Financial Data and Key Metrics Changes - The company generated net income of $2.8 million or $0.20 per diluted common share for Q4 2024, bringing the full year 2024 earnings per diluted common share to $0.93 [28] - Average loan balances totaled $522.2 million for the quarter, compared to $492.9 million in the prior quarter, indicating growth from SBA 7(a) commercial leases and consumer programs [29] - Net interest income for the quarter was $15.5 million, up from $14.8 million in the prior quarter, driven by increased loan volumes and lower cost of funds [31] - Noninterest income was $5.6 million in the quarter, down from $6.1 million in the prior quarter, primarily due to a decline in miscellaneous income [33] - The efficiency ratio improved to 64.2% from 67.5% in the prior quarter, reflecting a deceleration in expense growth [35] Business Line Data and Key Metrics Changes - The company originated $1.3 billion in loans during Q4, bringing total originations for fiscal year 2024 to $5 billion, a 16% increase from $4.3 billion in the prior year [14] - SBA 7(a) loan originations increased in Q4 versus Q3, driven by a gradual pickup in qualified applicants [16] - Equipment leasing and owner-occupied commercial real estate loans showed solid growth, contributing to stable interest income and credit quality [17] Market Data and Key Metrics Changes - The company remains well capitalized, significantly above federal regulatory standards, with approximately 38% of total staff employed in compliance and risk management [8][10] - The company expects a gradual progression in growth as it moves through 2025, particularly from its credit enhancement solution and BIN sponsorship initiatives [11] Company Strategy and Development Direction - The company aims to expand and diversify its revenue sources to enhance long-term growth, with a focus on new lending programs and strategic partnerships [7][9] - The introduction of new products, including credit enhancement, payments, and card programs, is expected to provide both immediate and long-term growth opportunities [11][25] - The company is committed to generating positive operating leverage and expects expense growth to be production-driven moving forward [12][36] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the outlook for the business, anticipating stability in originations from existing programs and growth from new initiatives [10][11] - The management highlighted the importance of regulatory compliance and risk management as key components of their strategy to gain market share [9][10] - The company expects to see a gradual impact from new initiatives throughout 2025, with credit enhancement products expected to contribute significantly [87] Other Important Information - The company reported a provision for credit losses of $3.9 million in Q4, up from $2.2 million in Q3, primarily due to net charge-offs on non-guaranteed portions of SBA loans [19] - Nonperforming loan balances totaled $36.4 million, an increase from $30.6 million in the prior quarter, with 53% of the NPL balance guaranteed by the federal government [21][77] Q&A Session Summary Question: What drove the end-of-period loan growth in the quarter? - The increase was attributed to minimal growth in SBA loans and notable growth in leasing and owner-occupied commercial real estate portfolios, reflecting strong credit quality [41] Question: Is the 24% growth in the held-for-investment portfolio repeatable? - The company expressed confidence in continued growth rates, with expectations for a mix shift as credit-enhanced products gain traction [44][46] Question: What kept strategic program fees flat despite lower originations? - The flat fees were attributed to diversification among partners, which helped stabilize income despite seasonal deceleration in originations [48][49] Question: What is the expected growth from new card and payments initiatives in the next few years? - The company anticipates substantial growth in credit-enhanced balances in 2025, with expectations of $50 million to $100 million increase by year-end [54] Question: What are the criteria for selecting new partners? - The company focuses on mature, established fintechs for partnerships, which enhances the quality of the pipeline [56] Question: What are the main concerns for the company currently? - Key concerns include cybersecurity, regulatory issues, and ensuring proper oversight of fintech partners [59] Question: What is the expected impact of the credit enhancement product on financial performance? - The product is expected to provide stable interest income while minimizing credit risk, benefiting both the bank and its fintech partners [96]

