FinWise Bancorp(US:FINW)2022-05-15 16:00Financial Performance - Net income for Q1 2022 was $9.4 million, an increase of 78.3% from $5.3 million in Q1 2021, driven by a $5.6 million increase in non-interest income and a $4.4 million increase in interest income [171]. - Interest income for Q1 2022 was $13.2 million, up 50.2% from $8.8 million in Q1 2021, while interest expense decreased to $0.3 million from $0.4 million [169][171]. - Net interest income for the three months ended March 31, 2022, was $4,527 thousand, an increase of $836 thousand or 22.7% compared to the previous period [177]. - Total noninterest income rose to $11,682 thousand for the three months ended March 31, 2022, reflecting a 92.2% increase from $6,079 thousand in 2021, primarily driven by Strategic Program fees and gains on loan sales [181]. - Total noninterest expense increased to $9,048 thousand for the three months ended March 31, 2022, a rise of 35.8% from $6,663 thousand in 2021, mainly due to higher salaries and employee benefits [184]. - Shareholders' equity increased by $9.5 million to $125.0 million as of March 31, 2022, compared to $115.4 million at December 31, 2021, primarily due to net income of $9.4 million [268]. Loan Portfolio and Asset Management - The company’s diversified loan portfolio has helped sustain growth despite challenges from the Covid-19 pandemic [166]. - The bank's primary lending focuses on SBA 7(a) loans, strategic programs, residential and commercial real estate, and consumer lending [162]. - Total assets reached $401,574 thousand in 2022, compared to $312,778 thousand in 2021, marking a 28.4% increase [175]. - The total loan portfolio reached $272.6 million as of March 31, 2022, compared to $265.8 million as of December 31, 2021 [200]. - As of March 31, 2022, total SBA 7(a) loans amounted to $126.8 million, representing 46.5% of total loans, down from $141.3 million (53.2%) as of December 31, 2021 [187]. - Strategic Program loans rose to $101.8 million (37.4% of total loans) as of March 31, 2022, up from $85.9 million (32.3%) as of December 31, 2021 [191]. - The total amount of fixed rate loans was $1.648 billion as of March 31, 2022, with significant contributions from various categories including Strategic Program loans [203]. Loan Loss Provisions and Asset Quality - The provision for loan losses increased to $2.9 million in Q1 2022 from $0.6 million in Q1 2021, reflecting a 365.6% rise [171]. - The allowance for loan losses (ALL) increased to $10.0 million at March 31, 2022, compared to $9.9 million at December 31, 2021, reflecting a 1.3% increase [241]. - The total charge-offs for Strategic Program loans in March 2022 were $2.878 million, compared to $0.741 million in March 2021 [242]. - The company actively monitors nonperforming assets and engages with borrowers to mitigate risks, especially during economic downturns like the Covid-19 pandemic [217]. - The total nonperforming loans to total loans ratio remained stable at 0.2% as of March 31, 2022, consistent with the previous period [211]. - The ratio of ALL to nonperforming loans was 1,517.8% as of March 31, 2022, compared to 1,499.1% as of December 31, 2021 [246]. Deposits and Funding - Total deposits rose to $277.5 million at March 31, 2022, an increase of $25.6 million or 10.2% from $251.9 million at December 31, 2021 [258]. - Interest-bearing deposits in other banks increased to $116.2 million at March 31, 2022, up by $30.9 million or 36.2% from $85.3 million at December 31, 2021 [248]. - The company’s interest-bearing deposits included $53.4 million in money market accounts, representing 19.3% of total deposits as of March 31, 2022 [258]. - Total uninsured deposits were $187.9 million for the three months ended March 31, 2022, compared to $106.4 million for the same period in 2021 [259]. Strategic Initiatives and Future Plans - The company plans to adopt the CECL model in the 2023 calendar year, which may impact future loan loss provisions [233]. - The company plans to market commercial checking accounts and expand deposit products targeted at SBA borrowers in 2022 [264]. - The company raised approximately $36.1 million in net proceeds from its IPO completed on November 23, 2021 [262].