularly consumer spending, which could impact lending demand [38] Other Important Information - The effective tax rate for Q1 was 28.1%, up from 24.3% in the prior quarter, primarily due to permanent differences related to executive compensation [17] - The company is comfortable with the outlook for credit enhanced balances to increase by $50,000,000 to $100,000,000 by year-end 2025 [17] Q&A Session Summary Question: What is the current expense run rate and expectations for future expenses? - The company reported an efficiency ratio of 64.8%, with expectations for expenses to remain relatively flat as revenues increase [21][22] Question: What is the outlook for net interest income (NII) growth? - The company expects NII growth to come from a return to normal origination levels and an increase in the loan portfolio, despite a decline in NIM [24][25] Question: What are the current credit enhanced loan balances and growth expectations? - The credit enhanced portfolio balance was slightly under $2,000,000 at the end of the quarter, with expectations to reach $50,000,000 to $100,000,000 by year-end 2025 [31][32] Question: How does the company view the health of its strategic partners? - Management expressed no current concerns about strategic partners, noting healthy origination levels and a gradual pickup from newer partners throughout 2025 [38] Question: What is the yield on owner-occupied commercial real estate loans? - The gross yield on owner-occupied commercial real estate loans is expected to be around prime minus 100 basis points [63]
FinWise Bancorp(FINW) - 2025 Q1 - Earnings Call Transcript
2025-04-30 21:30
Financial Data and Key Metrics Changes - The company originated approximately $1.3 billion in loans during the first quarter, with a tangible book value per common share increasing to $13.42 from $13.15 in the prior quarter [3][4] - Net income for the first quarter was $3.2 million, or $0.23 per diluted common share, with net interest income declining to $14.3 million from $15.5 million in the prior quarter [10][11] - The net interest margin (NIM) decreased to 8.27% from 10% in the prior quarter, primarily due to a change in the mix of loan originations and lower rates on variable rate loans [11][12] Business Line Data and Key Metrics Changes - The largest student lending program had strong originations but is expected to decelerate in the second quarter due to school calendars [6] - SBA seven loan originations decreased slightly quarter over quarter, driven by a lower average loan size, while equipment leasing and owner-occupied commercial real estate lines showed solid growth [7][8] - The provision for credit losses was $3.3 million in Q1, down from $3.9 million in the prior quarter, with non-performing asset (NPA) balances reduced to $29.9 million from $36.5 million [9] Market Data and Key Metrics Changes - Average loan balances increased to $565 million from $522 million in the prior quarter, with average interest-bearing deposits rising to $430 million from $355 million [10][11] - The company expects gradual growth driven by existing programs and new partnerships, with loan originations tracking at a quarterly rate of $1.2 billion in early April [5][6] Company Strategy and Development Direction - The company announced a new strategic program agreement with Fintech partner BACT to provide business installment loans to small and medium-sized businesses [4] - The focus remains on migrating the loan portfolio to a lower risk profile while maintaining profitability and increasing tangible book value [3][5] - The company anticipates that the credit enhanced balance sheet program will significantly contribute to earnings in 2025, particularly in the second half of the year [5][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for the business, despite a more uncertain macro environment [5] - The company is closely monitoring economic conditions but remains comfortable with the guidance for gradual growth from new partners throughout 2025 [36] - Concerns about potential macro risks, such as a slowdown in consumer spending, were acknowledged, but no immediate issues were reported [36] Other Important Information - The efficiency ratio remained relatively flat at 64.8%, with expectations for future decreases as revenue from new programs materializes [14] - The effective tax rate for the first quarter was 28.1%, with an expected rate of approximately 27.5% for 2025 [15] Q&A Session Summary Question: What is the current expense run rate and expectations for future expenses? - Management indicated that the efficiency ratio is around 64.8%, with expenses expected to remain flat and increase as revenues grow [19][21] Question: What is the outlook for net interest income (NII) growth given margin pressures? - Management expects NII growth to come from a return to normal origination levels