Core Insights - FinWise Bancorp reported revenue of $21.13 million for the quarter ended December 2024, reflecting a year-over-year increase of 3.6% [1] - The company's EPS was $0.20, down from $0.32 in the same quarter last year, with no EPS surprise as the consensus estimate was also $0.20 [1] - The reported revenue exceeded the Zacks Consensus Estimate of $20.69 million by 2.14% [1] Financial Performance Metrics - Efficiency ratio was 64.2%, better than the estimated 69.1% by analysts [4] - Net charge-offs to average loans stood at 2.8%, slightly above the average estimate of 2.5% [4] - Non-Performing Loans totaled $36.43 million, lower than the estimated $40.47 million [4] - Net interest margin was reported at 10%, exceeding the average estimate of 9.7% [4] - Total Interest Earning Assets amounted to $617.74 million, below the average estimate of $624.87 million [4] - Total Non-Interest Income was $5.60 million, slightly above the average estimate of $5.50 million [4] - Net interest income reached $15.53 million, surpassing the average estimate of $15.20 million [4] Stock Performance - FinWise Bancorp shares returned +1.6% over the past month, outperforming the Zacks S&P 500 composite's +1.2% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market [3]

Core Viewpoint - FinWise Bancorp reported quarterly earnings of $0.20 per share, matching the Zacks Consensus Estimate, but down from $0.32 per share a year ago [1] - The company posted revenues of $21.13 million for the quarter, exceeding the Zacks Consensus Estimate by 2.14% and up from $20.4 million year-over-year [2] Earnings Performance - The company has surpassed consensus EPS estimates three times over the last four quarters [1] - FinWise Bancorp's shares have increased approximately 1.6% since the beginning of the year, compared to a 2.7% gain for the S&P 500 [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.17 on revenues of $20.78 million, and for the current fiscal year, it is $0.90 on revenues of $89.63 million [7] - The estimate revisions trend for FinWise Bancorp is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Banks - Southwest industry, to which FinWise Bancorp belongs, is currently in the top 4% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8]

Financial Performance - Net income for 2024 was $12.7 million, including $2.8 million for the fourth quarter[1] - Diluted earnings per share (EPS) were $0.93 for 2024, with $0.20 for the fourth quarter[1] - Net income for the three months ended December 31, 2024, was $2,793,000, down from $3,454,000 in the previous quarter, a decrease of 19.1%[41] - Net income decreased to $12,742 thousand in 2024, down from $17,460 thousand in 2023, a decline of 27.0%[44] - Basic earnings per share fell to $0.98 in 2024 from $1.38 in 2023, a decrease of 29.0%[44] Loan Originations and Assets - Loan originations totaled $5.0 billion for the full year 2024, with $1.3 billion in the fourth quarter[1] - Total assets increased to $746.0 million as of December 31, 2024, up from $683.0 million as of September 30, 2024[15] - Total assets increased to $745,976,000 as of December 31, 2024, up from $683,031,000 on September 30, 2024, representing a 9.4% growth[39] - The total outstanding balance of loans held for investment with credit enhancement as of December 31, 2024, was approximately $0.9 million[59] Interest Income and Expenses - Total interest income increased to $74,352 thousand in 2024 from $64,534 thousand in 2023, representing a growth of 15.5%[44] - Net interest income after provision for credit losses rose to $47,339 thousand in 2024, up from $42,921 thousand in 2023, an increase of 10.6%[44] - Interest income from loans increased to $18,388,000 for the three months ended December 31, 2024, compared to $17,590,000 in the prior quarter, a rise of 4.5%[41] - Net interest income and net interest margin, after adjusting for credit enhancement expenses, are considered non-GAAP measures that provide insight into the company's financial performance[56] Non-Interest Income and Expenses - Non-interest income totaled $22,485 thousand in 2024, compared to $21,456 thousand in 2023, reflecting a growth of 4.8%[44] - Non-interest income totaled $5,603,000 for the three months ended December 31, 2024, down from $6,054,000 in the previous quarter, a decline of 7.4%[41] - The total non-interest income for the three months ended December 31, 2024, was $5,603 thousand, with credit enhancement income of $25 thousand deducted, resulting in a total non-interest income of $5,578 thousand[58] Credit Losses and Nonperforming Loans - The provision for credit losses was $3.9 million for the fourth quarter, compared to $2.2 million in the prior quarter[9] - Nonperforming loan balances rose to $36.4 million as of December 31, 2024, compared to $30.6 million as of September 30, 2024[3] - Nonperforming loans totaled $36.4 million, or 7.8% of total loans HFI, as of December 31, 2024, compared to $30.6 million (7.1%) on September 30, 2024, and $27.1 million (7.3%) on December 31, 2023[23] - The allowance for credit losses to total loans HFI was 2.8% as of December 31, 2024, down from 2.9% at September 30, 2024, and 3.5% at December 31, 2023, reflecting a shift towards lower risk loan portfolios[24] Capital and Equity - Total shareholders' equity increased by $3.4 million to $173.7 million from $170.4 million at September 30, 2024, and by $18.7 million from $155.1 million at December 31, 2023, mainly due to net income and additional capital issued[20] - The leverage ratio as of December 31, 2024, was 20.6%, up from 20.3% at September 30, 2024, and slightly down from 20.7% at December 31, 2023, remaining significantly above the well-capitalized requirement of 9.0%[21] Efficiency and Management - The efficiency ratio improved to 64.2% in the fourth quarter, down from 67.5% in the prior quarter[12] - The net interest margin for 2024 was reported at 10.00%, compared to 11.65% in 2023, showing a decline in profitability from interest-earning assets[48] Strategic Initiatives - The company announced four new lending programs, including two related to credit enhancement, as part of its strategy for growth[3] - The company is expanding its business model by incorporating Payments (MoneyRails) and BIN Sponsorship offerings, alongside its Strategic Program Lending business[31] - The company plans to host a conference call to discuss its financial results for the fourth quarter and year ended December 31, 2024[28] Share Repurchase - The company has repurchased a total of 44,608 shares for $0.5 million since the inception of its share repurchase program in March 2024, with no shares repurchased during the fourth quarter of 2024[22]

