FinWise Bancorp(US:FINW)2024-08-13 21:08Financial Performance - Net income for Q2 2024 decreased by $1.5 million to $3.2 million compared to Q2 2023, primarily due to a $2.9 million increase in non-interest expenses [126]. - For the first half of 2024, net income decreased by $2.0 million to $6.5 million, driven by a $6.0 million increase in non-interest expenses [126]. - Net income for the three months ended June 30, 2024, was $3.2 million, a decrease of $1.5 million, or 31.4%, from $4.6 million in the same period of 2023 [148]. - Net income for the six months ended June 30, 2024, was $6.5 million, a decrease of $2.0 million, or 23.6%, from $8.5 million in the same period of 2023 [149]. Interest Income and Margin - The net interest margin for Q2 2024 was 10.31%, down from 12.14% in Q2 2023, attributed to decreased yields on loans held-for-sale and investment portfolios [127]. - Net interest income for Q2 2024 increased by $0.9 million, or 6.9%, to $14.6 million compared to Q2 2023 [131]. - For the first half of 2024, net interest income rose by $2.8 million, or 11.0%, to $28.6 million compared to the first half of 2023 [132]. - The average yield for variable rate loans held for investment was 10.43% [177]. Assets and Loans - Total assets increased by $31.6 million to $617.8 million as of June 30, 2024, mainly due to a $40.0 million increase in net loans receivable [127]. - Loan originations remained flat at $1.2 billion for Q2 2024, while for the first half of 2024, originations increased by $0.2 billion to $2.3 billion compared to the same period in 2023 [128]. - Loans held for investment reached $400,930 thousand with an interest income of $12,861 thousand, yielding a rate of 12.90% [135]. - As of June 30, 2024, total loans held for investment amounted to $414.3 million, an increase from $372.2 million as of December 31, 2023 [158]. Non-Interest Income and Expenses - Total non-interest income for the three months ended June 30, 2024, decreased by $0.5 million, or 8.5%, to $4.8 million compared to the same period in 2023 [141]. - For the six months ended June 30, 2024, total non-interest income increased by $0.5 million, or 5.0%, to $10.3 million, primarily due to a $0.8 million increase in other miscellaneous income [143]. - Total non-interest expense for the three months ended June 30, 2024, increased by $2.9 million, or 28.9%, to $12.9 million, driven by a $1.9 million increase in salaries and employee benefits [144]. - For the six months ended June 30, 2024, total non-interest expense increased by $6.0 million, or 31.8%, to $24.7 million, primarily due to a $4.2 million increase in salaries and employee benefits [146]. Credit Quality and Losses - Provision for credit losses was $2.4 million for the three months ended June 30, 2024, a decrease from $2.7 million in the same period of 2023, attributed to lower charge-offs [147]. - The allowance for credit losses (ACL) as of June 30, 2024, was $13.1 million, up from $12.3 million as of December 31, 2023 [193]. - The net charge-offs (NCO) for the total portfolio were $5.3 million for the three months ended June 30, 2024, with a total ratio of NCO to average loans of 2.7% [202]. - The company has established underwriting guidelines and monitors delinquency levels to maintain the overall quality of its loan portfolio [182]. Deposits and Liabilities - Total deposits increased to $318,877 thousand, with a net interest expense of $3,807 thousand, resulting in an interest rate of 4.80% [135]. - Total deposits rose to $429.2 million as of June 30, 2024, an increase of $24.4 million, or 6.0%, from $404.8 million as of December 31, 2023 [207]. - Total liabilities increased to $452.0 million, a 4.8% rise from $431.2 million as of December 31, 2023, primarily due to an increase in deposits [209]. Shareholders' Equity - Shareholders' equity rose to $161,580 thousand, compared to $144,954 thousand in the previous year [135]. - Shareholders' equity rose by $10.7 million to $165.8 million at June 30, 2024, compared to $155.1 million at December 31, 2023 [218]. Strategic Initiatives - The company has focused on diversifying its SBA 7(a) portfolio to withstand economic shifts, targeting industries such as e-commerce and healthcare services [160]. - The company plans to leverage online and mobile banking to meet customer needs without expanding its physical branch network [212]. - The company intends to maintain adequate capital to support anticipated asset growth and ensure compliance with regulatory capital guidelines [217].