FinWise Bancorp(FINW) - 2024 Q3 - Quarterly Results

Financial Performance - Net income for Q3 2024 was $3.5 million, an increase from $3.2 million in Q2 2024 but a decrease from $4.8 million in Q3 2023[12]. - Net interest income was $14.8 million for Q3 2024, compared to $14.6 million in Q2 2024 and $14.4 million in Q3 2023[4]. - The annualized return on average equity was 8.3% for Q3 2024, compared to 7.9% in Q2 2024 and 12.8% in Q3 2023[3]. - Total interest income for the three months ended September 30, 2024, was $18,924, an increase of 4% from $18,422 in the previous quarter and up 10% from $17,212 in the same quarter last year[36]. - Net interest income after provision for credit losses was $12,606, compared to $12,230 in the previous quarter and $11,341 in the same quarter last year, reflecting a year-over-year increase of 11%[36]. - Non-interest income totaled $6,054, up 17% from $5,166 in the previous quarter and up 24% from $4,892 in the same quarter last year[36]. - Net income for the three months ended September 30, 2024, was $3,454, an increase from $3,180 in the previous quarter but a decrease from $4,804 in the same quarter last year[36]. - Earnings per share (diluted) for the quarter was $0.25, compared to $0.24 in the previous quarter and $0.37 in the same quarter last year[36]. Loan and Asset Management - Loan originations increased to $1.4 billion in Q3 2024, up from $1.2 billion in Q2 2024 and $1.1 billion in Q3 2023[2]. - Total assets increased to $683.0 million as of September 30, 2024, from $617.8 million in Q2 2024 and $555.1 million in Q3 2023[13]. - Total gross loans held for investment as of September 30, 2024, were $434.0 million, an increase of 4.0% from $414.3 million as of June 30, 2024, and a 28.6% increase from $337.6 million as of September 30, 2023[15]. - Strategic Program loans held-for-sale rose to $84.000 million, a significant increase of 26.2% from $66.542 million as of June 30, 2024[35]. Nonperforming Loans and Credit Losses - Nonperforming loans totaled $30.6 million as of September 30, 2024, up from $27.9 million in Q2 2024 and $10.7 million in Q3 2023[2]. - Nonperforming loans were $30.6 million, or 7.1% of total loans held for investment, as of September 30, 2024, compared to 6.5% as of June 30, 2024, and 3.2% as of September 30, 2023[20]. - The provision for credit losses was $2.2 million for Q3 2024, down from $2.4 million in Q2 2024 and $3.1 million in Q3 2023[7]. - Net charge-offs for the three months ended September 30, 2024, were $2.4 million, compared to $1.9 million for the prior quarter and $2.2 million for the same period last year[21]. - The allowance for credit losses to total loans held for investment was 2.9% as of September 30, 2024, down from 3.2% as of June 30, 2024, and 3.8% as of September 30, 2023[20]. Deposits and Equity - Total period-end deposits increased to $488.7 million as of September 30, 2024, from $429.2 million as of June 30, 2024[16]. - The company reported an increase in noninterest-bearing demand deposits and interest-bearing demand deposits, contributing to the growth in total deposits[16]. - As of September 30, 2024, 35.4% of deposits were uninsured, up from 31.3% as of June 30, 2024[16]. - Total shareholders' equity increased by $4.6 million to $170.4 million from $165.8 million at June 30, 2024, and by $20.0 million from $150.4 million at September 30, 2023[17]. - Shareholders' equity totaled $170.370 million, up from $165.796 million as of June 30, 2024, indicating a growth of approximately 3.4%[35]. Efficiency and Expenses - The efficiency ratio was 67.5% for Q3 2024, compared to 66.3% in Q2 2024 and 50.4% in Q3 2023[10]. - Total non-interest expense increased to $14,049, compared to $13,218 in the previous quarter and $9,733 in the same quarter last year, indicating a year-over-year increase of 44%[39]. - The efficiency ratio for the three months ended September 30, 2024, was 67.5%, slightly up from 66.8% in the previous quarter and significantly higher than 50.4% in the same quarter last year[39]. Future Strategies - The company plans to expand its business model by launching Payments Hub and BIN Sponsorship offerings in 2024[27]. - FinWise is focused on maintaining compliance oversight and risk management to support fintech brands effectively[27]. - The company is well-positioned to guide fintechs through regulatory compliance processes, enhancing its service offerings[27]. - Future growth strategies include the potential launch of new products and services, as well as market expansion initiatives[30]. Tax and Regulatory - The effective tax rate was 25.1% for Q3 2024, compared to 23.9% in Q2 2024 and 26.1% in Q3 2023[11]. - The leverage ratio as of September 30, 2024, was 20.3%, a decrease from 20.8% as of June 30, 2024, and 22.1% as of September 30, 2023[18].