Core Insights - FinWise Bancorp reported loan originations of $5.0 billion for 2024, with $1.3 billion in the fourth quarter [1] - The company achieved a net income of $12.7 million for 2024, including $2.8 million for the fourth quarter [1] - Diluted earnings per share (EPS) were $0.93 for 2024, with $0.20 for the fourth quarter [1] Financial Performance - Loan originations for Q4 2024 totaled $1.3 billion, a decrease from $1.4 billion in Q3 2024 and an increase from $1.2 billion in Q4 2023 [5][9] - Net interest income for Q4 2024 was $15.5 million, up from $14.8 million in Q3 2024 and $14.4 million in Q4 2023 [5][8] - The efficiency ratio improved to 64.2% in Q4 2024 from 67.5% in Q3 2024, but was higher than 56.0% in Q4 2023 [5][15] Asset Quality - Nonperforming loans increased to $36.4 million, or 7.8% of total loans held for investment (HFI), compared to $30.6 million (7.1%) in Q3 2024 and $27.1 million (7.3%) in Q4 2023 [27][28] - The allowance for credit losses to total loans HFI was 2.8% as of December 31, 2024, down from 2.9% in Q3 2024 and 3.5% in Q4 2023 [28][31] Balance Sheet Highlights - Total assets increased to $746.0 million as of December 31, 2024, up from $683.0 million in Q3 2024 and $586.2 million in Q4 2023 [18] - Total deposits rose to $544.9 million as of December 31, 2024, compared to $488.7 million in Q3 2024 and $404.8 million in Q4 2023 [22][23] Strategic Initiatives - The company announced four new lending programs, including credit enhancement, payments, and credit card offerings, aimed at diversifying revenue sources [3] - FinWise is focused on generating positive operating leverage and anticipates continued stability in loan originations from existing programs [3]

Core Insights - FinWise Bancorp (FINW) is positioned to continue its earnings-beat streak, having a strong track record of exceeding earnings estimates, particularly in the last two quarters with an average surprise of 33.09% [1][3] Earnings Performance - In the most recent quarter, FinWise Bancorp reported earnings of $0.25 per share, surpassing the expected $0.20 per share, resulting in a surprise of 25% [2] - For the previous quarter, the company reported $0.24 per share against an expectation of $0.17 per share, achieving a surprise of 41.18% [2] Earnings Estimates and Predictions - Recent estimates for FinWise Bancorp have been revised upwards, with a positive Earnings ESP of +15%, indicating increased analyst optimism regarding its near-term earnings potential [3][6] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat, with historical data showing that stocks with this combination beat estimates nearly 70% of the time [4][6] Earnings ESP Explanation - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which are often more accurate [5] - It is crucial for investors to check a company's Earnings ESP prior to earnings releases to enhance the probability of successful predictions [8]