and growth in traditional banking products, despite a continued decline in NIM [22][24] Question: What are the current credit enhanced loan balances and the timeline for growth? - The credit enhanced portfolio balance was slightly under $2 million at the end of the quarter, with expectations to reach $50 million to $100 million by year-end with existing partners [31][30] Question: How does the company view the health of its strategic partners in the current market? - Management reported no concerns about strategic partners, with origination levels remaining healthy and a gradual pickup expected from newer partners [36] Question: What is the yield on owner-occupied commercial real estate loans? - The gross yield on owner-occupied commercial real estate loans is expected to be around prime minus 100 basis points [63]
FinWise Bancorp(FINW) - 2025 Q1 - Quarterly Results
2025-04-30 20:18
Financial Performance - Net income for the first quarter of 2025 was $3.2 million, an increase from $2.8 million in the prior quarter but a slight decrease from $3.3 million in the same period last year[18]. - Diluted earnings per share (EPS) were $0.23 for the first quarter of 2025, compared to $0.20 in the prior quarter and $0.25 in the same period last year[5]. - Net income for the three months ended March 31, 2025, was $3,189 thousand, compared to $2,794 thousand for the previous quarter, reflecting an increase of 14.1%[45]. - Earnings per share (basic) for the three months ended March 31, 2025, was $0.24, up from $0.21 in the previous quarter, an increase of 14.3%[45]. Loan and Asset Management - Loan originations totaled $1.3 billion for the first quarter of 2025, consistent with the prior quarter and up from $1.1 billion in the same period last year[5]. - Total gross loans held-for-investment (HFI) as of March 31, 2025, increased by $27.0 million (5.8%) from December 31, 2024, and by $101.3 million (25.9%) from March 31, 2024, driven by growth in commercial real estate - owner occupied, commercial leases, and residential real estate loan portfolios[21]. - Loans held-for-investment reached $485.78 billion, generating $12.89 billion in interest income, resulting in a yield of 10.76%[50]. Income and Expenses - Net interest income was $14.3 million for the first quarter of 2025, down from $15.5 million in the prior quarter but up from $14.0 million in the same period last year[8]. - Total interest income decreased to $18,536 thousand for the three months ended March 31, 2025, down from $19,362 thousand in the previous quarter, a decline of 4.3%[45]. - Non-interest expense increased to $14,318 thousand for the three months ended March 31, 2025, compared to $13,563 thousand in the previous quarter, an increase of 5.6%[45]. - Total non-interest income was $7.81 billion, up from $5.60 billion in the previous quarter, reflecting a significant increase in revenue[49]. Asset and Equity Growth - Total assets increased to $804.1 million as of March 31, 2025, up from $746.0 million at the end of the prior quarter and $610.8 million a year ago[19]. - Total shareholders' equity as of March 31, 2025, rose to $177.4 million, an increase of $3.6 million (2.1%) from December 31, 2024, and an increase of $14.9 million (9.2%) from March 31, 2024, mainly due to net income and stock-based compensation[24]. - The company's total liabilities increased to $626,768 thousand as of March 31, 2025, from $572,256 thousand at December 31, 2024, an increase of 9.5%[43]. Credit Quality and Losses - Nonperforming loan balances decreased to $29.9 million as of March 31, 2025, down from $36.5 million in the prior quarter[5]. - The provision for credit losses was $3.3 million for the first quarter of 2025, down from $3.9 million in the prior quarter[11]. - The allowance for credit losses increased to $14.2 million as of March 31, 2025, from $13.2 million as of December 31, 2024, and $12.6 million as of March 31, 2024[30]. - Nonperforming loans as of March 31, 2025, totaled $29.9 million, or 6.1% of total loans HFI, a decrease from $36.5 million (7.8%) as of December 31, 2024, and an increase from $26.0 million (6.6%) as of March 31, 2024[27]. Capital Ratios - The leverage ratio as of March 31, 2025, was 18.8%, down from 20.6% as of December 31, 2024, and March 31, 2024, but still significantly above the well-capitalized requirement of 9.0%[25]. - The allowance for credit losses to total loans HFI was 2.9% as of March 31, 2025, compared to 2.8% as of December 31, 2024, and 3.2% as of March 31, 2024[30]. Strategic Initiatives - The Company is expanding its business model by incorporating Payments (MoneyRailsTM) and BIN Sponsorship offerings, alongside its existing Strategic Program Lending business[34]. - The company anticipates continued growth in interest-earning assets and improvements in net interest margin in the upcoming quarters[49].
