FinWise Bancorp(US:FINW)2025-05-13 20:10Financial Performance - Net income for the three months ended March 31, 2025, was $3.2 million, a decrease of 3.8% compared to $3.3 million in the same period of 2024[150]. - Interest income increased by 5.0% to $18.5 million for the three months ended March 31, 2025, compared to $17.6 million in 2024[150]. - Non-interest income rose significantly by 37.9% to $7.8 million in Q1 2025, up from $5.7 million in Q1 2024[150]. - Net interest margin (NIM) decreased to 8.27% for Q1 2025 from 10.12% in Q1 2024, primarily due to the repricing of variable rate loans[152]. - The effective income tax rate for the three months ended March 31, 2025, was 28.1%, compared to 26.5% in the same period of 2024[161]. - Return on average equity was 7.4% for the three months ended March 31, 2025, down from 8.4% for the same period in 2024[225]. Asset and Liability Management - Total assets increased by $58.2 million to $804.1 million as of March 31, 2025, compared to December 31, 2024[154]. - Total liabilities rose to $626.8 million, a 9.5% increase from $572.3 million as of December 31, 2024, mainly due to the increase in deposits[215]. - Total deposits increased to $605.8 million as of March 31, 2025, up from $545.0 million as of December 31, 2024, primarily driven by a $53.0 million increase in brokered time deposits[213]. - Liquid assets totaled $120.3 million, constituting 15.0% of total assets as of March 31, 2025, providing adequate liquidity for at least the next 12 months[222]. - The company maintains a leverage ratio greater than 9.0% to be considered well-capitalized under the Community Bank Leverage Ratio framework[227]. Loan Portfolio - Loan originations increased to $1.3 billion in Q1 2025 from $1.1 billion in Q1 2024, driven by new Strategic Programs and organic growth[154]. - Loans held-for-investment increased to $492,223,000 as of March 31, 2025, up from $465,233,000 as of December 31, 2024[173]. - SBA loans represented 50.0% of total loans held-for-investment as of March 31, 2025, totaling $246,004,000, down from 54.8% in the previous year[175]. - Total residential real estate loans increased to $55.8 million as of March 31, 2025, accounting for 11.3% of total loans held-for-investment[179]. - Total consumer loans reached $22.8 million as of March 31, 2025, representing 4.6% of total loans held-for-investment[183]. Credit Quality and Losses - The provision for credit losses increased to $3.3 million in Q1 2025, up 5.8% from $3.2 million in Q1 2024, attributed to growth in the loans held-for-investment portfolio[150][157]. - Nonperforming assets totaled $29.9 million as of March 31, 2025, down from $36.5 million at December 31, 2024[188]. - The decrease in nonperforming assets was primarily due to the resolution of two loans, despite some smaller loans migrating to nonperforming status[188]. - The allowance for credit losses (ACL) as of March 31, 2025, was $14.235 million, an increase from $13.176 million at December 31, 2024, with Strategic Program loans constituting 43.3% of the total ACL[205]. - Net charge-offs (NCO) for the three months ended March 31, 2025, totaled $2.248 million, with an annualized NCO to average loans ratio of 1.9%[210]. Non-Interest Expenses - Non-interest expense rose by 19.3% to $14.3 million in Q1 2025, compared to $12.0 million in Q1 2024[150]. - Total non-interest expense rose to $14,318,000, a 19.3% increase from $12,005,000 in the prior year[160]. - Salaries and employee benefits increased by $2,264,000, or 29.9%, from $7,562,000 in 2024 to $9,826,000 in 2025[160]. Strategic Initiatives - The company continues to focus on expanding its product offerings and supporting business infrastructure to drive future growth[154]. - The company emphasizes proactive identification and resolution of problem loans to maintain asset quality[190]. - The company manages interest rate risk through its Asset/Liability Management Committee (ALCO), which regularly reviews sensitivity to interest rate changes[247]. - The company does not engage in leveraged derivatives or financial options to mitigate interest rate risk, focusing instead on balance sheet structuring[246].