Core Points - FinWise Bancorp will report its fourth quarter and full year 2024 results on January 30, 2025, after market close [1] - A conference call will be held at 5:30 p.m. ET to discuss the financial results, with a toll-free dial-in number provided [2] - The conference call will also be available via webcast on the company's website, with a replay accessible for six months [3] 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]

Core Insights - FinWise Bancorp (FINW) shares increased by 5% to $19.53, with a notable trading volume, reflecting a 5.1% gain over the past four weeks [1] - The stock reached a new 52-week high of $20.50, driven by the company's strategic initiatives and focus on fintech needs, as discussed by CEO Kent Landvatter [2] - The upcoming quarterly earnings are projected at $0.27 per share, indicating a year-over-year decline of 15.6%, while revenues are expected to rise by 3.7% to $21.15 million [3] Earnings and Estimates - The consensus EPS estimate for FinWise Bancorp has remained stable over the last 30 days, suggesting that stock price movements may not sustain without earnings estimate revisions [4] - The stock currently holds a Zacks Rank of 3 (Hold), indicating a neutral outlook [4] Industry Context - FinWise Bancorp operates within the Zacks Banks - Southwest industry, alongside Private Bancorp of America, which has a Zacks Rank of 2 (Buy) and an unchanged EPS estimate of $1.60, reflecting a year-over-year increase of 17.7% [4][5]