FinWise Bancorp Reports First Quarter 2025 Results
Globenewswire· 2025-04-30 20:15
Core Insights - FinWise Bancorp reported solid financial performance for the first quarter of 2025, with loan originations of $1.3 billion and net income of $3.2 million, reflecting a resilient business model despite macroeconomic uncertainties [2][4][6]. Financial Performance - Loan originations totaled $1.3 billion, consistent with the previous quarter and up from $1.1 billion year-over-year [6][8]. - Net income for the quarter was $3.2 million, an increase from $2.8 million in the prior quarter but a slight decrease from $3.3 million in the same quarter last year [6][16]. - Diluted earnings per share (EPS) were $0.23, compared to $0.20 in the previous quarter and $0.25 in the same quarter last year [6][16]. - Net interest income decreased to $14.3 million from $15.5 million in the prior quarter, but increased from $14.0 million year-over-year [6][7]. Asset Quality - Nonperforming loans decreased to $29.9 million, or 6.1% of total loans held-for-investment, down from $36.5 million (7.8%) in the previous quarter [25][26]. - The allowance for credit losses was $14.2 million, representing 2.9% of total loans held-for-investment [28]. Balance Sheet - Total assets increased to $804.1 million, up from $746.0 million in the previous quarter and $610.8 million year-over-year [17][40]. - Total deposits rose to $605.8 million, driven by increases in brokered time certificates of deposits and demand deposits [20]. Efficiency and Ratios - The efficiency ratio was 64.8%, slightly up from 64.2% in the previous quarter and 61.0% year-over-year [14]. - The leverage ratio was 18.8%, down from 20.6% in the previous quarter, but still above the well-capitalized requirement of 9.0% [22]. Non-Interest Income - Total non-interest income for the quarter was $7.8 million, an increase from $5.6 million in the prior year, driven by higher strategic program fees and other miscellaneous income [11][12]. Strategic Initiatives - The company announced a new strategic program agreement to provide lending and credit enhancement products, aiming to enhance its business model and shareholder value [4].
FinWise Bancorp Announces Strategic Lending and Credit Enhanced Balance Sheet Program with Backd to Support Business Owners
Globenewswire· 2025-04-29 20:15
Core Insights - FinWise Bancorp has launched a strategic lending program in partnership with fintech Backd Business Funding to provide business installment loans to small and medium-sized businesses [1][2] - The partnership allows FinWise to offer Backd access to its Credit Enhanced Balance Sheet program, enhancing capital efficiency and diversifying funding sources [2][3] - Backd aims to empower SMBs in the U.S. with fast financing solutions, highlighting the significant market potential as SMBs represent nearly 44% of overall GDP and a $734 billion digital lending market [3] Company Overview - FinWise Bancorp provides banking and payment solutions to fintech brands, with a focus on scalable API-driven infrastructure for deposit, lending, and payment programs [5] - The company manages various lending programs, including SBA 7(a), Owner Occupied Commercial Real Estate, and Leasing, while also expanding into Payments and BIN Sponsorship offerings [5] - FinWise emphasizes compliance oversight and risk management to assist fintechs in navigating regulatory requirements [5] Backd Overview - Backd was established to support entrepreneurs by providing fast and flexible financing solutions to address critical financial challenges [4][5] - The company focuses on transparency, integrity, and partnership, aiming to help business owners overcome obstacles and drive growth [4][5] - Backd has demonstrated success in sectors such as healthcare and e-commerce, indicating a strong potential for growth in the SMB financing market [3]
FinWise Bancorp to Host First Quarter 2025
Globenewswire· 2025-04-03 20:15
Core Viewpoint - FinWise Bancorp will report its first quarter 2025 financial results and host a conference call on April 30, 2025, after market close [1]. Group 1: Conference Call Details - The conference call is scheduled for 5:30 p.m. ET, with a toll-free dial-in number of 1-877-423-9813 and an international number of 1-201-689-8573 [2]. - Participants are encouraged to dial in 10 minutes prior to the start time [2]. Group 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]. Group 3: Question Submission - The Company will accept questions submitted via email prior to the conference call, with a deadline of 5:30 p.m. ET on April 30, 2025 [4]. Group 4: Company Overview - FinWise Bancorp provides banking and payment solutions to fintech brands and is diversifying its business model by incorporating Payments and BIN Sponsorship offerings [5]. - The Company operates a Strategic Program Lending business through scalable API-driven infrastructure, supporting deposit, lending, and payment programs for leading fintech brands [5]. - FinWise also manages various lending programs, including SBA 7(a), Owner Occupied Commercial Real Estate, and Leasing, aimed at disciplined balance sheet growth [5]. - The Company emphasizes compliance oversight and risk management to assist fintechs in navigating regulatory requirements [5].