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].

Group 1: Iamgold (IAG) - Iamgold is an international gold exploration and mining company based in Canada with a Zacks Rank 1 (Strong Buy) [1] - The Zacks Consensus Estimate for Iamgold's current year earnings increased by 35.9% over the last 60 days [1] - Iamgold's shares gained 43.0% over the last three months compared to the S&P 500's gain of 6.5% [1] - The company possesses a Momentum Score of A [1] Group 2: Third Coast Bancshares (TCBX) - Third Coast Bancshares is a bank holding company operating primarily in the Greater Houston, Dallas-Fort Worth, and Austin-San Antonio markets with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for Third Coast Bancshares' current year earnings increased by 5.1% over the last 60 days [2] - Third Coast Bancshares' shares gained 37.7% over the last three months compared to the S&P 500's gain of 6.5% [2] - The company possesses a Momentum Score of A [2] Group 3: FinWise Bancorp (FINW) - FinWise Bancorp is a bank holding company headquartered in Murray, Utah, serving consumers and small businesses with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for FinWise Bancorp's current year earnings increased by 6.6% over the last 60 days [3] - FinWise Bancorp's shares gained 33.4% over the last three months compared to the S&P 500's gain of 6.5% [3] - The company possesses a Momentum Score of A [3]

Core Viewpoint - The article emphasizes the importance of timing and sustainability in stock trends for successful short-term investing, highlighting that sound fundamentals and positive earnings revisions are crucial for maintaining momentum in stock prices [1][2]. Group 1: Stock Performance - FinWise Bancorp (FINW) has shown a solid price increase of 28.5% over the past 12 weeks, indicating strong investor interest and potential upside [4]. - The stock has also increased by 8.6% over the last four weeks, suggesting that the upward trend is still intact [5]. - Currently, FINW is trading at 93.3% of its 52-week high-low range, indicating a potential breakout opportunity [5]. Group 2: Fundamental Strength - FINW holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, which are key indicators of near-term price movements [6]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), reflecting high optimism from the brokerage community regarding its near-term performance [7]. Group 3: Investment Strategy - The "Recent Price Strength" screen is a useful tool for identifying stocks like FINW that are on an uptrend supported by strong fundamentals [3]. - The article suggests that there are multiple stocks passing through this screen, providing additional investment opportunities for trend-focused investors [8].

Financial Data and Key Metrics Changes - Loan originations in Q3 2024 increased to $1.4 billion, up from an average of approximately $1.1 billion over the previous five quarters and $1.2 billion in Q2 2024 [4][7] - Tangible book value per common share rose to $12.90 from $12.61 in the prior quarter [5] - Net income for Q3 was $3.5 million or $0.25 per diluted common share [12] - Average loan balances increased to $492.9 million from $449.9 million in the prior quarter [12] - Net interest income was $14.8 million, slightly up from $14.6 million in the previous quarter [14] - Net interest margin decreased to 9.7% from 10.31% in the prior quarter [14] Business Line Data and Key Metrics Changes - SBA 7(a) loan originations increased due to a gradual pickup in qualified applicants as interest rates began to decline [9] - Commercial leases grew by 13.7% quarter-over-quarter, contributing to a 4.9% growth in total loans held for investment [9] - Noninterest income rose to $6.1 million from $5.2 million in the prior quarter, driven by increased origination fees [15] Market Data and Key Metrics Changes - The company noted a modest decrease in originations in early October 2024 compared to Q3 2024, influenced by seasonal factors [8] - NPL balances increased to $30.6 million from $27.9 million in the prior quarter, with unguaranteed NPLs rising slightly to $12.8 million [11] Company Strategy and Development Direction - The company is focused on enhancing long-term growth through strategic lending programs, having announced three new lending programs in 2024 [4][12] - There is an emphasis on expanding market share through new and existing strategic programs and product cross-selling [5] - The company aims to complete the payments hub by the end of 2024, with expectations for revenue generation in 2025 [21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operational performance and outlook, particularly regarding the strategic lending business rebounding after industry pressures [6] - The company anticipates a gradual improvement in profitability metrics as infrastructure investments are completed [5] - Management expects some relief in NPL metrics as interest rates decline [11][29] Other Important Information - The effective tax rate for Q3 was 25.1%, with expectations for Q4 to remain around the same level [15] - The company is experiencing a deceleration in expense growth, with expectations for further moderation in Q4 2024 [16] Q&A Session Summary Question: Loan production trends and seasonality - Management is optimistic about originations, noting that trends are improving despite expected seasonality from the Earnest program [17] Question: Impact of callable CDs and SBA on margin - Management indicated that NIM is complex to forecast due to various factors, but expects a decline in NIM during Q4 [19] Question: Updates on payments and card revenue - The payments hub is on track for completion by the end of 2024, with revenue expected to materialize in 2025 [21] Question: Incremental callable CDs and timing - Management provided details on callable CDs, indicating plans to call them in two buckets in November and December [22] Question: Average balance of HFS loans - The increase in HFS loans is primarily due to origination volume, with expectations for some moderation in Q4 [23][24] Question: Fee income and valuation of investment in BFG - Management noted that the valuation has been negatively impacted by slower SBA loan generation but expects improvement as activity picks up [25] Question: Expense growth moderation - Management anticipates a slight increase in expenses for Q4, but at a lower growth rate compared to previous quarters [26]

Core Insights - FinWise Bancorp (FINW) reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.20 per share, but down from $0.37 per share a year ago, indicating a 32.43% year-over-year decline [1] - The company achieved a revenue of $20.82 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.35% and showing a year-over-year increase from $19.64 million [1] - FinWise Bancorp has consistently surpassed consensus EPS estimates over the last four quarters, achieving earnings surprises of 25% and 41.18% in the most recent quarters [1][2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.21, with expected revenues of $20.99 million, while the estimate for the current fiscal year is $0.91 on revenues of $80.46 million [4] - The trend of estimate revisions for FinWise Bancorp is currently favorable, contributing to a Zacks Rank 1 (Strong Buy) for the stock, suggesting expected outperformance in the near future [4] Industry Context - The Banks - Southwest industry, to which FinWise Bancorp belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a strong performance potential compared to lower-ranked industries [5] - The broader finance sector includes other companies like Claros Mortgage Trust, Inc. (CMTG), which is expected to report a significant year-over-year earnings increase of 181.3% for the quarter ended September 2024 [5]