Loan Originations and Portfolio - For the three months ended September 30, 2024, loan originations increased to $1.4 billion from $1.1 billion compared to the same period in 2023, and for the nine months ended September 30, 2024, originations increased to $3.7 billion from $3.1 billion[143]. - The company's loans held for investment increased by 16.6% to $418,065,000 as of September 30, 2024, compared to $358,560,000 as of December 31, 2023[168]. - The total loan portfolio as of September 30, 2024, was $433.963 million, with fixed rate loans totaling $123.826 million and variable rate loans totaling $310.137 million[188]. - The gross loan portfolio as of September 30, 2024, included $251,439,000 in SBA loans, representing 57.9% of total loans, down from 64.5% as of December 31, 2023[175]. - Total commercial leases increased to $64.3 million as of September 30, 2024, accounting for 14.8% of total loans held for investment[180]. - Total commercial non-real estate loans reached $3.0 million, maintaining a steady 0.7% of total loans held for investment as of September 30, 2024[181]. - Residential real estate loans totaled $41.4 million, representing 9.5% of total loans held for investment as of September 30, 2024[183]. - Strategic Program loans held for investment remained stable at $19.4 million, accounting for 4.5% of total loans held for investment[184]. - Commercial real estate loans increased to $35.2 million, representing 8.1% of total loans held for investment as of September 30, 2024[185]. - Total consumer loans rose to $19.2 million, representing 4.4% of total loans held for investment as of September 30, 2024[186]. Financial Performance - FinWise generated net income of $3.5 million for the three months ended September 30, 2024, down from $4.8 million in 2023, and $9.9 million for the nine months ended September 30, 2024, compared to $13.3 million in 2023[145]. - Net interest margin (NIM) was 9.70% for the three months ended September 30, 2024, down from 11.77% for the same period in 2023, and NIM was 10.05% for the nine months ended September 30, 2024, compared to 12.11% for the same period in 2023[144]. - Interest income for the three months ended September 30, 2024, was $18.9 million, a 9.9% increase from $17.2 million in 2023, while interest expense increased by 48.6% to $4.2 million from $2.8 million[151]. - Non-interest income increased by 23.8% to $6.1 million for the three months ended September 30, 2024, compared to $4.9 million in 2023[151]. - Total non-interest income for the nine months ended September 30, 2024, increased by 10.3% to $16,882,000 compared to $15,299,000 in the same period of 2023, primarily due to higher origination volume of Strategic Program loans[162]. - Total non-interest expense for the three months ended September 30, 2024, rose by 44.3% to $14,049,000 from $9,733,000 in the same period of 2023, driven mainly by a 50.5% increase in salaries and employee benefits[163]. - The return on average equity was 8.3% for the three months ended September 30, 2024, down from 12.8% in the same period of 2023[234]. Assets and Liabilities - Total assets increased by $96.8 million to $683.0 million as of September 30, 2024, compared to December 31, 2023, primarily in loans and investment securities[146]. - Total assets grew to $661,815,000, up from $513,007,000 in the previous year[155]. - Total liabilities rose to $512.7 million, an increase of 18.9% from $431.2 million as of December 31, 2023, mainly driven by the growth in deposits[224]. - Total deposits increased to $341,227,000, with a total interest-bearing liability of $341,339,000, reflecting a 4.85% cost[155]. - The company's total deposits grew by 20.7% to $488,659,000 as of September 30, 2024, compared to $404,833,000 as of December 31, 2023[168]. - Deposits increased by $83.8 million, or 20.7%, from December 31, 2023, with noninterest-bearing demand deposits rising by $47.3 million, or 49.5%[221]. Credit Quality and Losses - The provision for credit losses decreased by 29.7% to $2.2 million for the three months ended September 30, 2024, compared to $3.1 million in 2023[151]. - The allowance for credit losses (ACL) was $12.661 million as of September 30, 2024, compared to $12.888 million as of September 30, 2023, reflecting a decrease in the overall provision for credit losses[206]. - The provision for credit losses for the three months ended September 30, 2024, was $1.944 million, down from $2.910 million for the same period in 2023[206]. - Total nonperforming assets increased to $30.6 million as of September 30, 2024, from $27.1 million at December 31, 2023, primarily due to several loans in the SBA 7(a) loan portfolio moving to nonperforming status[192]. - The ratio of net charge-offs (NCO) to average loans was 2.6% for the nine months ended September 30, 2024, lower than 3.5% for the same period in 2023, attributed to growth in lower credit risk loans[217]. - Nonaccrual loans to total LHFI ratio was 6.9% as of September 30, 2024, down from 7.0% as of December 31, 2023, reflecting growth in the loans held for investment portfolio[214]. - The company actively works with borrowers to provide loan modifications when warranted, reflecting a proactive approach to managing problem loans[194]. Strategic Initiatives - New strategic lending programs were launched, including partnerships with Earnest for private student loans and Hank Payments Corp. for cash management solutions[146][147]. - The company introduced Payments (MoneyRails™) and Bank Identification Number (BIN) Sponsorship products, which are currently under development[148]. - The company has established underwriting guidelines and monitors delinquency levels to maintain loan portfolio quality[192]. - The company evaluates the adequacy of the ACL on a quarterly basis, considering changes in the loan portfolio and current economic conditions[202]. - The company utilizes a grading system to assess loan quality, with periodic evaluations to adjust risk grades as necessary[196]. Shareholder and Capital Management - Shareholders' equity increased by $15.3 million to $170.4 million compared to $155.1 million at December 31, 2023, primarily due to net income of $9.9 million[232]. - The stock repurchase program authorized the repurchase of 641,832 shares, with 44,608 shares repurchased for $0.5 million at an average price of $10.30 per share since inception[238]. - The company is categorized as well-capitalized under the regulatory framework for prompt corrective action as of September 30, 2024[237].

Core Viewpoint - FinWise Bancorp (FINW) shows potential as a solid investment due to notable revisions in earnings estimates, indicating an improving earnings outlook and a positive stock trend [1][2]. Current-Quarter Estimate Revisions - The expected earnings per share for the current quarter is $0.27, reflecting a year-over-year decline of 15.63% - The Zacks Consensus Estimate for FinWise Bancorp has increased by 28.57% over the last 30 days, with one estimate raised and no negative revisions [4]. Current-Year Estimate Revisions - The anticipated earnings per share for the full year is $0.97, representing a decrease of 27.07% from the previous year - There has been a positive trend in estimate revisions for the current year, with one estimate moving up and no negative revisions, resulting in a 6.59% increase in the consensus estimate [5]. Favorable Zacks Rank - FinWise Bancorp currently holds a Zacks Rank 2 (Buy), attributed to promising estimate revisions, which historically correlate with stock performance - Stocks with Zacks Rank 1 (Strong Buy) and 2 (Buy) have shown significant outperformance compared to the S&P 500 [6]. Bottom Line - Strong estimate revisions have led to a 9.8% increase in the stock price over the past four weeks, suggesting further upside potential, making it a candidate for portfolio addition [7].