FinWise Bancorp(US:FINW)2025-11-10 22:09Financial Performance - For the three months ended September 30, 2025, loan originations increased to $1.8 billion, up from $1.4 billion in the same period of 2024, representing a 28.6% increase[169] - Net income for the three months ended September 30, 2025, was $4.9 million, a 41.6% increase compared to $3.5 million in the same period of 2024[170] - Interest income for the three months ended September 30, 2025, was $23.966 million, a 26.6% increase from $18.924 million in the same period of 2024[170] - Non-interest income surged to $18.052 million for the three months ended September 30, 2025, up 198.2% from $6.054 million in the same period of 2024[170] - Net interest income for the nine months ended September 30, 2025, was $47,614 thousand, compared to $43,384 thousand in 2024, representing an increase of 5.3%[176] - Net income for the nine months ended September 30, 2025, was $12.2 million, compared to $10.0 million in the same period of 2024[185] Asset and Liability Management - Total assets increased by $154.0 million to $899.9 million as of September 30, 2025, compared to December 31, 2024[169] - Total assets grew by $154.0 million, or 20.6%, to $899.9 million as of September 30, 2025, from $746.0 million at December 31, 2024[192] - Total liabilities rose to $712.2 million, a 24.4% increase from $572.3 million as of December 31, 2024, mainly due to the increase in deposits[245] - Shareholders' equity increased by $14.0 million to $187.8 million at September 30, 2025, compared to $173.7 million at December 31, 2024, primarily due to earnings of $12.2 million reported for the period[253] - Liquid assets totaled $105.6 million, constituting 11.7% of total assets as of September 30, 2025, providing adequate liquidity for at least the next 12 months[251] Loan Portfolio and Credit Quality - Loans held for investment generated interest income of $42,052 thousand in 2025, with a yield of 10.85%, compared to $37,847 thousand and 12.61% in 2024[176] - As of September 30, 2025, total loans held-for-investment amounted to $567.8 million, an increase from $465.2 million as of December 31, 2024, representing a growth of 22.1%[202] - The company reported a total of $567.8 million in loans held-for-investment, with fixed rate loans totaling $209.7 million and variable rate loans totaling $358.1 million[213] - The total amount of fixed rate loans maturing in one year or less is $162.7 million, while those maturing after five years total $214.5 million[213] - The company has established underwriting guidelines and monitors delinquency levels to maintain the quality of its loan portfolio[216] - The allowance for credit losses (ACL) reached $25,778 thousand as of September 30, 2025, compared to $13,176 thousand as of December 31, 2024, reflecting increased credit risks associated with Strategic Program loans[235] Credit Losses and Provisions - Provision for credit losses increased significantly to $12.799 million for the three months ended September 30, 2025, compared to $2.157 million in the same period of 2024, marking a 493.4% increase[170] - The provision for credit losses for the nine months ended September 30, 2025, was $20,761 thousand, significantly higher than $7,482 thousand for the same period in 2024[233] - Net charge-offs (NCO) for the three months ended September 30, 2025, totaled $3,127 thousand, with an annualized NCO to average loans ratio of 2.3%[237] - The ratio of ACL to total loans held-for-investment increased to 4.5% as of September 30, 2025, compared to 2.8% as of December 31, 2024[236] Deposits and Funding - Total deposits reached $482,990 thousand in 2025, up from $331,950 thousand in 2024, reflecting a growth of 45.5%[176] - Total deposits increased by $137.4 million, reaching $682.3 million as of September 30, 2025, compared to $544.9 million at December 31, 2024, driven primarily by brokered time deposits[243] - The Bank's total estimated uninsured deposits were $182.0 million as of September 30, 2025, slightly down from $183.2 million at December 31, 2024[244] Strategic Initiatives and Future Outlook - The company revised its reportable segments to three: traditional banking, banking as a service (BaaS), and treasury and administration, reflecting operational growth[167] - The BaaS segment reported strong performance, contributing significantly to overall growth, while traditional banking provided a stable foundation[190] - Looking ahead, the company expects continued growth in the BaaS segment as it expands fintech partnerships and product offerings[191] Interest Rate Sensitivity - The economic value of equity analysis indicated a decrease of 20.9% under a -400 bps interest rate shock scenario as of September 30, 2025[271] - The company’s asset/liability management strategy allows for adjustments to asset and liability durations to manage interest rate sensitivity[269] - The ALCO regularly reviews the sensitivity of assets and liabilities to interest rate changes and other financial metrics[275]