FinWise Bancorp(FINW) - 2025 Q3 - Quarterly Results

Financial Performance - Loan originations totaled $1.8 billion, a 20% increase from $1.5 billion in the prior quarter and a 29% increase from $1.4 billion in the same quarter last year[5] - Net income was $4.9 million, representing a 19% increase from $4.1 million in the prior quarter and a 42% increase from $3.5 million year-over-year[4] - Diluted earnings per share (EPS) were $0.34, up from $0.29 in the prior quarter and $0.25 in the same quarter last year[5] - Net interest income was $18.6 million, up from $14.7 million in the prior quarter and $14.8 million year-over-year[9] - Total non-interest income reached $18,052,000 for the three months ended September 30, 2025, compared to $10,337,000 in the previous quarter, a growth of 74.8%[43] - Strategic Program fees increased to $6,180,000 for the three months ended September 30, 2025, compared to $5,404,000 in the previous quarter, a rise of 14.3%[43] - Net income for the three months ended September 30, 2025, was $4,891,000, up from $4,097,000 in the previous quarter, reflecting a growth of 19.4%[43] Asset and Loan Management - Total assets reached $899.9 million, an increase from $842.5 million as of June 30, 2025, and $683.0 million as of September 30, 2024[22] - As of September 30, 2025, total loans held-for-investment (HFI) increased to $567.8 million, up $37.8 million from June 30, 2025, and $133.8 million from September 30, 2024[24] - Loans held-for-investment totaled $550,534 million with an average yield of 11.76%, compared to $514,222 million and 10.02% in the previous quarter, marking a significant increase in both volume and yield[49] - The composition of loans includes 42.2% in SBA loans, 15.8% in commercial leases, and 14.7% in owner-occupied commercial real estate as of September 30, 2025[23] Credit Quality and Losses - Nonperforming loan balances were $42.8 million, an increase from $39.7 million in the prior quarter and $30.6 million year-over-year[5] - The provision for credit losses was $12.8 million, compared to $4.7 million in the prior quarter and $2.2 million in the same quarter last year[13] - Nonperforming loans totaled $42.8 million, or 7.5% of total loans HFI, as of September 30, 2025, unchanged from the previous quarter but up from 7.1% a year earlier[29] - The allowance for credit losses increased to $25.8 million as of September 30, 2025, reflecting a provision for credit losses of $12.7 million during the quarter[31] - Net charge-offs for the three months ended September 30, 2025, were $3.1 million, compared to $2.8 million in the previous quarter and $2.4 million a year earlier[30] Efficiency and Ratios - The efficiency ratio improved to 47.6%, down from 59.5% in the prior quarter and 67.5% in the same quarter last year[19] - The effective tax rate was 23.7%, down from 24.5% in the prior quarter and 25.1% year-over-year[20] - The leverage ratio decreased to 17.2% as of September 30, 2025, from 18.0% on June 30, 2025, and 20.3% on September 30, 2024, remaining above the well-capitalized requirement of 9.0%[27] - The adjusted efficiency ratio, accounting for credit enhancement program expenses, was 59.7% for the three months ended September 30, 2025, compared to 65.3% in the previous quarter[47] Deposits and Equity - Total deposits as of September 30, 2025, reached $682.3 million, an increase from $635.2 million on June 30, 2025, and $488.7 million on September 30, 2024, driven by growth in brokered time certificates of deposits[25] - Total shareholders' equity increased to $187.8 million as of September 30, 2025, up $5.8 million from June 30, 2025, and $17.4 million from September 30, 2024[26] - Shareholders' equity increased to $183,882 million, up from $178,223 million in the previous quarter, reflecting a positive trend in the company's financial health[45] Strategic Initiatives - The company is expanding its business model by incorporating Payments (MoneyRails™) and BIN Sponsorship offerings to enhance its service capabilities[35] - The strategic program loans with credit enhancement increased by $29.6 million to $41.4 million during the quarter, aligning with the company's strategy to enhance its loan portfolio quality[24]